I guess that’s why we can’t have nice things in the Sunshine State. Facing its highest COVID-19 case counts since the January peak, Florida politicians and businesses are starting to tighten up on mask requirements. Walt Disney (NYSE:DIS) will be requiring all guests at its Disney World resort in Florida to wear masks in indoor settings starting Friday.
I suggested on Sunday that Disney could roll out requirements for face coverings before the end of summer. It turns out I didn’t even have to wait until the end of the week.
Running for cover
No one’s going to be happy with this move. Disney ended indoor mask requirements for fully vaccinated guests on June 15, in accordance with updated guidelines from the U.S. Centers for Disease Control and Prevention. However, by not requiring proof of vaccinations the decision also freed up those who have not taken the shots to slide through the turnstiles unchecked.
It’s not just that Disney World shifted the burden of proof to the honor system. Throw in a stubborn delta variant that’s feasting on the unvaccinated in the state and you have the perfect recipe for a six-month high in case counts with hospitalization and death rates also moving sharply higher.
There is never a good time for a spike in a deadly pandemic that has already claimed more than 628,000 lives in this country, but it’s particularly unfortunate timing for Disney World. The world’s most visited resort turns 50 in two months, and it’s launching an 18-month celebration backed by new rides and experiences.
Disney was already facing international travel restrictions that would eat into some of its potential visitors in the coming months. It’s not a surprise that it broke out a mid-summer promotion for Florida residents, offering discounted park tickets as a way to fill the void until the 18-month fete kicks off in October.
Will the new indoor masking requirement eat into potential demand? If the next step is for Disney to reintroduce plexiglass dividers on vehicles and space out guests on attractions it would hurt the supply side of the experience with reduced throughput.
Will Comcast‘s (NASDAQ:CMCSA) Universal Orlando and SeaWorld Entertainment (NYSE:SEAS) follow Disney’s lead? They have been more lax than the House of Mouse with their pandemic-era restrictions, but if they continue to let unvaccinated guests jam into enclosed buildings unmasked won’t those touristy haunts just become a hotbed of delta variant contagion?
This doesn’t have to end badly. Vaccination rates should start to pick up, especially as more companies are announcing that they will be required for employees returning to work. Friday’s masking mandate can prove short-lived if case counts start to fall. Politicos across the state from both parties are ringing the warning bell pretty loudly this week.
This summer is shaping up to be a lost season for theme park operators and many of the market’s travel and tourism stocks. This setback obviously isn’t helping. The masking mandate reversal on Friday will weigh on anyone planning a trip to Disney World. The COVID-19 crisis isn’t over, and that’s a point being driven home at a media mogul that is used to fairy tale endings.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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