Disney's Shanghai resort becomes first to resume operations amid pandemic
By Chen Tong
01:59

The Shanghai Disney Resort announced Wednesday that it will reopen to the public this coming Monday. After being closed for more than three months, the resort will be the first Disney park in the world to resume operations since the coronavirus pandemic began. 

Analysts said the reopening could help the company judge how fast its resorts can bounce back in other markets as well.

The park's announcement says the opening will be for limited attendance only.

Those wanting to visit the park will have to buy tickets and make reservations in advance. Industry insiders say the company hopes the Shanghai resumption will help out the firm's finances.

"The reopening of the Shanghai Disney resort is very encouraging in many ways. For theme parks, depression makes the largest portion of the cost. Therefore, any increase in attendance or income will help break even. There are also signals to the rest of the world that COVID-19 will eventually pass and business will be back to usual," said Theodore Shou, chief investment officer at Skybound Capital.

In 2019, the Shanghai Resort had welcomed 80,000 people a day, so Disney is in urgent need of business as usual. Its latest fiscal report published Wednesday shows the company's revenue from resorts dropped 58 percent year on year in the first quarter of 2020.

With theaters closed, the company's movie business has also taken a fall, but Disney said its biggest losses for the quarter were in resorts.

"Disney's resort and movie businesses still contribute most to the company's overall businesses. The resort business was heavily affected by the pandemic, and Shanghai resort's business resumption will help the firm to see whether there will be a quick rebound in business and how other resorts will perform once they are opened in the public," said Yang Zhongning, investment consultant at Industrial Securities.

While the company considers that, it can rely on its new streaming media business, Disney Plus, which now has more than 54 million subscribers, and which the firm is counting on. The new service was just launched at the end of last year.

Disney netted 11 billion U.S. dollars in the last fiscal year. That's down 12 percent year on year. So as the media environment evolves, studio entertainment including movies and streaming services have become the number one income booster for Disney. The segment earned over 1 billion U.S. dollars in fiscal 2019 – a nearly 80 percent increase from the previous year.

As the novel coronavirus pandemic becomes more subdued in China, the country is ramping up efforts to get tourism back on its feet again, with the majority of scenic attractions reopening and a slew of tourists swarming to popular sites during the May Day holiday season.

Read more: Disney takes $1.4 billion coronavirus hit, sets date to reopen Shanghai park