Disney’s California parks reopen April 30: good luck getting a ticket

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After a long and exhausting break, Walt disney‘s (NYSE: DIS) California theme parks will reopen on April 30. Disney closed the turnstiles in March of last year in response to the COVID-19 outbreak. California has been one of the hardest hit states throughout the pandemic, and as a result has implemented some of the toughest trade restrictions in all of the United States.

The House of the Mouse lobbied the state for the right to reopen. Highlighting the successful and safe reopening of its parks in Florida, he argued that he could follow the same protocols for his parks in California. Luckily for shareholders and fans alike, the parks will reopen at the end of the month. Pent-up demand from Californians who have been locked indoors for nearly a year could make admission tickets a popular commodity.

The Avengers Campus at Disneyland’s California Adventure Theme Park will open on June 4. Image source: Disneyland.

Disney theme park tickets will likely sell out

Interestingly, even though its theme parks were closed in California, the downtown area of ​​Disney was allowed to reopen several months ago. The vast shopping and dining area has seen incredible demand. The few times I took my family to visit we had to wait over 90 minutes to get in.

Additionally, Disney presented “A Touch of Magic, an exclusive shopping and dining experience inside its California Adventure Park that costs $ 75 per person; tickets sold out within hours. Such is the pent-up demand in the region to visit Disney properties. It’s a testament to Disney’s faith in providing a safe environment whose demand far exceeds availability.

When Disney’s California parks reopen on April 30, they will likely be limited to allowing visitors to only up to 25% of their capacity. Given the enthusiasm of fans and limited attendance capacity, tickets for the parks could sell out quickly after being offered to the public. Even if the doors will open, good luck finding a ticket unless you’re willing to pay a pretty dime for the privilege.

An opportunity for Disney to increase prices?

The dynamics of supply and demand appear to be strongly in favor of Disney. This could be an opportunity to increase the prices of tickets, parking lots, hotels and goods. In the past, Disney has been reluctant to raise prices too quickly because of the negative publicity it would get in response. However, given that it has been forced to shut down through no fault of its own and suffer significant financial consequences, this could give it the cover it needs to exercise some of its pricing power. After all, its operating profit from the segment that includes its theme parks fell from $ 6.7 billion in 2019 to a loss of $ 81 million in 2020.

Shareholders could benefit as Disney recovers its foothold, moving closer to full-scale operation. In the United States, more than 50,000 people still test positive for the coronavirus every day, and as vaccine rollout accelerates in the United States and a few other countries, we are a long way from ending the pandemic . But Disney is resilient: Its properties continue to be popular, and in the wake of the virus, its parks will likely be as full as before.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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