A couple of notable things are happening at Walt Disney's (NYSE:DIS) resort in Florida on Thursday morning. Disney began selling single-day tickets and booking hotel reservations again, its two largest sources of generating new revenue for its theme parks business, which has been shuttered since mid-March.
Disney temporarily suspended new ticket sales and resort bookings ahead of announcing a mid-July resumption of its theme park operations back in May. Nixing new admissions and lodging reservations was a move to help balance consumer demand with the limited supply of slots available in the initial weeks if not months of reopening this summer. In short, Disney World is back to making money again.
A whole new world
The other new development on Thursday is that the first non-cast member guests began to experience Disney World's theme parks. Annual pass holders were offered previews of the Magic Kingdom and Disney's Animal Kingdom on either Thursday or Friday. The available spots were spoken for within an hour, a strong indicator that the biggest fans aren't discouraged by the rapidly rising pace of COVID-19 cases in the Sunshine State.
Thursday's previews were generally more crowded than the two preview days set aside earlier in the week for Disney World employees and their guests to get a taste of the new normal. It's a fair bet that guest counts will also be picking up on Saturday when the first two Disney World parks officially reopen. Epcot and Disney's Hollywood Studios will start greeting guests again early next week.
A lot is at stake in these next few days. Disney has gone to extreme measures to make the theme park experience as safe as possible, but there will be hiccups. You don't suspend parades, fireworks, and other shows that typically attract large audiences while at the same time reducing hourly capacity on rides to achieve social distancing without ruffling some feathers. Cast members had generally glowing reviews of their visits on Tuesday and Wednesday, but now we're going to see the staunchest critics chime in as they get to kick the tires.
No one is expecting the theme park experience to be better right now. Disney shareholders aren't expecting a return to profitability for the segment anytime soon. Safety is paramount. Disney World making sure it's not a hotbed of COVID-19 spread is more important than staying out of the red financially through the next few months.
Disney is fortunate to be a well-diversified media giant. It can run its parks as a loss leader to give its fans a diluted spoonful of normalcy in these challenging times. Disney knows that other segments including its media networks, Disney+, and consumer products licensing deals can help shoulder the burden that its theme parks business -- historically its steadiest producer -- has typically carried during lulls elsewhere.
Entertaining consumers is what Disney has excelled at for decades, and for the first time in months, it's now entertaining them in person. A lot can go wrong this month. This will be a lost summer financially for Disney's theme parks business, but it's the first necessary step to getting back on track. It's a great big beautiful tomorrow, but Disney will have to get through today to get there.