DVC- the way forward?

[tjcj]

Looking into the magic ball what do folks think the future holds for DVC?
I'm thinking more destination resorts such as Aluani vice additional on site resorts with an increased focus on the adult traveller.
What do others think?

 

[com_op_2000]

GF
Poly
Washington, DC
Then some where in the mountains, Rockies?
Then I hope on CC.

 

[Chuck S]

I think as far as the US is concerned, most of the prime spots for timeshares were taken by other companies years ago. DVC would need to focus on "new and emerging" tourist destinations...and given the current economy, there are few new "hot spots" for tourism in the near future. The latest was Branson, Missouri, and it was quickly overbuilt and is now not doing well. Laughlin, Nevada and other traditional gambling locations, like Vegas, are also feeling the pressure from the ever increasing number of local Native American casinos, so those once potential hot spots are gone, too.

We may need to look out of the US for emerging, and more affordable, tourist destinations, like areas of Central & South America in order for DVC to be successful in any area that is not located near a Disney theme park.

I think they may build additional DVCs near Disneyland, and maybe near the International Disney parks, but that would depend upon local timeshare laws and economies...I think Tokyo would have been a good market, but post earthquake/tsunami Japan will probably not be a hot tourist area for International travel for several years, even in the areas not devastated by the disaster. And it would depend upon land costs for the other Disney branded International parks.

 

[DVC SSR Owner]

Could they build on castaway cay and offer a land/ cruise package? That would be awesome. And add a 5th park there!

 

[WilsonFlyer]

Could they build on castaway cay and offer a land/ cruise package? That would be awesome. And add a 5th park there!

Please put the drumstick down and back away from the turkey!

 

[dianeschlicht]

Could they build on castaway cay and offer a land/ cruise package? That would be awesome. And add a 5th park there!

Ehhh...Count me out for that one.

 

[tjkraz]

Disney is always looking at Return on Investment whenever it considers a project. Aulani cost $800 million and I think it will determine the future of DVC in many ways. They can still build at the Poly, GF, Disneyland Hotel and even new resorts at WDW. But it isn't a bottomless market.

The best way for Disney to continue to thrive is if it can build in non-park locations and draw in more buyers who don't want to visit the parks year-after-year (and don't buy into the RCI spiel.) But if DVC has trouble marketing the Aulani points, it doesn't bode well for other non-park destinations.

In the near future I think they'll continue with the park locations. Still plenty of AKV to sell and GF will eventually move forward. Poly is a possibility. Another Contemporary tower is a possibility. Ft. Wilderness is a possibility. And I can think of at least 3 stand-alone concepts that have been floated over the years.

Eventually Disneyland will get more DVC units. Could be more at the Grand Californian (the new hotel wing that was built with the villas was designed with the flexibility for eventual DVC conversion) or they could put up new rooms near the Disneyland Hotel.

Something new in California probably won't happen for a few years because they want west-coasters buying Aulani.

As for the other non-park locations, that depends entirely on Aulani's success. I'm sure DVC has internal estimates for how they wish to see sales progressing. If they meet or exceed those estimates, other non-park locations will be much easier to justify. If they have trouble selling Aulani, it's crazy to think they would throw more money into DC, NYC or other destinations.

 

[WilsonFlyer]

Well Tim, then the executives that made that decision at DVD are idiots and I'm glad they're all gone.

Anybody making those kinds of billion dollar decisions that thinks the average American can afford to fly, eat and take the time off from work to go to Hawaii every year or even every other year has severely missed the mark. While that statement may not be totally on the mark for those on the left coast, I think it certainly is true for most middle-income Americans.

Most of us still see Hawaii as Lifestyles of the Rich and Famous simply because of its distance and cost to just get there and back for a family.

DVC is HEAVILY marketed at middle to upper middle income Americans. Most of us are lucky to get to even see Hawaii once or twice in a lifetime. We travel freely all over the rest of America all the time (Those other cities and destinations you mentioned.).

If this is the measure of the expansion of DVC outside WDW and DL, it is truly a sad day for all of us and it was a terrible marketing decision. I'm not sure it wasn't done knowing full well what the end result would be with full intentions of using it as a way to get a Disney presence in Hawaii AND kill the outside Disney thing once and for all. I do have moments of being a conspiracy theorist.

Personally, I don't care if they ever build another resort outside Disney. I bought DVC to go to WDW and DL. Period. While we may make a trade into whoever at some point in the future, it wasn't why my family chose to buy in.

Disney needs to do what Disney does best; build resorts where the parks are there to back them up. When that market is saturated, the gig's over and they'll find a new one.

With the possible exception of AKV, where atmosphere and style probably contributed as much as anything else, the parks are what has sold DVC. What I mean is proximity. Disney needs to figure out that building a resort next to Epcot or HS is the answer. One need only look at the success of BLT or the perceived success of the Poly or GF DVCs to see this. Out the window is the answer. I still can't believe executives at Disney can't seem to get their arms around this simple concept. Build a DVC somewhere where people can reach out and touch Spaceship Earth and see Illuminations from their balconies and watch what happens. Put the Epcot monorail through the center of it like the Contemporary and they won't be able to finish it before it's sold out. Marketing 101.

I sure hope the future of DVC's expansion doesn't depend on DVC resorts outside Disney. If it does, I'm afraid we are all doomed to disappointment.

I would like to throw this out there while we're blue-sky thinking. It would be interesting, IMO, if they could figure out a way to do a timeshare through DCL with a ship. I don't think this has ever been done and I'm not sure how it could be done from a legal standpoint, but I bet it could. Disney's got a smart legal team. I'm sure there's a way and I'm equally sure it would sell if they did it. Then again, that would require some original thinking and DVD seems to be sorely lacking in that department since I've been a member. I wish they'd hire me and give me a shot at making that one happen. I bet you a dollar to a doughnut that I could.

 

[CMOORE185]

Well Tim, then the executives that made that decision at DVD are idiots and I'm glad they're all gone.

Anybody making those kinds of billion dollar decisions that thinks the average American can afford to fly, eat and take the time off from work to go to Hawaii every year or even every other year has severely missed the mark. While that statement may not be totally on the mark for those on the left coast, I think it certainly is true for most middle-income Americans.

Most of us still see Hawaii as Lifestyles of the Rich and Famous simply because of its distance and cost to just get there and back for a family.

DVC is HEAVILY marketed at middle to upper middle income Americans. Most of us are lucky to get to even see Hawaii once or twice in a lifetime. We travel freely all over the rest of America all the time (Those other cities and destinations you mentioned.).

If this is the measure of the expansion of DVC outside WDW and DL, it is truly a sad day for all of us and it was a terrible marketing decision. I'm not sure it wasn't done knowing full well what the end result would be with full intentions of using it as a way to get a Disney presence in Hawaii AND kill the outside Disney thing once and for all. I do have moments of being a conspiracy theorist.

Personally, I don't care if they ever build another resort outside Disney. I bought DVC to go to WDW and DL. Period. While we make make a trade into whoever at some point in the future, it wasn't why my family chose to buy in.

Disney needs to do what Disney does best; build resorts where the parks are there to back them up. When that market is saturated, the gig's over and they'll find a new one.

With the possible exception of AKV, where atmosphere and style probably contributed as much as anything else, the parks are what has sold DVC. What I mean is proximity. Disney needs to figure out that building a resort next to Epcot or HS is the answer. One need only look at the success of BLT or the perceived success of the Poly or GF DVCs to see this. Out the window is the answer. I still can't believe executives at Disney can't seem to get their arms around this simple concept. Build a DVC somewhere where people can reach out and touch Spaceship Earth and see Illuminations from their balconies and watch what happens. Put the Epcot monorail through the center of it like the Contemporary and they won't be able to finish it before it's sold out. Marketing 101.

I sure hope the future of DVC's expansion doesn't depend on DVC resorts outside Disney. If it does, I'm afraid we are all doomed to disappointment.

I would like to throw this out there while we're blue-sky thinking. It would be interesting, IMO, if they could figure out a way to do a timeshare through DCL with a ship. I don't think this has ever been done and I'm not sure how it could be done from a legal standpoint, but I bet it could. Disney's got a smart legal team. I'm sure there's a way and I'm equally sure it would sell if they did it. Then again, that would require some original thinking and DVD seems to be sorely lacking in that department since I've been a member. I wish they'd hire me and give me a shot at making that one happen. I bet you a dollar to a doughnut that I could.

I think as far as Hawaii goes Disney was counting on Japan to be a large part of their business, as the Japanese like to vacation in Hawaii. I have jokingly talked to a few employees at the cruise line about a DVC ship, and they said don't laugh it has actually been discussed. I don't know if it could ever work though.

 

[WilsonFlyer]

Yea. I really doubted I was the first one to think of the DCL idea. It would be way kool, though, and I bet it would sell well too. Even if they only did half a ship, it would be a great test market. I'd buy in in a heartbeat if it was priced proportionally to a cash cruise like the villas are to hotel rooms.

The other thing I've thought about a lot is what I call the Great Wolf Lodge effect. With a great waterpark like BB, would would do better than a hotel and possibly even some timeshare units that was adjacent to a great waterpark, especially if the hotel had some inside amenities/rides only available to hotel guests and inside and climate controlled? What if staying at that hotel included admission to that waterpark? What a concept!

They could essentially do the same thing with an Epcot hotel. Put an interesting ride or two inside and include park admission within the cost of the hotel/DVC stay. Put a coaster in that bad boy and don't let anybody ride it unless they're staying at the hotel/villa and watch what happens!

People would still buy tickets to the other parks and attractions anyway.

We're back to that original thinking thing and, unfortunately, the beauracracy thing. Sometimes divisions within a company can't get out of their own way long enough to see the opportunities available to them if they were only willing to give up a little control.

The Great Wolf Lodge thing will eventually happen at a Waterpark or Epcot. Mark my words. I may not live long enough to see it but it will happen. Some entrepunuering (sp?) young hot-shot executive at Disney will make his mark on the company one day by doing this and he or she will be hailed as a hero and an original thinker for doing so. Wait and see.

I think the DCL thing will happen too. Probably sooner rather than later. I'm thinking that one of the big hold-ups on this gig is the tax thing. Most boats are registered outside the US for tax purposes, as I understand it. Once someone figures out how to do a pricing structure that can compensate for that issue, the DCL thing will certainly happen. I don't think Americans (especially) will buy unless it's declared inside the US for liability reasons. Somebody will figure it out though, one way or another.

The take-away here, at least from my very opinionated chair, is this: There are plenty of opportunities for DVC still at WDW. The doors that are slowly closing are those that are tied to tunnel-vision thinking. I hate to use an 80's cliche here but somebody's gotta get outside the box, and somebody will. Some new kid will come along who Disney thinks is the second coming and he'll have his reigns loosened. It's gotta be somebody with the reigns over everything, though. Otherwise, again, you won't be able to make one sub-division (parks v. hotels, for example) get out of the other's way. Watch for an explosion if we ever live long enough to see this happen.

 

[tjkraz]

Well Tim, then the executives that made that decision at DVD are idiots and I'm glad they're all gone.

Anybody making those kinds of billion dollar decisions that thinks the average American can afford to fly, eat and take the time off from work to go to Hawaii every year or even every other year has severely missed the mark. While that statement may not be totally on the mark for those on the left coast, I think it certainly is true for most middle-income Americans.

Here's an interesting read regarding the growth of timeshares in Hawaii:

http://www.hawaiibusiness.com/Hawai...eshare-in-Hawaii-Build-it-and-They-Will-Come/

As of April there were over 10,000 timeshare rooms spread throughout 87 different resorts. Hawaii really is a destination that Disney had to add to the program if they wanted to grow outside of the parks. I view it as a "if they can't make it there, they can't make it anywhere" destination.

Aulani is going to be selling for a long time. Perhaps more than a decade. (BLT has nearly half as many rooms and a significant location advantage, and it's been selling for 3+ years.) But that doesn't make it a failure and it doesn't mean we won't see other off-site DVCs until it's gone.

Setting aside our middle America bias (I'm there, too), if other developers have been able to sell 10,000 units, Disney should be able to sell 460. The real question is one of meeting expectations. Disney has its own internal estimates of how quickly Aulani should be selling. I'm sure money was borrowed to build the resort so there is debt service to consider. The longer they have to keep an active sales presence in Hawaii, the more it costs.

Personally, I don't care if they ever build another resort outside Disney. I bought DVC to go to WDW and DL. Period. While we may make a trade into whoever at some point in the future, it wasn't why my family chose to buy in.

Many people share that sentiment. I know we did 8+ years ago when we bought. But our kids were 2 and 6 mos when we bought. Now at ages 10 and 8--with 15 to 20 park vacations under our belts--we have naturally begun to look into other destinations.

How many times have you seen posts from people which say something like: "I want to buy DVC and visit the parks regularly but my (significant other) wants to visit other destinations." In years past the advice was not to buy DVC because trading through RCI is a challenging process.

That is the market Disney hopes to attract by building off-site. And in the case of some of the more veteran owners like myself, giving us broader destinations helps keep us as owners rather than dumping some points on the resale market because we can't use them all for park trips anymore.

Disney needs to figure out that building a resort next to Epcot or HS is the answer. One need only look at the success of BLT or the perceived success of the Poly or GF DVCs to see this. Out the window is the answer. I still can't believe executives at Disney can't seem to get their arms around this simple concept. Build a DVC somewhere where people can reach out and touch Spaceship Earth and see Illuminations from their balconies and watch what happens. Put the Epcot monorail through the center of it like the Contemporary and they won't be able to finish it before it's sold out. Marketing 101.

I'm sure DVC would love that but they don't rule the roost. And they don't have enough pull to make it happen. TWDC is a huge company with many levels of management. Sure a park-adjacent resort would benefit DVC tremendously but that doesn't mean others with broader responsibilities to the parks would agree that it's a worthwhile project.

Forces continue to push DVC toward building at the existing resorts. Those cash resorts often lose some guest rooms, which means they have less inventory and can often reduce the discounts which must be offered in order to fill the resort. They also pawn-off a big chunk of resort expenses to DVC members.

Deluxe resorts aren't a growth industry for Disney now. Years down the road we could see even more rooms converted to villas rather than building new. It wouldn't surprise me a bit if existing Grand Floridian rooms were converted to villas. A second Bay Lake Tower replacing the South Garden Wing seems a possibility. Further down the road, I don't see any reason why they couldn't convert another Jambo House floor to villas or do similar work at other existing resorts.

 

[littlestar]

Anybody making those kinds of billion dollar decisions that thinks the average American can afford to fly, eat and take the time off from work to go to Hawaii every year or even every other year has severely missed the mark. While that statement may not be totally on the mark for those on the left coast, I think it certainly is true for most middle-income Americans.

I've been to Hawaii five times in my lifetime and every trip I made I saw/talked to an abundance of people from Japan, west coast of the USA, and various other countries. Most of the folks I've talked to from the west coast of the USA told me that Hawaii was to them what Florida is to me as a midwesterner. If I lived in California, I'd go to Hawaii at least twice a year (I LOVE Hawaii ).

As far as the future of DVC for more stand alone DVC resorts, I don't know. I've often wondered if they might partner with other chains and expand the Buena Vista Trading Company instead of developing new resorts. Should be interesting to watch.

 

[DebbieB]

I've been to Hawaii five times in my lifetime and every trip I made I saw/talked to an abundance of people from Japan, west coast of the USA, and various other countries. Most of the folks I've talked to from the west coast of the USA told me that Hawaii was to them what Florida is to me as a midwesterner. If I lived in California, I'd go to Hawaii at least twice a year (I LOVE Hawaii ).

As far as the future of DVC for more stand alone DVC resorts, I don't know. I've often wondered if they might partner with other chains and expand the Buena Vista Trading Company instead of developing new resorts. Should be interesting to watch.

I agree, I have friends who live in CA and they frequently go to Hawaii for vacation.

I don't see DVC expanding much beyond the parks. The quick & easy money is around the parks. Washington DC - I would be surprised if that ever gets off the ground. It's been 2 1/2 years and no progress towards actually building and DVC was never announced to be part of it. CC - no way, the logistics of building would be difficult let alone getting people there.

 

[DVC SSR Owner]

Please put the drumstick down and back away from the turkey!

Why not?

 

[WilsonFlyer]

Why not?

In a word; logistics.

I can come up with a hundred reasons why it wouldn't work. Don't get me wrong, the Disneyer in me likes the idea but the businessman in me screams no way. I'm not saying it's not possible. What I am thinking is that the logistics involved and the steps necessary to pull it off aren't worth the ROI. Business is all about ROI and the bottom line.

Will it happen one day? Maybe, IMO. Probably, even. In my lifetime? Probably not. There's way too much low hangin' fruit to pick first, IMHO.

 

[Brian Noble]

Aulani ... will determine the future of DVC in many ways.

I agree with this. Hawaii is the easiest possible "sell" you could imagine without being attached to a theme park.

Anybody making those kinds of billion dollar decisions that thinks the average American can afford to fly, eat and take the time off from work to go to Hawaii every year or even every other year has severely missed the mark.

Two thoughts. One, for the Left Coasters and the Japanese, HI *is* a much more common destination than you'd imagine from the Right Coast. Two, I'm sure that Aulani is being sold more as "part of a system" rather than "this resort is where you'll always go." That's the logical progression if DVC really intends to expand beyond the berm, and it is how most other point-based systems are sold.

Washington DC - I would be surprised if that ever gets off the ground. It's been 2 1/2 years and no progress towards actually building and DVC was never announced to be part of it.

This purchase always struck me as "We've got cash, they are selling a parcel for a song, might as well buy it." If Aulani does well, I would not be surprised to see a similar mixed-use (part timeshare, part hotel) go in at National Harbor. If Aulani does not do well, expect to see it quietly sold, and probably for a halfway decent profit. Other development at National Harbor hasn't been blistering, but it has happened slowly but surely, and interestingly has been a mix of residential, commercial, and hotel/resort. I expect the area to continue to build out, and "the hill" that Disney owns could end up being a good spot for higher-end residential if it comes to that.

 

[CMOORE185]

I agree with this. Hawaii is the easiest possible "sell" you could imagine without being attached to a theme park.


Two thoughts. One, for the Left Coasters and the Japanese, HI *is* a much more common destination than you'd imagine from the Right Coast. Two, I'm sure that Aulani is being sold more as "part of a system" rather than "this resort is where you'll always go." That's the logical progression if DVC really intends to expand beyond the berm, and it is how most other point-based systems are sold.


This purchase always struck me as "We've got cash, they are selling a parcel for a song, might as well buy it." If Aulani does well, I would not be surprised to see a similar mixed-use (part timeshare, part hotel) go in at National Harbor. If Aulani does not do well, expect to see it quietly sold, and probably for a halfway decent profit. Other development at National Harbor hasn't been blistering, but it has happened slowly but surely, and interestingly has been a mix of residential, commercial, and hotel/resort. I expect the area to continue to build out, and "the hill" that Disney owns could end up being a good spot for higher-end residential if it comes to that.

I disagree that the success of Hawaii will have anything to do with National Harbor. It is my belief that National Harbor will never be a DVC component for a number of reasons. It will never have enough year round interest to fill the rooms, there will never be enough repeat business, and I can't see enough interest in ownership to ever sell it out.

 

[tjkraz]

This purchase always struck me as "We've got cash, they are selling a parcel for a song, might as well buy it." If Aulani does well, I would not be surprised to see a similar mixed-use (part timeshare, part hotel) go in at National Harbor. If Aulani does not do well, expect to see it quietly sold, and probably for a halfway decent profit. Other development at National Harbor hasn't been blistering, but it has happened slowly but surely, and interestingly has been a mix of residential, commercial, and hotel/resort. I expect the area to continue to build out, and "the hill" that Disney owns could end up being a good spot for higher-end residential if it comes to that.

I agree with Brian. If memory serves, Disney spent $120 million on the land alone for Aulani. Add to that the logistics of building on the islands and it's a project that demands a high volume of DVC sales in order to be profitable.

The National Harbor land cost $10-12 million. Much easier to build there. They don't need to put 500 villas on that site in order for it to be viable.

I also believe that being able to list "Washington DC" as a DVC destination will add value to the program. As a parent, it's one of those locations you envision taking the family at least a couple of times in order to experience the nation's capital. The Disney parks appeal to the same audience so it's a natural fit. National Harbor itself may be a hard sell, but a DC area resort would be a boost to the program as a whole.

Most of us bought DVC for the theme park destinations so I can see it's hard to grasp the logic of non-park locations. But there are literally hundreds of timeshare developments across the US and around the world. Developers have had success everywhere form the Smoky Mountains to Branson, MO to the Adirondacks. And many, MANY resorts are more impressive than those Disney has created.

Building away from the parks does carry its own set of challenges. In FL and CA they already own very valuable property so land acquisition is not really an issue. Infrastructure is already in place with company-friendly municipalities able to assist if needed. A sales office and staff is readily available.

In a non-park destination, these are all challenges (and expenses) to be overcome. Disney will have to accept lower margins than they are used to, but there certainly would be buyers for a DVC in National Harbor or Lake Tahoe or Las Vegas. Only real question is whether those reduced margins are appealing enough to Disney or if they'd rather pursue more profitable ventures.

 

[Brian Noble]

It is my belief that National Harbor will never be a DVC component for a number of reasons. It will never have enough year round interest to fill the rooms, there will never be enough repeat business, and I can't see enough interest in ownership to ever sell it out.

Wyndham manages to do well there. Very well. And, they sell from the developer at prices pretty comparable to DVC's. It can be done. But, Wyndham as a system is much larger than DVC. In Wyndham's model, home resort is not particularly important to most owners.

I see DVC potentially moving in a similar direction. If DVC is going to continue to grow, it has to expand "beyond the berm". If that happens, you have to stop thinking of the resorts as separate entities and start thinking of them as a comprehensive system---a system that mixes non-park destinations with those tied to theme parks. In such a system, the notion of home resort becomes increasingly unimportant. That's a hard trick for Disney to pull off, because the non-park resorts have to have either a strong draw or a modest point chart to get people to go there.

The first two non-park resorts were, at best, a mixed success on this front. But it is clear that they tried a lot harder with Aulani to make it a destination unto itself.

Most of us bought DVC for the theme park destinations so I can see it's hard to grasp the logic of non-park locations.

This is an important observation, and not to be overlooked. From where I sit, Disney is already concerned about whether or not the "only Disney will do" market has been tapped out. Just take a look at how their marketing materials have changed over the past several years to increasingly emphasize the non-park trips. RCI and the other Collections are a much bigger part of their message.

And, if you think about it, that's not surprising. For a good part of the past decade, DVC was still "Disney's best kept secret"---that marketing message was really meant to tap into the frequent repeat visitor, and lock them in going forward. But, at this point, the habitual-returning guests have all been exposed to the idea, and either they've already bought in, or they probably won't. That leaves only the "new" guests and organic growth, surely a smaller stream of potential purchasers.

 

[jennypenny]

I wish, wish, wish DVC had built the Vero resort near Cape Canaveral. I would love to combine a beach stay with a cruise, but Vero requires renting a car and more driving than I'd like to do. (and yes, we've stayed there) It would be so nice to have a beach resort where you could watch the ships come in. I'll second Galveston for a DVC/DCL beach resort also. I think DVC tie-ins with cruises would work well. NYC? Vancouver/Whister? I think DCL and DVC would help each other by marketing together. I'm almost positive it won't happen, but you asked

Hawaii looks fabulous, but honestly, I am not flying 14 hours for a beach vacation. I assume Asia and the west coast are the target audience for that.