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US-POLITICS-BIDEN

A critical test of the entertainment economy’s reopening plans is set to take place as Disney begins allowing visitors to return to its Florida locations.

On Saturday morning, the company will reopen the Magic Kingdom and Animal Kingdom to visitors after an unprecedented <a href="https://www.washingtonpost.com/business/2020/03/12/movies-broadway-cancellations-coronavirus/" target=_blank>four-month closure</a> due to the pandemic. EPCOT and Hollywood Studios will follow shortly after, resuming business on Wednesday.

Disney’s parks in Tokyo, Shanghai and Hong Kong have all reopened in the past several months, and its Paris park is set to open next week too, as entertainment firms look to finesse a path through the summer of covid-19. The Florida reopenings, however, represent a more high-stakes move — an opportunity for Disney to start recapturing <a href="https://www.washingtonpost.com/business/2020/07/04/disney-july4-future-hamilton/" target=_blank>much-needed</a> revenue at home as well as a broader test of consumers’ willingness to leave their own.

But the effort comes with challenges, including a surge in Florida cases and objections from several constituencies.

More than 19,000 people have signed a <a href="https://sign.moveon.org/petitions/protect-our-magic-makers-don-t-open-theme-parks-until-it-s-safe" target=_blank>petition</a> calling on Florida Gov. Ron DeSantis (R) and the Walt Disney Co. to delay the opening. “While theme parks are a great way to relax and enjoy free time, it is a non-essential business; it is not fair to the people who work there to risk their lives, especially if they are at risk or have family members who are at risk,” the petition stated.

Actors’ Equity, the guild that represents some 750 performers who act in Disney shows, has also objected to the reopening. The group has <a href="https://deadline.com/2020/07/actors-equity-grievance-walt-disney-world-reopening-coronavirus-testing-retaliation-1202981379/" target="_blank">called for</a> testing for cast members, who they said would frequently be compelled to perform without masks at closer than six feet in park shows such as “Beauty and The Beast Live On Stage.” The company cited agreements it made with unions representing other park workers and said it would move forward without the actors.

Meanwhile, cases in Florida continue to surge. On Thursday the state saw 411 new hospitalizations due to the coronavirus, the most in more than three months, and 120 deaths, the most since the pandemic began, according to the<a href="https://www.covidmappingproject.com/states/florida" target=_blank> Covid Mapping Project.</a> Some 52 hospitals have now reached <a href="https://www.wfla.com/8-on-your-side/investigations/florida-coronavirus-52-hospitals-max-out-icu-capacity-as-cases-increase/" target=_blank>maximum ICU capacity</a>. More than 4,000 people have died of covid-19 <a href="https://www.clickorlando.com/news/local/2020/07/09/more-than-4000-people-have-died-in-florida-from-covid-19-here-are-the-latest-numbers/" target=_blank>in the state</a>, according to outside estimates.

On Friday the state reversed an earlier policy of withholding numbers and said that the number of current hospitalizations “with primary diagnosis of COVID” <a href="https://bi.ahca.myflorida.com/t/ABICC/views/Public/COVIDHospitalizationsCounty?%3AshowAppBanner=false&%3Adisplay_count=n&%3AshowVizHome=n&%3Aorigin=viz_share_link&%3AisGuestRedirectFromVizportal=y&%3Aembed=y" target=_blank>topped</a> 7,000.

While the surge in Florida cases has been most heavily concentrated in Miami-Dade County in South Florida, the county where the parks are located, Orange, hit a record of more than 1,100 new cases last weekend and as of Friday had <a href="https://bi.ahca.myflorida.com/t/ABICC/views/Public/COVIDHospitalizationsCounty?%3AshowAppBanner=false&%3Adisplay_count=n&%3AshowVizHome=n&%3Aorigin=viz_share_link&%3AisGuestRedirectFromVizportal=y&%3Aembed=y" target=_blank>489</a> hospitalizations, making it the fourth-most hospitalized of Florida 67 counties.

A Disney spokesperson declined to comment for this story. The chief medical officer for Disney Parks, Pamela Hymel, wrote in a <a href="https://disneyparks.disney.go.com/blog/2020/07/disney-parks-commitment-to-health-safety-measures/" target=_blank>blog post</a> this week that “As we continue the phased reopenings of our parks and resorts across the world, promoting health and safety for our guests, cast members, and the larger community is a responsibility we take very seriously.”

She outlined a host of safety measures, including requiring advance reservations, physical distancing in ride lines and temperature checks upon entry that the company hopes will protect and reassure visitors.

Disney will require guests to wear masks except in a handful of designated areas such as restaurants.

Fireworks and parades will also be halted, while many of the parks’ most popular attractions, including Space Mountain and Pirates of the Caribbean, will be open.

In normal times, it is rides like that that keep people pouring through Disney’s gates; the Magic Kingdom alone attracts an average of 57,000 visitors each day,<a href="https://www.ocregister.com/2020/05/22/what-an-attendance-cap-could-mean-for-crowded-disney-parks-in-the-covid-19-era/" target=_blank> according </a>to the Themed Entertainment Association trade group. But the capacity reduction, and the possibility of many consumers staying home, will cut significantly into Disney’s revenue, according to experts, who say operating the theme parks under these conditions is likely a money-loser.

“You have fewer people coming and then you have to hire many additional cast members for safety and cleaning — it’s probably double the payroll with far less revenue,” said Scott Smith, a professor at the University of South Carolina’s College of Hospitality, Retail and Sport Management who closely studies theme parks. “They’re going to be losing lots of money, but at some point you have to flip the switch. Not to be profitable for this year but to be profitable for the year after, and the year after that."

The financial consequences are high. During the July-September period last year Disney brought in $6.7 billion in theme-park revenue, according to<a href="https://thewaltdisneycompany.com/disneys-fiscal-full-year-and-q4-2019-earnings-results-webcast/" target=_blank> financial disclosures, </a>the most money of any of the company’s divisions. The unit also <a href="https://www.mynews13.com/fl/orlando/attractions/2019/11/07/revenue-up-at-disney-theme-parks-fourth-quarter#:~:text=%E2%80%94%20The%20Walt%20Disney%20Company%20on,growth%20at%20its%20theme%20parks.&text=Disney%20reported%20that%20Parks%2C%20Experience,17%20percent%20to%20%241.4%20billion." target=_blank>saw</a> $1.4 billion in profit for the period, a number that is expected to be drastically down this year, as is the company’s <a href="https://www.bizjournals.com/orlando/news/2019/11/07/disney-ends-fiscal-2019-with-solid-performance.html" target=_blank>annual total of</a> $26 billion in theme-park revenue.

Local officials, including Orlando Mayor Buddy Dyer, Orange County Mayor Jerry Demings and DeSantis have said they fully support Disney’s reopening plans. With tens of thousands of employees, Disney is the biggest employer in Central Florida.

As Florida parks will be throwing open their gates, the reopening of Disneyland and Disney California Adventure, the company’s two parks in Southern California, have been delayed indefinitely as Gov. Gavin Newsom (D) has declined to provide reopening guidelines in the wake of covid-19 surges in that state. Unions representing 17,000 employees at those parks had previously sent a letter to Newsom saying they objected to a now-scrapped July reopening.

But Florida parks pose a unique challenge compared to California because many visitors do not live in the Orlando area and instead drive or fly in from elsewhere. Experts say this could pose an additional hurdle to luring customers, and create potential health challenges as visitors return to their home cities.

Disney chief executive Bob Chapek has said the company will limit capacity at the parks but has not provided a number, saying it calculates the figure based on social distancing requirements. In Shanghai, the park has been operating below 30 percent, or 24,000 visitors, per local regulations.

Attendance totals in Florida could be high in the first few days and then diminish, as Smith said appeared to be the case from images posted to social media of Universal Orlando Resort, the smaller complex operated by Disney rival NBC Universal that reopened last month.

The Arthur F. Burns Prize for Foreign Reporting

Columbia University and Yeshiva University

Steven Zeitchik covers the emerging technologies that are transforming our lives – from cryptocurrency to the metaverse to AI to cutting-edge digital shifts still to come. He also has covered the business of entertainment. examining the industry's trends, challenges, issues and ideas.

Steven Zeitchik

washpost

Disney World opens in Florida Saturday amid covid-19 surge

the-washington-post

Kathleen Christiansen

Virus Outbreak-Disney

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