Disney Theme Parks Are Expected to Lose $21B During Ongoing Shutdown

Things continue to look bad for Disneyland, Disney World and the company’s other theme parks around the world. The parks have been losing millions per day during the shutdown and they won’t be able to open up again for at least a couple more months. Now, a new report suggests that even the already brutal financial estimates we have seen have been too optimistic, as Disney is expected to lose billions through 2022.

A new report from the analysts at MoffettNathanson lays out a bleak picture for the future, financially speaking. The report estimates that, over the next three years, Disney Parks stand to lose $21.7 billion, when compared to earnings from 2019. That represents a truly massive chunk of Disney’s business and paints an even grimmer picture than the one many in the industry have been expecting. Just to add some perspective, Shanghai Disneyland, in total, cost $5.5 billion to build. Per the report, they feel investors are being too conservative in weighing how long the recovery period will be.

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“We believe that investors are underestimating the lagging recovery nature of Disney’s theme parks.”

Disneyland and Disney World have been shut down since March, with the company’s other parks around the world temporarily closed as well. MoffettNathanson expects that theme park attendance will drop 50 percent through the end of 2020, with attendance ramping back up to 75 percent in 2021, and up to 90 percent in 2022. However, discount ticket prices will likely harm earnings potential, even as attendance begins to rise again. It’s expected that Disney will offer discounts to help get people back in the park, which will impact profits.

The report also looked at previous economic downturns. Disney experienced big drops after both 9/11 and the Great Recession in 2008/2009. Even so, MoffettNathanson predicts that the current situation will result in a far greater downturn in the travel and hospitality industries, which means Disney Parks will be hit hard.

“It is now clear that the current [situation] impact on the travel and hospitality industries is much more severe than both prior downturns. When will the parks reopen? How will Disney approach staffing them? Will they only open up one park like the Magic Kingdom to optimize operations? Given limited air travel, how many of their Orlando hotels will be up and running?”

It’s estimated in the report that Disney’s theme parks around the world may be able to reopen on July 1, but even that is viewed as optimistic. As we’ve previously reported, some expect that the parks may not open again until next year. When the parks do open again, it will be with strict guidelines so that the company can adhere to social distancing guidelines and help ensure the safety of its guests. Capacity will be heavily limited, health checks will be implemented and visitors may even need to sign a waiver clearing the company of any liability, should they get sick. This news comes to us via The Orange County Register.

Ryan Scott at Movieweb

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