Should Euro Disney pour money into the project, build one or more theme parks ... it will increase the operating cash flow and liquidity to the Euro Disney. ...
Public will no longer be satisfied with the traditional attractions, which offered by many European parks. Adding more top quality attractions to keep up and those parks, which grow and upgrade will prosper and those that stagnate will die.
The European parks have traditionally had much lower rates of penetration than the US. Building more high quality theme parks and more advertising will raise awareness of themed attraction. Consequently, market penetration will go up and gain more market share.
Moreover, if we wait for the upturn, it maybe too late for capture the market shares because it takes years to build and market the theme parks.
For example, consider if I have alternatives between go to Six Flags or Disney world, what would I like to go more? Absolutely, I prefer to go to Disney World because I recognize that Disney World is bigger and provides more fantasy to me than Six Flags.
From the reason above, I believe that invest to build one or more theme parks are necessary. It will bring more people to the park, and encourage people to stay longer. Overall businesses will receive this benefits including hotels, parks, restaurants, and shops. Consequently, it will increase the operating cash flow and liquidity to the Euro Disney.
The table above shows the operational statistics from 1992 to 1999.
* These figure came from Disney Paris’s 1995 Financial Statement
Spending per Customer will increase 28 percent.
Fixed Costs will increase 28% and can go up to 36%.
Building more theme parks are the reasonable alternative for Euro Disney because to market and build new theme parks may take years. Then, if we wait for the upturn, it maybe too late to capture the market shares. Moreover, The most important thing is to create more cash flow into the company. If we do not create more attractiveness, awareness, and fantasy by building more theme parks, people will perceive that Euro Disney is just a theme park that they can experience at any theme parks
Why they have to go to Euro Disney? We can see the evidence from the Disney World. First when Disney World opened, it also face the massive loss like the Euro Disney but today, Disney World is the most profitable theme park in the US or maybe in the world. It makes profit because it is big and different, and when people think about theme park in US, they think about Disney World. Finally, The most important thing in marketing is to create something differences from competitors, create more satisfaction to customers, and bring as much as cash flow into the company.