Disney's Long Term DVC Strategy

[NVDISFamily]

It's a situation that doesn't have an easy answer, I'm afraid. Current DVC leadership seems to operate under the general premise of "DVC Resale is the devil." There's definitely a push to reclaim market share; they believe they have lost a lot to the resale market when, in fact, it appears to me that the issue lies with their undertrained cast members and guides who can't sell the product without truly "selling." I feel like the average experience of most guides these days is less than five years, which doesn't provide them with a wealth of knowledge about the product. However, the problem is that as they target the resale market, they negatively impact the overall value of the product. The current direction could eventually render it comparable to other timeshares—this means that DVC loses its key market differentiation: its ability to maintain market value and break away from the stigma and mold of traditional timeshares.

Hmmmmm. Not sure if I would jump that far with the take that they think it's the Devil. I just think they have their balance off and are playing the FOMO game wrong. A few thoughts -

• The more I stand back and think about Disney objectively, they have been and likely continue to be masters of the FOMO approach to pulling on your wallet/heart. The "Disney Vault" with the VHS/DVDs, limited edition merch, and our newest favorite, line skips at the parks.
• When FOMO is working well, you kind of regret it when you don't open your wallet, but you also feel somewhat satisfied that you are having a good time, and you are pleased with the few times you have given into the mou$e.... Most people are happy, people are spending money, let's call this peak FOMO..... man I missed my window to buy the limited release platinum edition of The Rescuers on VHS, but I got my Little Mermaid and Aladdin (be kind please rewind).
• The DVC edition of this is when there is a reasonable delta between the two markets and entry into direct perks or the benefits of the direct points vs resale seems like a good value. When I got riviera points for 150s a point in 2022, the delta between that and resale and the benefits of those points (they have gotten a lot of use at VDH) made me easily go over the FOMO obstacle and buy direct.
• The other thing about DVC right now, is there is still good balance between resale and direct as there are still plenty of options for resale purchasers to flex in those points at other resorts at 7 months and it will be many years before that becomes "painful". This is mostly at WDW, and I'm coming at this from the perspective that DVC is dominated by what is going on in Florida. This of course has a few exceptions with the new restricted resorts. They have some FOMO in one direction (resale owners who cant book in) but too much FOMO the other way. Balance is a bit off. This is offset by the fact that they are new and in most cases very popular resorts so people who own love them and want to stay there. I think that a lot of resale owners of these restricted resorts already own direct points and are adding on for longer stays or larger rooms.
• Ultimately the struggles that DVC has with mastering it's FOMO approach has to balance into the larger Disney FOMO approach. It's okay that you don't think everything is perfect. You just have to be mostly/very happy with the mouse and keep those dollars flowing. If DVC keeps messing up this game and the FOMO balance get's too off and disrupts the rest of the game, the higher ups will bring it in line and find more knobs to turn. They don't want thousands of miserable people running around the resorts and parks.
• Just like Epic Universe will help Disney get back into the game (hopefully) perhaps we need a Universal Vacation Club...... I can dream

 

[muppets3d]

I think they meant Swan and Dolphin are Marriot and in the most ideal location possible inside the bubble.

Sure but that's another exchange program and you're exchanging into a hotel room, not a timeshare villa.

 

[Brian Noble]

Another thing I have been saying for a very long time: DVC is just another timeshare, and it always has been. It's a niche product---it appeals only to a small set of people---Disney fanatics---but it is also not particularly large, so that works out.

Disney has been working for years to differentiate the resale product, dating back to the 2011 removal of ABD/DCL/Disney collection from resale buyers. This is not new. Each new differentiating feature converts a few more potential resale buyers into someone buying from the developer.

There will never be a Mariott Vacation Club property built in the Disney bubble

There is one timeshare that is (functionlly) inside the bubble: Wyndhan Bonnet Creek. It is technically not on RCID/CFOTD land, and never has been, but it is landlocked by RCID/CFOTD on three sides, and I-4 on the fourth. The only way in or out is via Buena Vista Drive, and it is sandwiched between CBR and Typhoon Lagoon, and it is more conveniently located to many WDW destinations than some DVC resorts.

If you want to stretch the argument, you could also make the case for Silver Lake. I probably would not, but it is north of Irlo Bronson/US-192, and has a direct entrance onto Sherberth.

 

[muppets3d]

There is one timeshare that is (functionlly) inside the bubble: Wyndhan Bonnet Creek. It is technically not on RCID/CFOTD land, and never has been, but it is landlocked by RCID/CFOTD on three sides, and I-4 on the fourth. The only way in or out is via Buena Vista Drive, and it is sandwiched between CBR and Typhoon Lagoon, and it is more conveniently located to many WDW destinations than some DVC resorts.

If you want to stretch the argument, you could also make the case for Silver Lake. I probably would not, but it is north of Irlo Bronson/US-192, and has a direct entrance onto Sherberth.

And it's by all accounts a beautiful property (Wyndham, I mean). Plainly visible from Riviera and other places on WDW property. While Wyndham is near WDW it is far from being in the bubble. I would say that Swan and Dolphin are much closer to being in the Disney bubble than Bonnet Creek.

 

[Brian Noble]

There are lots of ways to define the bubble. You can always define it in ways that include some resorts and exclude others, but you have to get increasingly fine-grained to exclude Bonnet while including e.g. OKW or SSR.

(Also: Marriott owners probably don't care that much about having an MVC resort on property, because they have access to DVC exchanges via Interval, unless they happen to own an Orlando-area week that is not also in the Florida Club.)

 

[Sandisw]

No. Purchasing direct points offsets the developer's cost to build the resort. Perks is a different department - marketing. Dues offset maintenance cashflow, and the developer cares a lot about cashflow.

My point is DVD could show some more appreciation for dues maintenance cashflow they continue to get from resale owners to whom they did not have to market or sell anything - especially when other timeshare programs have some direct owners that abandon their contracts (and their dues payments) altogether because their products have no resale value.

Just my $0.02, but it wouldn't cost much to develop a program to appeal to (thank?) resale owners for staying on brand, keeping the value of the product high and writing those dues checks every year. Would not have to be free! Even if it was MMB for more money than direct owners pay, that would be a step in the right direction. Said another way, DVD is missing a profit opportunity by not appealing to resale owners in some way.

I’m confused though. The dues we pay for owners is to manage and run the program.

That money is not used to fund DVD, who in turn is the one paying any costs for membership extras.

If no membership extras existed, dues for owners would not change. And the profit that DVC makes from running the program would not change.

So, I don’t see how one has anything to do with the other.

So, if one wants extras, that marketing budget is part of DVD, which is a separate division than DVCMC.

And DVDs funds come from sales. In terms of the topic. DVD started in the road to differentiate between resale and direct in 2012…and I just don’t see them moving away from that direction.

 

[Brian Noble]

I take @DonkeyHoTay's point to be: Resale-only owners are loyal to Disney, and should be rewarded for that loyalty.

And, I understnad that perspective. But, I also don't think that has ever been the point of loyalty programs. They are not designed to reward past spending. They are designed to stimulate future spending. And, "spending" in the context of DVD is not "paying the Dues you are already contractually obligated to pay," it is "buying more points."

 

[Sandisw]

I take @DonkeyHoTay's point to be: Resale-only owners are loyal to Disney, and should be rewarded for that loyalty.

And, I understnad that perspective. But, I also don't think that has ever been the point of loyalty programs. They are not designed to reward past spending. They are designed to stimulate future spending. And, "spending" in the context of DVD is not "paying the Dues you are already contractually obligated to pay," it is "buying more points."

Got it! And you are correct, Disney doesn’t have a loyalty program for anyone.

Bounce back offers are the closest those you are cash guests who go regularly can hope for at this point.

 

[NVDISFamily]

I take @DonkeyHoTay's point to be: Resale-only owners are loyal to Disney, and should be rewarded for that loyalty.

And, I understnad that perspective. But, I also don't think that has ever been the point of loyalty programs. They are not designed to reward past spending. They are designed to stimulate future spending. And, "spending" in the context of DVD is not "paying the Dues you are already contractually obligated to pay," it is "buying more points."

I guess I'd take the leap that happy resale owners very often become happy direct owners or they associated with friends/family who are more affluent who they would talk to about or share DVC with who would then be prime targets for direct points.

Right now, I'm not quite at the spot where the 100+ dollar a point delta between resale and direct doesn't matter. Five to ten years from now if my financial situation allowed a hit of that magnitude without really thinking about it I'd likely be even more silly and just say I don't want to deal with the restrictions and call my guide and pay 260 bucks a point for that extra 100 Riviera points I "need".

 

[Brian Noble]

And you can do that! Resale owners can participate in Pay It Forward, unless you live in a verboten state (as I do). But, that has to be weighed against the benefits (to DVD) of differentiating the resale product. If DVD believes that the latter outweighs the former, that's what they are going to do.

 

[DonkeyHoTay]

If no membership extras existed, dues for owners would not change. And the profit that DVC makes from running the program would not change. So, I don’t see how one has anything to do with the other. So, if one wants extras, that marketing budget is part of DVD, which is a separate division than DVCMC.

I agree - my suggestion is about the overall DVD organization recognizing that one operating unit (the property management operation) benefits from resale owners, and having the marketing division enhance their product offerings (e.g. MMB) to both direct and resale owners and charge both owner types, not just direct.

I take @DonkeyHoTay's point to be: Resale-only owners are loyal to Disney, and should be rewarded for that loyalty.

Yes, that is my point. And it doesn't have to be a one way street - there could be a cost to charge resale owners to participate in that reward just like there is for MMB to direct. The way it is now, it seems extraordinarily one sided (DVC resale is the Devil?). They could take the edge off by offering something to resale owners. I think DVC should consider that in their long term strategy.

 

[Brian Noble]

I suspect Disney's thinking on this is: "Why should we reward someone for doing what they are contractually obligated to do?"

It's also worth noting that the person who made the "Disney thinks resale owners are the Devil" claim makes (at leat part of) his living in the DVC resale (and more importantly, rental) ecosystem. If I were in that position, I'd probably feel like I was in the crosshairs as well.

Look, I'm a huge fan of resale timeshare purchases. Most of mine were bought that way. (Well, "bought" because on average, they were free.) But I am under no illusions about how the various developers view me as a resale purchaser. And that's fine. I don't need them to like me. I just need them to do their jobs: Manage a well-run and well-maintained resort. DVCMC does a pretty good job of that.

 

[intamin]

It's a situation that doesn't have an easy answer, I'm afraid. Current DVC leadership seems to operate under the general premise of "DVC Resale is the devil." There's definitely a push to reclaim market share; they believe they have lost a lot to the resale market when, in fact, it appears to me that the issue lies with their undertrained cast members and guides who can't sell the product without truly "selling." I feel like the average experience of most guides these days is less than five years, which doesn't provide them with a wealth of knowledge about the product. However, the problem is that as they target the resale market, they negatively impact the overall value of the product. The current direction could eventually render it comparable to other timeshares—this means that DVC loses its key market differentiation: its ability to maintain market value and break away from the stigma and mold of traditional timeshares.

Yeahhhh as above I don't know if the resale value is the thing that truly makes it different. It's one of the things that makes it different but the more important thing is it's in the bubble.

If their properties were outside the bubble like where Wyndham is or even where Gaylord Palms is, I'm not sure I would've ever bought. Resale value wasnt the deciding factor for me to buy DVC as we operate as if the money we put into buying DVC is gone. It's not a liquid asset and shouldn't be relied on as such.

Obviously as a consumer, none of us like resale restrictions but what else has pushed people to buy direct? If the only separation between resale and direct was not being able to use our points on exchanges we'd laugh in their faces like we did for years. Why would anybody buy direct? We may not like it as owners, and you probably especially don't like it as an employee of DVCRM but it's the only thing that's been effective and they're trying to differentiate the product as much as possible with the limited tools they have. Their goal is not for the resale value of the resorts to be amazing, it's to keep selling as much timeshare as possible just like every other timeshare which people may not like hearing but it is. Disney just has extremely valuable locations because of their theme parks that only they exclusively can provide access to.

 

[Brian Noble]

(And if you think developers aren't fond of resale owners, wait until I tell you how they feel about exchangers!)