Case: Disneyland Abroad
Case: Disneyland Abroad
In 1984 Tokyo Disneyland completed its first year of operations after five years of planning and construction since the Walt Disney Corporation entered into an agreement with the Oriental Land Company in Japan. More than 10 million people (9 percent from other Asian countries) visited the park, spending $355 million. This was $155 million more than had been expected, largely because the average expenditure per visitor was $30, rather than the estimated $21 per visitor. Tokyo Disneyland thus became quickly profitable. Growth continued, so that by 1990 more than 14 million people visited the park, a figure slightly larger than the attendance at Disneyland in California and about half the attendance at Walt Disney World in Florida.
The Tokyo park is in some ways a paradox. Although such firms as Lenox China and Mister Donut had to adapt to Japanese sizes and tastes, Tokyo Disneyland is nearly a replica of the two parks in the United States. Signs are in English, and most food is American-style. The management of the Oriental Land Company demanded this because they wanted visitors to feel they were getting the real thing and because they had noted that such franchises as McDonald's have enjoyed enormous success in Japan as Japanese
youth have embraced American-style culture. Yet, a few changes were necessary, such as the addition of a Japanese restaurant.
The timing of the Tokyo Disneyland opening coincided with a rise in income and leisure time among the Japanese. A Disney executive said that a similar rise in income and leisure had contributed to the successful opening of the first park near Los Angeles.
That the park is nearly identical to the ones in the United States masks the fact that there have been numerous operational adjustments. Probably the most important were in the methods of promotion. Whereas Disney uses its own staff to prepare advertising in the United States, it has relied on outside agencies within Japan to adapt to cultural differences. Even within Japan there are differences. For example, ads outside of Tokyo are more informational, whereas those in Tokyo, where the park is well known, rely more on a fun image.
Disney provided no financing for the Tokyo operation. Disney provided master planning, design, manufacturing and training services during construction, and consulting services after completion of the facility. Disney received fees for its efforts during the construction phase, and — it now receives a 10 percent royalty from admis- "~ sions and 5 percent from merchandise and food sales.
The success of Tokyo Disneyland led the company to consider expansion into Europe. In 1985 it announced that it had narrowed its locational
choice to two countries, Spain and France, for a park scheduled to open in 1992. Since the park was estimated to provide about 40,000 permanent jobs and would draw large numbers of tourists, the two countries openly courted Disney. Disney, in turn, was likened to Scrooge McDuck, as it openly played one country against the other in an attempt to get more incentives. Spain offered two different locations and 25 percent of the cost of construction, and claimed it could attract 40 million tourists a year. The French guaranteed 12 million customers a year, the number Disney estimated as the break-even point, and agreed to extend the Paris railway to the park's location (thus linking the park to the rest of Europe) at a cost of about $350 million. In addition, the French government offered 4800 acres of land at about $7500 per acre, a cheap price for the area, and loaned 22 percent of the funds needed for financing. Disney finally signed an agreement with the French government in. 1986 because of the more central location of_ Paris (109 million people live within a six-hour^ drive of the French theme park), the large number of tourists who visit Paris throughout the year, and the availability of flat land near Paris. (The four Disney theme parks are depicted on Map 1.1.)
The negotiations resulted in Disney's agreement to own at least 16.7 percent, but not more than 49.9 percent, of Euro Disney, which included satellite investments around the park for hotels, shopping centers, campgrounds, and other facilities. The total investment by 1992 has been estimated at between 2.4 and 3.0 billion U.S. dollars. Disney opted for a 49 percent stake. Disney's confidence was due in part to the fact that 2.5 million Europeans visited the U.S. parks in 1990. Remaining shares were sold through an international syndicate of banks and securities dealers
with 50 percent going to investors in France, 2 5 percent in Britain, and the remainder elsewhere in Europe.
If Disney had opted for a Spanish location, the park would have been much more like the ones in the United States, where visitors are outside for almost all amusements. But Disney had learned from the Tokyo experience that colder weather does not necessarily impede attendance. Nevertheless, the colder climate in the Paris area requires more indoor shows, strategically located fireplaces, a glass dome over the teacup ride, protected waiting lines, and more focus on technology and historical themes. Because of French individualism, Disney has had to relax some of its U.S. grooming codes and has admitted that it may have to alter its no-alcohol policy for this park.
In spite of the economic benefits that the park is expected to bring, many people in France have feared that the park is just one more step toward the replacement of the French culture with that of the United States. A best-selling book denounced the French governmental concessions. Critics have called Euro Disneyland "a cultural Chernobyl"; Disney's chairman was pelted by eggs in Paris; and one magazine, le Nouvel Observateur, showed a giant Mickey Mouse stepping on the rooftops of Parisian buildings. Yet, the late actor Yves Montand summed up the feelings of young French when he said, "T-shirts, jeans, hamburgers—nobody imposes these things on us. We like them." Walt Disney Productions sought to head off criticism by explaining in the French press that Disney was of French descent, with an original name of D'Isigny rather than Disney. Disney also agreed to make French the first language in the park, although relying heavily on visual symbols. Disney has built an attraction, Discoveryland, based on the science fiction of France's Jules Verne, and a movie theater featuring European history. The park is also emphasizing that Pinocchio was Italian, Cinderella was French, and Peter Pan flew in London. But the "cultural invasion" is not entirely one way. In 1990 Disney announced plans for a large-scale shopping center adjacent to Walt Disney World to be anchored by Japanese and European department stores.
Disney's success in Japan and expansion into France has not gone unnoticed by competitors. By 1990 theme parks were either under way or
in planning stages all over Japan and Europe. Japanese parks include Space World, Sesame Place, and Santa Land. Among the many European parks are Busch Gardens and Universal Studios. This competitive expansion has raised questions about the future success of Disney's foreign theme parks, especially the one in France. The head of MCA's recreational group, the parent of Universal Studios,
said, "We're going to kick Disney's butt all over Europe."
In 1984 Tokyo Disneyland completed its first year of operations after five years of planning and construction since the Walt Disney Corporation entered into an agreement with the Oriental Land Company in Japan. More than 10 million people (9 percent from other Asian countries) visited the park, spending $355 million. This was $155 million more than had been expected, largely because the average expenditure per visitor was $30, rather than the estimated $21 per visitor. Tokyo Disneyland thus became quickly profitable. Growth continued, so that by 1990 more than 14 million people visited the park, a figure slightly larger than the attendance at Disneyland in California and about half the attendance at Walt Disney World in Florida.
The Tokyo park is in some ways a paradox. Although such firms as Lenox China and Mister Donut had to adapt to Japanese sizes and tastes, Tokyo Disneyland is nearly a replica of the two parks in the United States. Signs are in English, and most food is American-style. The management of the Oriental Land Company demanded this because they wanted visitors to feel they were getting the real thing and because they had noted that such franchises as McDonald's have enjoyed enormous success in Japan as Japanese
youth have embraced American-style culture. Yet, a few changes were necessary, such as the addition of a Japanese restaurant.
The timing of the Tokyo Disneyland opening coincided with a rise in income and leisure time among the Japanese. A Disney executive said that a similar rise in income and leisure had contributed to the successful opening of the first park near Los Angeles.
That the park is nearly identical to the ones in the United States masks the fact that there have been numerous operational adjustments. Probably the most important were in the methods of promotion. Whereas Disney uses its own staff to prepare advertising in the United States, it has relied on outside agencies within Japan to adapt to cultural differences. Even within Japan there are differences. For example, ads outside of Tokyo are more informational, whereas those in Tokyo, where the park is well known, rely more on a fun image.
Disney provided no financing for the Tokyo operation. Disney provided master planning, design, manufacturing and training services during construction, and consulting services after completion of the facility. Disney received fees for its efforts during the construction phase, and — it now receives a 10 percent royalty from admis- "~ sions and 5 percent from merchandise and food sales.
The success of Tokyo Disneyland led the company to consider expansion into Europe. In 1985 it announced that it had narrowed its locational
choice to two countries, Spain and France, for a park scheduled to open in 1992. Since the park was estimated to provide about 40,000 permanent jobs and would draw large numbers of tourists, the two countries openly courted Disney. Disney, in turn, was likened to Scrooge McDuck, as it openly played one country against the other in an attempt to get more incentives. Spain offered two different locations and 25 percent of the cost of construction, and claimed it could attract 40 million tourists a year. The French guaranteed 12 million customers a year, the number Disney estimated as the break-even point, and agreed to extend the Paris railway to the park's location (thus linking the park to the rest of Europe) at a cost of about $350 million. In addition, the French government offered 4800 acres of land at about $7500 per acre, a cheap price for the area, and loaned 22 percent of the funds needed for financing. Disney finally signed an agreement with the French government in. 1986 because of the more central location of_ Paris (109 million people live within a six-hour^ drive of the French theme park), the large number of tourists who visit Paris throughout the year, and the availability of flat land near Paris. (The four Disney theme parks are depicted on Map 1.1.)
The negotiations resulted in Disney's agreement to own at least 16.7 percent, but not more than 49.9 percent, of Euro Disney, which included satellite investments around the park for hotels, shopping centers, campgrounds, and other facilities. The total investment by 1992 has been estimated at between 2.4 and 3.0 billion U.S. dollars. Disney opted for a 49 percent stake. Disney's confidence was due in part to the fact that 2.5 million Europeans visited the U.S. parks in 1990. Remaining shares were sold through an international syndicate of banks and securities dealers
with 50 percent going to investors in France, 2 5 percent in Britain, and the remainder elsewhere in Europe.
If Disney had opted for a Spanish location, the park would have been much more like the ones in the United States, where visitors are outside for almost all amusements. But Disney had learned from the Tokyo experience that colder weather does not necessarily impede attendance. Nevertheless, the colder climate in the Paris area requires more indoor shows, strategically located fireplaces, a glass dome over the teacup ride, protected waiting lines, and more focus on technology and historical themes. Because of French individualism, Disney has had to relax some of its U.S. grooming codes and has admitted that it may have to alter its no-alcohol policy for this park.
In spite of the economic benefits that the park is expected to bring, many people in France have feared that the park is just one more step toward the replacement of the French culture with that of the United States. A best-selling book denounced the French governmental concessions. Critics have called Euro Disneyland "a cultural Chernobyl"; Disney's chairman was pelted by eggs in Paris; and one magazine, le Nouvel Observateur, showed a giant Mickey Mouse stepping on the rooftops of Parisian buildings. Yet, the late actor Yves Montand summed up the feelings of young French when he said, "T-shirts, jeans, hamburgers—nobody imposes these things on us. We like them." Walt Disney Productions sought to head off criticism by explaining in the French press that Disney was of French descent, with an original name of D'Isigny rather than Disney. Disney also agreed to make French the first language in the park, although relying heavily on visual symbols. Disney has built an attraction, Discoveryland, based on the science fiction of France's Jules Verne, and a movie theater featuring European history. The park is also emphasizing that Pinocchio was Italian, Cinderella was French, and Peter Pan flew in London. But the "cultural invasion" is not entirely one way. In 1990 Disney announced plans for a large-scale shopping center adjacent to Walt Disney World to be anchored by Japanese and European department stores.
Disney's success in Japan and expansion into France has not gone unnoticed by competitors. By 1990 theme parks were either under way or
in planning stages all over Japan and Europe. Japanese parks include Space World, Sesame Place, and Santa Land. Among the many European parks are Busch Gardens and Universal Studios. This competitive expansion has raised questions about the future success of Disney's foreign theme parks, especially the one in France. The head of MCA's recreational group, the parent of Universal Studios,
said, "We're going to kick Disney's butt all over Europe."
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