Workers at Disneyland Paris have upped the ante in their annual pay discussions with management by demanding a package of benefits which would cost the theme park operator in excess of $30 million.
The talks began earlier this month and threaten to cast a dark spell on the fortunes of the theme park complex which made a $193.3 million (€175 million) operating profit on record revenue of $2.7 billion (€2.4 billion) last year as we revealed in The Guardian.
It comes at just the wrong time for Disney’s Experiences division, which includes its theme parks and cruise lines. Disney’s executives like to boast that it has delivered record profit and revenue for multiple quarters but those days are gone.
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”. It set the scene for a dramatic fall from grace.
Last month Disney announced that in the third quarter to 29 June, Experiences revenue rose by 2% to $9.3 billion ($8.4 billion) thanks to higher guest spending at its domestic parks and cruise lines, as well as increased spending per-room. However, it is a sharp decline on the 13% increase in the revenue of the equivalent segment over the same period in 2023 compared to the previous year.
Worse still, the operating profit of Disney’s Experiences division declined by 3% to $2.4 billion ($2.2 billion) in the third quarter compared to the same period last year.
The worst could be yet to come as 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.”
Johnston 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.” Disneyland Paris represented almost half of the revenue of Disney’s international parks last year and 17.5% of its operating profit so it is far from insignificant.
The decline in the division’s overall operating profit was driven by costs climbing at Disney’s domestic parks so the last thing Disney needs is to have to pay workers more in Paris. However, it may have little choice about that.
Last week the Disneyland Paris branch of the French Democratic Confederation of Labour (CFDT) became the first union to put its cards on the table in the pay discussion. Writing in Blooloop, the world’s leading themed entertainment industry outlet, we revealed that the CFDT has demanded a 6% pay rise, up from 5.5% last year. It is far ahead of the 3.5% average which accountancy giant Deloitte forecasts across all areas of French industry for 2024.
On the eve of the second round of talks, which took place today, the National Union of Autonomous Trade Unions (UNSA), a French confederation of trade unions, issued its demands. They cover everything from increased pay for working on Sundays to longer compassionate leave and measures to level out the gender pay gap.
However, the star attraction for workers is the proposal for a “bonus of 1,200 Euros net for each employee.” It is 20% more than the CFDT asked for and a staggering 71.4% increase on the bonus paid last year to staff at Disneyland Paris. The latest filings for the resort’s operating company, Euro Disney Associés (EDA), show that it employs 17,702 staff bringing the total cost of the bonus alone to $23.4 million (€21.2 million) but it doesn’t stop there.
The UNSA has done away with demanding a percentage-based pay rise by instead asking for a “general increase of 200 Euros net for all employees.” That would cost EDA a further $3.9 million (€3.5 million) giving a total of $27.3 million from these two perks alone. Then comes the cost of all the other benefits that the UNSA is asking for, chief of which is reimbursing 100% of employees’ public transport costs. That’s in addition to doubling private transport mileage expenses and creating a green mobility bonus.
As we revealed in July, the staff in Paris are the only employees of any Disney resort who receive a share of its profits, putting them amongst the world’s most well-paid theme park workers. However, there is good reason why they need more money.
The political system in France has been in deadlock since snap elections took place in early July, with no party able to form a clear majority in the country’s National Assembly. Testimony to this, it took French president Emmanual Macron two months to find a new Prime Minister who appealed to enough politicians to get elected.
The instability dented consumer confidence in France and contributed to the country’s rate of inflation failing to fall as much as analysts expected last month. It reversed from 2.3% in July to 1.9% in August but didn’t drop across the board. According to France’s national statistics bureau, prices in the service sector rose from 2.6% to 3.1% in August, especially in accommodation and transport.
It has been felt at a grassroots level with 75% of 1,200 hospitality professionals in France revealing in a recent survey that tourist spending has fallen this year.
According to another survey, only 38% of the 1,000 tourism professionals interviewed said they were satisfied with their July financial results, compared with more than 80% between 2019 and 2022. About 70% of the respondents recorded a drop in sales with French newspaper Le Monde reporting that, out of all of the reasons for this, “the most important was the rise in prices.”
In June France’s central bank forecast that inflation would hit 2.5% over the next year which is more than double the rate in 2019. However, it is still a marked decline on the past two years.
Inflation surged throughout 2022 hitting a peak of 6.3% in February last year. By then, the cost of electricity in France had risen almost four-fold since Russia invaded Ukraine whilst flour, butter and eggs were about 50% more expensive.
Disneyland Paris made sure it didn’t lose out. It waved its magic wand in 2022 and increased one day, two-park ticket prices by 8.4% to $142.51 (€129) with annual passes rising the following year.
As we revealed in The Times, the ticket price hikes, combined with the opening of a new land themed to the hit Avengers movies, led to EDA’s revenue rising nearly three-fold to $2.7 billion (€2.4 billion) in 2022. It outstripped a 57.8% increase in costs leaving the company with a $51.9 million (€47 million) operating profit, its highest in a decade. It didn’t escape the attention of the staff.
“We see the figures, the profits they have made, the wealth that has been communicated by the Walt Disney Company,” said Disneyland Paris worker Ahmed Masrour in an interview last summer 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.'”
Ironically, the employees are known as cast members due to the roles they play in a themed environment but the atmosphere was anything but a fairytale at Disneyland Paris last summer. Cast members demanded a monthly wage rise of $221.48 (€200) as well as an increase to the bonus to long-serving staff and higher pay for working on Sundays. Management dug its heels in leading to a series of increasingly tense strikes through the two parks at Disneyland Paris. It shattered the fairytale atmosphere in the run up to last year’s pay negotiations. This had a magic touch as the cast members ended up with a bumper package of benefits thanks to the UNSA’s tireless work.
Although there have been no strikes this year and inflation is sharply down on 2023, the UNSA is far from complacent. In a statement it claimed that its members are facing “work overload, insufficient salaries, lack of recognition and degraded working conditions. These legitimate concerns can no longer be ignored and it is time to get concrete answers from management.” Disneyland Paris declined to comment as it said it is legally unable to do so at this stage of the negotiations.
The process is a world away from the one open to employees at Disneyland in California. Earlier this year Disney offered them an average increase of less than a dollar per year which was only improved after they threatened to strike. Their new deal gives them at least $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 as their latest pay rise only gave them $18 per hour, let alone a share in the profits of the parks.
However, a happy ending could still be far, far away for the workers at Disneyland Paris. Following today’s talks, the UNSA said that “we remain unsatisfied, the management still has very traditional, and insufficient, vision.” It added “we are wondering about the real intention of negotiating. Or is the process already decided and tied up? What is the point of engaging in a pseudo-negotiation?”
The outcome is far from certain as there is no pressure of strikes or soaring inflation like last year. The workers are heading into the unknown and although there is only one day of talks left, they still have everything to play for.
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