The Walt Disney Company is currently facing the most difficult business environment in its history. Movie theaters across the world are shuttered, meaning that tentpole films like Mulan have been delayed and 2020 is expected to have a record low box office. Merchandising has also taken a hit, with shoppers reluctant to spend money on unnecessary items in a time of financial insecurity. But the biggest whack has been to Disney’s theme park empire. Right now, all 12 of Disney’s parks around the world are closed and we don’t have a firm timetable as to when they’ll reopen.
Back when all this began in late March, the assumption was that the parks would remain closed for just one month. Now, a new report from MoffettNathanson says that this estimation was incorrect and that they’re predicting that business is set to resume on July 1st. However, as the article says, “that might end up being too optimistic as well.”
They go on to estimate that the Coronavirus pandemic will mean Disney’s overall theme park revenues will be $21.7 billion below 2019’s fiscal year levels. This gloomy outlook takes into account that even when they do reopen, the public is unlikely to rush back through the gates as there will be a “slower ramp back to a new normal.” Reasons for this include a public still wary of the virus, decreased availability of air travel and a general global economic slowdown.
Still, if you want to visit a Disney theme park, late 2020 may be the best time to go. They expect ticket prices to be heavily discounted when the parks reopen as the company attempts to regain momentum. Beyond that, there’s a glimmer of light on the horizon. Assuming that we have a vaccine, MoffettNathanson predict that Disney will have rebounded by 2022 and the parks will see a return to their previous high levels of attendance.
All this probably means we should expect Disney to be behaving very conservatively across all of their businesses over the next few years as they seek to minimize the massive financial impact of COVID-19.
