As the Walt Disney Co. looks beyond the current coronavirus crisis and to a horizon where its worldwide theme parks and resorts are able to re-open, Disney executive chairman Bob Iger is floating the possibility of taking visitors’ temperatures. Still, Wells Fargo separately downgraded Disney’s stock on Tuesday, with analysts there noting that attendance at the parks “could take 24 months to normalize.”
“One of the things that we’re discussing already is that in order to return to some semblance of normal, people will have to feel comfortable that they’re safe,” Iger said in an interview with Barron’s. “Some of that could come in the form ultimately of a vaccine, but in the absence of that it could come from basically, more scrutiny, more restrictions. Just as we now do bag checks for everybody that goes into our parks, it could be that at some point we add a component of that that takes people’s temperatures, as a for-instance.”
Iger discussed with the publication how the company has been weathering the crisis, as well as its preparations to confront a potentially changed media landscape after the pandemic. The suggested new health protocols are part of a possible path forward.
Iger went on to point toward China’s handling of the pandemic, particularly their implementation of frequent checkpoints where individuals’ temperatures were taken. He compared the practice to security measures that were introduced after 9/11, such as providing photo ID or walking through metal detectors.
“Let’s prepare for a world where our customers demand that we scrutinize everybody,” said Iger, who stepped into the role of executive chairman after Bob Chapek succeeded him as CEO earlier this year. “Even if it creates a little bit of hardship, like it takes a little bit longer for people to get in.”
Disney’s parks — located in Tokyo, Shanghai, Paris, Hong Kong and in the U.S. — are all currently closed. Stateside, Disneyland and Walt Disney World have been shuttered indefinitely amid strict social distancing measures meant to prevent the further spread of the coronavirus. This is only the third time in history that Disneyland, the theme park and resort in Anaheim, Calif., has fully suspended operations. The other instances were the Sept. 11 attacks and the national day of mourning after President John F. Kennedy’s assassination.
Meanwhile, Wells Fargo analyst Steven Cahall downgraded Disney stock to equal weight on Tuesday, doubtful of the company’s ability to get back to full force until testing and vaccines for COVID-19 become the norm.
“We’ve thought the value creation from Disney+ (and later on Hulu) would be enough to more than offset a declining environment for Media Networks,” wrote Cahall. “We still believe in that, but we didn’t foresee this unique and severe downturn for Parks. We don’t think Parks can get back to anything close to full capacity until testing and/or vaccines are far more ubiquitous.”
Cahall forecasts “zero park attendance” for the back half of fiscal 2020 and only 50% capacity in fiscal 2021. Disney’s current fiscal year should end around September, meaning the equity research firm is projecting that the current closures will last until at least then.
“We see the limiting factor as healthcare technology as assets like Walt Disney World will either need to operate with social distancing in-place – significantly limiting capacity – or a vaccine will need to be widely enough available that the population will again feel safe in such a gathering,” he wrote. “Testing may also improve, allowing customers with immunity/antibodies to behave a bit more freely.”
“While the healthcare community is working hard we think it’s overly optimistic to expect either a widely distributed vaccine or large parts of the population being immune in the next 12 months,” added Cahall. “As such our attendance forecasts are a best guess with a precipitous decline followed by a ~12-month recovery.”