[vc_row][vc_column][vc_column_text dp_text_size=”size-4″]Disneyland Paris revealed its financial results for 2022, reporting an operating profit of $51 million. The revenue reached a record high of $2.6 billion, driven by the easing of pandemic restrictions and the introduction of a new Marvel-themed area. As a prominent player in Europe’s tourism industry, Disneyland Paris’ strong performance signifies a positive shift following the challenges posed by COVID-19.
The resort’s achievement is particularly noteworthy considering its historical struggle to generate profits since its inauguration in 1992, when it was known as Euro Disney. Despite initial concerns about the weather, Disney’s decision to establish the resort in France, led by former CEO Michael Eisner, paid off. Eisner, in a recent interview, mentioned that the park surpassed expectations and attracted more visitors than the renowned Louvre museum in its first year.
Spanning an area of 5,500 acres, approximately one-fifth the size of Paris, Disneyland Paris maintains an advantageous position, preventing competition from nearby establishments. This allows Disney to exercise careful control over the quality of the surrounding environment. To secure such a vast land area, the French government engaged in a public-private partnership with Disney. As a result, Disneyland Paris was listed on the Paris Euronext exchange, with Disney holding a 49% stake. Rather than injecting capital directly, Disney provided loans, and the resort relied on $1.8 billion in bank borrowings for its construction, leading to financial losses due to interest charges.
In 2012, Disney alleviated its debt burden by clearing the bank loans, and five years later, it acquired complete ownership of Disneyland Paris through a share offer. Consequently, the resort was delisted from Euronext, reducing the transparency of its financial information, as it is no longer required to disclose quarterly figures.
Also Read: ‘Baby Shark’ Creator Grows Up.
While Disney’s own filings offer limited insights into the financial performance of individual parks, Euro Disney Associés, the operator of Disneyland Paris, continues to publish financial statements. These documents indicate a substantial increase in revenue from $968 million in 2021 to $2.6 billion in the fiscal year ending on September 30, 2022. Despite a corresponding rise in costs, which surged by 57.8% to $2.5 billion, the resort achieved a remarkable operating profit of $51 million. This marked a significant improvement compared to the previous year’s operating loss of $627 million.
The increase in costs was primarily attributed to the reopening of the theme parks in June 2021, leading to an expansion in the resort’s workforce by 9.4%, resulting in a total of 15,450 employees. With its extensive staff, Disneyland Paris stands as the largest private employer in the Paris region, and its employees, known as Cast Members, play a crucial role in maintaining the immersive experience for guests. The total remuneration for Cast Members reached a record $825 million in the reported year, representing a 30.8% increase.
Recent statements by Disney’s former CEO, Bob Iger, at a media conference emphasized the need to balance profit growth and pricing strategies, indicating a potential adjustment in ticket prices at Disney’s US parks. Lower ticket prices at the US parks could intensify competition for Disneyland Paris, adding to the challenges it faces.
Moreover, Disneyland Paris relies significantly on visitors from the UK, with 32% of its guests arriving by plane or train, facilitated by a direct transportation link. However, this direct service will be temporarily suspended in June due to post-Brexit border control requirements, causing disruptions at stations. The introduction of a new Entry/Exit System, scheduled for the end of the year, aims to replace these checks. Nevertheless, any inconvenience caused to UK travelers could potentially divert their attention back to Disney’s US parks, posing a risk to Disneyland Paris’ revenue[/vc_column_text][/vc_column][/vc_row]
