According to Disney executives, the theme park attendance was lower than they were expecting. It is because there is a spike in coronavirus cases and the United States struggles to contain its COVID-19 outbreak. But new data shows the dropoff may be even more severe.
The data published by Deutsche Bank shows that Disney World attendance is down by more than 80% as compared to previous years. On the other hand, there are no signs of getting the same kind of demand as it was last year. Even though the number of daily cases in Florida is decreasing.
“While Disney World appears to be lagging the COVID case reduction. We would expect the data to relieve some of the admissions pressure in the near future,” the bank’s analysts said in a note to clients. “At present, Epcot and the Animal Kingdom are outperforming the Magic Kingdom and Hollywood Studios.”
In a Better Position
Earlier in August, Disney’s chief financial officer Christine McCarthy said that even despite an uptick in cancellations, Disney World was “operating at a positive net contribution level.” However, the company did not exactly give details on admission figures. But the CFO mentioned that the parks are still financially doing well even at massively muted attendance levels.
“What we’ve seen is that we have roughly 50% of our guest base still traveling from a distance. But the other 50% coming from local markets and in-state,” CEO Bob Chapek said.
To court, those who don’t have to travel far, both Disney and its backyard competitor Universal have hawked heavy discounts for Florida residents. Some packages average as low as $49 per day through the fall.
“Given this ongoing improvement in Universal’s attendance and declining new daily COVID cases in Florida. We believe that Disney World will also soon see some benefit,” Deutsche Bank said.
A Decrease in New Cases
However, on Thursday there were about 4,555 new coronavirus cases reported in Florida. The state’s seven-day average of new cases has come down to 4,495 from a high of nearly 12,000 in July.
Disney World reopened to the public in July, after shutting its doors for more than three months. The parks, along with a surge in streaming sign-ups and some sports reactivating their seasons at the company’s campus helped make up for a steep decline in live TV, cruise ship, and movie revenues.
However, college football cancellations at major college conferences. And the continued shuttering of Disneyland California will likely be a lingering concern for investors.
Shares of Disney have fallen down to about 14% since the beginning of the year.