The global pandemic has negatively impacted nearly every company on the planet, but few have been hit quite as hard as the Walt Disney Company. The closure of movie theaters and the end of filming of live productions took one leg out from under the company, and the closure of theme parks took out another. Disney's theme parks got to come back in a limited way during the past financial quarter, but it was certainly not business as unusual. Today, Disney announced a Q4 loss in operating result in the parks division of $1.1 billion. Which is massive, but there is something of a silver lining.
First, that loss is significantly less than what the division lost in the previous financial quarter, due to the fact that most of Disney's theme parks were open for at least some portion of the quarter. But beyond that, it was also announced on the call that Walt Disney World and Shanghai Disneyland, the two biggest parks to reopen, did operate at a "net positive contribution" for the quarter. This means that the parks have made more money than they've cost. Disney may not be making as much money as they're used to, but these parks are still making money.
CEO Bob Chapek revealed on the call that when Walt Disney World opened in July, it was limited to 25% of total capacity, but that number has since increased to 35%. This increase is also good news to the bottom line because it means that the parks that are open are continuing to grow, which is that much more important with locations like Disneyland Resort and Disneyland Paris currently closed.
The Disney Cruise Line, which has also been shuttered completely since March, is also part of this division. Disney does think that crusie ship business will be back by at least 2022, as the company is expecting three brand new ships starting in that year.
As one would expect, Bob Chapek also took a shot at the state of California's decision to keep Disneyland closed. Chapek called the decision to keep the park closed "arbitrary," feeling that Disney's track record elsewhere shows that Disneyland can be reopened safely. It's a song Disney has been singing for months, and clearly California isn't interested in the tune.
While the road back to "normal" will certainly be a long one, this quarter's results would seem to indicate that Disney's theme parks are moving down that road right now. If the parks that are open continue to grow then the operating losses will continue to decline, and at whatever point that Disneyland does reopen, it will be a massive boost to the bottom line.
Disney is certainly doing what it can to find success at Disneyland Resort. Next month, a section of Disney California Adventure will reopen as an extension of Downtown Disney, it will only add more dining and shopping, no attractions, but that's something.
