Does DVC regret Poly?

[DVC Doctor]

I do not think Poly is a mistake although I am not adding on there.

I think having a resort with all studios is NEEDED for the monorail loop especially with the lack of studios at VGF and the tremendous demand.

I also think this will be more profitable for Disney in the long run than other configurations. However, I really WISH that they would have made one building for 1 and 2 and 3 bedroom units, even if they had to completely flatten a building.

I also will guess that they will take the same design to VWL and focus on lots of 5 person studios and lot of overpriced bungalows. It appears that the traditional DVC 1-2-3 bedrooms are on the way out for the near future.

 

[dizfan]

Why is the premise upon which this thread depends, that Poly is not selling well, correct? It only opened a few months ago and has been on sale for only a couple months before then and hit close to 100,000 points in both June and July. Does that mean sales are going badly? I personally feel sales are likely to be OK going forward and if DVD would just adopt a guaranteed connecting room option sales would even be better. The lack of any 1BR or 2BR option (and I don't consider the bungalows a reasonable 2BR option since they require a king's ransom in points to reserve) probably disacourages some possible purchasers but having a huge amount of large studios probably attracts many others.

While June and July deeds on the county web site were good, August dropped to just below 80k points.
Deeds showing up on the county site are sales ranging from 12 days ago to many months ago. There was a drop off in master contracts after the July 4th holiday.

It is entirely possible we see a pickup in deeds showing up in September. End of summer vacations and new webcast receiving much better reviews than the first one.

As Dean points out, we will likely never know what they expected the sales pace to be.

They may be happy with the sales pace. After all, the resort has been under constant construction between the DVC longhouse and the lobby. Many won't stay at a resort with construction. They may also refuse to buy until they see the finished product. 2016 the construction will be over. 2016 Disney also releases Moana. They may be counting on both factors pushing sales to higher levels per month and at higher prices. We will likely never know.

 

[JWG]

I still argue with nothing new in the arsenal, slower sales at Poly are ok with them. If it sells out quickly, all they have is Aulani.

 

[dizfan]

I still argue with nothing new in the arsenal, slower sales at Poly are ok with them. If it sells out quickly, all they have is Aulani.

If DVD was concerned with not having anything other than Aulani, they could have started WL construction sooner. Converting existing hotel rooms would not take very long, so they have plenty of opportunity if PVB sold faster.

They owe it to shareholders to maximize profits. Slower sales today aren't a bad thing for Disney, provided they believe the plan results in higher revenue long-term.

 

[disneynutz]

We don't know what their master plan is. Are slower sales acceptable to Iger? Other than doing DVC at the poly on the cheap, what was the reason for studios and very expensive bungalows? Again we don't know their plan or Igers marching orders.

Studios only to increase park attendance or less vacancies because studios are in higher demand?

Bill

 

[JohnDaleswife]

I'm going to call that a sales story that is coming out for why you shouldn't be disappointed that they converted 35 year old buildings into studios only at the Poly and then said "look, you wanted Poly, come buy it. BTW, we couldn't get some permits to build what we really wanted to so just be excited you got this".

What did they really want to build?

 

[disneynutz]

I'm going to call that a sales story that is coming out for why you shouldn't be disappointed that they converted 35 year old buildings into studios only at the Poly and then said "look, you wanted Poly, come buy it. BTW, we couldn't get some permits to build what we really wanted to so just be excited you got this".

IMO Disney pretty much gets their way when it comes to approvals and permits. They know how to work the system, heck, they are the system having their own cities and taxing authority.

I think that cost was the deciding factor taking buildings that weren't popular at the poly next to boat horns, obstructing their view with bungalows, and turning them into studios that will book no matter what. They also know that DVC people will be back each year no matter what the conditions of the rooms or resort. Why fix it if you don't have to?

Bill

 

[DebbieB]

What did they really want to build?

The original leaked plans had them demolishing the Pago Pago building and building a high rise. Then another new bulding over by the luau.

 

[JohnDaleswife]

The original leaked plans had them demolishing the Pago Pago building and building a high rise. Then another new bulding over by the luau.

That might have looked odd next to the others.

 

[dizfan]

I believe one of the leaked plans had both Pago Pago and Moorea being demolished. Replaced with two T-shaped buildings and a nice pool area being built between the two new buildings and Tokelau. That is in addition to the-shaped building in the luau area.

Based on many Disney web sites and social media this plan had much more appeal than the current PVB.

 

[disneynutz]

I believe one of the leaked plans had both Pago Pago and Moorea being demolished. Replaced with two T-shaped buildings and a nice pool area being built between the two new buildings and Tokelau. That is in addition to the-shaped building in the luau area.

Based on many Disney web sites and social media this plan had much more appeal than the current PVB.

But it had a much higher cost, why spend money if you don't have to.

Bill

 

[KAT4DISNEY]

What did they really want to build?

According to the salesperson they wanted to demolish and have 1Br's too but couldn't get the permits. I just doubt that they couldn't if they had really wanted to or rather felt that was the route to make the most money. 7 Seas Lagoon is a man made body of water - I doubt there's much if anything protected immediately around it - it's a very developed location at WDW.

 

[disneynutz]

According to the salesperson they wanted to demolish and have 1Br's too but couldn't get the permits. I just doubt that they couldn't if they had really wanted to or rather felt that was the route to make the most money. 7 Seas Lagoon is a man made body of water - I doubt there's much if anything protected immediately around it - it's a very developed location at WDW.

CM's are provided talking points, permits were probably on the list as a reason PVB has the configuration that it does. It's not that they can't get permits, it's the cost to satisfy the engineering requirements.

Bill

 

[MountainMouse]

Why couldn't they have built 1 and 2 bedroom units in the current configuration? If you can have connecting studios, I don't see what would have prevented them from connecting them in a villa layout. They just chose to layout all of the space as studios, the reason is up for debate.

 

[OKW Lover]

Why couldn't they have built 1 and 2 bedroom units in the current configuration? If you can have connecting studios, I don't see what would have prevented them from connecting them in a villa layout. They just chose to layout all of the space as studios, the reason is up for debate.

Agree with this point. Just take a look at AKL Jambo. All those DVC units were originally just regular hotel rooms yet they managed to make 1BR, 2BR and even Grand Villas out of them.

 

[bookwormde]

I do not know about DVC but DVD management has to be beginning to have serious concerns for their jobs, based on the configuration and construction cost containment impact on the popularity of Poly DVC. I think they way overestimated that any "Poly" would sell like hot cakes.

Combine this with the sharp point cost increase for both new and recycled DVC to raise margins it is not surprising that sales are sagging.

I think they also overestimated the strength of the recovery, even though pent up demand has supported sales in the short term.

Reality is that if DVD profit drops below 1 billion this year, heads will roll and given perhaps 2B in sales and using a 25% cost of construction and 25 Cost of sales they are at the tipping point.

 

[OKW Lover]

I do not know about DVC but DVD management has to be beginning to have serious concerns for their jobs, based on the configuration and construction cost containment impact on the popularity of Poly DVC. I think they way overestimated that any "Poly" would sell like hot cakes.

How do we know this?

 

[dizfan]

But it had a much higher cost, why spend money if you don't have to.

Bill

The decision to not spend money making PVB larger means they are spending money at WL this fall. Moving the construction from one location to another comes with a cost. Larger PVB presence would have shifted even more common area cost to DVC points, saving them money over 50 years.

I stand by my belief different decisions would result in higher profits for PVB. As the thread has repeatedly pointed out, super studios, 1BRs, reasonable points for 2BR options all likely boost sales. If they had stronger sales, would prices still be $165/pt? Maybe or maybe they would be $170/pt.

Instead of a better PVB modeled after proven concepts of VGF, BLT, BWV, and BCV, they went a new direction. Now they spend construction money at WL.

Maybe spending less at PVB was the right decision. They are the ones paid to make sure revenue for DVD keeps increasing each quarter. If revenues for DVD miss, analysts will be happy to question their decisions and push for a change of direction.

Not sure why management didn't use some Rapa Nui rooms for 2 BRs?
Tikiman wrote this in 2013...

With Rapa Nui having 76 rooms (all connecting and some connecting to 3 rooms)

Should have been easy and inexpensive to make that a 2BR. DVD management made their decision. Now shareholders wait to see if moving away from past resort designs was the right decision.

 

[disneynutz]

The decision to not spend money making PVB larger means they are spending money at WL this fall. Moving the construction from one location to another comes with a cost. Larger PVB presence would have shifted even more common area cost to DVC points, saving them money over 50 years.

I stand by my belief different decisions would result in higher profits for PVB. As the thread has repeatedly pointed out, super studios, 1BRs, reasonable points for 2BR options all likely boost sales. If they had stronger sales, would prices still be $165/pt? Maybe or maybe they would be $170/pt.

Instead of a better PVB modeled after proven concepts of VGF, BLT, BWV, and BCV, they went a new direction. Now they spend construction money at WL.

Maybe spending less at PVB was the right decision. They are the ones paid to make sure revenue for DVD keeps increasing each quarter. If revenues for DVD miss, analysts will be happy to question their decisions and push for a change of direction.

Not sure why management didn't use some Rapa Nui rooms for 2 BRs?
Tikiman wrote this in 2013... Should have been easy and inexpensive to make that a 2BR. DVD management made their decision. Now shareholders wait to see if moving away from past resort designs was the right decision.

Truth is we don't know why Disney does what they do. Could be that Iger doesn't like the new DVD/DVC guy so he wouldn't let them spend the money. Could be that resorts, a different Disney division doesn't like DVC and they have more pull. Could be that they are only allowed to spend x amount of construction dollars in a 5 year period, or it could be all driven by the bean counters and all studios somehow made them more money.

Bill

 

[bookwormde]

How do we know this?

Any Disney division whose profits fall significantly out of line with other division historically has had a leadership change very quickly. With Poly sales far below hat anyone though and Hawaii sales relatively slow and a much lower net margin, if sales do not pick up significantly that is exactly where DVD is going to find themselves. Basic big business practices, perform or go