The road to recovery for Disneyland Resort Paris and its complicated structure of operating companies, brought together as the Euro Disney SCA “group”, was never going to be quick.

Today, as the group publishes its much-anticipated First Half 2008 report, we get a first taste of the real “Tower of Terror effect” — since, despite the advertising just starting, it has been open since December — and a final claim to success for the first year of the 15th Anniversary Celebration.

Covering the six months which ended 31st March 2008, the report builds upon the First Quarter publication in January to announce in full the finances, attendance and operating margin for the period.

‘¢ Revenues increased 18% to € 605 million, primarily reflecting growth in Resort operations

Theme park revenues increased 17.5% to €316.4 million from € 269.3 million in the prior year, reflecting an increase in attendance and a minor increase of 2% in spending per guest, likely due to increased ticket prices.

Hotels and Disney Village increased 14.9% to €235.9 million, from € 205.3 million last year, driven by a 10% increase in average spending per room and a 5.4 percentage point increase in
hotel occupancy to 88.5%.

‘¢ Positive operating margin of € 1 million, against a prior-year loss of € 36 million

The operating margin between the increased revenues (as above) and the costs and expenses incurred by the resort grew by an impressive €37.6 million, compared to an increase of €24.6 million in First Half 2007. It built upon this prior growth to finally push the operating margin into a positive figure — of €1.3 million.

‘¢ Net loss reduced by 47% to € 43 million

The key financial figure also shows a strong continued growth, here impressive enough to divide the resort’s losses by two for the First Half, when compared to the same period in 2007. As they continue to work toward a resort which can turn a reliable profit, this figure is particularly exciting for the growth of Disneyland Resort Paris.

The net loss for First Half 2008 was reduced again by more than twice the amount it shrank in 2007 — €43 million compared to €19.8 million — suggesting that, should this strong growth continue throughout the extended second year of the 15th Anniversary, the First Half or Annual Report for 2009 could well finally see the resort announcing a (very modest) profit.

In an even more optimistic outlook, a perfect Summer season this year could even bring the net loss down to zero as early as this November’s 2008 Annual Report. Euro Disney is now, at last, in the home straight.

Most importantly, this growth has been strong and consistent for several years now, continually increasing with each financial report. This would suggest the recovery is steady and well calculated, the massively improved figures not merely a flash in the pan.

‘¢ Attendance increased 14.8% to 7 million

In first half 2007, Disneyland Resort Paris recorded a record attendance of 6.1 million guests, up 10.9% from 5.5 million in first half 2006. For first half 2008, it has the chance to claim an impressive 14.8% increase, bringing the attendance for the six months from November to the end of March to a full 7 million.

The record 14.5 million guests of 2007 was a real victory for the resort, and this second big step forward again suggests that the growth is steady and still ongoing. Rather than struggling to equal its record figure for 2007, the resort could instead be lucky enough to post a modest increase on that amount. The earlier placement of some holidays, such as Easter, could have benefited the figures slightly, suggests the report, but growth from French, Spanish and Dutch markets is credited with the 0.9 million rise.

‘¢ Hotel occupancy increased 5.4ppt to 88.5%

Room occupancy at the resort’s seven Disney Hotels is now a full 10.5 percentage points higher than it was for the first half of 2006 (78%). Between the first halves of 2007 and 2008, the figure rose by 0.06 percentage points more than it did between first half 2006 and 2007, giving another sizeable achievement (total 5.4ppt) despite increased prices and fewer special offers, which in fact also contributed more to the hotels’ large revenue increase listed above.

Commenting on the results, Karl L. Holz, Chief Executive Officer of Euro Disney S.A.S, said:

“Our first semester of fiscal year 2008 was marked by an 18% increase in revenues and a positive first semester operating margin. This solid performance was driven by continued growth across all our key markets and throughout our Resort operations with increases in attendance, hotel occupancy and average spending per guest.

Our management team remains focused on the execution of our growth strategy as we continue to drive our business toward profitability.

Building on the success of our 15th Anniversary, filled with immersive Disney family entertainment and adventures, we have launched The Celebration Continues…Big Time! with the opening of the iconic attraction The Twilight Zone Tower of Terror and Stitch Live!.

The entire Disneyland Resort Paris team is committed to delivering a quality Guest experience and building on our positive momentum as we head into the peak summer season.”

The words of CEO Karl Holz might be beginning to seem remarkably similar which each financial report, but his comments on driving the business toward profitability are now clearly ringing true. Whereas the results of 2007 showed the amount of hard work still required before the resort could announce a positive result, the figures here for First Half 2008 clearly show the drive is now reaching a plateau.

Continue along this path for another 18 months, Karl, Philippe, and Disneyland Resort Paris will not only be breaking attendance records and announcing positive operating margins — it could finally be allowed to use that most magical of words… profit.

Click here to read the First Half 2008 results in full (PDF, new window).

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