1 Disney in Europe

A Globalised Theme Park Market? The Case of Disney in Europe

Greg Richards

and

Bill Richards

Pre-publication version of Richards, G. and Richards, B. (1998) 'A globalised theme park

market? The case of Disney in Europe', in E. Laws, B. Faulkner and G. Moscardo (eds.)

Tourism Management: a Case Book. Routledge.

Abstract

Theme parks have become a global phenomenon, spreading rapidly from their origin in the

American amusement park to Europe, the Pacific Rim and beyond. Major transnational leisure

corporations such as Walt Disney and Warner Brothers have played a leading role in these

developments. Despite considerable success in their home markets, recent problems with

transplanting theme parks in Europe have underlined the importance of cultural factors in theme

park management. The problems of developing theme parks transnationally are illustrated through

an analysis of Disneyland Paris. The problems which Disney encountered in opening their new

European park are examined in terms of locational, cultural, managerial and financial terms. It is

argued that a basic lack of understanding of European consumer markets was a key cause of these

problems.

Background to the Authors

Greg Richards is Lecturer in Leisure Studies at Tilburg University in The Netherlands, and

Bill Richards is Senior Partner in Tourism Research and Marketing, a specialist tourism

2 Disney in Europe

consultancy with offices in London, Amsterdam and Vienna. Tourism Research and

Marketing is a member of the International Association of Amusement Parks and Attractions

(IAAPA) and has produced a series of reports on the UK and international theme park

markets.

Keywords: Theme Parks, Disney, Marketing, Globalisation, Culture

Introduction

The effects of globalisation, or the increasing integration of national economies, are

particularly evident in leisure and tourism. The global spread of homogeneous consumer

products has, for example, been labeled McDonaldization (Ritzer, 1993) and Disneyfication

(de Roux, 1994) . The growth of the theme park, and in particular the market leader in the

global theme park industry, Walt Disney, has made the Disney parks one of the most talked

about symbols of global cultural homogenisation. Boje (1995:997) has even been prompted to

pose the question who is better known, Jesus Christ or Micky Mouse?. As Altman

(1996:43) comments: Walt Disney occupies a special place in the global culture of the

second half of the twentieth century. With the advent of the mass media, Disney characters are

household figures all over the globe. The Disney phenomenon is particularly interesting from

a management perspective, not only because Disney itself is often praised as an example of

excellent management (Peters, 1985), but also because Disney parks are frequently cited as

examples of postmodern styles of tourism consumption (Bryman, 1993).

Disney is a highly successful global leisure corporation, which has expanded its activities

3 Disney in Europe

across a wide range of leisure markets, including theme parks, media, resorts, publishing and

merchandising. An important factor in the success of Disney has been the integrated nature of

its products, with synergies between film and television, between media and theme parks, and

between theme parks and hotel and resort operations. All of these products relate to leisure

markets, and as Gratton and Taylor (1988) suggest, it is knowledge of leisure markets which

are the essential management competence in the leisure industry. The worldwide expansion of

Disney in the field of media seem to suggest that Disney products have a universal appeal,

which can transcend national market boundaries and cultural distinctions (Altman, 1996).

Confidence of the Disney management in the global appeal of the Disney product was a key

factor in the decision to enter first the Japanese and then the European theme park markets.

While the media products have been successfully globalised, however, the opening of

EuroDisney in Paris provided a major test for the global strategy of Disney and the universal

appeal of its products. Would the Disney formula work in Europe? Could the Disney park,

the epitome of American culture, be transplanted into the cultural heart of France?

This chapter examines the globalisation of Disney theme parks, and assesses the managerial

problems involved in developing transnational tourism and leisure products. In particular, the

chapter analyses the role of market knowledge in the success of such products.

What is a Theme Park?

Although the literature relating to theme parks has blossomed in recent years, there is still

little agreement over what a theme park actually is. A wide range of definitions have been

proposed, but no single definition has been established. Some authors take a fairly wide view

4 Disney in Europe

of theme parks, arguing that theme parks are simply family entertainment complexes or

modern leisure parks developed from the basic fairground approach (Bruce et al 1986).

Other authors have taken a far narrower approach, insisting that a theme park must have a

clearly identifiable theme or themes (Mintel, 1990). If the narrow definition is used, however,

many parks which are commonly referred to as theme parks, would not qualify as such.

Disneyland, for example, in common with the other Disney parks, is based not on a single

theme, but on a series of loosely related themes in different worlds or areas of the park, and

in many other parks the theme’ is so generalised as to be almost invisible. The International

Association of Amusement Parks and Attractions (IAAPA) defines a theme park as a facility

with a definable and non changing location which has as its primary draw, hard rides, and

which also has a theme. For IAAPA, therefore, it is the presence of rides which is central to

the theme park concept, and the theming plays a supporting role. The problems of this

definition become obvious when you consider a park such as Legoland, now open in Denmark

and the UK, and soon to open in America. This park has a single theme, but lacks thrill rides,

and would therefore not fit IAPPAs definition of a theme park. Yet the appeal of Legoland is

very wide, and it can offer formidable competition in the family market to established theme

parks, such as Thorpe Park in the UK.

Our approach (Tourism Research and Marketing, 1993) has been to define a number of featu-

res of theme parks which seem to be common to most attractions identified as theme parks,

and which reflect the distinctive management parameters of a theme park operation.

Table 1: Features of a theme park.

5 Disney in Europe

The last point in Table 1 has recently been added to the definition (Tourism Research and

Marketing, 1996) to distinguish existing theme parks from the new generation of indoor

simulation-based entertainment centres, such as Sega World in London. Such developments

indicate how dynamic the theme park market is, and how definitions also have to remain

flexible to retain their usefulness.

6 Disney in Europe

The Global Theme Park Market

Theme parks evolved out of the amusement parks and funfairs which developed in North

America and Europe at the end of the 19th century. In his analysis of the European

development of theme parks, McEniff (1993) identifies theme parks as having roots in fixed

fairgrounds, pleasure gardens and seafront developments. In the United States, amusement

parks began to develop close to major conurbations during the 19th

century, and these

gradually developed into more spectacular and boisterous attractions. By the peak in the

amusement park boom in the 1920s the three amusement parks in Coney Island near New

York were attracting 20 million visitors a year (Weinstein, 1992).

The American amusement parks declined during the depression of the 1930s, and it was

during this time that Walt Disney developed his idea for a new type of family entertainment

complex. Disney’s ideas crystallised in the early 1950s, when he hit on the idea of opening a

park which would act as a backdrop for a TV series entitled Disneyland, and which would

also enable visitors to meet their favourite Disney characters in the flesh. In searching for

inspiration Disney visited many existing parks, including de Efteling in the Netherlands,

where Disney allegedly borrowed some of the fairy tale elements which were to be so

successful in Disneys parks. In 1955 Disney opened the first theme park in Anaheim,

California. Disneyland differed from its competitors in having a coherent theme, which for

Disney was based on his film characters. Disneyland was an immediate success, and attracted

4 million visitors in its first year. The success of Disney sparked a rash of imitators in North

America.

The 1960s and 1970s saw rapid growth in terms of theme park development and attendance,

7 Disney in Europe

and by 1980 theme and amusement parks in North America were attracting 125 million

visitors a year (Loverseed, 1994). The theme parks were successful because they met the need

for family entertainment in a market where travel was expanding rapidly. Disney expanded its

theme park operations with the opening of Disney World (1971), EPCOT (1982) and MGM

Studios (1989), all based in the 6000 acres of Florida swampland that Disney had bought for

$50 an acre.

In Europe, the theme park boom began much later, with the major growth occurring in the

1980s. Early centres of theme park development were the Benelux countries and Germany,

where a number of amusement parks had opened in the 1960s and 1970s. These parks

gradually developed into fully-fledged theme parks. UK theme park development started in

the late 1970s, while France only joined the rush in the 1980s.

Although some smaller amusement parks opened in Asia in the 1970s, major theme park

development in Asia and Australia only began to take off in the 1980s. Asia is now the fastest

growing area of theme park development, with growth rates in the early 1990s of up to 20% a

year.

The theme park market exhibits a similar pattern to many other global markets, with develop-

ments originating in the core markets of North American and Europe, and gradually sprea-

ding to peripheral regions. The growth of the market in recent years has been characterised by

increasing geographic spread and physical scale of facilities, increasing professionalisation

and the growing application and sophistication of technology. The level of investment

required to develop new theme parks has consequently risen. At Universal Studios in

8 Disney in Europe

Hollywood, for example, MCA recently invested $75 million in the Back to Future ride,

and $110 million in recreating Jurassic Park.

As the theme park market has matured, a growing proportion of the parks have been incorpo-

rated into major theme park companies and entertainment corporations, such as Disney,

Warner Brothers, MCA, Paramount, Anhauser Busch, Six Flags, the Tussaud Group and

Walibi. As competition has increased in their own domestic markets, these operators have

looked to international markets to provide the necessary business growth. Disney were the

first major corporation to expand abroad with the opening of Tokyo Disneyland in 1983.

Although the park was not owned by Disney, it was an almost complete copy of Disneyland in

California, with very few concessions to the Japanese market. As a PR executive for Tokyo

Disneyland commented: we really tried to avoid creating a Japanese version of Disneyland.

We wanted the Japanese visitors to feel they were taking a foreign vacation by coming here,

and to us, Disneyland represents the best America has to offer. Tokyo Disneyland, like the

original, was an instant success, attracting 10 million visitors in its first year of operation, and

it is now the most popular theme park in the world, with almost 16 million visitors in 1995.

The success of Tokyo Disneyland, and the growth potential identified in the relatively

immature European market persuaded Disney that there would be a market for a Disney park

in Europe. The idea of expanding the theme park operations abroad fitted well with the

aggressively expansive company policy during the early 1980s. Over 200 European locations

were researched, before a site at Marne la Vallee, near Paris was chosen.

The Plan

9 Disney in Europe

The contracts for the construction of EuroDisney at Marne la Vallee, 32 km east of Paris, were

signed in 1987. The choice of Paris as a site for the Disney park had been clinched by

financial incentives from the French government in the form of grants, tax breaks and

infrastructure improvements, which amounted to a quarter of the projected development costs

of Ffr 22 billion ($4.2 billion). Having granted tax breaks to Disney, the French government

was actually forced to lower the rate of value added tax for all parks from 18% to 7%. In

return for these advantages, Disney promised to make EuroDisney the only Disney park in

Europe for at least five years, to make French the principal language in the park, and to award

the bulk of building and equipment work to French and European companies.

The overall development was planned to cover almost 2000 hectares, which would be develo-

ped in three stages. In the first stage the main elements would be the Magic Kingdom theme

park, a resort complex with six hotels offering a total of 5,200 rooms, and assorted

commercial and residential developments. The second phase would feature a park similar to

the MGM Studios complex at Disney World, in Florida. Forecast to cost Ffr 18 billion ($3.38

billion), the second park would generate a further 8 million visitors a year when it opened in

1995. A third park, modeled on EPCOT, was scheduled to open in 2000, accompanied by a

convention centre, a water park and 13,000 additional hotel rooms.

In order to finance the development, EuroDisney was launched on the stock market in 1989,

with the aim of raising Ffr 5 billion ($950 million) million. In selling the park to investors,

much play was made of Disneys enviable track record, and its successful transplant of the

Disney formula to Japan. The prospectus forecast that the park would make pre-tax profits of

10 Disney in Europe

Ffr 200 million ($38 million) in its first year of operation, rising to Ffr1500 million ($300

million) in 1996 when the second stage of the development would be complete. Shares in the

French holding company, EuroDisney SCA were launched at 70Ffr ($13), and quickly rose in

value to over $18 by mid 1990. A peak of $26 per share was reached in early 1992, just

before the opening of the park (Tourism Research and Marketing, 1993).

The forecast attendance for the first year of operation was 11 million visitors, about 50% of

whom were expected to come from France. These estimates were regarded as conservative by

some observers, who expected the visitor numbers to be closer to Disneys optimistic

scenario of 15 million visitors a year (Table 2). The hotels and catering operations were

expected to contribute 50% of total turnover for the park, the same ratio as in the American

parks. The hotels were expected to have an average 85% room occupancy, also similar to that

achieved in Disneys American resorts.

Table 2: Visitor attendance at Disneyland Paris

The Reality

Fairly soon after the extravagant opening in April 1992, the projections which had been made

for the operational and financial performance of the park began to be questioned. It rapidly

became clear that not only would the park fail to meet even its pessimistic visitor targets, but

11 Disney in Europe

that it would sustain serious financial losses. By 1993 EuroDisneys debts had mounted to

over Ffr20 billion ($3.8 billion), with rising interest charges and disappointing revenu figures

contributing to a loss of over Ffr 300 million ($60 million) in the first year of operation, rising

to over Ffr 5 billion ($ 1 billion) in the second year. By late 1993 the share price had reached a

low of $6 (Tourism Research and Marketing, 1994).

A number of other assumptions in the original plan also proved false. Only 30% of the visitors

in the first year were French. There was also a steep fall in foreign visitors after the first year,

as the novelty factor began to wear off. UK visitors dropped from 600,000 in 1992 to just over

300,000 in 1993. The hotels performed far worse than had been expected. In the first 3 months

the average occupancy level was only 70%, already well below the forecast 80%, and during

the winter months occupancy levels fell to disastrous levels. The average room occupancy for

the first year of operation was only 55%. Catering and merchandising sales were also disap-

pointing, with average spend levels being way below those of Disneys American parks.

Disney had expected that merchandise sales would mirror those in America, with an emphasis

on high value, high quality items. European spending patterns proved to be far more

downmarket.

Disney also misunderstood the importance of bus and coach traffic in the European tourism

market. No facilities were provided for coach drivers, which is a major consideration at most

other large European parks. Disney expected most public transport business to come via the

TGV and the Channel Tunnel, not understanding that rail is relatively expensive for the theme

park public.

12 Disney in Europe

Tried and trusted Disney management strategies also failed to translate well to the French

situation. The French cast members met the show metaphor with cynicism and

resistance according to Boje (1995). There was also friction over the American style of

management and the strict Disney dress code. As a result labour turnover up to August 1993

was about 50%, over twice the level achieved at Disney’s American parks (Bryman, 1993).

The Recovery

Shortly after the opening of the park, Disney faced significant problems in terms of falling

visitor numbers, poor image and publicity, and most seriously, rapidly rising debts. All of

these problems required swift and decisive action from the company.

The most significant changes were financial. In order to inject more equity into the company,

a rights issue of almost 600 million EuroDisney shares at Ffr10 ($2)each was made, which

raised almost Ffr6 billion ($1.2 billion). Almost half the shares were taken up by the Walt

Disney parent company, increasing their financial stake in EuroDisney. A moratorium on

interest charges was arranged with the banks, reducing the interest burden. The Walt Disney

parent company agreed to waive their royalty fees from 1993 to 1998, and to reduce the

royalty fees by half from 1998 to 2003, and similar reductions were also made in the

management fee. The parent company therefore injected significant new capital into

EuroDisney, reducing the debt burden, and by reducing their fees, they also eased the

operational costs of the park. Disney also found an injection of capital from Saudi Prince Al-

Waleed, who agreed to take a significant stake in the company. Prince Al-Waleed has invested

heavily in hotels and entertainment, tending to buy into failing businesses when the price is

13 Disney in Europe

low. As with many of his other adventures, the Princes Disney adventure also brought about

the required confidence boost, followed by the desired boost to the share price.

In order to try and improve the financial position of the company, a number of cost-cutting

measures were also instigated. Staff numbers were cut from 14,000 to 12,000 in the first win-

ter of operation, and by 1993 winter staff levels had been further reduced to 10,000 (Tourism

Research and Marketing, 1993). Hotel rates were reduced in 1993 by 30% during the winter.

Room occupancies improved to over 60% in mid 1994, and rose to just under 80% in

1995/96. Much of the improvement was generated by promoting the hotels as corporate

conference venues, which in spite of the entertainment connections of the venue has been

quite successful. In spite of the improvement in occupancies, and the closure of one of the

hotels, the hotels are generating far less revenue than Disney had forecast even in its

pessimistic forecasts.

A further problem experienced in Paris was the fact that the park opened with too few attracti-

ons. The Paris park had only 15 major attractions in 1992, compared with 45 in the California

version. New attractions have therefore been developed, including Space Mountain, opened in

1995 at a cost of Ffr 400 million ($80 million). Based on a Jules Vernes story, this white

knuckle ride catapults visitors to the height of a five story building in less than two seconds,

with an acceleration of 1.3 g.

In a turnaround from the initial catering policy, sit down restaurants were transformed into fast

food outlets. The increased flexibility of the catering outlets allowed Disney to deal with two

problems. First, the habit of the European visitors of wanting to eat at the same time, instead

14 Disney in Europe

of grazing throughout the day like many Americans. Secondly the tendency for food

purchase decisions to be dictated by children, who were likely to influence their parents to

visit the nearest food outlet, rather than making a decision based on the quality or type of food

available. In a significant departure from Disney policy, alcohol was also introduced at some

outlets, in order to cater for the French insistence on drinking with their meals.

A further departure from company policy was made with the introduction of differential

admission prices at different times of year. The initial adult admission price of Ffr225 ($43)

was over twice the price of Alton Towers, the most expensive theme park in the UK (see

Figure 1), and markedly higher than the Disney parks in America. By 1994, although the high

season adult price was raised to Ffr250, a shoulder price of Ffr225 and a low season price of

Ffr175 brought the admission price significantly closer to the competition. The lower prices

were accompanied by a change in the name of the park from EuroDisney to Disneyland Paris.

It was claimed that the prefix Euro was seen in a bad light at a time of political unrest over

the unification of Europe. There was also a significant change in the management structure,

with a predominantly American team being replaced by a largely French group headed by

Philippe Bourguinon.

Figure 1: A comparison of EuroDisney admission prices with those of other European

theme parks, 1992 (source: Tourism Research and Marketing, 1992).

These changes had a marked effect on the operation of the park. Visitor numbers recovered

substantially in 1995 as it became clear that the park would stay open, and the product was

made more attractive through the opening of new attractions and lowering of prices. Attendan-

15 Disney in Europe

ces increased from less than 9 million in 1994/5 to 10.7 million in 1995/6, just short of the

parks original target of 11 million visitors. The improved performance of the park was

rapidly reflected in better financial figures. Following substantial operating losses in the first

two years of operation, the park began to make an operating profit in the 1994/95 financial

year, and profits had risen to Ffr 200 million ($40 million) by the end of 1995/96.

The Recriminations

What were the causes of this apparently disastrous performance? Lower than expected visitor

numbers clearly contributed to the problems of EuroDisney, but given the fact that the first

year attendance was only 5% less than forecast, this is not sufficient to explain the scale of the

problems experienced. A number of explanations have been offered for Disneys failure.

The most common explanations fall into four categories: locational, cultural, managerial and

financial.

Locational

The simplist explanation advanced is the fact that Paris does not have a suitable climate for

the operation of a year-round theme park. In the original share prospectus, only average annual

temperatures were given, providing a somewhat rosy picture of the Parisian winter. In fact, the

operation of Disneyland Paris has been highly seasonal, with 70% of visitors coming in the

summer months (Taylor and Stevens, 1996). Winter attendances have been below expectati-

ons, in spite of the fact that the under cover facilities were judged by consumers to be better

than those of comparable parks in the UK (Tourism Research and Marketing, 1994). As

Disney’s CEO Michael Eisner himself remarked when asked if Paris was the right location:

16 Disney in Europe

We feel we found the perfect place. It is within 20 minutes of both De Gaulle

Airport and the mass transit train. It is only when, on December 17 standing in the

snow, that one thinks: maybe Spain would be nicer? Maybe Greece would be

nicer? (Quoted in Boje, 1995:1019).

It has also been suggested that the hotels at Disneyland have suffered from being too close to

Paris, although the recovery of hotel occupancies following the price cuts seems to refute this.

Cultural

Much of the criticism leveled at Disney has centred on the American culture of the company

and its products. As Walt Disney himself said, Disneyland will be based upon and dedicated

to the ideals, the dreams and hard facts that have created America. And it will be uniquely

equipped to dramatize these dreams and facts and send them forth as a source of courage and

inspiration to all the world. There were many in France who did not appreciate having

Disneyland as a source of inspiration, including Culture Minister Jack Lang, who denounced

Eurodisney as a Cultural Chernobyl. Altman (1996) argues that while Disney has spent

much time and effort stressing first the European and later the French distinctiveness of

the park, Disneyland Paris is actually a much more faithful reproduction of the original

Disneyland than the Tokyo park. In a France which considers itself to be under American

cultural siege, Disney became symbolic of American cultural imperialism, which added to

the resistance to the park from the French consumer.

17 Disney in Europe

Disney have tried to deflect criticism of the companys image as a bridgehead of American

imperialism by introducing French culture in a number of areas of the operation. The

pronunciation of Micky Mouse was changed to Meekay, and the menus were altered to

better meet French tastes. Disney also tried to deflect criticism about its alleged cultural

imperialism by promoting French cinema in the United States (van t Zelfde, 1996). In spite

of these apparent concessions to French culture, French visitors still make up only 40% of all

visitors, much lower than the original forecasts had suggested.

Cultural miscalculations also extended to a lack of understanding of the European consumer.

As van t Zelfde (1996:94) explains:

Disney made some mistakes as far as their estimation of the European public is concerned.

Europeans turned out to be more frugal than American theme park visitors, and far less

people were prepared to stay in the adjoining hotels than had been hoped. European also

caused problems for the park because they insisted at eating around midday, rather than

grazing all through their visit as many Americans do. The French visitors in particular

were dismayed to find that there was no alcohol available in the park.

Managerial

Disney started out with what might be identified as an ethnocentric (Go and Pine, 1995)

attitude towards managing EuroDisney. The original management team was 90% American.

According to McGrath and MacMillan (1995), Disney management fell into the trap of not

examining the assumptions they had made in planning the new park. As they point out, new

18 Disney in Europe

ventures are undertaken with a high ratio of assumption to knowledge. With ongoing busines-

ses, one expects the ratio to be the exact opposite. Because assumptions about the unknown

generally turn out to be wrong, new ventures inevitably experience deviations - often huge

ones - from their original planned targets. Disney made a range of huge assumptions about

the performance of EuroDisney, including attendance levels, occupancy levels at the hotels,

sales of merchandise and pricing, most of which turned out to be wrong. Many of these faulty

assumptions can be attributed to a lack of attention being paid to the cultural differences

between European and American consumers, but different styles of management also caused

problems for Disney.

The problems encountered by Disney in Paris stimulated some major managerial changes,

including the appointment of Frenchman Phillipe Bourguignon as Chairman . There was a

shift from an ethnocentric to a more regiocentric style of management, as the largely

American management team was replaced by a largely European one, with almost half the

members coming from France and only a third from America. The basic argument was that

the French managers were closer to the European consumer and the European employees of

EuroDisney, and therefore understood the context within which the park had to function far

better. As Bourguignon himself said soon after his appointment

The blame for the calamitous first year is on its excessively pro-American stance.

Although most of our visitors enjoy an authentically American atmosphere, it was just a

little too much for them to have to celebrate Halloween, which is why we have decided

to place the accent on events that will seem more familiar to Europeans. (Quoted in

Tourism Research and Marketing, 1993:34).

19 Disney in Europe

In an attempt to underline its cultural change, Disney decided to admit their mistakes with a

cathartic zeal. Admissions of arrogance, an excessively pro-American stance, (doing) too

much too soon.... have been carefully delivered with convincing sincerity (Tourism Research

and Marketing, 1995:52). Such past mistakes could usefully be blamed on the old

management, providing a useful contrast with the changes brought about by the new French

management.

20 Disney in Europe

Financial

In the view of Taylor and Stevens (1996), locational and cultural factors are inadequate to

explain the performance of Disneyland Paris. They argue that the basic mistake lies in the

financial structure of the EuroDisney operation, and its relationship to the parent Walt Disney

company. Walt Disney took a 100% interest in the management company, but only a 49%

share of the operating company. In addition, Disney only paid Ffr10 ($2) per share for their

interest in EuroDisney, while the other shareholders were asked to pay Ffr70 ($13) per share.

Walt Disney therefore gained a 49% share in EuroDisney by providing only 11% of the

capital. In addition, Walt Disney was to be paid a management fee and royalties by

EuroDisney, which would come directly out of operating expenses. In other words, the Walt

Disney company not only had little to lose financially if things went wrong, but this deal also

guaranteed the parent company income even if EuroDisney operated at a loss.

These conditions, which were extremely favourably for the Walt Disney Corporation, were

extremely unfavourable for EuroDisney investors. The company was under-capitalised, and

saddled with large royalty payments to the parent company and faced with lower than

expected revenues. Not only did the financing structure work against EuroDisney, but the

economic climate also turned against them. Poor economic conditions in the early 1990s

meant that the profits which Disney had envisaged from land sales and commercial lettings

around the park did not materialise.

21 Disney in Europe

Evaluating Disneyland Paris

Of the various explanations advanced for the failures of Disneyland Paris, which is correct?

Although it is tempting to target locational, cultural, managerial or financial factors as the

single cause of Disneys problems, the truth is likely to involve a mixture of these

explanations. As McGrath and MacMillan (1995) point out, Disney displayed a general

arrogance in assuming that the strategies employed in their American operations would

translate effortlessly into a European context. Disney had arguably been lulled into a false

sense of security by the success of Tokyo Disneyland, which in spite of the very different

cultural context was able to function much like its American counterparts (van Maanen,

1992). Secure in the knowledge that they could not fail, Disney proceeded to develop

Disneyland Paris without a full understanding of the European market or the European theme

park consumer.

This lack of market knowledge proved costly, as the Disney management were unable to

anticipate the problems of seasonality and hotel occupancy caused by the Pairs location, or the

fierce cultural resistance to the Disney management style. Most crucially perhaps, they failed

to appreciate that Europe is still composed of a series of individual national markets, which in

spite of some convergence in the wake of the Single Market, still exhibit very different

consumption patterns. The vast differences between the forecast and actual visitor origin

profile for the park underline this problem. The mis-reading of the European consumer by

Disney tends to suggest that, as Gratton and Taylor (1988) suggest, it is market knowledge

which is crucial in leisure management. Knowledge of leisure consumption seems not to

transfer faultlessly from one world region to another, however.

22 Disney in Europe

Although Taylor and Stevens (1996) contend that the financial structure adopted by Disney to

develop Disneyland Paris was the major cause of its problems, if Disney had got its market

assessment right, the financial problems may never have surfaced. What the financial structure

did do, however, was to substantially lower the risks involved in the Disney investment. This

arguably compounded the problem of limited market knowledge, since the lower risk level

may also have reduced the care exercised in assessing this vital aspect of the development.

One also needs to be critical about the extent to which Disney failed in the case of Disneyland

Paris. Although the company did not meet its financial targets, its achievements have still

been considerable. The park added about 30% to the volume of the European theme park

market almost overnight (Tourism Research and Marketing 1993). The park was completed

on time, to a very tight schedule. It is now the biggest tourist attraction in Europe, and the only

attraction which currently draws a European visitor market, rather than a regional market

with a few overseas visitors as an added extra.

Although the operational and organisational qualities so much admired by Peters (1985) are

clearly still present, it is the marketing expertise which seems to have let Disney down

particularly badly in Paris. Gratton and Taylor (1988) have pointed out that knowledge of

markets is the key competence which leisure managers possess. The lessons from the Disney

case may indicate that there are some aspects of leisure markets which are not yet

transnational. Differences in the time/space relationships between North America and Europe

play a significant role in consumer demand. In particular, the greater availability of holiday

time for Europeans is arguably a cause of differing consumer behaviour as far as theme park

23 Disney in Europe

visiting is concerned. For Americans, with 10-15 days holiday a year, a visit to a theme park is

often regarded as a holiday, rather than a day trip. Europeans, with 5 or 6 weeks holiday, can

afford to take a three week main holiday and a shorter second holiday, and still have days left

to visit theme parks. Theme parks in European are therefore seen as day trip rather than

holiday destinations. US theme parks therefore generate a much higher level of overnight

stays, and consequently hotel revenue than their European counterparts (Richards, 1996).

Altman (1996:55)summarises:

in crossing borders one should watch the basic assumptions and be careful with business

objectives. Markets are perhaps becoming global and business may be converging, but

there are sufficient localized intervening variables to make things go wrong. Relying on

financial, economic or marketing analysis will not do: one needs to pay attention to societal

and cultural issues as well.

What this case study clearly illustrates is that managerial problems can have a range of

different causes, and they can also be analysed in a range of different ways. In many cases, a

purely managerial or economic analysis will be insufficient, since the social and cultural

context within which the organisation operates will be largely ignored. Recent experience of

theme park development seems to suggest that the chances of success for transnational

development are greatest in those regions where the cultural distance between the host culture

and the home culture of theme park developer is smallest. The experience of Disney in France

indicates that a truly global theme park market may not yet exist, although the speed with

which Disney has responded to its initial problems may mean that the birth of the global

24 Disney in Europe

theme park company is not so far away.

References

Altman, Y. (1996) A theme park in a cultural straightjacket: the case of Disneyland Paris,

France. Managing Leisure, 1, 43-56.

Boje, D.M. (1995) Stories of the storytelling organization: a postmodern analysis of Disney as

Tamara-land. Academy of Management Journal, 38, 997-1035.

Bruce, C., Rhodes, J., Venner, S. and Warwick, N. (1986) Time out on a theme park.

Polytechnic of North London, 21pp.

Bryman, A. (1993) Disney and His Worlds. Routledge, London.

Gratton, C. and Taylor, P. (1988) Economics of Leisure Services Management. Longman,

Harlow.

McEniff, J. (1993) Theme parks in Europe. Travel and Tourism Analyst, September, 52-73.

McGrath, R.G. and MacMillan, I.C. (1995) Discovery driven planning. Harvard Business

Review, July-August, 44-54.

Mintel (1990) Theme Parks. Leisure Intelligence, Volume 1.

25 Disney in Europe

Loverseed, H. (1994) Theme parks in America. Travel and Tourism Analyst, June, 51-63.

Peters, T. and Austin, N.(1985) A Passion for Excellence. Random House, New York.

Ritzer, G. (1993) The McDonaldization of Society. Pine Forge, Thousand Oaks.

de Roux, E. (1994) Eviter la Disneylandisation. Le Monde, 23 May 1994.

Tourism Research and Marketing (Various years) Theme Parks: UK and International Mar-

kets. Tourism Research and Marketing, London.

Richards, G. (1996) Time for a holiday? Rechtshulp 6/7, 2-10.

Taylor, R. and Stevens, T. (1996) An American adventure in Europe: an analysis of the

performance of Euro Disneyland (1992-1994). Managing Leisure, 1, 28-42.

VanMaanen, J. (1992) Displacing Disney: some notes on the flow of culture. Qualitative

Sociology, 15, 5-35.

Van t Zelfde (1996) Enviromentality at Disneyland Paris. In Bramwell, B., Henry, I.,

Jackson, G., Goytia, A., Richards, G. And van der Straaten, J. (eds) Sustainable Tourism

Management: Principles and Practice. Tilburg University Press, Tilburg, 87-102.

Weinstein, R.M. (1992) Disneyland and Coney Island: reflections on the evolution of the

26 Disney in Europe

modern amusement park. Journal of Popular Culture, 26, 131-164.