There are conflicting opinions on the impact that the Zika virus outbreak is having on Disney's (NYSE:DIS) theme park resort in Florida. Yesterday, we got to hear an update from the Big Cheese himself.
"We also said fairly recently that we've seen no impact in the United States -- in Orlando -- because of Zika," CEO Bob Iger said at the Goldman Sachs 25th Annual Communacopia Conference yesterday. "That's still the case, by the way -- no discernible impact whatsoever."
It may seem difficult to believe at first. Disney has set up "mosquito prevention" kiosks through all four of its Florida theme parks, offering up information and complimentary repellants.
"Walt Disney World Resort has an extensive mosquito prevention and monitoring program," the signs explain at the kiosks that have been up since late last month. Things don't end there. The park's official My Disney Experience has a mosquito prevention pop-up for guests in the park, and informational brochures have been handed out by the entrance.
A solution in search of a problem
Disney claims that Zika isn't weighing on its performance. However, drawing attention to the situation has to test the mettle, if not the confidence, of its guests. There hasn't been a single case of Zika reported at any of the area's theme parks, but there have been plenty of cases in the state. Is that really not going to weigh on a potential visitor?
Disney draws young families, and sometimes that includes a pregnant mother. If you're expecting a baby, why not take the family to Disney World since it may be a couple of years before you consider that the eventual newborn is ready? Give the older siblings a treat before the baby arrives. Are you telling me fears of the Zika virus don't weigh into that travel decision?
We have to take Disney's word for it. It takes too long to count guests or unrented strollers.
The counter to Zika concerns is that Disney beefed up its security last year -- all of the area theme parks did -- and it's not as if guests feel any less safe at area attractions. If anything, they may feel more secure that the safeguards are there. Information and easy access to repellant sprays could be making guests less concerned about Zika at the parks.
That's certainly possible, but we may never truly know if Zika was a factor this summer. Attendance fell at Disney World during the March quarter, a rare year-over-year dip. Disney's domestic theme parks experienced a 4% slide during the June quarter. It won't be a surprise to see that streak stretch to three quarters, and there will be plenty of scapegoats to blame when it happens. Attendance was already slipping months before Zika entered our vernacular.
Disney can blame the international shortfall in tourists, a lack of new attractions, or its own recent price hikes for the declines, but it has chosen to shake things off for the most part. If attendance bounces back soon, it'll just be a lull in retrospect. We may never know why attendance is in a funk, but it's safe to say that Disney will be giving us the reasons why folks are coming back when the turnstiles begin clicking in the right direction again.