Disney theme parks facing 'lost year' of revenue in 2021, analysts predict

[Chef Mickey]

Have you tried to book a cruise? The travel industry is not just lift, nor is it just Disney. Again, not disputing that people want to travel. Not saying Leisure Travel won't bounce back in a significant way. Your assessment about the industry as a whole is flat out wrong.



Markets have said whatever Jerome's "magical printing machine" has told them to say. Recently I've seen a few articles on Minsky. I think the up is inflated (you see the illogical push on Tech two weeks ago? And the pull back last? Nobody really knows.) and Armageddon is an overplayed hand. Truth will be somewhere in the middle. Market is not a projection of now, it's a projection of what has yet to be - based on perception. And because there is uncertainty, the market over inflates, and exacerbates the loss.

I know you're a Wharton guy. But numbers don't always equate to sentiment. In these types of times things move irrationally.

No, I disagree. Travel absolutely has objectively improved over March, agree? No one was even flying except for critical reasons. That's not the case anymore. Cruising will likely be one of the last to improve. I didn't want to cruise before the virus.

Earnings have been largely good. The Fed of course has an impact, but this isn't 1999. Our companies have real earnings to back up valuations. With interest rates this low, stocks are the only game in town.

I am telling you exactly that. Markets know the turnaround is and will happen. In March, markets correctly prepared for a doomsday scenario where things stay closed for indefinite periods of time. That is OFF the table, pending some new development.

Whether the vaccine comes in November (ha ha) or a couple months later is virtually immaterial. The fact a vaccine is imminent takes the hell freezing over scenario off the table. The struggles will be sector based, such as cruising or pockets of travel being weaker.

This is still going to be like the flu vaccine. Some will take it, some won't...and it will take a lot more deaths, cases, or both to get people to be serious about it. Without a vaccine, numbers are trending well at the moment. The next economic pain will come from something else, IMO. But I'm happy to have gotten the opportunity to add more DIS at $80 and S&P at 2500. Irrationality is great. I knew (as did anyone who could remain objective) that a respiratory virus wasn't going to be the end of markets. I was buying every day.

 

["El Gran Magnifico"]

No, I disagree. Travel absolutely has objectively improved over March, agree?

We'll agree to disagree. Parts (niches) of travel have seen some improvement. Take a look at AMEX GBT and tell me if they've improved. Ask Cruises and Maritime Voyages if they've improved.

You're talking Leisure. And I'm surmising it leans heavily on Disney or your being able to get a flight somewhere. And I get it - some parts of Leisure Travel have seen some level of improvement.

It though doesn't speak to the general health of the Industry. There was a bloodbath at Marriott. Interval and RCI the two largest players in the exchange industry are cutting right and left. I think the disconnect here is that you are equating people traveling again to an overall health check of the industry. People will travel. The Industry is not healthy.

 

[Chef Mickey]

We'll agree to disagree. Parts (niches) of travel have seen some improvement. Take a look at AMEX GBT and tell me if they've improved. Ask Cruises and Maritime Voyages if they've improved.

You're talking Leisure. And I'm surmising it leans heavily on Disney or your being able to get a flight somewhere. And I get it - some parts of Leisure Travel have seen some level of improvement.

It though doesn't speak to the general health of the Industry. There was a bloodbath at Marriott. Interval and RCI the two largest players in the exchange industry are cutting right and left. I think the disconnect here is that you are equating people traveling again to an overall health check of the industry. People will travel. The Industry is not healthy.

I said cruising will take time. There really doesn't have to be agree to disagree. I can pull up data that shows you the travel improvement in airline demand, hotel occupancy, and vacation bookings. I'm just too lazy and it's plain to me. I mean, Disney wasn't even open in Q2, so just being open with visitors is objective improvement.

I also didn't say the industry is "healthy." I said it's improving and doing so after just 5 months since lockdown. Things are moving far more swiftly than any doomsdayers predicted. I mean, I was just on a 100% full flight and at Disney. Unheard of in April.

 

["El Gran Magnifico"]

I said cruising will take time. There really doesn't have to be agree to disagree. I can pull up data that shows you the travel improvement in airline demand, hotel occupancy, and vacation bookings. I'm just too lazy and it's plain to me. I mean, Disney wasn't even open in Q2, so just being open with visitors is objective improvement.

I also didn't say the industry is "healthy." I said it's improving and doing so after just 5 months since lockdown. Things are moving far more swiftly than any doomsdayers predicted. I mean, I was just on a 100% full flight and at Disney. Unheard of in April.

It has to improve. There really is no where else it can go.

 

["El Gran Magnifico"]

I said cruising will take time. There really doesn't have to be agree to disagree. I can pull up data that shows you the travel improvement in airline demand, hotel occupancy, and vacation bookings. I'm just too lazy and it's plain to me. I mean, Disney wasn't even open in Q2, so just being open with visitors is objective improvement.

I also didn't say the industry is "healthy." I said it's improving and doing so after just 5 months since lockdown. Things are moving far more swiftly than any doomsdayers predicted. I mean, I was just on a 100% full flight and at Disney. Unheard of in April.

I know you said you've been recently. I was there the week prior to Labor. I loved the fact that there were no FP and nothing was over a 20 minute wait except 7DMT. Walked on to Soarin' the 10 minute wait time was due to the time it took to walk the queue.

I kinda liked it.

 

[Stitch826]

I do think the worst is over. Disney should be very happy that they have all those DVC rooms. I have to pay for my points and use them or lose them. In any case all of the rooms provide a profit to Disney and guests to the parks. WDW will be profitable in the next physical year starting in October. The vaccine should be out in large quantities in months and people will slowly start vacationing in Spring. The big thing to understand is that local and state governments have been requiring their employees yo work from home. As a result my friends who still work for the State of NJ have used none of their vacation time and are allowed to carry over more that the normal 1 year of time to 2021 but they will have to use it. They have also saved money by not having to commute. They will be vacationing in 2021 and many I know will visit WDW and Universal.

Exactly. I have used and plan to use none of my vacation days this year. That means going into next year, I will have almost five weeks available. Having not had a vacation since last October, I will certainly be back at Disney next year as soon as cuts are restored.

 

[Chef Mickey]

I know you said you've been recently. I was there the week prior to Labor. I loved the fact that there were no FP and nothing was over a 20 minute wait except 7DMT. Walked on to Soarin' the 10 minute wait time was due to the time it took to walk the queue.

I kinda liked it.

Not going to lie, I liked it. I have already been there 22 days since July. Looking back, the last 10 days were way more crowded than the July 11-21. It's already building.

 

["El Gran Magnifico"]

Not going to lie, I liked it. I have already been there 22 days since July. Looking back, the last 10 days were way more crowded than the July 11-21. It's already building.

I stayed at Gaylord. Was a little hesitant about on-property (due to NBA / Limited amenties). Well, take that back. I originally booked Hilton on Hotel Plaza. Got cancelled 'cause they didn't re-open in time - So I went with Gaylord. It was pretty much empty. Ventured out to Alehouse on IDrive to catch the Heat game. It was me (my family of 4) and about 10 others there.

This was Soarin'

 

[Lilofan]

I stayed at Gaylord. Was a little hesitant about on-property (due to NBA / Limited amenties). Well, take that back. I originally booked Hilton on Hotel Plaza. Got cancelled 'cause they didn't re-open in time - So I went with Gaylord. It was pretty much empty. Ventured out to Alehouse on IDrive to catch the Heat game. It was me (my family of 4) and about 10 others there.

This was Soarin'

View attachment 497626

That's crazy. That building is empty! How can WDW survive?

 

["El Gran Magnifico"]

How can WDW survive?

Because we'll all go. We're talking reduced crowds - It's not Wallyworld. Disney will be just fine. It just might be a bit different. Disney making it out of this is the least of my concerns. I'm just hoping Legoland does ('Cause I love that place).

 

[Chef Mickey]

I stayed at Gaylord. Was a little hesitant about on-property (due to NBA / Limited amenties). Well, take that back. I originally booked Hilton on Hotel Plaza. Got cancelled 'cause they didn't re-open in time - So I went with Gaylord. It was pretty much empty. Ventured out to Alehouse on IDrive to catch the Heat game. It was me (my family of 4) and about 10 others there.

This was Soarin'

View attachment 497626

What day was that? Only time I saw it that was was mid July. It was not like that this week, for sure. I had to wait about 20min for Soarin' in the afternoon.

 

[Sirwalterraleigh]

Scorp,

I appreciate your gusto...but it just doesn’t matter.

This is a persona...every single thing is brought back to wdw...going to Disneyworld, promoting disneyworld, and talking about how great Disney world is.

Somebody is “a fan”.
That’s ok for me until it enters unquestioning excuse land...and that’s sadly where it goes

No one on earth outside of the Florida board of tourism is saying that travel is “back”...or even predicting it will soon?

What have we heard from TWDC? Not a little bo peep...not even for positive Wall Street PR

And yet that case is trying to be sold here...devoid of all analysis of the issues at hand.

 

["El Gran Magnifico"]

What day was that? Only time I saw it that was was mid July. It was not like that this week, for sure. I had to wait about 20min for Soarin' in the afternoon.

Was a Wednesday. In all Fairness, it was about 30 minutes after gates opened. It did get up to a 15 min wait (according to the app - at certain points - but not much more). In talking to CM's (which I did frequently - 'cause any insider info no matter how detached it is could be valuable) - they said they expected Labor Day Weekend to be much more crowded. And I think that - that was proven to be the case.

 

[Giss Neric]

I'm okay with them increasing capacity in the parks to help, but I hope their social distancing and masks enforcement is still full force.

So far people are complying but as we all know people will take advantage of every situation, especially if no one is monitoring.

 

[Chef Mickey]

Was a Wednesday. In all Fairness, it was about 30 minutes after gates opened. It did get up to a 15 min wait (according to the app - at certain points - but not much more). In talking to CM's (which I did frequently - 'cause any insider info no matter how detached it is could be valuable) - they said they expected Labor Day Weekend to be much more crowded. And I think that - that was proven to be the case.

Actual Labor Day weekend felt fairly crowded to me...definitely Friday, Saturday and Sunday...thinning Monday.

 

[HongKongFooy]

""Walked on to Soarin' the 10 minute wait time was due to the time it took to walk the queue.""


Something doesn't look right with that.; it looks like a bizarre way of defining "wait".

 

[Lilofan]

""Walked on to Soarin' the 10 minute wait time was due to the time it took to walk the queue.""


Something doesn't look right with that.; it looks like a bizarre way of defining "wait".

I have also noticed when wait times are posted for example 30 min, it's actually less by a few minutes sometimes.

 

[thomas998]

No, I disagree. Travel absolutely has objectively improved over March, agree? No one was even flying except for critical reasons. That's not the case anymore. Cruising will likely be one of the last to improve. I didn't want to cruise before the virus.

Earnings have been largely good. The Fed of course has an impact, but this isn't 1999. Our companies have real earnings to back up valuations. With interest rates this low, stocks are the only game in town.

I am telling you exactly that. Markets know the turnaround is and will happen. In March, markets correctly prepared for a doomsday scenario where things stay closed for indefinite periods of time. That is OFF the table, pending some new development.

Whether the vaccine comes in November (ha ha) or a couple months later is virtually immaterial. The fact a vaccine is imminent takes the hell freezing over scenario off the table. The struggles will be sector based, such as cruising or pockets of travel being weaker.

This is still going to be like the flu vaccine. Some will take it, some won't...and it will take a lot more deaths, cases, or both to get people to be serious about it. Without a vaccine, numbers are trending well at the moment. The next economic pain will come from something else, IMO. But I'm happy to have gotten the opportunity to add more DIS at $80 and S&P at 2500. Irrationality is great. I knew (as did anyone who could remain objective) that a respiratory virus wasn't going to be the end of markets. I was buying every day.

You've managed to cherry pick the good news in the markets. The reality is there are still lots of companies that are no doing well and many that will end up DOA when the dust settles.

Worse still you've ignored some big problems. Many people are still unemployed, they aren't homeless yet because evictions have been put on hold, but that doesn't mean the mortgage and rent bills aren't building up. When the moratorium on evictions ends you're going to see a massive wave of homelessness which is going to pull down the economy even more. You've also got lots of people that will never be able to go back to the jobs they had before all this happened because the places they worked for will not be around, many will be unemployable until they get retraining.

Then there is that little nagging multi trillion dollars debt the government took on when they started handing out free money because of the pandemic, that is going to result in higher taxes what will impact everyone's ability to spend money.

You did a good job of just throwing out some good news that you were experiencing but the economy doesn't just go by the people that are moving along unscathed, it is based on everyone and not everyone is doing well or will be doing well in 6 months time.

Lastly, you've assumed the vaccine will exist and will be effective. It may not, sure trials are on going but who knows what whether they will work long term or will be safe enough or effective enough to help.

 

[Paper straw fan]

It's a clickbait story.

"Analysts Predict" tells you all you need to know. - Who are the analysts proclaiming the "lost year"? And what data are relying on to make said prediction? All I see are some "Deutsche Bank Analysts" referenced. What's their track record?

...Anybody on this board could have authored that article with just as much credibility.

That Fox News (business) is putting this story out is about all you need to know as far as the legitimacy of the article.

 

[Schweino]

They were profitable in a quarter with zero US park operations and did almost $12B in revenue.

Profit is already here. The build back up to profit of old is the only question, but that will happen of course in time.

The Disney Parks and overall Disney brand are intact. No reason they shouldn’t be. A vaccine ends this quickly and many are coming. In a year, Covid will be in our rear view mirror and the Travel industry will flourish again. Other industries are already recovering. A tough 12-18 months just gives good businesses like Disney a chance to get even better. This is nothing systemic or long term. It’s the virus and nothing else.

No theaters might be a blessing for Disney+ and testing alternate channels for content. Theaters will be back, but Mulan has already shown it can do well without theaters. The stock was up on the success of Mulan to Disney+. That’s the future for Disney anyway.

I think the profit remains to be seen. Their Q3 earnings they had a net loss of almost $5b, not a profit. Granted, that has to do with Fox acquisitions they say, but I am way to lazy to go digging into their non-gaap/gaap comparisons to find out how much of that is really true.