Disneyland Closure Update: Reopening Rules Fallout & Litigation

It’s been an eventful week (to put it mildly) in the ongoing reopening saga of Disneyland and Disney California Adventure. This post will bring you up to speed on the fallout from California’s stringent theme park reopening rules, responses from Anaheim leaders and businesses, and where Disney, Universal, Cedar Fair, and other operators will likely go from here when it comes to legal action.

In case you missed it, this week California released reopening rules for theme parks, the effect of which is likely extending Disneyland’s closure until Summer 2021. While smaller parks can open sooner, the theme park guidelines provide that Disneyland and DCA cannot reopen until Orange County reaches the yellow tier, at which point the parks will be limited to 25% capacity and reservations will be required.

These long-awaited theme park reopening guidelines are almost identical to what was leaked a few weeks ago that both Disney and Universal implored California to reconsider. These parks, along with local leaders and health experts, believe that Los Angeles and Orange Counties cannot conceivably reach the yellow tier in 2020, and most likely will not get there until Summer 2021 at the earliest. As they point out, such an onerous standard will have devastating consequences not just for the parks–but for local businesses dependent upon their operations…

Anaheim and Orange County leaders quickly spoke out quickly on the ramifications of California’s theme park reopening rules. “These guidelines fail working families and small businesses,” stated Anaheim Mayor Harry Sidhu in a statement to ReOpenOCNow.

“Too many Anaheim hotels, stores, and restaurants will not survive another year of this. Many are family businesses. The jobs they provide support even more families. The labor unions of the Disneyland Resort understand these impacts and support the reopening of theme parks in Tier 3 – not Tier 4, which would wipe out jobs and destroy lives,” concluded Mayor Sidhu.

“For a large county like us, especially a county with institution of higher education where folks [are] coming in from outside the county and outside the state, I think it’s going to be very hard to achieve the yellow tier,” stated Dr. Clayton Chau, Director, Orange County Health Care Agency at a Board of Supervisors meeting.

“It depends on when the vaccine will come as well as how many doses [are] available for our populations as well as how many of our residents will readily accept the vaccine – those are the three factors that will determine how soon we can get to the yellow tier.” Dr. Chau painted a bleak picture for the reopening, concluding that Orange County “can look forward to a yellow tier by next summer, hopefully. Hopefully.”

Todd Ament, President and CEO, Anaheim Chamber of Commerce criticized the decisions as “delaying by a year or longer reopening of the Disneyland Resort and major theme parks in California, decimating the state’s tourism industry. Tens of thousands of workers have already been laid off by state mandates to remain closed since March. Now, seven months later, small business owners in our resort areas who’ve held on by the thinnest of margins have no further hope or recourse to remain in business.”

Ament called the reopening guidelines “devastating news for the people of Anaheim.”

Although fans might envision scenarios of the parks packing up and relocating to Texas or wherever, that is not going to happen. It’s not feasible (this isn’t RollerCoaster Tycoon) or even economically viable. In the long term, being in the heart of Orange County is a great location for Disneyland. The short term news is obviously bad news for Disney, but the company will be fine. They have billions of cash on hand, and there will be no shortage of pent-up demand once the parks reopen.

The same is not true for many of the restaurants, hotels, other operations and their employees that are dependent upon Disneyland. This sentiment was echoed by small business owners in the Anaheim Resort Area, who shared the first-hand impacts to their families and employees, and the financial hardship that will be caused by remaining closed for an additional year or longer.

“At this point if the resort doesn’t open back up, we’ll be lucky if we make it through the end of the year,” said Karmel Shuttle Service owner Mike Afram, “It stills weighs on me every day because I don’t know what the next day brings.”

“I’m a first generation Latina in the United States and I know the struggles that my parents went through to get here and it’s just really sad to think we might not be here,” says Jocelyn Campos from family-owned Big Bertha’s Pizza in the Anaheim Resort, “I can’t imagine not being able to wake up in the morning and have something to call mine…ours.”

“At one time we had over 50 employees, but we have had to let almost 85% of our employees go, some of whom have been with us over 20 years,” says Bharat Patel, whose family built and has run the Castle Inn since 1974, “The day we had to lay them off was one of the hardest days of my life. I still think about them (our employees) every day.”

“I opened the business in 1987 and we were number one in Orange County and we continued to stay number one in Orange County,” says Rick Cerney, franchise owner of an Anaheim Resort Subway restaurant location. “We’re now at an 86% loss in business and we’re the lowest in sales. Out of 230 stores, we were the highest last March and now seven months later, we’re the lowest.”

Not to put too fine a point on it, but I think the quotes from these small business owners are important to share because they underscore some of the real world ramifications of these reopening rules. It’s understandable to focus on near-term health and safety given the circumstances, but that should not be occurring at the exclusion of literally everything else.

It’s disingenuous to ignore long term consequences–economic and otherwise. Shutdowns and closures do not occur in a vacuum; the full picture needs to be openly discussed as part of an honest conversation.

I’m sympathetic to the tough choices facing California leadership, but I’m also sympathetic to everyone losing their livelihood. I cannot fathom being entrusted with a business that has been in my family for generations, and having to watch it slowly slip away through no fault of my own. These are not multi-national conglomerates with billions in the bank–they cannot survive with no revenue for a year.

What the government should do to assist them is a moot point, because that clearly has not and will not happen. Unfortunately, even if the parks could reopen tomorrow, some nearby small businesses would still inevitably go under–but at least they’d have a fighting chance instead of watching a train wreck play out in slow motion.

This topic was repeatedly reiterated during the “Ready to Reopen Responsibly” conference call with theme park executives from Disneyland, Universal Studios Hollywood, Legoland, and Cedar Fair. That’s worth a watch if you have 44 minutes–there are a lot of great points raised by the participants that we won’t have a chance to touch upon here.

Those leaders stressed that the people hurt hardest by the theme park reopening rules were employees, small business owners, and local communities. They pointed out the parks will not be profitable for a while due to attendance caps and a lack of demand–that’s not their motive for pushing back against California’s rules. Rather, it’s to get people back to work and prevent catastrophic scenarios from playing out in the communities they call home.

Early on during the conference call, each executive presented their opening statement/reaction to the guidelines. Disneyland Resort President Ken Potrock closed his initial remarks by saying: “We’re strongly advocating for a science and real-time data-based approach to achieve a holistic and balanced solution. Ultimately, we all want to get people back to work…that helps from a health perspective, and is the right kind of collaborative solution we should all be working with the state to achieve.”

That’s a nice, succinct summation of the shape this conversation between California, theme parks, and other relevant stakeholders (literally any Californian) should be taking.

During the Q&A, the topic of visits by the team of state officials who toured parks in both Orange County Florida and California came up. Potrock said the teams were “incredibly through” during several multi-hour visits to observe how guests were behaving and how Cast Members addressed issues, including “strong and stringent enforcement of rules” by employees, which is an “industry differentiator” of the theme parks. Potrock indicated that the team took detailed notes and had a meeting with the parks afterwards.

Potrock’s impression was that the visits had gone well with Disney thinking, “This is great, they came and learned some things.” The other participants shared similar sentiment. Karen Irwin, President & COO of Universal Studios Hollywood added, “we were told there would be reports in a week or so that would provide us practical steps toward reopening.”

When the fruits of those visits were seemingly ignored, theme park leaders were perturbed, believing it was “just for show” and that California’s decision on the tiers a foregone conclusion. Potrock said there had been no solution-oriented collaboration or dialogue. Instead, the parks were told, “here are the rules–you have to live with it.”

The theme park leaders also pushed back on the state’s purported rationales for keeping the parks closed. Most notably, the notion that theme parks would attract visitors to California, further fueling transmission. They all agreed that past precedent elsewhere suggests it will be a predominantly local audience because few people will travel to visit theme parks right now. Irwin also pointed out that beaches and weather are bigger drivers of California tourism, and the hospitality businesses (restaurants, hotels, etc.) supporting those points of interest and attractions are already open.

The most noteworthy portion of the Q&A occurred early on, when Erin Guerrero, Executive Director of the California Attractions and Parks Association said that the organization is considering legal action to gain permission to reopen or to change the state’s newly-released reopening guidelines.

“All options are open at this point. We’re going to explore all options. Our number one goal is to reopen responsibly. Obviously, we’d love to keep that conversation going and come up with a reasonable timeline for reopenings, but at this point any options are viable,” said Guerrero.

Cedar Fair VP Raffi Kaprelyan echoed the sentiment regarding legal action: “If they’re open to discussion, we’ll continue our dialogue,” Kaprelyan said during the news conference. “If not, all options are open.”

It’s worth noting that Cedar Fair has been down that road before. Earlier this summer, Cedar Point and Kings Island filed a lawsuit against the Ohio Department of Health claiming an order singling out amusement parks and water parks from opening while other businesses were permitted to operate.

That lawsuit was resolved rapidly, with Ohio’s Governor responding the same day it was filed and agreeing to allow amusement and water parks to reopen two weeks later. Similar lawsuits have been filed around the United States seeking injunctive relief and equitable treatment.

It certainly appears that the theme parks are laying the groundwork for litigation–what not just based upon what they’ve expressly said in that press conference. It’s possible Disney, Universal, Legoland, and Cedar Fair could bring the action directly, or maybe have the California Attractions and Parks Association bring it on their behalf if they’re concerned about optics (although that appears less and less the case).

Meanwhile, the State of California’s representatives have been mostly quiet since releasing the theme park guidelines. Looking at the totality of the circumstances–the state dragging its feet on releasing the rules, scheduling park visits months after they should’ve and could’ve occurred, and then blindsiding the operators with a release of the same draft rules–it’s possible that California is simply trying to buy time. Delay the openings for another month or two, giving the state a better chance at getting numbers further under control.

Ultimately, it remains to be seen what will happen next. One thing is for certain: the saga of Disney v. California is far from over. While the rules as currently released mean Disneyland, Universal, Knott’s, etc. probably won’t open before Summer 2021, I’d personally be shocked if guests aren’t back in all those parks before then. I’m not bullish enough to bet that they’ll be back in time for Christmas 2020 (unless we’re counting food/merchandise events, in which case I’d make that bet) but before Spring 2021 seems possible. As always, we’ll keep you posted of further developments!

If you’re preparing for a Disneyland trip, check out our other planning posts, including how to save money on Disneyland tickets, our Disney packing tips, tips for booking a hotel (off-site or on-site), where to dine, and a number of other things, check out our comprehensive Disneyland Vacation Planning Guide!

YOUR THOUGHTS

What are your thoughts on California’s theme and amusement park reopening guidelines? Is this too stringent, or appropriate given the circumstances? Think Disney, Universal, Legoland, Cedar Fair or the California Attractions and Parks Association will file a lawsuit against California? Any other thoughts on the topics covered in this article? Do you agree or disagree with our assessment? Any questions? Hearing your feedback—even when you disagree with us—is both interesting to us and helpful to other readers, so please share your thoughts below in the comments!


68 Responses to “Disneyland Closure Update: Reopening Rules Fallout & Litigation”
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