After launching successful parks in Southern California, Florida and Tokyo, Disney’s fourth site outside of Paris proved to be a disaster. They lost roughly ~$1B in two years. What went wrong?
Projections based on population density in concentric circles around the site, weather patterns and income levels among other factors called for 11M visitors per year. At other theme parks, the average Disney guest remained for 3 days. So an assumption was made: 11M x 3 days = 33M “guest days.”
They almost got it right. The new park did receive 11M visitors in its first year. But on average they only stayed 1 day (vs 3). What went wrong? The other parks had 45 rides, and the Paris location opened with 15. Sometimes it really is that simple.
Per Clayton Christensen:
Some person way down in the organization made an unconscious assumption about Disneyland Paris being the same size as all the other parks. That assumption then got embedded in the numbers.
The folks at the top didn’t even know to ask, “What are the most important assumptions that have to prove right for these projections to work – and how will we track them?”