When it comes to Walt Disney's (NYSE:DIS) domestic theme parks, they literally and figuratively couldn't be further apart. Disney World in Florida keeps taking mouse steps forward in the direction of normalcy. On Thursday it announced that Festival of the Lion King -- arguably the best live show at any of the resort's four theme parks -- would be returning in a modified format this summer. One can follow that up by saying that Disneyland is taking steps backward, but it can't. It has its back up against the wall in California.
Disney's original theme park in Anaheim is showing no signs of opening in the near future given California's hard stance on the state's gated attractions. Folks assuming that cruise lines will be the last segment of the travel industry to get back to business may want to check up on Disneyland. There's a good chance that you'll be boarding a Carnival (NYSE:CCL), Royal Caribbean (NYSE:RCL), or Norwegian Cruise Line (NYSE:NCLH) ship before you walk down Main Street U.S.A. on the way to the iconic Matterhorn bobsled ride.
Image source: Disney.
The backside of water
A big difference between between Disneyland and the country's three leading cruise lines is that Disney only failed to live up to one restart date. Disney's California resort announced that it would open in mid-July of last summer, hoping that the Golden State would clear the move after assessing everything that world's largest theme park operator was doing to open safely for guests. California shook its head, and here we are -- six months later -- and it's not just the state shaking its head.
Cruise lines have continuously bumped their resumption dates every month or so. Norwegian Cruise Line announced earlier this week that it won't sail again until May. Royal Caribbean and industry leader Carnival followed suit on Thursday and Friday respectively.
An important difference between cruise lines and Disneyland is that at least the cruise line operators know what they have to do to resume operations. The steps are challenging. The on-board COVID-19 testing requirements, buildout of medical facilities on each ship, and a series of simulated cruises will take time to carry out, but at least they know it's in their hands now. Disneyland can point to how successful Disney World has been since reopening six months ago, and it's going to fall on deaf ears in California.
The irony here is that for all of the heat that Florida gets for opening the economy as quickly as it did just a few months into the pandemic, the numbers are on its side. California recently passed Florida in coronavirus cases per capita. Florida has reported 75,781 cases for every million residents as of Friday according to pandemic tracker Worldometers. California is now at 79,185 per million in its state.
It's also not a surprise that the two states are passing ships in terms of the economy. California's unemployment rate rose 0.9 percentage points to 9% in December. Florida's unemployment rate improved from 6.3% to 6.1% last month. Opening its theme parks wouldn't improve California's case counts, but there's no evidence that points to Disney World's restart as a catalyst for contagion. If anything Florida cases actually started going down after Disney World's mid-July reopening. The recent surge in the state -- and the country for that matter -- is attributed largely to holiday gatherings in November and December.
Under the sea
None of this means that cruise lines will be the first to dip their feet into revenue-generating waters. May can come and go just as every other line in the sand that Carnival, Royal Caribbean, and Norwegian Cruise Line have drawn in the past. Disneyland is clearly waiting at this point for widespread vaccinations to work, and the same might be said for cruise lines that have raised billions apiece to ride out the next few difficult months.
Disneyland recently canceled its annual-pass program, refunding all active pass holders. Cruise Lines pushing a restart date that is more than three months away is a new high-water mark for the industry in this pandemic.
Disney is the lucky one here. Its stock is hitting new highs on the strength of its wildly popular Disney+ streaming service. It's a well-diversified media stock, and it can withstand California paying hardball with its iconic theme park. Cruise lines can't cash in on streams -- or rivers, seas, and oceans for that matter. This also means that cruise line operators should be more desperate to get back to sailing. They need paying passengers walking on the gangway more than Disney needs folks clicking through its turnstiles.
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January 24, 2021 at 09:10PM
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