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Disneyland Paris: Attendance drop and cash flow crisis

IanB said:
I just feel that they borrowed to much in the early days to get the park off the ground, and instead of being able to spend money on improving the parks, it ended up being used to pay the banks back. It almost feels like a similar story with Merlin, borrow more and more money to fund its expansion, but not leaving itself with enough money to spend on its parks.
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Well, to be fair, it seems to just be DLP that suffers with this problem. Florida, California and all the Asian Disney parks all have had massive investment in the past few years and will continue to do so into the future.
 
It's not so much the amount that they borrowed, on paper if they pulled off what they intended the resort would be nothing short of rolling in it right now. The massively trumped up guest projections, and the crazy agreements on building amenities such as hotels are what has really hurt the place and prevented it from expanding.

As if those issues weren't enough, top that off with the financial crisis stopping people from visiting in the last decade and a half and it was a perfect storm for failure really.
 
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A video DLP have posted that attempts to explain what is happening for financial illiterates like me. :)
 
This means nothing though until we see firm investment. Companies have extensions to inter group debt all the time to allow them to carry on. A much tighter rein is needed from WDC to ensure finances are diverted accordingly.

I'll only get excited when I hear of several new investments
 
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From what I've pieced together in my own limited understanding and from what others have said here I've deduced that I think WDC have a clear plan for control of the resort.

They don't seem at all fussed by the financials and are happy to regularly reshuffle the debt - as well as provide cash injections to get things going again. Yet every time this happens it sends the stock price tumbling and puts Euro Disney SCA in a harder place once more.

What I assume is that WDC will continue to do this to drive the share price down so that they can then buy out the company at a cheap rate, avoid saddling themselves with a large debt and take the reins when the park can be profitable.

That's how it seems to me anyway - however I won't be excited until we see plans on paper for actual expansion.
 
Devaluing your own product in a cynical attempt to own 100% shareholding? I can't see Disney ever ever considering that. Plus they have purchased shares through a debt for equity swap anyway, but the French government will never allow 100% control.

Reshuffling the debt is very damaging, and is generally only considered to save a sinking ship if there is confidence it will successfully trade I'm the future to recoup profits to compensate for the previous losses. However, I'm not confident this is the case here as it seems to be more a case of giving some extra pocket money to your child because they lost the first lot down the back of the sofa. Not conducive to a recovering business plan unless there is strong pressure behind a sound strategy
 
Craig said:
It's not so much the amount that they borrowed, on paper if they pulled off what they intended the resort would be nothing short of rolling in it right now. The massively trumped up guest projections, and the crazy agreements on building amenities such as hotels are what has really hurt the place and prevented it from expanding.

As if those issues weren't enough, top that off with the financial crisis stopping people from visiting in the last decade and a half and it was a perfect storm for failure really.
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Yep, the Florida Magic Kingdom opened in 1972 with only two accommodations and 2 more planned (what are now the monorail hotels, plus the campground). The other hotels were built mainly in the 1980s and 1990s as the park got more popular and they opened more parks.
At Disneyland Paris they overestimated demand massively and built all 7 of the hotels to be ready for opening. This meant they have never been able to fill all their hotels as why stay at Disney when Paris is only an RER train ride away. If they had been much more cautious (as they are with Hong Kong) and opened small as a one day park with 1-2 hotels (similar to Alton Towers) they probably would have reached profit quicker and wouldn't have needed to built the Studios park on the cheap in a rush to make it a multi-day resort.
 
I guess they had to over estimate the hotel demand to get the French Government on-board. Weren't they suppose to have tripled hotel capacity as well by 2017?

No Disney Resort has ever been shut down before, and I don't think WDC would ever want that to happen because of the bad PR that would be generated.

Any resort getting 15 million guests a year, should be making a profit, and should be able to invest in staff, maintenance of rides and attractions, and building new rides and attractions.

Ian
 
I think as well that Disney believed that by building plenty of hotel rooms it will stop third party operators opening as many hotels and Disney can keep more of the guests. This strategy obviously didn't work as many guests still look for a cheaper option. I did see that Disney had agreed with the French government to build more rooms but I expect they will be trying to get out of that clause, maybe they can somehow show that the third-party good neighbour hotels make up the additional rooms.
 
Wow.

I am astounded by the backwards business thinking I am reading about, is this all true?

They opened SEVEN HOTELS? And that was to get the FRENCH GOVERNMENT on board?

I cannot find a facepalm that adequately reflects how astonished I am at such utter lunacy.
 
TheMan said:
Wow.

I am astounded by the backwards business thinking I am reading about, is this all true?

They opened SEVEN HOTELS? And that was to get the FRENCH GOVERNMENT on board?

I cannot find a facepalm that adequately reflects how astonished I am at such utter lunacy.
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No, they opened seven hotels because Michael Eisner (the CEO at the time) wanted to try and keep all of the hotel business for Disney (not third party hotels) and he wanted to have a go at designing many different hotels.

Disney & more have a good blog post on this http://disneyandmore.blogspot.co.uk/2014/10/dlp-announced-emergency-meeting-for.html
 
Brief read, is this guy the Anti-Varney?

For everyone action there is an equal and opposite, they do genuinely seem to be the anti-thesis of each other.
 
Michael Eisner did some great work while CEO of Disney, back in the 1980s he turned the company around and this resulted in the renaissance of Disney animation with Little Mermaid, Beauty & Bests and Lion King. At the parks Disney-MGM studios was built and a huge expansion in hotel rooms at WDW. There was also many good decisions made at Disneyland Paris with the look of the park and the budgets on some attractions, but the hotel he got seriously wrong and other budgets were cut.
But getting into the 2000s he got too concerned with cutting costs and that resulted in cheap looking parks such as Disney Studios Paris and California Adventure. It's taken John Lassester (of Pixar) to turn round Disney animation this time and he has also played a big part in the improvements in Disneyland California and DCA. Unfortunately Lasseter has no major involvement in Paris....
 
I do think DLP takes a lot of unfair stick from some.
TheMan said:
I would love to visit a "proper" Disney park, but you just never get that impression from DLP to want to visit - I never have, anyway.

I would visit don't get me wrong, but would I travel all the way there to do it JUST for that? No.

Could still see the draw with younger kids, but DLP just doesn't seem to have a spark or anything that really makes me want to visit.
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How is DLP not a proper Disney park? I could agree that Studios is lacking badly but Disneyland Parc is most certainly a proper Disney park. It's magical, incredibly well themed and has some great attractions. The main downside is the lack of investment in new attractions within the park. What is there though is proper Disney. It's currently the only 'magic kingdom' Disney park that I have visited but when I do visit Magic Kingdom next year it has a lot to live up to in terms of the feel of the park and comparision of similar attractions.

I have just got pack from a trip to DLP so here a few points of things I noticed, both good and bad:

- The park certainly didn't have the feel that those who went in April made out it had. For me it was the same place I visited in 2012 with the same magic.
- There is a lot of maintenance work going on across the park; Main Street has had and is getting a lot of attention.
- Theming in places does need some TLC but I get the impression they are working on this.
- Operations were very mixed. Queues were not long but empty boats being sent on Pirates is frustrating when there is a then minute queue. Operations of the Railroad were nothing short of dire and I shall be emailing to complain about this.
- Ratatouille has improved the feel of Studios park and is a lovely addition.
- Service at some of the F&B kiosks was frustratingly slow.
- Disney Dreams is still the most magical show I have seen.
- The Halloween decor around Disneyland Parc was really nicely done, very classy and different to your usual splattering of pumpkins etc.

Crisis or no crisis, we all had a great time at DLP. Like any park with financial problems there are flaws but it cannot be denied that it's still a world class theme park resort. We are somewhat spoilt by our regular visits to EP where money is no issue and they do things seemigly perfectly. There aren't many parks like that at all.

:)
 
It was running with only one train (when they have either three o four), we joined the queue and waited almost half an hour for it to arrive only to be told that there was not room for us on that train and we would have to wait for it to come round again, which would be another nearly half an hour. Needless to say we weren't waiting for that. As we walked out of the station we noticed that there were actually some seats left on the train in the station. The staff were very unhelpful and the communication of the wait time was almost non-existent.

If they only want to operate it on one train they need to have only the Main Street station open and make it a round trip so that they can always fill up a full train of people. Either that or only let guests get off at other stations and not on. It left a very sour taste in our mouths.

:)
 
Apparently it's been comfirmed that Space Mountain is closing in Jan for a 6 month refurb, including new trains.

The Videopolis theatre is also closing for the same length of time :)

(Read it on CF)
 
Glad I got some final rides in on Space Mountain, I actually really enjoyed it this time and found it to be more comfortable than some of my rides on RnR.

:)
 
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