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 As some U.S. states lift
stay-at-home orders, investors and park fans are
watching to see how Walt Disney Co <DIS.N> --
which makes a third of its revenue from parks,
experiences and products -- reimagines the
“happiest place on earth” for a world altered by
the coronavirus.
The high-touch, high-volume, kid-centered nature
of the parks, and Disney’s need to prevent
damage to a brand synonymous with safety and
families, will make reopening difficult, experts
said.
Disney’s ability to reopen its parks in Asia,
the United States and France will also be a
powerful signal about how the world can get back
to a semblance of normal as it deals with
COVID-19.
"This is the greatest challenge that the
industry has ever faced," said Phil Hettema,
founder of The Hettema Group, which designs
theme park rides and other experiences.
Disney, which has not announced any plans to
reopen the parks, declined to comment for this
story.
Executive Chairman Bob Iger recently said
checking guests’ temperature could become
routine at Disney park entrances. Among other
plans under consideration, according to a source
briefed on Disney’s thinking: Rides like the
Space Mountain roller coaster could stagger
guests in each “rocket” to enforce social
distancing. Guests could be notified via app or
another technology when they can go on a ride or
in a restaurant to eliminate lines.
Staffers, known as cast members, and guests
could be required to wear masks. But in true
Disney fashion, employees' masks would be fun,
not scary, the source said.
Disney on Thursday began online sales of face
masks featuring Mickey Mouse, Baby Yoda and
other characters and said up to $1 million in
profits would go to charity.
Masks, now worn commonly across China, are
ubiquitous in the shopping district outside
Shanghai Disney, where workers disinfect a
playground for 5- to 12-year-olds at noon and 3
p.m. daily. Temperature checks are mandated by
local regulations, according to Shanghai
Disney's website.
Business and political leaders in Florida, home
to Walt Disney World, have floated ideas such as
limiting capacity at all theme parks during an
initial re-opening phase.
The question that health experts and financial
analysts are asking is whether any of these
measures will be enough to protect employees,
guests or Disney’s bottom line.
Social distancing could come at a steep price.
In April, UBS downgraded its rating on Disney
and lowered its division profit estimates to
$500 million in fiscal 2020 and just $200
million in 2021 compared to $6.8 billion in
2019.
Disney parks need to be running at roughly 50%
of capacity to be profitable, according to the
firm.
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 Investors will see a fuller
impact of coronavirus when Disney releases its
second-quarter results on May 5; Comcast <CMCSA.O>
said on Thursday that if its Universal Studios
parks remain closed for the entire second
quarter, the company would suffer an earnings
before interest, tax, depreciation and
amortization loss of roughly $500 million.
Financial analysts have predicted reopen dates
for Disney ranging from as early as June to Jan.
1. Guidelines will be set by governors in
California and Florida, where Iger and Walt
Disney World Resort President Josh D’Amaro sit
on state reopening task forces. The rest is up
to Disney. Although Disney and
other large venues face an unprecedented
challenge protecting guests from an easily
spread airborne virus, experts and a former
executive pointed to its experience handling
crowds.
More than 157 million people visited Disney
parks in 2018, according to the Themed
Entertainment Association.
"If anybody can figure it out, Disney will,"
said Dave Schmitt, founder of MR-ProFun, a
consultant to theme parks.
Safeguards have limits. Temperature checks will
not catch everyone infected, and most vaccines
are not 100% effective, said Dr. Megan Murray, a
global health professor at Harvard Medical
School.
Even so, a vaccine would provide some
reassurance for park-goers, according to a
Reuters/Ipsos poll conducted from April 15-21.
While a fifth of respondents said they would
attend an amusement, theme or water park
whenever they reopen, about 30% would go if a
vaccine was available. The poll, which surveyed
4,429 American adults, noted that a vaccine
might not be available for more than a year.
Loyal fans are counting on Disney to get this
right. Chicago resident Kelly Alexis, 50, has
been to Disney resorts 35 to 40 times and plans
to go to Disney World with her family in October
if the park is open.
“It’s just the feeling that they do things so
perfectly and they will take every precaution,”
Alexis said. “They’re not going to want to have
an epidemic where everyone gets sick at Disney.
They would never let that happen.”
(Reporting by Helen Coster in New York, Lisa
Richwine in Los Angeles, and Shanghai Newsroom;
Additional reporting by Arriana McLymore in
Raleigh, North Carolina; Editing by Kenneth Li
and Lisa Shumaker)
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