The recent temporary closures have dropped theme park attendance to zero, but even more analysts are now predicting there could be a very long road ahead for Disney World and Disneyland — even after parks reopen or a vaccine is ready.
Earlier this month we reported on analyst predictions that it could take a full 18-24 months for Disney parks to return to pre-2020 attendance and profitability. Now, with stocks falling and tens of thousands of Disney employees furloughed, analysts are reiterating that theory, and suggesting even more detailed ways that the Walt Disney Company — and its theme parks — could be affected long-term by the fall-out.
Disney Stock Takes A Roller Coaster Ride Due To Low Crowd and Profit Projections
Until a vaccine becomes widely available, analysts are predicting significantly lower-than-average crowds for up to the next two years after the Disney parks reopen. And according to Forbes, stock projections are taking a hit.
Disney’s stock pricing has been…well…on a roller coaster ride recently, with even more losses today. UBS analyst John Hodulik noted January as a possible opening date for the Disney theme parks, which is the latest projected opening date we’ve seen so far.
Hodulik also noted that “crowds are unlikely to return [to Disney theme parks] in full until there is a vaccine widely available,” prompting UBS and Credit Suisse to downgrade Disney stock to neutral from buy.
Referencing the downgrade, Credit Suisse analyst Douglas Mitchelson states, “…we expect a full rebound in theme park and Hollywood operations over time. However, near- to mid-term we expect Disney will remain in a more narrow trading range given a remarkable lack of operational visibility, expected severe cuts coming to street estimates…, and a now more equally balanced mix of positive and negative catalysts.”
In 2020 so far, the price of Disney shares are down 28%, compared to the S&P 500 index, which is down 12%. Analysts are hopeful for Disney’s long-term prospects, but unconvinced that a rebound will be quick.
Disney Theme Park Earnings Could Drop By 92% This Year
In 2019, Disney’s theme parks generated an estimated $6.8 billion dollars for the company. This year, UBS analysts expect that number to drop by 92%. And predictions for 2021 earnings have been as low as just $200 million — and that’s worldwide.
Overseas theme parks such as Shanghai, Hong Kong, and Tokyo closed even sooner than the U.S. Disney parks. Although Shanghai has started to reopen parts of the resort, all of the parks still remain closed.
“The way people visit theme parks will never be the same again.”
We’ve discussed previously here on DFB the many ways that Disney parks could change dramatically when they reopen. But we’re starting to see industry leaders predicting many of the same points. According to Forbes, theme park guru Dennis Spiegel has been quoted as saying “The way people visit theme parks will never be the same again.”
This takes into account the guest experience when the parks initially reopen, but also more long-term processes that may be put into place. According to Bob Iger in a recent interview with Barrons, we’ll see “more scrutiny, more restrictions.”
Guests could see mandatory temperature checks and other health screenings when the parks reopen (similar to those put into place in Shanghai Disneyland and implemented on Disney Cruise Ships before they were shut down) as hinted at by Bob Iger.
We asked our readers if they’d be comfortable with temperature checks to enter Disney World. Here’s what they said!
And even after reopening, we could see more long-term changes in the parks. From streamlining attraction boarding to wiping down ride vehicles between guests, things will likely be different. We may see ride modifications, changes to character meet and greets, limited capacity requirements in parks and restaurants, and other major changes to the way guests experience the parks.
But while these predictions are slowly starting to become more realistic, we still don’t have any confirmed details from Disney on the next steps for the parks. Now that Disney execs have joined the re-opening task forces for both Florida and California, we might begin to see some idea of what changes will be implemented when the parks resume their operations.
When do you think the Disney parks will have “normal” attendance levels again? Let us know your predictions in the comments below!