Disney Parks expecting 2-month closure and combined ‘$175MM adverse impact’ from coronavirus precautions
Today during the Disney Q1 FY20 earnings call it was confirmed that Disney Parks are expecting a 2-month closure for their Hong Kong Disneyland and Shanghai Disney Resorts which ceased select operations last month in response to the global spread of the Wuhan corona virus. The closure is expected to bring a combined $175MM adverse impact to earnings for both locations.
During the call, it was confirmed that the closures come during one of the popular times of the year for both locations with strong attendance and high hotel occupancy being typical surrounding the Lunar New Year celebrations.
The Shanghai Disney Resort is expected to take a $135MM adverse impact for the second quarter (assuming a 2-month closure) and Hong Kong Disneyland is expected to assume a $40MM adverse impact for the same period.
Pressed about how coronavirus might affect attendance and income at the domestic resorts, Disney top brass outlined that domestic Disney Parks don’t rely on large amounts of tourism from Asian countries. Tourism from those countries does not rank in the top five for Walt Disney World (see UK, Canada, Brazil, and Argentina) or the top three for Disneyland Resort (see Canada, Mexico, Australia); while Japan does rank fourth for the California destination, they did indicate that it’s in the “low single digits” overall.
Following guidance from China’s National Health Commission and in step with other public facilities — including movie theaters — both Resorts are temporarily ceasing select operations to help discourage the further spread of the virus. An exact date is not yet known for the reopening of either location.