DVC direct sales very very low in Feb

[Minniemoo15]

I think an increasing issue for Disney will be the lack of families getting sucked into the bubble, and then as a result, DVC.

When we started coming with our toddlers in 2015, it was so easy. Magical Express meant no car seats, luggage magically appeared in our room without having to lift a finger. DDP was pre paid and allowed us to experience many character and themed meals. Pre booked FPs meant us parents showed up on vacation and could sit back and enjoy our kids being entertained. In my friend group, the common refrain amongst fellow parents was STAY ON SITE - it’s easy and so worth it. The seamlessness is what converted my DH from a non disney fan to the proud DVC owner he is today.

I compare that with the “next generation” in our friend group - parents with toddlers today. None of them stay on site. They rent a house and do a couple days of Disney while exploring the rest of Central Florida.

I fear the pool of future DVCers is shrinking rapidly.

 

[Brian Noble]

In the immortal words of James Carville:

https://en.wikipedia.org/wiki/It's_the_economy,_stupid

 

[RoseGold]

DL will not be impacted by this. It's a totally different product.

 

[Matty B13]

I'll second the statement that a WDW trip use to be "Easy" and mostly worth it........ now not so much and extremely expensive.

 

[kboo]

I get the feeling they like being able to offer an MK and an Epoct / DHS product simultaneously.

I think you are right - opportunities to cross-sell. (From someone who owns MK and EP/HS resorts and split stays regularly on purpose)

No way. Stockpiling inventory doesn’t make good business sense. Way more preferable to get the cash in one lump sum (Direct sale) upfront with the new owner covering all the costs associated with upkeep vs. spreading out cash sales over years and discounting that future dollar to present.

I think @crvetter is distinguishing between a new resort (where a vast number of points are undeclared and thus DVC's) v ROFR. There is no point to paying to recover points that were sold once already (unless there's a buyer in the wings), but there is a cost to declaring points where right now those points seem to be working for DVC at RIviera (and AUL)

(I seem to recall that there are thresholds of # points sold that lead to a need to declare more points, so I wonder if sales start approaching a threshold, there might be a small incentive to sell enough points to get over that threshold, but otherwise, RIV and AUL seem to be doing just fine with cash rooms.)

^and prior SSR ROFR points could be used at 7 mo for cash rooms there, right? (I have no idea)

I'll second the statement that a WDW trip use to be "Easy" and mostly worth it........ now not so much and extremely expensive.

The prices of everything are up. Our AUL trip is probably the most expensive vacation we are taking since having kids, partly because airfares are $$$$$. I was looking into a long weekend to WDW which in the old, pre-DVC days, was roughly the cost of airfare around ($250 pp) because we had APs and Marriott points). Food was a wash because it was less expensive to eat out at WDW than at home. <-- this was what got us to DVC.

We luckily held on to our APs during the pandemic, and the refunds/renewals actually helped us save on our pandemic-time trips to WDW. It was one of the few places where we felt like there was a real escape. Now that everything's back open they have a massive amount of banked points to get through - eyeballing the resale contracts on offer, there seem to be a lot with current and banked points... I do wonder what will happen when DVC owners have extracted the value of the banked points (whether by renting them or selling their contracts). We spent a lot of nights at DVC between Dec 2020-August 2022 without ever borrowing, and are have planned 3 DVC trips in 2023 (still without borrowing). We'll see what happens in 2024. We have definitely mellowed over the years, but my kids are still hard core park goers, so we will continue to take WDW trips and hang on to our APs. Maybe just less rope-dropping, maybe bringing friends. And it is nice not to be in strollers any more.

 

[crvetter]

I think @crvetter is distinguishing between a new resort (where a vast number of points are undeclared and thus DVC's) v ROFR. There is no point to paying to recover points that were sold once already (unless there's a buyer in the wings), but there is a cost to declaring points where right now those points seem to be working for DVC at RIviera (and AUL

This is my point the new resort was financed with debt somehow (might be debt to a bank, shareholders, bond holders, etc) but was done so at a time with near 0% interest rates.

Disney currently seems to have no issue with cash bookings selling out. And they have insight into this for months down the line, what basically a year. So rather than build a new cash resort at a higher cost of capital, why not rent out RIV as cash while slowly selling.

It defeats a few purposes: 1) allows them to delay (and even hopefully prevent) a fire sale that hurts their value long terms, 2) ride out the uncertain times by taking less risk with a new hotel build (again cash guest pay more per capitã than DVC), 3) make sure that RIV sticks around until PVB 2 which probably had debt issuance before the resent price hikes, and 4) the cost of capital today is significant that it might actually make umbrella Disney sense (probably not DVC silo) to not worry about high sale numbers

DVC is in a weird point of trying to survive to 2042 without killing DVC by over saturation, huge risk, or just having nothing to sell between then and now.

 

[Stank]

Biggest bank in Silicon Valley (15th largest in the country) came out yesterday and said, “Nobody panic, but we need money.” It was just shutdown by federal regulators an hour ago. Many startups couldn’t get short term loans for payroll; those that didn’t move their money by last night are now only insured up to $250k in deposits.

I think someone here a week ago mocked the notion we’re in a recession and that if this is one, it’s great. Careful what you wish for because things are breaking in ways no one realizes will impact them. Imagine being a well-capitalized tech firm who had millions in this bank; it’s now frozen, and payroll is every 2 weeks, and only a fraction of it is insured. Your company was and is fine, but you woke up this morning and you can’t get your money.

It’s like when you ask someone where food comes from and they respond “the grocery store” not realizing just how everything in the economy runs on just-in-time processes and if things break down, their perspective of “I have a lot of savings/I don’t have debt/bring on the so-called recession,” don’t realize the impacts can be random and reach anyone even if they think they’re immune to it because they own their home, they have a high salary, and they have millions in the bank. Then they show up to the grocery store and the food isn’t there. None of the rest really matters. Cornucopias dry up in recessions, not sure why people scoff and say bring it on.

When 9/11 happened, you couldn’t even get your money out of CDs from any bank because they are marketable instruments and the financial markets were closed. In World War I, the stock market was closed for 6 months. Folks, we’re in a time where crazy stuff has and is going to happen, perhaps more than we’ve seen. I just saw oil go to -$40 a barrel. That’s never happened in human history. People didn’t even know if the markets were structured to be even print a negative price for a commodity. You had to pay someone $40,000 to take your oil contract. That was less than 3 years ago. The idea of invulnerability is laughingly arrogant. It’s quite clear dark clouds are gathering, and as Jeff Bezos said a year ago, hold onto your cash. Oh and he just happened to have sold a ton of Amazon stock at the peak in late 2021, long before anyone else was making moves.

 

[Matty B13]

And it is nice not to be in strollers any more.

Yes, no strollers and no ECV's has been awesome the last 2 trips. Makes getting around so much easier. To bad the GF to MK walkway is closed right now, heading down in April.

 

[Matty B13]

Biggest bank in Silicon Valley just shutdown by federal regulators. Many startups couldn’t get short term loans for payroll; those that didn’t move their money by last night are now only insured up to $250k in deposits.

I think someone here a week ago mocked the notion we’re in a recession and that if this is one, it’s great. Careful what you wish for because things are breaking in ways no one realizes will impact them. Imagine being a well-capitalized tech firm who had millions in this bank; it’s now frozen, and payroll is every 2 weeks, and only a fraction of it is insured.

And this is why a lot of people hate crypto....... there is no regulation on it, and no one knows where the money truly is. I think that the dominos are just starting to fall on the crypto billionaires and millionaires....... glad I wasn't tempted to buy in.

 

[AnnaKristoff2013]

I think someone here a week ago mocked the notion we’re in a recession and that if this is one, it’s great

That was me, but this is a forum about DVC and not about debating whether we’re in a recession on a day when the US just added over 300,000 more jobs and has an unemployment rate of 3.6 percent, so I won’t continue.

 

[HIRyeDVC]

That was me, but this is a forum about DVC and not about debating whether we’re in a recession on a day when the US just added over 300,000 more jobs and has an unemployment rate of 3.6 percent, so I won’t continue.

I agree. As long as people have jobs, people have money to spend. The data is confusing though, because of this stubbornly high inflation.

 

[Sandisw]

We are not going down the road where we get into an economics debate. Posts that do not relate to DVC are off topic and may be deleted.

 

[DonMacGregor]

We are not going down the road where we get into an economics debate. Posts that do not relate to DVC are off topic and may be deleted.

How about a moratorium on long-winded posts that have absolutely zero to do with DVC, by posters who don't seem interested in talking about anything that actually pertains to the very topic of this thread and forum (and it seems don't own nor will ever own DVC)?

 

[Sandisw]

How about a moratorium on long-winded posts that have absolutely zero to do with DVC, by posters who don't seem interested in talking about anything that actually pertains to the very topic of this thread and forum (and it seems don't own nor will ever own DVC)?

That is the purpose of the reminder…further discussions of this nature will be deleted.

 

[SleeplessInTO]

Jobs / low unemployment data isn’t always a good economic sign. Due to inflation I may have had to pick up a second job to afford my DVC dues.

I’m not surprised direct sales were weak. Someone just posted on FB that they passed ROFR on a Boardwalk contract at $91/pt. Wow.

 

[Stank]

Of course they don't build without wanting it to sell at a decent rate. But, given the pandemic and the economy, if the unsold inventory is making them money via cash stays, then they are more able to weather the storm and not have to increase crazy incentives.

Honestly, given the incentives they just came out with last week, I am surprised the sales were this low. Those incentives were marginally better which tells you they at least content to stay the course for the current active resorts.

If not, we would have seen a bigger change in the pricing before VDH hits the market..

I think it’s them having to balance current market conditions with refusing to discount properties with a major new one in the pipeline for sale later this year.

DVC knows Direct sales are flagging, Disney knows vacation packages are doing the same going further out, but they can’t offer big incentives as they have a bright shiny new property they’ll need to sell. And the hype surrounding California had “sky is the limit” 12-18 months ago that’s watered down to low $200s.

 

[KAT4DISNEY]

I think it’s them having to balance current market conditions with refusing to discount properties with a major new one in the pipeline for sale later this year.

DVC knows Direct sales are flagging, Disney knows vacation packages are doing the same going further out, but they can’t offer big incentives as they have a bright shiny new property they’ll need to sell. And the hype surrounding California had “sky is the limit” 12-18 months ago that’s watered down to low $200s.

You must be referencing some of the board comments - "sky is the limit". They literally pop up for ever new resort.
DVC would not have been thinking that.

 

[CarolynFH]

How about a moratorium on long-winded posts that have absolutely zero to do with DVC, by posters who don't seem interested in talking about anything that actually pertains to the very topic of this thread and forum (and it seems don't own nor will ever own DVC)?

That’s why I appreciate the Ignore button.

 

[Brian Noble]

That’s why I appreciate the Ignore button.

A post so nice, I'd quote it twice.

(With apologies to Moto Moto)

 

[Stank]

How about a moratorium on long-winded posts that have absolutely zero to do with DVC, by posters who don't seem interested in talking about anything that actually pertains to the very topic of this thread and forum (and it seems don't own nor will ever own DVC)?

2nd largest bank failure in U.S. history isn’t relevant?

Are we perplexed as to why DVC prices have crashed in such a short time?

Cognitive Dissonance: people say it’s the economy, duh, but it’s not the economy. And any discussion about the economy relating to DVC prices is irrelevant.

I’ll maintain 6 months from now when DVC prices are lower than people contemplate today, the people pushing back today will revise their stance in H2 2023 and say well of course DVC prices are lower, “we all saw that coming.” And proceed to disregard any suggestion connecting the dots because it’s irrelevant.