The Coronavirus is Expected to Cause Disney This Much at Its Theme Parks

The coronavirus outbreak is not only scary but it is also costly. According to Disney, the virus outbreak will give its theme parks a blow of $175 million.

The company revealed this week that it anticipate the impact of $135 million on second quarter operating income from the Shanghai park and about $40 million from the closure of the Hong Kong park.

“The current closure is taking place during the quarter in which we typically see strong attendance and occupancy levels due to the timing of the Chinese New Year holiday,” Christine McCarthy, chief financial officer at Disney, said on the company’s earnings call on Tuesday.

She added, “The precise magnitude of the financial impact is highly dependent on the duration of the closures and how quickly we can resume normal operations.”

According to McCarthy, the Asian market is not as prevalent in terms of visitation to the domestic parks compared to
countries like Canada, Mexico, Austrailia and the United Kingdom.

The company said that revenue at Disney’s Parks, Experience and Products segment rose 8% from the prior year to $7.4 billion, while operating income increased 9% to $2.3 billion.

CEO Bob Iger also remarked on the company’s new Rise of the Resistance which as “done extremely well” in attendance and higher guest spending.

Disney also announced in its fiscal Q1 2020 earnings that its streaming service, Disney+, grew to 26.5 million subscribers during the quarter. This quarterly update was the first since Disney announced last November when the service launched that it picked up 10 million subscribers on the first day.

Disclaimer: We have no position in Walt Disney Co. (NYSE: DIS) and have not been compensated for this article.