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Monday, July 20, 2020

Walt Disney World is closing attractions and canceling others, which could benefit Universal Orlando

Posted By on Mon, Jul 20, 2020 at 9:30 AM

click to enlarge Reflections: A Disney Lakeside Lodge - IMAGE VIA DISNEY
  • Image via Disney
  • Reflections: A Disney Lakeside Lodge
Updated with comments from Disney

With so much uncertainty around the pandemic and the related economic slowdown, Disney has been aggressively reviewing every aspect of its Parks and Resorts division in an effort to cut costs. In May, CFO Christine McCarthy confirmed that the division would see $900 million in projects paused. Now, two and a half months later, the realities of these cuts are beginning to form.

In recent days, Disney has confirmed multiple attractions will be permanently closed, while other previously announced projects are being postponed.

With high fixed costs thanks to the live animals, it should come as no surprise that Animal Kingdom saw some of the most dramatic cuts. Both spinning coaster Primeval Whirl and nighttime lagoon show "Rivers of Light" have been officially retired. Both have long been rumored to be on the chopping block, with all of Dinoland, U.S.A. thought to be potentially re-themed in the coming years. For years, there have been rumors that Disney was looking at closing Primeval Whirl, but Dinoland itself is now expected to remain much in its current state, until more is known about the eventual economic recovery ahead.
click to enlarge Animal Kingdom's Rivers of Light nighttime show - PHOTO BY DAVID ROARK
  • Photo by David Roark
  • Animal Kingdom's Rivers of Light nighttime show
Disney used the acknowledgment of the two Animal Kingdom closures to also finally admit that Stitch’s Great Escape in the Magic Kingdom will not be returning. Leaked photos from inside that closed attraction showed that many elements had already been removed, so the confirmation did not come as much of a surprise. Magic Kingdom’s upcoming Tron coaster looks not to be affected by the pandemic, with construction now resumed.

Over at Epcot, both the Spaceship Earth overhaul and the much-anticipated Mary Poppins attraction have been officially postponed, while the multi-level Festival Center and other aspects of the Epcot overhaul are strongly rumored to be getting major budget cuts. It should be noted that even prior to the current global issues, the Mary Poppins attraction is believed to have received a significant value-engineering update that removed many of its more impressive aspects.
At Hollywood Studios, multiple attractions did not reopen with the park and are believed to be now permanently closed, despite Disney so far not confirming this. (Disney has so far not responded to our request for comment, but we will update this story if and when they do.) Like Animal Kingdom, many of those closures align with previous rumors of an upcoming new land but, as with Animal Kingdom, those rumored new offerings are now believed to be on an indefinite hold.

For 2021, nearly all aspects of the 50th Anniversary celebration that have yet to be announced are now believed to have been cut, including the return of a nighttime parade to the Magic Kingdom.
click to enlarge Dino-Rama at Disney's Animal Kingdom - IMAGE VIA MARKYDEEDROP | TWITTER
  • Image via Markydeedrop | Twitter
  • Dino-Rama at Disney's Animal Kingdom
Almost every project that’s not already significantly under construction now seems to be postponed or slowed. This includes the upcoming Reflections – A Disney Waterfront Lodge timeshare resort, where permits are still being pulled, but progress has been noticeably slower than it was just a few months ago in pre-pandemic early 2020. Interestingly, Disney does seem to be still moving forward with plans for a timeshare hotel at the Disneyland resort in California, despite that resort being currently closed with no reopening date.

Across Walt Disney World, those projects that are already well underway, including the Star Wars hotel and various Epcot attractions, still seem to be happening. However, it is unclear if they'll be able to stick to the original timelines.

For Epcot, the Guardians roller coaster, Ratatouille 3D dark ride and Space 220 restaurant were all expected to open this year. Ratatouille and Space 220 have already missed their Spring 2020 openings. Other attractions in the works for Epcot, such as the Play Pavilion and the upcoming film for the China pavilion, look to be still moving forward. However, they too may be delayed to better align the openings with the eventual return of large crowds.
click to enlarge The new multi-level Festival Center heading to Epcot - IMAGE VIA DISNEY D23
  • Image via Disney D23
  • The new multi-level Festival Center heading to Epcot
This slowing of projects means costs can be spread across multiple quarters, lowering per-quarter expenses for WDW. This is a common move by Disney when building large projects where expenses, if reported within only a few quarters, could be cause for concern from stock market analysts who look for quarter-on-quarter growth.

While the current economic slowdown is worrying for Disney (and everyone else), the more significant concern may be the lasting implications of the current cuts leadership has now signed off on. It took Disney three years from the announcement to the opening of the highly themed Seven Dwarfs family coaster in Magic Kingdom’s Fantasyland. It was a whopping six years from confirmation to the opening of Pandora – The World of Avatar. Star Wars: Galaxy’s Edge saw a four-year stretch from announcement to opening.

With many projects that were in the pipeline for Walt Disney World now believed to have been postponed or outright canceled, after the current projects underway open – nearly all of which are expected to welcome guests within the next 18 months – the resort will likely see a drought in new investments for some time.
click to enlarge Universal Orlando's Epic Universe park is moving forward, despite the coronavirus-related shutdown. - IMAGE VIA NBCUNIVERSAL
  • Image via NBCUniversal
  • Universal Orlando's Epic Universe park is moving forward, despite the coronavirus-related shutdown.
At the same time, Universal is working to open its new multibillion-dollar theme park, Epic Universe. That park has been delayed by one year, and now has a planned opening date of 2024.

Based on the historical timeline of recent attractions, if Disney plans to have an arsenal of new attractions to use in marketing against Universal’s new theme park, those projects should be announced sometime with the next year or so, which seems highly unlikely based on Disney’s current financial conservatism. Universal has also shown that they're interested in keeping investments going in their parks, with a major new roller coaster under construction at Islands of Adventure and multiple projects rumored to be in the pipeline for Universal Studios Florida.

In a quarterly earnings call on April 30, Comcast CEO Brian Roberts said the company remains confident in its theme parks.

We have also delayed construction of the fourth gate in Orlando, and Super Nintendo World Japan is likely to open a few months past our original expectation," said Roberts. "But there is no doubt that our theme parks will reopen, and when they do, I believe we'll benefit from strong pent-up demand. We love these businesses. They have been one of our fastest growing for the last 10 years.

Comcast CFO Michael J. Cavanagh went on to explain that the parks will see a rough patch but "the parks team is balancing near-term financial discipline with maximizing the long-term value of this business, and this is a dynamic effort on their part as the situation continues to develop. We remain very confident that the parks business will generate healthy returns over the long term."

Disney World is currently operating at a decreased capacity. Disneyland and the Disney Cruise Line are presently not welcoming guests, and there is no announced reopening at this time.

UPDATE- Disney did confirm to Orlando Weekly that they are reviewing multiple projects but did not give any specifics regarding which projects. Their response reads- "Given the current environment, we are continuing to evaluate the timing of some projects and will provide updates as they become available. We very much look forward to celebrating the 50th anniversary of Walt Disney World Resort next year with guests and cast members."

Disney has so far not responded to our requests for comment on any opening delays. Nor have they commented on any plans regarding the 50th Anniversary in 2021. We will update this story if and when they do.

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