Euro Disney losses blamed on tourist numbers

Parisian theme park and hotel operator Euro Disney today announced wider losses after visitor numbers failed to improve on last year.

The company said some 12.4 million people visited the Disneyland Resort Paris and Walt Disney Studios parks outside the French capital in 2004 – the same number as in 2003.

Higher operating costs and royalty payments to US parent company Walt Disney also contributed to net losses of €145m for the year to September 30, compared with a loss of €56m the previous year. Revenue was almost unchanged at €1.05bn.

The results come two months after Euro Disney announced a massive debt restructuring deal with its banks to keep it afloat.

Chief executive Andre Lacroix said: “The company’s annual results reflect a flat attendance and revenue performance in another difficult year for the European travel and tourism industry.”

Average spending per visitor increased 5% to €42.7. In Euro Disney’s hotels, however, a decline in the average occupancy rate to 80.5% from 85.1% more than offset a 2% increase in spending per room.

The company swung to an operating loss of €24m from €32.1m, excluding the effect of accounting changes.

Royalty payments to US parent company Walt Disney grew to €58m from €8m, Euro Disney said.

The lengthy negotiations that led to its September rescue deal drained a further €13m in fees and expenses.

Higher labour costs helped to swell Euro Disney’s direct operating costs to €665m, up 1.5% excluding accounting changes.

Shortly after its rescue deal with creditors, Euro Disney announced the appointment of Karl Holz, a former Walt Disney executive, as its new president and chief operating officer.

Mr Lacroix and Mr Holz now face the challenge of breathing new life into the parks and boosting visitor numbers and steering the company toward a successful €250m capital increase in the next four months – one of the conditions of its bailout.

Euro Disney shares were 1c lower at 27c in early afternoon Paris trading.