Even Disney Reopening Is No Magic Bullet to Orlando's Recovery

(Bloomberg) -- As Florida is reopening for business, the fate of a cluster of deserted hotels and motels along Orlando’s Route 192 remains in limbo.

“Without Disney, we don’t exist,” said hotel owner Charles Schnaars.

Last week, Florida joined Georgia and some other states in beginning to lift the restrictions on residents and businesses that were intended to slow the spread of Covid-19. Theme parks aren’t yet allowed to reopen. Even when they are, unlocking the gates to the Magic Kingdom won’t be a magic bullet.

Motels, vacation home rentals and other lodgings on the U.S. Route 192 corridor south of Orlando can come back to life only when tourists are once again willing to board crowded planes and line up to enter crowded attractions, which could be years away. That’s beyond the control of Florida’s governor. It’s beyond even the mighty Walt Disney Co.

Although hotels were allowed to remain open under Florida’s lockdown that began in early April, many are all but vacant. East of Schnaars’ hotel on Highway 192, a red sign illuminates the empty parking lot of Pradeep Sharma’s motel, Seasons Florida Resort. With no guest bookings, Sharma faces about $15,000 in monthly costs despite laying off 24 workers.

The picture is grim for America’s theme-park capital. Orlando is expected to be one of the hardest-hit economies in the U.S. Almost 350,000 positions in the Orlando-Kissimmee-Sanford area are in industries at high economic risk from the pandemic crisis, according to the Brookings Institution, a Washington, D.C., research group. Disney is the area’s largest employer.

The major Orlando parks – Disney World, Universal Studios and SeaWorld – usually draw tens of millions of tourists annually. Disney’s park attendance throughout the U.S., which was an estimated 83 million visitors last year, may end up halved for 2020. Its Orlando park closed in mid-March, a couple of weeks before Florida ordered all non-essential businesses to shutter. That pain trickles down quickly.

As part of his plan to gradually reopen Florida, Governor Ron DeSantis said Friday he invited amusement parks such as Disney to submit reopening plans, though he wouldn’t predict when he would approve such a step.

Schnaars, who co-owns Destiny Palms Hotel along Highway 192, had been looking forward to a banner year. February bookings were at a record. But then European visitors started canceling as the coronavirus spread across Italy and Spain. On March 11, President Donald Trump announced a ban on most travel from Europe into the U.S. The next morning, Schnaars lost $75,000 in bookings.

These days he’s watching developments in New York State for a sense of how potential tourists might approach future travel. It’s not just that fewer people will be able to afford trips. New York’s governor recently warned all states of a potentially fatal illness in children that might be related to the novel coronavirus, confirmed by a new study from Italy.

“That’s a worrying concern for parents,” Schnaars, 60, said outside his hotel one recent afternoon, watching a golf cart on a reopened course nearby. “It’s going to potentially put a dent in family vacations.”

Sharma, of Seasons Florida Resort, has been ambivalent about seeking aid from the government stimulus programs aimed at small businesses. For loans under the Paycheck Protection Program to be forgiven, employers must use the money to cover payroll now and must rehire the same number of employees that they had before the shutdowns. With no certainty of when Disney will reopen, both criteria are a challenge for Sharma and other motel owners. According to a study by the American Hotel & Lodging Association, most hotel owners could be worse off financially if they accept loans under the Paycheck Protection Program and meet its criteria than if they simply close.

Sharma, for one, resists shutting down. “This isn’t just a business,” the 61-year-old said. “It’s everything that I have worked for all my life.”

In a typical year, the Orlando area would be wrapping up one of its busy seasons that runs from December through April. This spring, however, Sharma said he is anxiously awaiting one piece of news: “Every day there are rumors about when Disney is going to open.”

Disney is beginning to test visitor demand. It aims to open Disney Springs, its mall outside the Orlando park, on May 20. Because China is ahead of the U.S. in recovering from its first Covid-19 outbreak, the company reopened its Shanghai theme park this week, after a hiatus of more than three months. Bloomberg Intelligence analyst Geetha Ranganathan wrote in a research note that Disney will use its Shanghai experience as a blueprint to reopen other parks worldwide, perhaps reaching full capacity gradually over years. The company didn’t respond to requests for comment.

Some of the Orlando-area businesses in Disney’s orbit see stirrings of hope. Although Florida vacation rentals are not yet allowed to host vacationers, Lance and Karin Boyer’s business started offering discounts earlier this month for bookings later in the year and received some interest. Although they received some government relief, those bookings can’t come soon enough for them.

“We felt like we’re in purgatory,” said Lance Boyer, 59, “and not sure which direction we’re headed.”

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