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We all knew that the Walt Disney Company was suffering due to the global pandemic, that wasn't a shock. But it was still something of a surprise to put real numbers on just how ugly the situation is. Yesterday, during the Walt Disney Company's Q3 earnings call we learned that the Parks, Experiences, and Products division lost $3.5 billion in operating income over the last quarter, in which parks like Walt Disney World were closed for the entire period. The pain isn't entirely over for Walt Disney World, as it turns out that the COVID-19 situation in Florida is still causing issues for the newly reopened park, but there is some good news to go along with the bad.

When Walt Disney World announced it was reopening in early June, things were actually looking pretty good for the park. CEO Bob Chapek says that at that point the resort was going to have more people looking to make reservations than the new limited capacity would likely allow. However, by the time the park actually opened, things had changed. According to Chapek...

We could tell from our reservation stream that we had ample demand to go above what the six-foot social distancing guidelines would give us. That was six weeks before we opened the park when we announced we were opening the park. And then, unfortunately, Covid struck again and all the numbers started going up. This gave some level of trepidation to travelers that were anxious about long-distance travel getting on a plane and flying to Walt Disney World. So what we've seen is that we've had roughly 50% of our guest base still traveling from a distance....We've also had a higher than expected level of cancellations once somebody does make a reservation because as the disease ebbs and flows they might necessarily cancel.

The vast majority of those that visit Walt Disney World during a normal period are vacationers coming from all over the world. Usually much more than half of those visiting are coming from a distance, but that number has shrunk significantly because of the COVID-19 situation in Florida. People just aren't willing to make the trip. Even if they were willing to visit the socially distant Walt Disney World, there are airports and airplanes that would need to be navigated in order to get there.

This hurts the bottom line because vacationers tend to spend more money at Walt Disney World than locals or Annual Pass holders. They tend to stay longer, which means more revenue from hotel rooms and restaurants as well as park tickets. Locals obviously don't need hotels and even Annual Pass holders that might come from a distance tend to make more frequent, but shorter, stays.

However, there is a silver lining in it all. The earnings call still confirmed that Walt Disney World is operating at a "positive net contribution," which is to say that even under the current situation, the park is making more money than it is costing to operate. That net positive contribution is apparently lower than what Disney was initially expecting, again, because of the drop off in long-distance travelers and the cancellations that are happening, but a net positive is still a net positive.

The Walt Disney Company's CFO Christine McCarthy, also said on the call that per capita spending by those who have been visiting the parks has been incredibly high, though specific numbers were not given. Likely due to the fact that so many people hadn't ben able to visit Walt Disney World in months, those that were there may have spent more than they otherwise would.

Things are going to be rough at Walt Disney World for a while, but it's not all bad news, and every indication is that as people return to normal patterns, that will include visits to Walt Disney World. It's simply unclear at this point when that will be.

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