The world's largest theme park resort welcomed its first paying day guests on Saturday. It's been four months since Walt Disney (NYSE:DIS) shuttered its domestic theme parks, and Disney World in Florida joins its smaller in-state rivals that have been open for at least month.
Disney is taking a fair amount of ribbing on social media for resuming operations. With COVID-19 cases, hospitalizations, and now deaths surging in Florida, it's not a good look. However, there's more going on here than just the optics of unlocking turnstiles in the middle of a pandemic. Disney World is doing the right thing because it went about this the right way. Let's go over the reasons the media giant is opening right now.
1. Theme parks are not a hotbed of contagion
Theme parks in Central Florida have been open for nearly six weeks. Media reports would be buzzing with stories of folks contracting COVID-19 following a day at the theme park if it was a problem. Instead we're hearing about bars, house parties, and church gatherings with relaxed face covering requirements as the reported culprits for the spike. Florida's surge is commonly tied to the late June relaxation of bar openings across the state and the end of the virtual school year earlier in June that resulted in an uptick of in-person social events.
Theme parks are a safe and largely outdoor diversion when social distancing norms are embraced and enforced. Disney World was able to watch what worked and what didn't for local peers including SeaWorld Entertainment (NYSE:SEAS) and Comcast's (NASDAQ:CMCS.A) Universal Orlando. All of them require protective masks and temperature checks. All of the queues have floor markings to keep parties at least six feet apart, and even ride vehicles are being loaded accordingly. The individual players are doing more than that.
- SeaWorld Orlando is wiping down its coasters between rides.
- Comcast's Universal Orlando is squirting riders with hand sanitizer before getting on ride vehicles.
- Disney World has Plexiglas throughout switchback queues, and even on some attraction vehicles to separate parties.
I've been to Legoland Florida once, Universal Orlando five times, and SeaWorld-owned parks three times since the gated attractions started to reopen. I was at a Disney passholder preview for Disney's Animal Kingdom on Friday and the official opening of the Magic Kingdom on Saturday. It's not safer than just staying at home, but I don't think I'm playing Russian roulette with my health. I felt considerably more secure in all 11 of those visits than when I head into a supermarket, hardware store, or any other essential retailer or service provider that isn't doing half of what theme parks are doing to keep their customers and employees safe.
I get it. Theme parks aren't essential services. No one needs to ride Space Mountain or spoon down a Citrus Swirl. However, ridiculing an industry that has gone above and beyond recommended guidelines -- waiting months to get it right -- is misplaced at this point. Shanghai Disneyland has been open for more than two months. The pandemic there continues to shrink.
2. Jobs are essential
Disney World is the state's largest single-site employer, and furloughing 77,000 cast members in April was rough. Many of those displaced workers are now back on the payroll. This won't necessarily be a fairy tale ending, though. SeaWorld, Comcast's Universal Orlando, and Legoland Florida have trimmed their payrolls in recent weeks.
The media giant is stacking the deck in its favor by giving its more lucrative overnight resort guests and single-day ticket buyers priority over annual passholders in claiming the required reservations to visit its parks. Winning the cash flow game will give Disney a better shot than its rivals at adding to its headcount than subtracting from it this summer. Disney may be an easy target for opening as COVID-19 numbers increase, but it may not be long before the narrative shifts to framing the House of Mouse as a forward-thinking company that just put tens of thousands of Floridians back to work.
3. There was never going to be an ideal time to reopen
Saturday marked the end to a 117-day drought of official closures at Disney World. Should Disney have waited a few more weeks or months for Florida numbers to stabilize? Should the Florida resort play it safe and stay closed for a year or longer until a viable vaccine hits the market?
Plans take time to execute when you're as large as Disney. It had announced its mid-July resumption back in late May. It would take a long time to bring its workforce back and build out the infrastructure necessary to lead the retail universe in safeguards. Slamming the brakes as Florida COVID-19 cases started to climb in late June would mean retraining a new wave of cast members months later. It wouldn't have made a lick of difference. The negative headlines and social media hot takes would've come out then, too.
Disney had to get back into the game sooner rather than later. It was never going to please its biggest critics, and the data suggests that the move wasn't going to harm its biggest fans.