DVC Hawaii Question

[jmatias]

Following article from www.khnl.com

HONOLULU (AP) - Preliminary site work has begun at Walt Disney Parks & Resorts' first family destination resort in Hawaii.

Disney said Thursday that the work at Ko Olina includes establishing where the foundations will be placed and laying underground utilities.

The work is being done behind a construction fence erected several weeks ago at the 21-acre oceanfront site located next to Marriott's Ihilani Resort & Spa.

Scheduled to open in 2011, the Disney resort is to include 350 traditional hotel rooms. It will also feature 480 timeshare vacation villas.

Plans call for a pool and water play area, an 18,000 square-foot spa, a wedding lawn, an 8,000 square-foot convention center and a children's club.

 

[OneMoreTry]

....

My impression has never been that HHI or VB were "out of the park hits" for DVC. So now they want to go to Hawaii? Hmm... And with the exception of summer you can book them fairly easily. Both of these are in locations with a key "period" While Hawaii has "peak" period it does have a more year round appeal then VB or HH. I owned HH and sold it. I will probably eventually buy something else there. The "Disney" premium just wasn't enough for the cost etc IMHO.

....!

Last time I was at HH, I met a member who found about the DVC HH while vacationing on the island. He bought sight unseen before it was built. Has had it since it opened. It's his family's favorite vacation of the year. He said they wouldn't miss it. They have NEVER used their points at WDW or anywhere besides HH.

I wonder how many similar owners exist. I bet DVC knows exactly.

 

[Dean]

Hard to respond to that without even knowing what Disney will bring to the table and how they decide to market it.

My sense is that, right now, many other timeshares are suffering largely due to the manner in which they market their product. As you've often said, other developers are much more aggressive in their sales tactics. This approach has historically lead to sales volumes several times those of DVC.

However in our tough economy, my suspicion is that other developers are losing the lower-end sale. The folks who previously could be badgered and cajoled into buying are now walking away with greater frequency. Either that or their financial situation prevents them from ever entering the room in the first place.

With DVC largely allowing business come to them, their sales numbers appear to be more stable. As was the case in 2001/02, DVC is gaining new business from people who see it as a way to reduce their long-term OOP expenses while locking-in those annual trips to DL or WDW.

The Disney name will carry some clout in terms of Hawaii sales, but it's hard to tell how far that will go. With them building nearly 500 DVC villas, someone seems to think the resort will hold appeal. One thing is certain--if Hawaii sells at a similar pace to Vero, you and I will both be in the ground before the place sells-out.

In many ways we know what Disney will bring to the table. We know their system and have an idea of their units and resort quality along with some idea of their activities approach. I don't have any doubt this will be a nice property if it's truly developed but lets compare to other top quality options for HI. DVC will go head to head with Marriott, Hilton and Westin. All have advantages in in many ways and better products than does Disney if you take WDW out of the equation, not that you can completely. If your were someone wanting to go to HI most years and trade the rest, DVC ONLY makes sense if WDW is a main destination for the off years. Marriott, Hilton and Westin have multiple other options and 2 of the 3 have an internal trading preference with II and two have internal trading on points similar to DVC but with more varied options. IMO, the switch to RCI will also hurt DVC in this regard. Certainly the number of points, cost per point and dues will have an impact IF (and only if) they can get people in to tour consistently.

I have no doubt this will be a nice resort and no doubt DVC COULD compete, they just haven't in the past. The let them come to us approach will not be enough, period. I guess we'll see if DVC is willing to get in the game, they may be given the other changes and risks they've been willing to take lately.

Personally I'd suggest they offer promo tours, be more aggressive soliciting people to tour including at malls, Waikiki, possibly even developer RCI deposits. I'd also suggest they ramp up the pressure on tours enough to force people to make a decision but not enough to be perceived as unprofessional. I'd also suggest they consider selling blocks of time in some way such as a priority for those that pay for it to book higher demand weeks like Xmas and Easter. With any approach including the current lay back and wait, we get to have fun threads. Either it's the resort is not selling (or worse, not being completed at the fully planned size or even at all) or that people don't like the more aggressive approach (whatever that ends up being).

 

[Dean]

Last time I was at HH, I met a member who found about the DVC HH while vacationing on the island. He bought sight unseen before it was built. Has had it since it opened. It's his family's favorite vacation of the year. He said they wouldn't miss it. They have NEVER used their points at WDW or anywhere besides HH.

I wonder how many similar owners exist. I bet DVC knows exactly.

I'm sure they have an idea. I'm also sure it's a very small percentage for HH and VB if you take it by owner. If you take it by contract, the numbers will be somewhat higher due to those that own points for those locations and other points for WDW. It ultimately doesn't matter, all that mattes is how many points are sold and to a degree, the % of those points planned to used at the home resort in question. DVC will certainly need a lot of owners who primarily want to go to HI and stay at that resort to be successful, something they've never been able to have previously. Both HH and VB far underperformed DVD's projections on sales taking about twice as long to sell out as they anticipated, even with the long standing $15 a point discount and free WDW passes early on for VB.

 

[jmatias]

I don't want to sound snobby, but HH and VB ain't no Hawaii

 

[Starr W.]

I don't want to sound snobby, but HH and VB ain't no Hawaii

We know that, it's can DVC compete with the big boys in HI in the "real" world of timesharing.

We know they didn't do well with HH and VB, ended up selling the land that became the Marriott Newport and Hyatt in Beaver Creek.

 

[Dean]

I don't want to sound snobby, but HH and VB ain't no Hawaii

In a way yes and no. Marriott sold out 3 properties in HH ahead of projections while DVC took twice as long as projected. Marriott also sold out a similar but much larger property to VB about 1.5 hours south quicker than DVC sold out a small resort. Lets say you wanted to go to HI ONLY and not to the other DVC resorts. And assuming the system stays the same as it is right now. Further assume that the DVC resort there is similar to BLT in function, unit size and points. Further assume only Magic and Premier time. So a full week in a 2 BR will cost maybe $50K with yearly dues about $2000-2500 a year. The Marriott next door will guarantee you a week at a time for maybe $60% of that in terms of up front cost and yearly fees. Add to that you'd have the lockoff feature, II internal trading, Marriott rewards points (poor value but some like it) and access to other Marriott resorts potentially by trade including Maui and Kauai. Unlikely WDW, I doubt many will go to HI for just a few days so the points option will be far less beneficial for HI than for the other locations other than to locals.