Monday,  July 13, 2020  4:10 am

Disney parks take a $1-billion hit due to COVID-19 shutdown

Disney parks take a $1-billion hit due to COVID-19 shutdown
Disney’s Parks, Experiences and Consumer Products posted losses of around $1 billion USD in revenue during the second quarter. (Pax Global Media/Michael Pihach)
Michael Pihach

Michael Pihach is an award-winning journalist with a keen interest in digital storytelling. In addition to PAX, Michael has also written for CBC Life, Ryerson University Magazine, IN Magazine, and Michael joins PAX after years of working at popular Canadian television shows, such as Steven and Chris, The Goods and The Marilyn Denis Show.

The COVID-19 crisis has led to unprecedented financial losses in the travel and tourism industry, and that extends to the world’s top amusement park and entertainment company.

On Tuesday (May 5th), Disney’s Parks, Experiences and Consumer Products segment posted losses of around $1 billion USD in revenue during the second quarter after its theme parks, cruises and stores were forced to close their doors.

Disney began closing its theme parks at the end of January, starting in Asia with Shanghai Disney (Jan 25th) and Hong Kong Disneyland (Jan 26th).

As social distancing measures amped up worldwide, the company then closed Tokyo Disneyland on Feb. 29th.

Closures hit the United Stated by mid-March once the World Health Organization (WHO) declared COVID-19 a global pandemic.

Disneyland in California, Disneyland Paris and Walt Disney World were all closed by March 15th, with Disney Cruise Line suspending sailings.

Disney reported a 10 percent drop in its fiscal second quarter, with revenue falling to $5.54 billion.

It also reported a 58 per cent drop in operating income for Parks, Experiences and Consumer Products in this quarter compared to this time last year.

“The impact of COVID-19 and measures to prevent its spread are affecting our segments in a number of ways, most significantly at Parks, Experiences and Products where we have closed our theme parks and retail stores, suspended cruise ship sailings and guided tours and experienced supply chain disruptions,” the company said in a statement on Tuesday.

Of the $1-billlion dollars Disney says it lost, around half of that was from Disney’s theme parks in the United States. International parks and cruise ships made up for the rest, the company said. 

This is the first time that Disney has reported quarterly earnings since the COVID-19 pandemic shut down its parks.

Meanwhile, Disney revealed on Tuesday that Shanghai Disneyland will re-open on May 11th.

As Florida and California enter the early stages of re-opening, the company has yet to issue an update on exactly when its theme parks there would do the same.

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