CORRESPONDENT'S REPORT
Euro Disney Pins Hope on Additions
By CRAIG S. SMITH
Published: October 17, 2004
MARNE-LA-VALLÉE, France
A CRANE hangs low over the Walt Disney Studios park here, putting into place the latest addition to Euro Disney's 12-year-old, multibillion-dollar amusement complex east of Paris, billed as the most widely visited tourist attraction on this side of the Atlantic Ocean.
"It may sound corny, but Walt Disney once said that as long as there's imagination left in the world, the parks will never be finished," said the guest relations manager, Ian Benjafield, sitting in a faux Victorian parlor with a slightly embarrassed smile.
He wasn't allowed to say more about what was going up behind the white construction wall (rumors are that it will be a Tower of Terror ride culminating in a stomach-churning drop in a mock elevator). But it may take more than imagination to keep Euro Disney growing.
Declining ticket sales and towering debt have spooked the lenders who have kept the park afloat since it was opened in 1992. Last month, Euro Disney skirted bankruptcy when creditors agreed to changes in its loan obligations, canceling some, after a tense month of negotiations.
Euro Disney, 39 percent owned by The Walt Disney Company, has been weighed down by roughly $3 billion in debt, a legacy of the money borrowed to build the theme park, and by its requirement to pay royalties to its American parent.
Analysts have estimated that the park needs 17 million customers a year for a profit. But without new attractions, the park will have trouble increasing ticket sales or satisfying customers if they do. Already, with more than 12 million visitors a year, lines at the park can reach patience-testing lengths.
For seasoned Disney visitors, the appeal of the Pirates of the Caribbean or the Haunted House or even the newer Space Mountain roller coaster, introduced in 1995, is questionable against the park's $50 one-day entrance fee ($37.50 for children 3 to 11), at $1.25 to the euro.
The company opened Walt Disney Studios adjacent to the main Disneyland Park in March 2002, hoping to draw more visitors and boost revenues. But with only 10 attractions at the studios - which are mostly longer lasting, special effect shows - compared with 49 at the main park, and with a separate admission fee as expensive as the main park's, the studios drew only two million visitors last year, a third of the number expected.
A single ticket to both the main park and Disney Studios is now available at $61.25, nearly half what it was. But on a recent visit to the studio park, one of the attractions was closed for repairs, another was closed between shows and the lines for English- or French-speaking visitors at a third were prohibitively long (the lines for people speaking Italian or Dutch were much shorter).
Part of the problem is that Euro Disney was conceived on an American model, designed for families to spend several days in the complex that now includes a cluster of hotels and peripheral amusement centers, such as movie theaters and live-action shows, outside of the main Disneyland compound.
That model hasn't appealed to Europeans to the degree that the park's investors had hoped. Much of the entertainment, meanwhile, is in French, reducing the appeal for visitors who don't speak the language. And the multilingual demands of Europe add to the park's operating costs.
One result is that, while lines are long at the main Disney attractions, the rest of the complex - which Euro Disney officials say covers an area one-fifth the size of Paris - feels empty.
André Lacroix, Euro Disney's fifth chief executive in just over a decade, is trying to increase attendance by cutting ticket prices on so-called Magic Nights from 5 to 11 p.m., and by promotions for holidays including Halloween and Mardi Gras.
The real draw, though, will be dazzling new attractions - Disney won't say how many or when they will open -whose construction, at $100 million to $200 million each, depends not on tourists but on investors.
Euro Disney Pins Hope on Additions
By CRAIG S. SMITH
Published: October 17, 2004
MARNE-LA-VALLÉE, France
A CRANE hangs low over the Walt Disney Studios park here, putting into place the latest addition to Euro Disney's 12-year-old, multibillion-dollar amusement complex east of Paris, billed as the most widely visited tourist attraction on this side of the Atlantic Ocean.
"It may sound corny, but Walt Disney once said that as long as there's imagination left in the world, the parks will never be finished," said the guest relations manager, Ian Benjafield, sitting in a faux Victorian parlor with a slightly embarrassed smile.
He wasn't allowed to say more about what was going up behind the white construction wall (rumors are that it will be a Tower of Terror ride culminating in a stomach-churning drop in a mock elevator). But it may take more than imagination to keep Euro Disney growing.
Declining ticket sales and towering debt have spooked the lenders who have kept the park afloat since it was opened in 1992. Last month, Euro Disney skirted bankruptcy when creditors agreed to changes in its loan obligations, canceling some, after a tense month of negotiations.
Euro Disney, 39 percent owned by The Walt Disney Company, has been weighed down by roughly $3 billion in debt, a legacy of the money borrowed to build the theme park, and by its requirement to pay royalties to its American parent.
Analysts have estimated that the park needs 17 million customers a year for a profit. But without new attractions, the park will have trouble increasing ticket sales or satisfying customers if they do. Already, with more than 12 million visitors a year, lines at the park can reach patience-testing lengths.
For seasoned Disney visitors, the appeal of the Pirates of the Caribbean or the Haunted House or even the newer Space Mountain roller coaster, introduced in 1995, is questionable against the park's $50 one-day entrance fee ($37.50 for children 3 to 11), at $1.25 to the euro.
The company opened Walt Disney Studios adjacent to the main Disneyland Park in March 2002, hoping to draw more visitors and boost revenues. But with only 10 attractions at the studios - which are mostly longer lasting, special effect shows - compared with 49 at the main park, and with a separate admission fee as expensive as the main park's, the studios drew only two million visitors last year, a third of the number expected.
A single ticket to both the main park and Disney Studios is now available at $61.25, nearly half what it was. But on a recent visit to the studio park, one of the attractions was closed for repairs, another was closed between shows and the lines for English- or French-speaking visitors at a third were prohibitively long (the lines for people speaking Italian or Dutch were much shorter).
Part of the problem is that Euro Disney was conceived on an American model, designed for families to spend several days in the complex that now includes a cluster of hotels and peripheral amusement centers, such as movie theaters and live-action shows, outside of the main Disneyland compound.
That model hasn't appealed to Europeans to the degree that the park's investors had hoped. Much of the entertainment, meanwhile, is in French, reducing the appeal for visitors who don't speak the language. And the multilingual demands of Europe add to the park's operating costs.
One result is that, while lines are long at the main Disney attractions, the rest of the complex - which Euro Disney officials say covers an area one-fifth the size of Paris - feels empty.
André Lacroix, Euro Disney's fifth chief executive in just over a decade, is trying to increase attendance by cutting ticket prices on so-called Magic Nights from 5 to 11 p.m., and by promotions for holidays including Halloween and Mardi Gras.
The real draw, though, will be dazzling new attractions - Disney won't say how many or when they will open -whose construction, at $100 million to $200 million each, depends not on tourists but on investors.
