Anyone Else Concerned With Disney Overbuilding?

[DanG]

I appreciate your efforts in helping to decipher (rather than deconstruct) my original questions. Clearly my question is intended to be provocative.

I think you are right that the total of 43,000 applies to the full Disney hotel capacity rather than the budget resorts (either that or applies to the capacity after Pop Century is built). In any event, the numbers are intended to be illustrative.

As to the "failure" comment, I stand by the suggestion that Disney has failed to maintain and improve its theme parks and attractions at an appropriate pace to meet the traffic it is driving by virtue of building all the resorts and DVC complexes. More specifically, I am referring to the future plans for improving the parks. There is no plan for a fifth gate or concrete plans for what could be considered a major attraction in any of the WDW parks. I am sure someone will correct me if I am wrong on this, but I don't believe I am.

As for the past improvements Goofy referred to, I would argue that many people were and continue to be disappointed by the Animal Kingdom-it is poorly laid out making small crowds feel large, the average person is finished touring in 4-6 hours, and costs $50. If it weren't in WDW few would ever go see it. And MGM and Splash Mountain? I love them, but they were built in the 1980s for crying out loud! How does that demonstrate Disney's current commitment? Disney Quest? Closed in CHicago. Aladdin and Dino Rama? Carny rides with characters slapped on. I'll give you Rock 'N Roller Coaster and Test Track, but the fact they stand out over the last five years is telling.

As for the increasing value of points, no one can seriously question that our points will decline in value sometime since they expire in 2042. I am also concerned that the demand for DVC is not endless. We have all been the beneficiary of DVC's popularity through increased resale prices. But how many people are so crazy about Disney that they (i) feel compelled to go at least once every year, (ii) must stay on property every time they go; (iii) want to lock in 40 years of vacations up front. We all did, but do you think there are hundreds of thousands more people that fit our profile who think its a good idea to lay out a lot of money for DVC during economically troubled times. I would suggest that the supply will catch up with demand soon after Beach Club sells out and that will be the breakpoint for when point decreases will start. That is why Eagle Pines will be a DVC II; so that Disney can differentiate it from the prior developments and avoid an apples to apples comparison to the resale market and start to lower the price support levels.

As for the DVC II, I am a lawyer and strongly believe that while DVC owners can file a suit, making an allegation that someone after me got a better deal would not support a winning case.

I apologize for my negativity, but I cannot ignore how current management is taking their eyes off of the great Disney franchise to focus on the broadcast transmission business at the expense of the core entertainment businesses (movies and themeparks).

As always, all this is just my opinion.

DanG

 

[fkj2]

I agree with an earlier poster that Disney wants the guest on Disney property from the beginning of their vacation until their return home.

Although new parks or additons would be nice, it would not surprise me if more guests will begin to go simply for vacation time. The population of our country is aging and some may be tiring of the go and bustle of running from park to park. You've already read posts here to that effect. Those guests will want the comfort of deluxe accommodations; the nicer restaurants, the spas, the perks that Disney's better resorts provide.

Disney, like all tourist attractions, has been studying demographics. They'll need to look forward to anticipate what an aging population will do for entertainment and plan around that.

 

[Goofy Fan]

DanG,

I agree, opinions are what make this board work, and we may agree to disagree. What caught my eye the most was your use of the word "abject" indicating more on your mind that your original post showed. It does spark curiosity as to why one would buy into DVC with such strong convictions, unless you've been a member from the beginning and are visualling recent trends. I think Disney considers quality and improvement very serious matters and never loses an eye for the future. That is what made Walt's dream come true and become what it is today. Also mentioned earlier were Universal Studios and other attractions that offer the competition to keep things moving. What Universal did with the 2 hotels and IOA pushed Disney's buttons if laziness had started to set in. The improvements in parks or rides no matter how small are subjective by age group but improvements nevertheless, and have been maintained pretty regularly. The amount of land that is still left untouched has to be on drawing boards as discussion topics or someone is not watching the ranch. Now that CA adds a second park at Disneyland, something feels like those drawing boards have writing on them.

As for the future value, it's probably somewhat overlooked by most of us as 2042 comes at an age when the majority of us are in rest homes or close to it. Granted, we are all passionate about passing down our estate. But I think it is a long enough time to easily savor the present or next few years worth of trips rather than looking at 2042. I'm of the opinion that I can't believe that 2042 signals the end of DVC. I think that putting all those resorts back into the overall resort bucket leaves a lot of empty rooms going forward.

Interesting topic.

 

[PamOKW]

More specifically, I am referring to the future plans for improving the parks. There is no plan for a fifth gate or concrete plans for what could be considered a major attraction in any of the WDW parks.

I have no idea what the Walt Disney Company is or is not planning. My guess is that they do have a business plan on the boards and are not sitting back to watch WDW deteriorate.

Not directly related to the parks, but I was reading how they are finalizing plans to have an X-treme sport facility at WWofS. This is to help draw the elusive teen population.

 

[prplcrzy]

Goofy I'm with you! In 2042 I think that's when we will see DVC II. They will resell all of the vacation club all over again and offer it to the people who currently own. Think about it, they already will have an audience who may or may not have had this passed to them through estates. These people will already be hooked and will probably be the first to line up to buy. This will be a major windfall for Disney because they will sell timeshares again and not have the associated construction fees. They may do improvements but won't have to shell out for a complete construction package. They will be able to sell it reasonably because they will have virtually no cost associated to it.

I think that Dan has a point though, nothing new at Disney with the exception of the rockin rollercoster and maybe a couple of other things is of the exceptional Disney quality. The AK is a perfect example of this. It is O.K. but I would not make it a destination park. It does O.K. because people buy multi park passes and want something esle to do.

Great question and I have enjoyed reading the opinions!

 

[prplcrzy]

Figment rules!!!

This may have been an annoying kis ride like It's a Small World, but this was the Disney type ride, the kids adored it. My daughter cried when I told her it wouldn't be there anymore. We were there the week before its demise and were smart enough to tell her when we got home. This was the Disney magic and I would love to see new rides that can captivate kids like that again.

 

[mikesmom]

Maybe we should take a look at the "big picture" also. Maybe there haven't been a great number of new parks or rides (however, I for one, love AK) but there has been a steady addition of "events" as I see it.

The Epcot Flower Fest and the Food & Wine Fest have both made WDW a destination during what were formerly slower seasons. If you think about it both of these events are geared very well to both the adult population and the repeat visitor (that's us!). Events that focus in on music, art, food, gardening etc., certainly appeal to the adult visitor and can be changed to maintain interest from year to year without a large capital investment.

I suspect Disney has increased their income by attracting adults during the "slow" seasons without having to add a thrill ride.

We certainly visit more - once in the summer for the family and at least once during the festivals for a break for DH and me.

 

[PamOKW]

I apologize for jumping in and out of this thread. I just went back to the original question about budget accomodations. I can't find complete figures on resort rooms but from what I could find I would think 26,000 rooms for all of WDW would come pretty close. All Star Sports has 1,920 rooms so 6,000 total All-Star rooms would probably be about right. CBR has approximately 2,100 and the combined PO/Dxl 3,000. I would guess CSR at 2,500. That brings moderates to about 8,000.

There are a lot of events for student groups held at WWofS. Many times they end up staying offsite. I think the location and pricing of Pop Century is going after this group. I'm pretty sure I even heard it mentioned that it would be convenient for people going to events at WWofS. I don't think the addition of rooms on site is necessarily going to increase the crowds in the park. It's just capturing more resort dollars.

As I started to say before, Disney doesn't want to stop building if Marriott is going to be putting up hotels on 535 or the Opryland opening at the backdoor. There are going to be rooms for more people whether Disney builds them or not.

 

[vernon]

I must comment on the thoughts of a "DVC 2" , I can't see it happening UNLESS it is a direct replacement to the current DVC and all the resorts under construction. For that reason I would guess that after 2020-25 I'd be suprised if there was any expansion to the DVC BUT coming 2035-40 half expect ( if the soundings went well) additional resorts to be commissioned that would come on line in and around 2042. The plans for the future of the original DVC would be know/announced previously. Given the time it has taken to sell the DVC to this point ( 10 years) even that may ambitious sales targets, so I'm not convinced Disney would like to have ALL the DVC inventory to sell AND have any new sites as well. On the other hand the publicity of having new resorts might help sales.

IMHO having a number of different "end dates" for differing DVC plans would make a sale of DVC to a third party almost impossible. While I don't think Disney would sell DVC, I also am certain they wouldn't limit that as an option if it were to be prudent at the time. I feel Disney's plan would be to "presell" the DVC 2 to DVC1 owners at a discount to what they announce DVC 2 will go up for sale for. Hoping they get a large take up to swallow the majority of the inventory. The could offer inducements like "buy 3 years in advance, get a 30% discount on 2042's price, 2 years ahead gets 20% and one year gets 10%"

Just hope I'm around to see it LOL.

 

[KLR-wlv]

How cool would it be if they turned the DVC properties into retirement home in 2042??? That's what I'm hoping!

 

[DanG]

I agree that we probably won't see a DVC II for the Beach Club. But given the planned number of units and extended timetable for expansion for Eagle Pines, I can't see new buyers laying out $90-100 points for as few as 35 years use. It becomes a less compelling financial model for purchase and Disney would start to have problems supporting the price on the other DVC developments.

I remember not so long ago members of this Board put a great deal of emphasis on the payback timeframe of a DVC purchase and typically people were finding 6 to 8 years payback on their investment when points were in the $50s (though I would argue with the rack rates as too high for calculating the payback; for most the accomodation costs would be lower, extending the payback time). Without doing the analysis, I would bet that payback on a Eagle Pines at $100 points would be closer to 12-14 years. With 35 years of usage that would be less compelling given the flexibility being given up by committing to DVC.

I also don't see where it will be all that confusing to buyers when the only difference is a different end date. And from Disney's perspective, it staggers the DVC inventory so not everything expires in 2042. They can start reselling DVC I in 2042 and when that inventory begins to runout, DVC II will be ready to come on the market.

There are so many compelling business reasons to shift to a DVC II, that I will be surprised if they can pull off DVC I for Eagle Pines.

I hope I am wrong, but I bet that I am not.

DanG

 

[KNWVIKING]

When MK first opened,was it perfect ? Hasn't it been an on-going,work in progress ? Ak is all of 3 yrs old. It's four major rides- Count Down,Rapid Ride,Tuff to be a Bug & the safari are every bit state-of-the-art Disney. Tarzan rocks is a great show. It's educational value is priceless. Kids love the play area. Is there room to improve and expand AK-absolutely. Is Disney doing so- absolutely. Personally I like being able to spend one relaxing day to see the entire park.

Also, IOA can in no way be compared to a Disney property. I guess it's great if you like unimaginative roller coasters that beat your head up & give you a headache for the rest of the day.Or a log flume ride that is only fun if you want to get soaking wet. That might sound like fun during the summer,but try it in the winter. Someone stated that Disney has added just "carny" rides lately. Does the Dumbo ride ever have an empty seat.How about the Tea Cups,or Merry Go Round. There is nothing wrong with adding timeless classic rides with a different theme if kids love to ride them. What about the new Space ride over in Epcot ? Do we see any other entertainment company making that kind of investment for just one ride ?

 

[PamOKW]

My feeling is that Pop Century is being built to support activity at WWofS. The addition of the Xtreme camp seems to indicate they do plan to use this area more.

Today's Orlando Sentinel has an article about Tampa's bid for the 2012 Olympics. The committee is here to evaluate their bid. Part of the plan calls for some events to take place in Orlando, including at WWofS. The Caribe Royale would be used as the satellite Olympic village for the athletes.

Anyway, the article contained hotel information. In the Orlando area there are currently 105,000 hotel rooms. They expect an additional 30,000 to be built by 2012. This includes the doubling of Caribe Royale from the current 2,800 rooms to 5,600 rooms. So, if Disney doesn't build, others will.

 

[KaraKW]

Hmmm...this is a very interesting topic. IMHO, I'm just concerned that WDW is building resorts and improving/expanding theme parks at an uneven pace...but I love WDW anyway!

Someone commented that they didn't think there were any major attractions in the works. I could be wrong but isn't EPCOT working on a NASA ride (in which riders will experience zero gravity/weightlessness)???? It was my understanding that this is going up where Horizons used to be. It's supposed to open in a few years, but I wouldn't be surprised to see it be delayed, delayed, delayed (a la Test Track)!

 

[HorizonsFan]

What about the new Space ride over in Epcot ? Do we see any other entertainment company making that kind of investment for just one ride ?

Just to clarify: Compaq is making most of the investment in Mission:Space, not WDC.

 

[Paul in CT]

No, I am not concerned about Disney "overbuilding" resorts. Remember, DVC is NOT an investment. I bought it because it appeared to be a good value for a prepaid vacation at a place I enjoy visiting frequently. The fact that the pont value has appreciated is just an added plus.

 

[DanG]

Paul, I agree that the investment benefits, if any, are incidental. I assume that most of us plan to hold our points through expiration in 2042. My greater concern is that the larger number of rooms, in and out of Disney World, will drive such large numbers of people to WDW (and the WDW marketing machine can rachet up the numbers), that the experience for which we have bought prepaid vacations through DVC ownership has been dramatically diminished.

Several have made the intriguing point that they enjoying their WDW vacations outside the theme parks. While I never have thought of Orlando as a vacation destination outside the parks, I can see where others do with all the resort and other amenities, and that at a different stage of my life, such a vacation could be just right.

The thoughts and comments have been great. I am still not convinced that Disney is overbuilding and that the overbuilding is a problem, but appreciate the other, different perspectives.

DanG