We're starting to see the first signs of life at Southern California's theme park scene. SeaWorld Entertainment (NYSE: SEAS) has received approval from local officials to open its original theme park -- with some pretty significant restrictions -- in San Diego.
When SeaWorld San Diego reopens in a few days it will be limited to outdoor animal exhibits. It will not be able to operate any rides or indoor aquariums and attractions, but if it gets the turnstiles moving for the time in more than five months it's better than the alternative. Cedar Fair's (NYSE: FUN) Knott's Berry Farm in Buena Park has also resumed pared back operations with an outdoor dining and retail experience. It's naturally not the same experience without the rides and other attractions, but it'll do for the new normal.
A few miles southeast of Knott's Berry Farm, Disney's (NYSE: DIS) original Disneyland theme park and the adjacent Disney's California Adventure remain closed. The Downtown Disney entertainment district just outside of the two gated attractions has begun a phased reopening, but there's no timeline for a return of the actual theme parks. California is getting there with its theme parks, but it's just not ready to party like it's 2019.
It's a small world
Disney and SeaWorld Entertainment have seen the rest of their parks open for at least a month. SeaWorld's attractions in Florida and Texas have been open for more than two months. Disney World began welcoming guests to its four theme parks in mid-July. They're not operating profitably at the moment, but the general consensus is that they're losing less money now than they would have if they had remained closed.
The irony here is that California, Texas, and Florida would all go on to experience a surge in new cases earlier this summer regardless of how tight a leash they kept on area businesses. California holding back on its amusement parks didn't spare the country's most populous state from the brunt of the virus. California now happens to have to most COVID-19 cases in the country. However, just as we've seen in Florida and Texas, new daily coronavirus case counts have been declining steadily since peaking in July. California's seven-day moving average is at its lowest since July 1.
In most markets this conversation would be moot. The peak summer travel season is essentially over, and it would be fine to just wait until the springtime of next year to get rolling again. However, Southern California -- like Florida and, to a lesser extent, Texas -- don't close their parks seasonally. These are year-round parks. When local officials give Southern California attractions the green light they're going to floor it.
Disney waited at least a month after all of its Florida rivals were opened to welcome guests to Disney World parks. It would be a surprise if Disneyland waits that long. All of the parks that can feasibly open will probably do so the moment that they can charge full prices for a somewhat full experience.
We don't know what SeaWorld San Diego will charge for the diluted experience. Cedar Fair's Knott's Berry Farm is charging just $30 for adults to enjoy the Taste of Knott's outdoor festival, and that includes a tasting card with five menu items at no additional cost. It's not the kind of stuff that will move the needle at Cedar Fair, but things have to start somewhere.
Even Disney doesn't know when Disneyland will reopen. It's in the hands of local officials now. With the recession showing no signs of letting up, and cast members working at the park now more than five months displaced, the original Disneyland in Anaheim can't open soon enough.
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Rick Munarriz owns shares of Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool recommends Cedar Fair and recommends the following options: long January 2021 $60 calls on Walt Disney and short October 2020 $125 calls on Walt Disney. The Motley Fool has a disclosure policy.
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