DVC affected by hotel closings

[CaptainMidnight]

I know some of us are concerned about how closings of a couple of WDW hotels may adversely affect the value of our DVC.

I learned something today from a CM that I didn't know. He told me that there is a law that if a hotel is closed for 4 weeks or more, it has to close down for an entire year. His take is that this was a major factor is the decision to go ahead and close the hotels.

I'm not sure I understand, but I thought I'd share this info.

 

[gometros]

I must be behind the times. What hotels have closed?

 

[TnRobin]

Port Orleans -French Quarter has closed. Port Orleans- Riverside has reduced its capacity to only 300 rooms.

 

[Richyams]

That sounds like a stupid law. What could the justification for such a law possibly be?

Probably some big hotel owner paid some lawmakers to help get rid of some of their weaker competition. Just another reason for term limits and limiting the power of government.

It may be that since they didn't close the entire resort, they will be able to re-open without having to wait the year.

 

[JonHM]

*because* they merged Port Orleans and Dixie Landings into one entity, as long as 1 room is available at the Port Orleans complex as a whole, technically the resort isn't 'closed' - isn't that correct?

 

[JonHM]

I was ahead of myself - Rich already made the point before I created my post.

 

[dianeschlicht]

Please explain why you think Port Orleans closing will effect DVC. Is it because of the ferry not running there? I'm not sure why a hotel closing would effect us.

 

[SJCSuzy]

This "law" sounds like an uninformed CM giving out bad information. I can't imagine the FL legislature making a law that they would lose out on all the room tax just because a resort closes for a little while. Sounds bogus to me.

 

[gmboy95]

This law seems very rational....it avoids something that goes on all the time down on cape cod....hotel and restaurant owners shuddering thier businesses during the offseason, and leaving ugly, basically abandoned bulidings during the offseason....winter on the cape is pretty depressing, nothing but empty parking lots, and boarded up restaurants.....think of how bad some of the stretches in fla would look if they where closed for long stretches.

 

[nuthut]

If that is a law, show me where it says so. It makes absolutely no sense whatsoever.

 

[KNWVIKING]

... and leaving Riverside open is a loop hole, then it looks like the merger of PO and DL was a pretty good business move. It also shows WDW was anticipating the slow down in attendence long ago.

 

[Mojomanny]

That the rumor mill has been quoted that Riverside/Port Orleans/Dixie Landing will be all or partially taken over by the military as an extension on Shades of Green.

 

[KNWVIKING]

.... I thought that rumor was about DI not PO/DL/FQ/RS/LMNOPQRS.....

 

[Niagara2]

I run hotels - have never heard of such a law. I have seen closed hotels for renovations and sometimes building inspectors or health department come in before you can open, but you wouldn't wait a year. There are literally thousands of seasonal hotels/motels in the US who open and close each year. What so you do - open seasonally every other year? (LOL)

 

[CaptainMidnight]

Well, I guess one scenario of how it could hurt DVC is that news of a WDW resort hotel closing is a pretty big simbol of reduced occupancy levels. DVC resorts do have some dependance on cash paying guests, and if they are not staying at DVC resorts and providing additional income, that could affect DVC members. Just a thought.

Some of the posts above about the CM not being correct may have a good point, that's why I thought I would check the info with our knowledgeable group here.

Perhaps the stop of the new resorts also has impact....

I don't suggest Disney isn't acting appropriately making these decisions, I'm glad they are making responsible changes in accordance with the difficulty of our times, I think they have to, just interested in the impact on us and our investment.

I was also recently told that Disney was targeted by terrorists, I hadn't heard that, I heard that training manuals listed theme parks as a target (Mr. Ashcroft mentioned this in the hearings today while showing a terrorist manual), not specifically Disney. People are just understandibly fearful, and we are learning how terrible the threat is. And for some of us like myself, the DVC investment is a pretty substantial one in comparison to others, sudden additional costs required for dues or something else to prop up the resorts wouldn't be very welcome right now.

I guess I could see the symbolism of closed resorts and stopped projects, messages of people being called to cancel or move their reservations, huge discounts at other places reducing the cash paying income for DVC resorts as a potential problem for DVC members. But, I'm sure there are better informed more knowledgable views on this than mine. I'm hoping BC won't be offerred at too high a point value, and hope it will potentially be the current level with a possible special offer. I plan to continue investing in DVC.

 

[Mojomanny]

Why should a loss of Disney guests affect our DVC membership. I can understand that if the guest counts at the parks are down, they will trim hours, maintenance, transportation etc...

However, as with any other DVC owner, Disney should be responsible for the same annual dues per point, regardless of whether they actually rent out the rooms.

If a DVC member buys points on speculation, hoping to rent out their allotment every year and reap the financial reward, they may do so. However, their dues paying responsibility is seperate from the point renting ability. If they fail to rent, they are still responsible to pay their dues.

So, unless there is something I missed in the Documents, I Do not think we should be hurt too hard by the lower head counts, as far as DVC is concerned. This assumes, of course, that you are looking to use your DVC points for personal use and do not mind if other non-DVC activities may be curtailled.

On the other hand....

Closing some of the resorts and mothballing some of the new projects may be beneficial to DVC even in times of lower guest counts. It is fairly obvious that Disney is currently overbuilt.

In supply/demand economic terms:
- Disney was oversupplied with room inventory, which created falling room rates.
- Demand for rooms was decreasing as a result of 9/11
- Disney is reducing the supply of room inventory, with the goal of stabilizing the room rates.

When demand increases, premiere resorts such as DVC will be able to reap financial benefits.

As a side note....
Southwest put tickets on sale for April school vacation (4/13-4/20) yesterday morning. By last night tickets from Providence, RI and Manchester, NH were all but sold out.