DVC Parks and Resorts Update for November 16th
On December 6th, the Disney Vacation Club will finally operate all its resorts again. I’ll explain what’s about to happen and also talk about Disney’s financials in the latest DVC Parks and Resorts Update.
Disneyland Resorts Remain Closed…
Over the past week, you may have two statements that sound wildly contradictory. Somehow, both are true.
Disneyland Resort hotels will not reopen in 2020. This statement came directly from park officials and was confirmed during the fiscal earnings report call last Thursday. Executives indicated that the parks will remain closed through the fiscal first quarter of 2021, which really just means the rest of 2020.
California’s situation has degraded in recent days. The state has reported more than 100,000 new infections in November, an average of 7,000 daily cases. Disneyland reached a standstill with California health officials before the most recent outbreak. So, this statement confirms the obvious, really.
Disney officials had previously indicated that mid-January seems most likely for a reopening, and even that appears ambitious now. Park planners have faced these facts and come to a realization.
But One Resort Will Reopen…
Disney’s Grand Californian Hotel & Spa will reopen on December 6th. On that date, all 15 DVC properties will once again be up and running. It’ll be the first time since early March.
You’re undoubtedly wondering why Disney has stated that its Disneyland Resort hotels won’t reopen in 2020. It’s an exercise in semantics as regular customers cannot book rooms at the Grand Californian.
Instead, Disney will take a similar approach to what it did in June. You may recall that the first two DVC properties to reopen were Disney’s Vero Beach Resort and Disney’s Hilton Head Island Resort. The following week, some Walt Disney World properties reopened even though the theme parks hadn’t.
DVC officials took this approach previously to address the impending DVC Points issue. While the resorts remained closed, members had no choice but to stockpile points they couldn’t use. This situation will have ripple effects on availability in 2021 and probably even 2022.
Why DVC Did This
The Grand Californian already experiences enough availability issues that I tell friends to buy a contract here if they plan to visit Disneyland regularly. Booking a reservation at the seven-month window has proven exceedingly challenging. Putting two and two together, the Grand Californian won’t operate for nearly nine months in 2020. You can extrapolate how that will impact availability.
So, DVC’s doing the smart thing here by opening the resort. Some guests may want to visit even though the parks aren’t open, and the pandemic continues. Many DVC members vacationed this way at Vero Beach, Hilton Head, and even Orlando.
In fact, my wife was just saying last night that she’d like to visit the Grand Californian while the parks are closed. Our situation’s a bit different, though, as her sister teaches at nearby Cal-State Fullerton. With California experiencing another outbreak, I’m dubious about how much DVC owners will want to visit Anaheim with all theme parks shut down in the area.
However, I firmly believe that DVC’s made the correct decision here. It needs to give customers the choice. Just as importantly, cast members need the work. Disneyland quietly underwent another round of layoffs this past week. The situation’s grim. By reopening the Grand Californian, DVC stands up for its program participants and cast members alike.
I will emphasize the positive here for DVC owners. Should you choose to stay at the Grand Californian right now, you will be the only people at the resort. Disney won’t accept regular hotel reservations for the foreseeable future. So, you have the run of the place, which is pretty great!
A Crucial Week for The Walt Disney Company
For many years now, Disney has posted its fiscal quarterly earnings reports on Tuesdays. This past week, Disney chose Thursday instead, and the significance of this date didn’t get hyped enough. November 12th commemorated the first birthday of Disney+, the service that has saved Disney during the pandemic.
CEO Bob Chapek picked the date as a tribute to the staggering success of the nascent streaming service. Disney+ has gained 73.7 million subscribers in a calendar. Netflix, the predominant streaming service, needed eight (!) years to reach that total. Obviously, the marketplace has changed dramatically since then. Still, Disney+ reached its five-year goal in less than 12 months.
Remarkably, Hulu and ESPN+ have performed almost as well. They enjoy combined subscription totals of 46.9 million, which would make those two entities a force in the industry on their own. Overall, Disney currently claims 120 million subscribers across its three services, four if you count Hulu+ Live TV as its own thing. Netflix possesses 195 million subscribers.
Disney’s closed the gap quickly over the past year. Even more impressively, Disney+ isn’t available everywhere yet. It’ll launch in several Latin American countries this week, and the company will report those numbers on its next Investor Day, December 10th.
Still, Disney needed all these streaming service positives to hide something in plain sight. The company’s stock rose even though Disney reported a yearly loss for the first time since people started keeping database records. That was all the way back in 1980! Yes, Disney hadn’t lost money for at least 40 years!
As a concession to the trying times of the pandemic, the company announced it won’t provide a dividend for now. However, it will do so at a later date despite activist investor Dan Loeb’s request.
Finally, Some Hope…
Disney stock rose 10 percent last Monday, and it had nothing to do with the upcoming earnings report. On that date, Pfizer and BioNTech announced that they were ready to manufacture a “surprisingly effective” COVID-19 vaccine.
Frankly, the Disney part of this borders on irrelevant. After the year we’ve all had in living through a pandemic, it’s terrific to hear that hope is on the horizon. Still, it’s a Disney Parks update, and you can imagine the impact a vaccine would have on visitation.
As I’ve mentioned before, Disney was pacing for record attendance in 2020 right up until Coronavirus reached North America. At that point, the parks experienced dramatic losses.
Executives indicate the parks lost $2.4 billion during the fiscal fourth quarter due to the pandemic. For the entire year, Disney suffered a financial shortfall of $2.83 billion. You don’t need to be a financial guru to understand how much COVID-19 impacted the parks and the company’s bottom line.
So, the news of a vaccine caused all theme park stocks to rise. Movie theater stocks also increased, another positive sign for Disney. It still has surefire blockbusters like Black Widow, Free Guy, and Jungle Cruise awaiting theatrical release. If COVID-19 becomes treatable early in 2021, all these titles will get Disney’s business back on track.
Other Park News
Obviously, the potential vaccine dominates park news (and everything else in our lives) this week. Still, lots more happened. Disney Springs has installed contactless security scanners at the Transportation and Ticket Center, leaving Magic Kingdom as the only place without them. You may recall that Disney Springs added them earlier this month.
Speaking of Disney Springs, the entertainment complex has extended its December hours. It’ll remain open until 11 p.m. throughout December and into early January.
So, you’ll get to spend plenty of time here on the days when the parks close early. Some of the parks, especially Disney’s Animal Kingdom, have added an extra hour. You can check the official park calendar for specific details.
I mentioned last week that Disney resorts wouldn’t decorate as much for the holidays. Humorously, cast members proved me wrong this week. No, gingerbread houses and cabins won’t come back this year, but Christmas trees anchor the hotel lobbies of all your favorite DVC resorts now. Disney’s decorated as much as it possibly can this year, which is commendable.
I also wanted to give you a heads up on something. Magic Kingdom Park Passes have sold out for annual passholders for October 1st next year. You may wonder about the date, and the answer is that it’s Disney’s 50th anniversary. You’re not too late to grab a Park Pass, though. You simply need a Disney resort (i.e., DVC) reservation. If you want to go, you should BOOK NOW, though. Otherwise, you risk getting shut out.
Even More Park News
Disney’s financial report also came with a modest surprise. Guests have reported that the parks seem more crowded. Well, that’s not your imagination. The parks have increased maximum capacity from 25 to 35 percent. This was the first time that executives officially confirmed the percentage on crowd limits.
Disney has also indicated that it has booked 77 percent of all Park Passes this holiday season. Hotel occupancy has also nearly reached capacity for Thanksgiving week. So, for the first time in a while, I can honestly say that everything’s looking up for Disney.
Stay safe and smart, everyone! We’re possibly/probably through the worst of the pandemic, just in time for the holidays!