Will Disney World Stay Closed Until 2021?

“Will Walt Disney World reopen before 2021?” and “will the parks stay closed through summer/Halloween/Christmas/[insert month, year or specific date]?” have become increasingly common thanks to one already infamous expert opinion.

With so much uncertainty in the air about when Magic Kingdom, Epcot, Animal Kingdom, Hollywood Studios, and the resort hotels will reopen, these questions are unsurprising. Accordingly, we’ve been doing an ongoing speculative series that attempts to offer balance, nuance, and our best guesses with all things considered. To recap, here are questions what we’ve addressed:

Previously, the common question we were receiving was “when will Walt Disney World reopen?” Due to recent commentary from Swiss bank UBS analyst John Hodulik that has gained traction in the Disney fan community, there has been rampant speculation and fear-mongering that Walt Disney World will not reopen until 2021. In large part, this post serves to rebut and contextualize that…

However, we first want to emphasis the speculative nature of this post. We do not own a (working) crystal ball nor have we consulted Nostradamus about this particular matter. While we’ve been asked these questions a lot in the last month-plus, the reality is that we don’t have a credible answer as to how long Walt Disney World will remain closed or when the parks will reopen.

The reality is also that literally no one does. Not any third party bloggers or vloggers. Not any Cast Member friends you might have, bus drivers or otherwise. Not even senior leadership at Walt Disney World or Disneyland. This is an unprecedented and constantly evolving situation. Our collective knowledge tomorrow will differ from what we know today–and next week it’ll be totally different.

Disney is scrambling to get ahead of this and is developing a range of tentative plans for modified operations, but the key word there is “tentative” (and also “range of,” meaning that several potential plans are being developed). Even Bob Iger’s controversial statements were only possibilities, and not procedures that definitely will be used when it comes to the future of the parks.

Another category of individuals who are taking stabs at when and how the theme parks might reopen are analysts. These individuals typically have no expertise in theme park operations, but instead understand the financial contours of the Walt Disney Company and its many business units.

There have been numerous predictions and forecasts of when Walt Disney World will reopen from respected financial experts, most ranging from June through October. None of these have gained traction in the Disney fan community because they’re more wonkish and less salacious.

As contrasted with the more moderate predictions, the 2021 date has been shared widely because it’s more controversial and attention grabbing. In this increasingly polarized environment, it vindicates those who believe shutdowns should last longer and enrages those who think we should reopen the economy ASAP. It’s being spread by those nodding in agreement and hate-shared by those who it upsets.

We’ve read or heard at least a half dozen predictions from analysts over the course of the last month, but didn’t feel a single one merited reporting on, just as we haven’t reported on the guesses of random friends and neighbors. Frankly, this one does not merit a blog post, either. Unfortunately, we’ve received a lot of confused and concerned questions from readers about it, so thought we’d clarify and contextualize this to the extent we can.

One of the things I’ve learned in following financial analysts is that you can validate your own preconceived notions, economic outlook, and general worldview–no matter what they may be–if that’s what you’re seeking to do. The Great Recession vindicated doom and gloom pundits, turning them into veritable celebrities and giving rise to a lucrative market for dire prognosticators who want to repeat that and star in The Big Short 2. The more extreme, the more likely the soundbite will be shared far and wide.

In a sense, there are actually some parallels to Disney fandom–polarization plays well, and anyone can find material that supports extreme positions that Disney has never been better or worse. This is almost akin to the intersection of these two things. Optimistic that parks will reopen June 1? Analysts support you! Skeptical and thinking they should stay closed until 2021? An analyst supports you!

With that preface out of the way, this prediction comes from UBS analyst John Hodulik, who offered it in his “Eye of the Storm” investor note. This memo served as his justification for downgrading the Walt Disney Company’s stock from buy to neutral, and cutting his price target on TWDC’s stock to $114 from $162.

This is predicated upon a bleak outlook for every single one of Disney’s business units save for Disney+, with a particular emphasis on troubles facing theme parks and live sports. In addition to Walt Disney World and Disneyland not reopening until 2021, Hodulik also believes that there are real risks to the fall sport seasons (while failing to acknowledge that ESPN would be well-positioned if sports do resume without spectators).

With regard to theme parks, Hodulik’s expectation is that “economic recession plus the need for social distancing, new health precautions, the lack of travel and crowd aversion are likely to make this business less profitable until there is a widely available vaccine.” That does not mean the parks won’t reopen until 2021, just that they won’t be as profitable once they do reopen.

MarketWatch’s FactSet tracks 27 analysts who cover the Walt Disney Company’s stock, and 18 rate it a buy and 9 rate it a hold. The average price target is $129.96, which is actually 26% above recent levels. In other words, Hodulik is objectively pessimistic on Disney as compared to other experts.

There is no disputing the assessment that Disney faces a lot of pressure right now and for the foreseeable future. The film business, live sports, media production, and theme parks all face uphill challenges. My perspective is also fairly pessimistic on Disney’s financial outlook, but for me the conclusion is different. I think that Disney will be more aggressive in attempting to bounce back, as the company’s future viability is on the line.

Even though summer is no longer peak season at Walt Disney World, it is still Florida’s prime tourist season. The resorts have offered numerous deals for the summer months, including Free Dining and the Fun & Sun discount. More recently, Walt Disney World started accepting reservations for June 1, 2020 or later. Likewise, the Free Dining Recovery Deal begins June 1, 2020 and runs through September.

Beyond that, Shanghai Disneyland is currently going through the motions of trial operations with test guests to practice social distancing, guest entry, and other aspects of modified operations. If this goes as anticipated, the park will reopen before having been closed 100 days. A similar timeline would put the reopening of Walt Disney World right around early June 2020.

Further supporting this is Governor Ron DeSantis’ Reopen Florida Task Force, which has an Industry Working Group subcommittee to determine how and when to reopen parks and other attractions in the Sunshine State. We covered these discussions and tentative possibilities at length in Potential Plans for Walt Disney World Phased Reopening.

It’s noteworthy that the Reopen Florida Task Force has not released a timeline for reopening theme parks, nor have Universal or Walt Disney World expressed their goals. However, in listening to press conferences by Governor DeSantis on the matter, who has stated that “the curve has been flattened in Florida,” it’s fairly clear that he wants to start the process of reopening the state. (To that point, on Sunday he said: “we’re gonna make an announcement pretty soon.”)

Between Florida wanting to begin reopening its battered, tourism-dependent economy and the Walt Disney Company wanting viable business units that are not the Disney+ streaming service, the 2021 prediction does not seem particularly plausible. From our perspective, a date closer to June 1, 2020 seems much more likely than one closer to January 1, 2021.

Suffice to say, there is more than ample reason to believe that both Disney and Florida want to be back in business by summer, and take advantage of whatever pent-up demand might exist then. Missing the more lucrative summer, Halloween, and Christmas tourist seasons to instead open for the January off-season doesn’t pass the smell test when considering the internal targets of both Disney and Florida. However, perhaps something will change again and so too will those internal targets.

None of this is to say that we think Walt Disney World should reopen this summer or stay closed until January 1, 2021. This is arm’s length analysis about what we perceive is most likely to occur, not what we ourselves want. This is truly a complex and multifarious problem, and total harm reduction modeling will need to be utilized. Neither of us are so deluded as to believe we have all of the answers or even a fraction of the information necessary to dictate what “should” happen.

We’d likewise encourage humility from everyone thinking about commenting below. Rather than condescendingly assuming you have the one valid perspective, have empathy. People are understandably worried about their health, both physical and economic. Try to put yourselves in the shoes of others who may be justified in their divergent perspectives. Those who tout themselves as the smartest person in the room seldom are, and never are viewed as such by the room’s other occupants.

Planning a Walt Disney World trip? Learn about hotels on our Walt Disney World Hotels Reviews page. For where to eat, read our Walt Disney World Restaurant Reviews. To save money on tickets or determine which type to buy, read our Tips for Saving Money on Walt Disney World Tickets post. Our What to Pack for Disney Trips post takes a unique look at clever items to take. For what to do and when to do it, our Walt Disney World Ride Guides will help. For comprehensive advice, the best place to start is our Walt Disney World Trip Planning Guide for everything you need to know!

YOUR THOUGHTS

Do you think Walt Disney World will reopen by June 2020? If not, what’s your predicted date/month? Think the UBS analyst’s prediction is plausible? Keep comments respectful, apolitical, and on topic. Anything not following these requirements will be removed.

197 Responses to “Will Disney World Stay Closed Until 2021?”
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