The doors to the Magic Kingdom may not reopen for a year due to strict social distancing measures enforced as the coronavirus pandemic spreads across the country.
Disney, which shuttered the Disneyland Resort in Anaheim, Calif. and Walt Disney World Resort in Orlando, Fla. on March 12, will likely be unable to reopen the parks until Jan. 1, according to a report from UBS analyst John Hodulik.
“Profitability will likely be impaired until there’s a vaccine,” Hodulik said. “We believe parks’ profitability will be impaired for a longer period of time given the lingering effects of the outbreak and now assume an opening date of Jan. 1 as our base case.”
The analyst said that even if Disney is able to open its doors early next year, the Mouse House will be impacted by health precautions that include social distancing, travel restrictions and crowd aversion, until there’s a COVID-19 vaccine.
As a result, he anticipates Disney’s theme parks take a $500 million earnings hit in 2020 and a $200 million hit in 2021.
Disney, which reports earnings next month, did not comment. Last month, the company said it was keeping its parks closed “until further notice” and that when it does reopen, it could incorporate new health measures including temperature checks.
JPMorgan analyst Alexia Quadrani had a more optimistic outlook for Disney, predicting the reopening of its US parks as early as June.
The analyst agreed with Hodulik that initial attendance will likely be “pretty weak,” pointing to the travel bans that remain in effect, as well as the closure of the US-Canada border to nonessential travel.
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