California theme parks will not profit from 15% of capacity

A review of California’s COVID-19 safety regulations, announced on Friday, could allow Disneyland, Universal Studios, Six Flags Magic Mountain and other theme parks to reopen their outdoor toys and attractions on April 1, if they are in counties where coronavirus transmission is low enough.

Another caveat: in most parts of the state, parks will have to maintain frequency at 15% of capacity – a rate so low that industry experts say the parks would certainly not make a profit.

Still, they say, parks are likely to adopt this way of losing money for a while, because they will need time to scale up operations.

“Fifteen percent is not sustainable as an operational level,” said John Gerner, theme park specialist and managing director at Leisure Business Advisors. “But as a transition to full openness … it makes sense.”

According to the new rules announced on Friday, amusement parks will be able to reopen on April 1 with 15% capacity in counties that are at the red level – California’s second toughest four-level reopening roadmap. A county is placed in one of four layers based on the number of new COVID-19 cases per 100,000 people, positive coronavirus testing rate and an equity measure.

According to the new regulations, the frequency cap increases to 25% of capacity when a county moves to the third stricter level, orange, and 35% when it reaches the softest, yellow level. The previous rules forbade the parks to reopen until their home municipality reached the yellow level and limited the frequency to 25% of the capacity.

In November, Praia and Calçadão de Santa Cruz became the first theme park in the state to reopen under previous rules, but closed after a weekend when COVID-19 cases rose again in the municipality of Santa Cruz.

Los Angeles County (home of Magic Mountain and Universal Studios Hollywood) and Orange County (home to Disney parks and Knott’s Berry Farm) remain in the most restrictive, purple layer, but they seem close to entering the red layer.

Theme park operators praised the change in state rules, saying the close of almost a year was a brutal financial blow to parks, their workers, nearby businesses and cities that depend on tax revenue generated by the parks.

Since the parks closed last year, most have laid off or fired many of their workers. The Disneyland Resort in Anaheim laid off nearly 10,000 of its nearly 31,000 employees after Disneyland and Disney California Adventure parks closed. More than 1,000 were rehired to help staff a food and shopping event scheduled to begin on March 18.

Gerner and other experts say the theme parks will need time to rehearse and train employees before reopening. Starting with crowds with only 15% of total capacity will make the transition easier, they said.

Many of the redundant workers have found other jobs, so theme parks will need to hire and train people who have never operated an attraction or served food in that environment, experts say.

“Everyone is rusty,” said Martin Lewison, a professor of business administration and theme park specialist at Farmingdale State College in New York. “They have to get the rust out of things.”

Lewison agreed that most theme parks will not make a profit operating at 15% capacity, but he said any revenue is better than none. In addition, he noted that parks continue to incur costs – taxes, utility bills and maintenance – even when they are closed.

Disneyland sources say the 100-acre park has a capacity of about 80,000 people a day. The new state regulations would allow about 12,000 visitors a day, once Orange County reached the red level.

The question is whether fans of theme parks will rush to the parks when the gates open or will be hesitant, fearing the risk of taking COVID-19 during a ride at Disneyland’s Matterhorn Bobsleds or on the Universal Studios Hollywood tram ride.

“I think a lot of people will think twice,” said Gerner.

Ryan Temple, a Disney fan from Phoenix who visited Disneyland a few times a month before the pandemic, said he lost the park and often remembers looking at pictures of his previous visits.

Still, he said, it probably won’t be there the day the park is reopened.

“Even if it was at 15% capacity, it would still be a sudden shock to be around so many people again,” he said, adding that he could wait until he was vaccinated against COVID-19.

“I hope this happens sooner or later,” said Temple.

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