Transformative Multi-Year Expansion Announced for WDS Paris

[nickys]

Where is the Monsters Inc Scream Monitors zone? I completely missed this on our trip.

I assume the street with the Hollywood facades is going to be one of the main ways down to the lake and new lands? It’s funny, I liked the SoA at DHS, but the DLP version just seemed incongruous and fairly pointless.

 

[Indy_UK]

Good to see that they could be ahead of schedule because with all those walls, it isn't the best time to visit the park. So am I right that all of Studio 1 will be closed and you will enter/exit through that slither to the side of studio 1?

 

[Gusey]

Monsters Inc was on the wall of Studio 1, next to the Animagique theater. Studio 1 is currently still open and expected to close in April

 

[marni1971]

So am I right that all of Studio 1 will be closed and you will enter/exit through that slither to the side of studio 1?

Yes. By end of April guests will enter and exit via the huge slim line access road between Studio 1 and the Cinemagique theatre.

 

[marni1971]

More walls up in the Studios around Monsters Inc Scream Monitors Zone and the Fake Hollywood facades. Apparently, Disney are 3 months ahead of schedule for the Theater District's Transformation:

The Village is giving the park a run for its money

 

[Gusey]

Wow, there definitely going for it with construction at the moment. At least they seem to be ahead to a rare change

 

[MisterPenguin]

Disney has just paid the bulk of its share of Hulu (and will be increasing it's revenue from Hulu by 50%). D+ is about to stop being in deficit. And there's $7B cash on hand.

Seems like projects are being given the go-ahead to accelerate now that Disney knows it can afford it (without having to borrow). That $60B in park investment seems like its starting to flow.

I would guess.

 

[Gusey]

Also, DLP had a record year last year "2.4 billion turnover, profitable operating result (175 million) for a net result of 161 million euros." so investing in DLP will be worth it

 

[Indy_UK]

Even if the studios expansion isn't complete, there is so much going on that it may be worth staying away for a good 18 months or so. Hopefully the village will be a good way through completion.

 

[marni1971]

Disney has just paid the bulk of its share of Hulu (and will be increasing it's revenue from Hulu by 50%). D+ is about to stop being in deficit. And there's $7B cash on hand.

Seems like projects are being given the go-ahead to accelerate now that Disney knows it can afford it (without having to borrow). That $60B in park investment seems like its starting to flow.

I would guess.

In all fairness they’ve been spending a small fortune on DLP since circa 2016. Though some might think it was making up for lost time.

 

[mrflo]

Also, DLP had a record year last year "2.4 billion turnover, profitable operating result (175 million) for a net result of 161 million euros." so investing in DLP will be worth it

Would be interesting to see if and how much licensing & management fees in 2023 went directly from the DLP operating company to TWDC. Plus - if that's also still applicable - how much were the fees for Imagineering services (e.g. for R&D and construction management of WDS expansion) also going back across the big pond.

It's great to see a profit. But those balance sheets of the operating company are usually also aiming to be as tax beneficial as possible. Hence, I would assume TWDC made way more money out of DLP than this. Otherwise just based on those reported numbers, the resulting margin (= ratio of profit to revenue) in Paris would be significantly lower than compared to the US parks (6% vs 26% in 2023).

 

[cjkeating]

Disney has just paid the bulk of its share of Hulu (and will be increasing it's revenue from Hulu by 50%). D+ is about to stop being in deficit. And there's $7B cash on hand.

Seems like projects are being given the go-ahead to accelerate now that Disney knows it can afford it (without having to borrow). That $60B in park investment seems like its starting to flow.

I would guess.

I don't think any of this is from the $60bn everything that is currently happening was planned in before COVID. It's also quite typical for refurbishments to go big at DLP outside of the anniversary 2 years. Happened after the 20th and 25th and they will have a similar plan leading up to April 2027.

 

[cjkeating]

Otherwise just based on those reported numbers, the resulting margin (= ratio of profit to revenue) in Paris would be significantly lower than compared to the US parks (6% vs 26% in 2023).

I don't think it's possible for Paris to be as profitable as the US parks as they are completely different operations. I think the best case scenario would be consistent year on year profitability which has never happened since the park opened.

 

[mrflo]

I don't think it's possible for Paris to be as profitable as the US parks as they are completely different operations. I think the best case scenario would be consistent year on year profitability which has never happened since the park opened.

I fully agree. Just compare the ticket prices in US, Genie+ upcharges, etc. Though seems like Disney is already aiming to push DLP to be a bit more on par with US parks. That's what Josh D’Amaro said about that topic last year in May:

"JPMorgan: Should we think of Paris running sort of full run rate like the U.S. at this point?

Josh D’Amaro: They're running really strong. I think there's still opportunity to go. And again, it's not just the product that is new and fresh at Disneyland Paris, it's also the commercial strategies. We're much more clear – much clearer in our commercial strategies. We're certainly not doing as much discounting as we have in the past, and the team has really taken it to the next level there."

Cutting discounts, adding more capacity to existing restaurants for profitability, price increases for tickets and passholders might be just a part of this new commercial strategy. I guess hand in hand with an overall expansion of DLP over the next few years we might also see more on that front as well. What do you expect to happen? Will DLP go more "premium"? Full Genie+ or other new upcharge features?

Like I said in my previous post, the "profitability" of DLP for TWDC might also include all those licensing & management fees that are costs for DLP in their own balance sheet. If TWDC for every 5 dollars that they invest in DLP expansion directly gains a profit of 1-2 dollars out of the Imagineering fees due to this whole scheme, that's already a very lucrative deal. If anyone knows more about the current setup, I would be very curious to learn more.

 

[fradz]

I was at the parks yesterday and can confirm it is becoming a bit of a maze, even for frequent park goers. But that is the price to pay for change, and change should be welcomed in the resort. More is coming

 

[Jordan dby]

It makes me smile when they talk about commercial strategy. As if they ever had a strategy to over discount or under price. They were maximising their revenues every year. Since covid they have charged more for less and to their surprise the parks remained full. My gut feel is this can't go on forever (especially as I reckon guest satisfaction is down a little bit vs pre covid), at some point
discounts will come back because it is better to let someone in half price than have the park underutilised.

Also Paris only ever really discounted hotels and restaurants as part of a package, and only for 3 days+. Without those offers there will just be more day trippers instead.

 

[Sir_Cliff]

It makes me smile when they talk about commercial strategy. As if they ever had a strategy to over discount or under price. They were maximising their revenues every year. Since covid they have charged more for less and to their surprise the parks remained full. My gut feel is this can't go on forever (especially as I reckon guest satisfaction is down a little bit vs pre covid), at some point
discounts will come back because it is better to let someone in half price than have the park underutilised.

Also Paris only ever really discounted hotels and restaurants as part of a package, and only for 3 days+. Without those offers there will just be more day trippers instead.

I am curious about the profitability of Disneyland Paris as it always seems so busy even when I go at "quiet" times (e.g. weekdays in February), but I still find the prices surprisingly reasonable and waits perfectly manageable when compared to the US parks. It makes me nervous when I see the official profit margins being quite slim that they'll push it too far toward the more anti-consumer policies of particularly WDW, and I just hope that it is more a case of what @mrflo suggests that a lot of the revenue is flowing back to Disney in ways that are shown as costs on DLP's balance sheet.

It does strike me that they are trying to match premium pricing with a premium product more directly with the recent hotel refurbishments and the attention to upkeep and entertainment in the parks. Dining is something they really need to look it as it's still hard to find a place for a sit-down meal in the parks for dinner on relatively slow days to almost impossible on busy days.

I suspect European consumers won't accept being pushed as far as US and international guests to WDW and there will just always be things such as wages and taxation that represent higher costs for them in France than the US. The guest mix must be interesting to deal with compared to WDW, too, as it is a combination of a destination resort, a local park, and a day-trip for people travelling to Paris. I don't think they'd really want to push a lot of the initiatives they have tried in WDW to over-complicate the planning process that would lose them any of those markets, even if I'm sure they'd prefer more guests staying on-site for multiple days. It wouldn't surprise me if this mix pushes them more toward providing incentives for staying on-site rather than penalties for not.

 

[marni1971]

I suspect European consumers won't accept being pushed as far as US and international guests

Took the words out of my mouth. Europeans are in the whole a different type of people who are used to paying the price for regional European parks as opposed to US Disney prices. I’m on several unofficial DLP social media sites and the amount of comments about pricing, costs, doing it cheaper etc. is telling.

 

[SplashJacket]

If pricing is at a breaking point in Paris, and they’re barely at profitability, what’s the solution? Cut pricing and operate at a loss?

 

[Indy_UK]

I think €100 an adult buffet at Disneyland hotel is now pushing it way too far. The regular price of €60 I can just about stomach because French law doesn’t allow refill drinks and you get the tiniest bottle included.

I don’t mind ticket raises when they are adding capacity like they are now but they do need to be careful.

I would love annual passes but for 3 of us, I’m not sure if it will be worth it plus once WDS expansion is done there will be another hefty increase