China is operating more normally than what you mention here... I know Beijing zoo opened yesterday and from what I was told had a full crowd. A family I know was eating in a Japanese restaurant (in China) while I taught their daughter.
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Coronavirus and Walt Disney World general discussion
- Thread starter Parker in NYC
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donsullivan
Premium Member
The way things are going right now Disney doesn't have the money to green light anything- and doing so would be grossly irresponsible stewardship of the company. They are bleeding cash by the billions right now with almost nothing coming in the doors. With the exception of ABC, nearly every single division of the company is all but shut down. Spending money on anything other than staff and survival is not even going to be considered. Every project that hasn't actually started construction is likely being evaluated and prioritized to at a minimum be delayed and often cancelled outright.
TrainsOfDisney
Well-Known Member
Disney is always looking to the future. If the world governments are looking to reset the economy and give everyone spending money Disney may jump back up in the next year or two.
But if we are looking at a global economic issue.... Disney will have to take very drastic measures.
Shame they already cleared the land for the nature resort, that’ll be on hold. The starcruiser COULD open very differently than originally announced.
But if we are looking at a global economic issue.... Disney will have to take very drastic measures.
Shame they already cleared the land for the nature resort, that’ll be on hold. The starcruiser COULD open very differently than originally announced.
GoofGoof
Premium Member
Like others have said, this is really unprecedented. A regular recession isn’t even close to the same thing. Maybe 9/11 is the closest thing since that directly and heavily impacted people’s appetite for air travel but they still had guests who could drive in. This is a general reluctance to be around crowds. It impacts everyone.
I think as things re-open the parks and resorts will see phased openings. It’s possible all parks won’t even open every day and hours are sure to be reduced. For resorts it may be that only certain resorts open initially or maybe whole sections of resorts would be mothballed for a period until demand ramps back up. Dining May be the biggest challenge if there’s continuing social distancing. Less people in each restaurant. Certain places with smaller footprint may not reopen for a while.
On capex the projects starTed will probably finish up. Rat, Tron, GoTG will likely be finished up. Future projects will likely be delayed or cancelled until demand returns. There could also be cutbacks to existing attractions or even stuff that gets closed. Hopefully doesn’t impact things like SSE refurb. If Comcast keeps the petal to the metal on future projects Disney may have no choice but to respond. In a recession there are even less possible customers so every possible edge counts.
HongKongFooy
Well-Known Member
I would have more love for running out of gas on highway 95, ripping a meniscus fouling up my tennis game, contracting non genital herpes and babysitting Sister's 2 nasty brats than politics.
GoofGoof
Premium Member
Nature Resort could flex to all DVC. Though even DVC demand could be way down at least for a little while.
DisneyCane
Well-Known Member
Were people scared away from WDW after the pending closure was announced? Crowds may be down if the economy is down but not from fear. If WDW announced it was opening back up tomorrow, it would be just as difficult to to get boarding groups for RotR and FoP would have a 150 minute standby line.
durangojim
Well-Known Member
I'd be really surprised if anyone would be willing for a couple of years after this to put their money in a timeshare. I think luxury/discretionary spending will be way down for many people for a couple of years to come.
Yes.
The company could fracture, with the content / studio divisions going in different ownership direction then P&R. Your guess as good as mine what remains ‘Disney’ and what becomes ‘under license from’.
Within P&R, there’s a lot of kludge to figure out. Is the cruise line worth the cost and risks? Will DVC implode from a large percentage of member default? Would you close and write off experiments like Aulani that were never really home runs in the first place? Can WDW and DL operations be consolidated enough to become profitable or do you walk away from / license to 3rd party operators smaller ventures like the water parks? Does it make sense to keep doing your own retail?
The trend was already in outsourcing as many aspects of the P&R experience as they could. It could be seen as a way of further diluting risk to involve more outside operators.
flynnibus
Premium Member
I would expect in the day to day world:
- massive reductions in resort capacity
- massive reductions in flexible offerings like tours, M&Gs, parades, fireworks, etc. (think fireworks on certain nights instead of every..)
- massive reduction in park staff so we get attractions running at lower capacities, less crowd control, etc
- reduction in operating food locations
- possibly 1 instead of 2 water parks
- package discounts encouraging onsite stays, steep discounts on local APs, etc
For Medium term
- expect any project not already started to be placed on immediate hold
- projects that are in progress could be evaluated for reduction in scope
Projects like EPCOT's FW transformation are an interesting one.. we could see a massive scope reduction and push things off to a 'later phase' as they try to just get the core park back to an operating baseline. Like, maybe they still do moana, but the entire flying saucer thing get put off, etc.
Remember, 9/11 lead to entire resorts being shuttered, projects like POP's second half to just sit like a skeleton for ages (a decade+ ?).
I think Disney would try to have all four parks going... but I anything that on the surface you couldn't tell right away was different I would expect brutal reductions.
GoofGoof
Premium Member
Agreed. The construction time is usually about 3 years for those projects so they wouldn‘t be selling it for a couple of years. I think Riviera is going to be the problem since that’s selling right now. May have to offer some short term incentives.
GoofGoof
Premium Member
Things have snowballed a lot since then. I don’t think if the parks opened tomorrow that there would be much of a crowd at all. Sure some people would go, but nothing like a normal crowd.
DisneyCane
Well-Known Member
Once the economy is started back up, you are overlooking the value of extremely low interest rates for loans to fund the capital projects. It would be grossly irresponsible not to take advantage of the low rates for future profitability.
In personal finance nearly all debt is bad to carry because there is no income in return. The only common exception is a mortgage to purchase a home due to the increase in value. Everything else you purchase with debt is either consumed or depreciates.
In business finance, debt is different. If a company can take on debt to build something that will bring in revenue in excess of the principal and the cost of servicing the debt over the life of the loan then it is a good investment. The lower the interest rate, the more easily the business case closes.
flynnibus
Premium Member
You're comparing an audience that thought 'no big deal... nothing will happen'
to
an audience that just witnessed wide-spread layoffs all around them, saw shutdowns like they've never seen in their lifetime (or even thought possible), and will daily be seeing their employers and everyone around them slashing costs and reporting horrible public market numbers.
Yeah, people will totally be the same as they were right before it...
Disneyson
Well-Known Member
You're probably right, I trust you - My info is about two days behind. I believe, though, that in terms of all large public gatherings there is a temperature check at the entry points as well as a requirement throughout China that mandates the use of masks in public. I mentioned Starbucks as an example, but yes, I believe all restaurants are slowly opening with the stipulation that parties need to maintain apxx. a table space of distance? Keep in mind that neither Shanghai Disneyland nor Hong Kong Disneyland parks are open yet.
The major point was, that China has about two-and-a-half months of government-mandated quarrentine and a ban on large, unnecessary public gathering, mandatory mask use, and other efforts throughout their transit system, school system, etc. This time, plus any time beforehand that was previously unreported by China, indicates a long time to return to safety and normalcy, even with measures that would be nearly impossible to implement in the United States, let alone most countries that are not conditioned to accept and cooperate with government-mandates protocols and ways of thinking at the drop of a hat.
Doesn't matter how many new things you have when international travel has been ground to a halt and you have 20 or 30% domestic unemployment. If you wanted equivalent crowd levels you would have to start lowering prices rather than just opening new attractions.
GoofGoof
Premium Member
Short term, yes. Medium to long term they will need to invest in new attractions.
donsullivan
Premium Member
What you are failing to see is that the company just took on $6Billion in debt just to support the cash flow needed to sustain basic operations (including payroll) and the total impact of this is just getting started on them. Whether folks here like to think of it as such or not, Disney is actually an extremely well run company and does not spend money frivolously just for the sake of it. When it comes to this sort of thing you need to stop looking at it from a totally parks point of view and look at the entirety of The Walt Disney Company. Nobody is going to movie theaters, nobody is making new TV or movie content to have in the theaters when people go back again. No sports are being played so ESPN has no live content (other than relentless cycles about Tom Brady). Nobody is going to any of their theme parks globally. Nobody is staying in any of their hotels globally. Nobody is on their cruise ships.
Capital projects will be reduced, slowed and/or cancelled for some time until they are fully and completely out from under all of this. We're only a couple of weeks into this- it's going to get worse for them before it gets better. They will survive and they will come out of this but people really need to get out of their Disney Parks bubble and look at the global impact on the company. They will take a significant financial hit and they'll need to pull back on lots and lots of spending to come out the other side of it safely and responsibly.
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And don't forget that even the folks that didn't lose their jobs will have had their 401k values cut in half. That has a psychological effect on how willing a person is to blow money on mouse ears. I know my retirement plans have suffered a serious setback. I may now be closer to the work until I die retirement plan.
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