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Will Disney World's Top Rival Reopen First?

By Rick Munarriz – May 13, 2020 at 7:22AM

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Comcast's Universal Orlando announced that it will open its CityWalk entertainment complex days before Disney does. It could be a similar strategic footrace to the starting line when theme parks can reopen later this year.

Central Florida's defining theme parks aren't allowed to open just yet in the current phase of the state's recovery efforts, but The Walt Disney Company (DIS -0.75%) and Universal Orlando parent Comcast (CMCSA -2.25%) are making the most of the short leash that they have been given for now. With the state's restaurants and retail outlets able to reopen with social-distancing safeguards and pared-back capacity, Disney World and Universal Orlando are ready to start generating revenue for the first time since mid-March.

Disney World announced last week that it would reopen Disney Springs, the massive resort's shopping, dining, and entertainment complex, in phases, starting with letting third-party retailers and restaurants crack open their registers again on May 20.

Comcast waited until Tuesday afternoon of this week to make a similar announcement for Universal Orlando's CityWalk entertainment complex, but it's making sure that it grabs the first wave of theme park fans with cabin fever by opening select eateries and stores on Thursday. If this is the way that the two theme park rivals are approaching their mini-malls, one can only imagine how the race to reopen their actual theme parks will play out. 

Universal Orlando's Islands of Adventure, a panoramic view at dusk.

Universal Orlando's Islands of Adventure. Image source: Comcast.

You must be this patient to ride

Theme parks will be allowed to open in the second phase of the state's recovery plan, but there is no firm timeline for when that will be. It could take just weeks from the first phase, which rolled out on May 4, to get gated attractions' turnstiles clicking again if COVID-19 cases and hospitalizations show improvement. But it could take months (if not longer) if a taste of freedom this month sends infections in the Sunshine State skyrocketing higher. 

There will be attendance limits for the theme parks wishing to reopen in the next phase, capping guest counts at 25%, 50%, or even 75%. Shanghai Disneyland opened on Monday in China with an initial limit of 30% of the park's total capacity of 80,000 visitors. Smaller operators may believe that it's not worth the hassle to open in the next phase, especially given the safety masks, temperature checks, social distancing, and enhanced sanitation demands that will likely be part of the requirements. 

Disney and Comcast may not immediately open when they get the green light. They could've opened up Disney Springs and CityWalk much earlier this month, choosing instead to wait as long as two weeks to get going. But with so much to lose when it comes to their theme parks (and an awkward reopening a given no matter when they start entertaining guests again), it does make sense to rip that bandage off sooner rather than later. If coronavirus cases and hospitalizations hold steady here or continue to decline, what other signal could they use as a starter pistol? A vaccination, herd immunity, or total eradication isn't in the cards anytime soon. 

All it takes is one theme park giant to blink first. And if it became a tactical footrace just to see which player opened its entertainment complex first, you're not going to see either player hold back when they are likely already well prepared for the inevitable safeguards of getting back to business in the new normal. 

Rick Munarriz owns shares of Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool recommends Comcast and recommends the following options: long January 2021 $60 calls on Walt Disney and short July 2020 $115 calls on Walt Disney. The Motley Fool has a disclosure policy.

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