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COVID-19

Why Disney wants to reopen its theme parks now

Kristin Schwab Jul 8, 2020
Heard on: Marketplace
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You won't see crowds like this at the reopened Walt Disney World Resort in Florida. Jacqueline Nell/Disneyland Resort via Getty Images
COVID-19

Why Disney wants to reopen its theme parks now

Kristin Schwab Jul 8, 2020
You won't see crowds like this at the reopened Walt Disney World Resort in Florida. Jacqueline Nell/Disneyland Resort via Getty Images
HTML EMBED:
COPY

Cases of COVID-19 are surging in Florida, but that isn’t stopping Walt Disney World Resort in Orlando from reopening this weekend. Though the experience won’t quite be the same: no parades, no indoor shows and no hugging Mickey and Minnie.

So why reopen in the middle of a pandemic?

Disney may not be making enough revenue in other areas, even with the success of “Hamilton.” The company moved up the release date on its streaming platform Disney+. That’s because the platform is still pretty new and cheap — a subscription is $6.99 a month. And the company doesn’t expect Disney+ to become profitable for a few years.

That means it has to look elsewhere, but elsewhere isn’t looking so good. “Disney has multiple businesses and most of them are hurting right now,” said Stephanie Liu, an analyst at Forrester.

Disney’s brightest spot this year was supposed to be its live-action remake of “Mulan.” But with many movie theaters closed, the company has suspended its release. Meanwhile, there aren’t many live sports playing on ESPN, and Disney cruises are suspended. But parks? “They have some more control over the experience and what reopening means,” Liu said.

The company also has experience managing a reopening during COVID-19. Its resort in Shanghai started welcoming visitors again in early May.

And for Disney, the parks are about much more than making money on standard admission, which costs $109 a day. The parks are Disney’s interactive PR tool, key to sustaining the brand. Once people visit the Magic Kingdom, they may be more likely to subscribe to Disney+, buy a stuffed toy at the Disney Store or, someday, see “The Lion King” on Broadway. 

“Parks is a big piece in the puzzle,” said Michael Smith, a professor of information technology at Carnegie Mellon University. “But I think it’s also a key part in the overall Disney experience.”

COVID-19 Economy FAQs

What does the unemployment picture look like?

It depends on where you live. The national unemployment rate has fallen from nearly 15% in April down to 8.4% percent last month. That number, however, masks some big differences in how states are recovering from the huge job losses resulting from the pandemic. Nevada, Hawaii, California and New York have unemployment rates ranging from 11% to more than 13%. Unemployment rates in Idaho, Nebraska, South Dakota and Vermont have now fallen below 5%.

Will it work to fine people who refuse to wear a mask?

Travelers in the New York City transit system are subject to $50 fines for not wearing masks. It’s one of many jurisdictions imposing financial penalties: It’s $220 in Singapore, $130 in the United Kingdom and a whopping $400 in Glendale, California. And losses loom larger than gains, behavioral scientists say. So that principle suggests that for policymakers trying to nudge people’s public behavior, it may be better to take away than to give.

How are restaurants recovering?

Nearly 100,000 restaurants are closed either permanently or for the long term — nearly 1 in 6, according to a new survey by the National Restaurant Association. Almost 4.5 million jobs still haven’t come back. Some restaurants have been able to get by on innovation, focusing on delivery, selling meal or cocktail kits, dining outside — though that option that will disappear in northern states as temperatures fall. But however you slice it, one analyst said, the United States will end the year with fewer restaurants than it began with. And it’s the larger chains that are more likely to survive.

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