Future Offsite DVC Properties & Exchange Opportunities

[littlestar]

I can't help but ponder the possibility of future DVC properties. I would imagine the west coast DVC members would love something closer for the west coast (and after all, Disneyland is out there). I would love to "see" into the future and find out what's on the drawing board. But, maybe there is nothing on the drawing board.

I wish there could be a DVC resort in the Clearwater area. I liked Vero beach, but felt it was isolated. I have also wished for a "Villas at Wilderness Lodge" type resort in the Smokey Mountains. It would be great to step out on the balcony of a Disney DVC resort there and look at the mountains. I'm dreaming, I know. But, heh, a person can dream, right?

I've even wondered about the Interval International relationship. When we did our latest add-on, the paperwork talks about not depending on that relationship to continue in the future for exchanging. Of course, the paperwork said there were only 2.8% exchanges confirmed (as of December 31, 2004) out of 85,107 members. That's not much.

Just pondering the future.

 

[RobertKC]

I would like to see a DVC on a lake in the Missouri Ozarks. I can't see it going into Branson because it has become a real tourist trap. But somewhere near by so you could drive over to the Branson attractions.

 

[dianeschlicht]

I'm still pulling for a Hawaii DVC!

 

[Horace Horsecollar]

I can't help but ponder the possibility of future DVC properties.

It's not enough for existing DVC members to want to use their points at off-site resorts. The real business issue facing Disney Vacation Development (DVD) is whether Disney can sell points at off-site resorts profitably. Off-site, Disney faces high land costs and higher marketing costs, and the Disney brand doesn't have the same value that it has at WDW.

On the other hand, things have changed since DVD built the wonderful, but financially unsuccessful, Vero Beach and Hilton Head DVC properties. There are now almost 100 thousand existing members to whom Disney could market off-site resorts; Disney has become a recognized and respected name in the timeshare industry; and timeshares in general have gained respectability that they lacked a dozen years ago.

I could see DVD/DVC working with other resort developers. In fact, for any future off-site locations, I think such partnerships are actually more likely than DVD doing everything themselves.

There are a number of Marriott Vacation Clubs in which Marriott works with another developer. The developer provides the location and financing. Marriott brings the name recognition, reputation, marketing, sales, ongoing management, and inclusion in the MVCI network of resorts. In such resorts, Marriott may or may not have an equity role. Presumably, the developer and Marriott both make money, and Marriott doesn't have to come up with all (or any) of the money for land and construction. Disney could do the same thing.

Last month, I posted Could this be the New DVC Resort in Hawaii?, speculating that the developers of the Grand Ko Olina project at Ko Olina on Oahu are likely to want a timeshare partner for the timeshare part of the massive resort complex — and a DVC resort could be a good fit for the developers and DVD/DVC.

I've even wondered about the Interval International relationship. When we did our latest add-on, the paperwork talks about not depending on that relationship to continue in the future for exchanging. Of course, the paperwork said there were only 2.8% exchanges confirmed (as of December 31, 2004) out of 85,107 members. That's not much.

The Interval International (II) relationship goes back to some time in the mid-1990s. Before that, DVC used RCI as the main exchange company for the World Passport Collection. The legal language simply points out that there's no guarantee — no contractual right — to the II program. But that shouldn't be read as an announcement that the II relationship will end.

The statistic that only 2.8% of DVC members successfully confirmed exchanges is really a statement that people buy DVC points to stay at DVC resorts. On top of that, I think that most DVC members don't know how to obtain successful exchanges — for example, that how many members know that they can't just call Member Services this week and expect to confirm Marriott's Maui Ocean Club for this summer?

 

[CarolMN]

IMHO, DVC will not be building very many (if any) resorts that are not somehow attached to one of its theme parks.

While many of us say would we would love to visit other places, the key to profits for Disney is how many of us would BUY at those non-park resorts. I think that is a much, much smaller number. There are so many other timeshares out there - IMHO, Disney would not have much of a competitive advantage over the other big players.

Best wishes -

 

[littlestar]

Thanks for the comments. It just intrigues me on the future possibilities.

From what I've read on this board, there are quite a few DVC members that also own Marriott.

I guess in a way, DVC is just a little fish in a big pond compared to Marriott Vacation Club (locations worldwide).

 

[disney-super-mom]

Well, I think that DVD needs to build something over here on the West side. We're definately feeling a little left out over here.

Obviously, there NEEDS to be a DL DVC. Also, I think a great secondary location would be San Diego (great weather, beautiful beaches, and LOTS to do there!). And of course, there's always the possibility of Hawaii, another highly sought after vacation destination.

I think those 3 destinations would do very well (DL, San Diego, Hawaii), and they would have high occupancy rates.

 

[littlestar]

Another thing on my wish list would be the ability to join II with an individual membership. That would give us access to II's Getaway weeks. What a great DVC "perk" that would be for our family. Especially for a trip to Branson or Williamsburg. Having the ability to possibly stay in a Marriott vacation club resort on a II Getaway week would be great.

Some of my family own other timeshares that trade through II, so that's how I know about the II Getaway weeks. But it would be nice to be able to have our own membership through II. We've been thinking about another timeshare purchase, but we don't know with who or where yet.

 

[Horace Horsecollar]

Another thing on my wish list would be the ability to join II with an individual membership. That would give us access to II's Getaway weeks.

People who buy from other II-affiliated timeshare developers typically receive a one year II membership as part of the purchase. After that, they have to pay renewal fees to II — 1 year $84, or 5 years $339, or various amounts in-between — to stay in II. With DVC members using II exchanges so seldom, most DVC members are better off with the current DVC-II relationship.

But I agree that it's a mixed blessing. Getaways (1-week rentals that do not require an exchange) can be a good deal. A few years ago, I got a 2BR/2BA at Marriott's Manor Club (Williamsburg) for $640 for a whole spring break week — that's probably less than owners there pay for annual maintenance. Also, DVC members don't get bonus weeks for depositing to II, while conventional II members get a bonus week (restricted second week) when depositing high quality, high demand weeks.

 

[walter]

I still think there is a profit to be made in a DVC resort on the west coast of Florida. I also think it was a mistake not to develop the Newport Beach site in California.

 

[mj2vacation]

Horace,

Where did you get this information from (Just curious, as it conflicts with information that I have):
In such resorts, Marriott may or may not have an equity role. Presumably, the developer and Marriott both make money, and Marriott doesn't have to come up with all (or any) of the money for land and construction. Disney could do the same thing.

 

[Horace Horsecollar]

Horace,

Where did you get this information from (Just curious, as it conflicts with information that I have)

The information about Marriott Vacation Club working with other developers comes from reading Marriott shareholder communications and other lodging news over the years. I did a few Google searches to come up with some examples. In the following examples, I honestly don't know the details about the ventures. I'm sure someone can (and will) say that one or more of the cases are bad examples, possibly because Marriott has a 100% equity role. Again, I don't know the details.

Marriott's Phuket Beach Club in Thailand is a joint venture between Marriott International and Thailand’s Minor International (MINT).

Marriott's Grand Chateau in Las Vegas is a joint venture between Marriott International and Diamond Resorts International.

Marriott's Villas at Doral in Miami, Florida, started as a joint venture between Marriott International and KSL Resorts, the former owner of the Doral Resort.

Marriott's Village d'Ile-de-France at Disneyland Resort Paris involves Marriott International and land developer Euro Disney SCA.

When it comes to conventional hotels and resorts, Marriott International owns very few properties. Marriott International makes money with their valuable brand primarily through management contracts and franchise agreements.

The following is a case in which a Hyatt timeshare resort is being developed by a company other than Hyatt:

Host Marriott Corp, a spinoff from Marriott International, is proposing to add a 12-story, 121-unit Hyatt-branded timeshare building at the Host Marriott-owned Hyatt Regency Maui Resort in Ka'anapali.

The point is that joint ventures could also be a viable way for Disney to expand the presence of Disney Vacation Clubs to off-site locations, while reducing capital expenses and managing risk.

Previously, I wrote, "Marriott brings the name recognition, reputation, marketing, sales, ongoing management, and inclusion in the MVCI network of resorts." One could say the same about Disney and the DVC network of resorts.

 

[yitbos96bb]

I would like to see a DVC on a lake in the Missouri Ozarks. I can't see it going into Branson because it has become a real tourist trap. But somewhere near by so you could drive over to the Branson attractions.

Ah Branson, All the lights of Vegas without most of the fun... I know it is a country music mecca of sorts, but as a vacation destination I'll take Nashville over Branson anyday.

Lake of the Ozarks is a pretty fun place. It would be cool to see it, but I have a feeling that any offsite destinations will be in higher profile places than Lake of the Ozarks or other Missouri Ozark lakes.