Challenges Disney Faces in the Pandemic’s Aftermath
The Walt Disney Company must be experiencing relief right now. Executives can finally see the light at the end of the tunnel.
As vaccinations become more prevalent, Disney theme parks may start planning for better days ahead. Still, questions abound.
Here are several challenges Disney faces in the pandemic’s aftermath.
When to Reopen Completely
Here’s an issue that could approach sooner than anyone expected.
Orange County Mayor Jerry Demings recently indicated that face mask rules and other Coronavirus-based restrictions will go away soon.
Demings couldn’t point to an exact date, instead suggesting when half the county has received complete vaccination.
At the current pace, that should occur by July, possibly sooner. So, Disney may plan as if some semblance of normalcy returns then.
Let’s say that we also reach 70 percent of vaccinated adults by the end of June.
In such a scenario, Disney could feasibly reopen entirely during the second half of the year.
Is that the right strategy? Here’s where I don’t envy park officials at all. They’ll need to make seemingly impossible determinations.
For the past year, the tourist industry has taken a series of body blows. Now, some analysts suggest a 180-degree turn is impending.
These people believe that tourism in general and Disney, in particular, will increase park traffic dramatically.
For that to happen, Disney must increase its current capacity limits from the threshold of 35 percent to one closer to, well, 100 percent.
I expect that to happen at some point in the late summer or early fall, but that’s pure speculation.
Crowds and Guest Sensitivity
As Disney picks its dates, it must factor in something much more challenging to estimate.
How comfortable will guests feel after spending more than a year indoors and away from crowds?
Here’s the challenge that Disney executives face. They must get the parks up and running at or near full capacity without stressing customers.
That task will require plenty of innovation on Disney’s part. It’ll also require the company to rely on the generational trust it’s brokered with fans.
Thus far, Disney has skipped parades, character meetings, fireworks, and major shows to avoid crowds.
According to internal surveys, Disney data suggests that a ravenous appetite exists among potential park guests.
They will return in force as soon as Disney boosts admission. As a reminder, Disney’s 50th birthday is right around the corner in October.
As a reminder, Remy’s Ratatouille Adventure opens on October 1st.
Management must operate the parks in a way that increases revenue after a year of historical losses.
However, Disney must achieve this goal while keeping guests feeling happy and safe. That’s a tricky balancing act.
When to Bring Back Ticketed Events?
This reopening discussion leads to another thought. If Disney needs a quick revenue stream, it must bring back ticketed events.
First, Disney After Hours debuted. Then, Disney Villains After Hours arrived at a higher price.
One park makes as much as $139 per ticket for these limited availability events. They’re virtual licenses to print money.
Obviously, Disney couldn’t operate ticketed events during the pandemic, though.
Safety issues required more cleaning measures. When the parks closed, cast members went to work on sanitizing all the touchable surfaces.
Also, Disney laid off 32,000 cast members in Orlando. So, it lacked the staff to run ticketed events.
One hand could wash the other here, though. Disney could bring back more workers and finance the decision via ticketed events.
I suspect Disney needs to act somewhat quickly on this particular decision. The company needs some lead time to sell tickets and prep the parks.
Realistically, ticketed events may need to wait until 2022, though.
I remain hopeful that the Halloween party will return this October…but I’m not holding my breath.
What Should Change with Buffets?
Before I address this, I should remind you of a few things. First, Disney relied on buffets at several of its restaurants, especially character meals.
During the pandemic, many of these places have remained closed. Others have modified their offerings.
Some deliver family-style plates of food to your table, while others allow you to pick an entrée from a list. Everything else…comes in plates of food for the table.
Nothing much has changed with the perception of buffets lately. Companies still avoid them as much as possible, with some chains closing in 2020.
Others like Golden Corral adapted their menus to reflect the changing times. The most famous buffet chain in North America now offers car side to-go service instead in many areas.
The 2019 version of the buffet was already dying, but 2020 killed it.
Disney officials must decide whether they can operate buffets safely again. And based on popular opinion, they probably cannot.
I suspect that family-style service is here to stay, at least until robotic service is viable.
What Should Change with Restaurants?
Interestingly, modern technology isn’t perfect, either. Disney restaurants committed fully to Mobile Ordering, which sounds great…and usually is.
For the most part, Mobile Order works well, but the pandemic has exposed some flaws. For starters, restaurants lack seating during busy periods.
Also, these eateries cannot satisfy the demand at ordinary meal hours. When you try to order lunch at a park restaurant at noon, you may be shocked!
Sometimes, the app indicates you must wait two hours or more for your meal window! Other diners have beaten you to the punch with their orders!
Disney currently cannot make everyone happy during the busy periods on the daily schedule.
So, the company needs to decide on three things. The first is when it should reopen all remaining restaurants.
Obviously, Disney won’t take this step until the parks expand capacity.
Otherwise, the reverse would happen with mostly empty restaurants featuring too many empty tables and bored employees, an expensive mistake.
Once again, Disney must balance supply and demand in a seemingly impossible situation.
I suspect that the company will bite the bullet and reopen some restaurants sooner than it’d like.
Then, the increased attendance will justify the decision and alleviate the short-term problem of overwhelmed lunch/dinner orders.
This particular issue might not be easy to wave away, though. Most people dine between 11 a.m. and 1 p.m. and then from 5:30 a.m. to 7:30 p.m.
Disney should investigate ways to entice customers to dine at off-hours.
Is a Select Hours Dining Plan feasible? I don’t know, but it’s an idea to explore.
When to Proceed with Delayed Expansions
Here’s a fun topic that’s fun to speculate on. Realistically, the answer is simple, though.
Disney announced several projects at the D-23 Expos in 2017 and 2019.
Some of them, like the Mary Poppins attraction, vanished during the pandemic.
The company CFO confirmed that capital expenditures dropped nearly a billion dollars due to the sudden, shocking budget shortfall.
Those projects wound up on the cutting room floor, trapped in limbo. Some of them may never come to fruition.
I’ve mentioned a Wreck-It Ralph attraction on many occasions. It fits the space of the former Stitch show in Magic Kingdom’s Tomorrowland.
Alas, Ralph Breaks the Internet didn’t become the expected box office blockbuster Disney had hoped.
So, this project was already in some trouble. Now, it might be permanently MIA.
However, Mary Poppins Returns only did okay at the box office and hasn’t had the anticipated cultural impact.
Disney had gone so far as to announce that ride, but it seems DOA.
Still, there’s a new X-factor in play. Disney has reinvented its former cable television channels as high-profile streaming services.
The explosive growth of Hulu, ESPN+, and (especially) Disney+ has more than doubled the company’s market cap.
Analysts project a revenue windfall by 2024, possibly even sooner.
With more money on the horizon – and I mean A LOT more – Disney could/should reinvest in its parks.
When will that happen? I’d expect announcements to occur in September of 2022.
As you may have guessed, that’s the date for the next D-23 Expo.
Fortunately, that’s only about 16-17 months away!
Feature Image Rights: Disney