Disney | Fundamental Analysis | MUST READ ! LONG SETUP

As you know, Disney World is getting ready for the holiday tour season, and an influx of guests at levels not seen in two years.

Recently, the media titan's theme parks have been a positive aspect of its financial performance. The parks, entertainment, and products segment stunned analysts by returning to profitability two quarters ago, and park revenues virtually tripled in the quarter ended Oct. 2. There may have been some obstacles along the way, but the House of Mickey is making sure Disney World is all set to surge in business. Let's see what changes this week.

Residents of California must have heard the explosions coming from Disney's Hollywood Studios shortly afternoon on Sunday. It was just the sound of The Indiana Jones Epic Stunt Spectacular returning to the park for the first time since the resort closed from the pandemic in mid-March 2020. Due to quarantine issues and staffing difficulties, the corporation has not hurried to resume live shows since the park reopened. Nevertheless, they are slowly returning to the resort's four closed theme parks, and the Indiana Jones-themed extravaganza is a pretty big deal given the show's large capacity. If your objective is to keep the seasonally increasing crowd of visitors scattered throughout the park complex, you'll want to make sure they have something to do.

Another welcome development this weekend was the return of streetcars to the parking lot. Streetcars play an important role in moving guests from the huge parking lots to the entrance gates. Since most guests are walking through the gates, they will no doubt be glad to be spared the long walks to and from their cars.

In addition, Disney World will expand its hours of operation slightly over the next two weeks. Usually, guests staying at fine Disney resorts can get into the park 30 minutes before the official opening. During the holiday season, they will be able to get into the park a full hour earlier. This will help reduce early traffic at the turnstiles, which is certainly a good thing.

This is the first holiday season for Disney World with Genie, Genie+ and Lightning Lane+, which the company launched two months ago. The new park optimization app and the more contentious replacement of the old FastPass system at a premium price show that Disney is raising the bar when it comes to using machine learning to deliver more personalized recommendations.

Guests can use Genie for free but must pay $15 a day for access to Genie+, which permits booking return windows for access to the Lightning Lane expedited queues that replaced the old FastPass system. And for the two attractions in each of the complex's four parks that require the longest wait times, Disney has added so-called Lightning Lane+ -- guests can pay an additional fee for one-time access to one of these expedited queues.

Over the next two weeks, however, Disney will move several attractions from the Lightning Lane+ system to the Genie+ platform. It may seem like Disney is losing money by doing this at the busiest time of the year, but the fuss makes sense. Genie+ has been criticized by novice users who feel the key return windows fill up quickly. Adding some Lighting Lane+ attractions to the Genie+ options will help boost supply at a time when demand is skyrocketing.

Four weeks ago, Disney World suspended the sale of most annual passes to new customers. It was a rather unexpected move for Florida, but it's a strategy that has been used for years at Disneyland in California.

Annual pass holders are some of the biggest fans of the resort, but they also pay $1 to $4 a day for year-round access. This is in stark contrast to the high prices guests who buy single-day tickets have to pay. Disney also recently made changes to the annual pass system, specifically adding more blackout dates during peak periods for less expensive options. The suspension of annual pass sales -- and the introduction of additional restrictions on when they can be used -- will cause Disney World's average revenue per guest this season to be much higher than in previous years.

The unpleasant backdrop to all of this is that cases of COVID-19 are on the rise again in Florida, across the country, and the planet. The omicron variant is highly virulent, even among people who have been fully vaccinated.

Disney World is not about to close, however. The company has already learned how to deal with fluctuating COVID-19 cases since it reopened last July. It has precautions and measures it can take, which tend to work, allowing it to operate safely in the new normal. Guests will still come, and Disney, as a leading company in the entertainment industry, knows - the show must go on.