Euro-Disney: The First 100 Days

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Euro-DisneyThe First 100 Days
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The Walt Disney Traditional Formula

• Theme parks--core of attractions organized to an
  identical set of themes
• Offerings for adults
• Offerings for children
• Offerings for different psychographic targets
• Stable of characters

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The Walt Disney Traditional Formula (contd)

• Commitment to always having something new and
  different at parks
• Service delivery
• Concept of guest experience
• Attention to detail
• Disney University
• Qualifying potential hires
• Transmitting Disney values
• Training employees to be effective in jobs
• Grooming standards

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Tokyo Disneyland--A Successful Transfer
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Euro Disney--A Success?
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Services Marketing Problems

• Heterogeneous target market--multi-national,
  local/traveling--makes strategy more difficult
• Pricing too high
• Poor market research
• Cold weather location
• Lack of consideration for local culture
• Service standards hard to implement

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Criteria to Assess First 100 Days

• 2/3 into initial 5 1/2 month operating period,
  have 2/3 of projected revenues
• figure of 3.6 million visitors slightly behind
  pace to achieve 7 million projected, although
  summer months remain
• Substantial cost problem
• Extra 5,000 workers needed
• Pre-opening and other costs

• ATTENDANCE
• COSTS
• PROFITS

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Criteria to Assess First 100 Days

• Very high in beginning period
• No employee housing
• More because difficult role to perform than in
  any other park due to language
• Appears to be ahead of other parks at same point
  in time

• EMPLOYEE
• TURNOVER
• OVERALL
• PERFORMANCE
• VS OTHER
• PARKS

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What Aspects Transferable/Not Transferable?

• TRANSFERABLE
• Theme park formula Values/quality/imagination
• Guest service
• Structure of parks

• NOT TRANSFERABLE
• Service standards conflicted with French labor
  unions
• Policy toward wine
• Waiting lines
• Management of local employees by expatriates

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Considerations Before Extending Service Concept
Across Borders

• Adapting service itself
• Adapting promotion and distribution
• Adapting entry modes
• Adapting communication
• Adapting market research international
• Adapting work force management
• cultures effect on employee behavior
• adapting service employee incentives
• adapting service standards for international
  delivery

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What Can Disney Do Now?

• Lower prices
• Build additional ride capacity
• Improve cast friendliness
• Coordinate marketing of parks with release of
  films
• Change to local management team
• Aggressive cross-promotion
• Attract and retain high quality employees

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Update March 93

• Loss of 40 million before deferral of 20
  million debt payment
• Underutilization of hotel rooms
• Bombarded with negative publicity
• Fitzpatrick stepped down as president
• Lowered admission prices by 25 for adults and
  33 for kids

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Changes and Update 1998An Impressive Turnaround

• More than 11 million visitors per year--bigger
  than Eiffel Tower or Louvre
• 1 short-stay tourist destination in Europe
• Higher hotel occupancy rate (64) than Paris
  hotels
• Profits 1997 rose 77
• Renamed Disneyland Paris
• Added new Space Mountain Ride
• Kids Go Free promotions

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Current Situation

• Profitable for last 3 years
• 1997 income up 21.5 yr to yr Costs up 8.3
• 1998 1st quarter income up 16.6 over 1997
• 12.6 million in attendance in 1997
• 78 hotel occupancy in 1997
• Recovery due in part to American cost controls
• Slight increase in average guest spending
• Emergence of major conference center

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Labor Unrest

• 80-160 employees went on strike in July 1998
• Wanted classification as artists not extras
• Resentful that multiple skills were not rewarded
• Costumed strikers smiling, not confrontational
• Average striking worker making more than minimum
  wage artist classification would net 330 more
  per month
• Disgruntled employees returned to work without
  government support

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Future Plans

• Control 3,200 acres around current location
• Creating Val dEurope - a town outside Euro
  Disney
• 90,000 sq. meter shopping mall
• 1,610 housing units
• Office space
• International business park

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"Rejected New Names for EuroDisney"

• 10. Euro Disaster
• 9. El Biggo Mistake-o
• 8. Never-Never-Profit Land
• 7. La Veal de Guys in Big Smelly Costumes
• 6. Gumpworld
• 5. Beaucoup de Crap Americain
• 4. Johnny Depp's Hotel of Destruction
• 3. Boutros Boutros-Goofy
• 2. Have-You-Forgotten-We-Saved-Your-Ass-in-the-W
  orld-War-Two-Land
• 1. Ooh-La-Lame

As presented on the 9/15/94 broadcast of LATE
SHOW with DAVID LETTERMAN