Please ensure Javascript is enabled for purposes of website accessibility

Disney Rebuffs Fears That Zika Is Hurting Attendance

By Rick Munarriz – Sep 16, 2016 at 9:09AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A survey claims that Disney World is suffering as a result of the Zika virus outbreak, but the media giant sees things differently.

Mosquito prevention kiosks offering insect repellant sprays and information sheets have been all over Disney World's theme parks for two weeks. Image source: Rick Munarriz.

There's a bad kind of buzz surrounding Disney (DIS 0.43%) these days, and the media giant is trying to swat it away before things get out of hand. Disney stock began to move lower yesterday, following a BTIG Research report highlighting a survey showing that Zika virus concerns may be scaring some vacationers out of going to Disney World.

Market researcher Civicscience surveyed thousands of respondents over the past week, asking them if the growing threat of the Zika virus is weighing on their plans. Most of the respondents had no plans to visit the world's largest theme park resort, but the results are pretty startling for those who were thinking about going to Disney World. 

A whopping 569 of the 1,217 respondents who were considering a trip to Disney's Florida resort said they had either canceled the trip or decided against planning the getaway. It's a statistic that may seem startling at first, but is it a significant enough sample size? Was the survey phrased fairly?

Disney stock bounced back later in the day after a spokeswoman refuted the survey results. The virus is having "no real impact on cancellations or future bookings," she told Bloomberg.

The empire strikes back

The spokeswoman's comments relieved investors. It's also a company line that mirrors what CEO Bob Iger himself had said last month. 

"We mentioned earlier we've not seen an impact from Zika," Iger said during the company's Aug. 9 earnings call. 

Iger's comments were made more than a month ago, back when Zika cases were limited mostly to Miami. It was made before Disney was staffing kiosks offering complimentary insect repellant, something that it's been doing at all of its Florida theme parks for the past two weeks. 

This makes the spokeswoman's rebuttal comforting, but Disney doesn't appear to be any closer to solving the attendance woes at Disney World. The media giant has suffered back-to-back quarters of year-over-year declines, and that streak is likely to stretch into the summer quarter that ends later this month. 

For now, the negative traffic trend isn't hurting. It costs a lot more to visit Disney World this summer than it did last summer, and it's been able to grow its theme park segment's revenue and operating income despite the guest shortfall in Florida. Disney also has at least one major new attraction opening next year -- the ambitious Avatar-themed expansion to Disney's Animal Kingdom -- to draw guests. Naturally, any positive catalysts can come undone if Zika virus cases are actually reported at one of its theme parks in the coming months, but until Disney's top and bottom lines start feeling the pinch, it's fair to say that Disney is winning this particular battle. 

Rick Munarriz owns shares of Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Stocks Mentioned

Walt Disney Stock Quote
Walt Disney
DIS
$92.55 (0.43%) $0.40

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.