The Walt Disney Company will open its Shanghai theme park next week, three and a half months after closing it down following the coronavirus outbreak in China's Wuhan. The company made the announcement during its earnings call, stating that the company made significant loss in the first quarter due to the closure of its lucrative parks business across the world.
Disney's parks business generates almost a third of its total revenues, which remain closed for months now. However, the opening of the Shanghai theme park comes with a new strategy which will limit the number of visitors and enforce strict social distancing measures on its rides and in restaurants.
Disney to open theme parks in phased manner
Disney said that its largest international park is slated to open with "enhanced safety measures" on May 11. Shanghai Disneyland was also the first Disney theme park to close following the Covid-19 outbreak. The company closed the Shanghai theme park on January 24. Next week's phased opening will also make Shanghai the first Disney theme park to allow entry to guests since March 15.
Disney reopened Disneytown, Wishing Star Park and the Disneyland Hotel in Shanghai in March. All of Disney's 12 theme parks in North America, Asia and Europe remain closed for more than a month now. "We know how much our guests have been looking forward to returning to Shanghai Disneyland, and our cast is excited to begin welcoming them back," said Bob Chapek, CEO of The Walt Disney Company.
However, the park will open with new set of restrictions and increased safety measures. There will be limits on attendance using an advanced reservation and entry system. Moreover, there will controlled guest density using social distancing and strict government required health and prevention procedures.
Also, guests will be required to wear masks and there will be temperature screenings and other contact tracing and early detection systems. The Shanghai park attracts around 80,000 visitors per day but according to the new government mandate the park has been asked to operate at 30%capacity or 24,000 visitors. However, the park will open with an even lower capacity and slowly ramp up to reach the 30% capacity.
Disney still unsure about reopening other parks
The parks business is one of Disney's biggest profit avenues, generating almost a third of its revenues. Disney said that the park closures across the world severely hurt its profits in the reported quarter. The company suffered $1 billion in lost profits due to the coronavirus-led shutdown.The earlier the theme parks open, the better it is for Disney. However, the company said that it still remains unclear when the rest of Disney's parks, resorts, cruise ships and Disney-branded stores can be reopened.
All these fall under Disney's Parks, Experience and Consumer Products segment. Disney generated more than $26 billion in sales at its Parks, Experiences and Products division in fiscal 2019, representing 37% of the company's overall revenue. The closure of this segment saw the company losing almost 10% of its revenues in the second quarter.
