Delta Variant Spread Key To Disney’s Recovery Even As As Theme Parks Return To Profit

The answer to the questions of whether the entertainment giant Walt Disney Co can keep its parks open for the rest of the year will be the most crucial to whether the company will be able to sustain a recovery in its theme parks business.

The company expects all of its employees in its theme parks to return back to normal work by the end of the year to meet rising demands, said Disney’s chief financial officer, Christine McCarthy.

However the spread of the highly contagious Delta variant of the coronavirus in in the United States and elsewhere will determine whether the plans of the company related to its parks are realised. The Delta variant is already spreading in Florida, home to Disney’s biggest park, in addition to other US states that have lower vaccination rates.

“Disney’s ability to keep its parks and resorts open is clearly of the utmost importance to their bottom line,” said Joe McCormack, analyst at Third Bridge. “Whether (parks remain open) will largely be driven by Delta variant.”

The phenomenal; performance of the video-streaming operations of the company have been welcomed by investors and analysts. However, worries about the prospects for the parks of the company are being raised by some.

“It is clear that parks will not return to full capacity for some time,” PP Foresight analyst Paolo Pescatore said.

Executives at the company however were confident, saying there has been no waning  =of demand for its parks.

“The primary noise we’re seeing right now are really around group or convention cancellations,” Chief Executive Officer Bob Chapek said. “But on the whole, we see really strong demand for our parks.”

The better than expected third quarter results earlier this week pushed Disney shares up by more almost 5 per cent to $187.69 and prompted at least six brokerage groups to raise their price targets on the stock.

There have been varying impacts on the domestic and international businesses of theme park operators of the pandemic and the new Delta variant. According to experts, the domestic and international is one of the biggest factors that is weighing down on the full recovery of te company.

“That could hold back attendance at parks – particularly international parks like Paris and Hong Kong that rely on cross-border travel,” said Nicholas Hyett, analyst at Hargreaves Lansdown.

While being optimistic about their businesses in their home market of the United States, Disney, Comcast and Six Flags have also offered a cautious outlook on their international operations and said that its recovery will largely depend on inflow of tourists.

Earlier this week, warnings about the spreading of the delta of the coronavirus potentially hitting their operations were issued by Airbnb Inc and Southwest Airlines both.

(Adapted from DailyAdvent.com)

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