UPDATE: Disney has decided to close Disney World early on Saturday due to the approaching Hurricane Irma. Disney has said it hopes to resume normal operations starting Tuesday, September 12.
Hurricane Irma is barreling toward Florida and is expected to cause major damage, including to Disney World.
Disney World generates about $30 million in revenue a day for its parent company, so shutting down for even a half day means millions of lost dollars, according to John Janedis, an analyst at Jefferies.
Last year, Hurricane Matthew closed the park for 1 1/2 days, costing the company about $40 million in revenue, according to Janedis. It was only the second time the company had closed its doors in the last decade, according to reporting from Chelsea Brasted at the Times-Picayune.
Disney recently released a statement saying it would be closing Disney World in Orlando early on Saturday and remain closed until Tuesday, a rare move for the company. The hotels will remain open, according to the company’s website. According to Janedis’ numbers, this could cost Disney up to $90 million in lost revenue, and wouldn’t include any damages caused by the storm.
“Walt Disney World Resort continues to monitor the path of the Hurricane Irma as we take the necessary steps to maintain the safety of Guests and Cast Members,” a warning on the company’s website states.
Disney World, national weather service hurricane irmaNational Weather Service
Hurricane Irma is expected to be in the Orlando area sometime Sunday
Hurricane Irma is expected to be in the Orlando area sometime Sunday evening, according to the National Weather Service. The agency warns residents of east-central Florida to “prepare for life-threatening wind having possible devastating impacts” from Hurricane Irma.
Omar Sheikh, an analyst at Credit Suisse, said before the park closed that the impact of Irma will be less than a 1% drop in Fiscal Year 2017’s earnings. The park segment of the company may be hit for about 10% of its operating income, but the company as a whole would probably see minimal impact.
Several Disney Cruises have been canceled due to Irma. Sheikh says just five cancellations would have a similar impact to a park closure at Disney World, and three cruises have so far been canceled according to the company’s website. Disney is offering all impacted customers full.
Shares of Disney are down about 8.37% this year.
Story by Seth Archer
Source: Markets Insider