It’s been a long four months of furloughs, unprecedented closures, and project cancellations, thanks to the turbulent effects of COVID-19, and today, as scheduled at the end of every fiscal quarter, The Walt Disney Company presented its third-quarter earnings report to its investors and the public.
As expected, results were bleak, with a historic $2 billion reported in revenue loss from the company’s Parks, Experiences and Products division. The company’s third quarter runs from April through June. With a May reopening for Disney Springs, followed by the start of limited DVC resort reopenings in late June, the company reported very little revenue, given that the parks themselves didn’t begin official phased reopenings until July 11.
However, it seems not all is lost for Walt Disney World, as it seems the resort is operating at a meager profit, or at the very least exceeding variable costs. Roughly 50% of Walt Disney World’s guest base is still traveling in from a distance, with the other 50% coming from in-state.
While the resort has seen a higher level of cancellations, they’re still trying their best to fill the parks at the current capacity limits while still maintaining social distancing, with Annual Passholders filling in for the loss of out-of-state travelers.
Disney believes they should be in good shape once consumer confidence returns. While demand is not as high as expected, they do they expect demand to pick up once COVID-19 case numbers lower.
Disney stock was trading up 2.3% in after-markets after the earnings were released earlier today. You can review the full Q3 2020 Earnings Report by clicking here and read our full analysis and break-down here.
When the face mask requirement is dropped I would imagine their attendance will explode. I guess they are keeping their eyes on spring 2021 then? I know that when the masks are gone my family and I will be first in line. We have our eyes on Not So Scary October 2021!!!
Reduce costs to increase attendance. It’s not rocket science and I’m not even a businessman. But I doubt Chapek is either. Or do they think it’s OK to charge full price at a Disney hotel which does not have: resort delivery for merchandise, proper Magical Express, reduced bus capacity which means more waiting, or Extra Magic Hours? If they really wanted to make passholders feel special, they could have done all those benefits JUST for them. Why spend $800 at a Disney hotel when I can get the same experience staying at a Best Western or Four Seasons which is probably cheaper? Or a Universal hotel and visit Universal. I bet Universal is doing better than Disney right now.
Probably time to open up the parks in totality to Florida resident APs. We went to the Magic Kingdom today, it was empty.
>>they’re still trying their best to fill the parks at the current capacity limits
Uh, no. Check the availability calendar. Many parks are not available to Annual Passholders. There is only availability for resort guests or ticket purchasers. So clearly parks aren’t “at capacity.” They’re just holding out to rent a room or sell a ticket rather than let a passholder take a spot. I don’t expect many passholders to renew under these conditions.
I’m no high-ranking business executive either, but I do know that “operating at a meager profit” will NEVER be a sustainable strategy for any company. Do they really think they can continue operating this way? In addition, having roughly 50% of WDW guests coming from out of state is simply bad news… that figure is typically 70-80%.