With Hurricane Ian intensifying and preparing to slice through the state of Florida, theme parks had no choice but to lock their turnstiles for the safety of their guests and employees. Disney (DIS 0.20%) is closing all of its Florida theme parks on Wednesday and Thursday. Nearby competitors SeaWorld Entertainment (SEAS 1.11%) and Comcast's (CMCSA +0.48%) Universal are also shuttering their gated attractions for both days.
The three major theme park operators waited until Tuesday afternoon to make the call. Even though it was clear that the fierce hurricane was going to make landfall near the state's popular Central Florida tourist attractions at some point this week, announcing shutdowns is a pretty big deal. Two days for parks operating year-round may not seem deliver much of a financial impact, but it does upend longer getaways because it disrupts vacation plans. With high fixed costs and some variable expenses that will continue to trickle in despite the loss of revenue, the closures will leave a mark when all three companies report financial results for the quarter that ends later this week.
Image source: Disney.
Riding the storm out
It's not just the days' guests that will need to be refunded. The industry has rallied around Halloween-themed nighttime events as a way to generate incremental revenue following shortened regular operating hours. Disney World had to cancel Thursday's Mickey's Not-So-Scary Halloween Party. Universal's Halloween Horror Nights was set to take place on both nights, and naturally those hard-ticket events have been nixed. SeaWorld Orlando is a recent arrival to the Halloween after-hours game, but it did not have any nighttime parties to cancel.
All three chains expect to reopen on Friday, and that should not be a problem unless the storm meanders slowly through the Sunshine State or if there is material destruction at any of the gated attractions. It doesn't mean that it will be business as usual. With airport travel disrupted and locals assessing their own damage and cleaning up, guest counts are typically thin in the days following a hurricane-related shutdown.
NYSE: DIS
Key Data Points
Safety is paramount, of course. Even though it will take just a couple of hours for a hurricane or tropical storm to blow through, the closure window has to be long enough to account for the unpredictability of a storm's pace, as well as the time needed for employees to secure the popular tourist destinations.
The actual financial impact of the windstorm-related closure will vary. Disney and Universal Studios parent Comcast are well-diversified media stocks with a lot more to offer when it comes to revenue drivers beyond Disney World and Universal Orlando. SeaWorld Entertainment is a different beast. Theme parks are its only business, and nearly half of its attractions are located in Central Florida, including Busch Gardens Tampa, which is enduring a three-day closure.
Naturally, there are greater things to worry about than a near-term financial hit for the state's theme park operators. Hurricane Ian will deliver a lot of destruction to Florida, and the overall recovery process will be more complicated than the inland tourist draws that will eventually get back to business as usual. Weather can be cruel.
