The opening of Euro Disneyland near Paris, France, continued the spread of American culture to France and was expected to improve France’s economy.
On April 12, 1992, the Walt Disney Company opened its fourth major theme park in Marne-la-Vallée, on the Marne River about twenty miles east of Paris, France. This was Disney’s second theme park outside the United States; Tokyo Disneyland opened in 1983. Disneyland
The entire complex known as Euro Disney Resort occupied forty-eight hundred acres of what used to be farmland. It included the Euro Disneyland theme park, six hotels with a total of fifty-two hundred rooms, dozens of restaurants, a twenty-seven-hole golf course, a 139-acre campground called Camp Davy Crockett, and a 10-acre artificial lake. Eleven million people were expected to visit the resort in the first year of operation; each was expected to purchase an average of $33 worth of items as well as paying admission and accommodation costs.
Marne-la-Vallée was chosen for this project out of two hundred possible locations in Western Europe, even though it has cold weather in the winter months and Euro Disneyland would stay open all year. Tokyo has similar weather, and Tokyo Disneyland
Euro Disney’s financial structure was unlike those of the other three Disney resorts. Euro Disney was the first to be a public company, with 51 percent of its stock owned by European individuals and institutions and 49 percent owned by Disney. France does not allow foreign enterprises to have majority ownership. About half of the European investors were French. Original agreements called for the Walt Disney Company to receive 10 percent of all ticket sales, 5 percent of all merchandise sales, a management fee of 3 percent of gross revenues (until 1997, when the fee increased to 6 percent), and incentive management fees of up to 50 percent of pretax cash flow. This was anticipated to amount to as much as 57 percent of Euro Disney’s profits by 1997. Pretax profits were expected to be 227 million French francs in 1994 and as high as 3 billion francs by 2001.
A master agreement between Disney and the French government was to be signed on June 18, 1986, but the signing was postponed because thirty to forty issues remained to be resolved. The parties finally signed an agreement in March, 1987, that gave Disney loans of up to 4.8 billion French francs at an interest rate of 7.85 percent, much less than the going rate at that time of 9.25 percent. Euro Disney also was permitted to write off construction costs against taxes at rates higher than those allowed for other companies.
In addition, the French government agreed to pay for and build metro and road links into Paris at a cost of more than $350 million. The agreement also required that Euro Disney put maximum effort into hiring French people, a major concern of the French government at a time of 9 percent unemployment in France. At the time the resort opened, about 60 percent of the employees were French. Disney was allowed to buy the forty-eight hundred acres of land on which the resort was set at 1971 agricultural prices. The average cost was 11.1 French francs per square meter, a small fraction of the cost of land in other Paris suburbs.
The project initially provoked considerable opposition in France. Prior to the beginning of the Euro Disney project, Jack Lang,
In January, 1992, sixteen French contractors claimed that Euro Disney owed them $150 million for construction. A bitter public battle ensued, threatening the opening of the resort, and an arbitrator had to be called in to settle the issue.
Euro Disney was expected to have a large influence on the economy of the surrounding area of France as well as on the growth of the Walt Disney Company. Many analysts believed that the “boom” years of Disney in the United States were over, and to continue to grow, the company had to extend its operations into other countries. Robert John Fitzpatrick, chairman of Euro Disney, indicated that the resort would be Disney’s big project for the 1990’s. Disney executives believed that by the time the project was finished, Paris would be only a “side trip” for visitors to that part of the world; Euro Disneyland and other parts of the resort would be the main attractions.
The Euro Disney Resort initially employed approximately ten thousand people; by 2005, the resort, now known as Disneyland Resort Paris, employed some forty thousand. Finding housing for employees posed problems at the beginning, so Disney constructed eight hundred units of new housing of various types, including singles, dormitories, and family quarters. The company also looked for other housing opportunities in the area and as far away as Paris, reserving apartments and single rooms for employees of Euro Disney. The demand for housing in the area benefited the construction industry in a time of recession and increased occupancy rates for many landlords. A few problems also arose because of housing issues: Some people were evicted after illegally camping out on local farmland, and some villagers in the area surrounding Euro Disney were fined for triple-renting rooms, or renting rooms in eight-hour shifts, to Disney employees.
Not everything at Euro Disney went according to plan at first. Disney had projected that eleven million people would visit the resort in the first year of operation. In the first five months of operation, about six million visited Euro Disneyland, or an average of forty-one thousand per day. Attendance reached seven million by October, 1992, but daily attendance fell during the winter months, and the first year’s projections were not met.
The continuing recession in Europe meant that many families were unable to afford the high cost of visiting Euro Disney. Hotel occupancy rates at the resort did not reach projected levels: August of 1992 saw nearly complete occupancy of the fifty-two hundred hotel rooms, but other months saw lower occupancy, especially the winter months. In October, 1992, the Newport Bay Club, the largest of the six hotels at the resort and one of the largest in Europe, shut down its eleven hundred rooms until spring, even though it had originally planned to stay open through the winter. Two other hotels cut their rates up to 25 percent, and some of the resort’s restaurants offered meals at reduced prices.
Profits did not live up to expectations in the resort’s rugged early years, but Disney responded by adding new attractions and making some changes. In 2002, another theme park, the Walt Disney Studios Park,
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“Anything but a ’Mickey Mouse’ Project.” International Business 44 (January, 1989): 5. Contains information about the financial arrangements involved in the Euro Disneyland project but offers few details. -
“Disney Gears up for Fairy-Tale Opening.” International Management 47 (March, 1992): 16. Explains some of the problems Euro Disneyland faced as projections for attendance failed to be realized in the first year of operation. -
Dunlop, Beth. Building a Dream: The Art of Disney Architecture. New York: Harry N. Abrams, 1996. Uncritical, enthusiastic presentation of the architecture of Disney from the original Disneyland forward. Includes discussion of the Euro Disney buildings and their architects. Features photographs and architectural drawings. -
Gooding, Judson. “Of Mice and Men.” Across the Board 29 (March, 1992): 40-44. Addresses the impact that Euro Disneyland had on farmers whose land was taken for the project as well as impacts on other businesses in and around Paris. Also discusses the housing problem faced by employees. -
Kobliner, Beth. “Next Stop Eurodisney.” Money 21 (March, 1992): 155-156, 158. Explains the scope of the initial development project and facilities that were a part of the first phase of Euro Disneyland. Also gives a limited cost comparison between Euro Disneyland and Walt Disney World in Florida. -
Lainsbury, Andrew. Once upon an American Dream: The Story of Euro Disneyland. Lawrence: University Press of Kansas, 2000. Former employee of Euro Disney draws on company archives and interviews to examine the history of Euro Disneyland and Europeans’ love/hate relationship with the park and with American culture. Includes bibliography and index. -
“Mickey Goes to the Bank.” Economist 312 (September 16, 1989): 78-79. Very informative article describes the master agreement signed by the French government and Walt Disney Company and discusses many of the very favorable terms given to Disney and how Disney opened Euro Disneyland as a public corporation. -
“The Not-so-Magic Kingdom.” Economist 324 (September 26, 1992): 87-88. Describes projections for attendance at Euro Disneyland, hotel occupancy, and profits and examines why these projections were not realized in the first year of operation. -
Toy, Stewart. “Mouse Fever Is About to Strike Europe.” BusinessWeek, March 30, 1992, 32. Provides some examples of the opposition that Disney faced in opening Euro Disneyland. -
_______. “The Mouse Isn’t Roaring.” BusinessWeek, August 24, 1992, 38. Very informative article discusses Euro Disneyland’s failure to meet projections. Compares the cost of visiting Euro Disneyland with that of visiting Walt Disney World in Florida.
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