News / Corporate

Increased revenues from the Parks, Hotels and Disney Village failed to outweigh the extra investment pumped into maintaining those assets during the past year, Disneyland Paris has recorded in its Fiscal Year 2011 Results, leading to a net loss of €64 million. Though these Resort operating revenues rose by €60m to €1,275.2m, they couldn’t make up for an increase of €42.3m in direct operating costs to pull Euro Disney SCA, the operating group behind the resort, out of a net loss. As CEO Philippe Gas comments, “This past year we further invested in enhancing the overall guest experience, by introducing longer park operating hours, adding new entertainment and improving the appearance of our guest facing assets. Although these investments increase our costs, they are critical to maintain our long-term attractiveness as Europe’s number one tourist destination.”

Numbers are made to look worse, year-on-year, by the exceptional €47m sale of the land beneath the Val d’Europe shopping centre last year, which also affected Third Quarter 2011 results. Had this not taken place, rather than losing “just” €45.2m in 2010 the company would have seen a €92.2m net loss last year. Considering the heavy operational investment leading up to the 20th Anniversary and the lack of new attractions, the resort perhaps didn’t fare too badly in 2011. In fact, the figures which remain strikingly positive are those for visitor numbers. Park attendance rose to a new record of 15.6 million visitors, while hotel room occupancy grew back up to 87.1% from 85.4% last year (it was at 87.3% in 2009). Average spending per room also increased by around €10 to €219.74, no mean feat given the economic climate across Europe and continuous special offers.

But, as ever, the challenge for Disneyland Paris remains turning these strong numbers into a profit on the bottom line. €123 million in borrowings was reported to have been paid back this year, but if the resort can’t turn a profit on 15.6 million visitors, will it ever climb out of its estimated €2 billion debt? Was the heavy investment in refurbishments this year a one-off, or just the level of rolling investment the resort should be putting into its parks and resort all the time? And if visitor numbers rise again for the 20th Anniversary, will that translate into a profit, or will grand plans for the new nighttime spectacular (etc) — and the longer opening hours required to present it — outweigh the gains yet again?

Speaking of which, the report finally confirms: “In April 2012, Disneyland Paris will launch the celebrations of its 20th Anniversary. A number of brand new experiences await guests, including Dreams, a night-time show with classic Disney storytelling and the latest technical special effects.”

Perhaps the greatest special effect Dreams can pull next year is that, come November, Euro Disney SCA inches into a profit. That’ll take more than faith, trust and pixie dust.

FULL REPORT Euro Disney SCA Fiscal Year 2011 Results (PDF)

After a 5-year relationship between 2002 and 2007, during which time the company sponsored Moteurs… Action! Stunt Show Spectacular, German car manufacturer Opel has returned to Disneyland Paris as its official vehicle partner. There’s no comment yet whether the General Motors subsidiary could return to sponsor the Backlot stunt show, but it will certainly make its presence known across the resort — if only for backstage Cast Members. As part of the two-year agreement announced on 7th November, Opel France will replace the resort’s entire fleet of cars with brand new, more environmentally-friendly models such as the Opel Movano, Opel Vivaro and Opel Combo. One vehicle whose presence won’t be felt quite so much is the striking all-electric Opel Ampera (the European version of the Chevrolet Volt), a fleet of which Disneyland Paris will take delivery of for backstage duties in January 2012 — one of the first companies in Europe to do so. The entire fleet will also be fitted with Opel’s latest CO² reduction technologies “ecoFLEX”and “Start/Stop”.

The resort’s previous vehicle partner, Ford, ended its three-year partnership in early 2010. During that time it was the official sponsor of Autopia, helping some new investment at the Discoveryland attraction with a new marquee and photo location. Since Opel has only signed for two years, a sponsorship of either motor-based attraction seems unlikely. Now, Disneyland Paris will ironically be replacing its fleet of backstage support vehicles with electric cars while this “highway of the future” continues to belch out petrol fumes. Only Hong Kong Disneyland currently operates electric cars on the attraction.

VIA Disneyland Paris Corporate (PDF)

For once it was good news all-round as Disneyland Paris operating group Euro Disney SCA published its Third Quarter 2011 revenues announcement earlier this month. A 5% increase in park attendance, 4% increase in guest spending and 1.3 percentage point increase in hotel occupancy boosted the Resort revenues by almost 7% compared to the same period last year. Though the group chose to lead with this positive improvement in its core business, it’s important to note that overall revenues for the quarter actually decreased by €28.7m (7.7%) because figures for the period in 2010 included the exceptional €47m sale of the land on which the Val d’Europe shopping mall is located.

Nevertheless, the full report paints a positive picture for the parks and hotels as we head towards the financial year-end. Visitor fluctuations continue, with fewer visitors from France now reported against more from the United Kingdom and Italy. This might appear to show that steady and widespread promotional campaigns for the resort in the British Isles have paid dividends with extra bookings following several years of decline for the cross-Channel market. The resort notably partnered with Walt Disney World for its first joint television advertising earlier this year and has had a strong showing with it’s Magical Moments Festival promotions despite the lack of any true new attractions this year. Somewhat desperately, both the obligatory comment from CEO Philippe Gas and “update on recent events” quote the return of The Tarzan Encounter as a  key recent draw — a show which returned for just three months and originally premiered over ten years ago.

Still, if they’re posting attendance boosts in a year as anodyne as this, when half of Disneyland Park has been under scaffolding for refurbishment (which would have been a much more welcome thing to promote to investors) it’s looking good for the 20th…

VIA Euro Disney SCA (PDF)

You might never have realised it, but that Chip ‘n’ Dale’s Fish ‘n’ Chips you ate at Café Mickey wasn’t necessarily a “Disney” meal at all. Along with most of the other Disney Village restaurants, Café Mickey is actually managed and operated under contract by Groupe Flo, a large French catering company. Or at least, for now it is — member Mr Freddy on Disney Central Plaza Forum has shared the interesting news that Café Mickey, along with Annette’s Diner and presumably The Steakhouse, all part of Groupe Flo’s “Euro-Gastronomie” subsidiary, will come under full Disney control when the current contract ends on 1st October 2011. Citing the fact that Disney now has more experience in restaurant management in Paris and can probably make some considerable savings (it is said to pay Groupe Flo €10m a year for the contract), another member suggests the handover could even mean each of the restaurants closing for between a week and a full month at the end of the this year, ready to become fully Disney-operated establishments from January. The change won’t affect Rainforest Cafe or King Ludwig’s Castle, which are managed under separate contracts to Groupe Flo and will likely always be separate to Disney.

With Disney able to completely control the management and operation of the venues, rather than just make changes at arms-length, it will be interesting to see what differences, if any, we might spot when the changeover takes place. Looking at the bigger picture, this move may even tie in with promised developments for the Village over the next ten years, as Disneyland Paris slowly continues to improve the offering and give it more of a “Disney” stamp with projects like World of Disney.

And if DLRP Today had been handed the contract instead? Well, besides some poorly-cooked Fantasia Mushrooms, for starters you’d at least see that tacky blue tent add-on to Café Mickey ripped off and a proper extension built onto the building instead.

VIA pussinboots (magicforum), Mr Freddy (Disney Central Plaza)

Eighteen months into his role as chairman of Walt Disney Parks and Resorts, Tom Staggs has announced a big reorganisation for the department that appears to bring Disneyland Paris more tightly under Disney’s managerial wing. The former President of Worldwide Operations position has been eliminated following the retirement of Al Weiss; in its place a new expanded role for Walt Disney World President Meg Crofton, pictured above, who will now not only oversee the resort and four parks in Florida but serve in a new position as President of Operations in the US and France. Reporting to Meg will be George Kalogridis of Disneyland Resort in Anaheim, California (and previously chief operating officer in Paris) and our own Philippe Gas of Euro Disney SCA, the group which operates Disneyland Paris. Meanwhile, previous Euro Disney CEO Karl Holz will add Disney Vacation Club to his current role overseeing Disney Cruise Line and Adventures by Disney.

In a memo sent on Tuesday Tom Staggs writes,

“Meg’s strong leadership abilities and broad experience make her the perfect person to lead resort operations in our established markets in the United States and Europe. Meg will report directly to me and become a member of my executive committee, allowing us to continue the great work of sharing best practices and leveraging our operational expertise across our properties. Meg understands and respects the unique heritage and characteristics of each of our theme park resort locations, which gives me great confidence in her ability to fulfill this role while preserving and enhancing what makes each of our properties so special in their own right.”

Whilst crossovers between Disneyland Paris and the American resorts have been noticeably increasing in recent years (the UK even had a joint Paris/Florida TV campaign earlier this year), this appears to be the firmest move yet in bringing their trans-Atlantic management closer. In fact, the Orlando Sentinel reports that it is all part of an initiative known as “One Disney”, which has been seeking to merge functions and responsibilities between resorts. What do you think — Is it a good thing for Disneyland Paris to be brought closer to the American resorts? And is Meg the right person to do it?

VIA The Disney Blog, Progress City, U.S.A.

When you’ve got around €2 billion in debt weighing you down, paying off €45.4 million might seem a drop in the ocean. But for Euro Disney SCA, the operating group behind Disneyland Paris, it’s another slow but sure step to financial stability. The company published its First Half 2011 results this morning, for the six months up to 31st March 2011 and had generally good news to report. Total revenues increased 8% compared to the period last year, maintaining the 8% rise of the First Quarter, to €559 million. A net loss of €99 million is a €15 million drop from last year, although the company points out that these results may be below what could be expected due to different Easter holiday dates this year. In attendance numbers, the resort has almost recovered the terrible drops of last year’s first half with theme park attendance up 5% to 6.9 million. In 2010, this figure fell 8% to 6.5 million, from a high of 7.1 million in 2009 (coming off the back of the extended 15th Anniversary). More good news for the Disney Hotels, too, as room occupancy rose back up a modest 3.8 percentage points to 83.4%. In 2010, it dropped a huge 6.2 percentage points to 79.6%, so the resort still has some way to climb to the 85.8% of first half 2009 but isn’t doing badly at all.

The debt repayment of €45.4 million in the first half, which was consistent with repayments during the same period last year, will be followed by €77.5 million of repayments in the next six months. The company is also negotiating its investment budgets for the next two financial years, something that we may be able to directly see in the parks. After deferring a €45.2 million payment to The Walt Disney Company for royalties and management fees in 2010, its investment budget for 2011 was set at just 3% of “the prior fiscal year’s adjusted consolidated revenues”. Thankfully, the company obtained lenders’ agreement on 31st March to increase the recurring annual investment budget from €37 million to €81 million for fiscal year 2011, and up to 5% of the prior fiscal year’s adjusted consolidated revenues for fiscal year 2012. That sounds like good news, but it still comes on the condition that the company meet its financial performance requirements for this year, or else a call to The Walt Disney Company and further delays for new attractions might be all that we see.

VIA Euro Disney SCA (PDF)

Les Villages Nature de Val d’Europe might not have the most catchy name, particularly for non-French speakers, but the project’s new website has just launched at a more succinct www.villagesnature.com. This is the 50/50 development between Euro Disney and Pierre & Vacances Center Parcs, a huge new leisure and accommodation destination planned to be built on land surrounding Disney’s existing Davy Crockett Ranch a few kilometres south-east of the parks. A first phase of 1,730 accommodation units (710 apartments surrounding the main lake, 1,020 individual cottages further south) would also see the creation of a unique geothermal heated lagoon and the largest water park in Europe, along with restaurants, shops and other amenities. This new website seeks to collect questions and opinions from those affected in the local area, with a budget  of €700 million “subject to public debate”. Of that, €430 million would be for accommodation units, to be leased to individual investors for periods of 9 years, whilst €260 million would be for the water park, leisure facilities, shops and restaurants.

The results of this public inquiry will be known in August, when the authorities are hoped to give the go-ahead. Marketing would then begin towards the end of this year with construction starting in the first quarter of 2013 for a first phase opening date of first quarter 2015. Don’t think this project will be a self-contained expansion, either — we’ll certainly see the effects back up at the main esplanade. The Transports page confirms some big changes, such as the long-awaited construction of a southern entrance to the TGV platforms, opposite the new World of Disney, allowing travellers from Val d’Europe and the south to access the high speed rail station without crossing the busy park entrances. Not only that, but a southern RER entrance is now also planned, and a southern bus station to be positioned in front of the Disney Village parking building.

Even more dramatic, Disneyland Paris would no longer be the end of the RER A line, with a plan to extend the line to join up with RER Line E at the town of Esbly to the north-east — currently very close but hard to access from the resort. Sadly for international travellers there’s no such rail extension in the pipeline up to Charles-de-Gaulle Airport (which would surely be both profitable with tourists and hugely useful for locals, better than using the TGV for such a short hop), but an “intensification of shuttle services”. The envisaged tramway system also appears to have hit a buffer-stop when Val d’Europe lost its bid for the French Open tennis tournament, meaning the super-eco-friendly project will probably be relying on shuttle buses. Although a stop at least looks to be provided for Davy Crockett Ranch, which will remain separate from the project, allowing trappers to leave their cars behind to get to the parks. Finally, the road network would be improved — in particular with an entrance to the Villages Nature themselves branching south from the main Exit 14 of the A4 autoroute, visible in the map above.

Architecturally, many of the buildings revealed so far are certainly daring. In fact, you might worry that these are going to be the 2015 equivalent to 1992’s soon-dated Festival Disney. But a strong artistic direction at this stage could also be reassuring. The most exciting aspect so far is that Joe Rohde, the lead designer of Disney’s Animal Kingdom, has been mentioned as part of Walt Disney Imagineering’s artistic involvement, and it seems you can see that influence already in the buildings overgrown by plants, creating a mélange of man and nature. Arts & Crafts and Art Nouveau are strong influences, with the styles of Frank Lloyd Wright and Friedensreich Hundertwasser quoted officially as inspirations.

VIA Projet Villages Nature

DLRP Today received several emails last month questioning why Euro Disney SCA’s share price had suddenly rocketed from €4.39 to as high as €9.05, its highest price since June 2008, in just the space of around 10 days. And it seems us Disneyland Paris fans weren’t the only ones to think it just a little odd. As The Telegraph reports, the sudden price spike will now be investigated by France’s stock exchange watchdog, the Financial Markets Authority (Autorité des Marchés Financiers). Christian Sylt writes, “Its share price jumped 17pc on the positive first quarter results and, defying expectations, continued to climb with the trading volume following suit. In one session 13pc of the company changed hands, which led to speculation of a takeover or that the shares would be delisted and bought back by the Walt Disney Company. Both suggestions seem to be wrong.”

VIA Christian Sylt (The Telegraph)