Florida will continue to be the only place that you can visit a fully owned Walt Disney (NYSE:DIS) theme park in the near future. The original Disneyland in California has yet to reopen since closing in the wake of the pandemic more than 10 months ago. Over the weekend, Disneyland Paris announced that it's bumping its second restart date from Feb. 13 until at least April 2.
With the recent spike of COVID-19 cases in Europe, it's not entirely a surprise. Disneyland Paris opened alongside Disney World and Disney-branded gated attractions in Tokyo, Hong Kong, and Shanghai between late spring and early summer last year. The French resort shuttered its two theme parks in late October. It was hoping to reopen for two weeks during the peak Christmas holiday season but that didn't happen with coronavirus cases rising throughout Europe. Disneyland Paris is now only taking reservations for visits from April 2 onward, and naturally there's no guarantee that it will be able to open then, either. Running a theme park is a challenging endeavor in the new normal.
Stamping the passport
Theme parks are a big part of Disney's business in normal times. It's a segment that thrives during busy travel activity and economic expansion, but we're 0-for-2 on that front right now. Disneyland Paris is the only international resort that is fully owned by the media stock giant. Disney has significant but still minority stakes in Hong Kong Disneyland and Shanghai Disney. It doesn't own Tokyo Disney at all, but it does collect royalty and licensing fees and plays a part in designing new attractions.
Only Tokyo Disney, Disney World in Florida, and Shanghai have stayed open after restarting operations last year. Hong Kong Disneyland closed three times in 2020, and its turnstiles continue to be locked since the final shutdown on Dec. 2. It's waiting for health authorities give it the green light to get going again. Disneyland in California shows no signs of opening anytime soon, and last week it announced that it would be ending its annual pass program and refunding active pass holders.
The ups and downs of operations make it hard to plan a trip to a Disney theme park, but it's not as if the travel market in general is all that conducive with COVID-19 case counts mounting worldwide. Theme parks are relying largely on domestic and especially local visitors to keep the registers ringing.
Just half of Disney's six branded theme park resorts are currently open, but even they are operating on shorter leashes, with limited daily capacity levels and a checklist of social distancing and safety measures. Disney's theme parks are not presently profitable, but the plan right now is to be losing less money than if the attractions weren't open at all.
Investors aren't going to react to the extended downtime at Disneyland Paris, and not just because it houses two of the three least-visited Disney-branded theme parks. The huge success of Disney+ is driving the shares to all-time highs, even if the streaming service is accounting for just 7% of the revenue mix. The market is confident that the theme parks will bounce back once the pandemic abates, and in the meantime, homebound fans are staying close to the House of Mouse by subscribing to the premium streaming service. It's a welcome distraction -- in more ways than one.