A common complaint among diehard fans of Walt Disney's (DIS 1.09%) domestic theme parks is that they're not as magical as they used to be. It was a fair knock when the Disney World initially reopened during the pandemic two summers ago and Disneyland followed nine months later.
Disney parks opened with social distancing measures that made classic character meet-and-greets a clinical experience, as masked guests would be kept far apart from the costumed icons. Ride queues and even some of the vehicles would have plastic partitions to keep COVID-19 virus transmissions in check. It was not an ideal experience, but it was necessary for world's largest theme park operator to unlock its turnstiles in the new normal.
A lot has changed this week at Disney World and Disneyland. Disney returned to traditional character interactions on Monday, and if you're a fan of the media giant's gated attractions your social media feeds were likely filled with teary eyed fans hugging their favorite characters for the first time in more than two years. The final mandate on face coverings -- covering transportation on Disney vehicles including buses and the signature monorail -- was lifted at Disney World this week. Disney continues to recommend that unvaccinated guests limit potential virus transmissions by masking up, but the requirement itself is now gone. Disney is almost back to normal.
Image source: Walt Disney.
Avoiding the mousetrap
Parades, shows, and lodging choices have all been storming back in recent months, increasing the capacity of Disney theme parks. There are still pressure points. Requiring theme park reservations to keep visitor counts in check and prioritize high-value guests is a sore spot for regulars. Having to pay for access to expedited queues is another popular knock among traditionalists, but that's not going away. It's a new revenue stream for the House of Mouse. The arrival of Lightning Lanes also justifies keeping some annual passes around, as guests who refuse to pay for faster access to attractions are still helping monetize the platform by loading up the standby queues that make the premium ones more attractive.
NYSE: DIS
Key Data Points
It's not all pixie dust and mouse-shaped ice cream bars. A visit to Disney World is more complicated now than it was before. You can buy your way out of a good chunk of that learning curve by staying at a Disney-owned resort for extended access to the parks or paying for Genie+ and Lightning Lane to get on more rides, but even then it's still a lot harder now to coordinate a group of family and friends to be at the same park or experience at the same time.
One can only imagine how potent Disney's theme parks will be as moneymakers once it clears some of the remaining hurdles, but it's doing pretty well right now. It posted record revenue and operating profits at its domestic resorts in its latest quarter, and park availability routinely sold out through the recently concluded spring break multi-week holiday.
Some partisan critics may argue that Disney taking sides on Florida's "don't say gay" bill last month will be divisive, but the stock price doesn't bear that out. Disney shares closed at $131.75 on March 8, the day before CEO Bob Chapek initially spoke out against the legislation at Disney's annual shareholder meeting. The stock closed at $131.90 this Tuesday, before taking a hit on Wednesday along with all of the streaming service stocks.
It's still early to be gauging how all of Disney's moves over the past year and change will play out. However, with the experience itself improving you don't want to bet against the rebound at the media giant's flagship theme parks.
