Breakage Income - Is DVCMC's share decreasing?

[mustinjourney]

Ha - I was basically rethinking my last post then started thinking, wait a minute.......

1 Million Bungalow points sold at about 170$ per point - they sold those Bungalows for 170 million dollars. What could they have cost to build and sell? Lets say 2 mil a piece? 40 Mil total. That is 130 mil in profit with no breakage.

breakage income on those is just icing on the icing on the cake

Although I would think there is some wiggle room on the cash price of a Bungalow. They can't slash it, but could probably drop it 10 percent or so.

The other issue about the Poly DVC that is being ignored here is that they took a beloved resort that, to my knowledge, did not have occupancy issues, and slashed the room inventory by about 1/3. Poly room prices have gone up a chunk since the rooms were converted. Poly has a cult following, and not everyone who bought Poly DVC was in that cult...and those people still want to stay there.

I'd bet they didn't cost more than $500,000 each to build. When you're building 20 of the same thing, you get some nice economies of scale. With that said, even if they were $1million each, that is still a hefty profit.

I'm curious what DVC overhead is though. The sales teams do not work solely on commission and having a full fleet of drivers/vans to pick people up and drop them off are not free.

 

[jerseyduke]

I'd bet they didn't cost more than $500,000 each to build. When you're building 20 of the same thing, you get some nice economies of scale. With that said, even if they were $1million each, that is still a hefty profit.

I'm curious what DVC overhead is though. The sales teams do not work solely on commission and having a full fleet of drivers/vans to pick people up and drop them off are not free.

Its a good question, I doubt they even cost 500K to just build. I just took a WAG at total cost, design, build, market, sell. Of course, you only need 1 set of plans, not 20. 20 plunge pools isnt going to cost 20 times what one would cost...

I went high with the employees...those kiosks, the vans, the base salaries of everyone...

 

[Keetchino]

If you read Tikiman's Facebook back when it was just starting to be built, several of his followers were very upset by the location of the Bungalows which screwed up the view for most of the hotel rooms.

My family loves the Poly, and would have bought direct...... if it has 2 bedroom and 1 bedroom units, but I think they really screwed up with the all studio configuration.

We loved the Poly and were completely set to buy when the DVC was first announced, on a waiting list and everything..... Until we found out it was only studios and bungalows. We slammed the brakes hard at that point and immediately canceled plans to buy. I wanted the flexibility of different room types, and was so disappointed at their offering.

 

[mustinjourney]

Its a good question, I doubt they even cost 500K to just build. I just took a WAG at total cost, design, build, market, sell. Of course, you only need 1 set of plans, not 20. 20 plunge pools isnt going to cost 20 times what one would cost...

I went high with the employees...those kiosks, the vans, the base salaries of everyone...

I didn't realize your $1million estimate included the ancillary costs -- I thought you were going pure construction costs.

when I did a tour of the CCV cabins, the guide that showed me around used to work in home construction. I asked him what he thought they cost to build and his conservative estimate was $300,000 including the landscaping. I used that number for the bungalows and added a hefty percentage to cover the completely over the water construction...of course, they don't really have any landscaping costs.

 

[disney11fan]

We loved the Poly and were completely set to buy when the DVC was first announced, on a waiting list and everything..... Until we found out it was only studios and bungalows. We slammed the brakes hard at that point and immediately canceled plans to buy. I wanted the flexibility of different room types, and was so disappointed at their offering.

hey I have some wonderful swampland i can let go cheap in lake buen a visit....this is a joke....

 

[jerseyduke]

I didn't realize your $1million estimate included the ancillary costs -- I thought you were going pure construction costs.

when I did a tour of the CCV cabins, the guide that showed me around used to work in home construction. I asked him what he thought they cost to build and his conservative estimate was $300,000 including the landscaping. I used that number for the bungalows and added a hefty percentage to cover the completely over the water construction...of course, they don't really have any landscaping costs.

We we both just using estimates - and both prove the same point - either way you slice it or dice it Disney comes out a head!

 

[mustinjourney]

We we both just using estimates - and both prove the same point - either way you slice it or dice it Disney comes out a head!

Bigly!