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The Walt Disney Co. is targeting May 11 to reopen Shanghai Disneyland Park, which for months has been shuttered due to the coronavirus pandemic.
On a Tuesday earnings call, newly appointed CEO Bob Chapek gave an update on when he hopes the destinations will once again welcome guests. Disney estimates the impact on Parks, Experiences and Products segment, hit hard by the global shutdown, is approximately $1 billion due to lost revenue.
Chapek said the company is “evaluating a number of different scenarios to ensure a cautious, sensible and deliberate approach” to reopening parks. Density control, limited capacity and health measures are all on the table, he noted. The Shanghai park has a capacity of 80,000, but under government restrictions it must be capped at 30 percent, which is 24,000 visitors a day. Chapek noted the park would open with a lower capacity than the 30 percent and after a few weeks increase to the 24,000 figure.
The sprawling Chinese facility was the first of Disney’s parks to go idle. It has been shuttered since the end of January, when large entertainment venues across the Middle Kingdom, including virtually all of the country’s cinemas, began shutting down as part of the nationwide effort to contain the spread of the new coronavirus.
Hong Kong Disneyland across China’s southern border closed its doors around the same time, followed by Japan’s Tokyo Disneyland and Tokyo DisneySea near the end of February.
The domestic parks have been closed since mid-March when the novel coronavirus rocked the nation, forcing states to issue stay-at-home orders. Initially, Disney hoped parks would reopen by mid-April, but when it became clear that was not an option, the company closed the parks (and surrounding hotels and shopping districts) indefinitely.
Mass furloughs of park staff have resulted. Executives have not been immune, with Chapek taking a 50 percent salary reduction and other executives also taking pay cuts. Executive chairman and former CEO Bob Iger is forgoing his entire salary in response to the financial fallout from the coronavirus pandemic. (On the Tuesday call, Iger, who spoke first, thanked first responders, medical professionals and those who are social distancing.)
Ahead of Tuesday’s earnings report, several analysts reduced their longer-term financial forecasts for the company, with theme parks among the key reasons.
MoffettNathanson’s Michael Nathanson cut his Disney stock rating from “buy” to “neutral” due to the pandemic, citing “unrivaled earnings risk for the foreseeable future.” He now forecasts Disney’s theme parks revenue to drop 33 percent to $17.7 billion this fiscal year, with earnings before interest and taxes (EBIT) falling 65 percent to $2.4 billion.
Last week, an Orange County, Florida, task force shared its initial guidelines (will will change and evolve) for reopening Walt Disney World in Orlando, which included: all employees would be required to wear face masks; touchless hand sanitizer stations would be placed at each ticketing entry, turnstile, ride/attraction entry and exit; staff would be required to have a temperature check prior to their shift; and all railing and surfaces would be wiped down regularly.
Iger previously floated the idea that guests may be required to have their temperature checked before being admitted to the parks.
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