Disneyland Paris Reveals $1.5 Billion Investment In Studios Park

Disneyland Paris revealed that it has invested more than $1.5 billion (€1.4 billion) in its movie-themed park over the past five years.

The resort on the outskirts of Paris comprises seven on-site hotels, two convention centers, a 27-hole golf course, the 44,000-square-meter Disney Village entertainment district and two theme parks. The ornate iron gates to the fairytale-themed Disneyland Park first swung open in 1992 and it was joined by the neighboring Walt Disney Studios a decade later.

Designed at a time when behind the scenes tours were all the rage, the studios park was intended to look like an actual movie studio backlot. Instead of being home to extravagant brightly-colored buildings, the park was filled with cream-coloured hangar-like soundstages. The choice of attractions reflected the architecture. Light on roller coasters, the highlights were shows about the history of animation and the secrets of special effects.

As time went by, ‘making of’ featurettes on DVDs and online search engines lifted the veil of secrecy on the art of movie-making. It took the shine off the studios park’s selling point and critics nicknamed it ‘Warehouse World’ after its austere architecture.

Although attendance at the park rose 17% over the decade to 2019, according to the TEA/AECOM Theme Index, it still only came to 5.2 million which was 46% lower than the number of guests who streamed through the turnstiles of the Disneyland Park next door.

It cast a dark spell on the entire resort’s fortunes and by 2012, two decades after Disneyland Paris opened, its bottom line was still being dragged down by finance charges on the $1.8 billion (€1.7 billion) of bank loans which funded its construction. The reason for the debt dated back to before the ground had even been broken on the site where Disneyland Paris stands today.

When Disney was looking for a site in Europe it requested a plot of land a fifth the size of Paris in order to maintain its exacting standards in the area surrounding the parks. Disney got its wish but it came with a catch.

As we have reported, the French government was only prepared to allocate such a large plot of land to a foreign company on condition that it entered into a public-private partnership.

Disney incorporated a company, now known as Euro Disney Associes to run the resort and it was listed on the Paris Euronext exchange. Only 49% of the company was in Disney’s hands making it the private party in the partnership. The majority of the shares in it were owned by the public and this made it difficult for Disney to pour money into the business as it has done with its parks in the United States which it wholly-owns.

Instead, Disney gave loans to its French outpost and it handed over one of the biggest in 2012. With a wave of its magic wand, it eased the debt burden on Disneyland Paris by taking on its loans and refinancing them to significantly reduce the interest rate. It put the resort on course for profitability but that was just the start. In 2014, Disney backed a $1.05 billion (€1 billion) recapitalization of Disneyland Paris and three years later it finally took full control of the company.

The takeover, which we first forecast in 2012 in Britain’s Daily Telegraph newspaper, saw Disney pay $2.10 (€2) a share for all of the stock that it didn’t own. The offer was a generous 67% higher than the share price at market close the day before the takeover was announced. It has had a magic touch.

The acquisition was followed by a $1.6 billion (€1.5 billion) recapitalization which was again backed by Disney. This finally cleared the debt mountain at Disneyland Paris as the terms of the transaction stated that the proceeds would be “allocated to repayment of debt owed to TWDC [The Walt Disney Company].” It didn’t stop there.

In November 2017, we broke the news in British newspaper The Express that Disney was planning its biggest show of support yet by investing $2.1 billion in Disneyland Paris. This was finally officially announced in February 2018 by Disney’s chief executive Bob Iger and French president Emmanuel Macron.

They announced that the money would be spent on the biggest expansion in the history of the studios park. In the face of declining interest in behind the scenes tours, Disney decided to reposition the studios park as a place where guests can immerse themselves in elaborate recreations of the environments from their favorite movies. Three new lands for the park were announced with the first being the superhero-themed Avengers Campus, which opened last year and will be followed by an area based on the hit animated film Frozen.

Development work on the new lands was acknowledged for the first time in the first set of EDA’s financial statements that were filed after the announcement. They covered the year from October 1, 2018 to September 30, 2019 and showed a $366 million (€347 million) increase in the construction in progress. The financial statements explained that “this increase reflects the investment linked to the development plan for the Walt Disney Studios park, IT projects and new seasonal events.”

In 2020, the increase in the construction in progress came to $349 million (€331 million) and was attributed to the studios expansion and IT projects. From the following year onwards, the financial statements show that the increase only “reflects the investment linked to the development plan for the Walt Disney Studios park”. It came to $317.4 million (€301 million) in 2021 and $473.5 million (€449 million) in 2022 bringing the total to $1.5 billion. It isn’t hard to see where the money has been spent.

Avengers Campus immerses guests in the worlds of Marvel superhero movies and features fastidious attention to detail. The land looks like a high-tech science park that has been built on the site of old factories and a military base. Fake crumbling brickwork, complete with faded paint on it, can be seen behind the futuristic facades. As we have reported, the highlight is a Spider-Man simulator which uses motion-sensing cameras and 3D screens to give guests the impression that they are shooting virtual webs from their wrists.

Even the restaurants fit the theme. One is called the Pym Test Kitchen and it is meant to be run by Hank Pym, AKA costumed crimefighter Ant-Man. In keeping with his power to shrink and grow objects, it serves micro Oreos and burgers the size of dinner plates which are cut into slices like cake. No expense has been spared here either as a screen above the counter shows food going into an oven and growing or shrinking. Even its ice cream cart fits the theme as it looks like a shrunken factory on wheels.

The land feels like less of a theme park area and more of a stage for guests to act our their super hero fantasies. Costumed characters even do battle with each other on the roofs of the elaborate buildings which seems like a more natural location for mock-fights than the stages that usually stand on the ground in theme parks.

The wizards behind the immersive lands in Disney’s parks are known as Imagineers because their jobs involve the imaginative application of engineering. Disneyland Paris was developed by Imagineers who aren’t just leaders in theme park design but the entire experiential entertainment sector. They include luminaries like Tom Morris, Eddie Sotto and Jim Shull who oversaw the Avengers Campus expansion.

One of Imagineering’s most skilled artists, Shull was a logical choice as he began drawing Marvel characters when he was only a few years old. “I also owned thousands of Marvel Comics and they proved as useful as the films in the creation and design process,” he said. No stone was left unturned as he visited factories in France to ensure that the ones in Avengers Campus looked authentic.

“European factories don’t look the same as US factories,” he said. “The electrical, the fittings, the walls are different.” No detail was too trivial as he even inspected valve fittings to design the exposed piping for the make-believe former factory in Avengers Campus. “European guests would have known if the factory didn’t look correct and lived in,” he explained.

All the design details are deliberate and Shull is one of the few people who knows the reason for them. One of the restaurants in Avengers Campus appears to be located in a converted military base with stains on the walls. It is no accident. Called the Stark Factory, Shull says the story behind it is that it was a storage room for dangerous materials and the stains are actually burn marks from them.

Pointing to a map of the land, Shull even shows where an airfield would have been located in the fantasy world where the buildings were a military base rather than a theme park. “The airfield doesn’t exist in reality, but it was present in my mind whenever I thought about the foundations of the designs,” he said. It has paid off.

During Disney’s second quarter earnings announcement in May, Iger said that “at Disneyland Paris, our Avengers Campus has been a resounding success in its first year.” It is no exaggeration.

In 2022 all the stars aligned for Disneyland Paris as the end of pandemic restrictions unleashed waves of tourists with pent up demand to travel. It coincided with the opening of Avengers Campus as well as the debut of a ground-breaking drone show to celebrate the resort’s thirtieth anniversary in April.

According to the Themed Entertainment Association’s Global Attraction Attendance Report, total attendance at Disneyland Paris rose 183.6% to 15.3 million last year making it Europe’s most-visited theme park resort. It has reported record per capita guest spending for the eight quarters to Q3 2023 and this contributed to EDA’s revenue rising nearly three-fold to a record $2.5 billion (€2.4 billion) in the year to 30 September 2022.

As we revealed in the Sunday Times newspaper in March, EDA reported its highest operating profit in a decade last year. After paying $124.4 million (€118 million) of royalties to Disney, EDA made a $49.6 million operating (€47 million) profit in 2022 but then had to shell out more than $105.5 million (€100 million) of financial charges.

EDA ended the year with a $49.6 million (€47 million) net loss and since 2019 has lost a total of $1.05 billion (€1 billion) so it is a long way from recouping the investment in the studios park. However, it still has everything to play for.

Over the past 20 years, Disney’s aggregate worldwide investment in its theme park division has increased three times but the operating income it has generated has risen by a factor of four. Its international parks are particularly powerful engines as their per capita guest spending has increased by 69% over the five years to Q3 2023.

Disney’s theme parks don’t just benefit the company financially as they also promote its movies and streaming shows and this is where Avengers Campus comes into its own. An actor dressed like Tom Hiddleston’s Loki character has been greeting guests in Avengers Campus since the streaming show he stars in debuted two weeks ago. Likewise, when Ant-Man and the Wasp: Quantumania launched in February, models of the Pym particle discs which shrink and grow objects in the film were scattered around Avengers Campus so that guests could go on a treasure hunt to find them.

Although Avengers Campus has been the focus of the new developments at Disneyland Paris since the expansion was announced, other new attractions have also opened. In July, the studios park premiered TOGETHER: A Pixar Musical Adventure, an indoor show featuring a live orchestra playing tunes synchronized to movie scenes on floor to ceiling LED screens surrounding performers on a stage.

In addition to the Frozen land, the studios park is also due to get a bizarre-sounding Alice In Wonderland show featuring stunt bikes. Next door in the Disneyland Park, drones will be used from early 2024 in a new show which will recreate classic Disney parade floats in the air. The resort is fast making a name for itself in this field.

To celebrate France’s national holiday in July Disneyland Paris arranged a special show featuring its centerpiece Sleeping Beauty castle flanked by famous local landmarks formed from drones. It even impressed industry experts who have seen it all. Robb Alvey, founder of Theme Park Review, the world’s leading theme park and roller coaster review site, said “I can’t believe what my eyeballs are seeing! This drone/fireworks show that Disneyland Paris did for Bastille day is absolutely insane! Why are we not doing this here in the U.S. DisneyParks?”

Aside from the two theme parks, the Disney Village entertainment district is also getting a fresh sprinkling of pixie dust. The complex hasn’t changed much since it opened with Disneyland Paris 31 years ago. It was designed by renowned architect Frank Gehry and has an industrial style which was popular in the 1990s. There are brushed steel pillars, bare concrete paths and shops in warehouse-like units.

In 2018, we revealed that Disney Village would be transformed by both a major renovation and expansion. “We have renewed part of the hotels, and we will continue that. We have renewed a number of attractions in the parks so the next step will be to renew the Disney Village as well,” revealed Francis Borezée, the former vice president of resort and real estate development at Disneyland Paris. “We will start with the renovation, but then we have an opportunity to expand where today we have tents which are used for business events.” The plan was finally officially announced in March last year.

The Disney Village and the studios park aren’t the only areas where construction is in progress. The Disneyland Hotel, a pink Victorian palace which stands at the entrance to the Disneyland Park, is nearing the end of a renovation which follows the transformation of the neighboring Hotel New York into a Marvel-themed property. According to Disney, its average daily rate has increased by more than 100% since 2018, the last full year before it closed for the refurbishment. It may be music to Disney stockholders’ ears but it has disenchanted a lot of guests.

Earlier this month, TikTok user Mario Zelaya posted a video complaining that he had spent $1,160 (€1,100) on tickets for a family visit to Disneyland Paris. “I made a huge mistake,” he said in a video which has been watched 685,000 times. “I’m almost embarrassed at how much money I spent.”

The Canadian father explained that he paid for Premier Access to skip queues for rides but still had to wait for more than an hour for some of them. He claimed that his family would have spent over 25 hours in lines if he hadn’t bought the tickets but that wasn’t what many cash-strapped followers wanted to hear.

The resort faced an even greater problem over summer when strikes by workers demanding more pay repeatedly paralyzed Disneyland Paris as we reported. Worse still, it came at around the same time that Disneyland Paris lost its direct rail connection to the United Kingdom making it more difficult for travelers from its second-biggest market to reach the resort.

As if that wasn’t enough, it is facing home-grown challenges as the DLP Report fan account frequently posts photos of disrepair at Disneyland Paris. Even the brand new Avengers Campus hasn’t escaped its gaze. Its photos show that the glass doors at the entrance to the Pym Test Kitchen shattered once in January, again in June and once more in September.

Other photos from DLP Report document broken doors to the Stark Factory, lighting faults at night and cracked props which subsequently had to be replaced. The popularity of the new land could be the explanation and this comes with its own challenges.

The larger the crowds, the more pressure on the staff at Disneyland Paris who are known as Cast Members due to the role they play in a themed environment. The resort’s main union, the UNSA, is currently locked in salary negotiations with management and recently announced its disappointment at the lack of progress after three meetings.

Undaunted, Disney is pushing forward with expansion plans, not just in Paris but all over the world, and recently announced that it plans to invest $60 billion in its parks over the next decade, almost double the capex of the previous ten years.

Although new rides have only been announced for the studios park, Borezée revealed to us that its neighbor is due to get a glow too. Talking in the Disneyland Park, he said that “in terms of the resort we will be adding new attractions in this park and mostly in the Walt Disney Studios.”

He added that “there are locations which are already dedicated for future hotels but there is no decision to go ahead with them until we have the need.” The expansion could be the driving force behind that.

Five years ago, we revealed in the Daily Telegraph that in anticipation of the crowds that the new lands will attract, Disneyland Paris planned to build a further 14,700 hotel rooms. The pandemic set the resort’s plans back but given how fast it is growing, a happy ending may not be far far away.