Effects of Coronavirus (COVID-19) On Entertainment & Tourism Industry

[OhHaiInternet95]

People keep paying it?


For now.

COVID has really devastated the Disney product. Much more so than Universal's. I'm pretty sure there is going to be serious brand damage down at the house of mouse. They really haven't handled this well at all. Many long term former employees simply will not go back after how things went down. Being fired via email after 22 years of service doesn't sit well with people. The equity talent will leave town and work at Dolly's Dixie Stampede or Vegas. When travel comes back, and it will come back, Disney is going to find a smaller, less enthusiastic, and less talented workforce to choose from.

I suspect Hoop De Doo won't come back, and it should. BatB will come back, and it shouldn't. FotL will come back, and that's good.

I really hope you’re right—both about Disney having incentive to actually care and travel coming back (if immunity doesn’t last ugh).

 

[JungleSkip]

(if immunity doesn’t last ugh).

Dude you really need to stop with this. It clearly does.

 

[Parkscope Joe]

Everything will come back.

 

[vgp]

Six Flags just posted their earnings for Q3, and it's bad, but not unexpected: Six Flags Announces Third Quarter 2020 Earnings

Some interesting tidbits in here, and I think a good baseline for the bleak financial reality that WDW in particular is facing. At the end of the day, Six Flags brought in $126M of parks revenue in the quarter, and spent $160M in opex/sga/cogs, while also paying for a 'transformation plan' and all of the various capital projects... and so they are clearly still in mitigation mode and will likely be for some time. Their net income was -$116M, against a backdrop of having $214M in cash and $2.7BN in long-term debt. And when you consider WDW is far more capital intensive, and far more expensive to simply operate in general, there remains a very uncertain short/medium-term outlook for this industry, no matter how optimistic the pictures of at-capacity parks and long queue lines may appear at first glance.

 

[JoeCamel]

Some interesting tidbits in here, and I think a good baseline for the bleak financial reality that WDW in particular is facing. At the end of the day, Six Flags brought in $126M of parks revenue in the quarter, and spent $160M in opex/sga/cogs, while also paying for a 'transformation plan' and all of the various capital projects... and so they are clearly still in mitigation mode and will likely be for some time. Their net income was -$116M, against a backdrop of having $214M in cash and $2.7BN in long-term debt. And when you consider WDW is far more capital intensive, and far more expensive to simply operate in general, there remains a very uncertain short/medium-term outlook for this industry, no matter how optimistic the pictures of at-capacity parks and long queue lines may appear at first glance.

TWDC at least has a good cash/credit position and can hang on for a year or more, with those numbers six flags isn't even a good takeover target.

 

[Mad Dog]

People keep paying it?


For now.

COVID has really devastated the Disney product. Much more so than Universal's. I'm pretty sure there is going to be serious brand damage down at the house of mouse. They really haven't handled this well at all. Many long term former employees simply will not go back after how things went down. Being fired via email after 22 years of service doesn't sit well with people. The equity talent will leave town and work at Dolly's Dixie Stampede or Vegas. When travel comes back, and it will come back, Disney is going to find a smaller, less enthusiastic, and less talented workforce to choose from.

I suspect Hoop De Doo won't come back, and it should. BatB will come back, and it shouldn't. FotL will come back, and that's good.

Disney's brand is super strong, but not invulnerable. Prime example is Sears, perhaps the strongest brand ever, as their brand plummeted once a over zealous cost cutting executive administration, cut the quality and free warranties
that made the brand such a valued treasure. Sears is barely alive now. Their slippage started well before the advent of online retailing and retail shopping slippage. Their downward trajectory was a direct result of customers perceiving
a loss of value....And they are not alone. Many strong brands that perceived themselves as invulnerable no longer exist....Disney is taking a really risky route. Comcast and Universal should strongly consider taking advantage of this and
keep their value intact, even if that results in a financial loss for now. It will repay benefits in the future, many times over.

 

[JungleSkip]

I think people are severely over blowing what's going on. These shows will be back, with much of the same talent. Disney saw an opportunity to negotiate a sweetheart deal when they bring these entertainers back in a year-18 months and took it. Is it gross and cynical? You bet. But this isn't the end of these shows permanently

 

[OhHaiInternet95]

I think people are severely over blowing what's going on. These shows will be back, with much of the same talent. Disney saw an opportunity to negotiate a sweetheart deal when they bring these entertainers back in a year-18 months and took it. Is it gross and cynical? You bet. But this isn't the end of these shows permanently

I would honestly rather the entertainers refuse to come back. I'd like to believe workers can still have some leverage. Once again, maybe this wakes people in this country up (but I doubt it...so wish I could get out of here!).

 

[JungleSkip]

I would honestly rather the entertainers refuse to come back. I'd like to believe workers can still have some leverage. Once again, maybe this wakes people in this country up (but I doubt it).

Then they'll go find entertainers that will work for what they're paying. There's always going to be talented people that will want to work at these locations. It's the nature of the beast.

 

[Mad Dog]

I think people are severely over blowing what's going on. These shows will be back, with much of the same talent. Disney saw an opportunity to negotiate a sweetheart deal when they bring these entertainers back in a year-18 months and took it. Is it gross and cynical? You bet. But this isn't the end of these shows permanently

I agree. The shows will ultimately come back in some form in the future. They'll use this as a power move to get working conditions in the contract more amenable to them. But there's still inherent damage to the brand in the interim. Plus severe damage to the relationship with the employees. That will linger for a long time.

 

[Legacy]

I would honestly rather the entertainers refuse to come back. I'd like to believe workers can still have some leverage. Once again, maybe this wakes people in this country up (but I doubt it...so wish I could get out of here!).

Florida is a right to work state. Workers there have almost no actual leverage.

 

[RevFreako]

Then they'll go find entertainers that will work for what they're paying. There's always going to be talented people that will want to work at these locations. It's the nature of the beast.

"Entertainers that will work for what they're paying" won't be nearly the caliber that they had before. They're shooting themselves in the foot, in the long term.

 

[JungleSkip]

"Entertainers that will work for what they're paying" won't be nearly the caliber that they had before. They're shooting themselves in the foot, in the long term.

I think this is naive. There will always be young, hungry, talented people out there that want to show off what they can do. I'm not saying I like the way Disney treats its workers, but it's the truth. There's always another talented singer that wants to perform in front of people.

I agree. The shows will ultimately come back in some form in the future. They'll use this as a power move to get working conditions in the contract more amenable to them. But there's still inherent damage to the brand in the interim. Plus severe damage to the relationship with the employees. That will linger for a long time.

As someone who worked in these parks, the idea that there's ever been a good relationship between the parks and its employees is kind of funny to me.

 

[Grabnar]

I think this is naive. There will always be young, hungry, talented people out there that want to show off what they can do. I'm not saying I like the way Disney treats its workers, but it's the truth. There's always another talented singer that wants to perform in front of people.

"Entertainers that will work for what they're paying" won't be nearly the caliber that they had before. They're shooting themselves in the foot, in the long term.

I think it's a balance between these two; yes, new talent will still want to work at Disney.... for now, but there comes a point where either your company or the industry is toxic or unstable enough that your well of talent starts to dry up. This is just one more brick on the other side of the scale for workers.

 

[RevFreako]

I think this is naive. There will always be young, hungry, talented people out there that want to show off what they can do.

"Young, hungry, talented" only gets you so far. Disney just cut the meat of the biggest piece of the puzzle - experience.

 

[OhHaiInternet95]

Dude you really need to stop with this. It clearly does.

Everything will come back.

I feel like for things to come back there has to be SOME improvement in ‘21. Not a return to ‘19, just better than ‘20.

 

[JungleSkip]

I feel like for things to come back there has to be SOME improvement in ‘21. Not a return to ‘19, just better than ‘20.

There almost certainly will be improvement in 2021

 

[RevFreako]

I feel like for things to come back there has to be SOME improvement in ‘21. Not a return to ‘19, just better than ‘20.

On the one hand OHai, I agree with you. I'm increasingly of the opinion that the theme park experience as we knew it before COVID is dead -- but repeatedly making that prediction doesn't serve anyone in these conversations any more than the repeated Pollyanna of "Everything is going to come back." Doesn't make for a very entertaining forum, if nothing else.

 

[OhHaiInternet95]

On the one hand OHai, I agree with you. I'm increasingly of the opinion that the theme park experience as we knew it before COVID is dead -- but repeatedly making that prediction doesn't serve anyone in these conversations any more than the repeated Pollyanna of "Everything is going to come back." Doesn't make for a very entertaining forum, if nothing else.

I feel that IF there’s gradual improvement in 2021, then perhaps that experience can. Once again, though, part of me wonders if the “pre-Covid normal” is even worth going back to, considering it led to...well, Covid.

Before the news last night I was feeling pretty hopeful.

 

[JungleSkip]

I feel that IF there’s gradual improvement in 2021, then perhaps that experience can. Once again, though, part of me wonders if the “pre-Covid normal” is even worth going back to, considering it led to...well, Covid.

The pre-COVID normal or something ridiculously close to it will return because literally everyone in the world will want it to return