Although Disney is implementing several measures to reopen safely, reopening a dense theme park roughly the size of San Francisco carries risks, questions and criticism as cases escalate in Florida.
Even under normal circumstances, running Disney World is no small task. The station has over 75,000 employees (or, as the company calls it, “actors”) and is visited by millions of people each year. The Magic Kingdom alone, home to top attractions like Cinderella Castle and Space Mountain, welcomed more than 20 million visitors in 2018, according to an AECOM report.
Disney World is “the heart of the brand,” according to Trip Miller, Disney shareholder and managing partner of Gullane Capital Partners.
“When you think of Disney, I think for many people, Disney World immediately comes to mind,” he said.
“The single most important asset of Disney”
Disney’s media empire is vast. The company has successful film franchises, a popular and growing streaming service, and a strong cable network at ESPN. However, all of these things may not be as vital in the short term for the business as its parks and resorts.
And no Disney park is as essential as Walt Disney World.
“It is three times the size of Disneyland in terms of revenue,” media analyst and founding partner of MoffettNathanson told CNN Business.
Nathanson estimates that Disney World alone generated $ 11.2 billion, or about 16% of the company’s total revenue in 2019, and added that it is a huge engine of growth for the company.
“This is probably their most important asset,” said Nathanson.
Disney’s Parks, Experiences and Products unit, which grossed over $ 26 billion in fiscal 2019, was financially destroyed in the last quarter due to the epidemic. Segment operating profit fell 58% from a year earlier, and Disney reported a loss of $ 1 billion in profits just weeks after the global shutdown.
According to Nathanson, while the coronavirus pandemic has affected all sectors of Disney’s activity, its parks are the ones where Disney has the most agency in terms of reopening.
“You have television, which is affected by the lack of production, the lack of sports, the weakness of advertising, the cut in cables. It’s not good. You have its cinema unit, which has great content, but no theatrical openings in the near future. It’s a problem. And then you have parks that have been affected by Covid-19 and closings, “he said. “So of these three, what you can control is your fleet business. You have control over security issues, openness. It’s under your control, so you can do what you can there. ”
Despite Disney’s many safety protocols and health measures, which include reduced capacity in its parks and requiring all employees and guests to wear masks, one thing that Disney cannot control is the coronavirus itself.
“How do you plan for something that seems to change every day?
The Florida Department of Health reported on Tuesday more than 10,000 new cases of coronavirus, bringing the state total to more than 220,000.
Significant increase in the number of cases in the past two weeks has led to employee petitions asking to delay reopening and the union leader representing Disney World service workers to warn that Disney “has to do it right” In terms of reopening.
“The risk to me is not just a potential epidemic in the parks, but the rapid evolution of the virus,” said Miller. “Even though Disney has done everything it can to fight the spread of the virus, which seems to have been the case, how do you plan on something that seems to change every day? ”
Bob Chapek, CEO of Disney, told CNN Business in May that he thought it was safe to return to the park.
“I think what we can say is that we have done everything we can to open up responsibly,” said Chapek.
When contacted for comment, a Disney spokesperson highlighted a blog article from Dr. Pamela Hymel, chief medical officer of Disney parks. In the publication, Hymel wrote that Disney remains “deeply committed” to focusing on the well-being of customers and employees.
“From increased cleaning and disinfection in our parks and resorts to updated health and safety policies, we have reinvented the Disney experience so that we can all enjoy the magic responsibly,” wrote Hymel. . “We implemented our health and safety measures after taking into account the advice of the government and local health authorities. “
“This is the future of the travel industry at this point”
Disney World is not the only theme park open in Florida. Other popular theme parks like Universal Orlando and SeaWorld Orlando have already had guests. And Disney opened some of its other theme parks overseas, including Shanghai Disneyland, which returned on May 11. Disneyland, the Disney complex in California, was scheduled to reopen this month, but has been postponed.
But Disney World is different. It’s not just America’s most popular theme park; it is the most popular theme park in the world, which can set the tone for the entire tourism industry, according to Robert Niles, editor of ThemeParkInsider.com.
“This is the future of the travel industry at this point,” said Niles. “It’s just a wreck in the whole industry at this point … So someone has to find a way to make this sector work if this industry is to survive, and Disney has more resources than anyone.” It is an obvious leadership opportunity for Disney. ”
But what does the future hold for Disney and its parks? Niles is not sure.
“My best guess at this point is that it’s slow for Disney,” he said. “Even if they do the best job they can to keep things safe, people still have to go, they still have to fly, and the parks still need international borders to open up. So Disney is at the mercy of many other things beyond its control. ”