Walt Disney World released its third quarter financial statement earlier this week and as expected, the company reported a big loss: a whopping 42% drop in quarterly revenue. Disney’s Parks, Experiences and Products division, has been particularly hard hit during this time period, with losses reported at $3.5 billion in revenue, a massive decrease of 85%, which resulted in an operating loss of $2 billion.
And though we didn’t get much information during Disney’s discussion of this past quarter’s financial results beyond the catastrophic losses the company is currently seeing, there were some mentions of how exactly Walt Disney World specifically is staying afloat during the COVID-19 Pandemic.
Walt Disney World is at least operating at a profit
With pictures flooding social media of empty Walt Disney World attractions, it may seem logical to wonder if the resort is even making a profit with such low guest levels. However, Disney has confirmed that while attendance has been lower than was initially predicted, Walt Disney World is indeed operating at a profit with the parks being open.
In addition, though guest levels are very low at the moment Disney believes attendance will rise once consumer confidence returns and when COVID-19 case numbers go down.
Disney is getting the most revenue from “valuable” guests traveling in from out of town
Though there aren’t as many guests in the theme parks as Disney would probably like, per-guest spending has been reported to be “very, very strong”, especially among guests who are traveling to Walt Disney World from out of town. Disney has confirmed that about 50% of guests visiting are non-local and Bob Chapek emphasized the fact these guests are “marginally more valuable” than Annual Passholders, saying the following:
As you know, different guests—depending on where they’re coming from—have different relative values in terms of their contribution as a guest to the park. Typically, somebody who travels and stays for 5 to 7 days is marginally more valuable to the business than someone who comes in on an Annual Pass and stays a day or two and consumes less merchandise and food and beverage. So the way I would look at it, as our constituency changes a little bit, so do our overall margins.
Disney is hoping more guests will come from out of town soon
Unfortunately it looks like the surge of COVID-19 cases in Florida has had a direct effect on the number of guests visiting the resort from outside Central Florida, but Disney is confident that numbers will pick up once regular travel patterns into Walt Disney World resume.
Walt Disney World is an international travel destination, and with so many travel restrictions in place, the resort is already facing a difficult situation, and when you add in mandatory quarantines for inter-state travelers, the resort is in the unfortunate position of relying on local guests for now, but they are hopeful that as restrictions are lifted in the coming months, guests will return in larger numbers.
Unfortunately, there’s no way to know exactly when this will happen, and it will definitely be a long time before we see a “normal” day at Walt Disney World. However, it looks like the Orlando park is making at least some money in the meantime, and we’re sure Disney is anxious to get Disneyland Resort in California back open as soon as possible so it can continue to improve its financial situation.
As always, while this situation is evolving, all travelers should check out the CDC’s official site here, which has information on the virus and how to prevent its spread.
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