Euro Disney Earnings Bloodbath

[pheneix]

http://corporate.disneylandparis.com/CORP/EN/Neutral/Images/uk-2013-11-07-euro-disney-sca-reports-annual-results-for-fiscal-year-2013.pdf

Just put this poor park out of its misery, please.

 

[pheneix]

"We narrowed our losses due to re-financing activities in FY 2012"

Dig a little deeper and discover that DLRP is in fact turning over its largest operating losses in its history and is also burning through its cash on hand. But cheer up! Under their repayment plan TWDC they are only liable for 11 million euro of their 1.2 billion in debt in FY 2014!

 

[alissafalco]

Oh jeez

 

[croboy82]

Not surprising really...

 

[Ralphlaw]

France, thy name is fickle. With Ratatouille, and a Europe based movie in Frozen, things should pick up. Of course, the overall recovery should have the greatest impact, hopefully. With a 2 billion euro asset, bringing in 1.3 billion euros in revenues, this isn't so bad. Yes, the debt is killing them right now, but a few good years should make that more manageable.

 

[|Q|]

Just put this poor park out of its misery, please.

What is this supposed to mean? lol

Actually, it's pretty tough times on this side of the ocean, it would have been some kind of miracle if DLP was reporting it's first active in 10 years in 2013.

 

[Nero the dog]

How many times has it been said that Paris was the wrong place to build it.
Just because some highly paid execs thought Paris was a nice glamorous place.

 

[Ralphlaw]

The question is whether DLP is a good idea in general. Once it opened, it immediately became the biggest tourist attraction in Europe. As I understand it, the financing structure was the problem. The Disney Corporation is making huge money right now, and one of the last resorts for viability (a cash infusion from Disney Corporate) hasn't yet happened. DLP has generally been forced to stand on its own two feet, and has done so successfully. Yes, they carry huge debt, but the parks are some of the most beautiful anywhere (from what I read), and are a tremendous asset. I'll be there in June to take a look for myself.

The "put . . . out of its misery" comment connotes shooting a poor dog who is going to die anyway. DLP isn't there by a longshot. It struggles with the rest of Europe, but an average daily attendance of 40,821 people, and about 5,000 rooms per day being rented out is not an enterprise that needs to be "put out of its misery" like Ol' Yeller. If those numbers shoot up a mere 10%, profits should start flowing.

 

[|Q|]

How many times has it been said that Paris was the wrong place to build it.
Just because some highly paid execs thought Paris was a nice glamorous place.

OK, Paris has lame weather, but what would have been a better place? Maybe southern France. For sure not Spain or Italy.

 

[Nero the dog]

OK, Paris has lame weather, but what would have been a better place? Maybe southern France. For sure not Spain or Italy.

It's not just the weather. The people have a different attitude to life.
Britain, Germany or the Low Countries would have all had much the same weather and transport links, but they would have had a population who already spend a lot of time and money in theme parks.

 

[|Q|]

It's not just the weather. The people have a different attitude to life.
Britain, Germany or the Low Countries would have all had much the same weather and transport links, but they would have had a population who already spend a lot of time and money in theme parks.

Comeon, UK is way to rainy, Germany is bloody cold, even worst than Paris.

 

[IWantMyMagicBand]

Comeon, UK is way to rainy, Germany is bloody cold, even worst than Paris.

At least in Germany everyone would queue like they are supposed to lol, hate that it's the opposite in France. British queue, Germans queue. British enforce queuing as do Germans.
Free for all everywhere else and it pees me off no end!

 

[Bolna]

I often loved to speculate about the "what if DLP had been built somewhere else" in the past, but I have to admit that I have come to terms with its location.

First of all: When the decision was made to build a Disney park in Europe, Europe was considerably smaller than today. Not geographically, but certainly economically. Beyond Germany was the Iron Curtain. Paris was pretty central for the Europe of the 80s. Hence a very good location.

I fully understand the desire to build the park close to a large metropolitan area. It gives the park a certain security of people to come and visit just because so many people are locals. There are only two areas in Europe which can compete with Greater Paris in population: Greater London and the Ruhr Area in Germany. The later might have lots of people, but in the 80s it was poor as hell (still is) since all the coal mines and heavy industry closed down. Oh - and it was known for still having lots of issues with air pollution due to the remaining industry. Not a great place for a theme park.

I don't think that one single nationality causes the problems at DLP. I very much think that it is the clash of different cultures which causes the problems - combined with language barriers. Listening to tourists in a foreign city you can always hear people complaining about why things are this or that way, because they are different from at home. In a way DLP is a European melting pot - with the problem that mosts guests don't want to be melted, they want to be among their own people because those know "how to behave". So it really does not matter where DLP would have been built. The guests who like to jump lines would have travelled wherever DLP is anyway.

At the time DLP was built air travel in Europe was still horribly expensive, so it was important that many people would be able to make a relatively easy journey by car or train to its location if it was ever going to be a destination for a mulit-day trip. And Paris has excellent links in all directions.

The world has changed since then in many ways, but we cannot use today's conditions to judge the decision for Paris that was made in the 80's.

 

[mweier]

I've always wondered why it wasn't in Barcelona or Italy or something. Cool damp winter in northern Europe is no substitute for a sunny spanish holiday. I suspect DL wouldn't have done as well had it been located in Oregon.

 

[lazyboy97o]

I've always wondered why it wasn't in Barcelona or Italy or something. Cool damp winter in northern Europe is no substitute for a sunny spanish holiday. I suspect DL wouldn't have done as well had it been located in Oregon.

The French government offered a better incentive package. And the park itself has never really been the problem. It is the far bigger project, that also goes beyond the Disneyland Paris Resort, as well as the convoluted financial and business structure. Euro Disney SCA had to dump a bunch of money, but not enough, into building a second gate just when they had finally taken control of the rough financial situation they were handed at opening.

 

[Ralphlaw]

As I understand it, here are some of the reasons:

1. Close to a major city.
2. Plenty of land available right now.
3. Not close to any other major amusement park resorts.
4. Stable government.
5. History of low crime rates.
6. Decent climate, although not as perfect as some that were closer to the Mediterranean.
7. Close to major transportation arteries.
8. Close to existing major tourist attractions (Eifel Tower, Louvre, etc . . .)
9. Minimum of bribery needed to get it done.
10.Successfully partnered with an EPCOT pavilion.

During the 80's, when all of this was being planned, southern Europe was considered rather backward. If you wanted to get robbed, go to Spain or Italy. If you wanted broken machinery to stay broken, go to Italy or Greece. If you wanted to catch a 4 p.m. train in Italy, wander in around 5 p.m.

France was considered chic, and cutting edge. Fashion, style and food all came from France. They also had the fastest trains in Europe (the TGV), and their subway system was a model of clean efficiency. They were already the biggest destination of European tourists at the time.

I was in Europe as a student in 1985, and southern Europe was considered much riskier, with tales of tourists being robbed on trains while they slept, and beat up in dark alleys. France was clean, efficient, and beautiful. Yeah, the French were snooty, but everywhere else was either much colder, cloudier, or gloomier, or too far away.

You've also got to remember that the Berlin Wall didn't come down until 1990, and central Europe (especially Germany) was filled with American GI's and terrorist threats against them. And weather north and east of France was much worse. It was a pretty obvious choice back then. Today, I imagine Barcelona would be a first choice (in part because they put on a great Olympics in 1992), but in the 80's, Paris made the most sense.

 

[AndyS2992]

Oh dear, judging by those figures, it would suggest Disneyland Paris will struggle harshly to survive another 10 years unless they get that revenue up and costs down by at least 20%.

 

[lazyboy97o]

Oh dear, judging by those figures, it would suggest Disneyland Paris will struggle harshly to survive another 10 years unless they get that revenue up and costs down by at least 20%.

Or the French government could set aside their protectionism and allow The Walt Disney Company to acquire Euro Disney SCA and all of that debt will disappear. I still think this might be Disney's hope.

 

[Ralphlaw]

Oh dear, judging by those figures, it would suggest Disneyland Paris will struggle harshly to survive another 10 years unless they get that revenue up and costs down by at least 20%.

I'm not sure if you're being sarcastic, but a lot can happen in 10 years.

Except for that nasty money thing, DLP has been a huge success. Debt is the problem, but a few percentage points and some good years will straighten that out.

 

[|Q|]

I've always wondered why it wasn't in Barcelona or Italy or something.

Lol, if they tried to built it here in Italy in the 80s, man, they would still building it. This is the country of unfinished works (and the project would have been caught for sure in the middle of the Tangentopoli scandal, back in the days)

Fashion, style and food all came from France.

They may have been pretty good in marketing this notion in the 80s, but that's NOT true. (and while after the 80s Italy could have lost positions in Fashion and design, when it comes to food we still rule above anyone else)