Question 1: What issues are at the heart of euro Disney's problems? Why?.
When the project (cultural Chernobyl) opened, there were some major assumptions of the model that unfortunately were revealed to be inaccurate, not only in terms of attendance of the park, but also mainly on the real estate side of the project. There were overoptimistic projections at that time, and it was a time in the early 1990s when the real estate market, especially in France and Europe, was booming and there were very optimistic projections about the speed, the size and the kind of price Disney would get form the land development. The downturn of Paris real estate market affected the sales of hotels. The attendance was below the expected rates (See Appendix I).
The second major issue was the whole tourist destination including the park was over invested form the beginning. Costs skyrocketed and Disney managers could not price the entrance to the park at the right level to pay for those costs and at the right level to be affordable by the Europeans during the recession (See Appendix II).
Disney had to define their branding decisions based on a thorough understanding of the idiosyncrasies of the customers they were targeting, as well as the general political and cultural environment they were located in, rather than just on the specific characteristics of their destinations or the attributes specific to their product. Disney had made little provision for local management participatory contribution or community cooperation when it constructed its park in France. It relied entirely on command and control enforcement techniques and on what it considered was its infallible experience. Disney ignored social cultural environment sensitivity, dietary preferences and communication skills that discouraged large number of potential visitors.
Although the Walt Disney company is an icon of successful commodification of culture and its brand stewards have done most things right, it has faced several failures.