Disney World May Face Tougher Recovery Than Disneyland According To Analyst

One of the big indicators to people across the United States that they needed to take the spread of the coronavirus seriously was the announcement that The Walt Disney Company would be closing its theme parks, including California's Disneyland and Orlando's Walt Disney World resort. There's been talk and speculation about when they'll re-open for business, and how they'll handle it when that time comes, but it's still unclear when that will even happen. A new report reveals that the parks won't have a simultaneous recovery either though, with the Florida based parks likely having a much harder time recouping revenue and attendance than the others.

"By our estimation, 85 percent of the attendance base in Orlando — in a normalized environment, forget about the virus for a second — comes from out of state or out of country," Wall Street analyst David Miller told The Hollywood Reporter. "Which means you pretty much have to fly there. So, it is a two-step process with getting consumers conformable with going back to the parks. You have to be comfortable No. 1 with getting on a plane ... and then you have to be comfortable actually going into the park and hope that it is a fairly sterile environment and that people will hopefully adhere to safe social distancing."

Miller went on to note that there are two models being used to analyze the possibilities of how theme parks will work when they can re-open for business, one where they enforce social distancing policies to attendees and one where they don't have to because there are so few people actively visiting the parks. In the end the bottom line of these parks, which make up a major portion of the revenue for these companies, will likely be effected in some way until a vaccine exists.

"At least with theme parks, there's no secular threat in going to the theme park unless there is no cure for the virus," Miller added. "Eventually, there is going to be a vaccine. Eventually life will return to normal, but no one knows how quickly. Because of the reorganization of the [Disney] business line, the parks and experiences strategic business unit is now the largest unit. So when you close your largest unit, that's serious earnings power that gets extracted out of the model. The problem is, everyone is modeling different numbers because no one knows when these parks are going to reopen."

A previous report on the re-opening of both Disneyland and Walt Disney World, The Los Angeles Times brought word that they may not re-open until 2021, for similar reasons outlined above. Disney's executive chairman Bob Iger previously said they could begin screening guest's temperatures when they decide to re-open, but all plans at this point about the parks opening their gates again are tentative. The Walt Disney Company will hold a quarterly earnings call on Tuesday, May 5th however, which will likely contain some news about their intentions.

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