The national health emergency continues and there is major uncertainty as to when it might end. Disneyland and Walt Disney World are closed with no official reopening date announced despite them taking reservations for June 1 or later. When they do open for guests again, things are likely to look and operate differently.
One of the big differences will be a cutback on construction projects at the parks. Capital expenditures are usually one of the first things to go when Disney trims its theme park budget during economic down times.
When the parks first closed in Mid-March, some of the construction vendors that worked on site reported that their projects had been shut down as well. Some projects continued on for a few more days, but for the most part construction on existing projects have ground to a halt to comply with stay-at-home orders for non-essential workers.
How many of these construction projects will start back up? It depends on how quick and strong the recovery will be. I saw today that Goldman Sachs predicted a 34% reduction in GDP for 2020. That’s a big hole to dig out of.
From a business perspective, Disney has to hedge its bets. No one really knows what the situation will look like in June, July, August or September (hopefully not October or November, but it’s possible) when physical distancing restrictions are lifted across America.
Disney officials will be making a plan for multiple possibilities. One of those would be that the economic recovery is swift and demand for its theme parks and tentpole movies returns to 80% or more of what it was prior to this situation. This would be a best case scenario.
Even in that best case scenario, a 15% or more cutback in revenue from the parks on top of the losses from the months while the parks have been closed, means that we will likely see many projects cut back or canceled at Walt Disney World.
Historically, Disney is not shy about canceling or postponing projects when the economy turns south. Remember the ‘Ghost Hotel’ that was originally going to be phase two of Pop Century Resort?
Let’s take a look at which projects might stay and which might go when Disney decides it’s time to reopen.
We can assume that any project you may have heard as a rumor or that hasn’t officially been announced yet will be canceled. These are the easiest for Disney to cut. Any project that has been announced, but for which ground hasn’t yet been broken is also likely to be defunded. Even some projects that have broken ground will find their work put on hiatus for a year or two even in the best case scenario.
Let’s look at Walt Disney World
Walt Disney World is gearing up for its 50th anniversary in 2021. It seems likely that Disney will want to continue some sort of celebration to help with the marketing for this anniversary, but I would expect it to be cut back in scale with some of the big attractions that were supposed to open in time for the anniversary being delayed. We probably weren’t getting any new parades for this, so those won’t have to be canceled, at least.
There were no big projects in the works at either Disney’s Animal Kingdom or Disney’s Hollywood Studios as both had recently opened major expansions.
The Magic Kingdom
There’s only one big project underway at Walt Disney World’s original Magic Kingdom — The TRON roller coaster — TRON Lightcycle/Run. The massive project in Tomorrowland is quite a bit along on its construction timeline. But will be pushed back due to the closure and is a likely candidate to be pushed back even further. There is, after all, a roller coaster right next door to it.
Since Star Wars: Galaxy’s Edge opened last year, the majority of construction at Walt Disney World has been focused on EPCOT. It’s in the middle of a major transformation of the Future World area, a project that will likely see a number of cutbacks and cancellations.
The area around its former Innoventions hall was to become ‘World Celebration,’ but it seems likely that work will be halted and a few planters added instead. The only thing that might be saved is the ‘Moana – Journey of Water’ which is basically a low cost park with some fountains.
Disney will want to have a home for its festivals. However, I expect that the new 3-story futuristic building that was to go where the old Club Cool / Butterfly garden was located, will be cut. There is still one old Innoventions building standing, that might just work as a temporary home for EPCOT’s Festivals, which do bring in a lot of money.
Both MouseGear and Electric Umbrella are in various stages of construction as of the shutdown. I expect both to be finished once work is able to begin again, but with budgets slashed.
The project that was closest to completion at EPCOT was the trackless Ratatouille attraction in the France pavilion – Remy’s Ratatouille Adventure. It was rumored to be in testing mode already. I would expect it to be finished as soon as possible with the opening used to help promote that Walt Disney World is back in business.
The other big project currently underway is on the far other side of EPCOT. Guardians of the Galaxy: Cosmic Rewind was a long way along on the construction timeline, but still nowhere near finished. It’s a tossup between TRON and GOTG for where Disney might apply a smaller construction budget, but I would have to give the edge to TRON, which will need something new to celebrate. I would expect GOTG to be finished, but perhaps with a reduced and delayed budget.
Next to Guardians of the Galaxy is the future home of the Play! Pavilion. When the parks shut down the pavilion was in the middle of a new project to restore its roof. This facility is essentially a replacement for the old Innoventions style attractions and meant to provide some attractions aimed at families with young children, for which there isn’t a lot to do at EPCOT. I expect the Play! Pavilion to be finished, but with some of the budget cut or delayed.
Disney had announced a new version of Spaceship Earth, even going so far as to set a closing date in May to start the transformation. It was to get a new story, new scenes, and some general TLC. It definitely needs the TLC and a new ending. If the project isn’t canceled outright, I expect big budget cutbacks.
Space220 is likely to be finished at the Mission: Space pavilion. The opening date for the space-themed restaurant has already been pushed back thanks to the park closure.
Harmonious, is a new nighttime show coming to the World Showcase Lagoon. Physical distancing guidelines likely means that most, if not all, shows at Walt Disney World will be canceled until a vaccine is widely available. Disney has done a lot of work on this show already and I would expect them to finish it, but the show probably won’t come back until it’s safe to hang out in crowds again.
Disney had announced two more projects at EPCOT, a new film in the China Pavilion and a new Mary Poppins attraction. Depending on where production on the new film stands, that could actually be finished, but I think we’ll all have to wave bye-bye to Mary Poppins.
Two new hotels are currently under-construction at Walt Disney World. The Star Wars: Galactic Starcruiser and Reflections – A Lakeside Lodge will both be pushed back indefinitely.
Star Wars: Galactic Starcruiser was designed to attract a high-end clientele. The demand for that will eventually return, so I would expect it to eventually open. Reflections is a DVC resort, that’s a whole different enchilada. I’m sure there are multiple spreadsheets trying to figure out when demand for a new resort might rise to levels needed to support work to begin on that site again.
The Cove hotel at the Swan and Dolphin Resort just went vertical. Judging by the state of the economy and the impact it already had on major hotel chains, this one is likely to be placed on an extended, if not permanent, pause. It’s also likely that the new third party hotels over by the Western gateway at Flamingo Crossings will no longer be built.
What about the Disneyland Resort?
Disneyland only had one major project underway, a clone of Mickey & Minnie’s Runaway Railway. It’s a cute ride, but Disneyland might be content to ride the coattails of Star Wars: Galaxy’s Edge a bit longer. I’d say the fate of this one is 50/50 at this point, depending on how fast crowds return to the park.
Disney California Adventure
Across the esplanade a major Marvel makeover is in the middle of construction. It seems likely that phase one of the project, which includes the Web Slingers: A Spider-Man Adventure attraction will open after a delay. But Phase 2, which included the E-ticket Quinjet ride to Wakanda, is likely to be cut back and postponed until the economic recovery is well underway.
The luxury resort is definitely off the table now as is the new DVC tower at the Disneyland Hotel, at least for some time. Paradise Pier’s hope of a major remodel and any work over at Gardenwalk is probably cut as well.
What about Disney Cruise Line?
The cruise industry as a whole is going to be hit hard by this, but Disney Cruise Line is better positioned than most to recover. They have just four ships, the crews have been largely kept on board each ship doing training and maintenance, and cruise ships already have good hygiene and cleanliness routines.
That said, a new level of cleanliness and hygiene enforcement will be needed until a vaccine is widely available.
What about the new ships Disney has already announced. I expect that Disney will try to push back or cancel construction on the second and third ships in their three ship order.
Construction on the first ship, Disney Wish, was supposed to start in November 2019, but that was pushed back due to issues with the supply line for specialized LNG equipment. If Disney can postpone work on the Disney Wish too by working with ship builder Meyer Werft, I’m sure they’ll take advantage of that. Not sure what the contractual obligations are there.
We’re confident The Walt Disney Company is well positioned to survive this unprecedented financial crisis, but it won’t emerge unscathed. Even the most optimistic economic forecasts believe the travel industry will take a big hit.
Disneyland’s location in the center of a major population center has it better positioned for a recovery over Walt Disney World which has to wait for its international clientele to recover and for North American residents to feel up to spending some of their household budget on travel again. That said, of all the Orlando parks, Walt Disney World seems the best positioned for a strong recovery.
I know it’s tough to hear that there will be no new projects, but that’s consistent with how Disney has operated in the past. If there is any project on the cut or delayed list you really wish Disney would save, let us know in the comments!