Direct prices going up. Again.

[blondietink]

Well, I still don't pay more than $25.00 for a pair of jeans, so when they raise prices, I could buy almost 6 pair of jeans for each point!

 

[tjkraz]

OK, they have to have something up their sleeves.

To keep driving prices up, when the economy still doesn't dictate the raising of prices - they have to be ramping up to a MAJOR price increase, or structure change to the program.

The DVC product is valuable, however - it isn't THAT valuable. If they reach $200 a point - a 160 point membership goes up to $32,000. In what galaxy is that a reasonable purchase for the average family?!

For a family that stays at a deluxe resort every year is going to spend more or less than $5,000. It would take 6-8 years from a break even scenario - and that's if they pay cash for their membership!

If you calculate the going interest rate for a $32,000 loan with the 'preferred' DVC interest rate of 11.75% - a family would pay NEARLY $70,000 for their DVC ownership of 160 points.

For the average family, DVC will be so far out of reach that they are going to have to get FAR more aggressive in marketing and making the sale.

At the end of the day, the only thing that really matters is the rate of sales. We could spend all day debating the state of the economy and what the average family can (or cannot) afford...but Disney sees the real dollars.

As Brian said, the spread between direct and resale pricing is commonplace in the timeshare industry. And most timeshares have far lower resale values than DVC.

Yet they all continue making direct sales.

Believe it or not, there ARE still hundreds of guests every day who willingly pay $400+ PER NIGHT for a room at the Grand Floridian, Contemporary, Poly, Beach Club and other Disney resorts. Even at $145 per point, DVC still makes a great deal of sense and will save buyers tens-of-thousands of dollars in the long run over rack rates.

We have the luxury of knowing about the resale market and the additional savings to be found there. The uneducated buyers listen to the sales pitch on a whim, hear about the very real savings DVC can provide, and simply sign on the dotted line.

Will Disney eventually introduce some sort of tiered benefits? Perhaps. But IMO it's not worth fretting about until it happens. (It's also completely out of our control.)

$145 per point may sound ridiculous to many of us who spent well under $100 per point. However it's the price Disney has deemed necessary to justify continued support for the DVC product. Best thing for we owners is for uninformed buyers to keep showing up and paying Disney's prices. As long as Disney keeps selling, there is no need for tiered benefits.

 

[Simba's Mom]

I can't believe AKV will be selling at $145 when we purchased it in 2009 for less than $100 per point. NO THANK YOU!! I am perfectly happy with my 260 points. There is no way I would add on at these prices.

That's a 45% increase in less than 5 years. DH certainly hasn't gotten a 45% increase in his salary in 5 years. I just don't know what Disney is thinking by making this harder to afford.

 

[keishashadow]

Just hope it will drive up the resale prices. Would like to regain some of the value.

maybe it'll help convince renters that (as i've read recently on a thread) that $6 a point is a fair rate to pay.

That's a 45% increase in less than 5 years. DH certainly hasn't gotten a 45% increase in his salary in 5 years. I just don't know what Disney is thinking by making this harder to afford.

Disney tickets and to lesser degree rack rates have increased in the same ball park (if not more) during the same time period. Raise the rack rate, then throw out 'special' promos so folks think they're getting a bargin.

 

[DougEMG]

Best thing for we owners is for uninformed buyers to keep showing up and paying Disney's prices. As long as Disney keeps selling, there is no need for tiered benefits.

 

[luckyman_apd]

Well, I still don't pay more than $25.00 for a pair of jeans, so when they raise prices, I could buy almost 6 pair of jeans for each point!

$30 is my limit now, but when I was paying $25, at the time my father thought jeans should be no more than $15. And this was less then 15 years ago!

 

[Breyean]

The DVC pricing is similar to what is happening with race entry fees, both at Disney races and at other destination races.

Last week the Dumbo Double Dare at DLR, including the 1/2 marathon on Sunday and a new 10K race on Saturday, sold out in under an hour. The price was around $300!

People lament the increase in race entry fees at these and other big events, yet they sell out in record time. For DDD it sold out BEFORE Disney had sent out the email to everyone that registration had opened that same day.

So as long as people pay the $$, why stop raising prices? You'd think at some point there would be a price where EVERYONE thinks it's too much to pay, but as long as ENOUGH PEOPLE are willing to pony up the higher fees each year, the prices continue up.

I think DVC is operating on the same philosophy. The resorts are still selling so there's no reason to stop increasing the costs as long as enough people are willing to pay.

 

[CMOORE185]

The DVC pricing is similar to what is happening with race entry fees, both at Disney races and at other destination races.

Last week the Dumbo Double Dare at DLR, including the 1/2 marathon on Sunday and a new 10K race on Saturday, sold out in under an hour. The price was around $300!

People lament the increase in race entry fees at these and other big events, yet they sell out in record time. For DDD it sold out BEFORE Disney had sent out the email to everyone that registration had opened that same day.

So as long as people pay the $$, why stop raising prices? You'd think at some point there would be a price where EVERYONE thinks it's too much to pay, but as long as ENOUGH PEOPLE are willing to pony up the higher fees each year, the prices continue up.

I think DVC is operating on the same philosophy. The resorts are still selling so there's no reason to stop increasing the costs as long as enough people are willing to pay.

I am glad it is still a thriving and desirable timeshare but I cannot believe people pay these prices.

 

[DannysMom]

I am glad it is still a thriving and desirable timeshare but I cannot believe people pay these prices.

Me neither!

On a different discussion board, a direct buyer tried to spew the lies her guide told her to get the sale as fact. Things like resale buyers are limited to DVC only & at some point may be limited to home resort only. She bought direct for all the exchange opportunities, as she only interested in going to Disney every 2 or 3 years. Didn't have the heart to tell her she bought an awfully expensive timeshare to trade with.......

Sent from my iPad using DISBoards App, please excuse any typos or autocorrects!

 

[bighoo93]

The DVC pricing is similar to what is happening with race entry fees, both at Disney races and at other destination races.

Last week the Dumbo Double Dare at DLR, including the 1/2 marathon on Sunday and a new 10K race on Saturday, sold out in under an hour. The price was around $300!

People lament the increase in race entry fees at these and other big events, yet they sell out in record time. For DDD it sold out BEFORE Disney had sent out the email to everyone that registration had opened that same day.

So as long as people pay the $$, why stop raising prices? You'd think at some point there would be a price where EVERYONE thinks it's too much to pay, but as long as ENOUGH PEOPLE are willing to pony up the higher fees each year, the prices continue up.

I think DVC is operating on the same philosophy. The resorts are still selling so there's no reason to stop increasing the costs as long as enough people are willing to pay.

This is exactly right (and that philosophy is called "basic economics"). There is no need for a more complicated explanation than this about something that DVC has up their sleeve or tiered benefits or anything. The most obvious, simplest and likeliest explanation for any company that raises the price of its product is that the demand supports it. It is an indication of business health. In some businesses, it could also reflect increased cost of labor and raw materials, but that is definitively NOT the case for already-manufactured products, in this case timeshare shares that are sitting on the shelf ready to go out the door. The reason why doesn't really matter, it simply appears that Disney is making sufficient sales at the current rate that they believe they can support a higher price. Good for them, I congratulate them on the apparent success and health of this business unit. I wasn't going to pay the old price anyway, so it doesn't matter to me. Except that it is also probably an indication that they don't feel threatened by the resale market either, so while nobody can predict the future, the "necessity" of adding draconian restrictions to resale purchases may be overstated.

 

[holcomb-mania]

They've definitely priced direct add-ons out of my range.

The good news is that I look like a certified genius for buying under $100.

 

[Greysword]

I do find it interesting that DVD thinks it can support increasing the price for Aulani, as it may be indicative that sales there are close to acceptable levels, which is telling in itself.