Will Disney World Play the Zika Card Tomorrow?
Image source: Disney.
Florida tourism has taken a hit this year, and we should get more confirmation that the peak summer season has been a bit of a dud when Disney (NYSE: DIS) reports financial results tomorrow. However, an already problematic situation can get uglier now that we have a few confirmed cases of the mosquito-borne Zika virus in South Florida. Will tourists hold off visiting the entire state until the coast is clear?
The media giant didn't offer a lot of insight into why its Florida theme parks experienced a decline in attendance during the March quarter, even if it's something that doesn't happen often. For a little insight we could've turned toSeaWorld Entertainment (NYSE: SEAS)which mentioned Brazil more than 20 times in its first quarter earnings call. A sharp drop in Latin American tourists has accounted for more than half of the decline at SeaWorld through the first six months of 2016.
Florida is a problem for SeaWorld, as its other parks have posted gains year-to-date. With Disney suffering a similar fate during the March quarter -- Disneyland turnstile clicks were up -- it wouldn't be a surprise to see in tomorrow afternoon's report that California is holding up just fine. It should be a different story in the Sunshine State.
A pocketful of excuses
Disney will have plenty of excuses that it can use to explain the likely dip in attendance for the June quarter. There was the shift in timing of the visitor-heavy Easter holiday from March of last year to April this time around. There were the horrific events of mid-June, including the Pulse nightclub shooting and the two-year toddler that died on Disney property after an alligator attack resulted in his drowning at a resort hotel's lagoon. It can even take some of the blame as a result of shifting to tiered pricing, a move that priced single-day tickets 18% higher than last summer with smaller but still significant increases for multi-day and annual passes.
However, as it looks ahead to the September quarter, if it's still suffering through cancellations and poor bookings these days it's probably the handiwork of Zika. The Washington Post began an article discussing Zika's impact on Florida tourism by detailing a Disney World trip's cancellation.
Zika's side effects are typically tame for adults, but a pregnant woman infected risks birthing a child with greater risk ofmicrocephaly, brain defects, and other maladies. Disney World is a place for young families, and pregnant or potentially pregnant women may not want to take the chance.
SeaWorld did point out last week that attendance climbed 4% across its parks last month, suggesting that Florida tourism may have overcome the mid-June setbacks. We're now a day away from learning how Disney sees things. It will have one more scapegoat to use if its outlook is weak, but hopefully it can keep that Zika card deep in its deck -- and never played.
A secret billion-dollar stock opportunity The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here.
Rick Munarriz owns shares of SeaWorld Entertainment and Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.