While locals shored up Disney World attendance, Disney parks still down $3.5 billion
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Disney World was closed for more than 100 days due to COVID-19 from mid-March until it reopened in early July. Disneyland remains closed and Hong Kong Disneyland has now closed for a second time, neither with set reopening dates.
Disney often stays pretty tight-lipped about numbers, dollars and future plans, but every few months we get a peek under the ears thanks to the company’s investor call. Today’s investor call taught us that the long park closure was as impactful as one might have guessed, to the tune of about $3.5 billion in missed parks-related revenue in the last quarter. All-in, the company lost $4.72 billion this past quarter.
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But Disney released other info beyond just revenue specifics. It also released intel surrounding the mix of guests who are — and aren’t — in the Disney parks right now. (Oh, and we also learned that after several missed release dates due to COVID-19, “Mulan” is skipping theaters and going straight to Disney+ on Sept. 4 for $30. Get that best card for streaming dusted off.)
Disney World is making money
On the last Disney investor call back in early May, Disney stated that it wouldn’t open a park unless it could make a “net positive contribution” from a financial standpoint. In other words, Disney had no plans to open and operate the parks at a loss.
So, while Disney didn’t release numbers surrounding attendance, occupancy or maximum capacity, it did say that a reopened Disney World is making a “net positive contribution” … just not as much of a contribution as the company thought it would when the reopening was first announced in late-May.
Since that time, Florida has experienced a big spike in coronavirus cases. And that is stopping many Disney fans from visiting the park at this time.
More would-be guests are canceling than expected
Based on the stream of reservations it was receiving, Disney anticipated ample demand to go above even what six-foot social distancing would have allowed when it first announced reopening plans. But since then it has experienced “a higher than expected number of cancellations.” Disney attributes this largely to the trepidation of travelers who are anxious about flying into Florida to go to Walt Disney World.
As a result, Disney World is catering more to locals than it normally does. The current mix in the parks is about 50% local drive-in guests and 50% those who are traveling in from further out.
In advance of its reopening, Disney World introduced a new Park Pass reservation system to manage park attendance. There are three different buckets of availability — one for annual passholders, one for Disney resort guests and a third for ticket holders who aren’t on an annual pass or staying at a Disney resort.
As Disney experiences cancellations from guests who were traveling in, and perhaps staying at a Disney property, it is opening up more availability to annual passholders. This is keeping Disney pretty close to utilizing as much capacity as it has available while maintaining social distancing.
However, the company acknowledges that a travel-in guest who stays at a Disney resort for five to seven days on a more traditional Disney vacation is a bit more “valuable” than someone on an annual pass who comes in for a day or two. But, everyone walking down Main Street U.S.A. must have missed the parks, as Disney said those who are in the parks are indeed spending cash — likely thanks to “pent up demand.” (Or maybe they just are afraid they won’t be able to get back to the parks again anytime soon.)
Based on what was released today, Disney World seems to be making money even with dramatically reduced occupancy.
Disney expects those numbers will improve when more regular travel patterns return, which won’t happen until those out-of-state guests are again ready to board a flight and take that weeklong Disney World getaway. But as things stand today, many Disney World hotels remain closed (or filled with NBA players), Florida is still experiencing a high rate of coronavirus cases and air travel is still only at a fraction of what it was at this time last year.
Featured image by Summer Hull/The Points Guy
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