By Caroline Reid and Christian Sylt
Workers at Disneyland Paris are demanding a 6% pay rise to prevent an increasingly uncertain economic outlook in France from casting a dark spell on their finances.
The theme park complex on the outskirts of Paris employs nearly 18,000 staff. They are known as cast members due to the roles they play in an escapist environment. They work in seven on-site hotels, an entertainment district, and two theme parks. This includes the fairytale-inspired flagship Disneyland Park and its movie-themed neighbour, the Walt Disney Studios. The workers have had a rollercoaster ride in recent months.
A rollercoaster ride for workers at Disneyland Paris
Snap elections in early July left French politics in a deadlock. No party was able to form a clear majority in the country’s National Assembly. It didn’t do the country’s economy any good. The inflation rate in France reversed from 2.3% in July to 1.9% last month. Yet it was higher than forecasted and wasn’t driven by reductions across the board. According to France’s national statistics bureau, prices in the service sector accelerated from 2.6% to 3.1% in August, especially in accommodation and transport.
The overall drop in inflation was largely driven by a sharp slowdown in energy price rises, which increased by just 0.5% in August. However, this followed an 8.5% rise in July which is stark evidence of how unpredictable the economy is in France. Staff at Disneyland Paris aren’t leaving it to chance.
In a statement, the Disneyland Paris branch of the French Democratic Confederation of Labour (CFDT) said:
“In the economic, social and geopolitical context, the outlook is not encouraging for the daily lives of all employees.”
The union added that Disneyland Paris has a duty to “avoid a situation of wage insecurity and to head off inflationary effects which limit employees’ desire to purchase. Increasing purchasing power is a profitable investment for the company; purchasing power is the fuel for financial well-being. Purchasing power is the key to employee motivation.”
Demands for higher pay at Disneyland Paris
In addition to demanding a 6% general pay rise for all employees, the CFDT is asking for a 3.5% increase for individuals in specific circumstances. It also wants a 1% boost to the retirement allowance for non-executives and a one-off £842.15 (€1,000) bonus.
If the CFDT gets what it wants, it should push the average salary at Disneyland Paris to nearly £33,686 (€40,000). The latest accounts for the resort’s operating company, Euro Disney Associés (EDA), show that it spent £523m (€621m) on 17,702 employees during the year ending 30 September 2023. This gives an average pay of £29,543 (€35,081). That was just the start.
In October last year, most cast members got a 5.5% pay rise. So, the latest demand for 6% is a step up. The 5.5% raise was part of a bumper package of benefits. This also included a bonus of £589.50 (€700), a transport subsidy of up to £1,011 (€1,200) and even reimbursement of 80% of their public transport costs. It didn’t stop there. In January this year, supervisory cast members got a further 1% pay rise, whilst their salaried counterparts got 2%.
The icing on the cake came in the same month when any employee who had worked for Disneyland Paris for at least three months was handed a share of EDA’s operating profit. This rose nearly fourfold to £147.4m (€175m) last year. Each employee got £442.13 (€525). It made them the only cast members to share in the profits of a Disney theme park. But getting it was far from child’s play.
Workers at Disneyland Paris strike over pay
Disneyland Paris is famous for its escapist environment. However, strikes have shattered the fantasy atmosphere in its two parks for the past 15 years. In 2009, on one of the busiest days at the Disneyland Park, staff protested against a pay freeze. This caused the first-ever cancellation of the daily parade down its Victorian-themed Main Street.
It sparked three years of protests culminating in disruption during the festivities for the resort’s 20th anniversary in 2012. Celebrities, including British broadcaster Jonathan Ross, witnessed the ugly scenes. He Tweeted to his 4.9m followers: “We are at Disneyland Paris for the 20th anniversary. There’s a dispute and strikers march down Main st. Worst Disney parade.” It didn’t fall on deaf ears.
At the time, Disneyland Paris’ parent company was listed on the Paris Euronext stock exchange with only 49% in Disney’s hands and the remainder owned by the public. As Disney didn’t own the resort outright, it gave it loans rather than pouring money into it as it has done with its parks in the United States. The construction of its French facility was funded with £1.4bn (€1.7bn) of bank borrowings and its finance charges led to the company making colossal losses.
Six months after the fateful day of the parade’s cancellation, Disney waved its wand and cleared the bank borrowings. It replaced them with a low-interest loan giving Disneyland Paris the financial flexibility it so badly needed. In 2013, it spent a record 44.2% of its costs on staffing. This pacified the cast members, but the best was yet to come.
The final act came in 2017 when Disney took full control of Disneyland Paris, putting it on a path to profitability. It didn’t take long for its new owner to have a magic touch.
Revenue, inflation and pay at Disneyland Paris
Just one year after the takeover, EDA’s revenue rose 11.4% to £1.6bn (€1.9bn). This left it with a £16.8m (€20m) operating profit – its first in six years. It remained on this upward trajectory once the dark clouds of the pandemic had cleared.
In the year to 1 October 2022, EDA made a £39.6m (€47m) operating profit—its highest in a decade. This was driven by a sharp increase in revenue, which hit a record £2bn (€2.4bn) and represented a staggering 78.8% of the total generated by Disney’s international theme parks. It didn’t escape the attention of cast members.
At the time, France had begun counting the cost of the war in Ukraine and bailouts during the pandemic. Inflation steadily climbed during 2022 and hit a peak of 6.3% in February last year. By then, the cost of electricity in France had risen almost fourfold since Russia invaded Ukraine. Meanwhile, flour, butter, and eggs were about 50% more expensive.
Cast members calculated that to survive they needed a monthly wage increase of £168.43 (€200) as well as increased pay for working on Sundays and improvements to their length of service bonus. Management didn’t agree, so the staff downed their tools again. The protests started as ad hoc gatherings but became increasingly intense as demonstrators paralysed both parks for days last summer.
Calling for better pay, around 1,000 Disneyland Paris cast members blocked paths and prevented parades from taking place. They whistled whilst waving flags and placards which shone a spotlight on their plight. “Aladdin Need Of A Pay Rise” was the message on one of them. Another was based on one of the resort’s most famous slogans, saying “From Need Magic To Need Money”.
The impact of protests
The protests eventually led to the cancellation of the nightly fireworks show in June. This caused boos from angry guests to echo around the park. It was the antithesis of the carefree conditions that Disneyland Paris is famous for, so the last thing the resort wanted was for news about it to spread. However, that is precisely what happened. The disruption was captured in a video that went viral on the DLP Report social media account, fueling the demonstrators’ fire.
“We see the figures, the profits they have made, the wealth that has been communicated by the Walt Disney Company,” said cast member Ahmed Masrour in an interview at the time with French news magazine L’Obs.
“The visitors sometimes chat with us and say to us: ‘You’re right, we don’t understand why the ticket price has increased, why the prices of all the products at Disneyland have increased, starting with car parking, while you employees, your salary does not follow suit.’ So it’s just a simple equation: Let’s share the wealth fairly.” The protestors got what they wanted.
New Disneyland Paris pay negotiations begin
The strikes were strategically timed in the summer as Disneyland Paris holds annual salary negotiations with staff in early autumn. The strikes led to the staff getting their bumper package of benefits last year. Although there haven’t been any disruptions this year, the CFDT’s demand for another pay rise shows that they are far from complacent. Again, the demand was strategically timed as the annual negotiations began on Wednesday and will be held again twice later this month.
The CFDT’s demands are reflected by those of the UNSA, a French confederation of trade unions which also worked tirelessly to negotiate last year’s pay package. Ahead of this year’s talks, its Disneyland Paris branch said, “a fairer sharing of the wealth produced by those who work is essential. Without them, the magic does not exist.” A spokesperson for Disneyland Paris declined to comment on the talks.
Disneyland pay in California vs Paris
The annual negotiations are a world away from the options open to cast members at Disneyland in California. Earlier this year, Disney offered them an average increase of less than a dollar per year. Only after they threatened to strike did this improve. Their new deal gives them at least £20.21 ($24) per hour. But, unlike in France, it is locked in for three years, so it will be some time before they can demand more.
Workers at Walt Disney World in Orlando are even worse off. Their latest pay rise only gave them £15.16 ($18) per hour, let alone a share in the parks’ profits.
However, a happy ending could still be far, far away for the workers at Disneyland Paris. Political instability in France has begun to weigh down on the country’s already weak consumer confidence. Testimony to this: new car registrations in France reversed by a staggering 24.3% last month compared with the same period in 2023, according to French car lobby Plateforme de la filière automobile.
Although a trip to Disneyland Paris doesn’t cost as much as a new car, it still has a premium price point. In July and August, the resort offers a package including park passes for two adults and two children sharing a room in a three-star on-site hotel for an eye-watering £1,762. More visitors to Disneyland Paris come from France than any other country. So, a decrease in local attendance could drag down the resort’s revenue and thereby impact the profit share paid to staff.
That’s not all. Disney revealed last month that it expects to see “impacts at Disneyland Paris from a reduction in normal consumer travel due to the Olympics.”
Financial pressures
An increase in staff costs could come at just the wrong time for Disney’s Experiences division, which includes its parks and cruise lines. Experiences have been a fairytale for Disney since the pandemic receded. When the lockdown ended, consumers had tremendous pent-up demand for travel. And they were flush with furlough cash, so they could pay a premium to visit theme parks.
Disney took advantage of this and increased ticket prices while limiting attendance, thereby lowering costs and increasing revenue and profit. This magic formula led to Experiences accounting for just over a third of Disney’s £74.9bn ($88.9bn) revenue and more than two-thirds of its £10.9bn ($12.9bn) operating profit last year. However, the glow is even coming off this now.
In May, Disney’s stock began a steep decline after its chief financial officer Hugh Johnston warned of a softening in theme park attendance due to “a global moderation from peak post‐Covid travel”. In short, the furlough money has been spent, and the travellers who wanted to visit theme parks have now done so. There have been widespread reports about the high cost of visiting Disney’s theme parks. This explains why Johnston added that “relative to the post‐Covid highs, things are tending to normalise.”
After crunching the numbers, Brandon Nispel of KeyBanc Capital Markets forecasted that Disney’s domestic park business “will be pressured for the rest of 2024″. This was no exaggeration.
A worrying trend
Last month, Disney announced that in the third quarter to 29 June, the company generated £3.6bn ($4.3bn) of operating profit on £19.5bn ($23.2bn) of revenue. This was up 4% on the same period the previous year. It was a respectable result, but a deeper dive into the data revealed a worrying trend for Disney’s Experiences division.
Higher guest spending at Disney’s domestic parks and cruise lines, as well as increased spending per room, drove up Experiences revenue by 2% to £7.1bn ($8.4bn). However, it is a sharp decline on the 13% increase in the revenue of the equivalent segment over the same period in 2023 in comparison to the previous year.
Worse still, the operating profit of Disney’s Experiences division declined by 3% to £1.9bn ($2.2bn) in the third quarter compared to the same period last year. Costs climbing at Diseny’s domestic costs drove this. This perhaps explains why it held out for so long to give a pay rise to the workers at its resort in California.
The increase in costs came at a terrible time. Disney’s earnings statement revealed that “the demand moderation we saw in our domestic businesses in Q3 could impact the next few quarters. While we are actively monitoring attendance and guest spending and aggressively managing our cost base, we expect Q4 Experiences segment operating income to decline by mid-single digits versus the prior year.”
Looking ahead
During the results announcement, Johnston gave insight into the reasons for the decline at Disney’s domestic parks as he explained that “the lower-income consumer is feeling a little bit of stress. The high-income consumer is travelling internationally a bit more. I think you’re just going to see more of a continuation of those trends in terms of the top line.” He added that “we saw attendance flat in the quarter” with a “flattish revenue number” forecast for the fourth quarter and a slowdown expected for “a few quarters.”
Disney’s shares crashed 4.5% on the news and subsequently fell even further, hitting a nine-month low of £72.09 ($85.60) on 13 August. They have rallied slightly since then but are still more than 50% off their peak in March 2021. If the decline continues, the pay of disenchanted workers at Disneyland Paris could be the least of Disney’s worries.
