On December 8, a special meeting happened at Disneyland Paris New York Hotel between DLP Shareholders and Tom Wolber, EuroDisney CEO, Mark Stead, DLP CFO and Yohan, Senior Manager Investor Relations. The good guys of ED92 did a special report on the meeting, and you'll know all about the questions asked by the shareholders and the answers from DLP executives. This is the english translation of ED92 report and you can read it
in french directly on ED92 HERE. Note that you may have to register to the forum to access the page.
One more thing before you start the reading. You'll probably be surprised by some of the questions asked by shareholders and some looking not really interesting to you. But you have to understand that shareholders, and especially small shareholders don't think like we do, and when it's small french shareholders it's even worst as they can be interested by thing which look like insignificant details. Not that details are not important, they
are and specially in Disney theme parks, but when you have one hour with the CEO of a Disney theme park you'll probably ask different kind of questions. I, for instance would have asked directly something like "So, what about this Avatar land which is secretly envisioned for the Walt Disney Studios?" To what i would probably have had a typical corporate answer like "The company is always working on different projects that we can disclose for now". Thanks for DLP i'm not a shareholder, but the whole report is an interesting read anyway as it is rare to have such a precise report about an intimate meeting and ED92 did a real good job. So, here we go:
The meeting began with a presentation of Tom Wolber, new CEO of EuroDisney who explained his excitement to be back since two months at Disneyland Paris as 25 years ago he started his career at EuroDisney.
A quick reminder of Tom Wolber previous positions at Disney:
1989-1993: Various positions at EuroDisney. He oversaw for instance the construction and opening of the Davy Crockett Ranch,
1994: Head of Disney Vacation Club France,
1995: He went to the US to manage California Vacation Clubs and monitoring the construction of the second ship in the Disney Cruise Line in Italy
1999-2004: Vice President of Disney-MGM Studios. He si the one who, at the opening of the WDS, discovered "Action Motor, Stunt Show Spectacular" and imported it at WDW DHS.
2004-2013: Senior Vice President Operations for Disney Cruise Line. In charge of the enlargement of the activity: setting up new destinations and qualitative monitoring,
2013: Senior Vice President for DownTown Disney and the Department of WDW Sports Activities
2014: Senior Vice President Operations for WDW Resorts and Transportation.
I was looking for a picture of Tom Wolber and Mark Stead together and i found the one above, shot last October in Paris, on which they are in talks about DLP recapitalization with Prince Alwaleed Bin Talal ( right ), Chairman of Kingdom Holding Company, who owns 10 percent of EuroDisney shares. Looks to me that the meeting probably happened at the Georges V Fours Seasons Hotel which is owned by Alwaleed.
A first shareholder asked Tom Wolber about what is his strategy:
Tom Wolber answered that it is to continue the strategy put in place by Philippe Gas, specifying immediately that he's talking about the one deployed since 2012. The main word is "quality": quality of the visitor experience, but also for the stays in hotels, catering or even memories: "That's Disney!"
Accelerate the renovations that started on the hotels, but on a shorter cycle. Focus on the basics, renovate the park and attractions over several years.
In 1993 a problem was already existing: insufficient capacity of restoration: it is essential to improve it. DLP must also invest in management computer system as those in place since 1992 no longer meet the needs and expectations of 2014. Some examples: a key to open the hotel room, coupons for restaurants, it is not anymore what DLP customers expect in 2014!
Tom said that they are currently identifying the problems one by one to complete the specific plan to implement. This plan aims to go beyond the expectations of DLP visitors to find the WOW effect because "That's Disney!"
Another shareholder asked him directly: "Basically you are announcing the arrival of MagicBands?"
Tom answered they actually think about the MagicBands because it worked at WDW. But it is a significant investment and although Disneyland Resort Paris is on a smaller scale than WDW, it is doable but not right away because DLP needs first to catch up and comply with standards and expectations.
He takes as an example the WDS and the Disney Village that are not "complete", these structures must be repaired and complemented but Tom also said that all is not doable in 3 years because they can't catch up the past that fast.
He pointed out that if the recapitalization is successful, it will be more than 600 million euros which will be invested in the Resort in the coming years.
The destination will be much better in 3 years. The 25th Anniversary will be celebrated as it should be and the content will be there.
Another shareholder then asked a very long question:
It is always a pleasure to meet with the CEO, but you know that shareholders still have a critical look... For example, the Christmas decorations are very poor this year compared to 5 or 6 years ago, or the disappearance of the choirs during the Christmas period and also the parade which seems a bit short for a parade.
He also asked what is happening to the entrance of the Disney Village now without his arch, reminding that it is the first thing guests see when they're arriving.
He also took the opportunity to ask why there is no more electrical parade, note the lack of Show at Vidéopolis or Chapparal Stage.
Finally, he complimented Cast Members who are always polite, draws attention to the quality of the catering and finished by asking what is the future for Captain EO?
Tom thanked him for this long question: "I'll try to answer them."
For the parade, we can be certain that things will change and evolve. He cited the Halloween Cavalcade which has further evolved this year, it has expanded, or also the new Resort decorations for that period. Then he spoke about Christmas, saying that Christmas was perhaps most impressive in the past but they will continue to improve it. He has already spoken with Daniel Delcourt to improve, for instance, the tree lighting ceremony, to make it brighter, more sparkling.
He said that in the coming year a new show is coming to Videopolis, but he will not say more about it because rumors go fast and they will soon do an announcement.
He thanked the shareholder for the compliments on Cast Members and also indicated that CM too need infrastructure investments, and they're thinking about a renewal of the CM cafeteria and their rest rooms for instance.
For the catering, he explained that the parks restaurants used before many frozen foods, but they are now looking to work more with fresh products, especially through their joint venture with the Flo group. He took as an example the Remy's Bistrot, who in two months became the number 1 restaurant of the Resort. So even though he has no special menu, the dishes are fresh and of quality.
Want to see the future of catering at DLP, look at what is done at Chez Remy.
A shareholder then told Tom that "Jedi Academy" products can already be found and asked about Star Tours 2?
Tom answered that as we know, LucasFilm - and Star Wars - is now owned by TWDC and it is quite extraordinary! He reminded to the shareholders that a new movie arrives late 2015 and said that Disneyland Paris will play its role to run the Star Wars franchise: so, Jedi Academy yes, but he did not forget to say "we can do better."
Another shareholder asked Tom what were the feedback on the Halloween evening because the visitors experience has been catastrophic with too many people (more than in other years). He added that the characters appeared over a too short period of time and at the same time, which was not a good idea.
Tom started by saying that this year there were 2,000 people more than the previous year. In addition, people stayed longer in the evening as temperatures and the weather was good. He added that next year there will be more shows, that they'll do changes for the characters and the problem will be resolved.
The feedback was quite good and they have already identified the problems to be fixed.
They think about doing before and after hours in the hotels to try to spread a bit more the guests. They were impressed by the number of people who came disguised and the quality of their costumes. He concluded by stating "we can do better and we will do better"
A shareholder then asked why there is no dedicated website for Annual Passholders with the ability to check prices of hotels nights as today due to the complexity of the different offers and the prices that change all the time many of annual Passholders look instead to partner hotels.
Yohan explained that this idea is already being considered as demand has already been made several times, so they're working on it because it is a very good idea.
Tom added that for now DLP has to invest in the computer system, because at the moment it does not manage such an offer, but it will come.
They changed the website a month ago and this is only the first phase. Other developments will happen.
A shareholder wondered about the Shareholders Club after the recapitalization. Will it still exist and what will be the entry requirements?
Tom answered that the Shareholders Club will be the same after the recapitalization. It will not change, those who were members of the Club before will always be after. The access conditions will be reviewed for new investors.
A shareholders asked Tom about the access cards renewal conditions and the number of shares to get in.
Mark Stead answered that those who were members of the Shareholders Club with 100 shares before the recapitalization - and still have a minimum of 100 shares after - will still be Club members and will be able to renew their cards.
The conditions will be changed for the new shareholders. It is estimated that the threshold will be raised to 900 shares, for example. But this figure is not final and the new conditions will be communicated after the recapitalization.
Then was asked a question about why the Shareholders General Assembly didn't happened at Disneyland Paris?
Mark Stead answered. They tried to do it, and it was not possible to have it at Disneyland Paris as during this period two major groups had already booked the two convention centers with overnight stays in hotels. Canceling these reservations would have been a financial hit for the company but also it could have had repercussions on future bookings from the two groups who are loyal and regular customers of the Resort. He agreed that it would have been better to have done it at Disneyland Paris because it would have been easier also for them.
A shareholder asked for hotel rooms and the price of the Convention Center car park.
Tom said that, yes, there will be an offer for the nights in Disney hotels like every year.
And Mark Stead concluded by saying that they will not fund the parking lot for the shareholders.
Another shareholder said that waiting times at the attractions are now longer, and asked if DLP should not raise park admission prices during peak seasons to limit the number of guests.
Tom answered that the parks are victims of their success, like Tokyo, Orlando and all the Disney Resorts. The guests know that they'll have a bit of a wait, but they're coming too to meet Mickey, Minnie or Woody and Buzz and the Snow Queen, and all their favorite characters.
However, he agreed about the need to increase capacity by continuing investments on the long term.
But also the attractions should run more efficiently, not as BTM that when it is stopped takes over an hour to restart.
They must therefore work on the refurbishment of the attractions using the latest technologies and modernizing the effects that have the most concern and then invest in maintenance and cleaning so that the rides remain at the top, and that it is part of DLP long-term vision.
But in the short term, it is also possible to act by bringing back shows in the parks and increasing meet and greet with the characters.
He concluded by explaining that the idea is not to increase the park admission price but better control the promotions that are still too many and sometime available during periods when they don't need to do promotions as the parks will be full in all cases. It is useless to do discount on the product when there is no need. Tom reminded the shareholder that if he wants to avoid long wait, he is welcome in January and February.
But DLP must also react better when there is a lot of guests, and takes as an example the first Saturday of December when Disneyland was full with restaurants in refurbishment and food carts closed. This Saturday they opened all available restaurants and bring out more characters. Which has allowed a park full of guests to better manage the guests flow and increase visitor satisfaction.
He concluded by reminding that guests who are coming in summer or Christmas time expect anyway to see many people in the resort.
A shareholder asked: You are announcing more Shows in the parks, but when?
Tom answered that there will soon make announcements.
Another shareholder asked if the Fantillusion will be back?
Tom said he can not answer for now this question (with a smile)
A shareholder pointed out that Disneyland Paris is the most beautiful Disney Resort in the world but also the more poorly maintained, specifying that the maintenance of the rides is catastrophic, with over 50% of absent effects on Phantom Manor or POTC, and also noted that the cleaning when ended the construction of Ratatouille rest rooms has not been done because there are still strokes of pencil marks.
Tom agreed about the beauty of the resort, saying that the Sleeping Beauty Castle is for him the most beautiful Disney castle. About maintenance, CMs do their best with what they have but recent years have been complicated because DLP had to find a delicate balance between cash flow and visitors experience and this is why the recapitalization is so important for DLP, as it will allow to find more cash flow.
But he reassured the shareholders, stating that they will take heed and in future there will be many more maintenance, cleaning and monitoring of attractions coming out of refurbishment and not only just a coat of paint on the façade.
Tom stated that Philippe Gas had already said it, and they will simply accelerate the program.
Ratatouille is a very big success with more than one million visitors in 4 months. The area is beautiful and will remain so. About the rest rooms, details are important and they will fix it.
A question is then asked about Space Mountain which since Mission 2 no longer has any coherence, and the rehab of Big Thunder Mountain.
Tom said he can't give us details, but again announcements will be done soon. He said that this will not be a simple coat of paint on the facade, these two projects as well as all others will be done at 100% and they will make additions and updates as soon as needed to serve the story or to give a new life to an attraction.
A question was then asked about the lighting of the park that is poorly maintained and on changing bulbs, and if it is the CMs that report this or not.
Tom answered that this should not be the CMs to report, and take the example of Main Street USA with its impressive number of bulbs. He explained that they are in the process of finalizing with Osram a lighting that will imitate to perfection bulbs with warm white but using LED technology, which will have a longer life and therefore will reduce a significant problem.
A question was then asked on a hypothetical return of Frontierland geysers who are not working anymore since 12 years.
Tom reminded again that they're working on it and that by 2017 a lot of such problems will be solved. He hopes that everything will be done at 100%. They don't know if they will succeed but they will do their best.
A question was asked on the addition of VIP Services, kind of top restaurants or about the increase of the number of rooms allocated to different clubs in the hotels, and also organizing night tours of the park. In two words: about short, private services for people with comfortable means.
Tom explained that what was asked was exactly what they started to do, by instance with the addition of the Golden Forest Club at the Sequoia Lodge, or what they're actually doing at the Newport Bay Club, and they're thinking about it for the Hotel New York.
Also, about restaurants, not necessarily "gourmet", but yes it must evolve and more table service quality restaurants must be find in the Parks.
Regarding the VIP services it is under consideration but Tom reminded that DLP must find a balance because we must not forget the guests who have saved a long time to pay for their stay in the parks and hotels.
He added that France, unlike other countries, does not come out very well from the financial crisis, and for instance on the year 2013, attendance was down 5%, but turnover fell only 2%.
That at the moment with Ratatouille and Frozen they have a big success.
About private visits, they can think about it, but no night tours of the park, as this is the time they can do maintenance. They're also thinking about theme dinners or theme nights in the hotels.
A question was asked about the Villages Nature and Pierre et Vacances.
Tom said they are happy, the first stone ceremony will happen this week, that Villages Nature is really a huge project. Tom was present during the construction of the Davy Crockett Ranch and this new project is three times the size of it. He added that they are on time and on budget, that this is an alliance between two companies, unusual on such a project, but it will be spectacular.
Yesterday, Thursday December 11, the Villages Nature "first stone" ceremony happened with France Prime Minister Manuel Valls, Tom Wolber, Euro Disney CEO, Gérard Brémond, Pierre et Vacances Group president and Dominique Cocquet, Villages Nature general Director.
A shareholder then asked: You arrive at a key and complicated moment for the Resort, would not it be time to have a discussion on the Business Model and usefulness of small shareholders?
Mark Stead answered that DLP is impacted like all companies in the sector. The strategy to make renovations and repositioning the product for 2017 looks good to him.
They expect a turnaround in the French and European economy in 3-4 years and there DLP will be ready with a park 100% operational and just like new.
About the recapitalization: investments were not at the needed level, they could not do the necessary work. They needed more money. So they asked for TWDC support and to reduce the debt.
They want to invest in quality, live shows, shops, the quality of the food, the staff training. Nothing will be forgotten. 40% will be invested in 3 years and the recapitalization will allow it.
They know they're asking a lot to small shareholders, but they could not do otherwise, because it was impossible to further reduce investments. But with this recapitalization, they will finally have the means to their ambitions.
Tom added that it is important to keep in mind that the current market is not bright in France, but other economies have restarted and there is therefore more visits from guests from these countries.
The economy will get better in France, it will not remain the only European country in crisis and they will be ready to welcome them.
The French market is important to them, but they will also attack with a marketing plan countries that do not come much at the resort, to get new market shares.
And, finally, TWDC realized that she has left Disneyland Paris a little bit too much alone and it was urgent to act as Disneyland Paris was their European showcase, and that the WDC would now be a real support.
A question was asked about the poor English of some CMs.
He said yes and they're working on that. He returned from a European tour to recruit the 8000 necessary seasonal CMs and have naturally targeted the countries from which are mainly coming the customers. The results were good in Italy, Spain and the Netherlands. However, in England they are a little below their expectations because there is less unemployment there.
He also reminded that they absolutely want all CMs to speak French because it is the country's Resort and added that for the shows it is now useless to do them in five languages because technology allows translation in real time, hence the urgency to invest.
Yohan said that the schedule is already over 30 minutes and they'll have to stop there. He thanked the shareholders for their presence.
Tom said that the shareholders asked pertinent questions, made interesting proposals and is very happy with this meeting. He noted that the audience was not composed only of shareholders, but also of people who love the company. He therefore concluded by thanking all for coming and give an appointment soon for a new meeting.
Text: copyright ED92, Disney and more for the translation. All my thanks to ED92.
Pictures: copyright Disney, Kingdom Holding Company, DLPWelcome, MouseFanCafe
