Disney anticipating a $280 million loss due to closing Chinese parks over the coronavirus

The Walt Disney Company could see a $280 million loss in income the second quarter due to the coronavirus outbreak that has caused company to close its Shanghai and Hong Kong theme parks.

The current closures are 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. The precise magnitude of the financial impact is highly dependent on the duration of the closures and how quickly we can resume normal operations,” Disney Senior EVP and CFOP Christine McCarthy said during Disney’s 2020 First Quarter earnings call.

Disney estimates losing $135 million in income from closing Shanghai Disney Resort, assuming the park is closed for two months during Q2.

“At Hong Kong Disneyland, we currently estimate the closure of the park could have an additional adverse impact to operating income of about $40 million for the second quarter. As I discussed last quarter, we were already seeing a significant decrease in visitation to Hong Kong Disneyland from China, and other parts of Asia,” McCarthy said.

“So in aggregate, we estimate these two factors could result in a decline in Hong Kong Disneyland’s Operating income of about $145 million for the second quarter. Again, this assumes the resort is closed for two months,” she said.

The death toll from the coronavirus now stands at 492 people worldwide with the majority of those in China.

In the first quarter, operating income at Disneyland and Walt Disney World increased by 6%. Park attendance was up by 2% and per capita guest spending was up 10% on higher admissions, merchandise and food and beverage spending, Disney reported.