Disney (DIS) Shows Glimmer of Hope, Taking Resort Reservations for July 1

After weeks of punishing returns on the stock market, featuring bond issues, furloughs and firings, and of course, more than a little hand-wringing, there's finally some hope to come out of the Happiest Place on Earth. Disney (NYSE: DIS) is poised to start taking reservations for resorts again, and the new start date is July 1.

A Bit of Fairy Dust in These Reservations?

Interestingly, the reservation system may be hiding a bit of a secret of its own. While resort reservations are being accepted for dates on or after July 1, there's still no official reopen date announced for the parks and the resorts for which the reservations have been made. This means, theoretically, people may be making reservations that ultimately go nowhere.

However, Disney's making some very big plans to make that reopening happen. The parks are poised to phase in their openings, focusing on certain retail operations as well as certain dining facilities. There's a greater emphasis on physical distancing, which will be accomplished by reduced capacity measures for some time, and an increase in the park's overall cleanliness and sanitization operations. That's the word out of Disney Parks' chief medical officer—and who thought the Disney park system had one of those?—Dr. Pamela Hymel.

Planning to Fail

Some here might wonder, what happens if the plan to reopen July 1 doesn't go off? Will Disney just be keeping payments? Sort of, say reports; those who make a booking that doesn't go off will be able to push the booking back until the park is actually allowed to honor the booking by law.

The park is also looking to honor the tickets that were sold before the shutdown processes began; those with unexpired multi-day tickets that aren't completely used, or tickets that had a date-specific period issued between March 12 and the closure date will have their expiration dates extended to December 15. Those who still can't visit in this time frame will be able to redeem the ticket for credit toward a future ticket.

Not All Disney Parks Are Reopening Equal

Additionally, the planned reopening for Disney Springs, the entertainment venue that boasts dining and shopping options, will be arriving in phases starting May 20. Such plans will include all the standard wheezes we're hearing about ad nauseum these days, including ramped-up cleaning procedures, the use of “appropriate face-coverings” by literally everybody, and limits on everything from capacity to operating hours.

Meanwhile, the California side of Disney remains a massive unanswered question. There's no word on when Disneyland Resort operations can restart, and an attempt to check room availability for even June 1 was declared “unavailable” as of this writing. Meanwhile, the Disney Cruise Lines and the Hawaiian spa destination / resort Aulani are both still shuttered.

Where Does the “Magic” Part Come In, Again?

Disney is in a terrible position right now. It must restart its park operations—not to mention its movie operations—to have any chance to even sit in the same room as profitability. Its stockholders are likely considering further share sales—especially after the recent downgrade from MoffettNathanson—and its newly-minted crop of bondholders are likely wondering where their returns will come from.

But by like token, opening up with too many restrictions is likely to damage the Disney parks, and possibly irreparably in some cases. Who's going to want to go to a theme park, in Florida, in July, and be required to wear a face mask around for 12 hours straight? That's assuming they can even get in in the first place thanks to the reduced capacity requirements.

Even if they manage to get in, what will they see? A bunch of closed shops and stern-faced employees nannying people around, screaming “six feet!” until they're hoarse? Will the Hug Police be dispatched to cover Cinderella and the other Disney Princesses like a jumped-up palace guard, insisting that six-year-olds keep proper social distancing from their fairy-tale heroes? How many parkgoers will simply forego the return until the return looks something more like what it should look like? How can Disney even come close to properly projecting what it will need in terms of food, employee manhours, and other supplies in the midst of that level of uncertainty?

Regardless, Disney must try. It depends on those admissions fees and hotel room sales far too much to do anything but. It's taken on a lot of debt recently, and that needs quite desperately to be covered.