DVC direct sales continue downward slide

[DebbieB]

I bought in 1999 at $65 a point, $16,250 for 250 points at BWV (-$1,500 incentive for selling back 150 first year). Even though my salary is far higher today, I can't imagine putting out $41,250 at $165 a point. Plus the points don't go as far at the new resorts. Even though I could probably do it financially, there is no way that it makes sense to put that out vs paying as you go.

 

[Brian Noble]

Disney Vacation Club's year-over-year sales fell again in 2015

Per the original article, Aulani sales numbers for the final two months are not in yet. I'll want to see those before I draw final conclusions.

 

[DougEMG]

So DVC has had a 27% drop in sales from 2012 to 2015. How does that compare to direct price increases since then? Probably not to bad. And if they've reduced their costs, the drop might not be that bad.

To keep their money train rolling I'm sure they are planning what is going to take them to 2042 when the leases on the first set of resorts expire. Smaller resorts with higher prices and slower sales might be their solutions.

 

[Minniesgal]

Do they actually have enough inventory to continue sales at the pace of 2010 to 2012? The current sales pace may well be planned. They seem to be turning people away who want to buy anything other than Poly or Aulani would they be doing that if they were concerned about overall sales volumes.

 

[SpaceMountain77]

Per data gathered by Wil [wdrl] and published on DVCNews and summarized on *******, Disney Vacation Club's year-over-year sales fell again in 2015 - continuing a trend that started in 2012.

What do you think accounts for the continued drop in sales volume?

Should DVC be concerned?

View attachment 145625

The graph is misleading. Although point sales may be on the decline, profits are likely improving year-over-year.

At one point, in 2010 I believe, DVC representatives were marketing BLT for $95 a point at DLR. Hypothetically, using the graph, if all monthly points sold (204,525) were for BLT ($95), then the total would be $19,429,875. If one assumes that all monthly points sold last year (137,360) were for PVB ($165), then the total would be $22,664,400.

The math is certainly not perfect, but it demonstrates how higher points costs coupled with fewer resort offerings can result in increased yearly revenue.

 

[quandrea]

The Canadian dollar is at the worst point in about 13 years in comparison to the U.S. dollar. $160 per point converts to $236 per point for us.

Yikes! Our dollar is horrible now. When we purchased, the Canadian dollar was above par. We'd never buy, even resale, with the dollar in the state it is in now. We've actually started renting as a way of off setting some of the pain of paying dues. Good time for Canadians to sell though.

 

[gagirldawg95]

Plus the points don't go as far at the new resorts. Even though I could probably do it financially, there is no way that it makes sense to put that out vs paying as you go.

I wonder if Disney's pitch will begin to explicitly stress the "deluxe" idea of DVC. If a family typically stays at a Value resort or offsite, it would be difficult to justify the direct prices Disney now charges. But for those families whose habits include Deluxe rooms or suites, the long term savings can still be substantial.

We bought direct at VGF because we felt it best matched how we like to travel. We usually are in a king suite when not at WDW, and for years we have been paying cash to have 1bd villas at DVC resorts (2 or 3 times a year). We really like having the separation from our room to where the 2 kids sleep, and I love the "homey" aspects of a kitchen and washer/dryer.

With increased park attendance and hotel occupancy, Disney has been reducing its discounts. Several of our recent stays have been at rack rate. And trends in increases of hotel rates reflect increases well in excess of actual inflation. In comparison, a DVC purchase doesn't seem as expensive.

I don't fool myself that this is some brilliant investment. We made a purchase that effectively locks in the rate of future accommodations, subject to actual increases in MF. For Disney-obsessed families like ours, this made sense (we can afford the upfront and future costs, including AP, etc).

But the "value" prospect is completely relative - you've got to compare it to expensive options for it to be there. IMHO.

 

[Brian Noble]

If a family typically stays at a Value resort or offsite, it would be difficult to justify the direct prices Disney now charges.

This has been true for quite some time---possibly since inception, but certainly for the last dozen years.

To keep their money train rolling

One note: DVC was very useful at keeping the P&R balance sheet healthy during the recessionary travel slump. Those days are behind us and travel demand has never been stronger. It is possible that DVC sales are no longer as necessary for the health of the bottom line now that attendance, resort occupancy, and per-capita/per-room spending have been increasing. If so, then it's wise for DVD to slow the pace of sales at a higher margin.

 

[DebbieB]

I mentioned about the higher points charts. I was just looking at BWV vs VGF. I bought to stay in a 1 bedroom, mainly in early December. A BWV standard is 154, a VGF standard is 247 a week. Purchase points are 2.5 times higher than when I bought (I know you have to account for inflation for some of it) and the requirements are 1.6 times higher. That's just crazy, there's no way I would buy today, it would be cost prohibitive considering I bought for 5 or 6 nights in a 1bedroom twice a year, OKW in May, BWV in early December (that was all there was at WDW when I bought). Plus the ticket costs have skyrocketed.

 

[Sandisw]

I do think that the higher price per point definitely contributes to the decline in points being sold but as someone pointed out, it may not necessarily mean a drop in total profits. But, it would seem that one could increase those profits by selling more at a reduced cost. But, resale is also not as low as it used to be and for someone who might want to add on, neither option seems to make it worthwhile.

 

[kungaloosh22]

... I wasn't thrilled that they converted the longhouses that were always "second tier" choices for those in the know (due primarily to the location near TTC). ...

For us the choice of longhouses for DVC is a significant feature, and as decades-long fans of the Poly, we're plenty "in the know." From years of reading various forums, it has always seemed to me that Moorea and Tokelau were 2 of the most popular longhouses. We've almost always requested the longhouses that are now DVC, partly because they are close to the TTC (obviously, YMMV). Also because they were somewhat newer, had the largest rooms, and most importantly, guaranteed either a patio or balcony. The worst thing to us about the Poly has always been the possibility of getting a 2nd floor room without a balcony.

Not trying to change anyone else's mind, just mentioning that it's not a hard fact that these longhouses were "always 'second tier' choices for those in the know." Everyone values different things in a room or a resort.

 

[disneynutz]

For us the choice of longhouses for DVC is a significant feature, and as decades-long fans of the Poly, we're plenty "in the know." From years of reading various forums, it has always seemed to me that Moorea and Tokelau were 2 of the most popular longhouses. We've almost always requested the longhouses that are now DVC, partly because they are close to the TTC (obviously, YMMV). Also because they were somewhat newer, had the largest rooms, and most importantly, guaranteed either a patio or balcony. The worst thing to us about the Poly has always been the possibility of getting a 2nd floor room without a balcony.

Not trying to change anyone else's mind, just mentioning that it's not a hard fact that these longhouses were "always 'second tier' choices for those in the know." Everyone values different things in a room or a resort.

True but IMO booking patterns and guests determine which rooms were converted. Most guests want to be close to the main building/pool.

Bill

 

[kungaloosh22]

True but IMO booking patterns and guests determine which rooms were converted. Most guests want to be close to the main building/pool.

Bill

I always assumed they determined the longhouses based on how to best keep the studios closest to the bungalows, and the DVC buildings as a whole in a single area that doesn't split up the rest of the resort.

I could also have seen them building bungalows on the other side of the marina, and converting those longhouses instead.

 

[dizfan]

I agree with others that DVD may be profiting more today than in the past.

Keep in mind, they eliminated 3 longhouses of hotel rooms at PVB. WL II continues the approach used many times with DVC. Convert excess hotel rooms to DVC, reduce discounts, and raise hotel prices. Moving the inventory to DVC for 50 years puts the risk on buyers and keeps rooms booked most of the time.

 

[DebbieB]

I only stayed at the Poly once almost 20 years ago and I requested one of the 3 buildings that are now DVC. Mainly because they are close to the TTC and were newer. No transferring monorails to go to Epcot. Got what is now Tokelau. Great location.

 

[jade1]

For us, it would be both the price and the continued rise of yearly dues. When we first bought in to BWV, points were $62 per, and our maintenance, yearly was around $600. This year, we'll be paying $900 for those same points. We have seriously begun thinking about selling, not because we cannot afford the yearly fees, but because we are thinking about what else we could do with $1800 per year (we now own two contracts) and with the $30,000 we would get from selling our 300 points.
There is also an issue with the cost of the new resorts. The price DVC is asking for Poly (and the outrageous number of points needed to even think about renting a bungalow, for instance) completely turns us off. There was a time when I would have snatched up a contract at Poly. But not anymore.
I think there is a definite break point, even for those of us who are die-hard Disney fans.

You could rent XMAS week for about $4,500 on that $1,800 gives you $2,700 per year-plus your investment is still rising. Even summer we have gotten $15.

 

[SuperRob]

I'd be surprised if Disney hadn't anticipated the lower sales numbers. Their last two "new" resorts were both limited in either total rooms or room configurations. Aulani has been slow since it opened ... that's a hard location to sell on either coast (we're on the west coast, but determined that owning there didn't make sense for us). Clearly the price increases were designed to mitigate that, keeping profits up.

Higher point costs are certainly a factor, so much so that I'm a bit surprised that Disney isn't snatching up more resale contracts in order to have inventory to satisfy a variety of price points as well as shoring up price perception.

So this chart doesn't surprise me. What I'm interested to see is what happens when/if WLV2 becomes reality ... can they maintain the price point they've set with monorail resorts? I don't see them lowering the price, but I can't imagine WLV2 will support that kind of price without some strong incentives. I also wonder if we've seen the last of the new buildings with VGF. Now that DVD is seeing how the existing hotel conversions fares, I suspect the palatability of capex for completely new construction is going to be extremely low.

 

[mnra]

As an owner in several of the resorts including blt I think the main reason is cost per point. I can't imagine how most people could even afford 165 per point. I know Disney is trying to market to certain income levels but I simply can't see how most families could come close to affording this