Disney theme parks around the world closed earlier this year due to the COVID-19 global pandemic.
Now, several months after those initial closures, most of Disney’s theme parks and several of its resort hotels have reopened, but some hotels, restaurants, and other aspects of the Disney Company — like Disney Cruise Line — remain closed or temporarily suspended.
According to Bloomberg, some analysts are now saying that Disney’s earnings “might not return to last year’s levels until 2024.” Disney and other theme park operators have announced some significant layoffs over the last several months.
Bloomberg notes that these actions are the result of limited attendance by domestic guests — both due to social distancing requirements and some families’ unwillingness to get on airplanes and travel for their vacations. One theme park consultant said, “People are just not ready to come back yet.” Some guests have noted that the airport and flights may be more of a concern to them than the parks themselves.
Additionally, travel bans prevent many international visitors from making their way to the happiest place on earth, and some theme parks, like Disneyland, remain closed as they wait for government guidelines which would allow them to reopen.
Bloomberg’s theme park revenue data shows Disney’s revenue on 12/31/19 was $7.4 billion, while the revenue as of 6/30/20 is $983 million. Other analysts have predicted that Disney will have another “lost year” in 2021.
Mark Zandi, an economist at Moody’s Analytics noted that the “Disney layoffs signal the leisure industry won’t be the same, not anytime soon…It’s going to take two to three years to fully catch up.”
In the Orlando/Kissimmee area, about 14% of workers are employed in accommodation and food service, “making it the nation’s second most tourist-dependent city (after Las Vegas), according to data researcher SeoClarity.” Some analysts have noted that the Disney Parks will likely need a vaccine to exist to return to regular operations.
As shared by Bloomberg, market researcher STR says that, for hotels in the Orlando and Anaheim areas, revenue per available room in August, which is typically one of the strongest months of the year, was down almost 70% from a year earlier. Hotels that are open appear to be averaging an occupancy rate of under 30%, and some hotel operators are saying things are not looking much better for the holiday season.
Researcher MoffettNathanson LLC says that Disney’s “theme park division could swing from a $4.9 billion pretax profit last year to a $1.5 billion loss in 2020” and that “[e]arnings might not return to last year’s levels until 2024.”
Other analysts have noted that international tourist spending may also not return to normal until 2024. Although Disney revealed a number of weeks ago that locals now make up about 50% of park attendance at Disney World, it’s likely that Disney is feeling a financial impact from the loss of international visitors.
Things are constantly changing at Disney. Despite some of the financial concerns, construction is moving forward on certain Disney projects, Aulani, A Disney Resort & Spa is reopening soon, and Disney On Ice is also coming back.
We’ll be on the lookout for more Disney news and we’ll let you know as the situation with Disneyland and other aspects of the Disney company develops.
Click here to read about the ONE thing you’ll NEED to do before getting on a Disney Cruise Line ship when sailings resume!
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Do you have a trip planned to a Disney theme park this year? Let us know about it in the comments!