Disney Resorts Occupancy Rates

[MouseOfCards]

Saw this article on Disney World's summertime performance:

http://www.fool.com/investing/2016/...er-an-2.aspx?source=isesitlnk0000001&mrr=0.50

Towards the end of the article, they mention occupancy rate at one the Epcot resorts was at 69% during a holiday weekend, while DVC bookings were north of 95%. What do you read into this?

 

[disneynutz]

I read that Disney keeps DVC rooms full by design and converting cash rooms to DVC makes them money.

Bill

 

[Dean Marino]

Saw this article on Disney World's summertime performance:

http://www.fool.com/investing/2016/...er-an-2.aspx?source=isesitlnk0000001&mrr=0.50

Towards the end of the article, they mention occupancy rate at one the Epcot resorts was at 69% during a holiday weekend, while DVC bookings were north of 95%. What do you read into this?

All personal opinion - I'm not right, you aren't wrong....

I personally believe you are seeing EXACTLY WHY the New DVC At WL involved the conversion of close to HALF of the Main Hotel to DVC units. Not going into statistical measures - just ground observation over a 12 year period, twice per year, ALWAYS at the WL.....

WL has experienced a perpetual 30% General Public Discount rate. And every time we have been there? The RENTAL rooms have been far from full. The existing VILLAS at WL, however, have been pretty much booked. If the article is even close, I'm seeing about a 25% increase in occupancy rate, DVC vs pure rental. Just a thought - I believe Disney sees that too, and is acting on it.

Now that's just the WL conversion project.... I suspect that there might very well be others.

Again, all personal opinion - I'm not right, you aren't wrong....

 

[drusba]

DVC rooms usually get close to full. The difference of interest to most members is simply how fast they fill. They can often be open at 7 months out many times of the year and then other times rooms often disappear in the 11 month window.

It does not take rocket science to figure out that the conversions of hotel rooms to DVC that have occurred at AKV, Poly, BLT (they removed buildings for that one), and VWL are partly the result of diminshed occupancy of the hotel rooms by paying guests. (Do you think any conversions would have occurred if the hotel rooms were always full?) That diminishing occupancy itself resulted at least partly from Disney's constantly increasing the rental price for the deluxe resorts far beyond anything that could be called for by the effects of inflation.

 

[SpaceMountain77]

My first guess would be that Disney's Yacht Club experienced a significant drop in attendance. Discounted standard rooms are still available for many nights throughout the summer, which are generally the first to go. Also, the Yacht Club relies more heavily on vacationers during the summer months rather than its standard conventioneers.

 

[KAT4DISNEY]

There may be a little bit of DVC cannibalizing their return customers showing up in the resort numbers. I never knew the resorts to be overflowing with demand. As DVC uses the savings angle for repeat visits vs staying at the resorts coupled with not being under supplied with hotel rooms in general it isn't crazy to think it would start to show in those numbers.

 

[DebbieB]

It would be interesting to find out how many points rooms are occupied by non members. If you read the resorts board or Facebook, there are lots of posts about the benefits of renting points. Rental agencies like David's makes it feel more "safe".

 

[drusba]

No post

 

[DougEMG]

I wonder what occupancy is like at the Grand Floridian hotel. Given how hard it is to get into the VGF, it would be nice if they converted some of the hotel rooms into studios.

 

[Dean Marino]

It would be interesting to find out how many points rooms are occupied by non members. If you read the resorts board or Facebook, there are lots of posts about the benefits of renting points. Rental agencies like David's makes it feel more "safe".

And you have an interesting point . Let's suppose WDW doesn't sell those DVC all that quick.... who owns them? WDW .
Sooooooo - they rent the stuff out. Hey, wait a minute: they were doing that with the HOTEL ROOMS that got converted . No loss there....

But what would occur if WDW rented out their DVC holdings at a huge discount? THAT could be a problem. People would begin to see DVC as a bad economic proposition . Why buy the cow for $28000 when the milk goes for $1.00 a gallon .

All personal opinion - I'm not right, you aren't wrong.... but I suspect WDW worries about all this - and may even HOLD BACK on WDW owned DVC Rentals, just to keep the Sale market up . Meanwhile? They MAY be getting a little worried about DVC "Owners" that are primarily Rental Speculators . Let's see how that angle goes in the future....

 

[Brian Noble]

What do you read into this?

This is exactly the point of being a timeshare operator. The proposition is that a customer pays a portion up front to commit to return visits over the long term, and in exchange gets a discount over rental rates. Because the rooms are pre-sold, they tend to be more or less full year round, independently of other travel trends. For example, right now South American tourism to Florida has cratered, so discretionary trips from that area are way down.

 

[Douglas Clark]

keeps DVC rooms full by design

I have a question based on my recent attempt to get a weekend reservation for Oct 1-3. I was told in the entire DVC WDW realm there were no Studios or 1 BR's available. Is that an example of intentionally limiting supply to keep occupancy high? I'm sure if I wanted to pony up the cash for the weekend they would be able to find a room pretty quick... Maybe it's my newbie ignorance, but finding it hard to believe there were NO Rooms at the inn for a weekend 2.5 months in advance...

(and no, David's rentals didn't have any success either...)

 

[KAT4DISNEY]

I have a question based on my recent attempt to get a weekend reservation for Oct 1-3. I was told in the entire DVC WDW realm there were no Studios or 1 BR's available. Is that an example of intentionally limiting supply to keep occupancy high? I'm sure if I wanted to pony up the cash for the weekend they would be able to find a room pretty quick... Maybe it's my newbie ignorance, but finding it hard to believe there were NO Rooms at the inn for a weekend 2.5 months in advance...

(and no, David's rentals didn't have any success either...)

Mid Sept thru the end of the year (actually, marathon weekend in Jan) has been the busiest time for DVC for several years and only seems to get busier. Bookings begin 11 months ahead and some rooms book within that first week. It's not due to limiting, just popularity. Cash availability is separate from points and I'm sure that you could find something going that route. Anything on points is going to be luck in picking up a cancellation. But 2.5 months ahead would have problems many/most times of the year.

 

[Sandisw]

I read somewhere that Disney attendance as a whole is down this summer compared to years past...so maybe that is what this is referring to...

 

[_auroraborealis_]

As well, David's is simply an intermediary for owners and renters; they don't have access to a top secret stash of rooms that aren't out there for the general DVC population.

But what would occur if WDW rented out their DVC holdings at a huge discount?

You mean like they have with the Poly studios they still own? Been possible to get Poly studios much cheaper than a Poly Standard room for a while, then add in discount.... The one thing I see happening with that is as they declare the rest of the studios, thereby restricting cash booking inventory at Poly even more, Poly rack rates will go up even more, and the rental market for Poly points will go up even further (than it is now; in some seasons, and in the absence of a discount, point rental is still cheaper than the CRO rate for a studio, even now; with fewer studios in CRO and increased rack rates, they will be obviously and consistently cheaper).

 

[disneynutz]

I read somewhere that Disney attendance as a whole is down this summer compared to years past...so maybe that is what this is referring to...

Haven't seen very many TV commercials to boost attendance.

Bill

 

[Disney Dad ADL]

I have a question based on my recent attempt to get a weekend reservation for Oct 1-3. I was told in the entire DVC WDW realm there were no Studios or 1 BR's available. Is that an example of intentionally limiting supply to keep occupancy high? I'm sure if I wanted to pony up the cash for the weekend they would be able to find a room pretty quick... Maybe it's my newbie ignorance, but finding it hard to believe there were NO Rooms at the inn for a weekend 2.5 months in advance...

(and no, David's rentals didn't have any success either...)

No, they are not intentionally limiting supply. It's not really possible for Disney to do that. With the exception of Polynesian, all other WDW DVC resorts are sold out, meaning 98% of the points are owned by DVC owners and Disney keeps 2% for themselves. Starting at 11 months prior the vacation date, DVC members get the first chance to book rooms using their points. I believe Disney cannot rent out DVC Villas for cash unless the room is still vacant 60 days prior, with the exception of the 2% that they own. So in theory, if your October dates are not filled by early August, Disney could start renting out those rooms for cash at that time.

However, If you had access to the actual DVC member booking site, you would see how popular October is in the DVC world. DVC is the hardest to book from September - January and actually easier in the summer (despite it being a "popular" season) because it costs more points. There are some booking categories that are so popular, they sell out in 5 minutes, 11 months in advance.

If you think you want to rent DVC in October 2017, you should contact the DVC rental company in November 2016 (11 months prior to your desired date), or in March 2017 (7 months prior) at the very latest.

If you really want to try for October 2016, keep an eye on the cash reservations at Saratoga Springs, which is usually the least popular DVC resort, and especially the 1 bedrooms Villas, which are usually the least popular. In theory, they could get more cash availability starting in August, although TBH I think the chances of that happening are relatively low.

 

[Paula Sedley-Burke]

Forgive my ignorance how does converting cash rooms to DVC units make Disney money? Apart from the initial cash injection as points are sold how do they make money moving forward? Wouldn't cash rack rate be a better money spinner?

 

[Douglas Clark]

keep an eye on the cash reservations at Saratoga Springs

Thanks for your great explanation and information. How would I keep an eye on those cash res. you mention??
We've already decided to forgo the Not So Scary event(s) this year, but will think about planning ahead for next year.

Thanks

 

[Douglas Clark]

Drilling down into your post...

all other WDW DVC resorts are sold out, meaning 98% of the points are owned by DVC owners

So does that mean that WDW DVC resorts on any given night, on average, have 98% occupancy rates???
If so, the mouse will be making money on dining and souvenirs if not making profit on room rentals...