Disney expects coronavirus to deal theme parks US$175m blow

A worker sprays disinfectant outside Walt Disney Co.'s Disneyland Resort in Hong Kong, China, on Monday, Feb. 3, 2020. Photographer: Paul Yeung/Bloomberg

LOS ANGELES: The spread of coronavirus in China could deal a blow to the operations of Disney's theme parks in Hong Kong and Shanghai.

Speaking during a call with investors Tuesday, Walt Disney executives said they expected the virus to result to affect $135 million in second-quarter operating income if its Shanghai Disneyland resort is closed for two months and around $40 million in operating income if Hong Kong Disneyland is closed for the same amount of time. Disney had already said that the Hong Kong facility had been affected by protests in the region.

"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," said Christine McCarthy, Disney's chief financial officer, during the call."The precise magnitude of the financial impact is highly dependent on the duration of the closures and how quickly we can resume normal operations."

Executives did not think the coronavirus would affect visitation to its U.S. parks. Visitors from Canada, Mexico, Australia and the U.K. are more prevalent at those attractions than tourists from Asia.

The Walt Disney Company owns 43% of the Shanghai resort, with the majority 57% held by Shanghai Shendi Group, a joint venture of three companies owned by the Shanghai municipal government. It opened for business in June 2016. The decade-older Hong Kong park is 53% owned by the Hong Kong government, with Disney owning the remaining 47%. - Reuters