Eurodisney Failure During the Initial

EuroDisney Failure

During the initial planning phases for EuroDisney, sites in Great Britain, Italy, Spain and France were all considered. Due to the British Pound being highly inflated as a global currency and the lack of a large enough flat expanse of land, Great Britain was taken out of consideration. Italy, Spain and France were all in the running as host nations, with France being the most aggressive in the use of incentives to win the contract. France also would eventually under-write the development of the park and provide a government subsidy to keep the park running.

Disney did not immediately see however that its flagship parks in the United States would be the greatest competition for their European upstart. Ironically the financial performance of EuroDisney has traditionally been impacted more by U.S.-based Disney theme parks than competing theme parks or venues throughout Europe, according to Kepler Equities (2005). The weak dollar and strong marketing of DisneyWorld, Epcot Center, Wild Animal Kingdom and the many other attractions in Orlando, FL are attracting more UK- and European families than EuroDisney. The allure of visiting America and having the purchasing power both the British Pound and Euro and wealth of attractions has been strong enough to bring more visitors to DisneyWorld from Europe than have been drawn to EuroDisney. It is common knowledge in London that many families make shopping trips three or four times a year to New York given the strength of the British Pound relative to the U.S. dollar. Many middle-class families in the UK can afford to travel first class and stay in four-star hotels and resorts in the United States due to the significant difference in currency values.

For EuroDisney the challenge is how to attract and keep young European families, many of who spend less than ten days out of the country when visiting DisneyWorld in Orlando, FL. According to Kepler Equities, there will be a 5% average growth in sales over the next five years for EuroDisney as a result, and breakeven is considered to be achievable in the 2012 timeframe. While EuroDisney can't compete with a strong British Pound and Euro relative to the weak American dollar, they can do what Disney does best, and that is bring in the flashy, new rides and entertainment. In 2005 for example Space Mountain 2 opened and Buzz Lightyear's Laser Blast opened in 2006, with Toon Studios planned in 2007 and Tower of Terror for 2008. All these new attractions are meant for generating interest from young families and stop them from going over to Orlando when they can get the same experiences at EuroDisney.