Layoffs, closures of less popular attractions, and shorter hours of operation have been the regular pattern of claims news that have swept through the industry in recent weeks. The last blow was on Friday afternoon when Comcastof (NASDAQ: CMCS.A) Universal Orlando has informed guests of upcoming stays at two of its seven on-site resorts that the hotels will be temporarily suspending operations starting next week.
Universal Orlando will close the Sapphire Falls and Aventura properties on August 21. Existing reservations at both hotels will move to one of the other resorts which will remain open as Comcast consolidates its accommodation business.
We are nearing the end of what has always been the peak summer travel season, so it’s safe to say it’s no surprise to see the theme parks in central Florida retreat. Schools in the area are starting the new school year – practically at least – and this has generally marked the time for iconic closed attractions to unwind ahead of the popular Halloween festivities that won’t be happening this year for Disney (NYSE: DIS) and Universal Orlando from Comcast.
However, it’s also clear that the theme parks were hoping for better performance at this point. Universal Orlando wouldn’t have booked guests at the two soon-to-be-closed hotels if it didn’t believe they would operate at sustainable occupancy levels.
This isn’t the first sign that Comcast’s once-bustling theme park is losing steam since its reboot in early June. A week ago, it temporarily closed six of its less popular rides and shows. It also introduced an aggressive promotion where people buying the equivalent of a one-day ticket could keep coming back until December 24.
It’s not just the Comcast resort that experiences shrinkage pains upon retirement. Disney’s quarterly earnings call earlier this month came with the admission that the media giant’s theme parks were not meeting its internal projections.
“While Walt Disney World is operating at a positive net contribution level, the benefit we are seeing from reopening is lower than we originally anticipated given the recent surge in COVID-19 cases in Florida,” said CFO Christine McCarthy on call.
The point is, Florida experienced a resurgence of coronaviruses in the weeks leading up to Disney World’s reopening in mid-July, but the number of cases has tended to drop every week since it unlocked its turnstiles. Concerns about COVID-19 are expected to ease rather than escalate in the nearly five weeks since Disney World resumes business.
The country’s two largest theme park operators are struggling in the new normal. For now, it’s a small step backwards. Disney has opened its parks in Florida with limited hours and next month they will see their operating contract even more. Comcast is temporarily closing attractions and hotels. Things aren’t perfect, but an important distinction is that both companies mentioned in their recent results that the parks would lose more money if they remained closed.
The reopening process was going to have its hiccups. We are here now. What Disney and Comcast do next will go a long way in determining how quickly things get back on track.