ORLANDO, Fla. — Disney’s theme parks took another big hit from the pandemic in the second quarter, but easing COVID-19 restrictions could bring the division closer to recovery, the company said Thursday.
What You Need To Know
- Disney says revenue for the parks division fell 44% to $3.2 billion in the quarter
- However, easing COVID restrictions could bring it closer to recovery, the CEO says
- Disney CEO Bob Chapek said capacity is "already started" to increase at the parks
- Meanwhile, Disneyland in California was able to reopen last month
In an earnings report, Disney said revenue for its parks, experiences and products division fell 44% to $3.2 billion in the quarter as some of its parks remained closed and others continued to operate at a significantly reduced capacity. Its cruise ships also remain paused for now.
“We estimate the total net adverse impact of COVID-19 compared to the prior-year quarter was a decrease in segment operating income of approximately $1.2 billion,” Disney said in the earnings report.
However, moving forward, Disney could start to see the numbers rebound as more parks reopen and pandemic restrictions begin to lift. Disneyland in California, which was closed for 412 days, reopened April 30. And Disney World, which has been open since last summer, has already begun to increase park capacity, Disney CEO Bob Chapek said.
“In terms of the parks, and when we’re going to sort of be able to raise our capacity limits, we’ve actually already started that,” he said in an investors call after the earnings were released.
Previously, Disney World parks have been operating at 35% capacity. Chapek didn’t specify a new capacity figure.
Disney has made changes to its health and safety measures based on guidance from local health officials and the Centers for Disease Control and Prevention. Disney World will eliminate temperature checks for guests on May 16 and soon begin reducing physical distancing in certain areas of the resort.
Chapek addressed the latest guidance issued Thursday from the CDC on face masks for fully vaccinated people but didn’t say whether it would lead to a change in Disney’s current policy.
“(It’s) very big news for us, particularly if anybody’s been in Florida in the middle of the summer with a mask on,” Chapek said. “That could be quite daunting. So we think that’s going to make for an even more pleasant experience.”
Disney World later released a response to the latest CDC guidance.
"Today's guidance from the CDC allowing fully vaccinated individuals to remove masks and the removal of physical distancing requirements is extremely positive news and as soon as is pratical we will implement updated guidelines across our businesses," a Disney spokesperson said in a statement to Spectrum News.
Demand continues to be strong at Disney’s domestic parks, Disney CFO Christine McCarthy said in the investors call. At Disney World, attendance trends have continued to improve, while guest spending increased double-digits compared with the previous year. For Disneyland, McCarthy said the company was encouraged by the initial guest response when it reopened.
The recovery also means the return of more cast members (Disney employees). When the pandemic hit, Disney laid off about 32,000 workers. And while some businesses have struggled to get workers back, Chapek said that’s not the case for Disney. Chapek said about 80% of cast members asked to return have come back.
“We’ve had no problems whatsoever in terms of trying to get our cast to come back and make some magic for our guests,” Chapek said.