The Walt Disney Company today reported a 37 percent drop in theme park segment revenue in the fiscal year ending September 30, due to the ongoing effects of the pandemic. But in an investors's conference call, company leaders pointed to improving performance at reopened parks, especially at Walt Disney World, which is now operating at higher capacity, even though the Disney anticipates Disneyland in California remaining closed for the remainder of the year.
Disney's Parks, Experiences and Products segment reported $2.58 billion in revenue during the fourth quarter of the fiscal year — down 61 percent from $6.655 billion in the same period in 2019. Disney estimated that the total net adverse impact of Covid-19 on segment operating income in the quarter was approximately $2.4 billion, leading to a loss of $1.1 billion for the quarter.
The Disneyland Resort and Disney Cruise Line were closed for the entirety of the quarter, while the Walt Disney World Resort and Disneyland Paris re-opened in mid-July and Hong Kong Disneyland Resort was open for about two weeks at the beginning of the quarter and about one week at the end of the quarter.
For the year, Disney reported $16.5 in revenue for its theme park segment, down from 2019's $26.225 billion.
"Even with the disruption caused by COVID-19, we’ve been able to effectively manage our businesses while also taking bold, deliberate steps to position our company for greater long-term growth,” Disney CEO Bob Chapek said. "The real bright spot has been our direct-to-consumer business, which is key to the future of our company, and on this anniversary of the launch of Disney+ we’re pleased to report that, as of the end of the fourth quarter, the service had more than 73 million paid subscribers – far surpassing our expectations in just its first year."
"On the parks side, we've proven over many months that we're able to operate our parks responsibly, following strictly enforced guidelines provided by health care experts and successfully reopening our parks in Orlando, Shanghai, Tokyo and Hong Kong," Chapek said. "We've also reopened Disneyland Paris for several months, although the resort is now temporarily closed due to President Macron's recent lockdown order in response to a resurgence in Covid cases in Europe.
"People have shown a willingness to visit our parks, which I believe is a testament to the fact that they feel competent in the measures we've taken. And we're very encouraged by the positive news earlier this week on the progress of potential vaccines.
"Unfortunately, we're extremely disappointed that the state of California continues to keep Disneyland closed, despite our proven track record. Our health and safety protocols are all science-based and have the support of labor unions representing 99 percent of our hourly cast members. Frankly, as we and other civic leaders have stated before, we believe state leadership should look objectively at what we've achieved successfully in our parks around the world — all based on science — as opposed to setting an arbitrary standard that is precluding our cast members from getting back to work while decimating small businesses in the local community."
Chief Financial Officer Christine McCarthy noted that the Walt Disney World Resort is seeing park reservations at 77 percent of current capacity for the current quarter, with Thanksgiving week booked close to capacity.
"We are pleased to report that Walt Disney World, Shanghai Disney Resort, and Hong Kong Disneyland all achieved a net positive contribution in the quarter, which means we generated revenue that exceeded the variable costs associated with reopening," McCarthy said.
"We're actually very encouraged by what we're seeing right now in our parks across the world," Chapek said. "There are really two dynamics that are going on. Number one, our park operators — which as you know are the best in the world — are becoming much more efficient and effective in operating under Covid guidelines, and we've been able to pretty materially increase our capacity and still stay within the guidelines that local governments are giving us, for example, six-foot social distancing, and this is happening across the across our parks across the world.
"In fact, Walt Disney World, which was at a 25 percent capacity constraint, which was our industrial engineering estimate to keep six-foot social distancing, now has been able to increase to 35 percent of capacity — so almost a 50 percent increase in the number of guests that we can allow in and still adhere to the local guidelines and the guidelines that are stipulated by the CDC with the six-foot social distancing. So we're very pleased by how we've become adept at operating under these constraints.
"But the second thing that's even more encouraging is the increasing demand that's growing for our parks across the world. I think it says two different things. Number one, it shows the love that guests have for our experiences that we have within our parks and the tremendous IP that we have as a company have, but I also think it speaks to the trust that people have, given the track record that we now have after months of operating across the globe with very stringent guidelines."
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They did get very lucky with Disney+'s EU/UK Launch window basically hitting at the same time as lockdowns. A good year it seems, all things considered.
Nothing surprising here. The election is "basically" over and Disney still hasn't made any announced progress for a lawsuit against Gov. Newsom. If they were planning to, they would have done it already. If these parks are going to be compliant with Newsoms guidelines, no parks in So Cal will open until at earliest late spring-early summer next year, even if the vaccine starts rolling out by the end of this year.
Nothing all that unexpected in this report. When I visited Florida last month, Walt Disney World was far busier than I or anyone in my group expected, and if I didn't know better I would say it felt like normal crowd levels. I do think there's a fair chance Florida tourism takes a nose dive after the holidays, but it's clear that people who are willing to travel and go out into the world don't have any particular fear of theme parks.
As for California, I've started hearing whispers that the parks are trying to strike a deal with the state that will guarantee they can reopen in spring 2021 before resorting to legal action. Pretty much all of them gave up on 2020 completely when the guidelines came out, but many are starting to face the reality that if they can't reopen by next spring (or certainly by next summer), it may be more financially viable to repurpose assets and sell the rest than attempt to remain in business on the west coast. What happened with the Santa Cruz Boardwalk has pretty much scared any of them off from attempting to reopen without a firm guarantee that once they're open, they stay open.
"Number one, our park operators — which as you know are the best in the world --"
What an arrogant git. And if he think that is true why not pay them a decent wager.
Sure, Disney executives, you're able to operate safely in the middle of a pandemic when others aren't, you must be friggen magic, please continue.
The schools aren't open in Northern California, but you're "disappointed" with the state government that Disneyland isn't. Please, by all means, Disney making money is more important than kids going to school.
I've never thought less of Disney than I do now, I'm going to stop reading these comments from them.
Thecolonel’s ignorant unrealistic leftist propaganda continues to show that he has zero respect for Disney’s competence in handing COVID. He is too blinded by political bias to see that Disney is one of the safest places to be right now. I think I speak for all of us when I ask @thecolonel to shut up. Stop fearmongering and stop your anti capitalist, anti science propaganda.
@TheStormRunner: Right now, all these places folks were complaining about "open when Disneyland isn't" in California are on the verge of closing right down again and yet somehow, a busy theme park can open safely when every state is showing huge spikes? No Kingdom is that Magic.
I work at Universal Studios Hollywood and the upper management have told many team members if they were not allowed to open by the end of October, they were not going to bother opening until 2021.
Outdoors mall style is coming to Disneyland, no rides, with some stores and eateries open. It will happen, its going on at Knotts Berry Farm right now.
The reporting from the New York Times still holds true today ("At Disney World, ‘Worst Fears’ About Virus Have Not Come True" - 10/09/20). Further, WDW safety management is constantly (CONSTANTLY) reviewing safety and operating protocols and making improvements as needed. Additionally, the park is acting responsibly. An example is the company's decision to limit capacity and park hours with early closings (including New Year's Eve). This despite the fact that state of Florida restrictions have been lifted.
So regardless of what TPI's regular (and rather cliche) trollers might assert, it's not arrogance for Disney to say they are the best park operators in the world. At a minimum when it comes to COVID-19, it's accurate.
Also Newsom and his parade of bureaucratic Sacramento sycophants still have not acted responsibly. Apparently, they sent a group of people to Orlando to check out what UO and WDW are doing to successfully manage the crisis.
And then they left.
As far as I know, there has been no publicly released document that lays out how this group (travelling on the taxpayer's dime) managed their audit. Who went? What are their qualifications related to theme park operations, contagious disease management or park safety? Which parts of the resorts did they survey (front of house, back of house, restaurants, hotels, etc.)? What did they like about the administrative and engineered safety controls? Who did they engage with from WDW and UO safety, operations and executive management?
And then the big question: Why did they leave? Why didn't a contingency stay to see how the parks monitored the situation on the ground and how they adjusted and adapted to circumstances?
If the governor of California truly cared about the CMs and TMs of Disney, Universal and other California attractions, he would make a public commitment to do everything possible to get these businesses open.
Instead he gleefully brags about how he is going to be "stubborn" -- acting proud about this witticism, and disregarding the theme park workers whose interests he is supposed to be representing.
@TH - I just read an interesting article about the Golden State Warriors, and how their owner, Joe Lacob, who has a masters degree in public health from UCLA, is preparing a proposal to allow the Chase Center to host fans for Warriors games at 50% capacity.
If a sports team in San Francisco can host an indoor event at 50% of a building's capacity (granted a brand new facility with best in class ventilation and filtration), then it establishes a precedent that California theme parks should use to argue that they can host guests at mostly outdoor venues. The NBA season starts on December 22, so if the Warriors are to get clearance to host fans for the beginning of the season, they will need to get California's buy in the next couple of weeks.
The decision by WDW to increase capacity should come as no surprise with the holiday season on the horizon, and weekends seeing more and more crowds. At the moment weekdays are still relatively calm and easy going, but the period between Thanksgiving and Christmas will, I'm sure, see more and more people visiting the parks. December isn't a month I go to Disney very often anyway, so I'll be more interested to see what it's like in January now.
Hey TheStormRunner how about you mind your manners? If the moderator of this website is going to allow you to personally insult me, why not just provide your contact information and I'll get somebody to stop by and slap you in person?
@MikeW your busy theme park doesn’t exist right now. With limited capacity and literally one of the most controlled public environments on the planet, there are few places safer than Disney Parks right now. Why are they unfairly being denied the opportunity to safely make a profit?
@The colonel I didn’t insult you, I simply pointed out the flaws in your argument. Hence why no one has stepped in. If you have an issue I suggest you take it up with the complaints department
Oh please go ahead and insult thecolonel.
You want some, too TH Creative? What's up with this site that people are insulting and it's allowed to fly with the moderator? Am I on a MAGA site? I thought this was a site for theme park lovers, not for jackboot fascist morons who are driving this country into the dust with their reality denying selfishness.
Truth of the matter is that the reason they haven't had problems with Disneyworld is because central Florida is light yellow on the national map given its climate. When Orlando is as blood red as Wisconsin, Disneyworld won't be able to stop the virus any more than anyone else.
@thecolonel: On July 18th, TPI tossed out a post titled "Is Disney World the Safest Place in Florida Now?" Which caused YOU to post "Strikes me as an irresponsible article title, Robert."
When you were confronted multiple times about the BS nature of that accusation you never recanted. You never acknowledged that the discussion forwarded by that post was a question not an avocation.
When you write "When Orlando is as blood red as Wisconsin, Disneyworld won't be able to stop the virus any more than anyone else" it's as if you are hoping the worst will happen just so you are proven correct on an Internet thread discussion.
You must be very proud.
Also, "Disney World" is two words, not one, Shakespeare.
"What's up with this site that people are insulting and it's allowed to fly with the moderator?"
You've got to be joking right?
Let's not forget the time you said you hope everyone who chooses not to wear a mask dies.
No one should be insulting anyone. But you should not be talking... glass houses and all. You’ve been insulting and belittling many for a while now.
So everyone who doesn’t entirely agree with your, in many cases, extreme views must be a Trump supporter? Get real. Sometimes you make good points, but almost always you take things too far and past the point of reason.
Let’s not feed the trolls.
Let’s consider increasing capacity as good news. The country has been excited at the vaccine news late last week. The parks were obviously going to start planning to get back to the old normal.
All of you should be ashamed of your actions. I have reported each and every one of you to the cyber police. Here is your certificate-
I hear that certificate entitles you to a 50% discount at your local Waffle House.
IMO its a mistake at this point to be increasing the parks capacity. Even if it doesn't spread the virus, the parks already feel very busy at their previous capacity, so its going to be a bad look for Disney when people go there and feel uncomfortable as the new case counts keep skyrocketing every day. I understand the pressure to make money and that they are allowed to as the governor doesn't have any interest in trying to regulate it, but it seems short sighted to allow peoples opinion of Disney to be that they are trying to do is make as much $ as possible during the pandemic.
"provide your contact information and I'll get somebody to stop by and slap you in person?"
Afraid to stop by yourself? Come to NY and I'll give you my # so you can try and fail!
I am afraid Newsom is going to hurt CA even more and close down outdoor dining, hair and nail salons, etc. all while he more discretely has dinner and meals with friends, without masks, and in groups of more than three households. I do not see Downtown Disneyland staying open much longer for dining and sadly I think DCA will not open or stay open for long in terms of their outdoor shopping or eating. BTW, I have not gone to DTD as I think I would be depressed and I can order Disney goods online.
And on another note, I think anyone threatening others with physical harm should be suspended/ banned from the comment area. I get we will all at times disagree if theme parks should be open or should re-open, but one poster has gone too far IMHO/
I went to the Santa Monica Pier recently, and it was packed with people. They were wearing masks, but I was kind of shocked how many people were allowed to be on the pier. No rides were open, but there were long lines for the concessions. If you can allow a venue like that to be open without restriction, then it's mind boggling that theme parks, that can control admittance, cannot be open. And open air rides, even indoor rides, should be safe if you wear masks.
Disfan when you elect a clown as governor, expect a circus
BREAKING: Chapek to announce the opening of a French Laundry restaurant in the middle of Frontierland. As soon as he hears about it, we can expect Governor Newsom to let the gates of the park fly open.
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Can't say shocked given spikes nationwide. Or, sadly, not shocked Florida keeps going open on stuff but given threats of new lockdowns in various states, opening a major theme park now would have been nuts.