Euro Disney, known today as Disneyland Paris, just kicked off its 25th Anniversary celebrations with new fireworks, a new parade, and a refreshed look for some of its most popular attractions. Even the park itself has received a fresh coat of paint and some fairly significant repairs to what had been a general dull on the sheen of magic you usually find at a Disney branded theme park.
This was made possible by the Disney company increasing its stake in Euro Disney SCA, the company that technically owns and operates Disneyland Paris, and investing in the park and hotels. The company now owns 86% of Euro Disney stock and wants to own the rest.
Why would Disney want to own a company that has been in ‘financial crisis’ mode for nearly its entire existence? Because the park and resort itself has good bones, it was just saddled with too much debt.
Disney has made an offer to the remaining share holders to buy the stock at its existing price, but not everyone is happy. An investor group that recently bought a bunch of shares in the park believing they were under valued (a fair assumption considering Disney Corporate obviously sees some value in keeping the park open too), is suing.
We reported on this before, but The Economist has added a bit more analysis to the situation.
“Yet investors clearly have reasons to lament the firm’s performance. Disneyland Paris has failed to deliver more than a handful of profitable years—it last did so in 2008. Visitor numbers have slipped. Some 13m came last year, 1m-2m fewer than a decade ago; hotel occupancy rates that were at nearly 90% early in this decade are below 80%; spending per visitor is up only modestly, despite new restaurants. A spokesman, François Banon, blames “macroeconomic conditions and difficulties”, noting years of stagnation in France and its neighbours, plus fears about terrorism.”
I think there is good news ahead for Disneyland Paris, if it can continue to grow and invest in itself while the French economy strengthens (assuming Brexit doesn’t derail everything again). Travel has also been depressed by fears of terrorism, but is expected to come back this year. The park might even see increased travel from the USA as airfare and hotel prices are very affordable right now.
Have you ever been to Disneyland Paris? Do you think it will be stronger with complete ownership by Disney?