Disneyland Paris

Executives at Walt Disney Corporation found themselves working frantically to keep the new Euro Disney in Marne la Vallee, France from drowning in a sea of red ink just two years after the theme park's opening in April 1992. Despite the fact that Euro Disney achieved target attendance objectives of 11 million guests in just over a years operation, cumulative losses at the end of 1993 exceeded $1 Billion, and the park was losing 1 million per day. The $4.4 billion, 5000 acre park represented the second largest construction project in European history, after the Channel Tunnel connecting the United Kingdom to France. Unfortunately a number of basic assumptions and forecasts made during the planning of Euro Disney turned out to be faulty or misguided.

For example, in their quest for European style grandeur and perfection, Disney executives spared no expense in building the park and adjacent hotels. The plan called for some of the hotels to be sold at a handsome profit after the park was opened. Disney appointed Robert Fitzpatrick to be head of Euro Disney SCA; although American, he had travelled extensively in Europe, spoke French and had a French wife. Disney anticipated that the French would infact represent the park's core clientele. An effort was made to ensure that Euro Disney's cast members would be able to speak with the guests in French. Disney uses the words cast member and guest instead of employees and visitor respectively. French food was widely available in restaurants and characters such as Snow White and Pinocchio from European fairy tales were emphasised instead of Bambi and Dumbo.

Unfortunately Disney planners failed to anticipate major changes in Europe's economy. The Paris real estate market slumped, making it impossible to sell any of the hotels. Moreover, Europe was heading in to recession at the time the park opened and adult admission to the park, the equivalent of $43 was out of sync with the times. To make matters worse, currency devaluation in the United Kingdom and Italy reduced purchasing power of guests from these countries.

Unanticipated cultural issues compounded the financial problems. Many in the French establishment were vocal critics of the park. For example the newspapers Le Figaro wrote, "Euro Disney is the very symbol of the process by which people's cultural standards are lowered and money becomes all conquering." When Walt Disney chairman Michael Eisner dismissed such criticism, he and others in his management team were accused of arrogance. Despite negative publicity in the local press, most of the guests were indeed from France. However their numbers were lower than expected; visitors from Great Britain and Germany taken together outnumbered the French. Thus although the hosts of the various attractions such as Buffalo Bills Wild West show were prepared to speak to the guests in French, on any given night the audience could predominately be from Spain of Germany.

Other embarrassing cross-cultural blunders occurred and were widely, often gleefully reported in the press. For Example, prior to opening the park, Disney insisted employees comply with a detailed written code regarding jewellery, clothing and other aspects of personal appearance. Women were expected to wear "appropriate undergarments" and keep their fingernails short. Disney defended its move, noting that similar codes were used in other parks. The goal was to ensure that guests received the kind of experience associated with the Disney name. Despite such statements, the French considered the code to be an insult to French culture, individualism and privacy.

There were other missteps as well. Disney had assumed that European parents would readily take their kids out of school in mid semester for short family sojourns to a Disney theme park as Americans often do. Also in designing hotel restaurants, Disney assumed that Europeans don't eat breakfast. The restaurants were scaled down as a result. In reality, most guests wanted to eat a morning meal of more than just a continental breakfast of coffee and pastry, resulting in long lines and disgruntled guests. A similar problem occurred inside the park at lunchtime. The US is a nation of snackers and the Disney team assumed that Europeans would be content to graze and then eat in shifts. It turned out that at 1pm each day the park's restaurants were inundated with hungry patrons. To make matters worse, the extension of Disney's standard no alcohol policy meant that wine was not to be available at Euro Disney. This, too, was deemed inappropriate in a country renowned for its production and consumption of wine.

A number of changes were made to remedy some of these problems and revitalise Euro Disney. Fitzpatrick left his position as head of Euro Disney and was replaced by a French national Philippe Bourguignon; the theme park's official name was changed to Disneyland Paris; a new program called challenge 1994 was implemented, with efficiency and economy as its hallmarks. To reduce costs, nearly 2000 full and part time employees were dismissed. The number of different souvenirs in the park's shop 30000 at first was cut in half. In the hotel restaurants, the selection of food items was reduced from 5400 to 2000. Reductions in admission prices after 5pm were introduced to encourage people to visit the park in the evening. Training programmes for Euro Disney cast members used the Mary Poppins character to promote a better service. In an attempt to increase revenue, new flexible job descriptions allowed employees to shift from selling tickets in the morning to selling souvenirs in the afternoon. On September 30th 1995, when Euro Disney closed its books for the financial year, the park had finally turned in a profit.

Questions

1. What issues were at the heart of Euro Disney's problems and why?

2 How could Disney have avoided some of the problems with the theme park