For 413 days, no visitors clicked through the turnstiles of Disney's (DIS 4.68%) original theme park. And even after the Disneyland resort in California reopened on April 30, admissions were limited to that state's residents.
But there's finally a light at the end of the Space Mountain tunnel for fans living in the other 49 states -- or anywhere else on the planet. The world's largest theme park operator announced on Wednesday that it will allow all guests into its gated attractions in Anaheim starting on June 15.
State of mind
Disney is a well-diversified media company, but its theme parks are a key part of its operations most of the time. In the company's fiscal 2019, the business segment that includes its global portfolio of theme parks accounted for 38% of total revenue and 45% of operating profits.
Naturally, it was a different story over the past year, when the pandemic required it to temporarily shutter those theme parks. Even now as they reopen -- only Disneyland Paris remains closed, and it's due to come back on June 17 -- the popular destinations are limiting guest counts and paring back ride capacities to allow for more social distancing. In short, don't book a trip to Southern California next month expecting to visit Disneyland without securing your tickets and park reservations first.
Disneyland in California initially restricted its visitor counts to 25% of its normal capacity. That's a sweet deal for the guests who get in -- they can enjoy a day at the theme park with reasonable wait times for attractions. But it's not so sweet for shareholders. Disney's Parks Experiences and Products segment hasn't returned to profitability yet, though at least in Florida, Disney World is no longer losing as much money as it was when the park was closed.
Things will get better from here. The Orlando park went from an initial capacity of 25% to 35% a few months after reopening. CEO Bob Chapek recently said that Disney World's daily admissions are now being capped at a level that's above 35% of normal capacity, but he didn't reveal the actual number of daily park reservations that the Florida resort is offering.
The timing couldn't be better for these two coastal resorts to be easing up on restrictions. We're heading into the summer travel season, which has always been a busy time of the year for Disney's theme parks. Now, with people itching to get away from home -- and in many cases, ready to spend the money they were unable to use on summer getaways last year -- premium-priced destinations like Disneyland and Disney World are obvious candidates to benefit.
A trip to Disneyland this summer was still going to be a hard sell for folks in much of the country, but once June 15 rolls around and people can walk through its gates without having to brandish a California state ID, we can expect a wave of ticket-buying and reservation-booking for the park's on-site resorts.
Disney shares recently took a hit after the media giant posted disappointing Disney+ subscriber growth. So it should be comforting for investors to see another revenue stream start picking up some of the financial load in the next couple of quarters.