As trade tensions and tariff-fueled fears of a recession roil the economy, stock analysts warn that Walt Disney Co.’s theme parks could take a hit.
Typically, amusement park attendance in the U.S. is tied to the health of the American economy. When people feel better about their financial situation, they’re more likely to spend on discretionary purchases, such as a Disney vacation, said Laurent Yoon, senior analyst at Bernstein.
“When the economy is not doing well, the parks’ performance tends to follow that trend,” said Yoon, who wrote a note to clients late last week about the pressures on the company, including the parks’ exposure to economic shifts.
Over the last few months, consumer sentiment has plunged amid fears of a trade war and President Trump’s tumultuous changes on tariff policies. This month, a University of Michigan survey found that consumer sentiment in April dropped 11% from March, marking the fourth straight month of declines.
Read more: ‘I don’t trust America.’ Trump’s tariffs, detentions take a toll on local tourism
“Economic hope and economic optimism are big drivers of the American economy,” said Martin Lewison, associate professor of business management at Farmingdale State College in New York. “When that optimism dries up, it changes consumption behavior.”
This could affect future bookings for the Disney parks. Visitors who have already scheduled trips tend not to cancel, but those who were considering a vacation may put it off if they’re concerned about their personal financial situations, said Jessica Reif Ehrlich, senior media and entertainment analyst at Bank of America.
Disney did not respond to a request for comment.
The company’s parks could also be vulnerable to decreased international tourism.
Trade tensions between the U.S. and other nations have already led to some anti-American backlash. Canadians, for example, have been boycotting American products in stores and canceling their plans to visit the U.S. after Trump has repeatedly called for annexing Canada as the 51st state.
Overall international travel to the U.S. is expected to decrease by 5% this year, with a 15% decline from Canada, according to Tourism Economics, a Philadelphia-based travel data company.
Although Disney does not release visitor tallies, international tourists are a vital source of business for Walt Disney World in Orlando, Fla., and Disneyland Resort in Anaheim, even if they have not returned in the same numbers as before the pandemic.
“International visitors are really important,” Reif Ehrlich said.”They tend to spend more and stay longer so they’re really profitable.”