Disney assumes coronavirus outbreak could keep Shanghai and Hong Kong theme parks closed for two months
Shanghai Disneyland and Hong Kong Disneyland will remain closed indefinitely amid the coronavirus outbreak that has killed hundreds, infected thousands and restricted millions from traveling.
Disney assumes the coronavirus outbreak in China that has forced the temporary closure of Shanghai Disneyland and Hong Kong Disneyland could keep the two Asian theme parks closed for at least two months.
The temporary closure of Shanghai Disneyland and Hong Kong Disneyland due to China’s coronavirus outbreak could result in a $175 million loss in Disney’s upcoming second quarter, Disney chief financial officer Christine McCarthy said. The loss assumes the closure of both parks for two months, McCarthy said.
“The recent closure of our parks in both Shanghai and Hong Kong due to the ongoing coronavirus situation will negatively impact second quarter and full year results,” McCarthy said during the company’s latest earnings call. “The precise magnitude of the financial impact is highly dependent on the duration of the closures and how quickly we can resume normal operations.”
Shanghai Disneyland and Hong Kong Disneyland will remain closed indefinitely amid the coronavirus outbreak that has killed hundreds, infected thousands and restricted millions from traveling. The closure of the two Disney theme parks came at the beginning of the week-long Lunar New Year holiday, one of the busiest travel seasons of the year in China.
“At Shanghai Disney Resort, we currently estimate the closure of the park could have an adverse impact on second quarter operating income of approximately $135 million assuming the park is closed for two months during Q2,” McCarthy said.
Hong Kong Disneyland had already seen a significant drop in theme park attendance and hotel bookings due to the ongoing protests in the city.
“At Hong Kong Disneyland, we currently estimate the closure of the park could have an additional adverse impact on operating income of about $40 million for the second quarter,” McCarthy said. “Again, this assumes that the resort is closed for two months.”
Coronavirus symptoms include fever, coughing and difficulty breathing. Coronavirus cases have been confirmed in more than two dozen countries outside mainland China. The U.S. Centers for Disease Control and Prevention has identified at least 11 coronavirus cases in the United States, including in California.
The coronavirus outbreak hasn’t had an impact on visitation at Disney’s U.S. theme park, McCarthy said. Disney’s U.S. parks don’t draw a significant amount of visitors from Asia, McCarthy said. Approximately 1 in 5 visitors to Disney’s domestic parks come from international markets, McCarthy said.
Coronavirus: Hong Kong Disneyland Resort hotels suggested as quarantine centres
- Tourism lawmaker calls on government to look at using resort’s remote accommodation for isolation
- Ministers are scrambling to find quarantine sites with confirmed infections increasing
Kanis Leung Published: 3:42pm, 5 Feb, 2020
Calls grew on Wednesday to use hotels at Hong Kong Disneyland Resort as quarantine centres as the city tackled the deadly coronavirus outbreak.
Former chief secretary Henry Tang Ying-yen added his voice to calls from lawmakers and urged the government to look at isolating those caught in the outbreak at the theme’s park accommodation, which is located in a secluded area of Lantau Island. The park is closed because of the outbreak.
Here's the thing, I've seen this on screamscape and their post is linked to Disney and More which seems to also quote SCMP as it's source...
but that site has had an anti-theme park bias in their editorials for a while. Especially since the Ocean Park bail-out, they've been running a lot of articles about how the theme parks/money the government invests should just be used for housing and trying to use their platform to sway public opinion.
How much truth is there is to the hotels being quarantine centers? I honestly don't know, it could have been floated as a vague idea in a meeting of possible quarantine centers. But so far SCMP seems to be the main source for these sites and they clearly think the land the parks sit on (again most of their editorials are more aimed at Ocean Park having a second government bail-out.) and until I see more sites reporting this that don't link back to SCMP, I'll take it with a pinch of salt.
I've noticed the SCMP slant as well. Someone really must have murdered their mother at a theme park or something cause they have it out for the parks! I will say that they're not wrong about the remoteness but great infrastructure at those hotels but I'm also assuming it was just a random idea by someone who wants to see parks fail. I also don't think Hong Kong needs that many quarantine beds at this time.
I didn't know where to post this but with the report of both Hong Kong and Shanghai parks being closed for at least 2 months, I'm curious if Disney will do anything domestically to offset the loss of operating income from the international parks? I don't really know what they would do but losing 2 months of cash flow from two resorts has to be concerning. Maybe they ramp up marketing and offer some kind of a special ticket packages or promotions? Maybe an new after hours event or something? If they launched some kind of after hours Star Wars event at the Studios you know it would sell out in a heart beat.
I really don't know if they would actively try to recoup that projected loss but it will be interesting to follow.
I want to believe that they won't because they know that this is a short term issue that has nothing to do with the performance of the company itself but I don't believe that at all. I'm just telling myself that because I want to believe it.
I'm sure they have a plan in place for this kind of thing I'm just curious if the affects of the plan will be noticeable to people outside of the executive levels of the company. It's not like they're gonna make an announcement "Hey since Hong Kong is closed for 3 months we're going to be offering a new line of limited merch to recoup the loss!", but it will be interesting to see if they do something different or out of the ordinary operationally over the next couple of months.
^I assume we'll see cuts at the US parks that consumers will notice and probably more so employees. I'm sure there are high ups in panic mode right now trying to figure out how to recoup some of this money.
$175 Million is actually less the 1% (about 6 thousandths) of Disney WW Theme Park revenue from 2019. Only about 3 thousandths and total company annual revenue from 2019. A one week closure of WDW would be much more damaging.
Disney probably has to flexibility to shift segment goals to make up for deficiencies in other segments especially with this much lead time. For example, a 1% increase in advertising rates could make up $200 million. Disney still has the clout to set the US TV advertising market rates.
I would expect minor changes to the US park budgets as the Chinese parks will have 8 months to more heavily promote their properties if parks are back online by May.
Also a large corporation like Disney, could easily offset this small of a % revenue loss via various corporate accounting practices.
As usual, my analysis is free of charge! Original enough to not steal someone else's quote as a signature
These pages are in no way affiliated with nor endorsed by SeaWorld Parks & Entertainment, Cedar Fair, Legoland, Merlin Entertainment, Blackstone, Tussaud's Group, Six Flags, Universal Theme Parks, the Walt Disney Company or any other theme park company.
photos and videos on this website were taken with the permission of the park by
a professional ride photographer.
For yours and others safety, please do not attempt to take photos or videos at
parks without proper permission.
You need a sense of humor to view our site,
if you don't have a sense of humor, or are easily offended, please turn back
Most of the content on this forum is suitable for all ages. HOWEVER! There may be some content that would be considered rated "PG-13." Theme Park Review is NOT recommended for ages under 13 years of age.