- Shanghai Disney announced on Monday that it will be temporarily closed due to the recent escalation of the BA.2 variant of the COVID-19 crisis.
- Hong Kong Disneyland has been closed since January and is expected to remain closed for at least a month.
- With the death rate still well below the peak of 14 months ago, there’s no reason to think Disney World and Disneyland will close.
The global reach of Walt Disney’s (NYSE: DIS) theme parks is underused these days. As the number of COVID-19 cases increases again in China, Shanghai Disney announced on Monday that it will temporarily close its doors. The resort joins Hong Kong Disneyland, which ceased operations in January.
There’s no timeline for when Shanghai Disney will resume operations, but it’s not like the planned reopening dates aren’t set in stone. Hong Kong Disneyland was originally only supposed to be closed for two weeks, but now it will remain dark until at least April 20. Disney theme parks in Paris and Tokyo remain open and continue to welcome guests in hubs, as do the media giant’s two national resorts.
With the number of new cases of COVID-19 increasing worldwide, will Disney World in Florida and the original Disneyland Resort in California close? Of course, anything is possible, but Disney attractions in the United States are unlikely to close.
The world is small…
Disney World reopened its four theme parks in Florida two summers ago after a four-month closure. The smaller but iconic Disneyland resumed operations last April after a much longer closure.
Unlike some overseas Disney parks, which have experienced pandemic-related outages since resuming operations in 2020, none of the U.S. resorts have had to close. Security measures in the park have been tightened and relaxed depending on local conditions. Both resorts require guests to book in advance to limit visitor numbers. This is much more likely to happen for actual closures on both coasts.
Disney World and Disneyland remained open until the end of last year, although the Omicron variant resulted in more new and active cases than any previous variant. Improved vaccination rates in the United States have helped improve prognosis for those who contract the virus, with daily deaths never reaching their peak levels in early 2021.
It may be too early to assess the impact of the new BA.2 variant globally or nationally, but the consensus of both political camps is that business will continue until containment efforts can keep deaths in check. Disney theme parks, like most national and regional theme parks, took a long time to regain momentum after the initial closure 24 months ago.
Disney’s home theme parks posted record sales and operating results in the last quarter. It would be much easier for Disney to enforce masking and social distancing requirements than to close the turnstiles again, especially when it comes to wooing out-of-town visitors who spend weeks and months, if not years, planning their Disney vacation. .
The theme park industry has learned a lot over the past couple of years, but it’s always hard to regain momentum once it’s lost. Health risks will always come first, but if Disney parks in the United States have been able to stay open safely during the Delta and Omicron variants, it will be a long time before BA.2 suspends operations.
Financially, Disney can weather the storm of current closures in Hong Kong and now Shanghai. It is a well-diversified multimedia stock. In addition, the company has a significant (but still minority) stake in these two locations. The resorts in the United States and France are wholly owned by the Company and the Tokyo resort is operated as a licensee under a licensing agreement.
Disney World and Disneyland are unlikely to close their doors anytime soon, but that doesn’t mean investors and theme park fans can just ignore the BA.2 variant.
The Disney World and Disneyland article will not close soon appeared for the first time in The Motley Fool Germany.
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This article represents the author’s opinion, which may differ from the “official” recommendation position of a Motley Fool premium consulting service. Challenging an investment thesis, even ours, helps all of us think critically about investments and make decisions that help us be smarter, happier, and richer.
This article was written by Rick Munarriz and was posted on Fool.com on 3/21/2022. It has been translated so that our German readers can join the discussion.
The Motley Fool owns stock and recommends Walt Disney. The Motley Fool recommends the following options: January 2024 long calls $ 145 on Walt Disney and January 2024 short calls $ 155 on Walt Disney.
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