Disney World Set to Reopen in July
Disney World Set to Reopen in July
Walt Disney World, one of the largest tourist sites on the planet, has a plan to reopen in mid-July. But the necessary safety protocols — limiting the number of visitors, making face masks mandatory, deploying roaming squads to enforce social distancing, no longer allowing people to get up close and personal with Mickey Mouse — shows how difficult it will be to operate once-booming attractions as the country prepares for a broader reopening.
“We’re going slow because we want to make constant progress and not have to backtrack,” Bob Chapek, Disney’s chief executive, said by phone from Florida on Wednesday. “The risk is going too far, too fast.”
Disney’s theme parks, some with Main Street U.S.A. entrances, loom large in the popular imagination as symbols of Americana. Disney World has been closed since March 15 because of the pandemic, and its reopening carries a certain symbolism in itself, an attempt by fans to reclaim a semblance of normal life and an effort by a coronavirus-battered Disney to demonstrate that a visit will remain a cultural rite of passage for many children.
The Orange County Recovery Task Force in Orlando approved reopening plans for Disney World and SeaWorld on Wednesday but pressed executives about how they would enforce mask wearing, something that has become a contentious issue as more people return to public places and may pose difficulties for vacationers in the Florida heat. Jim MacPhee, Disney’s World’s senior vice president for operations, said signs would have “strong language” and that “high-energy squads” of employees would remind guests about compliance. He said Disney might establish “relaxation zones” where guests can take off their masks.
Walt Disney World consists of six separately ticketed parks with combined annual attendance of 93 million. The two most popular ones, the Magic Kingdom and the Animal Kingdom, will reopen on July 11. Disney World’s other major parks, Epcot and Hollywood Studios, will reopen on July 15.
The National Basketball Association has been in discussions with Disney to restart its season in late July by holding games and practices and housing players at the resort. Mr. Chapek said he was “very optimistic” about making a deal with the league. (Disney-owned ESPN is a broadcast partner of the N.B.A.) Major League Soccer is also in talks to restart its season from the resort’s ESPN Wide World of Sports Complex, which Mr. Chapek noted had high security and “turnkey” broadcasting capabilities.
Mr. Chapek declined to say how many people Disney would let into its parks. The number is likely to be less than half of pre-outbreak capacity, at least at first. Major Disney parks can handle 80,000 people a day. In China, where Shanghai Disneyland reopened on May 11, the government limited attendance to one-third of normal capacity.
Visiting any theme park will be very different than in the past, at least until a vaccine is widely available. Universal’s reopening plan involves staggered parking to create distance between groups and increased mobile ordering at restaurants. Mr. Chapek said seats would be left empty on rides like Pirates of the Caribbean to separate guests and that half the tables in restaurants would be removed. Shops will have new signage: “Help us protect the Magic. Please limit handling of the product.”
And Disney will add a new reservation system for park entry; visitors can no longer walk up and buy a ticket. All visitors will have their temperatures checked.
Disney will start working with local unions to reopen at least some of its 18 Disney World hotels. “We will accordion hotel capacity up and down as needed,” Mr. Chapek said, noting that about 50 percent of Disney World guests typically stay at a Disney-owned hotel.
Disney did not give reopening dates for the smallest of its six Florida parks, Typhoon Lagoon and Blizzard Beach, which offer water slides. Disney Vacation Club, a time-share business with 3,200 units at the resort, will reopen on June 22. Disney Springs, an adjacent 120-acre shopping mall, began to reopen on May 20. “Guests have been extremely compliant,” Mr. Chapek said of mask requirements at Disney Springs.
Disney theme parks in California, France, Japan and Hong Kong remain closed. The company has given no indication when they could reopen.
“You can’t sugarcoat how hard this is going to be managerially,” Craig Moffett, a media analyst at MoffettNathanson, said on a recent conference call with clients. “Will there be a generational shift in the willingness of people to socially crowd? Will a generation of consumers find it uncomfortable to be strapped into a roller coaster next to a stranger? We just don’t know the answers.”
Tourism is Orlando’s largest industry, supporting 41 percent of the city’s work force, according to the trade organization Visit Orlando. Central Florida’s other theme parks will begin reopening on June 1, when Legoland, owned by Britain’s Merlin Entertainments, unlocks its gates. NBCUniversal’s three Orlando theme parks, home to the Wizarding World of Harry Potter, will reopen on June 5. SeaWorld, which offers aquatic zoo exhibits (“Dine with Orcas”) and looping roller coasters, will restart operations on June 11.
But Disney World drives the market. The resort’s size is difficult to comprehend. It is the largest single-site employer in the United States, with roughly 75,000 jobs. It has a larger bus fleet than the City of St. Louis. Guests gobble up more than one million roasted turkey legs annually.
Theme parks have high costs. It takes a minimum number of people to operate the rides and a minimum amount of electricity to power them. Then add in upkeep, taxes and insurance. To cover those expenses — just to break even — Disney must sell a certain number of tickets. The company also makes money by selling food and merchandise and renting hotel rooms, all of which are driven by attendance.
So how can Disney make money if the resort opens to low capacity?
The media analyst Michael Nathanson said in an email that he had little clarity on the matter. (“None, zero!” was his precise answer.) Jessica Reif Ehrlich, a Bank of America analyst, said Disney could “cut down capacity for a period of time and still be profitable — well, well below 50 percent somewhere.” She added, “There are more things that Disney can do to contain costs than you might think. Fewer cashiers on duty. Fewer ride vehicles in operation. Some hotels still closed.” There will be no signature fireworks displays or parades, which involve hundreds of performers and pose crowd-control challenges.
Mr. Chapek positioned the reopening as providing “positive net contribution” to the company’s parks business. That means Disney World may not be profitable at first. However, revenue from reopening at a limited level is expected to exceed the costs associated with reopening and offset a good portion of the property’s fixed costs. In other words, Disney may ultimately lose money until capacity can be increased. But not as much as it would if the parks remained closed.
With the television business facing significant challenges in the streaming age, theme parks have emerged as a surprisingly strong moneymaker for media companies. For the 2019 fiscal year, Walt Disney Parks and Resorts had an operating profit of more than $4.5 billion, an increase of more than 100 percent from six years earlier. The top five theme park companies in the United States — Disney, Universal, Cedar Fair, Six Flags and SeaWorld — had combined attendance last year of about 288 million, up 4 percent from a year earlier, according to the Themed Entertainment Association.
Growth has been fueled by hundreds of millions of dollars in new attractions and resort hotels; fading worries about security in the aftermath of the Sept. 11 attacks (and the 2015 attacks in Paris and San Bernardino, which prompted Disney and Universal to install metal detectors at their front gates); and the so-called experience economy, where people — millennials in particular — started to see memorable events as a mandatory rather than optional expenses. A high-season, single-park adult ticket at Disney World now costs $135, up from $82 a decade ago, and demand has not eased. Lines still stretch for an hour or more on popular rides like the Seven Dwarfs Mine Train and Avatar Flight of Passage.
Mr. Chapek said prices would remain “status quo,” meaning Disney saw no need for discounts to draw back visitors. “There’s not going to be an issue with demand,” he said.
Some theme park observers were less enthusiastic. No fireworks? No photos under Cinderella’s arm?
“The majority of fans are very much wait and see,” said Robert Niles, editor of the news site Theme Park Insider. “Given the expense, particularly in the middle of a recession and with huge unemployment, a lot of people may stay home until the experience gets back to normal.”
Sue Pisaturo, who founded Small World Vacations, a New Jersey agency that specializes in Disney trips, said interest had been “surprisingly strong” in recent weeks. “Some people are definitely raring to go,” she said.
But she predicted that mask requirements would keep some people away. Heather Abbott Vogel, an agent at Destinations in Florida Travel, agreed.
“I’ve had clients say, ‘If I have to wear a mask, I’m staying home,’” Ms. Abbott said.