Disneyland’s closure due to coronavirus could hurt O.C. economy

Disneyland will be closed until at least the end of the month due to the coronavirus.
Disneyland will be closed until at least the end of the month due to the coronavirus.
(Lawrence K. Ho / Los Angeles Times)

The prolonged closure of Disneyland to mitigate the spread of the deadly coronavirus could have deep economic ramifications for Orange County, according to Cal State Fullerton researchers.

Disneyland closed on March 14 and will stay shuttered until at least the end of the month. Meanwhile the coronavirus continues to spread, with the number of cases in Orange County rising to 53 on Thursday.

“Disneyland has to stay shut down at least for those two weeks,” said Aaron Popp, assistant professor of economics at Cal State Fullerton. “But what happens in April? What happens in May? We don’t know quite yet.

“Ideally, everything reopens and everything returns to normal, and this is just a temporary problem for the local economy. If it’s a more long-term issue, then long-term economic impacts are going to start to grow.”

It’s unclear if Disneyland’s closure will be extended at the end of the month.Disney spokespeople declined to comment.

On Tuesday, Orange County released a health order calling for residents to avoid large gatherings and practice social distancing and good hygiene. On Thursday, Gov. Gavin Newsom ordered all 40 million residents of California to stay home, except for visits to grocery stores, pharmacies and gas stations, among other places.

“It is highly unlikely in my view that Disney will be able to open in two weeks,” said Anil Puri, an economics professor at Cal State Fullerton and director of its Woods Center for Economic Analysis and Forecasting. “Given the number of cases is going up … We are not close to containing it.”

Puri and Popp were part of a research team, along with Cal State Fullerton economics professor Adrian Fleissig, that conducted a study earlier this year into the economic impact of Disneyland on Southern California.

Analyzing data from 2018, the team found that Disneyland is responsible for bringing about $8.5 billion into the regional economy through direct and indirect means, which includes the tourism it draws and the crowds it brings to surrounding businesses.

“The direct loss to Disney from ticket sales and all that are certainly something to the company, but there’s a huge loss to secondary businesses that rely on Disney,” Puri said. “All the private hotels around Disneyland. All the food and restaurants.”

Though several businesses surrounding Disneyland were contacted, none were willing to comment for this article.

Popp said about $139 million of the money generated from Disneyland-related activities is part of the Anaheim general fund.

“The closure of Disney, the longer it runs, the more substantial impact on the city of Anaheim and on its general fund,” Popp said.

Popp said the current scenario is further exacerbated because Disneyland is closed during spring break, an “above-average attendance period.” He said it would be “very bad” if the closure extended into the busy summer months.

In addition, the researchers found that Disneyland was responsible for generating about 78,000 jobs through direct and indirect means. About 31,000 of those were “cast members,” what Disney calls its resort employees.

In total, Disneyland is responsible for about 3.6% of the jobs in Orange County.

While Disney is currently paying its employees through the end of March, those other upward of 40,000 jobs could be substantially impacted, Popp said. It’s unclear whether Disney would continue to pay employees if the closure is extended.

“If the cast members continue to get paid, then that is going to mitigate the job loss impacts on Orange County in particular,” Popp said.

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