An honest to God rumor that even Scoop may like!!!

[Werner Weiss]

Originally posted by Bob O
I would much perfer that wdw spend the money improving their parks rather than another resort when their hotel occupancy is way down, they have to stop building on a new one and close others. They may misplaced priorties is this rumor is true!!

Keep in mind that the Disney Vacation Club (DVC) timeshare product is a different than regular hotel lodging. DVC is a strong business for Disney. In fact, it's possible that the current Beach Club Villas DVC resort may sell out up to a year before the Saratoga Springs Resort & Spa opens. Regular hotel occupancy is down, but DVC remains strong.

Also, the Saratoga Springs Resort & Spa promises to be particularly profitable for Disney because it reuses a fair amount of infrstaructure and facilities of the defunct Disney Institute.

Bob O... Are you suggesting that Disney should get out of the timeshare (DVC) business?

 

[DisneyKidds]

Bob O - as WW pointed out, DVC (actually DVD) is a seperate animal. If they were to forgo building this DVC resort it doesn't mean that there would be money to spend on the parks. Two seperate bank accounts, if you will, with the DVD money never to be put toward any park. Actually, the fact that DI is being developed into a DVC resort probably provides some money for theme park (or other) improvements. I would imagine that DVD is probably paying somethng to get the existing DI assets.

 

[manning]

From the Orlando Sentinel article

"Prices to purchase one week in the new section of Saratoga will range from $12,000 to $150,000 for rooms and suites that sleep up to 12 guests each. "


From the Albany NY Times article

"Tourists would rent the same units and be able to come back the same time each year as part of the Disney Vacation Club."


Does this mean that points aren't involved in this project? You are buying weeks?

 

[hopemax]

Frankly, I wonder about Disney and DVC, but it's not something I know a lot about and maybe it's worth some discussion.

I can comprehend why Disney is thinks timeshares are a good idea now. Every time one is sold, they get a lot of cash up front going into the financial statements. And as gets pointed out many times, Wall Street expects next years numbers to be better than the year before. Right now, Disney seems to get around that by keeping the cash supply flowing by opening new properties. But they can't keep attracting new members forever, it's going to reach a plateau sometime, just like attendance. And one thing that is working against Disney is that families share their timeshares. So unlike attendance, where mom and dad and 2 kids, can turn into Grandma, Grandpa, 2 sets of parents with 3 kids each or 4 people morphs into 12, Grandma and Grandpa just share their timeshare with everyone. Attendance potential grows by 11, DVC grows by 0.

Eventually that major cash flow is going to stop. Disney will be pulling in some money in maintence fees, but not nearly in the chunks that the initial purchase brings in. How is Disney going to replace that cash flow? I kinda wonder if Disney will find itself in a situation like our current social security system. As 2042 approaches there are going to be a lot fewer buyers (cash flow in) but lots of Grandparents bringing the whole family every year and expecting a well-maintained, wonderfully staffed resort(cash flow out). I can just hear the MBA's screaming, "We've got all these people staying at these expensive-to-run resorts and all the money we're getting is a dinky maintence fee!" I know that one of the consumer's problems with timeshares is what happens when the "expiration date" approaches. Would Disney's timeshares fall into disrepair like other timeshares? The answer in 1992 was, "No! Disney has a reputation to maintain, customers to please, etc." But with everything that's been happening in the parks lately (attraction closures without replacements, carousels needing to be rebuilt, level of service, etc.) I'm not feeling to confident that DVC will fair any differently. But in 2035, Eisner will most definitely be gone, so hey, I wonder if the thought was just, 'It will be someone else's problem."

And another thing, I read some stuff over on Brian Bennett's site and one of the messages that he has, included an explanation that one of the reasons that Disney got into timeshares was that it was a nice way to get money to improve infrastructure at WDW.

But you've hit on the reason Disney can offer this vacation plan. They are getting cash money up front which they will "invest" in park upgrades and resorts and so forth, and therefore don't have to get the money from a bank.

Can anyone comment on the truth of that. In the 90's was Disney's strategy to use DVC money to enhance the entire property?

 

[Lesley]

Its possible the writers of the articles are ignorant of the way DVC works.....or I guess its possible that they'd sell set weeks. If that's the case, sorry, we won't be interested at all......

I do wonder which it will be....selling set accomodations for set weeks would solve that points chart problem that was mentioned before, but it could open up a whole Pandora's box of other issues.

 

[Bob O]

Werner weiss-I thought that it was going to be a wdw hotel and not a DVC property.
But like everything else they must make sure they dont overbuild like they have with hotel capacity.
Hopemax-I have seen no evidence that DVC money has been used to upgrade the parks recently, if the money went anywhere it went to paying off lawsuits/contract buyouts and too abc.
Disneykidds-It may be separate bank accounts but it is all part of the companies bottom line so in this wolrd of synergy its all related.

 

[PKS44]

maintenance fees are just that, they are not income...they are the cost of maintaining a place...as for why Disney (call them DVD or DVC give them another bank account, it is still Disney)would want to maintain them is clear in knowing how the system works...when owners have points that they do not use, Disney gets those points and then can use that property...this can happen when an owner of say Saratoga Springs uses points for a nonDVC hotel at Disney, or non Disney hotel all over the world or in timeshare exchange, or on the cruise, etc...Disney has to rent out those units thru CRO- that will be very hard to do if the place is unappealing, unkempt, no good,etc...also Disney always holds on to about 4% of these properties anyway, so they have at least that much interest in maintaining them...

As to the hubbub about ending all other pool hopping it just seems silly and pointless...allowing poolhopping costs next to nothing...IF they do find a way to eliminate the true poachers (locals or non resort guests using pools) then such a system could still allow resort guests AND DVC members to continue using the pools as the rules indicate they can right now...

Hopemax- is on to something with the overbuilding...we certainly see this pattern to Disney behavior over and over-they find something is successful then they over do it, beat it to death, expand beyond their core values of high quality, top level service- (Disney stores, WWTBAM, incomplete new parks,Character Meet/Greets, hotels) The one thing going for timeshares now is the ever expanding leisure set (those with $$$ and the desire to spend it on leisure activities-Boomers in their 50's and soon 60's etc...) BUT the good news is that Disney actually does seem to be showing some restraint as they were also planning a "golf resort" DVC at Eagle Pines that seems to have been put on hold..interesting that these two more recent offerings are MORE ADULT DVC developments(away from the parks-golf, spa, etc.) indicating a desire to appeal to a different market segment than prior new DVC offerings (OKW excluded)...one has to wonder what their theme park plans are given the shifting demographics they face ( the Echo Boom that drove their recent success is moving on--the next real peak/boom in "kid" population (5-11 year olds) will have to come from the teens and early twenty somethings of today..so that would be at least 10 years away- (let's hope they don't have kids too early!)

Paul

 

[Werner Weiss]

Originally posted by PKS44
maintenance fees are just that, they are not income...they are the cost of maintaining a place

DVC maintenance fees include a percentage as a "management fee." That's another term for profit -- guaranteed bottom line profit for Disney year after year, even in lean years.

That's one reason that lodging companies such as Marriott, Starwood, Hilton, Four Seasons, Wyndham, and Hyatt are all jumping on the timeshare bandwagon. Such companies often rely on management fees at managed hotels owned by other investors. When business is down, the managment fees are down. When the investor switches management to a different lodging brand, the management fees end. But with timeshares, the lodging companies make ever increasing profits, year after year, as maintenance fees creep up.

Also, timeshares are a good way to bring back guests year after year. Over the past year, the Hawaiian islands experienced a drop-off in tourism. But the island of Kauai, with the largest percentage of timeshares of any of the islands, had the least drop-off. Bringing back guests year after year is good business for Disney too.

Originally posted by hopemax
I can comprehend why Disney is thinks timeshares are a good idea now. Every time one is sold, they get a lot of cash up front going into the financial statements.

Yep, hopemax makes a good point. A timeshare conventional developer tries to sell $300,000 condos for $1 million (in the form of 50 weeks @ $20K each). For many timeshare developers the cost of land is a significant expense, along the lines of $2 miilion or more per acre at desirable sites. But at WDW, Disney can build timeshare resorts on land acquired in the 1960s for a few hundred dollars per acre. Also, many timeshare developers face considerable marketing expense, often paying potential customers over $100 (or providing travel premiums worth much more) just to listen to the sales pitch, but Disney is able market directly to their core customers at WDW.

Timeshare developers lose money when their projects go too long without selling out. The developer carries the cost of the capiutal and the marketing expense, without generating enough sales. But the on-site DVC resorts at WDW have a history of selling well and selling out quickly.

Originally posted by hopemax
Would Disney's timeshares fall into disrepair like other timeshares? The answer in 1992 was, "No! Disney has a reputation to maintain, customers to please, etc." But with everything that's been happening in the parks lately (attraction closures without replacements, carousels needing to be rebuilt, level of service, etc.) I'm not feeling to confident that DVC will fair any differently.

The timeshare resorts that have problems are the badly run operations that use high-pressure sales techniques to sell timeshares to people who can't afford them. The annual maintenance fees are artificially low -- insufficient to properly build reserve funds -- and the owners of the weeks end up not paying, especially if they regret their purchase and don't use their weeks. The week may revert to the developer or the HOA, but that doesn't bring maintenace money. Fortunately, this is not how DVC is run. There's no reason for Disney not to maintain the quality of the DVC resorts. Unlike the parks or the regular hotels, no MBA can make a case that cutting expenses will increase profits for Disney. Any unused funds in the budget stay in the resort's account; they don't flow onto Disney's balance sheet.

 

[PKS44]

Originally posted by Werner Weiss
DVC maintenance fees include a percentage as a "management fee." That's another term for profit -- guaranteed bottom line profit for Disney year after year, even in lean years.

I don't think this is really accurate. The management fee is the money it takes to pay the people to administer over the place...it is not pure profit as suggested...If it takes $X for maids, and $Y for front desk and $Z for transportaion and $K for landscaping, etc., etc.. you still have to add $M (management fee) for somebody to hire and fire those people, do the paperwork etc...it is not profit, it is salary to the administrators of the place... the maintenance fees are capped so that they are not allowed to go up more than a certain amount and some years recently they have even gone down...that could not happen if they were just a profit center (especially with Ei$ner and Pre$$ler) ...I think the implication here that "management fees" are just a profit generator for Disney is incorrect. Dean on the DVC boards is the expert in this area, so I would defer to him, but the way the maintenance fees are required to be deteremined seems to prevent the sort of profiteering implied here...DVC is profitable for the other reasons Werner mentioned, cheap land, a unit costing only so much being sold for multiples more than it cost to build and the guarantee that the maintanence of that property is somebody else's expense for the next 40 years- they don't have to set aside their own money for maintenance...all of these things on top of getting folks onto the property every year are why Disney likes DVC...

Paul

 

[Werner Weiss]

Originally posted by PKS44
I don't think this is really accurate. The management fee is the money it takes to pay the people to administer over the place.

Read one of the DVC annual budget documents.

"The money it takes to pay the people to administer over the place" is covered in the Administration and Front Desk cost component. ("Cost of front desk operations and resort management, including operating supplies and equipment rental. Also includes costs for operational and administrative support from WDW Resorts.") [I added the bold emphasis.]

Disney Vacation Club Management Corporation (DVCMC) takes a management fee of about 2.2% of the annual budget, and DVCMC is a subsidiary of The Walt Disney Company (TWDC).

Here's a key phrase about how DVCMC allocates costs: "In connection therewith, substantially all operating expenses have been allocated to the Association from DVCMC and certain operating expenses expenses may be rendered by or incurred through other Disney entities." In other words, DVCMC makes sure that all costs are paid by out of other parts of the budget, not out of the 2.2% that DVCMC keeps.

I don't begrudge Disney the 2.2%. By the way, 2.2% may not sound like much, but in service and retail industries, 2.2% is actually pretty good net income, given the amount of gross revenue that's involved.

There is no reason why any of us should expect that The Walt Disney Company (or Marriott or any other lodging company) to be responsible for year-after-year timeshare resort management without making any profit.

 

[Another Voice]

"The management fee is the money it takes to pay the people to administer over the place...it is not pure profit as suggested..."

Hmmm.....

Anyone want to hazard a guess as to how much money Disney Vacation Development Inc. has to pay The Walt Disney Company in rights fee for the word "Disney"?

You'd be surprised what fun and interesting "expenses" can get hidden before the 2.2% amount is factored in.



P.S. - Why would anyone in their right mind travel all the way to central Florida just to be reminded of the Catskills?

 

[DVC-Landbaron]

P.S. - Why would anyone in their right mind travel all the way to central Florida just to be reminded of the Catskills?

My point EXACTLY!!!!






(Hey, Scoop!!! This time I said it first!!! Must be something about great minds thinking alike!!)

 

[space42]

P.S. - Why would anyone in their right mind travel all the way to central Florida just to be reminded of the Catskills?

You know.. I thought the same thing about Old Key West. Why would someone want to see an Old Key West resort when the real Old Key West is in the same state?

You never know...

 

[TiggerFreak]

Why would anyone want to go the the Wilderness Lodge when they could go to any number of National Park Lodges?

 

[Lesley]

And why go to the Beach Club when the real New England seaside is nearby?

Really, folks, this is just the point I was making. You could say it about any of the resorts and many parts of the parks. I find it odd that the Landbaron has chosen not to explain why OKW is any different than this New York idea. Hey, Mr. Baron! You know I usually agree with you....but I don't understand your stance on this one.... You want more exotic themes? Yet, AKL is not good enough? What exactly do you expect? (Granted that's a tough question to answer.....I don't really know exactly what I expect either)

I don't know that I'm particularly impressed with the idea....but that's neither here nor there. At least its not an idea that makes me cringe just considering it (like Pop Century and Dino Rama) I like the location and will probably go take a look when its finished.

 

[PKS44]

I will wait to see what they come up with- though my initial response is "eh." sounds kinda like the Grand Upstate New Yorkian to me...I would have liked to have seen them take that location near Downtown Disney and let the Imagineers do their take on Miami's South Beach- Disney Deco---but that would have meant re-doing or forgetting the DI tie-in, so I see why they went the way they did...I hope they can surprise me with a great show, but I doubt it....I also would like to see a Greek Island themed resort...but given the current state of things I know we will likely never see either... in my lifetime.

Paul

 

[DVC-Landbaron]

And why go to the Beach Club when the real New England seaside is nearby?

I couldn’t agree more!! I think the themes that Ei$ner has initiated are ordinary, pedestrian, and SAFE. With the exception of AKL they are all western hemisphere and for the most part American. That certainly doesn’t make them bad, by any means. But ALL of them!!?? Every stinking one of them!?!?! Couldn’t we have slipped in a Spanish something or other? A Scottish castle? How about a Black Forest looking thing? Prussian anyone? Thai? Igloos!!!!??? I don’t care, but something - exotic! Something from - somewhere else! Something NOT from - HERE!!!! Not all of them. Not all the time. Fine put in a Boardwalk. Then Beach. Then a Persian!! How’s that? Then you can build a New Orleans place. And then a Mediterranean one!! Doesn’t this bother anyone else?

Now!! That doesn’t mean that what they built isn't wonderful!! I LOVE Wilderness! But I think I would have LOVED a Venetian WAAAAAAAAYYYY more than a Caribbean or even a Key West!! Don’t you?

There was such promise. And instead of exploring all the possibilities, he played it safe and ordinary! How disappointing!!

So when a new one is announced, I always have my hopes up that this one will be the Poly (part II) only better!!! Ahh! It is never to be. We have someone at the head with rather limited vision. We should have figured that out when he traded the Asian for the Floridian. But, heck!! I’m a hard learner. That's why he can still disappoint me.

I find it odd that the Landbaron has chosen not to explain why OKW is any different than this New York idea.

Personally I’d rather have had a much more exotic theme than Old Key West. And again, that’s not to say it isn’t nice. Heck, it’s gorgeous!! I LOVE it!! But that doesn’t mean the next one has to be more of the same, western hemisphere, familiar, comfortable, SAFE type theme. Does it? Or maybe the one before was SAFE and Old Key West would have been the perfect place to experiment with that Greek Island type resort!! Pretty cool, eh? I would have forgone the Key West theme in order to see a nicely done Tibetan Hidden City!!! Wouldn’t you?

You want more exotic themes? Yet, AKL is not good enough? What exactly do you expect? (Granted that's a tough question to answer.....I don't really know exactly what I expect either)

You answered your own question. I don’t know either, but it really wasn’t it. Although the more I go there, the better I like it!! I just wish it wouldn’t remind me so much of Wilderness!!! Am I the only one that sees tremendous similarities!?!?

At least its not an idea that makes me cringe just considering it (like Pop Century and Dino Rama) I like the location and will probably go take a look when its finished.

LESLEY!!!!! Do you hear what you are saying!!! That is very, very close to a Pirate type response!! You are telling me that so long as it’s not the worst idea in the world, one that would make you cringe, it’s OK for Disney to do!!! And that’s because lately they’ve been doing such HORRIBLE stuff that anything that doesn’t sink to that level is acceptable!! It doesn’t have to WOW!!! or exceed expectations any more. Heck!!! It doesn’t even have to be particularly good!! Just so it isn’t BAD, it’s OK!!! Thank God, it’s not APPALLING!!!!! Is that the way you look at Disney now? I don’t.

 

[Werner Weiss]

I think a key point is the American-themed resorts at have been built at WDW over the past 15 years don't just take you to an East Coast beach or some other US location. They take you back in time. That's why the Boardwalk and the Yacht & Beach Clubs and OKW and the Wilderness Lodge "work" for me. We're not talking about oceanfront Holiday Inns here; we're talking about grand resorts or quaint neighborhoods of a bygone era whose real counterparts are, for the most part, long gone.

I expect nothing less from the Saratoga Springs Resort & Spa. Keep in mind that we already know what the "town center" and spa area look like because it's the former core area of the Disney Institute. (You can even see one of the Disney Institute buildings in the background of the artist's rendering.)

I'm concerned about the announcement that the Saratoga Springs Resort & Spa will include 300 refurbished units -- not about the resort's theme. I assume these are the old 1-bedroom bungalow units -- there were 316 of them at the Villas at Disney Institute. Those units are 25-30 years old, and today they have bland, unthemed, 1970s architecture. I just hope these units will be brought up to DVC standards and can somehow be made to fit into the theme of the Saratoga Springs Resort & Spa properly.

 

[Lesley]

Maybe they'll be taking us back in time to 1970's upstate NY

And, yes, I am thinking "Thank God this idea isn't appalling" Yes, I guess that's all I expect of Disney these days. Sad isn't it? There was a time when I could expect better....and certainly many of your ideas sound really cool (ya know, we have yet to stay at the YC/BC because I don't find the theme that immersive or interesting....though we'll try it next Oct. mainly to use SAB...) Anyway....I have no idea where I'm going with this. My favorite thing about OKW is that it will save us some points. I love the real Key West....been there once and would love to return. OKW....I go there when I want to save points or put a few more square feet between me and my guests....yes, its lovely, but I agree something else would have been much more compelling.

I think if I got upset over every announcement, every stupid move Disney is making, etc....well, I'd be ready to stop returning. And, I can't let myself hate the place if only for my dh and kids, who love it so much! Heck, there are things I love too. There are other places I'd like to go but the other three quarters of my family....well....lets just say my 2yo came up to me this evening and said sadly "I want to go Disney....go home....Disney....see Mickey...and Minnie"

yes, I'd love to see the creative folks given a much freer hand....being a creative type myself, I just love seeing big dreams made into reality. ANd we're no longer seeing big dreams being created. The dreams are still there....but they're being told," sorry, we don't do that, too expensive. Now, we need to get more folks into this 20 sq feet....figure out a way to bring them there...and , oh, your budget is half of whatever you think you need to do it"

Not too long ago, there were new experiences to be had at WDW that I was literally yearning to try for myself (AKL is one.....I really do love the place.....it is perhaps, the next best thing to the Polynesian....but the Polynesian is, well, wow....something about those torches at night....ahhhhhhh) No I don't feel that way about this new announcement...and I am very glad it doesn't look like it'll be another eyesore like PC or DinoRama. I really do long to be able to feel the kind of excitement about something at WDW as I have in the past....but for now, I can keep myself busy rooting out all the old things that I've missed....bits of the past magic than can be savored. No, I don't hold much hope for the future.

so anyway....maybe I'm coming in just short of "woohoo! its not hideous" but geesh.....trying to toss me to the rose colored glasses crowd? Not quite. I guess I just forgot you're very hard on ideas that don't meet the standard... even though you may end up liking the result!



Sorry to be so depressing.....Its very discouraging to be hoping to hold onto the legacy of a man who died 6 years before I was born!

 

[Uncleromulus]

Werner:
So the pool will be something like the main pool at OKW, but with bubbles.
The absolute cutting edge in pool design!!

About coming to OKW when the real OKW is nearby, etc--
I worked in downtown Baltimore for almost 30 years. A real cesspool if ever there was one. Yet each Spring and Summer, I saw thousands of obviously out-of- town tourists swarming about. And I always thought--have these people lost their minds?? If they want to see a big city, why not SF, NY, New Orleans--heck--even DC!!
So I guess staying at the OKW resort (or the WL, or the new Saratoga Springs) isn't so unusual, even if the "real thing" is accessable.