Hurricanes may be old hat for Floridians, but with Orlando in the crosshairs of Hurricane Irma over the weekend, Disney (NYSE:DIS), Universal Orlando parent Comcast (NASDAQ:CMCSA), and SeaWorld Entertainment (NYSE:SEAS) are all scaling back their operations to make sure that guests and employees are kept out of harm's way.
As of Friday afternoon, many nighttime events were being canceled, and operating hours were being trimmed.
- Comcast's Universal Orlando will close its parks at 7 p.m. on Saturday and remain closed on Sunday and Monday. The two-night Rock the Universe Christian music festival will take place on Friday, but not on Saturday night.
- SeaWorld's Busch Gardens in Tampa and SeaWorld Orlando will close at 5 p.m. on Saturday, and like Universal Orlando, should resume operations on Tuesday morning.
- Disney will also close its parks early on Saturday night and keep its attractions shuttered on Sunday and Monday.
The closures will naturally be inconvenient for guests on vacation right now. Shareholders of all three companies, however, will be the ones who may be inconvenienced when financial results for the summer quarter are announced in late October and early November.
In the eye of the storm
Central Florida's theme parks aren't coastal properties, so they typically don't flinch as hurricanes approach. The impact of most hurricanes diminishes as they approach inland locations.
Irma is different. It's powerful, massive, and the latest storm advisories have it passing right over Orlando on Sunday.
The closures will translate into lost revenue and guests requesting refunds. Some of the last-minute resort cancellations are being snapped up by residents of South Florida fleeing up north, but there's no denying that it will be a net negative.
We don't have to guess. The last time that the theme parks had to close down for a storm was last October when Hurricane Matthew approached. It didn't go well.
Disney wound up posting a 5% decline in domestic guest counts for the quarter. Its parks and resorts division still posted an increase in revenue and operating income, but that was mostly the result of the opening of Shanghai Disneyland earlier that year and a big spike in ticket prices.
SeaWorld blamed Hurricane Matthew for a small decline in attendance and revenue. Comcast's theme park's pro forma revenue rose, but that was largely on the surge in turnstile clicks at Universal Studios Hollywood following the springtime opening of The Wizarding World of Harry Potter in California.
These storms are naturally one-time events, but after back-to-back years of park closures and financial setbacks, one has to wonder if it's time to start pricing in hurricane-season closures into the financials.