Disney's theme park strays from script
Simon Bowers
Thursday November 14, 2002
PARIS (Guardian Unlimited) -- A costly marketing campaign surrounding the opening of Euro Disney's new 600m euro (£380m) movie theme park helped pushed the company twice as far into the red as some analysts had predicted.
Net losses for the year to October were 33m euros, compared with a profit of 30m euros the previous year. Analysts' expectations had been for losses ranging from 12m euros to 27m euros.
A worldwide fanfare of publicity surrounded the opening of Walt Disney Studios theme park in March, contributing to exceptional costs of 38m euros.
But by July executives were forced to concede that visitor numbers were little more than 13m, compared to 12m a year earlier when only the company's Magic Kingdom theme park was operational.
Some analysts suggest the two parks - which are located side by side, to the east of Paris - have been cannibalising each other's audience.
Euro Disney's finance director, Serge Naim, insisted that hotel capacity was the biggest headache.
He said the marketing push for Walt Disney Studios had generated a tidal wave of demand this summer, which led to many visitors staying away because of a lack of hotel rooms.
Mr Naim denied the costly publicity campaign had been misjudged. Some 1,500 additional rooms next spring would be able to accommodate demand.
Together, the company expects its two parks to draw 16m-17m visitors in two year's time.
Chief executive Jay Rasulo said: "Despite the difficult tourism environment... our Walt Disney Studios attracted more than two million guests during the first six months... and our hotels reported occupancy levels of 88%."
Some analysts suggested this summer's marketing fiasco had almost been an inevitability. "Above all, they could not afford for the new park to fail," said Arnaud Frerault of SG Securities.
Euro Disney, which is 40% owned by Walt Disney Co of America, booked a one-off charge of 37m euros relating to hiring and training staff as well as publicity campaigns for Walt Disney Studios.
The company was also hit by a 7m euro insurance premium after concern about terrorist attacks heightened after September 11.
Euro Disney yesterday promised investors it would keep a tight reign on marketing spend in this financial year and was not planning costly new attractions at either of its parks. There are now 10 attractions at Walt Disney Studios compared with 40 at Magic Kingdom.
Simon Bowers
Thursday November 14, 2002
PARIS (Guardian Unlimited) -- A costly marketing campaign surrounding the opening of Euro Disney's new 600m euro (£380m) movie theme park helped pushed the company twice as far into the red as some analysts had predicted.
Net losses for the year to October were 33m euros, compared with a profit of 30m euros the previous year. Analysts' expectations had been for losses ranging from 12m euros to 27m euros.
A worldwide fanfare of publicity surrounded the opening of Walt Disney Studios theme park in March, contributing to exceptional costs of 38m euros.
But by July executives were forced to concede that visitor numbers were little more than 13m, compared to 12m a year earlier when only the company's Magic Kingdom theme park was operational.
Some analysts suggest the two parks - which are located side by side, to the east of Paris - have been cannibalising each other's audience.
Euro Disney's finance director, Serge Naim, insisted that hotel capacity was the biggest headache.
He said the marketing push for Walt Disney Studios had generated a tidal wave of demand this summer, which led to many visitors staying away because of a lack of hotel rooms.
Mr Naim denied the costly publicity campaign had been misjudged. Some 1,500 additional rooms next spring would be able to accommodate demand.
Together, the company expects its two parks to draw 16m-17m visitors in two year's time.
Chief executive Jay Rasulo said: "Despite the difficult tourism environment... our Walt Disney Studios attracted more than two million guests during the first six months... and our hotels reported occupancy levels of 88%."
Some analysts suggested this summer's marketing fiasco had almost been an inevitability. "Above all, they could not afford for the new park to fail," said Arnaud Frerault of SG Securities.
Euro Disney, which is 40% owned by Walt Disney Co of America, booked a one-off charge of 37m euros relating to hiring and training staff as well as publicity campaigns for Walt Disney Studios.
The company was also hit by a 7m euro insurance premium after concern about terrorist attacks heightened after September 11.
Euro Disney yesterday promised investors it would keep a tight reign on marketing spend in this financial year and was not planning costly new attractions at either of its parks. There are now 10 attractions at Walt Disney Studios compared with 40 at Magic Kingdom.