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Newserector
2020-05-02

Long lines, lots of kids, and lots to touch How does Disney open its parks again

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Look no further than Shanghai where the entertainment giant has staged a limited reopening of Shanghai Disney Resort for a glimpse into how Disney recovers from the coronavirus pandemic. Adults, children and the elderly wear masks while wandering among staff and security guards carrying contactless thermometers and hand sanitizers.

As some U.S. states lift stay-at-home orders, investors and park fans are watching to see how Walt Disney Co - which accounts for a third of its revenue from parks, experiences and products - reimagines the "happiest place on earth" for a coronavirus-changed world.

The high-touch, high-volume, child-centered nature of the parks, and the need for Disney to avoid damage to a brand synonymous with safety and families, will make it difficult to reopen, experts said.

Disney's ability to reopen its parks in Asia, the United States and France will also be a powerful signal as it deals with COVID-19, how the world can return to a semblance of normal.

"This is the biggest challenge ever faced by the industry," said Phil Hettema, founder of The Hettema Group, which designs theme park rides and other experiences.

Disney, who did not announce plans for reopening the parks, declined to comment on this story.

Recently, executive chairman Bob Iger said that checking the temperature of guests at Disney park entrances could become routine. According to a source briefed on Disney's thinking, among other plans under consideration: Rides like the Space Mountain roller coaster could stagger guests in every "rocket" to enforce social distancing. When they can go on a ride or at a restaurant to eliminate lines, guests could be notified via app or other technology.

Staff, known as cast members, and may require guests to wear masks. But in true Disney fashion, it would be fun to have employee masks, not scary, the source said.

Disney started online sales of face masks featuring Mickey Mouse, Baby Yoda and other characters on Thursday and said profits of up to $1 million would go to charity.

Masks, now commonly worn across China, are ubiquitous in the shopping district outside of Shanghai Disney, where workers disinfect a playground at noon and 3 p.m. for 5- to 12-year-olds. Everyday. According to Shanghai Disney website, temperature checks are mandated by local regulations.

During an initial reopening phase, business and political leaders in Florida, home to Walt Disney World, floated ideas such as capacity limiting at all theme parks.

The question being asked by health experts and financial analysts is whether any of these measures will suffice to protect employees, guests, or the bottom line of Disney's.

Social distancing might have come at a steep price.

UBS downgraded its rating on Disney in April and lowered its division profit estimates in fiscal 2020 to $500 million and 2021 to just $200 million compared with $6.8 billion in 2019.

According to the firm, Disney parks need to run at approximately 50 percent of the capacity to be profitable.

Investors will see a more comprehensive coronavirus impact when Disney releases its second quarter results on May 5; Comcast said on Thursday that if its Universal Studios parks remain closed for the entire second quarter, the company will suffer earnings of approximately $500 million before interest, tax, depreciation and amortization.

Financial analysts for Disney have forecast reopening dates ranging from June to Jan. 1. Governors will set guidelines in California and Florida, where President Josh D'Amaro of Iger and Walt Disney World Resort will sit on reopening task forces for the state. The rest lies with Disney.

Although Disney and other large venues face an unprecedented challenge to protect guests from an airborne virus that can be easily spread, experts and a former executive pointed to their crowd handling experience.

According to the Themed Entertainment Association more than 157 million people visited Disney Parks in 2018.

"If anyone can figure it out, Disney will," said the MR-ProFun founder Dave Schmitt, a theme park consultant.

There are limits for the safeguards. Temperature controls won't catch every infected person and most vaccines aren't 100 percent effective, said Dr. Megan Murray, a Harvard Medical School global health professor.

Even so, according to a Reuters / Ipsos poll conducted from April 15-21 a vaccine would provide some reassurance for park-goers. While a fifth of the respondents said they would attend an amusement park, theme or water park whenever they reopened, about 30 percent would go if there were a vaccine available. The poll, which surveyed 4,429 American adults, noted that there may not be a vaccine available for more than one year.

Disney counts on loyal fans to get this right. Chicago resident Kelly Alexis, 50, has been to Disney resorts 35 to 40 times and plans to go with her family to Disney World in October when the park is open.

"It's just the feeling they're doing things so perfectly and they're going to be taking every precaution," Alexis said. "They will not want an epidemic at Disney, where everyone gets sick. They would never have allowed this to happen.