Disney World Could Re-Open By June Says One Analyst
There’s a lot of differing options just now about when Disney World may once again open its gates to visitors. According to a recent report in Barrons, J.P. Morgan media analyst Alexia Quadrani says that this may happen earlier than you think.
Quadrani told Barrons, “Everybody we talk to has a very different impression of when this crisis will end. Obviously, nobody knows. We’re assuming the parks will open on June 1 . I’m talking about the domestic parks—I think Shanghai will open earlier, and perhaps Hong Kong opens later. It’s largely based on a couple of things—when the lockdown and the social distancing might become less stringent. It’s also the date that Disney is accepting reservations. If you call up and you want to book a hotel at Disney World, that’s the first date you can book—June 1.”
Impact on Theme Park Attendance
When it comes to how busy the theme parks will actually be upon re-opening, Quadrani advises that things will be slow at first. One of the reasons is that international visitors will be down. As Quadrani points out international travellers typically make up somewhere between 18 – 22% of total theme park visitors. It may be a while before visitors from overseas being to travel back to Walk Disney World.
Another way that that the COVID-19 impact will be felt on theme park attendance is that with increased rates of furloughs and unemployment, it may take families longer to bounce bank meaning less disposable income and less travelling.
These factors combined leads Quadrani to predict that we can expect “pretty modest attendance.”
The Walt Disney Company As a Whole
When Barrons asked Quadrani about how Disney as whole would fare during this time of economic uncertainty she advised that J.P Morgan did cut earning estimates for 2020 but that she believed the company would continue to make a profit. This, she argues is the result of the studios being the least impacted in the short term. She says, “the cost associated with distribution and marketing of films in theaters gets eliminated. In some ways, it can be a profit benefit in the short term because most of your profits in the film industry come from the back end—movies that have already been in theaters and now are producing a profit with limited costs.”
She also predicts a healthy profit across Disney’s media networks through distribution fees (which aren’t impacted) as well as advertising revenue. The only area where Disney is really feeling the burn is ESPN which has falling ratings due to sports being suspended.
Also, we can’t overlook the fact that streaming is on the up! As we previously reported here on MickeyBlog, the Disney+ subscription service now has over 50 million subscribers. The fact that more people are at home and streaming can slightly offset the big financial hits as a result of the theme parks closures.
Quadrani believes that the company as a whole has the ability to endure the COVID-19 crisis. She says, “This is a top-notch management team. And Bob Chapek whose most recent background has been the parks is now CEO. So you talk about having an expert in the field running the company. Bob Iger is still very much involved. And beyond that, they have a very strong balance sheet.”
When you put it like that, perhaps the shift in management in the lead into the crisis doesn’t seem like such a bad move! Readers are encouraged to keep following along with MickeyBlog for the latest Walt Disney World news and updates!
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