Disney Revs Up for a New Park

The early struggles of Disneyland Paris, which Walt Disney Co. opened at Maine-la-Vallee east of Paris in 1992, may have led some to believe that Europeans don’t like amusement parks. But in fact, the eventual huge success of the park prompted Disney to announce in September that it would build a second theme park next door to the first.

The Paris newspaper Liberation recalled that some had described the arrival of the first park as a “cultural Chernobyl”. Yet that did not deter Disney, which owns 39 per cent of the company that runs Disneyland Paris, from announcing plans for a new $615 million, 25-hec-tarc park that will focus on film studios, animation and television.

The opening is planned for April 2002, 10 years from the inauguration of the first park. Nor did it discourage the authorities, who are delighted with the prospect of 5,000 jobs the new park is expected to generate.

Whatever some Europeans may think about theme parks, the majority seem to be voting with their feet. In the fiscal year that ended Sept. 30. Disneyland Paris drew 12.5 million visitors, more than any other attraction in France. Only about 41 per cent were from France, with 17 per cent from Belgium, Luxembourg and the Netherlands, 15 per cent from Britain and 10 per cent from Germany.

“In California, we needed 35 years to reach those results, even though the park there is larger,” said Gilles Pelisson, chief executive of Euro Disney SA, the company that operates the French Disney Park.

The planned studio park is not a first for Europe. A park called Movie World near Bottrop, Germany, was recently sold by Warner Brothers, the film and entertainment unit of Time Warner, to an American company called Premier Parks; Warner Bothers and Premier are building another movie park outside Madrid, to open in 2002.

The Disney project will have the familiar features: guided tours of television and movie studios, demonstrations of special effects, a half-hour stunt show in which actors portraying secret agents attempt to arrest a band of terrorists on a set that re-creates a Mediterranean Village.

Disney’s entry into the world of European theme parks was not an easy one. It spent roughly $5 billion, much of it borrowed, to develop the original park, only to swing open its pink Victorian gingerbread gatehouse in 1992 in the midst of a European recession.

The park’s hotels drew so few guests that some had to be shuttered temporarily. To hold costs down, Disney kept salaries low, which over the years has led to strikes by mainly low-paid performers. Moreover, Disney's original marketing strategy proved a flop. Originally named of Euro Disneyland, signalling the parent company’s intention to reach out to all of Europe, the park was soon quietly rebaptized Disneyland Paris, in recognition of the need to focus on national markets.

Advertising was also redesigned along national lines, taking into account the fact that features of the park that appealed, say, to Germans would not be the same ones that drew Dutch or British visitors. Wine was added to Disney menus, an omission that had irritated the French, and perhaps most important, ticket prices were temporarily reduced.

Thanks to these initiatives, annual attendance quickly took off.

By the mid-1990s, Disneyland Paris was attracting more than 9 million visitors a year. Still, as the interest burden on Euro Disney's debt caused financial losses to mount, the company was forced in 1995 to obtain a five-year debt rescheduling agreement from banks and forfeiture of management fees from the parent Walt Disney Co..

For the financial year 1998-99, Euro Disney has reported a $24 million net profit Though that was 46 per cent less than the year before, the drop was attributed mainly to a resumption of Euro Disney’s payment of management fees to the Walt Disney Co. and to stagnant attendance, which was hurt by the World Cup soccer tournament in France in the summer of 1998.

Even so, Disney was buoyed by the rise in occupancy rates at the six big hotels at Dis- l neyland Paris to 82.6 per cent for the year ending in September, from 80.9 per cent the year 1 before.

So successful has the park been at drawing crowds that some local politicians in the Mame-la-Vallee area are growing nervous. Euro Disney is pushing to increase the returns on land it bought in the early phase of the project, and this spring a mega-mall built by an outside developer, and designed to be Europe's largest, is set to open at Serris, next door to the original park.

On one weekend in late October, when crowds flooded into Disneyland Paris, highways leading to the park were completely blocked by traffic. The addition of the Serris mall, plus the new park, some local leaders say, will lead to continuous gridlock.

In November, the local Communist Party demanded an immediate study of the possible impact the mall and park will have on local roads. Then the conservative Rally for the Republic appealed to the ministers responsible for early action to double the size of the A4 highway that links the capital and the park.