The global reach of Walt Disney (DIS -1.10%) theme parks is not operating at full strength these days. With COVID-19 case counts climbing again in China, Shanghai Disney announced on Monday that it's temporarily closing its doors. The resort joins Hong Kong Disneyland, which suspended operations in January.
There's no timeline for when Shanghai Disney will get going again, but it's not as if proposed reopening dates are set in stone. Hong Kong Disneyland was initially supposed to be closed for just two weeks but now will remain dark until at least April 20. Disney-branded theme parks in Paris and Tokyo remain open, joining the media-giant's two domestic resorts in continuing to welcome guests through its turnstiles.
With new COVID-19 case counts rising on a global basis, it's easy to wonder if Disney World in Florida and the original Disneyland resort in California will suspend operations. Anything can happen, of course, but a closure scenario for Disney's stateside gated attractions isn't likely to materialize.
Image source: Disney.
It's a small world
Disney World reopened its four theme parks in Florida two summers ago after a four-month closure. The smaller, but iconic, Disneyland resumed operations in April of last year after a much longer shutdown.
Unlike some of the Disney parks overseas that have experienced pandemic-related interruptions since restarting in 2020, neither U.S. resort has had to shut down. The in-park safety measures have strengthened and loosened based on local conditions. Both resorts require guests to make advance reservations to cap visitor counts. A lot will likely have to happen for actual shutdowns on either coast.
Disney World and Disneyland remained open late last year, even with the omicron variant resulting in a larger spike of new and active cases than any previous incarnation. Improving vaccination rates in the U.S. helped boost the prognoses of those that came down with the virus, and daily deaths never approached peak levels of early 2021.
It may be too soon to size up how the new BA.2 variant will play out globally or nationally, but the consensus from both political camps is that businesses will continue to operate unless containment efforts fail to keep fatalities in check. Disney's theme parks -- like most national theme parks and regional amusement parks -- took a long time to regain momentum after the initial shutdown 24 months ago.
Disney's domestic theme parks achieved record revenue and operating income results in its latest quarter. It would be a lot easier for Disney to tighten masking and social-distancing requirements than to lock its turnstiles again, especially when it comes to wooing non-local visitors who spend weeks and months, if not years, planning their Disney vacations.
The theme-park industry has learned a lot over the past two years, but momentum is something that's always a challenge to regain after it's squandered. Health risks will always remain paramount, but if Disney's stateside parks were able to successfully remain safely open through the delta and omicron variants, it will take a lot for BA.2 to breach the operations.
Financially speaking, Disney can weather the storm of the current closures in Hong Kong and now, Shanghai. It's a well-diversified media stock. It also owns a substantial (but still minority) stake in those two resorts. It fully owns its resorts in the U.S. and France and collects royalties from its Tokyo resort under a licensing agreement.
Disney World and Disneyland are unlikely to close their doors anytime soon, but it doesn't mean that investors and theme-park enthusiasts alike can just ignore the BA.2 variant that's starting to spike overseas.
