Tuesday morning is a pretty big deal for Disney's (NYSE:DIS) domestic theme parks. In Florida, Disney World loosened its mask guidelines. Fully vaccinated guests may now roam freely without face coverings throughout the park.
The entertainment giant joined the operators of smaller theme parks and regional amusement parks in relaxing its mask rules last month in accordance with revised U.S. Centers for Disease Control and Prevention guidelines, but until the turnstiles were unlocked Tuesday, Disney World was still requiring folks to mask up inside buildings and while standing in attraction queues, unless they were actively eating or drinking while stationary. Now, the requirement for masks is limited to the mass transit bus, monorail, and boat options by which guests get to and from the parks themselves.
Three time zones away, the changes are even more pronounced. Get excited, shareholders.
A whole new world
At its California resorts, Disney is taking its biggest steps since the end of April, when it reopened the parks solely to in-state residents. Disneyland and the adjacent Disney's California Adventure are now open to out-of-state visitors. The company is also lifting its social distancing guidelines for guests.
Both moves are huge in terms of increasing the pool of potential visitors, as well as the number of guests that the parks can serve at any given time. Disneyland had initially limited daily admissions to just 25% of normal park capacity. The need to provide space for social distancing meant keeping visitor counts in check, and the hourly throughput of rides and attractions also had to be scaled back to accommodate those precautionary measures.
Disney World and Disneyland are continuing to cap daily visitor counts, and are requiring would-be guests to secure a limited number of park reservations available on any given day. However, now the new standards are in place to eventually get back to normal operations.
Disneyland should get an immediate boost from allowing folks from outside of the Golden State to return for the first time in 15 months. Locals aren't going to spend as much on food and keepsakes as folks coming to the resort for a rare or once-in-a-lifetime visit. And people who must travel further to get there are more likely to book stays at one of Disneyland's three on-site hotels.
Happily ever after
The turnaround will take some time. Investors may appreciate the fact that many travel and tourism stocks are trading at pre-pandemic levels again, but we're still not back to the point where we can party like it's 2019. Disney World's top rival -- Comcast's (NASDAQ:CMCSA) Universal Orlando -- announced that it had greeted 11 million visitors since reopening a year ago. That's a big number, but it's less than half of the 23 million guests that the resort's three gated attractions are estimated to have entertained in 2019.
International travel restrictions are also keeping the most lucrative patrons away. However, every step back toward normal is important. The initial goal in reopening these parks was for the operations to not lose as much money as they would have if they had remained closed. As we head into peak summer travel season, the parks' new objective has to be returning to profitability. That may prove challenging as many operators are struggling to hire enough workers, but consumer demand for the product is clearly strong so far. The masks -- and the gloves -- are off. The theme park industry's ready to fight for turnstile clicks, and investors are looking forward to the ride.