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Analysts predict plunge into red for Euro Disney

Thursday, 12th November 2009 at 02:09

FinancialToday is looking like being a bad news day. In just a few short hours, the operating group of Disneyland Paris is predicted to announce sharp falls in revenue off the back of the economic crisis.,

It was all looking so good. The 15th Anniversary extended, record attendance figures pushing above 15 million, three years of new attractions, hotel occupancy reaching saturation point and, this time last year, the resort’s first profit in almost 10 years.

Back then, they just about crawled towards €2 million in the black. All things considered, today will most certainly see the resort slip painfully back into the red.

Journalist Christian Sylt shared an article with DLRP Today published in The Telegraph newspaper last week, reporting on analyst predictions of a sharp decline in revenue.

It doesn’t make for fun reading.

Theme park operator Euro Disney is expected to post a sharp decline in revenue, plunging it from net profit into loss, when it announces its results on Thursday.

The company, which runs the Disneyland Paris resort on the outskirts of the French capital, has been battered by the downturn as more holidaymakers have stayed at home and the pound has reached record lows against the euro.

In 2008 Euro Disney posted a €1.7m net profit, its first in more than five years, as revenue rose 9pc to €1.3bn on the back of record attendance of 15.3m people. The recession looks to have put paid to this being repeated.

“I think the attendance could be flat,” said one Paris-based analyst. “The big issue for me is the prices.”

As Christian goes on to report, Euro Disney SCA’s operating loss in just the first six months of 2009 was €85.4m, nearly double its deficit from the same period the previous year.

Flat attendance would certainly be troubling, given the almost continuous 20%, 30% and even 40% discounts the resort has been running this year, desperately trying to keep up the momentum gained in previous years. But naturally, slicing 40% off the income from a package holiday presents a disastrous outlook for the resort’s revenue.

Toy Soldiers Revenue Drop

All this puts into question whether Euro Disney really could accompany the report with an announcement of new attractions, or as heard most recently, that new Convention Centre and resort development.

If the money’s there, it’s certainly more positive to be reporting losses alongside announcements of investments which should build future growth. The Convention Centre would tap in properly to the business market, a new hotel would allow the resort to capture more guests at peak periods, the signature World of Disney store might help the parks’ traditionally low guest spending and new attractions could stop attendance slipping backwards — since clearly unimaginative filler like Mickey’s Magical Party has failed to inspire during the global recession.

Of course, whatever happens, there’ll be one bit of good news when the sun rises over Disneyland Paris later: Toy Story Playland will finally be officially announced by Euro Disney SCA. Er, won’t it? Well, better late than never.

Brace yourselves, people.

• Read the rest of the article, including a background of the resort’s finances, here.

Image © Disney.

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  • R obert/cologne  12th November 2009, 07:08

    Im sure things will get better next year if everything gets back to normal after the crisis,which crossing my fingers cant last for ever.The best thing to do would be invest so it makes it immposible not to go to DLP.Advertising would help here,just look at the Small World Xmas adverts for the US parks,and expand the advertising to more markets because here in Germany we have good to none.

  • It was not as bad as I first thought but their was no real info regarding future projects except Toy Story Playland which everyone except investors knew about it before it was anounced to shareholders this shows how important they feel investors are to the business.

  • “Of course, whatever happens, there’ll be one bit of good news when the sun rises over Disneyland Paris later: Toy Story Playland will finally be officially announced by Euro Disney SCA. Er, won’t it? Well, better late than never”

    It is:


  • I’m certainly no financial analyst or even very savvy in these matters, but the net loss of € 63m that was announced today certainly seems in keeping with the current financial climate, but – to me – doesn’t sound too disastrous. And yes, they announced Toy Story Playland. So there. Comments, anyone?

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