Disney has revealed that over the decade to 2021 its theme park complex in Paris booked $3.6 billion (€3.4 billion) of revenue from five on-site hotels and the 44,000-square-meter entertainment complex next door to them.
Disneyland Paris is one of the largest hotel sites in Europe with 5,800 rooms across seven properties. The majority of them are only a short walk away from the resort’s two theme parks and this casts such a powerful spell that the group’s main hotel operating company still managed to generate $102.2 million (€95.5 million) of revenue in the year-ending September 30 2021 even though the properties were closed for more than seven months of that time.
Earlier this week Disney announced that in the quarter to December 31 2022 its parks and experiences division made $8.7 billion of revenue with $1.1 billion of that coming from its international outposts. This was a 27.1% increase on the same quarter in the previous financial year and Disneyland Paris gave it a magic touch.
Disney’s earnings release states that one of the reasons for the rise is “an increase in volumes and higher guest spending” at Disneyland Paris. “Higher volumes consisted of increases in attendance and occupied room nights. Guest spending growth was driven by an increase in average ticket prices and higher average daily hotel room rates.”
Disney’s filings in the United States don’t disclose the results of individual parks so they don’t give detailed insight into how well Disneyland Paris is performing. However, companies in France have to compile annual financial statements and they lift the lid on the inner workings of the Mouse’s French resort.
The documents drill down deep into detail as Disney has set up separate companies which are responsible for most of the resort’s key business areas from the operation of individual restaurants to the design of the site itself. Due to the difference in the filing deadlines, their financial statements aren’t usually lodged until long after Disney’s results in the US but it’s well worth the wait.
The latest financial statements for the resort’s main operating company, Euro Disney Associés, show that in 2021 it incurred $1.6 billion (€1.5 billion) of costs on $544.5 million (€509 million) of revenue. This was down 48.7% on the previous year and more than $1 billion (€1 billion) off the pre-pandemic tally that we reported in the UK’s Daily Telegraph.
The bulk of this revenue is generated by the resort’s two parks – the fairytale-themed flagship Disneyland Paris and the neighboring Walt Disney Studios. Hotels are one of the company’s biggest sources of revenue after the parks and the properties at Disneyland Paris are all distinctly different.
At the entrance to its flagship park is the Disneyland Hotel, a pink palace that looks like it has come from the pages of a Victorian fairytale. A little farther afield on the sprawling site is a woodland lodge complex as well as five hotels inspired by destinations in the Americas.
The Santa Fe and the Cheyenne are themed to Mexico and the Wild West respectively whilst the Sequoia Lodge looks like a huge woodland retreat and the Newport Bay Club is in the style of a sprawling New England holiday home. In 2021 they were joined by Disney’s Hotel New York – The Art of Marvel. The hotel was originally themed to the Big Apple but was given a makeover to make it seem like it is set in the world of super heroes.
Its lobby has the air of an atrium of an Art Deco American railway station. There are brushed steel floors, stone walls and mahogany display cabinets containing replicas of Captain America’s shield as well as Iron Man’s armour.
More than 350 pieces of artwork showing Marvel comics characters have been designed bespoke for the property and are scattered around it so that guests can go on treasure hunts to find their favorite heroes. Different areas of the hotel showcase the heroes in unexpected design styles from street art to giant murals made from the bricks in Rubik’s Cubes. The art tells the story behind the Marvel Comics characters who inhabit the Avengers Campus which opened last year in the Studios park as we have reported. It came at just the right time.
Over the past year dark clouds have gathered above Disney’s parks in the United States as guests have been faced with ticket price rises whilst struggling with a growing cost of living crisis. Research revealed that a one-day ticket to Walt Disney World in Orlando rocketed from $85 in 2011 to $175 in 2023 – reportedly more than 40% higher than the rate of inflation.
Social media became swamped with stories about it from disenchanted guests including a family of four from New Jersey who complained that five days at Disney World cost them $8,480 with the total bill rising to more than $10,000 when their airfare was included. One woman even avoided paying the admission price by disguising her child as a baby in a video which went viral on TikTok. Inside the parks many of the queues often last for several hours with some of the longest waits found at the flagship Star Wars attraction Rise of the Resistance. Crowds weren’t the only disturbance in the force.
Florida’s limp response to Covid combined with the price hikes have put off many international travelers. The latest data from Visit Florida shows that in the first three quarters of 2022 five million overseas travelers visited the sunshine state, a 30.8% fall from the pre-pandemic year of 2019. International tourists tend to stay for far longer than their counterparts from the US as they are traveling further to get there. The longer they stay, the more they spend in local shops, hotels and restaurants so the sharp drop in visitation has been a big blow to Florida.
Disneyland Paris capitalised on it with the launch of the Avengers Campus as it gave European travelers even more of a reason for a staycation. No longer did they have to cross the Atlantic to experience Disney’s latest rides. Disneyland Paris has long been seen as the poor relation to its bigger brothers in the US as it sometimes had to wait more than a decade to get their star attractions. However, Avengers Campus in Paris came with cutting-edge rides which launched just one year earlier at Disneyland in California and won’t be appearing at Disney World at all any time soon.
The reason for this dates back to 1994, 15 years before Disney acquired Marvel for $4 billion. That is when the comic book company signed an agreement which is still in effect to this day and gives NBCUniversal exclusive rights to the Avengers, and many other Marvel characters, in theme parks to the east of the Mississippi. A similar deal in Dubai led to the creation of a Marvel land at the IMG Worlds of Adventure park which is unconnected to Disney and was instead designed by Florida-based themed entertainment experts Falcon’s Creative.
Although Marvel characters can be found in a number of parks outside Paris, no other resort can boast an entire hotel themed to them and it has already had an heroic effect.
The five destination-themed hotels and the Disney Village shopping and dining district are run by French company EDL Hôtels (EDLH) which is a wholly-owned subsidiary of Euro Disney Associés and is ultimately owned by Disney itself.
EDLH’s financial statements confirm that it “operates the Disney Village entertainment center, the Hotel New York, Newport Bay Club, the Sequoia Lodge, the Hotel Cheyenne and the Hotel Santa Fe…The Company owns Disney Village and the five hotels, including the land on which they are located.”
The filings reveal that whilst its revenue fell by 55.1% in the year to 30 September 2021, it still generated more than $100 million. Although this was by far the lowest level of the past decade, its trajectory before the pandemic gives the clearest indication of its growth potential. As the graph below shows, its revenue climbed sharply after Disney took full control of Disneyland Paris in 2017 and hit a high of $473.2 million (€442.3 million) the following year.
EDLH got a boost in 2021 from the opening of the Marvel hotel as well as a ride which had been re-themed to Pixar’s popular Cars franchise. Generating more than $100 million in the midst of the pandemic is all the more impressive given that Disneyland Paris was shuttered from October 29 2020 until June 16 2021 when only some of its hotels re-opened.
This helped to keep costs down and in 2021 EDLH’s expenses fell by 24.1% to $307.8 million (€287.7 million). However, it still wasn’t enough to leave the company with a profit. It costs so much to keep the hotels looking sparkling that EDLH has never made a net profit over the past decade. Its net loss widened by $29.3 million (€27.4 million) to $207.1 million (€193.6 million) in 2021 but its next set of financial statements should be more enchanting.
When Disney announced its results for the first three months of 2022 its chief financial officer Christine McCarthy said that at its “international parks, a profitable first quarter reflected improving trends at Disneyland Paris.” The earnings release attributed this “to increases in attendance and occupied room nights”. That trend continued in the second quarter when Disney again reported that “higher operating results at Disneyland Paris were due to increases in attendance and occupied room nights.”
The third quarter got an even brighter glow thanks to the start of the thirtieth anniversary celebration at Disneyland Paris. Testimony to this, McCarthy said that “improvement at our international parks in the third quarter was driven by Disneyland Paris, where both revenue and operating income exceeded 2019 levels.” As the resort headed into the opening of Avengers Campus, per capita spending was 30% higher than in 2019 setting the scene for a return to pre-pandemic performance.
This gathered speed in the fourth quarter with the opening of the new land and, according to McCarthy, the results of Disney’s international parks “improved significantly year over year, driven by continued strength at Disneyland Paris.” The earnings release gave further detail as it explained that the improvement was driven by “increases in attendance and occupied room nights, partially offset by higher operating costs due to volume growth.”
Costs are also rising due to the pixie dust that Disneyland Paris is sprinkling on its site. Since its ornate iron gates swung open in 1992 it has invested a total of $9.7 billion (€9.1 billion) and is currently in the midst of a multi-billion Dollar expansion plan. We first revealed this in the Express newspaper in 2017 and it began to take shape with the addition of Avengers Campus. Four of the on-site hotels have been refurbished in the past decade alone but Disneyland Paris isn’t stopping there.
The latest one to get a makeover is the Disneyland Hotel which became France’s largest five star property in 2012 as we reported. Its olde worlde atmosphere is being replaced with royal theming which is due to be ready for the public in 2024.
Disney Village is also getting a long-overdue upgrade. The huge complex next to the parks was designed by renowned architect Frank Gehry and still has an industrial style which was popular in the 1990s when the resort opened. It is one of the largest entertainment centers in greater Paris and is packed with shops and restaurants. There’s a LEGO store, a 15-screen Gaumont cinema and themed eateries including the Rainforest Café, a wild west-style steakhouse and a 1950s diner. They will soon be immersed in a new setting.
In 2018 we revealed that the Disney Village would be transformed by both a major renovation and expansion. “We have renewed part of the hotels, and we will continue that. We have renewed a number of attractions in the parks so the next step will be to renew the Disney Village as well,” Francis Borezée, the former vice president of resort and real estate development at Disneyland Paris revealed to us. “We will start with the renovation, but then we have an opportunity to expand where today we have tents which are used for business events.”
The plan was finally announced in March last year and the first fruits of it will come to light later this month when the medieval-themed King Ludwig’s Castle re-opens as a British pub. It will be followed by the addition of a new French brasserie as well as a new park and boardwalk.
The magic touch of being located in the Disney Village is revealed in the latest financial statements for Flo Kingdom and Flo Evergreen, the independently-controlled operators of King Ludwig’s Castle and the Rainforest Café respectively. The revenue of the former rose by 61.2% to $2 million (€1.9 million) in the year to 31 December 2021 whilst it increased 88.1% to $6.3 million (€5.9 million) at the latter. Impressive as this is, the Rainforest Cafe still only generated around half as much revenue as it did in 2019. The same goes for its $350,000 (€329,590) profit. King Ludwig’s Castle was not so fortunate as it recorded a $500,000 (€467,086) loss in 2021.
Both companies are controlled by hospitality operator Groupe Flo, which was bought by the rival Groupe Bertrand in October last year. It shows how Disneyland Paris has become a dream ticket for investors as well as a tourism titan.
According to the TEA/AECOM Theme Index, 15 million visitors streamed through the turnstiles of the two parks at Disneyland Paris in 2019 making it Europe’s most-visited tourist attraction. As the graph below shows, it has dipped sharply since then due to the pandemic but the guidance in Disney’s earnings reports suggests that attendance strongly rebounded in 2022.
Since the resort opened there have been more than 375 million visits to Disneyland Paris and it has generated 6% of France’s tourism revenues. In turn, it has paid $9.4 billion (€8.8 billion) of tax in France and contributed up to $90.4 billion (€84.5 billion) in added value to the French economy including the creation of 63,000 direct, indirect and induced jobs in 2019 alone.
It is a far cry from the early days of Disneyland Paris when the French were put off by high ticket prices, the lack of alcohol in the park’s restaurants and English being its first language. Disney took note and created more affordable tickets, made French the first language across the entire resort and introduced alcohol to the restaurants for the first time in a Disneyland park.
The resort now has such a close relationship with the French government that the wave of expansion which is currently underway was announced at a joint press conference with Disney’s chief executive Bob Iger and president Emmanuel Macron.
The next steps in it will be the addition in summer of a show based on Pixar characters followed by lands themed to hit animated film Frozen and Star Wars. There could be more to come.
Talking in the Disneyland Paris park, Borezée told us that “in terms of the resort we will be adding new attractions in this park and mostly in the Walt Disney Studios.” He added that “there are locations which are already dedicated for future hotels but there is no decision to go ahead with them until we have the need.” The expansion could be the driving force behind it.
As we revealed five years ago in the Daily Telegraph, in anticipation of the crowds that the new lands will attract, Disneyland Paris planned to build a further 14,700 hotel rooms.
It remains to be seen whether Covid has held up these plans though the pandemic is far from the only obstacle.
According to Disneyland Paris, around 44% of its visitors have come from France since it opened with the second-largest market understood to be the UK. It may not stay that way for long.
At the end of January 2020 the UK left the European Union (EU) and severe travel delays have become commonplace in the country since then. UK passengers traveling to Europe now need their passport stamped when they cross the border whereas previously it was just inspected on a scanner.
The new system has contributed to “bottlenecks” in stations according to Gwendoline Cazenave, chief executive of Eurostar which runs the only rail service between London and Paris.
Last month Cazenave told the BBC that Eurostar is running 22% fewer trains between London and Paris than in 2019. “We have a main issue in Eurostar terminals because of the new boarding conditions between the UK and EU, because of the impact of Covid, because of staff in the stations.”
A new Entry/Exit System, known as the EES, is due to replace the checks, but the technology has been delayed several times and is now due to be introduced at the end of this year. It can’t come soon enough for Disney.
In summer last year Eurostar announced that it will suspend its direct service between London and Disneyland Paris from June 2023 for financial and logistical reasons.
It is a blow for the resort as in 2016 it reported that 32% of its guests arrived by train or plane. Travelers will still be able to get connecting trains there from London and Eurostar initially said it will consider whether to reinstate the direct service from 2024. However, Cazenave was circumspect about this and told the BBC that “it depends on the way we can handle the big stations’ issues.”
At the same time, change at the top of Disney could eventually increase the competition for Disneyland Paris. In an embarrassing turn of events, Disney ejected its chief executive Bob Chapek in November and replaced him with his predecessor Bob Iger.
He has vowed to make Disney’s US parks more accessible and said earlier this week “it is clear that some of our pricing initiatives were alienated to consumers.” He added that “after basically paying heed to what we are hearing, we started to address it and the steps that we took were actually were very, very positive. We got really, great reactions to it.”
Since Iger returned, Disneyland in California has increased the number of days when its lowest-priced tickets are available whilst parking fees have been eliminated at Disney World’s hotels. It may take more than that to tempt more European travelers to Florida and for Disneyland Paris, that really is a happy ending.
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