Brexit 1, Disney World 0

The Brexit vote last night puts up a lot of uncertainties for investors which is
why the markets reacted as they did worldwide

There's no shortage of big losers in the U.S. stock market today after the United Kingdom's surprising vote from last night to cut ties with the European Union, an economic and political alliance comprising of 28 member states in the European continent.

Upon learning of the devastating news of the Brexit vote, British Prime Minister David Cameron, who had championed the campaign for the U.K. to remain in the EU, resigned which further set in just how shocking the news was.

The Dow Jones industrial average plummeted 610 points, or 3.4%, on Friday as global stock, currency exchange, and other markets reacted swiftly and very unkindly to the immediate uncertainty of Britain's economic future of deciding to say FU to the EU in the crucial Brexit (short-hand for "British exit") vote last night.

The immediate financial repercussions of the decision saw the value of the U.K.'s pound plunge worldwide against other foreign currencies. In particular, the pound dropped 8% relative to the U.S. dollar and 4.6% against the euro, making it that much more expensive for tourists from the U.K. to visit Disney theme parks and resorts in Florida, California, France, and elsewhere around the globe.

The biggest take-home message from the Brexit fallout is that tourism from the
U.K. to the U.S. is expected to fall precipitously after the pound plunged relative
to the dollar and the euro

The devaluation of the pound now puts it at its lowest level in 30 years after many U.K. pollsters inexplicably misread the how the actual Brexit vote would turn out. 24 hours before the actual vote, polls showed a 90% chance that the U.K. would remain in the EU.

With an estimated 1.7 million tourists who came to Florida last year from the U.K., this is a devastating blow to U.S. companies, particularly to Disney. Because the value of the pound plunged nearly 8% relative to the dollar, it's going to cost U.K. tourists coming to America at least 8% more to finance their vacations packages to Walt Disney World Florida and Disneyland California across the pond, and even to Disneyland Paris in the EU.

Add on the political and financial uncertainty and worries from the Brexit chaos and suddenly many Brits are thinking twice about traveling to America on holiday. It doesn't help Disney's cause that their theme park tickets now cost 18% more this summer than from a year ago, which is even far outpacing the difference in the currency exchange flux and from inflation, combined.

Thus, it's no surprise that Disney stocks fell on par with Dow Jones losses today, going down 3.3% to $95.72 per share.

The bad news couldn't have come at a worse time for Disney as domestic and international park attendance at Disney's theme parks are already down from the same period last year due to numerous factors, including threats of terrorist attacks, increased prices, anticipation of the Rio Summer Olympics, decrease in the number of Brazilian tourists to Florida, and the imminent scare of a Zika virus outbreak in Florida.

When it rains, it pours.

Sources:

• Motley Fool: Brexit 1, Disney World 0 (6/24/16)     
• Romper: When Will Zika Hit Florida? There Are Already Travel-Related Cases (6/20/16)