Uncertain ride ahead for Disney
Looking at how the situation has evolved over the past 12 months, the specialist highlighted its success with both launching the streaming service and implementing the rules regarding running the parks safely. What will be key to recovery, they noted, is “being able to ratchet up the capacity, the allowed capacity, of Walt Disney World”.
Downsides to the recovery include the fact that many of Disney World’s usual audience has been majorly financially impacted by the pandemic. “There’s something that Disney’s leadership and cast members talk a lot about, which is people save up their entire lives to go to Walt Disney World one time with their kids at certain ages. A lot of those families have had a lot of trouble right now.”
Annual pass [AP] holders could also have knock-on effects for the recovery trajectory. Although there is a large up-front cost, AP holders create lower revenue per visit. “There are very strong opinions on both sides of the AP argument. It is, in my opinion, a drug that, once you’re on, it’s incredibly difficult to get off… The challenge is that it adds a tremendous amount of volume without much incremental revenue.”
Another sore point could be pricing. “What I’ll say is, pricing is probably the biggest risk factor right now more than anything, going forward and getting back to normal.” There have already been “record increases in food and beverage pricing and ticket pricing for the past several years”, which could bring about negative publicity, according to the former head.
To access all the human insights from Third Bridge Forum’s Disney – Parks Business Update & Post-coronavirus Recovery Outlook Interview, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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