DVC Future Expansion Plans

[Mickmse2002]

I think it would be cool yes, but I certainly wouldn't lose sleep over it if they didn't. I think they generate revenue through other non-theme park sources, like they are doing at on-site properties. Spas, tours, member-only events, recreational activities, restaurants, etc. I am not suggesting it is a make or break thing. I am suggesting that there are a lot of DVC members world wide who explore other vacation options other than WDW and haven't been successful in trading for a II resort. Take a look at the DVC member cruise and how fast they sell out each and every year.

I am not sure where the $100 per day beyond the room number comes from. Disney is excellent at creating and marketing vacation experiences when they make the concious decision, and investment, to do so.

 

[John Dobbertin]

An approximate $100 a day: Average $50 park admission (plus/minus); $25 for meals (& that's light for adults); $10 plus-minus for snacks/drinks; $15 souvenirs, misc. out-of-pocket. Those hundreds melt in a hurry at WDW!

 

[Horace Horsecollar]

The major lodging companies -- Marriott, Starwood, Hyatt, Cendant, and Hilton -- are agressively expanding their timeshare resort portfolios. They love the business. They love the guaranteed profit from the management fee year after year -- without having the usual worries of room rate and occupancy fluctuations that lodging compnies face with regular hotels. They love the tie-ins with their frequent guest programs. They love being able to market to their guest base. (For example, Marriott has desks at their three Oahu hotels offering tours at their Ko Olina timeshare resort.) And they've figured out how to make money in both the development cycle and in steady state operations.

In a way, Disney is a lodging company too -- except that their hotels are all near their theme parks. So Disney is actually at disadvantage over Marriott and others in places like Hawaii.

The one thing that Disney Vacation Development (DVD) has now that they didn't have when Vero and HHI were launched is a large base of existing DVC members to whom new resorts can be marketed as add-ons. But the question is whether those DVC members only want the option of staying at off-site resorts, or if they're also willing to buy points at them.

 

[John Dobbertin]

Horace, I hear you. We're DVC members and members of HGVC. HGVC has timeshares all over the place -- five of them were "nailed" on Sanibel. HGVC is the outfit at disadvantage -- they can't sell $50 a day tickets to Oahu.

 

[Mickmse2002]

Originally posted by Horace Horsecollar

The one thing that Disney Vacation Development (DVD) has now that they didn't have when Vero and HHI were launched is a large base of existing DVC members to whom new resorts can be marketed as add-ons. But the question is whether those DVC members only want the option of staying at off-site resorts, or if they're also willing to buy points at them.

I think this makes a huge difference. When you read many posts over on the DVC board you see a trend of members who are tired of the high price of admission at the parks. I do think there is a market for an additional off-site property such as Hawaii.

DVC wouldn't have to charge a $50 admission fee to the island as keeps getting restated. I think Disney's successful foray into the cruise market and the hugely successful member cruises validates that DVC members are willing to spend money outside the parks.

 

[John Dobbertin]

Where to build DVCs is about money. Best parallel I can draw -- & it is a stretch -- is way back when Hilton was considering closing their huge hotel on South Michigan Ave in Chicago & building a new hotel on the Chicago River. They compared that with building a new hotel in Las Vegas. The return-on-investment in Las Vegas was under five years; in Chicago, closer to 25. What do you think they did? Disney has unlimited opportunities to build and solidify the DVC operation without ever leaving WDW, and the return-on-investment has to be faster at WDW.

 

[Mickmse2002]

Originally posted by John Dobbertin
Where to build DVCs is about money. Best parallel I can draw -- & it is a stretch -- is way back when Hilton was considering closing their huge hotel on South Michigan Ave in Chicago & building a new hotel on the Chicago River. They compared that with building a new hotel in Las Vegas. The return-on-investment in Las Vegas was under five years; in Chicago, closer to 25. What do you think they did? Disney has unlimited opportunities to build and solidify the DVC operation without ever leaving WDW, and the return-on-investment has to be faster at WDW.

Yep, it is about the money and the ROI. But it is also in the timing. That's why Vero Beach and Hilton Head weren't wildly successful when first offered, because DVC was a new concept and the opportunities at WDW were unlimited. I don't think the same can be said for today. There are 90,000 member families in the club now, not an insignificant number. They will reach a saturation point for on-site properties and Saratoga Springs could very well be it as it is a huge complex. I bet there is a significant number in that population that bought points to come to Orlando on an every other year basis and vaction elsewhere on the off-year. Be it a cruise, Caribbean, Hawaii, wherever. That is a market they could zero in on, as well as others who would be willing to do an add-on for a different option outside of those available today.