Disney’s losses are quickly adding up as the United States parks could possibly see a $3.4 billion loss in revenue to the shut-downs and likely economic recession that will follow according to an analyst report from MoffettNathanson.
The Coronavirus Pandemic has cause massive disruptions for many and Disney has not been immune. They have had to shut down their parks across the globe. Even though they won’t make a formal announcement, Walt Disney World will likely be shut down past April 1st due to the “stay-at-home” order in place.
The MoffettNathanson report also expects the closures to go beyond March and at least though mid-April.
“We expect the closure to extend for another two weeks into April as the country scrambles to get this virus contained.” -MoffettNathanson analyst report.
The analysts already expect the global park shut-downs to lose $1.4 billion for Disney, but if does indeed go into a recession, as people are afraid to spend money, it could be several more months of losses. And they estimate another $2 billion lost for just the US Parks.
If you factor in all the parks they estimate it could be a $4.3 billion loss.
Disney just had to turn to the debt market in both the United States and Canada for about $7.3 billion and Walt Disney World and Disneyland have only been shut down now for a couple of weeks.
It isn’t just the closure of the parks and the loss of tickets, hotel, food, and merchandise, it’s the economy that will likely cause further issues.
Even after the “all clear” is given and people are allowed to return to work or the parks the economy is likely going to go into a recession as people are not going to be spending money and certainly not to the levels that the Walt Disney Company would need them to.
When the parks re-open it isn’t going to just magically go back to how it was and Disney won’t be able to keep raising prices like they were. Many won’t have the money, or won’t be willing to spend the money like they were, until they return to a more secure place in their own lives.
Right now going on a vacation is not the most important thing for a lot of people. Pushing for them to “reschedule” when they are concerned about rebuilding their savings, keeping their home, finding work, etc. is a bit tone deaf.
Of course this is one report out there, but it’s saying the same things I’ve been hearing from others. Disney will get through it, but it’s not going to be the same for a very long time.
Source: OC Register,
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