Please ensure Javascript is enabled for purposes of website accessibility

Disney World, Rivals Shine on Labor Day Weekend

By Rick Munarriz - Sep 7, 2020 at 1:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Central Florida is having a busy holiday weekend.

It's been a busy holiday weekend at Central Florida's theme parks. Crowds and long lines are historically the norm in this industry over Labor Day weekend, but in this very unusual year after a very unusual summer, it has to feel good for Walt Disney (DIS -2.14%), Universal Orlando parent Comcast (CMCSA -1.10%), and SeaWorld Entertainment (SEAS -2.18%) to give the impression that they're succeeding.

All of Universal Orlando's theme parks had to turn guests away a couple of hours after opening on Saturday. They had hit their daily guest capacity levels, something that hasn't happened at Comcast's Universal Studios Florida and Islands of Adventure since they reopened to visitors three months earlier. The same scenario also played out on Sunday. Social media reports out of SeaWorld Orlando and all four of Disney World's theme parks also played up substantial crowds, and long wait time for rides on their apps bear that out. At first glance, it may seem as if the industry is back to business as usual, but shareholders and theme park fans may not want to celebrate too soon.

Manta roller coaster at Sea World Orlando as it skims the waterline.

Image source: SeaWorld Entertainment.

The ride stuff

It's important to frame this weekend's success in the proper context. Universal Orlando parks filled up over the weekend, but all of the area attractions are operating on reduced capacity levels in an effort to encourage social distancing. The wait times for rides across all parks were high, but throughput is down substantially as vehicles are getting sanitized throughout the day in some cases, and all parks are spacing out passengers so a lot of empty seats figure in the hourly capacity mix.

There's also still no sign that the industry isn't retreating. Many employees have been furloughed since reopening. Several on-site hotels at Disney World and Universal Orlando remain closed, a strong indication that it's locals -- who spend far less on a day at the park than out-of-towners -- at the parks. Comcast's Universal Orlando temporarily closed six of its least popular attractions last month. 

There are also longer-lasting implications. SeaWorld Entertainment isn't going to open any of the coasters it was supposed to introduce in 2020 until next year, and that will push out future expansion projects. Disney announced in last month's earnings call that capital expenditures for this fiscal year will be $700 million lower than last year, largely the handiwork of lower investments at its domestic parks and resorts as it delays and in some cases nixes future rides and resorts. 

The pandemic's toll may be even heavier at Universal Orlando. Comcast announced earlier this year that it would halt construction of the Epic Universe theme park that was supposed to open in 2023. The gated attraction isn't lost forever, but it may wait until not just the eradication of COVID-19 but a turnaround to this thorny recession before getting that development back on track. In short, even 2024 may be optimistic at this point for the potentially bar-raising Universal Orlando park to open.

For now we can raise an "I survived" glass to the industry for a holiday weekend well done. No park is operating profitably, and a potential third spike in COVID-19 cases in the state could derail Central Florida's recovery. However, the appetite for theme park escapism is still alive -- and for now that will have to be enough. 

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 October 2020 $125 calls on Walt Disney. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$120.05 (-2.14%) $-2.62
Comcast Corporation Stock Quote
Comcast Corporation
CMCSA
$38.19 (-1.10%) $0.42
SeaWorld Entertainment, Inc. Stock Quote
SeaWorld Entertainment, Inc.
SEAS
$53.94 (-2.18%) $-1.20

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
397%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.