An employee is clearing the grounds behind the closed gates of Disneyland Park on the first day of the closure of the Disneyland and Disney California Adventure theme parks in Anaheim, California, on March 14, 2020.
DAVID MCNEW | AFP | Getty Images
Disney suffered another financial blow in the first fiscal quarter, as restrictions on its participation in its open theme parks and the continued closure of its parks in California were significant.
There is currently no timeline for the reopening of Disneyland, as the state of California has said it will not allow theme parks to reopen until coronavirus cases fall substantially into the surrounding community. Although the 7-day average of new daily cases of Covid fell from a week earlier in California, more than 1,000 new cases are diagnosed every day in the state, according to a CNBC analysis of data from Johns Hopkins University.
“Where we have managed to reopen our theme parks with limited capacity, guests have consistently demonstrated a desire and willingness to visit what we believe is proof that they are confident in the health and safety protocols they have. we have put it into operation, “CEO Bob Chapek said during a earnings call on Thursday.
The company said the outbreak cost the division about $ 2.6 billion in operating income lost in the December quarter.
Revenue from Disney’s parks, experiences and products segment fell 53% to $ 3.58 billion.
Disney has reported similar losses in each of its last three gains. In the fourth quarter, the company said the coronavirus outbreak cost about $ 2.4 billion in operating revenue lost in its last period. In the second quarter, the company reported that it lost $ 1 billion in operating income due to the pandemic, and in the third quarter, the pandemic reduced its operating income by $ 3.5 billion.
Walt Disney World in Florida and Shanghai Disney Resort were open for the entire first quarter, while Disneyland and all Disney cruising activities were suspended.
Disneyland Paris was open until the end of October, about a third of the quarter, and Hong Kong Disneyland was open until the beginning of December, or about two thirds of the quarter. The company expects its Hong Kong headquarters to reopen in the second quarter.
“In terms of the parks’ outlook for the rest of the year and capacity, it will really be determined by the public’s vaccination rate,” Chapek said. “This seems to us to be the biggest lever we can handle, either to take the parks that are currently with limited capacity and increase them, or to open parks that are currently closed.”
Chief Financial Officer Christine McCarthy said that for the open parks, the company managed to make a profit from the guests. Revenues from park visitors exceeded opening costs. She also mentioned that the company is happy with the number of bookings and bookings it sees.
As the parks expand their capacity and reopen, Chapek said there will be some level of social distancing and wearing a mask for the rest of the year.
“Dr. Fauci said earlier today that he hopes there will be vaccines for everyone who wants them by April this year,” Chapek said. “If that happens, it will change the game and it could speed up our expectations and give people the confidence to go back to the parks.”
“Will there be any overlap until we know we’ve hit the herd’s immunity?” he said. “Sure, but will we also believe that we will be in the same state of social distance of 6 feet and wearing a mask in 2022? Absolutely not.”