Disneyland Paris celebrates 20th birthday €1.9bn in debt
Twice as many people pass through its gates in search of Mickey Mouse as climb the Eiffel Tower, but Disneyland Paris celebrates its 20th anniversary burdened with vast debts.
Despite charging its 15.7 million annual adult visitors – that's anyone over the age of 11 in Disney's world – a minimum of £51 per visit, the theme park lost €55.6m (£45m) last year, and its debts are a towering €1.9bn. The debts are so huge that the company's chief executive has admitted it will still be paying them off for the next 12 years.
While Zinedine Zidane and the Oscar- winning actor Salma Hayek turned up to kick off the park's birthday party last week, there is no new blockbuster attraction, as there has been for previous anniversaries, because austerity has come to the Magic Kingdom.
The park, which sprawls over about 2,000 hectares (4,942 acres) of old beetroot fields east of Paris, has chalked up losses of more than €212m over the last few years, despite increasing sales to more than €1.3bn a year. The company's share price has crashed by 50% over the past year to just €4.43. One leading City analyst has even warned that the company's finances are in such a dire state that it will probably never make a profit.
The park is now the most popular tourist destination in Europe, with more than double the number of visitors to the Louvre – and it recently recorded its 250-millionth customer since the iron gates swung open in 1992. But the increase in the number of visitors has come at a price.
In a bid to boost attendance at a time when Europeans are being battered by economic turmoil, Disneyland Paris has been offering discounts of up to 50% on the price of packages, which include tickets to its two parks and accommodation at its seven on-site hotels. As a result revenue increased by only €23m last year.
Twenty years ago Robert Fitzpatrick, Walt Disney's then chairman, boasted: "My biggest fear is that we will be too successful." But it didn't take long for the fairytale to turn into a financial disaster.
The signs were not good from the outset. When Michael Eisner, Disney's former CEO, launched the company on the Paris stock exchange he was greeted by protesters waving "Mickey, Go Home!" placards and pelted with eggs.
The intelligentsia of Paris also opposed the park, with some deriding it as a "construction of hardened chewing gum", while French film director Ariane Mnouchkine's "cultural Chernobyl" monicker is still used to deride it.
On its opening day on 12 April 1992 motorists were warned of massive tailbacks near the park, then called Euro Disney, in Marne-la-Vallée about 18 miles west of Paris. The French government reckoned that up to half a million people were planning a visit on the big day. In the event the huge car park complex was only half full, suggesting only about 25,000 people turned up.
Perhaps Disney's biggest misunderstanding of its customers was a ban on wine, with staff in fancy dress only allowed to sell soft drinks and non-alcoholic "mocktails" just moments away from the world's best champagne vineyards.
The booze ban was swiftly lifted, visitor numbers began to increase and the company recorded its first quarterly profit in 1995. But rumours quickly circulated that the park was on the verge of bankruptcy and Walt Disney, which owns almost 40% of the company, and its banks were forced to bail out the park. Saudi billionaire Prince al-Waleed bin Talal also owns a 10% stake.
At the same time the company finally bowed to pressure to change its name, with Eisner admitting: "As Americans, the word 'Euro' is believed to mean glamorous or exciting. For Europeans it turned out to be a term they associated with business, currency, and commerce." It was probably a smart move: today it would have been linked with crisis and cuts.
The company has also has a history of difficult relations with its staff. In 2009, on one of Disneyland Paris's busiest days of the year, staff protested against a pay freeze by striking and marching through the park, causing the first ever cancellation of the its famous daily parade down its Victorian-themed Main Street.
Broadcaster Jonathan Ross visited the park recently and tweeted: "We are at Disneyland Paris for the 20th anniversary. There's a dispute and strikers march down Main st. Worst Disney parade." Four of the seven Disney unions were demanding a pay rise of at least 4%, compared to the 1.5% on offer.
Philippe Gas, the park's sixth CEO, conceded this week that "[Disneyland] didn't work in the early years how we wanted. But now we are at the healthiest situation in our history".
"It's been a long way, but now we have a calendar of payment that will see all the debt wiped out by 2024. We no longer need Mommy and Daddy to help us," he told the AFP news agency.
But the analyst, who declined to be named, said Disneyland Paris "should have a good outlook because of the anniversary ... [but] my guidance is that it will never make a profit."