Disney did not like an analyst's suggestion that Zika could be causing travelers to reconsider trips to Florida parks. The theme park company is working to allay visitors' fears with bug spray and messages about mosquito control, but as long as the virus isn't being transmitted locally, we don't expect the parks to take a serious hit.
Walt Disney Co. said the Zika virus isn’t hurting its theme-park business in Orlando, Florida, disputing concerns raised by an analyst.
The virus is having “no real impact on cancellations or future bookings,” a Disney spokeswoman said Thursday in an interview. The comments reiterated those of Chief Executive Officer Bob Iger, who said on an Aug. 9 earnings conference call that the virus wasn’t hurting business.
Disney was responding to BTIG LLC analyst Rich Greenfield, who said in a research note Thursday that Florida’s Zika outbreak may be causing vacationers to reconsider plans to visit resorts including Disney parks in Orlando. Greenfield cited a 5,000-person survey earlier this month by CivicScience, a Pittsburgh-based consumer polling firm, which found that about half of roughly 800 people planning trips to the area said they have canceled or decided not to visit Walt Disney World due to the threat of the virus.
Disney, based in Burbank, California, is the world’s largest theme-park operator. Greenfield has been recommending investors sell the stock since December 2015. With growth at Disney’s ESPN network slowing and the film studio and consumer unit facing tough comparisons, the company is relying on the parks to drive growth in fiscal 2017, he wrote.
While the survey suggests travelers have Zika fears, it’s not clear that will show up in Disney’s attendance numbers, Greenfield wrote.
“Given how meaningfully the cancellation/deferral rate appears to be, this is clearly a key question Disney should be pushing management to talk about,” he wrote.
Disney shares rose 0.3 percent to $92.55 in New York trading. The stock is down 12 percent this year through Wednesday.
Disney has been handing out free mosquito repellent in its Orlando parks and hotels since Aug. 28.
The virus has been spreading rapidly through the Americas. The number of infected people in the U.S. rose to 3,176, according to the latest figures from the U.S. Centers for Disease Control and Prevention. While the vast majority of cases have involved travelers to more severely affected countries, at least 71 people got the virus from mosquitoes in the U.S. Health officials have traced most of the locally transmitted cases to two areas in Miami and have warned pregnant women to avoid those neighborhoods.
There are 70 cases of Zika in Orange County, Florida, where Orlando is located, as of Wednesday, and all of them have been related to international travel.
“The impact of the Zika virus on Starwood hotels in South Florida has been a bit sporadic with some properties seeing cancellations and others not at all,” said Bruce Hicks, spokesman for Starwood Hotels & Resorts Worldwide Inc., which owns brands such as W and Sheraton. Starwood hotels in South Florida have also been taking steps to protect guests such as removing water that could be mosquito breeding grounds and providing guests with insect spray along with guidance on protecting themselves, he said.
©2016 Bloomberg L.P.
This article was written by Scott Moritz, Christopher Palmeri and Tatiana Darie from Bloomberg and was legally licensed through the NewsCred publisher network.
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Photo Credit: A Walt Disney Co. spokeswoman said the Zika outbreak is not causing attendance to drop at Disney parks in Florida. Shown here is the Magic Kingdom in Orlando. Travis Wise / Flickr
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