Why Walt Disney World, Disneyland will remain shut despite Florida, California reopening
Walt Disney Co. didn’t offer any new estimate Tuesday as to when it will reopen its U.S. theme park complexes – Disneyland in Anaheim, California, and Walt Disney World in Orlando, Florida – as it issued financial results for the three months ended March 28.
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So for now, even though Florida and California are in the early stages of reopening after their coronavirus shutdowns, Disney offered no more news on the issue than its earlier pronouncement that its U.S. parks will remain closed until further notice.
In its earnings release, it did say that the market segment that includes its theme parks took a $1 billion hit on operating income over the past three months. It estimated it will take another $1.4 billion blow across all its business segments in the current quarter.
The company’s other theme parks in France, Japan and China are also shuttered, though CEO Bob Chapek said Shanghai Disneyland will reopen May 11 with social distancing, masks, temperature scans and other precautions. That head start may provide a blueprint as to how to roepen safely while preserving the fun.
Disney’s bleak financial results – a 91% decrease in net income from continuing operations during the previous quarter – come as analysts’ have issued expectations of a protracted theme-park shutdown, perhaps made worse by any resurgence of COVID-19 as states reopen.
Don’t expect the parks to reopen until 2021, wrote John Hodulik, managing director of investment research for global financial firm UBS, in a report to investors last month.
“We believe Parks’ profitability will be impaired for a longer period of time given the lingering effects of the outbreak and now assume an opening date of Jan. 1 as our base case,” Hodulik wrote.
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Though Disney’s devotees are itching to get back to the parks, the company is even more anxious to be able to safety reopen. They are the major driver of Disney’s profits.
And there seems to be little question about pent-up demand among consumers for vacations and escapism from the current coronavirus myopia.
Southwest Airlines CEO Gary Kelly, in revealing last week that the carrier filled only 6% of the seats on its aircraft in April, cited Disney World as the kind of destination that could be key to a leisure travel revival.
“They need to have something to be able to do when they get there. So Disney World needs to open back up. Restaurants need to open back up.’ Kelly said.
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On Friday, United Airlines President Scott Kirby put it another way: “Taking my kids to Disneyland is something I do every year, and I love it…but Disneyland needs to be open.”
Contributing: David Oliver, Dawn Gilbertson