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After seeing “encouraging signs of a gradual return to some sense of normalcy in China,” the Walt Disney Company announced Shanghai Disneyland will begin a phased reopening on May 11 with social distancing measures put in place to mitigate the spread of the coronavirus.
“We know how much our guests have been looking forward to returning to Shanghai Disneyland, and our cast is excited to begin welcoming them back,” said Disney's CEO Bob Chapek. “As the park reopens with significantly enhanced health and safety measures, our guests will find Shanghai Disneyland as magical and memorable as ever.”
Chapek said the decision to begin re-opening is "not about break even, but just making a positive contribution."
“We wouldn’t open any park unless we could make a positive contribution to overhead and overall net profitability,” he added.
Shanghai Disneyland typically has roughly 80,000 visitors per day, but the Chinese government has mandated that the park operates at 30 percent capacity, or 24,000 visitors. Chapek said the park would initially begin operating well below that capacity and ramp up to reach the 30 percent cap over several weeks.
“We will take a phased approach with limits on attendance, using an advanced reservation and entry system, controlled guest density using social distancing and strict government required health and prevention procedures,” Chapek said on the company's second-quarter earnings call. “These include the use of masks, temperature screenings and other contact tracing and early detection systems.”
Guests will be required to wear masks during their entire visit, except when dining. Hand sanitizer will be made available at all ride entrances and exits, while sanitation of all high-touch locations, including ride vehicles, handlebars, queue railings and turnstiles, will be increased.
Additionally, cast members will receive procedural training with "an emphasis on contactless guest interaction, cleaning and social distancing" and will be required to wear personal protective equipment while working.
“Given the constantly changing global health environment, these practices may evolve as we consider the latest guidance, but we will share more information with you as we look towards reopening,” Disney Chief Medical Officer Dr. Pam Hymel said in a statement. “Our focus remains on the health and safety of the entire Disney community — including the wellbeing of the Cast Members who are caring for and securing our parks and resorts during the closure. We continue to learn from these experiences and will carry these lessons into reopening and beyond.”
Shanghai Disneyland closed Jan. 25 as the coronavirus began to spread from Wuhan, China. Shanghai Disney Resort was able to partially re-open “a limited number of shopping, dining, and recreational experiences” in Disneytown, Wishing Star Park and Shanghai Disneyland Hotel in March.
Blockbuster movies like Marvel's "Black Widow" and the live-action "Mulan" have been forced to postpone their theatrical releases while other Disney films, including "Artemis Fowl," "Frozen 2," "Onward" and "Star Wars: The Rise of Skywalker" have gone straight to the company's streaming service, Disney+, which has surpassed 50 million subscribers.
“While the COVID-19 pandemic has had an appreciable financial impact on a number of our businesses, we are confident in our ability to withstand this disruption and emerge from it in a strong position,” Chapek said in a statement. “Disney has repeatedly shown that it is exceptionally resilient, bolstered by the quality of our storytelling and the strong affinity consumers have for our brands, which is evident in the extraordinary response to Disney+ since its launch last November.”
Executive Chairman Bob Iger announced earlier this year that he will forgo his salary while Chapek has taken a 50 percent cut.
The news comes the same day Disney announced during its second-quarter earnings call that the company's parks and live entertainment business took a $1 billion hit due to the coronavirus.
“We estimate the total impact of COVID-19 on segment operating income in the quarter was approximately $1.0 billion,” Disney said in its earnings release. “Prior to the closure of our domestic parks and resorts, volumes and guest spending were higher compared to the prior-year quarter.”
The company reported quarterly revenue grew 21 percent to $18 billion, slightly outpacing expectations, but adjusted earnings per share came in at 60 cents, which fell short of the 89 cents per share expected by analysts.
Revenue for Disney’s Parks, Experiences and Consumer Products division dropped 10 percent to $5.5 billion, while operating income fell 59 percent to $639 million.
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Shares of Disney closed at $101.06 at the end of Tuesday's trading session, down 2 percent, and fell another 2 percent in after-hours trading.