Future Disney Vacation Club regional resorts

[mcd2745]

Would hotels be profitable? Yes...probably. But not nearly as profitable as the theme park destinations. Why be content getting earning $400 for a weekend getaway when Disney stands to gross 10x as much by luring them to Florida or Anaheim?

The question I guess comes down to whether or not there is enough people like myself, who in addition to (almost) annually trips to WDW, also take 3-4weekend road trips throughout the year to places like GWL, Hershey Park, Lake George, etc. If there was a Disney option as an alternative to those places...there's a good chance it replaces one of those other destinations - and wouldn't also replace our trip to WDW.

 

[ChipnDale79]

There will be no need for a Disney resort in Pigeon Forge after Dolly completes her Dream Resort being built right now. Google it. If you have ever visited Dollywood, you know that Dolly can out perform Disney. Dollywood is Frontierland on steroids and better at that!

Actually we spent a day and a half at Dollywood last fall, that's what made me think of the Pigeon Forge area. Anyone that hasn't been to Dollywood should totally check it out, they've done an amazing job there.

I've read the reports about what you are talking about, it sounds really exciting to me.

 

[Horace Horsecollar]

I don't think there's any question that destinations like Hawaii and Hilton Head add value to the entire program. There are many families where one member pushes strongly for the annual Disney parks visit while the other has reservations. Adding more neutral, non-park destinations to the program can only help those sales.

I agree completely.

Marriott timeshare salespeople can present a strong portfolio of properties to potential buyers. DVC "guides" (salespeople) can present a strong story about WDW. After that, the portfolio is limited to Vero Beach, Hilton Head, Grand Californian, and Aulani.

Of course, the DVC wing at Disney's Grand Californian does not count as a "neutral, non-park destination." It has an amazing location and is part of a great resort hotel, but it was a small project anyway.

Vero Beach and Hilton Head were timid projects. Despite being pleasant resorts, they failed to capture the public imagination. Only Aulani was built on a grand scale.

But that brings up the issue of what it costs to build something like Aulani at a highly desirable location.

Disney bought the the 21-acre Aulani site $144 million (nearly $7 million per acre) and spent around $800-to-850 million to build the resort. In other words it was a billion dollar project. In comparison, the DVC resorts at WDW were built on land that Disney already owned (bought in 1964 and 1965 for a reported average price of $182 per acre).

WDW on-site DVC = "free land" + Florida construction prices + low marketing cost + tremendous value of Disney brand to potential buyers

Standalone DVC = high land acquisition cost + potentially high construction prices (in places such as Hawaii) + high marketing cost + limited value of Disney brand to potential buyers

 

[ABE4DISNEY]

Actually we spent a day and a half at Dollywood last fall, that's what made me think of the Pigeon Forge area. Anyone that hasn't been to Dollywood should totally check it out, they've done an amazing job there.

I've read the reports about what you are talking about, it sounds really exciting to me.

Yes, I am excited as well. I think it will be amazing!

 

[skier_pete]

I would book a week in the NH mountains. I live in GA and WDW is pretty easy for me to get to. I love it but I also like to use my points for VB AND HHI. A Disney Ski vacation sounds wonderful.

Disney ski vacation would have me buying points in a heartbeat! Especially if it was a year round destination location.

Disney bought the the 21-acre Aulani site $144 million (nearly $7 million per acre) and spent around $800-to-850 million to build the resort. In other words it was a billion dollar project. In comparison, the DVC resorts at WDW were built on land that Disney already owned (bought in 1964 and 1965 for a reported average price of $182 per acre).

WDW on-site DVC = "free land" + Florida construction prices + low marketing cost + tremendous value of Disney brand to potential buyers

Standalone DVC = high land acquisition cost + potentially high construction prices (in places such as Hawaii) + high marketing cost + limited value of Disney brand to potential buyers

I think the level of success is a key to this. Aulani while not being a disaster has also not been an unmitigated success. The big problem with Aulani is by being located in Hawaii it is almost entirely designed to cater to left-coasters and the Japanese. Tough economic conditions in Japan have hurt.

I guess what I would like to see is something similar on the East Coast. In our recent DCl cruise we found we didn't love the cruise but we DID love Castaway Cay. A Disney All-inclusive resort in the Carribean would be a logical extension of what they did with Aulani, but I wonder if they would be worried of it pulling people away from the cruise line.

The one thing I feel fairly certain of - Disney is not going to stop building DVC properties. The prospect of pre-selling a hotel is too great. It's the reason they have almost entirely focused room expansion for the last 14 years on DVC. (Art of Animation/Suites being the one exception.)

 

[Donut23]

Washington DC was a brilliant idea. National Harbor seriously not so-good Disney dumped the property. With the casino going in now it's probably not a good image for Disney anyway.

I think if they managed to find property actually IN Washington and adjacent to a subway stop vs. water taxi, 15 minute walk up the hill to the Metro and 35 minutes to town......Washington DC would be a terrific DVC destination. You could NEVER run out of things to do.

Disney doesn't seem to have the best property scouts. I'm not convinced Aulani is really the best location.

Step back and take a look at a map. How many millions of people are within a 1/2 days drive of Washington DC. Megga convenient and no airfare expense. Something for everyone. Just buy better property, Disney!

 

[Horace Horsecollar]

I think if they managed to find property actually IN Washington and adjacent to a subway stop vs. water taxi, 15 minute walk up the hill to the Metro and 35 minutes to town......Washington DC would be a terrific DVC destination. You could NEVER run out of things to do.

Washington, DC is a family destination that people can return to year after year. The city can be enjoyed all year long because there's so much to see and do inside museums and government buildings. In that regard, it's a perfect timeshare (including DVC) destination.

However, the utter lack of timeshare resorts within DC says a lot about the economics of DC as a timeshare location. Club Wyndham has a timeshare at National Harbor, Maryland and another at Alexandria, Virginia, but none in DC itself. Marriott International has long been headquartered in the Washington suburbs (although its timeshare business has been spun off as a separate company based in Florida) and has hotels everywhere in DC -- but Marriott never put a Vacation Club into DC.

National Harbor apparently seemed like a good idea to Jay Rasulo, but not to his successor Tom Staggs.

A DVC property at a good location in a tourist-friendly part of DC would be great, but where is there suitable site at a price that makes economic sense?

Disney doesn't seem to have the best property scouts. I'm not convinced Aulani is really the best location.

Can anyone identify a better beachfront resort site available in Hawaii in 2008? If anyone wants to answer Maui or Kauai or the Big Island, then please tell us where on those islands? Places like Wailea and Kaanapali on Maui are fully developed. Ko Olina still had some undeveloped resort sites. Also, there's a lot to said for Oahu as the island with the most attractions of any of the Hawaiian Islands.

 

[yitbos96bb]

This is part of the greater DVC puzzle to me. At some point, I'm not sure you can build a new DVC resort at WDW. Where do you put it?

Disneyland seems a possibility but is there room.

So unless you do overseas, how do you grow your business?

Never say never but current Disney management doesn't appear particularly interested in off-site developments. Seemed to be something that Jay Rasulo was pushing during his tenure as Parks & Resorts chief. He was front-and-center on the Aulani announcement. Around the same time, Disney optioned some land outside of Washington DC, presumably for a combined hotel / timeshare.

But the DC land is out of the picture now and conventional wisdom suggests Aulani is not quite as successful as Disney had hoped.

Outfits like Great Wolf Lodge and Kalahari have built a business around regional destination / waterpark resorts. Kalahari even has a timeshare element. I don't see why Disney couldn't follow a similar model: Waterpark...character meals...stage show...even some sort of unique interactive "attractions." A lot of elements used on the Disney Cruise ships could be incorporated into a regional hotel setting.

Either Disney doesn't think margins are sufficient to make the venture worthwhile or they fear it will cannibalize more profitable business from the theme parks and cruise ships. If residents in the north east or midwest can get their Disney "fix" via a relatively cheap weekend stay at a nearby Disney-branded hotel, some would be less likely to book a week at Walt Disney World.

Future TWDC management may adopt a different philosophy but there aren't any signs that current management is pursuing such plans.

 

[rteetz]

This is part of the greater DVC puzzle to me. At some point, I'm not sure you can build a new DVC resort at WDW. Where do you put it? Disneyland seems a possibility but is there room. So unless you do overseas, how do you grow your business?

Disney has plenty of room in WDW to build future resorts. Rumors are picking up again that next will be an Epcot DVC. You could build a DHS DVC at some point as well. Disney could go back and build new DVC resorts like old key west and Saratoga springs. They could build a new deluxe resort on the Epcot monorail line and add DVC to that. Possibilities are endless but what disney will actually do is the question.

 

[yitbos96bb]

Disney has plenty of room in WDW to build future resorts. Rumors are picking up again that next will be an Epcot DVC. You could build a DHS DVC at some point as well. Disney could go back and build new DVC resorts like old key west and Saratoga springs. They could build a new deluxe resort on the Epcot monorail line and add DVC to that. Possibilities are endless but what disney will actually do is the question.

Room? Sure... The property is only 1/3rd developed. Demand? That remains the question... Which is part of the question.

And just FTR, Saratoga wasn't a net new resort. They haven't built a net new at WDW since old key west. Many elements remained of Disney Institute when they built SSR, although they did rebuild and build significant portions...

 

[rteetz]

Room? Sure... The property is only 1/3rd developed. Demand? That remains the question... Which is part of the question. And just FTR, Saratoga wasn't a net new resort. They haven't built a net new at WDW since old key west. Many elements remained of Disney Institute when they built SSR, although they did rebuild and build significant portions...

I was just pointing that they could go that route if they wanted obviously we don't know what route they are going to go otherwise we wouldn't be here.

 

[tjkraz]

Room? Sure... The property is only 1/3rd developed. Demand? That remains the question... Which is part of the question.

And just FTR, Saratoga wasn't a net new resort. They haven't built a net new at WDW since old key west. Many elements remained of Disney Institute when they built SSR, although they did rebuild and build significant portions...

Demand is very difficult to address. There are always new (young) families discovering WDW for the first time. The target market for DVC sales in another 10 years will be kids who are in high school and college today.

Is that new business large enough to keep sales at a pace Disney wants to see? Who knows.

As for resorts, I guess it depends on how you want to qualify "net new."

Old Key West opened in 1991. BoardWalk followed as all new construction in '96...the villas and hotel rooms opened at the same time.

Animal Kingdom Lodge opened in 2001 and a portion of it was converted to villas around 2008.

Most of the subsequent DVC developments were brand new physical construction: Beach Club, Wilderness Lodge, Grand Floridian, Kidani Village at AKV.

Saratoga Springs did displace old hotel rooms at the Disney Institute. Similarly Bay Lake Tower replaced a CR garden wing and now the Poly is converting hotel rooms to DVC. But overall it's been a mixture of entirely new rooms added to WDW and hotel rooms converted / removed to make way for DVC.

There are many options available at WDW. The most obvious include a second "Bay Lake Tower" at the CR, Ft. Wilderness (plans have already been leaked), perhaps something at the Yacht Club. I've heard rumblings that Coronado Springs could someday become a DVC property--probably in the same way as SSR with guest rooms demolished and larger villas built. Since AoA opened, WDW is overbuilt in that Moderate(ish) room class.

They could go back and revisit other existing DVCs, adding more rooms if space and demand dictate. Beach Club has plenty of available land out into the parking lot to add some more rooms if desired.

Or they could just build a stand-alone property. Adding DVC rooms to existing resorts is clearly the most economical approach to take...but let's not pretend that they wouldn't build an entirely new property if they have exhausted all other options.

 

[beer dave]

How about this-- with the current growth of DVC, referring to the increased desirability of location, and the increased point cost, it has been my opinion that they would need to continually increase the the desirability level to provide growth and interest in purchasing. This is where the idea of building new resorts near or attached to the remaining parks with none becomes a possibility.

BUT... what about if Disney started a "second string" if you will, DVC Junior... Kind of like the value resorts... Where you purchase your points at a rate which is reminiscent of the original DVC pricing, but is limited to the new econo resorts being built. The points would not transfer to the existing DVC, or would at a steep exchange rate....

Not sure if this would be a money maker over the existing traffic at the values, but it would certainly lock in another group of people, and on a side note, might help get rid of the free dining, since that is not offered to any DVC.

 

[rteetz]

How about this-- with the current growth of DVC, referring to the increased desirability of location, and the increased point cost, it has been my opinion that they would need to continually increase the the desirability level to provide growth and interest in purchasing. This is where the idea of building new resorts near or attached to the remaining parks with none becomes a possibility. BUT... what about if Disney started a "second string" if you will, DVC Junior... Kind of like the value resorts... Where you purchase your points at a rate which is reminiscent of the original DVC pricing, but is limited to the new econo resorts being built. The points would not transfer to the existing DVC, or would at a steep exchange rate.... Not sure if this would be a money maker over the existing traffic at the values, but it would certainly lock in another group of people, and on a side note, might help get rid of the free dining, since that is not offered to any DVC.

That's a good point. Disney could eventually come out with a new category. Maybe a lower priced version different points system who knows possibilities are endless. The major thing is will it sell and increase revenue for Disney that is with anything they do.

They could build a moderate DVC category and put it at the moderate resorts. A little bit cheaper and it can't be used at the deluxe resorts. We can throw out numerous ideas it's just what will they do.

 

[Chuck S]

Disney needs enough land to either add local attractions or to have a buffer between their resort and the "real world." Plus there has to be a draw for cash guests and timeshare buyers willing to pay Disney prices, which are generally higher than surrounding resorts.

It has to be in an area that is NOT oversaturated (Las Vegas and Branson are examples of oversatuation) and has to have an inviting climate for year round operation, not just a seasonal ski resort. Then they may run up against objectors, like with the Disney America park, when local did NOT want DIsney coming in...so they area planned as a Disney destination is now strip centers and tourist traps, not a major draw.

And to maximize profit potential it would need to draw on the foreign travel market, not just domestic US tourism. Kind of limits their choices of US locations. Even Sea World and Fiesta Texas (Six Flags) are operated seasonally here in San Antonio...not enough year round draw.

 

[skier_pete]

That's a good point. Disney could eventually come out with a new category. Maybe a lower priced version different points system who knows possibilities are endless. The major thing is will it sell and increase revenue for Disney that is with anything they do.

They could build a moderate DVC category and put it at the moderate resorts. A little bit cheaper and it can't be used at the deluxe resorts. We can throw out numerous ideas it's just what will they do.

I am new to DVC, but it seems they already have this to a degree. It's called Old Key West, and the way it works is the rooms take a lot less points. You can stay at OKW for half the points that you can stay at say Bay Lake Tower. (A quick look says a studio at OKW is October for a week is 78 points, but studio at BLT (Magic Kingdom view) is 151 points.) A "moderate" DVC would just have a similar structure. They wouldn't need a separate point system.

However, I think Disney has very little interest in a "moderate" DVC. I can't believe the rate at which the point sales have risen. (Points were around $100 just 7 years ago, now $150-$160.) Clearly they're is no shortage of people wanting to buy deluxe DVC.

 

[beer dave]

I am new to DVC, but it seems they already have this to a degree. It's called Old Key West, and the way it works is the rooms take a lot less points. You can stay at OKW for half the points that you can stay at say Bay Lake Tower. (A quick look says a studio at OKW is October for a week is 78 points, but studio at BLT (Magic Kingdom view) is 151 points.) A "moderate" DVC would just have a similar structure. They wouldn't need a separate point system.

However, I think Disney has very little interest in a "moderate" DVC. I can't believe the rate at which the point sales have risen. (Points were around $100 just 7 years ago, now $150-$160.) Clearly they're is no shortage of people wanting to buy deluxe DVC.

I agree there is no shortage for the current sales.

Since you are a relatively new DVC owner--- what if when you were looking at purchasing, you were given an option to get the same amount of points for half the price, regardless of buying resale or from Disney. What if you saw that if you were happy with staying at a value level resort, you could spent half the money, pay half the monthly dues, and still get the desired number of nights at the D. Then think of all the people who can't afford even the current resale prices at around 90 per point on the average. "Wow-- I can get a dvc contract direct from Disney with built in financing and all the perks that go with it for 70$ a point? That is really affordable." Then once these points go to resale, they will be around $45 or less.

The thing about your comparison with BLT and OKW is that you have selected the most expensive room category available. Standard view BLT and OKW are not nearly that far apart. My idea revolves around a category of rooms lesser than OKW.

I have said in the past that the early purchase DVC owners are really getting huge benefits from the increase in level of accommodations (due to location) we have been receiving over the past several years. (on my 78 dollar points) My concerns are that for the new contracts to increase in value as mine have in the past, the level of accommodations will have to make another jump-- and I wonder-- to where? This is where the idea of more units attached to the other parks such as at MK. There has been talk of another Epcot resort attached to the world showcase with it's own entrance. This could help with the elevation of the current contracts. Or if they do star wars land and attach a themed DVC-- That would sell like crazy. In order to keep selling at the levels they are, they will have to keep raising the bar. OR--- lower the bar and lower the buy in price. DVC used to be much more in the reach of the average joe homeowner-- keep your car for another few years after you pay it off, and you could pay off a dvc contract. Not any more. Unless your car is a lexus, and then I think you could afford the DVC.

I keep waiting for the new resorts being built to be off limits to me... So far so good.

 

[rteetz]

I am new to DVC, but it seems they already have this to a degree. It's called Old Key West, and the way it works is the rooms take a lot less points. You can stay at OKW for half the points that you can stay at say Bay Lake Tower. (A quick look says a studio at OKW is October for a week is 78 points, but studio at BLT (Magic Kingdom view) is 151 points.) A "moderate" DVC would just have a similar structure. They wouldn't need a separate point system. However, I think Disney has very little interest in a "moderate" DVC. I can't believe the rate at which the point sales have risen. (Points were around $100 just 7 years ago, now $150-$160.) Clearly they're is no shortage of people wanting to buy deluxe DVC.

I was just throwing things out there. People keep asking what else disney could do I don't think they will do that it was just something they could do.

 

[Alice Royal]

People...actually want to go to NH for vacation?



(I grew up there for 18 years. I don't get it.)

 

[skier_pete]

The thing about your comparison with BLT and OKW is that you have selected the most expensive room category available. Standard view BLT and OKW are not nearly that far apart. My idea revolves around a category of rooms lesser than OKW.

You're right, I was selective to make a point, but from what I can tell, the lowest category rooms at BLT are hard to get unless you own there, and the point purchase prices are different to own at BLT versus OKW as well, which DOES give you priority. I would still say those units are NOT equivalent.

I have said in the past that the early purchase DVC owners are really getting huge benefits from the increase in level of accommodations (due to location) we have been receiving over the past several years. (on my 78 dollar points) My concerns are that for the new contracts to increase in value as mine have in the past, the level of accommodations will have to make another jump-- and I wonder-- to where? This is where the idea of more units attached to the other parks such as at MK. There has been talk of another Epcot resort attached to the world showcase with it's own entrance. This could help with the elevation of the current contracts. Or if they do star wars land and attach a themed DVC-- That would sell like crazy. In order to keep selling at the levels they are, they will have to keep raising the bar. OR--- lower the bar and lower the buy in price. DVC used to be much more in the reach of the average joe homeowner-- keep your car for another few years after you pay it off, and you could pay off a dvc contract. Not any more. Unless your car is a lexus, and then I think you could afford the DVC.

You are right on most counts here. Disney really COULD use a value/mod DVC property to bring in a different crowd.

However, I don't think that Disney is much interested in the "value" traveler anymore. Have you looked at the price of rooms in there new "value" resort? (AoA) The only reason they have the single (Little Mermaid) rooms there is because the building was already built. The rest of the rooms start at $250 a night. Real "value" huh?

I am with you on your prediction. I think the most likely event to occur is expansion at one of the Epcot area resorts or if they decide they're willing to build the infrastructure for it, you could see a completely new one. I think the likelyhood of a "value" resort is very, very low. But even if they did it, I think they would more likely do something along the lines of continuing to charge the same amounts for points, but make it cost less points per night.

I keep waiting for the new resorts being built to be off limits to me... So far so good.

Keeping it the way it is is a win-win for Disney. Buy opening the Poly and VGF and being able to charge $155+ per point (Up over 25 % from just 5 years ago.) they are making TONS of money on the new sales. Meanwhile, by keeping these open to ALL DVC members - they keep the RESALE values UP, which is also good for them. Could you imagine what the resale value of resorts like OKW and SS would be if you COULDN'T use them at other Disney resort locations?

For years I had resisted DVC because of the high buy-in prices they charged, but I just discovered the resale market, and part of the appeal was buying at AKV (@ $74 a point) and still having the chance to stay at all these other resorts I'd never otherwise be able to go to. I am not sure I would've bought if I was restricted to only ever staying at one location. To me, I don't mind being at my home resort at popular times, but am really looking forward to trying out as many resorts as possible.