This case is based on “The Not So Wonderful World of EuroDisney”. EuroDisney opened near Paris in 1992. Its American designers meant for it to be the most lavish of the Disney resorts, but the French were unimpressed. Many assumptions were made that did not fit with the local culture. Tokyo Disneyland had been a huge hit since it opened, but the Japanese have a particular affection for Disney characters that has not been repeated. Instead, the French saw the park as an undesirable plasticized Americanism and refused to pay prices at Disney similar to those charged at top Parisian hotels.

Disney did not understand local culture and did not hire local executives at first. So mistakes including erroneously believing that Europeans do not eat breakfast, resulting in not nearly enough breakfast locations; assuming that people would bring their children to the park for a few days, rather than the European tradition of taking a family vacation for the month of August; and assuming that because the bad weather in Tokyo did not deter visitors, neither would bad weather in France; they did not even cover the outdoor cafes despite a lot of rain! Disney did learn from its mistakes, hired locals, and eventually exceeded the Louvre and the Eiffel Tower as a tourist attraction.

In Hong Kong, Disney hoped to learn from its mistakes and create a theme park that was “culturally acceptable,” incorporating feng shui. But it began too small and too focused on Disney characters, with which many were not that familiar; the characters had been banned in China for decades! There were some features that were popular, such as the fantasy gardens. But missteps included commercials featuring a family with two children, when most Chinese only have one child. As the park fixed these, and offered promotions and holiday celebrations, their losses diminished, and further expansion is planned. It is believed that a planned Shanghai park on the Chinese mainland will benefit from the improvement of the Hong Kong park, and it is planned to be much bigger from the beginning. However, the Hong Kong park had about 6 million visitors per year, whereas the Tokyo and American parks have about 20 million visitors per year each.

The factors that contributed to EuroDisney’s poor performance during its first year of operation included cultural tone deafness, arrogance regarding Disney’s appeal to any market, lack of cultural knowledge, and too high prices. The factors that contributed to Hong Kong Disney’s poor performance during its first year included making the park too small, and expecting the Chinese to be familiar with and enjoy Disney characters when China had been cut off from American culture for decades.

These factors were controllable to a great degree by EuroDisney or the Disney parent company once they realized what had happened. They made corrections and eventually created a very successful park. These factors do not seem to have been foreseeable, or only to a small degree, because despite a very different culture from the U.S., Tokyo Disneyland did phenomenally well. One could see how everyone involved would have been lulled by that success. However, Hong Kong, opening in 2006, had more than a decade of the European experience to draw upon, so its problems should have been both foreseeable and controllable to a great degree by Hong Kong Disney and the parent company. Executives seem to have been too financially timid; only 16 attractions seems quite small. EuroDisney turned around when local executives were brought in; where were the locals for the Hong Kong project? Locals could have identified the cultural issues prior to opening.

Now that Hong Kong Disney has improved, the Shanghai development is likely to benefit from the Hong Kong experience because some of the culture of Shanghai and Hong Kong is shared, particularly regarding the major issues above. However, mainland China may have its own issues. Hong Kong, for example, is a wealthy financial center, so prices may need to be re-examined for Shanghai. Disney should hire local executives for this and any other international projects in the future, to help them make the correct cultural decisions before the theme parks open.