Opening theme parks in Central Florida after months of inactivity has not been easy. Operations scale now the demand falls short of expectations will be even harder.
Savings, unlocking less popular attractions, and reducing working hours were the constant diet of grim news that has trickled down the sector in recent weeks. The last jab came on Friday afternoon then Comcast‘s (NASDAQ: CMCS.A) Universal Orlando informed guests with upcoming stays at two of its seven on-site resorts that the hotels will stop operations next week.
Universal Orlando will close the Sapphire Falls and Aventura properties on August 21st. Existing bookings at the two hotels will shift to one of the other resorts that will remain open as Comcast trades its accommodations.
Image Source: Disney.
Summer bluffing
We’re nearing the end of what has historically been the hot summer travel season, so one can argue that it’s no surprise to see Central Florida theme parks in retreat. Area schools are doing the new school year again – virtually at least – and that has usually marked a time for the iconic gated attractions to shrink ahead of the popular Halloween festivities that will not happen this year before Disney (NYSE: DIS) and Comcast’s Universal Orlando.
However, it is also clear that theme parks are hoping for a better view at this point. Universal Orlando would not have booked guests at the two soon-to-be-closed hotels if it did not think they would be running at sustainable occupancy levels.
This is not the first sign that Comcast’s once thriving theme park resort has lost steam since the launch of the new one in June. A week ago, six of their less popular rides and shows were temporarily shut down. It also introduced an aggressive promotion where people who buy the equivalent of a one-day ticket could return by December 24th.
It’s not just the resort of Comcast due to some shrinking pain in the retreat. Disney’s quarterly revenue gains earlier this month came with a statement that the media giant’s theme parks did not live up to its internal projections.
“While Walt Disney World is operating at a positive level of net contribution, the uptick we see from the opening is less than we originally expected seeing the recent rise in COVID-19 cases in Florida,” said CFO Christine McCarthy during the call.
The thing here is that Florida experienced a resurgence of coronavirus in the weeks leading up to the re-emergence of the mid-July global war, but the case counts have been declining every week since its turnstiles unlocked. COVID-19 concerns should become easier instead of intensifying in the nearly five weeks since Disney World re-entered the business.
The country’s two largest theme park operators are struggling with the new standard. For now, it’s a small step back. Disney opened its parks in Florida with limited hours, and next month they will see their operations contract even more. Comcast closes attractions and hotels temporarily. Things are not perfect, but an important difference is that both companies mentioned in their recent earnings call that the parks will lose more money if they stay close.
The recovery process would have its hiccups. We are here now. What Disney and Comcast do next will go a long way in terms of how quickly things get back on track.
