Disney doubles down on claims that Disney World has seen no fallout from the Zika scare despite a notable drop in park attendance



Update 9/22/16:

Yesterday, Disney CEO Bob Iger tempted fate by tripling down on Disney's most recent claims that the Zika virus outbreak has had no impact on attendance numbers at Walt Disney World thus far, stretching Disney's credibility with tourists and investors to its most extreme limits.

Disney CEO Bob Iger is tempting fate by claiming Zika still has had no impact
on Disney World's notable attendance drop in the last two quarters
"We also said fairly recently that we've seen no impact in the United States—in Orlando—because of Zika," Bob Iger said at the Goldman Sachs 25th Annual Communicopia Conference yesterday. "That is still the case, by the way—no discernable impact whatsoever."

If that is indeed the case, then Disney has to be very worried about what was the real reason that sent Disney's U.S. theme park attendance numbers plummeting by more than 4% in the last two quarters, because, if Zika hasn't impacted visitation numbers to the parks thus far, then it most definitely will do so for years to come and with greater impact.

The biggest problem with the Zika virus is that it, not only causes severe birth defects in the unborn by killing stem cells in the brain, but it now seems the virus also affects young children and adults, who are both susceptible to long-term damage to the brain from the virus.


Recent studies show the virus can kill stem cells in the brain of children and adults, which in turn may cause cognitive, learning, behavioral, and even neurological problems and issues later on in life.

Disney's Zika prevention program is little more than lip service to stop a highly
contagious virus spread through mosquito bites and exchange of bodily fluids
This is especially a huge worry for developing children because because Disney World is such a magnet for children and families, and this is no longer just an issue for unborn fetuses and women thinking of child birth.

In any case, Disney officials have appeared to present themselves as being over-confident in doing something that no scientist, health, and government official have been able to do thus far anywhere in the world: stop this very scary virus in its tracks.

While Disney World has a so-called mosquito prevention and monitoring program—by that we mean merely handing out complementary bug repellent to guests—that's little more than lip service when the virus will begin to hit the resort, which can be any day now, if that isn't happening already.

The virus has already reached the local mosquito population as far north as Pinellas County, Florida, which is within a 100 miles of Orlando, but it takes a few months to confirm that fact, even with testing.


The real issue at stake here with Disney managing its many standing lakes, ponds, and waterways on property, where mosquitoes are expected to breed, is this: If Disney can't eliminate or completely control hazardous pests as large as alligators, then what's the chances they can prevent creatures as small as mosquitoes from breeding and biting guests?


With throngs of people coming to Disney World from all over the world every day, there's no doubt that when—not if—the virus hits Orlando that a much bigger worldwide pandemic of the virus to other areas of the globe will set a new precedent for the spread for this very scary contagion. Hopefully, that isn't already happening now, but you can never be sure.


Previous Article:

The Nile is not just a river in Africa.

If Disney is not worried that the Zika scare is not affecting their park attendance
numbers, then why are they giving out free bug repellent to guests?
It also appears to be the public relations strategy for the Walt Disney Company with the news media these days as Disney officials, as high up as the CEO Bob Iger, have been disputing concerns raised a Wall St. analyst who has said that Florida's Zika virus outbreak could impact Disney World attendance.

The Zika scare is having "no real impact on cancellations or future bookings," a Disney spokeswoman said yesterday in an interview with the press.

The denials by Disney officials have doubled down on comments made by Disney CEO Bob Iger back on August 9th during Disney's third-quarter earnings call when he claimed the Zika scare wasn't impacting visitations or bookings to Walt Disney World Florida. (See the CNBC video above.)

Disney appears to be very defensive about BTIG LLC analyst Rich Greenfield's comments in a securities analysis on the Walt Disney Co. he made on Thursday which said Florida's Zika outbreak may be causing tourists to reconsider their plans to visit Walt Disney World.


Greenfield cited a 5,000-person survey by CivicScience, a Pittsburgh-based consumer polling firm, earlier this month which found that about half of the the 800 people they surveyed, who were planning to visit Disney World, have either canceled or decided not to go to Central Florida due to the very real possibility of contracting the virus from the local mosquito population in the area.

Wall St. Analyst Rich Greenfield of BTIG says, 'Sell Disney'
Currently, there are 77 89 92 known cases of local transmissions of the Zika virus in Florida, and health officials have confirmed that local mosquitoes do, in fact, carry the virus, which all but explains the outbreak of all the locally-transmitted cases in the State of Florida.

Disney World attendance numbers have fallen since early in the summer when we first reported that a Zika viral pandemic was inevitably going to break out in a few months in the State of Florida, and park attendance numbers have stayed down ever since we published that report.

Owing that there may multiple factors at play, other than the Zika scare, which have kept park attendance down at all Disney theme parks in the U.S. and around the world (e.g., ticket price hikes, poor foreign currency exchange rates from the U.K. and Latin American countries, concerns over terrorism, concerns over violent crimes in Orlando, lack of new attractions, etc.), we can understand why Disney is denying that the Zika scare is the particular cause of their loss in visitors.

However, the facts remain that all of Disney's key metrics are down significantly by more than 4 percent, even if you nitpick about what is causing Disney's slumping performance.


Iger's less than honest response on Aug. 9th was not much different than in February of 2015 during Disneyland California's measles outbreak around the Christmas and New Year's holidays when he said bookings and visitations to the resort were not affected; however, the press did report that Disneyland park attendance was down significantly in the first two quarters of 2015.

Disney World is now making children, aged 3 to 9 years old, take fingerprint
scans to prevent parents from passing individual children's tickets to different users
Despite these current denials, Disney officials seem to be very worried, behind the scenes, that the Zika scare is significantly affecting business in Florida and are taking steps to counteract the damage.

To squeeze as much revenue out of existing park ticket sales as possible, Disney World—but not Disneyland—has announced that all toddlers, ages 3 to 9, will have to scan their fingerprints to match the owners to their tickets on admissions.

Many parents, however, are concerned about what Disney will do with the sensitive information gathered about their children's fingerprints, so Disney is allowing parents, who do not what to have their children's fingers scanned, to get their own fingers scanned on behalf of their children instead.

Disney is making the move to try to stop ticket passing or sharing, which passes a single child's ticket to multiple children, but even we can see this system is not foolproof.


For example, if a parent or guardian scans his or her own finger on behalf of a child to admit one child, then that parent or guardian can exit the park and readmit another child to the park on the same ticket using his or her own fingerprints. This is the easiest way around the system which could still potentially admit multiple children on a single child's ticket.

Even Star Wars is not moving the needle for Disney's stocks as witnessed by
shares dropping on the same day Disney announced its $250M broadcasting
rights deal with Time-Warner's Turner Broadcasting two days ago
Those who are more adventurous and daring could even apply liquid band-aid on their children's fingers, or even simply wet their child's fingers, to obscure their children's fingerprint on the scanner. Thus, no fingerprint will show up on the scanner. It's not as simple and straight-forward as the first method, but it could theoretically still work to admit multiple children on a single ticket.

Disney had also announced at the end of summer that they were offering hotel room discounts during their busy Christmas holiday season, from Nov. 6 to Dec. 23, when they noticed a slow down in hotel bookings from May to August in Central Florida.

And of course, Disney World began offering free insect repellent to all guests after the Zika outbreak came within 100 miles of Orlando in Pinellas County.


All these moves to get more visitors to come visit the theme parks seem to suggest that Disney has already been impacted by bad publicity from the Zika viral outbreak in Florida.

Families are worried about the devastating effects of severe birth defects of
the Zika virus on unborn children
Disney stock (DIS) is already the worst performing stock on the Dow Jones Industrial Average in 2016, down more than 10% for the year to date. It is only one of just five Dow stocks to post a share price decline, year to date, while all the stock markets are near an all-time high.

Rich Greenfield has been recommending that investors sell their Disney stocks since December of 2015. Due to continuing losses of cable subscribers hurting ESPN and a slowing of the film studio and consumer units, there really is nothing left to grow, revenue wise, for the company in the foreseeable future as even their theme park business is now tanking.

Disney recently announce a few days ago that they were laying-off 250 workers from their consumer products and digital interactive segment, so things are clearly not going well at the House of Mouse, across the board.


The price of Disney stock has been steadily sliding ever since the company's mixed third-quarter earnings call back on the closing bell of trading on August 9th.

Since Aug. 9th's earnings call, Disney shares continue to dive in a freefall
In that call, there was a serious lack of any compelling announcements of promising business opportunities for future growth from Disney executives to fire up investors to continue buying Disney stocks.

Even two days ago, the announcement of the $250 million Star Wars movie licensing deal with Time Warner's Turner Broadcasting caused shares of Disney to dip.

Many experts are already wondering if Disney struck the television rights deal with Turner, to exhibit Star Wars movies through 2022, because they are badly in need of cash.

After all, Disney has major cable and television network channels of its own to exhibit their own intellectual properties, so why would they sell the rights to exhibit their highly-prized Star Wars franchise to a rival media competitor?


The answer is not clear, but it may be because the only reliable revenue-generating unit at Disney for fiscal 2017, the theme parks and resorts, is also faltering because of several reasons, among them the Zika viral outbreak in Florida. It seems that Disney is really strapped for cash these days.

Articles published after our article:


Sources:

Comments

Post a Comment