With a reasonably busy Labor Day holiday weekend fading in the rearview mirror, Central Florida's theme parks are starting to hunker down again. Walt Disney (NYSE:DIS) trimmed the operating hours at its four theme parks on Tuesday. Last month, Universal Orlando parent Comcast (NASDAQ:CMCSA) temporarily closed two of its on-site hotels and six of its least popular theme park attractions ahead of this seasonally slow time of the year.
Even SeaWorld Entertainment (NYSE:SEAS) -- the outlier of the bunch that has taunted its larger rivals by offering holiday fireworks and longer hours -- is paring back a little bit. SeaWorld Orlando is closing two hours earlier this weekend than it did last weekend.
None of these companies turned a profit at their theme parks this summer, and they aren't going to fare any better now that kids are back in school. Without the big-ticket Halloween events at Disney and Universal that typically save autumn from an even worse fate, the next few months will be rough. With initial hopes of a pandemic-licking vaccine out as early as late October dimming quickly, the industry is bracing for a challenging climate even after getting through the thorny reopening process in June and July of this year. Disney, Comcast, and SeaWorld Entertainment will make it out alive, but nothing comes easy at this point.
Florida itself is taking another shot at reopening its economy as a second surge in COVID-19 cases subsides. Businesses have started to reopen, and come Monday bars will be able to legally entertain guests again -- with social distancing norms in place and capacity limited to 50%. Earlier this month Florida Governor Ron DeSantis even hinted at lifting capacity restrictions for theme parks altogether. That may seem encouraging for shareholders and folks working in the amusements industry, but some things you can't fix with the stroke of a pen.
COVID-19 is still a threat, and that will hold the industry back in a few ways. For starters, it will keep many visitors -- particularly lucrative out-of-state tourists -- away. There hasn't been a single major outbreak tied to Central Florida's theme parks since they started to let guests back in more than three months ago, but it's hard for some to justify taking a chance with the country's pandemic death toll now approaching 200,000. The other coronavirus-related setback is that until the pandemic is eradicated, guests will likely have to continue to wear face coverings, and since ride capacity will be limited, visitors will have to space out within vehicles.
We also can't ignore the pesky global recession that is also pinching the state's economy. A lot of people -- including furloughed and laid-off theme park employees -- are still out of work. Folks are still hungry to get out of the house, but with movie theaters starting to open last month and bars opening up next week, there are cheaper forms of escapism now available.
The good news is that the major theme park operators aren't going away anytime soon. Disney and Comcast have much larger media businesses that are picking up some slack for their struggling theme park and movie studio businesses. Disney and Comcast will turn out healthy overall profits this year. SeaWorld Entertainment isn't as fortunate. It has all of its eggs in the same aquarium. This could also be why it's more willing than its larger competitors to take chances, like hosting boozy weekend festivals that run well past dusk.
The peak summer travel season is over, and it wasn't much to write home about. Autumn won't be pretty, and things could get uglier fast if a third surge in COVID-19 cases materializes across the state. It's not business as usual; it's business as unusual. But for now it will have to do for the three leading players as they bridge their way out of the new normal.