Disney, Universal Parks May See No Immediate Cheer As International Visitors Return

A surge in worldwide guests to the United States could not profit Disney and Universal theme parks within the nation till subsequent yr, since early arrivals will deal with household reunions and vacation journeys will want planning.

While home footfall rose within the parks operated by Walt Disney Co and Comcast Corp, capability constraints, rising prices and fewer worldwide vacationers visits to its U.S. parks weighed on earnings.

“Disney World in Orlando has more worldwide vacationers on the whole (in comparison with Disneyland) - it’s a really huge vacation spot. And so it’s not one thing folks do on a whim, folks must plan that out," said Neil Macker, senior analyst at Morningstar.

In recent weeks, the United States opened its borders to fully-vaccinated international travelers and approved vaccines for children aged 5-11, boosting investor hopes and Disney shares.

Disney executives said they expect a recovery in international attendance only by the second half of next year and signaled a ramp-up in costs as well.

Some see domestic travelers keeping parks full.

“There is an expectation that stronger domestic demand will make up (for) the shortfall with signs of pent-up demand from holidaymakers who have been starved of vacations," mentioned Susannah Streeter, analyst at Hargreaves Lansdown.

However, the prices of operating theme parks throughout a pandemic stay excessive and worldwide vacationers, who make up 10% to twenty% of whole U.S. theme park guests, usually purchase more souvenirs and different high-profit gadgets.

Executives at Comcast, which owns Universal theme parks, one in every of Disney’s closest rivals, mentioned that pre-pandemic revenue ranges are depending on worldwide visits.

“We are inspired by the continued restoration, however getting again to after which exceeding pre-pandemic ranges of EBITDA will doubtless require an enchancment in worldwide visitation," Comcast CFO Brian Roberts has said.

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