Assignment for Resort Management Essay
Assignment for Resort Management
The key areas requiring coverage will be the following:
What factors influenced Disney to internationalize and why, please discuss thoroughly What were Disney’s ownership specific advantages (what did they have to trade/what areas were they expert in?) What were Disney’s location specific factors (the Where) – why did they select France? – Discuss and thoroughly evaluate and discuss using factors in the text What were Disney’s internationalization advantages (the how), how were they going to achieve such a complex move to a European culture and why? Assess the relationship between two parties (Disney & the French Government), who holds the most powerful position, discuss and evaluate What are the multiplier’s effects for France and Disney? Evaluate, analyze and compare Conclusion
No additional research is necessary for this assignment. All details are included in the text given to you.
Reproduced by permission of John Wiley & Sons, LTD from Progress in Tourism and Hospitality Research Vol. 3 No 1, 1997
Disneyland Resort Paris: a permanent economic growth poll in the Francilian landscape
Anne- Marie d’Hauteserre
Department of Geography, Southern Connecticut State University, 501 Crescent Street, New Haven CT06515 USA
Disneyland Resort Paris was located in the Francilian landscape to increase the capital accumulation of the Walt Disney Company. It has settled there permanently, thanks in part to the convention signed by the company with the French government who needed an economic growth pole in the eastern part of the Paris Basin. Disney accepted the partnership and it’s constraints because it had ambitious real estate development plans. The French government, with it’s New Town policy, was the only European country that could provide such a large acreage which it used to lever Disney’s presence.
Keywords: capital circuits; new towns; economic growth pole; landscape formation; public/private partnership Introduction
The arrival of the Magic Kingdom in the Francilian1 landscape ignited a vituperative press campaign by French intellectuals who stood adamantly opposed to American cultural imperialism. It is the latest (although only) international theme park venture by Disney Company. Why did this highly successful company, selling an American specific cultural product that would not benefit from production cost reduction, decide to internationalize?
It certainly would not reduce labor costs as illustrated by the migration of European car factories to the United States, while it would require major construction costs. Was the prospect of a widened European market by the time of the opening of Disneyland Resort Paris in April 1992 the main incentive for foreign foray, and why? Was it established to act as an economic growth pole, complementing the French state’s policy of urban development of the Eastern suburbs of Paris?
Large theme parks, like megaevents, promise potential economic development of the areas they localize in. This new geographic landscape was produce not just by private capital, to be dismantled at capital’s whim (Harvey, 1989), but by the synergic action of several different agents. This paper will demonstrate how the continued economic success of Disneyland Resort Paris is not simply just the result of it’s capacity to create profits through it’s consumption in a new locale, however semiotically explained, and/or the result of the judicious choice of the localization of this cultural capital circuit at the apex of European accessibility.
Its success is circumscribed by and dependent on the French government’s development strategies and judicial structures. Capital has had to negotiate with government the design of it’s commodified landscape, the continued organization of which has also been subject to pressure by its potential customers. The convergence of these agents’ guarantees that Disneyland Resort Paris will remain embedded in Marne-la-Vallee in spite of all the difficulties it has faced until now such as financial restructuring in March 1994.
The paper will first discuss how different approaches to economic globalization explain the Disney Company’s move to internationalize and how the choice of the site was based more on traditionally geographic reasons such as accessibility and availability of land. It will then demonstrate how the Company’s designs to ensure continued growth in the far future could only be accommodated by France with it’s New Town development strategy.
This allowed the state to impose constraints on this private venture to ensure that it would remain a permanent part of the Francilian landscape whose new design the company had to negotiate. The paper will then show how Disneyland Resort Paris is not the white elephant that the French government was accused of subsidizing but will continue to act as a major economic growth pole.
Causes of Disney Company’s move to internationalize
The circuits of capital approach emphasize the totally interconnected nature of finance, production, commodity trade and consumption. ‘Capitalism is a process of reproduction of social life through commodity production. The laws of capital circulation are consistent’ (Harvey, 1989:343). The primary requisite of a capitalist economy is a continuous circulation of capital. Jean-Paul Sartre had noticed already in 1945 that ‘over and above greed, a genuine economic principle motivates Americans: “Money is supposed to circulate” (Combat)’. As capital circulates it is transferred from one investment to another. It follows only one cardinal rule: value be increased. Competition has become increasingly global.
Disney Company, like all TNCs, is essentially a capitalist enterprise driven by profit. ‘The odd thing about post-modern cultural production is how much sheer profit seeking is determinant in the first instance’ (Harvey, 1989:336). The domestication of fantasy in visual consumption is inseparable from centralized structures of economic power. Disneyland Resort Paris is a private instrumental space designed for the efficient circulation of commodities, which is itself a commodity produced for profit. Cultural capital may represent an infinitely more expendable resource for capital accumulation than traditional investment capital, both for private companies and for governments.
Cultural capital is considered here as a form of economic capital invested in the production of culture, rather than a symbolic capital, a person’s or group’s knowledge. These circuits of capital are not abstract notions; they are anchored in space where they create geographical landscapes. The company and its imagineers have been pushed by investors to create more and more circuits.
The Bass brothers controlled nearly 25% of equity and so named Michael Eisner as the new company chairman in 1984, following other hostile takeover attempts, because the company was not exploiting it’s full potential to create more circuits of capital (Wallace, 1985; Taylor, 1987). The company, in 1984, was already a powerful brand name with annual revenues of $1B. Disney’s profits had soared to $783M in 1989 and its revenues had reached $8.5B in 1991 thanks to a very successful theme park in Japan, through enlarging the Orlando area and through other ventures.
It’s new directors wanted to capture more of the surplus value the name generated by entering the real estate business. They wanted to collect more than just royalties, as in Japan, to control more hotel development (they own only a small portion in Orlando), and to draw in more potential customers. ‘They are banking on Eurodisney as the principal engine of Disney’s growth in the 90’s’(Business Week, 1990). Disneyland Resort Paris was considered a major investment potential by 1984 because of the worldwide shift in capitalism from an emphasis on production to consumption.
The organization of consumption has just as important an effect on economic and social structure as the organization of production (Lash, 1993; Zukin, 1991). Shopping, consuming is the most important contemporary social activity on North America (Levine, 1990; Williamson, 1986). The consumption landscape can be viewed as a by-product of the changes in the distribution of income in the constant struggle of labor and capital over economic surplus. Consumption is also emphasized inside the parks. The Magic Kingdoms represents a fantasy landscape constructed around an entirely fictive nexus based on highly selective memory and mediated by mass consumption.
In the United States “…….the Disney landscape has become a model for establishing both the economic value of cultural goods and the cultural value of consumer products” (Zukin, 1991: 231) and has legitimized investment in them. In the over crowded market place (even or especially that of theme parks – see Figure 2) imagery has become increasingly critical as a way of attracting particular publics and facilitating acts of consumption.
The decision to internationalize is a major strategic decision. Disney was looking for economies of scope and co-ordination (Dicken, 1992: 143). Although the process of knowledge accumulation obtained from locating in new markets generates endogenously productivity gains that can sustain long run growth, the company had to ‘compare anticipated streams of monopoly profits with expected costs of product relocation’ (Grossman and Helpman, 1992:335).
The innovation phase of its entertainment product (‘Magic Kingdom’) required it’s location in California, close to the movie and television studios it’s inception and survival depended on (W.Disney in Schikel, 1968). As the product matured, the company reacted to the actions of major competitors. To prevent further entry by competitors it developed the resort in Florida and licensed the ‘Magic Kingdom’ to a Japanese company (Lanquar, 1992).
The dynamic nature of economic and social processes finally led to the direct penetration of foreign markets, penetration of foreign markets, penetration limited in Europe exclusively for the next ten years to it’s French site (Convention, 1987.) Disney Company developed a globally integrated competitive strategy to focus on it’s know-how in resort development which had taken it thirty years to develop and refine and which would differentiate it from it’s competitors. In North America, Disney World had remained the most frequented tourist site, as of 1995. Las Vegas is disputing this ranking today.
Dunning (1980, 1991)2 indicates that, at the micro (firm specific) level, to internationalize, companies need to fulfill three conditions: ownership specific advantages, internationalization of the use of these advantages, and location specific factors, all of which characterize the Disney Company if not always in the traditional manner.
Disney’s ownership specific advantages reside in intangible assets, it’s perfected knowledge in resort development, it’s ability to create new imaginative visual consumption products, it’s sophisticated imagineering skills, inscribed in it’s brand image. Disney’s pursuit of an intentional accumulation of knowledge to respond to anticipated market conditions (for example, by engineering new themes for consumption, since the company has vowed to forever renew it’s parks, cf. Flower, 1991: 186-8, 205-6, 279, 285) requires an allocation of resources and investment of the same magnitude as for creating new technology. ‘Internationalization of this knowledge will require [Disney] to operate a network of [parks] on a world-wide basis’ (Grossman & Helpman, 1991:82).
The application of these skills is limited to theme park creation although the idea has been replicated in other arenas of consumption: mega-malls, for example, seek to attract and retain customers for the longest time by presenting Disney-like attractions. Steve Wynn salutes Disney’s imagineering with his pirate shows performed against the backdrop of a ‘Treasure Island’ sidewalk décor in Las Vegas. Copycat theme parks have burgeoned too, like Busch Gardens.
This socio-spatial complex of production cannot be geographically separated from its consumers. It has needed to locate (i.e. to move outside of the US to where the consumers are) this new form of consumption as well as to localize it’s specific features (creating it’s own landscape within another cultural landscape, both at a geographic site and in the business and consumption world).
The very localized consumption space offered by its theme parks limited it’s possibility for expansion. Disney needed to serve new markets in different locations directly even though the product is virtually identical. Marginal increases in numbers of visitors would have been minimal even if the parks in the United States were enlarged (this was one of the main reasons for Disney’s original move to Florida).
This potential number of tourists from Europe would not increase either much above the 2 million now visiting the theme parks in the United States, considering the slow growth of European population and of it’s wealth. Time and cost space convergence have not been significant enough at the international level for pleasure travelling and it has not dissolved the psychic distance (language barrier for travelling to the United States, if not inside the Disney theme parks).
Geographic reasons for choosing a location in Europe and a Francilian site.
The Disney Company has mentioned two major reasons, or more traditional location specific factors (Euro Disney SCA, 1992). It can draw on 350 million customers (almost one and half times the size of the population of the United States) over an area half it’s size (Figure 1). Such a geographic move was to enable it to take advantage of the growth of short break holidays in Europe, together with the growth in numbers and sophistication of tourists while finding it’s niche in the increasing tourist market segmentation.
Four groups of tourists have been identified in Europe: 52% still travel attractive coastlines in warmer climes, 13% buy tourist packages, 25% prefer rural tourism and the rest practice urban tourism (Straw & Williams, 1990: 241). It founded its strategy on the notion that new consumption practices can take place anywhere and are eminently transportable. The company wanted to insure that it would remain the industry leader while it captured more of the world’s market share and augmented the size of the firm (Grover, 1991). Their target, for some sectors, is up to a 20% yearly increase (Lanquar, 1992:73).
Long holidays occur over the summer months whereas shortest trips (their targeted travel niche) are taken year round. In 1985, more than %19 had taken a second holiday in the European Community, 27% in France. Unfortunately, that kind of travelling could not maintain it’s early fast growth: it had increased 10% yearly in Great Britain between 1976 and 1985. France was also then the European leader in international conferences (Straw & Williams, 1990: 242).
The recession, combined with the staging of several mega-events in Europe in 1992, absorbed much of the disposable income for that year and beyond (Winter Olympic Games in Albertville, France; World Fair in Sevilla, Spain; Summer Olympics in Barcelona, Spain). Disney Company also relied on the fact that its products-division received 50% of its worldwide revenues from Europe.
Fifty-five million copies of The Journal Mickey are published yearly in Europe, including now a Russian version, but only 13 million in the United States. At least 250 European societies have signed licensing contracts with the Disney Company (Rencontres, 1992: 89). Walt Disney Animation, one of the largest European studios for the production of cartoons had been implanted in France earlier (Saffarian, 1992). European consumption habits already included Mickey Mouse paraphernalia.
Disney Company’s organizational apparatus leads, now across the world, to an increasing consumption synergy as its merchandise acts as both commodity and advertisement. In 1990, one third of its revenues were generated from foreign sales (Grover, 1991: 200). Name recognition is crucial even if often taken for granted in the consumer world (Flower, 1991: 21, Grover, 1991: 187). ‘Disney’ has become a shared term in world culture.
Disney Company’s megadesigns (‘Dream, diversify……and never miss an angle’, W.Disney, 1988: 7), part of the dynamism and growth of transnationals, boosted competition for the park between European countries where it was considered a potential economic growth pole by itself and because it co-operates with other large multi-nationals.
Cultural consumption contributes to capital accumulation by enhancing profits on entrepreneurial investment in production and distribution. European governments were anxious to anchor this new circuit of capital on their soil where it wold spawn more circuits. In the first ten years of Disneyland’s existence in California, the Disney company took in $273M, the peripherals $555M (Sorkin, 1992: 224). What distressed Walt Disney even more than the loss of surplus value was the disorderly and sullying form of this growth.
In Orlando it has led to the construction of 76,800 hotel rooms, 5000 of which are under direct Disney management, 12,000 under licensing agreement (Rencontres, 1992). All the others are the result of spillover effects which include the implantation of 23 attraction parks around Disney World (Figure 2)
The two other main contending countries besides France were Spain, for it’s sunshine (access, however was very constricted) and Great Britain because of the successful entertainment complex of Blackpool. The creation of Disneyland Resort Paris opened new spaces for the service economy where it should have a positive effect on capital accumulation in real estate development. Cultural goods and services gain economic significance through their role in interacting circuits of economic and cultural capital (Zukin, 1991: 260). In the contemporary (European, French) market economy investment in cultural capital would offset cyclical devaluation in other parts of the same circuit or in other circuits.
European governments regard tourism as having an important economic role through its impact on foreign earnings, employment creation and regional development, because the activity is labor-intensive and employment can be generated relatively cheaply by those governments. In the United Kingdom tourism supports 1.4 million jobs (Urry, 1990). Urban tourism is being used as a spur to regeneration in many de-industrialized(zing) areas in spite of the strong dependence of tourist activities on part-time and seasonal as well as low-skilled, and this low-waged, labor (Straw and Williams, 1990, Urry, 1990). Man governments were desperate to stem unemployment.
In the mid 1980’s, 16 million workers were unemployed in the European Union. The unemployment rate hovered around 10% between 1983 and 1992 with highs of 12% in France and 21.2% in Spain. The rate for young people was 18% across the Union but reached %30 in Spain and Italy(Commission des Communautes Europeenes, 1992). Many of the recruits of Disneyland Resort Paris are young and unskilled (Lanquar, 1992:117).
Cultural and environmental problems can also be exaggerated by the introduction of mass tourism (e.g. Disney World’s problem with sewage effluents in the Orlando area, Flower, 1991: 252). Such economic development can occur only if it does not put undue pressure on vulnerable natural resources.
European governments are involved in tourism development because of its multiple impacts. Tourism, in turn, has commercialized ‘civilization’: in France, the transformation of ‘the places of memory’ into ‘places to visit’ has returned handsome benefits. The French government takes a broad perspective on tourism: it is more socially and culturally informed and less biased toward economic issues (OCDE, 1992, Rencontres, 1992:157).
Why did Disney Company choose a rainy site close to Paris?
It is one of three major population concentration poles in Western Europe, the other two being London and the Rhine Valley, and it is the most accessible to these other two (see Figure 1). Spain or the London area would have given access to the European Union market but from a peripheral location. Accessibility underpins the pull of centrality. The Paris Basin is at the juncture of northern and southern Europe: it is an unavoidable thoroughfare.
Paris is also one of the most attractive cities with 25 million foreign
visitors throughout the year. It is fewer than the 60 million visitors of London, but the majority of these are domestic (Straw & Williams, 1990). Those who will come to Disneyland Resort Paris, the company reasoned, will remain in the Eurodisney hotels 2 or 3 nights to visit Paris too. Studies conducted in 1985 determined there was great demand potential for theme parks in Europe (only one in ten people had even been to a theme park) that was largely unfulfilled (Rencontres EPA, 1992). ‘The large Paris metropolitan area is missing a theme park that could restore it’s tradition as a center for recreation’ (Ousset, 1986). He felt that Disneyland Paris would fulfill that role.
There existed only two large recreational complexes in Europe: Blackpool Pleasure Beach in England (7 million visitors a year) and more than one hundred-year-old Tivoli Gardens in Copenhagan (3.8 millions) (Urry, 1990). Its site (in Marne-la-Vallee) illustrates the importance of geographical location (Figure 3) in it’s traditional materialist interpretation, which is even more critical at the microlevel. The company had definitely opted for the French site in 1985, in spite of it’s unfavorable weather conditions, following studies conducted since the 1970’s in several European countries on the feasibility of a number of sites (Grover, 1991: 187-8).
Disney Company was looking for a site that was easily accessible to a large number of potential customers year round. When the company returned to court French authorities in the early 1980’s it had also realized that it’s projects needed a minimum critical mass to allow them to function as resorts. They were thus looking for a site that would guarantee the land area needed not only for it’s theme parks (a total of three are planned into 2017) but also for the hotels, restaurants, residences, office that would be built because of the demands generated by the parks (Figure 4).
At the same time, social practices are structured in time as well as in space as they structure that space. Spain has offered the Walt Disney Company a better deal than France, but it was not able to put together a large enough parcel of land (Grover, 1991: 188). The Paris area was the best equipped to handle such a large real estate project thanks to the state’s ‘New Towns Policy” initiated 30 years ago: large virgin plots of land were ready for rapid urbanization, minimizing the cost of infrastructure provision and of the environmental disruption caused by such construction (Roullier, 1993).
Four million cubic meters of land were moved, 68,000 cubic meters of rocks were molded and 85,000 trees planted, while work on sanitation and drainage was equivalent to that required by a town of fifty to sixty thousand inhabitants during the construction of the Disney park (Nouveau Courrie, 1992). This readiness includes not just the transport and other physical infrastructure, but also the judicial and administrative mechanisms for integrated project developments conducted by both the state and private companies.
New town development strategy and the constraints of the ‘convention’
New Towns were created by the French Government in 1964 to guarantee a more harmonious economic development of the Ile de France by emphasizing the eastern side until then neglected (Bastie, 1991: 88). Major industries had located on the western and southern side of Paris, while their pollutants blew east. The French government’s planned office center, La Defense, was built on the western fringes of Paris.
These new towns were to offer a dynamic urban life within an architecturally stimulating environment and to remedy the earlier uniformity of suburban high rising apartment projects constructed to house the lower French classes, and little else (Roullier, 1993) The government chose suburban locations for the new towns (Figure 5) to counteract the main characteristics of all suburbs: their distance from town renters which turns suburban dwellers in Europe into second-class citizens (Merlin, 1989).
More than a million people now live and work in these new towns, 225,300 in Marne-la-Vallee alone in 1993 (Figure 6, EpaMarne/EpaFrance, 1994). Their exact location as well as their layout was to respect the physical characteristics of the area and to take advantage of its environment amenities. Disney Company came on board when the third section (Bussy-St-Georges: 7000 housing units, 600,000 square meters of offices and 90-hectare technological industrial park) was just started (Etablissments Publics, 1991).
The park’s size made it an ideal addition to the new town. Disneyland Resort Paris was not just an amusement, but a large urban development, supported by major improvements in the transport network finance by the French government. (Boyer, 1994).
In the French Government’s view, for the French new towns to really develop – i.e. grow beyond the need for constant state subsidies and to successfully change into old towns – attracting private investment was as important as constructing subsidized housing. The implantation of Disneyland Resort Paris crowned a development strategy conceived many years before (Roullier, 1993). The long-term objective was to make this area on of the main economic pivots of Europe, as revealed by it’s name ‘Val d’Europe’. This objective was based on the improvements in transport systems that would restore freedom of choice to town dwellers, provide access to the labor force and offer distribution networks for businesses.
Transportation has been a key to new town development from its inception. The existing transport network is capable of draining towards Disneyland Resort Paris all those millions of anticipated visitors (Figure 3). All main communication routes in Europe or within France converge towards this area. Even if the Magic Kingdom were to fail (close it’s doors), these transport improvements would remain as the basis for attracting other private investors to an area that has always been designated for urban growth. Continuous urbanization from the other three sectors had been planned for this area, for some indefinite time in the future. The park only accelerated the process.
There are two main themes to the development of Marne-la-Vallee as a new town. One is an office complex ten kilometers from Paris, with direct links to the capital. The other is the complex of Val d’Europe centered around Disneyland, one of it’s featured attractions, with a large number of offices serving as headquarters for Disney in Europe (100,000m2) that should attract other offices functions to occupy another 200.000m2. (EPA, Marne/EPA France, 1994; Boyer, 1994).
By attracting large numbers of tourists, Disneyland Resort Paris will act as
an investment magnet on other circuits of capital, based on the provision of hotels, tourist and leisure facilities and office buildings, that the French government will channel precisely through it’s new town of Marne-la-Vallee and as per the 173-page accord signed by two on 24 March 1987 after 27 months of arduous negotiations. The complete document with it’s appendices totals more than 400 pages (Convention, 1987). Results in real estate values remain way below predictions because Europe has been mired in an economic recession since the opening of the park.
Although the French government seems to have given in to Disney Company’s demands (Grover, 1991), for example by agreeing to an international rather than a French court to settle disagreements, the detailed contract attributes obligations to both sides. The French government spent 2.7 billion FF to provide first rate transportation links, but it has meant added jobs for the area (4,500 for the rail line, 1,300 for the RER).
Disney Company must, in turn, guarantee a minimum number of rides for the Regie Autonome des Transports Parisiens (RATP) on the extended regional metro (RER) ‘A’ line, or pay for the difference (Convention, 1987, Article 11). A detailed program of development of the land offered to Disney schedules each step. It was not given all 1,945 hectares to speculate with at will, contrary to some press accounts (Business Week, 1990; Smadja, 1988).
Disney Company spent only 500M FF to acquire the land necessary for the it’s first theme park (covering the costs of the infrastructure provided with the land) but it led to private investments of 10B FF (Lanquarm, 1992:109). Other major projects, such as international soccer stadium and centers of higher learning, are being erected in the area, encouraged in part by the presence of Disneyland in Paris (Boyer, 1994).
Disney Company also appreciated dealing with one main negotiating team, the EPA (Etablissement Public d’Amenagement), whose existence was permitted by the new town judicial structure (Rencontres, 1992: 99-122). This is a public development corporation that fulfills both commercial and financial functions. It is established by government decree and has powers of pre-emptive and compulsory purchase, as well as legal and financial autonomy. It can thus function as developer in the new town, while it also represents the government.
Communication remains remarkably static-free between this private company and French authorities, thanks to the single government voice and thanks to the detailed blueprint that indicates who does what, when, and how (Convention, 1987). The company also underlines the importance of continuity on the French side, adhered to through the years, since the first negotiations in 1985, by the French government in spite of political changes at the helm (Rencontres, 1992:100).
The French state did require that this development occur within guidelines set up in a ‘Projet d’Interet General’ (EPAMarne, 1987, Limery, 1996) that seeks to insure a coherent approach that will, for example, enable the villages in the area to maintain their present specific characteristics. The requirement was not made in a spirit of simulated heritage but to maintain architectural variety while enabling new construction to be fully integrated in the new town’s landscape.
This evolution will transform the living conditions of the residents of the old villages of the area who thought they could maintain a rural lifestyle only thirty minutes away from Paris and who are going to be invaded by millions of tourists. Agriculturists and ecologists have joined forces to fight for the preservation of agricultural areas within the new town to counterbalance this mounting urbanization. (See Roullier, 1993; Bastie, 1991).
The departement of Seine-et-Marne has seen an increase of 18,000 hotel rooms between 1985 and 1992. This includes the 5,200 rooms constructed by Disney Company (Rencontres, 1992: 165). It wants to develop the potential attraction of the southern part of the departement, i.e. the region farthest from the park that includes Fontainebleau, from Melua to Chateau-Landon and from Barbizon to Montereau. It’s cultural and natural landscapes are rather exceptional since they include a number of famous castles (Fontainebleau and it’s museum.
Vaux-le-Vicomte, Moret-sur-Loing) and beautiful natural forests. It is also an area frequented by locals (9 million per year) and by many foreign visitors (Maison Departementale, 1994). Disneyland Resort Paris is a wonderful opportunity to increase the level of visits by outsiders to the area which has suffered until now from it’s location in the shadow of Paris (25 million foreigners visit the capital, less than a million come to this area). The convention that Disney Company signed includes the obligation for it to advertise other tourist sites in the area besides it’s own, as per Article 10 of the 1987 Convention (see, for example, the Michelin Guide to the Magical Kingdom).
Tourist operators who do not have exclusive contracts with Disneyland Paris are also solicited to include these other stops in their packages. The departement is also trying to increase partnership agreements with a variety of service providers. Europcar, the official car rental agency of Disneyland Resort Paris, will put inside each vehicle a tourist map of the whole departement, as well as discount coupons for castles and restaurants in the area (Convention, 1987, Conseil General, 1991).
Negotiating the design of the Francilian landscape
The French government must have recognized that behind the vitriolic cultural debate about Disneyland Resort Paris stood a high level of capitalist investment in performance, in the machinery of reproduction, investment designed to create a ‘product’. The French government did not bow to capitalism which, like technology ‘does not invite a close examination of it’s consequences. It asks for trust and obedience….because it’s gifts are truly bountiful’ (Postman, 1993: xiii). Contrary to popular opinion which accused it of caving in to the bullish tactics of Disney and the lure of many jobs, the French government had already resisted approaches by the company in 1976.
French negotiators needed proof that this product could be exported. Tokyo Disneyland could not serve as a model in European negotiations and development, because the Disney Company was not a direct participant. It sold the exploitation rights to a Japanese company (Oriental Land Company) who financed, owns and runs the park. It did, however, serve the purpose of proving that the Magic Kingdom could be successfully transplanted onto foreign soil. ‘We’re finally able to convince the French negotiators that we really meant business.’ (Recontres, 1992:113).
Because of the cultural capital are formed in real spaces, they suggest how space in an advanced service economy is really formed. ‘Capital creates and destroys it’s own landscapes’ (Harvey, 1989). Space is structured by circuits of capital as they leave messages embedded in their surroundings. ‘Since the nineteenth century, shifting from one landscape to another has depended less on individual mobility than on a broad scale varied remaking of landscape itself.’ (Zukin, 1991: 18). Landscapes sometimes grow by accretion; they do not seem as historically and culturally bound as in the past as they are constantly reinvented by ‘footloose’ capital.
The French government could not have forced Disney Company to choose a location in France. Some incentives to influence it might have over come any benefit government intervention could command. Tax concessions may eliminate any gains or lead to a transitory gains trap. The wages obtained from the supplementary jobs might be very low, leading to minimal tax and spillover gains, while increasing the need for services.
The landscape is broader, has deeper roots and relies on more interconnections than government alone can control, especially on the international scene, since government intervention is restricted to it’s territory. Strategies of cultural consumption may only complement, rather than contradict, strategies of capital accumulation.
The competitive edge of the French government to capture the Disney investors was by means of product differentiation, offering a space they enhanced through design and designation. The linkage between cultural capital and real estate development enables new economic structures to be localized and to acquire specific geographic locations: Marne-la-Valle for Disneyland Resort Paris. Disneyland Resort Paris demanded specific efforts to insert this large international project into a suburban new town within which it is to evolve rapidly. These are efforts of co-ordination in planning strategies, in capturing spillovers and in image development (Rencontres, 1992).
Disneyland Resort Paris could not, by itself have acted as a growth pole that would economically resuscitate the eastern suburbs of Paris. The circuit of cultural capital it represented fizzled out within two years: Disneyland Resort Paris was ready to close it’s doors in March 1994 because it was bankrupt due to blunders before and at the time of the opening cultural, financial and economic matters. A capital asset that cannot earn income has no value; it becomes a liability. It did subject Disney Company to some ridicule by the press (Solomon, 1994).
The tension between globalization forces that led to it’s expansion in Europe and localization forces, the result of local differences in production and marketing techniques has forced Disney Company to change and adapt it’s much prized know-how: for example, it has had to accept the sale of alcohol in the park. Losses were mounting too dangerously to ignore subtly different cultural practices. It was assumed that traditional status systems and parochial loyalties would wither away in the course of economic growth. Globalization has not done away with culture-specific modes of consumption.
One of Disney Company’s continued problems is the minimal amount spent by these millions of Europeans within the park: an average, in 1992, of 310FF instead of the expected 333 (Commission du Tourisme, 1993), down to 224FF in 1995 (Revenu, 1996). These spectators (Disney Company’s terms for the visitors of it’s parks) have chosen other non-pecuniary forms of participation in Disney’s spectacle.
The resort was, however, integrated in a long-term project of the French government, dedicated to the balanced economic growth of the Parisian Basin. The short-term effect of Disney Company’s capital venture was counteracted by the long term (30 year) ‘convention; signed by both parties. Disney Company could not withdraw, especially if the circuit was no longer profitable. This convergence, in Marne-la-Vallee, of capitalist action and social action created the synergy for Disneyland Resort Paris to be financially restructured in March 1994 so that it could again generate profits.
Mutual effects of economics (circuits of capital pushing Disney Company to find new investment opportunities), politics (the French government looking for economic growth poles), and culture (the acceptance of a not-so-foreign popular cultural trait) are restructuring the Francilian landscape.
Landscape includes the geographical meaning of ‘physical surroundings’ and the ensemble of material and social practices: it is the entire panorama. It connotes a contentious, compromised product of society, but on which powerful institutions have a pre-eminent capacity to impose their view: both the French government and Disney Company in this case, not just the private company Disney (i.e. capital). In the United States, potential investments that are not targeted on short-term gain are often criticized as ‘social’ investments, but all investment takes place in a social context.
Although it is believed that the role of sovereign states is being eroded in favor of international organizations, agencies and/or associations, private or political, that of France used it’s ‘strategic’ position to direct the development and prosperity of the Parisian Basin. The French government tried to avoid that public value be held captive to private value. It wanted to avoid that improvement explicitly reject the social variety of habitation of explicitly seek security by exclusion.
Capitalism’s most lasting product is landscape (new geographies) which in many places it had rendered impermanent, forever exhibiting a new repertoire. Such shifting landscapes illustrate the structural charges of the global economy (Harvey, 1989; Zukin, 1991; Dicken, 1992). The spatial mediation of cultural consumption affects the redistribution of benefits among social classes and explains the direct interest of the French government in a Disney theme park, and it’s offer of the Marne-la-Vallee location. Space does make material form for the differentiation of a market economy but places can be selectively configured to promote community goals.
The French government’s intervention of land in Marne-la-Vallee from matter to property so that development (localized economic growth) would not lead to obsolescence and dereliction here or in other parts of the Paris basin. It demonstrates that capitalism is not a monolithic force operating alone at the universalizing level to carve up the world according to it’s sole designs.
Spillover effects of partnership
Both parties emphasize positive results in spite of the vituperative press campaign which accompanied the arrival of Disneyland in the Francilian landscape (a ‘cultural Chernobyl!’). Such a large attraction was recognized as both a chance and a challenge: ‘The chance we grabbed, and together with our American partners we have worked to make the park a success so the 12
million visitors will bring wealth to this whole eastern region.
The challenge we are facing is to become a strong pole of attraction culturally and economically’ (Rencontres, 1992: 196) Daniel Robert (of Bison Fute fame) added: ‘Marne-la-Vallee is blessed with an extra-ordinary opportunity to sell it’s millions of square meters of office space, it’s ideal of an urban area, it’s strategic position’ (Rencontres, 1992: 55). The presence of such a large investment has emboldened Marne-la-Vallee to combat the skepticism that smaller potential private investors show when solicited by New Towns.
Visitors poured into Eurodisney: 6.8 millions by October 1992, 19.5 millions by February 1994 (Eurodisney SCA, 1992, 1994). It’s basic allurement is it’s Americanness. It has been the best received park ever in Europe and it is the number one paid admission attraction there: Beaubourg Centre received only 8.2 million visitors in 1993, 3.8 million of which were free entries to the library; La Villette saw 5.8 million entries, the Effiel Tower 5.4; the Louvre welcomes 5 million visitors per year (Eurodisney Resort, 1993: 5).
These numbers are insufficient, however, for the park to break even, since it needs 11 million per year to do so and reached just that number only it’s first year of operation. Number of visitors followed a downtrend until 1994: 6,708,551 averaged 1.45 visits in 1993. In 1994, only 5,574,059 (-16.9%) pushed the turnstiles 1.61 times. Visits by residents of the Parisian Basin had dropped by 31.3&. In 1995, however, the park registered a 21.5% increase in attendance.
The percentage of foreign visitors had dropped by 15% between 1992 and 1993 down to 56% of the visits but it was back up to 61% in 1994. The majority of the customers (93.3% of the 5,777 hotel rooms and bungalows – more than are available in the city of Cannes) are tourists, versus less than a two-thirds average for the Ile de France, but here too the number of foreigners has dropped (72% in 1994, 75% in 1993, vs. 82% in 1992).
The occupancy rate of hotels has remained way below Orlando’s rate of 79% even if it did not increase from 55% in 1992 and 1993 to 61% in 1994 and 68.5% in 1995. Every hotel night sold by Disneyland Resort Paris engenders the sale of at least one other hotel night in the area. In 1994, Eurodisney hotels stared welcoming guests who were not necessarily attracted by the theme park
(EPAMarne, 1994, EPA-France, 1995).
Marne-la-Vallee is a creation in progress and it needs to become credible in the eyes of private investors. Although a negative image of Disneyland Resort Paris was diffused by the press during the construction phase, based on it’s American cultural attributes, it’s business of selling false reality for pleasure and it’s bullish negotiating tactics with the French government and later with private companies and labor, the more positive one of leisure and festivities and of successful business know-how has since been emphasized. Disneyland Resort Paris is more than the Magic Kingdom because of the hotels, leisure resources, offices and residences it plans to construct (Figure 4).
It has developed an image as a solid capitalist enterprise, the kind Marne-la-Vallee wants to attract. Know-how can be applied to both Disneyland Resort Paris and Marne-la-Vallee, so that Mickey’s notoriety in Europe can increase that of Marne-la-Vallee, it’s present location. There does exist the danger that it becomes ‘Disney Vallee’.
The social construction of the regional identity of Marne-la-Vallee will be dominated by Disney’s cultural capital and the various other capital circuits it will engender. Two strategies have been suggested to counteract such a danger. At the national level, the state should put in place structures that define the identity of Marne-la-Vallee separate from the company’s trademark. At the local level, endogenous and original solution need to be found to allow each and every inhabitant to identify culturally with the specific part of the Brie plateau s/he lives in.
Disneyland Resort Paris has fulfilled it’s role as an economic growth pole both directly and indirectly, distributing spillover effects in the eastern suburbs of the Paris Basin while bringing economic benefits to the country. Within the perimeter of Disneyland Resort Paris, the ratio between public and private investment is 1 to 8, similar to the one found in most new towns. The French government invested 2.7B FF in public infrastructure while private companies and individuals disbursed 23B FF (Eurodisney Resort, 1993: 2).
Construction employed 5,100 local workers and 180 companies for a cost of 13B FF 47% of which went to Ile de France companies, 76% in the case of residential developments. The company also had to construct 1,800 housing units occupied by 3,500 of its employees. In 1992, Disneyland Resort Paris paid 81M FF in local taxes and 250M FF in sales taxes. On opening day it employed 11,500 people, two thirds of whom were French (70% by 1995), one fifth of other European origin. There are now 9,700 employee representing a saving of 7% in operating costs.
The downsizing came as part of the financial restructuring of March 1994. They were paid 2B FF in salaries and benefits, a substantial addition to the revenue stream of the new town. They generated with Disneyland, another 25,000 jobs in the area. The fifty tons of laundry produced daily by the resort, for example, led to the construction of two plants in the area. A little over 40% of these employees live in the Seine-et-Marne departement and thus consume within the area.
There are another 5,000 seasonal jobs, 10% of which are filled by local residents. The economic activities of Disneyland Resort Paris in 1993 generated 9.2% less revenue than in 1992, although visitor spending outside of Disneyland Resort Paris increased by 3.8%. Another decrease of 6/9% was registered in 1994.
In the fiscal year 1991-2, the company spent 2.7B FF, but only 2.2 in 1993, a decrease of 20% in goods and services (insurance, laundry, electricity…). Purchases registered a gain of 14% in 1994, and investments for improvements and maintenance, of 22%. Much of the income from these purchases remains in the area. 93% of food products are bought in France, 65% in Ile de France. Statistics were culled from Eurodisney Resort, 1993, EPAMarne, 1994, EPAFrance, 1995, Eurodisney SCA 1992, 1993, 1994.
The French government received 4BFF in foreign currency (3.4% of foreign currency earnings through tourism in France in 1993), 812MFF in taxes and 9 to 15,000 jobs, depending on the season. Although totals fluctuate from year to year, they remain a plus for the economy. Disneyland Resort Paris led to a more than 3% increase in the total number of foreign tourists in France, 60.1M in 1993, 61.3M in 1994. The combined activities and purchases of all 61.3 million tourists provide 5.1% of the French GNP and 7.1% of it’s foreign currency earnings. The park is placed seventh as a major tourist
operator in France, with 4.9BFF in revenues, behind Air France, SNCF, Accor, Club Med, Aeroports de Paris and Nouvelles Frontieres (EPAMarne, 1994, EPAFrance, 1995).
Other theme parks come way behind: Futuroscope earned only 300MFF, Asterix 194MFF. The financial restructuring of it’s annual debt, which amounted to $370M in Marhc 1994, allowed the park to announce a profit of $35 million in the second quarter of 1995 and increased attendance helped consolidate profits for the remaining of the fiscal year…. at least prior to debt payments (New York Times, 1995: D7).
There was wide-spread optimism that Disney’s presence in Europe would enhance the attraction sector’s image, help improve standards of presentation and raise consumer expectations and especially willingness to pay. It has increased investment in smaller-scale attractions in France Asterix park (25 miles north of Paris) which had required an investment of $208 million receives 1.5 million visitors per year.
The comic books it represents three-dimensionally have been translated in 40 languages. It conquered 7% of the potential market in the Paris Basin in three years. Disneyland Resort Paris aims for 17%. Under the influence of Disneyland Resort Paris it has begun a five-year refurbishment program. It has also been forced to define it’s product more clearly (Saffarian, 1992).
Futuroscope, ‘an intelligently entertaining’ park, has revitalized the region that surrounds it. It opened in June 1987 and boasted profits of 15M FF from revenues of 300M FF paid by 2 million visitors in 1994. It’s theme is moving images. When innovators must compete in integrated product markets, they have reason to pursue distinctive ideas, and thereby contribute to the global accumulation of knowledge.
‘Dynamic Cinema’, one of the most sought-after attractions at Futuroscope, thrills, awes and panics spectators through the use of a 60/second flow of images and hydraulically controlled seats with computerized links to the pictures (Tresch, 1994). It has also had repercussions in other European countries. Port Aventura opened in May 1995 near Barcelona. Four hundred million dollars were invested, 20% of which by Annheuaer Busch, over 20 hectares, i.e. 50 acres (Tagliabue, 1995).
Both sides have benefited from this partnership between a private multinational corporation and public authorities. Disneyland Paris has maintained the momentum of development in Marne-la-Vallee that the French government wanted to stimulate. ‘The success of the office centers of Marne-la-Vallee, of the Cite Descartes (and area of higher learning) and the presence of Disneyland Resort Paris demonstrate that betting on Marne-la-Vallee to assure the economic development of the eastern part of Paris Basin was the way to go, even if success was long in coming’ (Merlin, 1989: 77). New large projects are being constructed and jobs and their multiplier effect, taxes, new transport lines are increasing. In 1995 attendance numbers were on the rebound and hotel revenue and occupancy rates augmented.
Even Orlando had rocky beginnings before returning it’s investment many times over and the two American parks suffered from lulls (Grover, 1991, Flower, 1991). Both the company and the French government had remained optimistic since talks for the next stage of development are right on schedule. Disneyland Resort Paris obtained a site it can grow in, with the necessary communication links to one of the most densely (in numbers and in purchasing power) settled areas in the world while it provides the French government with a major economic growth pole.
The contract binding the two parties distributes obligations to limit the ability of private companies to speculate on investments made by public bodies financed by the general public, while it guarantees the timely completion of these investments. Optimism was justified when Disneyland Resort Paris opened as scheduled on 12 April 1992. It is still justified today as attendance numbers and spillover effects are on the increase. (Revenu, 1996: 9). Proving that public/private partnerships can enhance social benefits and capital accumulation.
1 ‘Francilian’ refers to Ile de France, also called the Paris Basin
2 A National Public Radio report in June 1996 indicated that Las Vegas had become the number one tourist destination among travelers who booked through travel agents. In a private communication, J. Brett of the Nevada Commission on Tourism mentioned that 30 million visitors were welcomed in the past twelve months in Las Vegas. Although slightly more than the 30 million who visit Disney World, the numbers quoted are of turnstile pushes rather than of head counts. I was not told how the total number of visitors to Las Vegas was arrived at.
3 All forms of knowledge (all products based on knowledge) have peculiar properties as economic commodities. Know-how is a ‘non-rival’ good: using it does not preclude others from doing it, of, other theme parks. It also ‘non-excludable’: the very use of information in any productive way is bound to reveal it in part (Grossman & Helpman, 1991: 15). Preventing unauthorized use of it depends on property laws and their enforcement. One can understand Disney Company’s sensitivity to any copyright infringements.
4 The first theme park in the Western world was built at the end of 1200’s by Robert II of Artois at Vieil Hesdin. It included a revolving castle, a grotto within which rain or snow could be willed, animated marionettes, collapsing bridges, as well as exotic plants and animals that symbolized paradise. Charles V destroyed the park 300 years later.
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