Disney expects USD175 million impact from China park closures
Walt Disney executives expect to take a $175 million hit on Greater China park closures due to the coronavirus crisis.
During a call with investors Disney said second-quarter operating income will be impacted by $135 million if the Shanghai Disneyland resort stays closed for two months and a further $40 million in operating income if Hong Kong Disneyland remains closed.
The Hong Kong park had already been heavily impacted by last year’s pro-democracy protests.
"The current closure is taking place during the quarter in which we typically see strong attendance and occupancy levels due to the timing of the Chinese New Year holiday," said Christine McCarthy, Disney’s chief financial officer.
"The precise magnitude of the financial impact is highly dependent on the duration of the closures."
Still, Disney doesn’t believe there will be much impact on US parks even though there are now strict entry restrictions on travelers coming from China.
Even though the Chinese market is one of the highest spending, it makes up a much smaller proportion compared to Canada, Mexico and the UK.
After two stagnant quarters, Disney reported a 2% increase in attendance at Walt Disney World and the Disneyland Resort, and hotel occupancy rates at 92%.
The Parks, Experiences, and Products division posted an overall first quarter 8% increase in revenue to $7.8 billion.
Disney’s financial year begins in October.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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