Disneyland Paris Reports Record $2.6 Billion Revenue

Disneyland Paris has revealed that it made a $51 million (€47 million) operating profit last year on revenue which hit a record $2.6 billion (€2.4 billion) as the lifting of pandemic restrictions and the opening of a new land themed to Marvel super heroes led to a surge of guests through its turnstiles.

With two parks and seven hotels, Disneyland Paris is a bellwether of Europe’s tourism sector so its strong performance indicates that the dark clouds blown in by Covid have finally begun to clear.

Its results are all the more remarkable as Disneyland Paris has rarely made a profit since its ornate iron gates swung open in 1992, when it was known as Euro Disney.

Disney’s then-chief executive Michael Eisner selected France over Spain as the location for the resort despite concerns about the weather. In a recent interview for The Times of London he told us that “Disney executives in Burbank, California – but also theme park and resort management in Anaheim and Orlando – thought the winter would kill the park and hotel business.

“I’m from New York City. Unless there is a nor’easter storm, people go out, and if there is a subway to the front door, no problem. Later I insisted we put fireplaces in the lobby of each Euro Disney hotel, but that’s another story. Plus, Tokyo Disneyland opened in spring 1983 and proved successful from the start, so we had real-world experience with a Disney theme park where it snowed.”

Disneyland Paris covers an area of 5,500 acres which is around a fifth the size of the French capital. This locks out competitors from the local area and enables Disney to carefully control the standards of the land surrounding its parks. In order to get such a large amount of land, the French government asked Disney to enter into a public-private partnership.

Accordingly, Disneyland Paris was listed on the Paris Euronext exchange with only 49% in Disney’s hands. As Disney didn’t own the company outright it gave it loans rather than pouring money into it. The resort also funded its construction with $1.8 billion (€1.7 billion) of bank borrowings and the finance charges on it fueled losses.

Eisner says that “from day one it was a hit with the people. I think we had 10 million people in year one, more than the Louvre.” However, he adds that “various factors – the extreme costs associated with going for excellence, for building a castle where castles were real; financing costs of a highly leveraged entity structure; lower per capita spending by visitors who use all their allotted vacation time etc. – hurt the bottom line for a decade or so.”

The debt burden was lifted in 2012 when Disney cleared the bank loans and five years later it took complete ownership of Disneyland Paris in a $2.17 (€2) a share offer. It was de-listed from the Euronext which reduced the visibility into its finances as it is no longer obliged to release quarterly figures.

Disney’s own filings only give general guidance on the results of individual parks and their financial performance isn’t itemised. However, the company which operates its French outpost, Euro Disney Associés, still files financial statements. They show that its revenue rose from $968 million (€893 million) in 2021 to $2.6 billion in the year to 30 September 2022. It far outstripped the 57.8% increase in the company’s $2.5 billion (€2.3 billion) costs leaving it with a $51 million operating profit. As the graph below shows, this was its highest in a decade and a marked improvement on its $627 million (€579 million) operating loss the previous year.

The increase in costs was driven by the re-opening of the resort’s theme parks in June 2021. This led to it taking on 9.4% more staff giving it a total of 15,450. Disneyland Paris is the largest private employer in the Paris region and its staff are known as Cast Members due to their role in a themed environment. Their total pay rose 30.8% last year to a record $825 million (€761 million) as can be seen in the graph below.

The resort is also Europe’s most-visited tourist attraction and, according to infrastructure analysts AECOM, it welcomed an estimated 15 million guests in 2019. As we reported in the Daily Telegraph at the time, the resort was set for a happy ending thanks to significant growth in guest spending and increases to average daily room rates in its hotels.

Capitalising on this, the company invested $216 million (€199 million) in 2018 and said that it was “driven by costs incurred for the development of the resort and improvement of the existing assets. They also include costs linked to the renovation of theme parks and hotels.” As we reported in 2017, Disneyland Paris was due to open a game-changing attraction in 2024 but Covid cast a dark spell on these plans.

According to the latest estimates, attendance fell to just 5.4 million in 2021 but it has skyrocketed since the resort re-opened from the pandemic. In a recent report we revealed that five of the seven on-site hotels at Disneyland Paris alone generated $102.2 million of revenue in the 12 months to September 30 2021, even though they were shuttered for more than seven months of that time. Their financial statements show that this revenue rose a staggering 497% last year to hit a record $617.8 million (€570.2 million).

The positive trend is continuing into 2023 as Disney’s chief financial officer Christine McCarthy revealed last month. Announcing Disney’s results for the three months to December 31, 2022, McCarthy said that “in this quarter, we had very strong performance, especially year-over-year from Disneyland Paris.” Disney’s earnings release noted that attendance and occupancy rose during the quarter whilst guests spent more money due to “an increase in average ticket prices and higher average daily hotel room rates.”

Weak currencies coupled with ticket price increases have put Disney’s parks in the United States out of reach for many European travelers. Disneyland Paris has been the beneficiary of this and made the most of it by opening new attractions. Last month McCarthy added that “at Disneyland Paris, we remain pleased with the positive results we’re seeing from the substantial investments we’ve made there.”

In April last year the resort celebrated its thirtieth anniversary with the debut of the first drone show in a Disney park and followed it up three months later by swinging the doors open to a land themed to the hugely-popular Marvel super hero movies.

The glitzy opening ceremony was attended by Hollywood A Lister Brie Larson who plays the super powered Captain Marvel on the silver screen and in a roller-coaster which is exclusive to Paris. Another ride uses motion-sensing cameras to make it seem like guests are firing webs from their wrists into a 3D screen alongside Spider-Man. Disneyland Paris isn’t stopping there.

The Marvel land is the first stage in a multi-billion expansion which we revealed in the Express newspaper in 2017. The Euro Disney Associés financial statements show that $410 million (€378 million) of assets were under construction in 2022 and the bulk of it relates to a land themed to the hit animated film Frozen which will open over the coming years. It was due to be followed by another land set in the world of Star Wars but Disneyland Paris’ president Natacha Rafalski recently cast doubt on that. She told the France Info television network that Disneyland Paris is “still working on the third theme. We will make announcements about this when we are ready.”

It is rumoured that the third land could instead be themed to the Avatar franchise following the success of the second film in the series which recently became the third highest-grossing movie in history with total takings of $2.3 billion according to industry analyst Box Office Mojo. Pandora – The World of Avatar is one of the most popular lands at Walt Disney
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World in Orlando so it could be just the magic touch that Disneyland Paris needs to remain profitable.

Soon after Bob Iger began his second run as Disney’s chief executive in November last year he made it a priority to make the US parks more accessible. Since then he has boosted the number of lower-priced tickets to Disneyland in California, scrapped parking fees at Walt Disney World hotels and removed restrictions for passholders after 2pm. There could be more to come.

Earlier this month Iger said at the Morgan Stanley
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media conference “I think that in our zeal to grow profits, we may have been a little bit too aggressive about some of our pricing. And I think there is a way to continue to grow our business but be smarter about how we price so that we maintain that brand value of accessibility.” Lowering ticket prices to Disney’s US parks could increase the competition for Disneyland Paris and it isn’t the only challenge which could be on the horizon.

In 2016 Disneyland Paris reported that 32% of its guests arrived by plane or train as there is a direct line from the resort to the UK which is one of its biggest markets after France. However, the direct service will be suspended in June to ease bottlenecks in stations caused by the post-Brexit need to stamp passengers’ passports when they cross the border. A new Entry/Exit System, known as the EES
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, is due to replace the checks but the technology has been delayed several times and is now due to be introduced at the end of the year.

If this inconvenience tempts UK travelers to look at Disney’s US parks again just as benefits to ticket-holders are increasing Disneyland Paris could lose lucrative business. As Brits have to travel further to Disneyland Paris than many of their European counterparts, they often stay longer to make the most of it. This increases revenue and thereby profit for Disneyland Paris so any steps which reduce its appeal to the UK market mean that staying in the black might not be a walk in the park.