Coronavirus has injured theme parks, costing Disney $ 2.4 billion

While the majority of Disney theme parks were open during the company’s fiscal fourth quarter, the continued closure of Disneyland in the United States had a significant financial impact.

The company expects its California parks to remain closed until the end of this year. The state has said it will not allow theme parks to reopen until coronavirus cases dramatically decrease in the surrounding community. Currently, Covid-19 cases are on the rise.

“Unfortunately, we are extremely disappointed that the State of California continues to keep Disneyland closed despite our proven track record,” CEO Bob Chapek said on a conference call Thursday. “Our health and safety protocols are all science-based and have the support of unions representing 99% of our hourly members.”

Disney on Thursday said the Covid-19 outbreak cost its parks, experiences and products segment about $ 2.4 billion in lost operating income in its most recent period. The segment, which includes its parks, cruise lines, resorts and merchandising, saw revenues fall 61% to $ 2.6 billion.

In the second quarter, the company said it lost $ 1 billion in operating income due to the pandemic, and in the third quarter, the pandemic reduced its operating income by $ 3.5 billion.

The Walt Disney World Resort in Orlando, Florida, and Disneyland Paris reopened in mid-July and remained open until the end of the quarter. The Parisian park closed again in October, but these revenue losses are not reflected in the company’s fourth quarter results.

Hong Kong Disneyland was open for the first two weeks of the quarter and the last week of the quarter, due to coronavirus restrictions in Asia. During the period, Disney cruise activity was closed.

All California theme parks remain closed as state guidelines ban reopening until coronavirus cases in counties fall below 1 in 100,000 – a target that will be difficult to achieve as cases are skyrocketing across the country.

On Thursday, Orange County, where the two Disneyland parks in California are located, recorded 5.6 cases per 100,000 inhabitants.

The guideline was set by California Gov. Gavin Newsom, who has been concerned for months about the number of people who frequent theme parks, the length of time they spend there, and the potential for rates transmission increases if parks are reopened.

Chapek would like the state to reconsider these guidelines based on the success it has had in operating its other parks.

“Frankly, as we and other civic leaders have said before, we believe state leaders should take a hard look at what we have successfully accomplished in our parks around the world, all on the basis of science, as opposed to setting an arbitrary standard that excludes our cast members from getting back to work while decimating small businesses in the local community, ”he said.

With its California parks unable to open, Disney laid off 28,000 workers in the parks division in September. Then earlier this week, the company announced that additional workers at its California theme parks, including executives, wage earners and hourly workers, will face time off. Disney did not disclose the number of workers affected.