In the third part of my story of Disneyland Paris we bring the story up to the time I left the resort.
The first signs of the new development were a Planet Hollywood restaurant and a multiplex, Gaumont Cinema, were added to the Festival Disney entertainment complex located next to the Magic Kingdom. At the same time, a couple of miles down the road, closer to Paris and near the town of Serris, groundbreaking for the ambitious Val d'Europe project started. Disney worked with the town to build what would one day become a huge shopping mall, outlet shopping village, thousands of new housing units, and two partner hotels. These additions were built on the edges of the property. Years after the plans were laid, the property goals were coming through.
The Magic Kingdom Park acquired new attractions in the shape of The Storybook Cruise water ride and Casey Jr. mini roller coaster. The company also started quietly planning its second gate on the site - the Walt Disney Studios theme park.
During this period, the French Sunday night Business show on the M6 channel, 'Capital', did an expose on the overpriced poor value that they perceived at Disneyland Paris. They followed Christian Perdrier, Vice President of Operations at the resort, around the resort and questioned him in depth. One scene filmed in an average hotel room at Disney's Hotel Cheyenne saw the interviewer asking if people really wanted to pay extra for the cowboy boot lamp and 'Typically American bucking bronco wallpaper,' especially when the French hotel three kilometers away by the auto route would give you a similar room for half the price, minus the themed lamps. The expose was a success - only not as the television crew expected. The next morning the Central Reservations team was inundated with requests for rooms 'chez les Cowboys - sil vous plait.'
Central Reservations was inundated with requests for rooms 'chez les Cowboys - sil vous plait.'
At the same time, food prices in the Disneyland cafes were substantially reduced, the French Franc began a slide against Sterling and hotel and package prices were reduced. These actions effectively doubled the number of visitors from the UK and other regions of Europe.
As well as the easing of the recession, stronger, more tailored marketing campaigns were spurring increasing attendance, rising from 10.7 million visitors in 1995 to 11.7 million in 1996. Posting its second year of profits in 1996, Euro Disneyland seemed finally to be rousing from its European nightmare and moving into the dreamland Disneyland Paris should have been all along.
Disaster struck the resort at 6:45am September 9, 1996. Fire broke out in the electrical wiring in the roof space of one of the largest hotels, Disney's Sequoia Lodge Hotel 1,000 room main building. The New York Times led with the title, "Hundreds Flee a Fire At Disneyland Paris." 1,500 Guests fled the hotel in their night cloths, mercifully few needed medical attention. The hotel's sprinkler system functioned perhaps too perfectly, almost all of the hotel's rooms needed remedial work following the fire, which meant the hotel was out of service for quite some weeks.
Despite the setback, attendance surpassed twelve million visitors by 1997, making the theme park Europe's leading tourist destination. Hotel occupancy was also strong, encouraging Disney management to go ahead with its plans to open a second park. Construction began in 1999 on Walt Disney Studios, a second gate based on cinema, animation, and television. The company believed that the addition would not only bring in over five million new visitors each year, but entice holiday makers to stay longer and thus keep the resort hotels full.
One of the little understood facts about the hotel business is that a Guest who only stays one night in your hotel can actually lose the hotel money. If a Guest stays one night, the whole room has to be refreshed - new linen, new complementaries, and the room has to be deep cleaned with the associated staffing costs. If the same Guest family stay two nights, the costs are more than halved. Enticing people to stay longer would make you more revenue.
1998 saw the World Cup held in France, which strangely considering many matches were played around Paris, dented expected attendance figures but still 12.7 million Guests visited the park. The adjusted pricing on souvenirs, food and park entry also worked, spending per Guest increased markedly.
The elephant in the room in 1998 was that the interest rate payments.
With a second state of the art convention center opened at Disney's Newport Bay Club Hotel, Disney tapped into the growing business tourism market in Europe. The new center at Newport Bay Club and its sister center at Disney's Hotel New York formed Europe's largest business tourism location - hosting major European events for the likes of Peugeot, McDonald's, and Coca Cola.
The elephant in the room in 1998 was that the interest rate payments, which the banks had foregone in 1994, and the royalties' payments to the WDC became due in stages. So - despite increased revenues - the overall profits for the park were reduced.
In 1999, Disney Village continued its aggressive expansion phase with the opening of the Rainforest Cafe and McDonald's opened a giant restaurant in a custom built location, at the same time the building of the Walt Disney Studios was commenced in earnest. The Magic Kingdom saw 'Honey, I Shrunk the Audience' open to replace the ageing 'Captain Eo' staring the then embattled Michael Jackson.
To focus on and profit from the different holiday patterns in Europe, weekends became a focus for packages and the park expanded the seasonal entertainment specials, including Halloween, Bonfire Night (for the booming British market) and Christmas which had the combined effect of filling the hotels at weekends and up to 82% during the weekdays.
In the midst of this increased prosperity a disaster struck. December 26, 1999, a monster storm swept across northern France and devastated the theme park, damaging and destroying much of Camp Davy Crockett, and ripped apart the newly launched Crescend'O tented circus show in the Disney Village. The park was forced to close for the day for the first time in its history, a disaster given the peak family holiday period. The emergency procedures and hard work of the Cast Members that day, many of whom risked their lives just getting to the resort, meant there was only the minimum impact on Guests who were onsite that day, but again had an impact on the bookings for the coming months.
The new millennium brought mixed blessings. The construction of the new Walt Disney Studios park costing $530 million put even more strain on the company's debt load, which had risen to $2.2 billion by 2000. Profits began a downward trend, falling from EUR 38.7 million in 2000 to EUR 30.5 million in 2001, due mostly to expansion costs and royalty payments to Walt Disney Co.
In 2001, hotel occupancy increased to over 86% - an astonishing figure, well in excess of Florida's resort. The phenomenally successful Mulan show featuring the talents of the Chinese circus school continued to run in Videopolis and CEO Jay Rasulo was able to announce that the Walt Disney Studios would be opened on March 16, 2002. The symbolism of opening the new park ahead of schedule, before the tenth anniversary of the opening of Euro Disney was potent. It was a marker of maturity for the company. Just when the future held much promise, however, fate was to deal the worst blow.
"We have learned about each other during those ten years.., how to be integrated, both socially and culturally, with the French."
In the summer of 2001, alerted by French Intelligence of a possible terrorist strike against American interests, security increased dramatically at the park. September 11th, brought tragic confirmation of that warning and damaged the package holiday, airline and travel industries substantially and with them, Europe's largest holiday destination.
Despite its faltering financial situation, Euro Disney went ahead with its plans, and on March 16, 2002, Walt Disney Studios Park opened for business. In sharp contrast with the original park's opening in 1992, Walt Disney Studios was well received by France and the media. A Disney executive commented on the difference in a 2002 Amusement Business article stating, "We have learned an amazing amount about each other during those ten years and we've learned, more than anything, how to be integrated, both socially and culturally, with the French."
However, since the opening of Walt Disney Studios coincided with a drop in tourism and an overall slowdown in the global economy, it soon became apparent that Euro Disney had once again stretched itself too thin. The firm posted a EUR 33.1 million loss in 2002 and announced, for the second time in its history, that it needed financial help from its major shareholders. To make matters worse, attendance dropped during the spring and early summer of that year. In early 2003, Euro Disney's parent stopped collecting its royalty fees once more in an attempt to alleviate some of its financial burdens.
In 2003, Jay Rasulo, was promoted to greater things within the company, and a new boy Andre Lacroix took over. His first public statements laid bare the worrying financial position of the company. The ongoing problems in tourism, the French labor difficulties, and the costs incurred in building the new park which had failed to realize its potential, had all combined to damage the profitability of the resort, which had incurred its first serious loss in several years.
The focus of the 2003 ad campaign which asked the question "Need Magic?" was firmly aimed at the first time visitor, but it might well have been asked of the company.
By August 2003, Euro Disney announced that it would be unable to make its debt payments in the following fiscal year. The company began negotiating with the Walt Disney Company and its three major banks in an attempt to restructure its debt once more. Desperate for a second princely rescue, chairman and CEO Andre Lacroix turned to Prince al-Waleed in September. Euro Disney faced an uncertain future, and it appeared to me as though the company needed a dose of Disney Magic to get itself back on track.
I wanted to put a little meat on the bones of a lot of the rumors and stories about the Resort.
I left the company in early 2004, it seemed the right time. I'd met my wife to be and we were planning to marry in 2005. The feeling amongst the Cast Members behind the scenes was a little down. We'd been there before and I was a little tired. Been there and yes, the tee-shirt still fitted, but it was just the right time to go. It was a feeling common to many Cast Members who'd been at the resort for a while. I still care deeply about the place, hence these five thousand or so words on the topic. I wanted to put a little meat on the bones of a lot of the rumors and stories about the Resort.
"The crowds in the streets, the lights in the shops and balconies, the elegance, variety, and beauty of their decorations, the number of the theatres, the brilliant cafes with their windows thrown up high and their vivacious groups at little tables on the pavement, the light and glitter of the houses turned as it were inside out, soon convince me that it is no dream; that I am in Paris."
- Charles Dickens, A Flight: