Disney theme parks face a potential USD 21 billion revenue loss through 2022 due to the ongoing coronavirus closures of its resorts around the globe along with the economic recession projected to follow, analysts warn in a new research paper.
“We believe that investors are underestimating the lagging recovery nature of Disney’s theme parks,” according to the MoffetNathanson report.
Disney’s two Anaheim theme parks, three hotels and outdoor shopping mall remain closed until further notice due to the COVID-19 pandemic. The shuttering of the Anaheim parks was preceded by closures of Disney parks in Shanghai, Hong Kong and Japan and followed by closures of Disney resorts in Florida and France.
In aggregate over the next three years, the new MoffetNathanson analyst report forecasts that Disney’s overall theme park revenues could be USD 21.7 billion below 2019 fiscal year levels.
To put that mind-boggling loss into perspective, that’s enough to pay for Shanghai Disneyland four times over. Disney’s USD 5.5 billion Chinese theme park resort opened in 2016.
Back in March, MoffetNathanson assumed that Disney’s 12 shuttered theme parks around the world would remain closed for a month. Now, MoffetNathanson forecasts that Disney parks will reopen on July 1.
“That might end up being too optimistic as well,” according to the MoffetNathanson report.
The new MoffetNathanson report assumes Disney theme park attendance will drop 50% through the end of the 2020 fiscal year. Attendance should ramp up to 75% of previous levels in 2021 and 90% in 2022, according to the report.
Discount ticket prices intended to help drive attendance after the coronavirus closures could cut into Disney theme park profits through 2021, according to the report. Disney is expected to delay capital expenditures on non-critical theme park projects to help curtail the losses, according to the report.
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