Disney Sees No Florida Fallout From Zika, Rebutting Analyst
(Bloomberg) -- 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 $92.50 in New York trading. The stock is down 12 percent this year.
Disney has been handing out free mosquito repellent in its Orlando parks and hotels since Aug. 28.
The virus is spreading rapidly through the Americas. The number of infected people in continental U.S. rose to 3,176 through Wednesday, including 70 cases in Orange County, Florida, where Orlando is located, according to figures from the U.S. Centers for Disease Control and Prevention and the Florida Health Department.
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.
Since the first Miami cases were confirmed in late July, officials and local agencies have been working with hotel operators to reassure business executives that the city is a safe destination for travel.
“We have heard of a handful of cancellations of small meetings that happen within hotels, especially for the latter part of this year and maybe for next year,” Rolando Aedo, executive vice president at the Greater Miami Convention & Visitors Bureau, said in an interview.
Seeking to alleviate some of those concerns, the agency is using webcams to allow event coordinators to observe the city’s business activity in real time. “For the most part, it’s business as usual,” Aedo said.
The impact of the Zika outbreak 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 properties in South Florida also have 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.