DVC Hawaii on hold?

[dvc_john]

Found this - sounds like the Hawaii project may be on hold. Hope not.

http://activerain.com/blogsview/781...ders-Trump-Ocean-Resort-in-Baja-loses-funding

Formal groundbreaking was scheduled for November 19.

From the link:

Disney's Ko Olina Resort on Hold. Kapalua Resort looking to refinance Lehman debt with new lenders. Trump Ocean Resort in Baja loses funding.
It is going to be a bumpy ride.

Disney to wait it out until economy improves. Also hitting the construction skids are Kapalua Resort, Moana Vist, 1723 Kalakaua and Trumps Baja Mexico Resort.

Disney's Ko Olina Resort:

Just confirmed through two sources, but has not made the news yet. Disney is putting construction on hold of their Ko Olina Resort until the economy stabilizes. One source said that Disney does not feel they can sell their suites at projected market rate. This is the third project on Oahu to his the skids on construction. Moana Vista and 1723 Kalakaua are also being affected by the recession.

Edited: Disney is denying this rumor. See tjkraz's post #8

 

[Chuck S]

It would not surprise me to see this project on hold until the economy improves. Hawai'i would be an expensive building option for both Disney (resort side) and DVC (timeshare side). The resort would need a steady income from cash customers to support the non-DVC portion. If tourism is down, it hurt. Cash tourists would also be a potential sales pool for the timeshare portion, less tourism = smaller sales pool = slower than expect sales. If the resort were to open under those circumstances, it would require Disney and DVD to spend a lot of $ on operating costs until the economy improved.

 

[bookwormde]

I am sure with the downturn Disney wants to conserve cash and does not want to finance it internally.
Even for large companies outside financing if difficult to get and is expensive at this time, so why not wait 6 month until the market conditions stabilize. As much as I am looking forward to Hawaii, if just make good business sense to delay.

bookwormde

 

[DebbieB]

I'm not surprised considering that DVC already has 2 large projects under construction.

 

[Mouseaholic!!!]

Anaheim had a choice....build Hawaii right now and lay off many more employees company wide.....or be intelligent and put the project on hold.

Would you honestly prefer to have Hawaii built at the expense of the castmembers at WDW and DL who provide the Disney Magic we all enjoy. How about just cleaning the bathrooms less often during the day.....or fewer fireworks and shows.

It simply didn't make financial sense.

 

[CarnotaurDad]

This was a smart business decision. No way would this sell out in the current climate.

 

[jimmymac]

2 large DVC construction projects under way at WDW. 1 at DL ( a true eyesore). And now Hawaii. When was the last purely guest the Disney built? And finished

 

[tjkraz]

Disney is denying any truth to this rumor:

http://dvcnews.com/index.php?option=com_content&task=view&id=687&Itemid=1

Ground breaking still set for next week.

2 large DVC construction projects under way at WDW. 1 at DL ( a true eyesore). And now Hawaii. When was the last purely guest the Disney built? And finished

If you're asking about the last all-cash hotel, that would probably be Pop Century. At the Grand Californian, the number of cash rooms being added (200+) is much larger than the number of DVC villas (50.)

The way DVC is selling, I don't think it makes sense to build stand-alone cash resorts anymore. And every time Disney sells another DVC contract, they shift some business from the cash resorts to DVC. Instead of paying cash to stay at the Grand Floridian, Poly, AKL or Caribbean Beach, those new DVC members will use their points to stay at the Bay Lake Tower, Animal Kingdom Villas or Saratoga Springs.

DVC purchases effectively give Disney added capacity in its cash resorts without them having to build.

 

[Jaaron2]

 

[marynvince]

Anaheim had a choice....build Hawaii right now and lay off many more employees company wide.....or be intelligent and put the project on hold.

Would you honestly prefer to have Hawaii built at the expense of the castmembers at WDW and DL who provide the Disney Magic we all enjoy. How about just cleaning the bathrooms less often during the day.....or fewer fireworks and shows.

It simply didn't make financial sense.

This is not the way decsions on employees and staffing are made. To build or not to build is independent of staffing.

 

[snowbunny]

How about just cleaning the bathrooms less often during the day.....or fewer fireworks and shows.

I think that low-hanging fruit has already been picked.

As for DVC Hawaii, as soon as the price of oil spiked and killed cheap travel from the mainland, this result was in the cards.

 

[BostonDisneyKid]

If you're asking about the last all-cash hotel, that would probably be Pop Century.

tjkraz - Pop isn't finished... They stopped construction 2002 but never finished. There was suppose to be a "Legendary Years" portion which was never completed. The buidlings are built (foundations and frames) but they are no where near a point of occupancy. I was actually just reading about their future state and it seems as though they may be rebranded into "Disney's Animation Inn & Suites".

To read about it go to the site below: http://jimhillmedia.com/blogs/jim_hill/archive/2008/11/10/monday-mouse-watch-will-pop-century-be-rebranded-as-disney-s-animation-inn-and-suites.aspx

 

[tjkraz]

tjkraz - Pop isn't finished... They stopped construction 2002 but never finished.

Yeah, I know Disney never finished it. But I do think that the part which is open represents the last all-cash (no DVC) resort that Disney has opened. At least domestically that's true.

Fun article at JHM, wasn't it?

 

[JimC]

The way DVC is selling, I don't think it makes sense to build stand-alone cash resorts anymore. And every time Disney sells another DVC contract, they shift some business from the cash resorts to DVC. Instead of paying cash to stay at the Grand Floridian, Poly, AKL or Caribbean Beach, those new DVC members will use their points to stay at the Bay Lake Tower, Animal Kingdom Villas or Saratoga Springs.

DVC purchases effectively give Disney added capacity in its cash resorts without them having to build.

And construction costs are paid for as points are sold which reduces capital outlays. Then operating and reserves are covered by dues. This is a fabulous model for Disney. I've wondered why they have not converted more hotel rooms to DVC.

 

[Mouseaholic!!!]

I think that low-hanging fruit has already been picked.

As for DVC Hawaii, as soon as the price of oil spiked and killed cheap travel from the mainland, this result was in the cards.

I agree - we watched airfares spike. Friends were planning a trip to Hawaii but changed to a resort closer to home. They drove.

Hawaii will suffer but they are not alone....Las Vegas is struggling, cruiselines are struggling.

We were shocked that Anaheim would make this kind of mistake <--they rarely do.....especially when they said they would go ahead and develope the property while managers are preparing lists of staff to layoff.


As far as the "low hanging fruit"....you have no idea how much Disney is willing to cut. (not always as nice a view from the inside). My DH is a 30 year castmember and he is often disheartened with the changes. Hopefully the 7 for 4 will fill the resorts in 2009 and we will not have to watch more cuts next year.

 

[Mouseaholic!!!]

This is not the way decsions on employees and staffing are made. To build or not to build is independent of staffing.

Not when they are making BOTH decisions at the same time. It's a little frustrating for managers to be told to prepare for budget cuts - possibly difficult budget cuts and then watch a new resort being built in a local economy that is suffering.

You BET Anaheim looks at EVERYTHING when they make a $$$ decision.

 

[hakepb]

I wonder if they are seeing a lot of fuel surcharges on building materials. Since fuel prices seem to be dropping, they may be smart by waiting for the surcharges to fall off.
They might even be able to get a lower construction bid in a worsened economy, if contractors start hurting enough.

 

[Mississippian]

The way DVC is selling, I don't think it makes sense to build stand-alone cash resorts anymore. ....

And let us pray that they never build another stand-alone DVC resort unless it has really big units with a really cheap point chart.

 

[snowbunny]

As far as the "low hanging fruit"....you have no idea how much Disney is willing to cut. (not always as nice a view from the inside).

It's not a nice view from the outside either, if you (like me) are old enough to remember the way it used to be. In 1968, you could eat off the floors in Disneyland.

 

[gingermouse17]