DVC direct sales very very low in Feb

[Ruttangel]

https://www.dvcnews.com/dvc-program.../5537-dvc-direct-sales-slump-in-february-2023

You have to ask is DVC in a really big slump, some shocking numbers for February would take 8 years for RIV to sell out at that pace

@wdrl mentions in the article that anyone aware of resale market is looking at that 50% discount very favourably

 

[Royal Consort]

They keep raising the price without seemingly factoring in market conditions. That will do it.

 

[Ruttangel]

They keep raising the price without seemingly factoring in market conditions. That will do it.

Yeah, $10 increase when money is getting tighter for folks was a strange one.
Maybe current members waiting for VDH but this is still very low

 

[TheLyinKing]

Yeah, $10 increase when money is getting tighter for folks was a strange one.
Maybe current members waiting for VDH but this is still very low

Its probably a bit of both honestly.

 

[crvetter]

I think one thing people tend to forget is that Disney isn't having an issue selling out Riviera via cash rentals so they probably don't care right now about selling out quickly, rooms go for a ton a night there and inventory is slim to none (again why Aulani as a failure for DVC isn't as big of an issue for the company since Cash side is strong). The business model on Disney isn't only how quickly I can sell, but can I also keep renting via cash bookings, which in the short term probably has a higher ROI. Then if the market tanks, they will discount the direct purchases to stimulate sales in that market.

So I don't look at it as bad that the resort is selling out, Disney might have priced the resort to specifically keep the DVC sales at some level of interest (not 0) but also to keep enough cash inventory during a time when it is strong for them. Disney created DVC (particularly at exisiting resort conversion) to sell out rooms they couldn't via cash. But Riviera is special in that it is a new-build that I think is particularly popular for non-DVC folks too (though I think the echo chamber of disboards people don't aknowledge that it is very popular).

Also to their advantage not to sell out right now, when they can sell for cash, to delay until PVB2 comes online. The real bad would be for DVC to have no resort to sell at any given time, people buy on a whim for usage now. And interest would disappear if all the sudden their wasn't a resort to sell.

I'm also guessing the debt they took to build it is very low interest rate so better to hold onto that then sell (which triggers that debt to paid off) then to reinvest in new capital at higher debt rates.

Also these are January sales not February always been a complaint of mine since deed recordings take about 30 days.

TLDR: Riviera is a cash cow for Disney and they don't have an incentive to sell it right now.

 

[Ruttangel]

TLDR: Riviera is a cash cow for Disney and they don't have an incentive to sell it right now

I hear what you are saying but there's a risk to cash stays, that's why they converted VGF BPK to DVC

Also, Poly 2 tower cash rooms will be more desirable than RIV so that will be a factor in about 18 months

 

[AnnaKristoff2013]

Maybe, and I don't know, but maybe they should let DVC owners buy annual passes again. But what do I know? I'm sure Bob's got this one figured out!

Edit: Also, and hear me out, maybe there should be a real, actual, AP discount for direct purchasers.

 

[linzjane88]

As someone who wants more points but only if it's a steal of a deal.....I say let er rip! Momma needs a new Poly 2 contract!

 

[AnnaKristoff2013]

That's a lot of poly 1 direct they just sold relative to other sold out resorts. I wonder if people will read into that.

 

[Ruttangel]

That's a lot of poly 1 direct they just sold relative to other sold out resorts. I wonder if people will read into that.

I think this was when PVB had discounts getting it down to $205 at 200pts

 

[Sandisw]

I just can’t imagine that with this low level of sales that they will up the price again to get VDH higher as base price.

 

[crvetter]

I hear what you are saying but there's a risk to cash stays, that's why they converted VGF BPK to DVC

Also, Poly 2 tower cash rooms will be more desirable than RIV so that will be a factor in about 18 months

Sure but they weren't my point. My point was that Riviera is a cash cow now, and they can't sell out before PVB 2 is online or they run the risk of having little to no DVC resort in Florida. That would be more negative then not selling out Riviera right away. They will fire-sell Riviera when cash rooms no longer sell, which is why DVC went through this huge expansion after the Financial Crisis cash rooms weren't selling anywhere, but that isn't an issue anymore. Also my guess on why VGF expanded was more likely to do with a fear of running out of points to sell than an issue with VGF cash bookings, it was a cheap turn over until PVB 2 could come online since Reflections was cancelled (or delayed).

Also I will make my point their cost of capital on Riviera is much cheaper than what they could get now (likely 3-5% cheaper) which means their ROI is better here (renting rooms for cash) than it would be selling Riviera and building a new DVC to sell at a greater cost of capital.

Also your opinion is that Poly 2 towers will be more desirable than Riviera but you or I don't know that. It is again the disboard ecochamber that Riviera is unpopular, but evidence of bookings (and nightly prices) suggest otherwise. Both resorts have limitations and they appeal to different groups of people. Poly has issues with pool size and the additional pool isn't much to correct the problem they have there currently, the monorail is in a sad state of repair and ultimately takes very long to get to the parks. Riviera is more secluded (I feel like that is the negative that everyone states on disboard, but again that is really personal preference) and "generic" (but Poly 2 will probably be similar).

 

[Ruttangel]

Sure but they weren't my point. My point was that Riviera is a cash cow now, and they can't sell out before PVB 2 is online

Not sure they had planned just 30k of sales at RIV or even have the level of control on sales to make them be this low. Could be Something more significant going on, maybe the demand for DVC is generally not there, if It can take 8 years to break even on direct purchase against renting then just rent when you want and don’t bother.

 

[KAT4DISNEY]

That's a lot of poly 1 direct they just sold relative to other sold out resorts. I wonder if people will read into that.

I actually got a call from a guide letting me know about the Poly promotion. Can't recall if that was a week or week and a half ago but not long. I had not gotten a call from a guide ever if I hadn't called to ask about something. I knew things must be getting dire with direct sales.
Anyway - DVC was pushing Poly sales so not surprising they were up.

 

[tom1944]

I saw a headline that Iger made a statement that Disney got overzealous with their pricing in their quest for growth.

Maybe there will be a recalculation of prices across everything Disney.

https://www.msn.com/en-us/money/com...e-and-hulu-might-be-worth-selling/ar-AA18qi35

 

[Doberge]

I got a call last month because my old guide left DVD so the new guide wanted to touch base.

I think there's some truth to Disney being okay with lower sales but these numbers are terrible and difficult to spin.

 

[crvetter]

Not sure they had planned just 30k of sales at RIV or even have the level of control on sales to make them be this low. Could be Something more significant going on, maybe the demand for DVC is generally not there, if It can take 8 years to break even on direct purchase against renting then just rent when you want and don’t bother.

A couple reasons renting isn't for everyone (restrictions on resorts, issues finding an owner with points available and timing to go during peak times) and the entire market can't move to renting because it would simply not function anymore economically. I just suspect it isn't dire yet for Disney, maybe your DVC guide that wants to sell more because it is commissioned, but Disney the major corporation probably is fine sitting on cheap debt on a property that sells okay during an unsure time. If Disney was concerned their promotions would be good like they were during COVID, but they simply aren't so they don't seem to be concerned at the moment.

I actually got a call from a guide letting me know about the Poly promotion. Can't recall if that was a week or week and a half ago but not long. I had not gotten a call from a guide ever if I hadn't called to ask about something. I knew things must be getting dire with direct sales.
Anyway - DVC was pushing Poly sales so not surprising they were up.

The guide isn't really Disney. Of course they are concerned their commissions are lower but Disney (again not DVC since they are sub-entity) just simply isn't concerned and DVC isn't concerned else we would see incentives being better than where they are now.

 

[Bo1203]

Maybe, and I don't know, but maybe they should let DVC owners buy annual passes again. But what do I know? I'm sure Bob's got this one figured out!

Edit: Also, and hear me out, maybe there should be a real, actual, AP discount for direct purchasers.

This right here, you want to sell a premium product at premium prices, you need to include the premium features

 

[Ruttangel]

DVC isn't concerned else we would see incentives being better than where they are now.

They just added a new incentive for Disney Visa card holders but they have committed to current incentives until end of May now so they are a bit stuck (apart from VDH which may have very good initial offers)

 

[Doberge]

They just added a new incentive for Disney Visa card holders but they have committed to current incentives until end of May now so they are a bit stuck (apart from VDH which may have very good initial offers)

Disney has the numbers in real time so when they released the current promotion they would have been aware of these sales that predated the current promotions.