After considering more than 200 possible sites, Marne-la-Vallee, about 20 miles east of Paris, was chosen to host Euro Disneyland, which opened in 1992 (Matusitz, 2010). The name of Euro Disney was changed to Disneyland Paris in 1994. According to Disney’s annual financial report, Disney owned 81 percent of Disneyland Paris at the end of fiscal year 2015, up from 49 percent in 1992. Unlike the arrangement with Shanghai Disneyland, there is no joint-venture management company for Disneyland Paris; it is 100 percent managed by Disney. The revenue performance of Disneyland Paris was disappointing. During its 14 years of business before Shanghai Disneyland opened in 2016, the park was reported to have only made profits for two years with a maximum loss of US$400 million. Euro Disney S.C.A, the owner company of Disneyland Paris, had been bailed out three times in three decades. The execution of Disneyland Paris was deemed as problematic, with issues, such as cultural missteps without considering local preferences and overstaffing from the very beginning. While making efforts to improve the management of Disneyland Paris, Disney continued its global expansion of another international Disneyland to enhance overall revenue performance for its parks business.
Hong Kong Disneyland
Opened in 2005, Hong Kong Disneyland is owned by a joint venture company, the Hong Kong International Theme Parks Limited, with two shareholders: The Walt Disney Company and the Government of the Hong Kong Special Administration Region (HKSRG). For the initial construction, HKSRG covered 90 percent of the US$1.8 billion cost but owned 57 percent of Hong Kong Disneyland. The closed-door Hong Kong Disneyland deal was called an unequal treaty by a local legislator (Choi, 2010). The Hong Kong government leased the land for free. Taking into account the infrastructure cost, such as highways and a 3.5-kilometer new railroad, HKSRG in total invested US$2.9 billion with an estimation that it would create 30,000 jobs (Lee & Fung, 2013). As former chief secretary of HKSRG Anson Chan emphasized, Disney and Hong Kong were both internationally well-known brand names and one could not put a price on Disney’s choosing Hong Kong as a partner (Lee, 2009). After the later expansion projects invested in by Disney, HKSRG’s ownership shifted to 53 percent and Disney’s to 47 percent at the end of the fiscal year 2016. Unlike the arrangement for Shanghai Disneyland, there is no jointventure management company for Hong Kong Disneyland; it is 100 percent managed by Disney.
According to Hong Kong Disneyland’s annual financial reports, since its opening in 2005 until fiscal year 2019, only three years, fiscal years 2012 to 2014, showed net profits. In September 2020, due to economic concerns, the Hong Kong government ended Disney’s land expansion option. As a pilot park for Disney’s business in China, the underperformance of Hong Kong Disneyland did not stop Disney from investing in populous mainland China to attract more Chinese tourists to a nearby location.