The U.S. Disney Parks — Walt Disney World in Florida and Disneyland in California — saw a drop in profits due to the ongoing pandemic, especially in 2020 when both Resorts were forced to close. In fact, every Disney theme park around the world closed at some point during the ongoing COVID-19 pandemic, but the four Disney World theme parks reopened in July 2020 while Disneyland and Disney California Adventure reopened at a much later date — in April 2021.
As the theme parks continue to operate throughout the ongoing pandemic, analysts are now predicting a rebound in 2022, a spike in 2023, and continued growth in 2024.
According to The OC Register, a new analyst report from research firm MoffettNathanson shows a strong next few years for the U.S. Disney Parks.
“While there are clear headwinds in some of Disney’s legacy businesses, there are also strong tailwinds for the parks in both the near and long term,” the MoffettNathanson report said.
Despite the recent omicron surge, which actually forced Hong Kong Disneyland to re-close its theme parks, MoffettNathanson is predicting a quick “bounce back” in Parks profits. “Despite the latest omicron uncertainties, it still seems as though fiscal year 2022 will bring a quick bounce back in parks profits,” according to the report.
Disney’s U.S. Parks — Walt Disney World and Disneyland — had a loss of $1.6 billion in the third quarter of 2020, but bounced back as the Parks continue to operate throughout the pandemic. In fact, they broke even in the third quarter of 2021 and now has a projected profit of $1.3 billion in the third quarter of 2022, according to the report.
The report continued to explain that both Walt Disney World and Disneyland are expected to approach pre-pandemic levels of profitability and “generate $4 billion in earnings before interest and taxes in 2022”, according to the report.
The increase in profit is expected to keep growing in 2023 and 2024. The report predicts the U.S. Parks to bring in $5.2 billion in 2023 and $6.3 billion in 2024, which is above the $4 billion reported in 2018 and the $4.4 billion in 2019, prior to when the COVID-19 pandemic began.
The OC Register reports:
The financial turnaround at Disney’s theme parks happened much faster than initially forecast during the start of the pandemic –- in part due to the rapid development of COVID-19 vaccines.
We have already seen an increase in Florida tourism, specifically at Walt Disney World. Disney Chief Financial Officer Christine McCarthy said in The Walt Disney Company earnings call in November 2021 that Parks revenue, including Disney Cruise Line operations, for the second half of 2021 is up 26%.
She stated that attendance was also up, which aligns with a recent report from Visit Florida, which showed Florida tourism numbers in the third quarter of 2021 surpassed those from the same period in 2019, which is before the coronavirus pandemic affected the United States and its tourism.
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