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In an effort to curb transmission of the coronavirus, any place where large numbers of people gather is shut down. Stadiums and arenas are closed and major sporting events are on hold. But the big blow to a lot of people right now is that theme parks are shut down. All the parks around the world from Disney, Universal, Six Flags, and more are closed for business until at least the end of March. That's going to be a major hit to the bottom line of any company, but according to some estimates, the closure is hitting the Walt Disney Company especially hard, as it's costing the company ten of millions of dollars a day.
A report in Variety estimates that just the closure of Disney's domestic parks, Disneyland and Walt Disney World, is costing the company between $20 and $30 million every single day. That means the total cost to the company, assuming the parks reopen on April 1, which is by no means a guarantee at this point, will be somewhere in the neighborhood of $400 million. And again, that's just for the domestic parks. That's not including the Disney parks in Hong Kong, Shanghai or Paris, which are also closed and obviously costing the company money.
Disney's theme parks have always been a key part of the company's overall success. The division of parks, experiences and consumer products makes up nearly half of Disney's overall revenue, and now with even Disney Stores closed, basically all parts of that division have ceased making any money.
Of course, some of the costs associated with the closure are very much intentional on the part of Disney. Hourly employees who are losing work due to the closure are still being paid. Many companies who aren't technically required to pay their employees while being closed are still paying their workers due to the extreme circumstances. While Walt Disney World has had to close for a day or two now and then due to hurricanes, this is already the longest closure that the domestic parks have seen and there's still a week and a half to go at least.
Disney will be fine in the long term, of course. The movie studio still has the most popular films and characters in Hollywood, and the movies will come out eventually. And people will return to the parks once they're open. In fact, the longer the shutdown, the faster they'll probably return. At a certain point, you just need to be able to get back outside and celebrate the fact that you can.
At the same time, this cost will take time to recover from. We might see delays in planned theme park renovations or the building of new attractions simply because the money to do those things isn't there anymore. Projects scheduled for completion will likely be pushed back. Disneyland and Walt Disney World could be dealing with the impact of coronavirus for years.