Walt Disney World released its third quarter financial statement earlier this week and as expected, the company reported a big loss: a whopping 42% drop in quarterly revenue. Disney's Parks, Experiences and Products division, has been particularly hard hit during this time period, with losses reported at $3.5 billion in revenue, a massive decrease of 85%, which resulted in an operating loss of $2 billion.
And though we didn't get much information during Disney's discussion of this past quarter's financial results beyond the catastrophic losses the company is currently seeing, there were some mentions of how exactly Walt Disney World specifically is staying afloat during the COVID-19 Pandemic.
Walt Disney World is at least operating at a profit
With pictures flooding social media of empty Walt Disney World attractions, it may seem logical to wonder if the resort is even making a profit with such low guest levels. However, Disney has confirmed that while attendance has been lower than was initially predicted, Walt Disney World is indeed operating at a profit with the parks being open.
In addition, though guest levels are very low at the moment Disney believes attendance will rise once consumer confidence returns and when COVID-19 case numbers go down.
Disney is getting the most revenue from "valuable" guests traveling in from out of town
Though there aren't as many guests in the theme parks as Disney would probably like, per-guest spending has been reported to be “very, very strong”, especially among guests who are traveling to Walt Disney World from out of town. Disney has confirmed that about 50% of guests visiting are non-local and Bob Chapek emphasized the fact these guests are “marginally more valuable” than Annual Passholders, saying the following:
As you know, different guests—depending on where they’re coming from—have different relative values in terms of their contribution as a guest to the park. Typically, somebody who travels and stays for 5 to 7 days is marginally more valuable to the business than someone who comes in on an Annual Pass and stays a day or two and consumes less merchandise and food and beverage. So the way I would look at it, as our constituency changes a little bit, so do our overall margins.