Grand Floridian Expansion - The math is nuts to me!

[Ssplashhmtn]

I truly do appreciate why this does not matter to most - in the end - it is just another way to get access to a DVC room. Disney internal account is not overly important to the average member.

However, it does help to at least understand what they are doing.

They are not foregoing rental income. They are pre-collecting it. The average hotel has a gross margin of about 30%. Let's say Disney does not much better - make it 50% gross margin. This is just profits after direct expenses of operating the hotel. It does not include the marketing expense to fill those rooms, etc. For 200 rooms, at 85% occupancy, they are getting about $13m or so per year in gross profit from renting those rooms. I am guessing they just got $250m or more for that building. This $250m is an asset sell without further expense. So, they basically got prepaid 20+ years of rental gross profit by having DVC buy this building. Given time value of money, that probably covers the entire operating profit of the building until the DVC contracts expire.

Again, I realize, in the end, for most, this does not matter. However, to your last point, when you see DVC nickel and dime the members you have the basis to be a bit disappointed. We are a complete cash cow.

It would be nice if they fed the cows a few times while milking them for this type of profit. Is a coffee maker and microwave in every room too much to ask?

Yes, agreed on all of this. I don’t begrudge them making a profit on the sale of BPK to DVC. Most real estate eventually increases in value, and they simply liquidated that value. Good for them….real estate investments often pay off.

However I agree, the least they could do is show they still care about quality. Brushing off details like the GF Orchestra, the villa lobby coffee machine - that nickel and dimeing sends the wrong message in face of the blatant profit on the flip. I get that point.

 

[RamblinWreck]

LOL! I guess I'm becoming cynical. Instead of thinking "Oh, I've always wanted to stay at the Grand, and look how beautiful those rooms are!" I'm thinking "Oh, look how Disney shifted the cost of maintaining that building from themselves to the DVC owners there!"

They always pass that cost along via rental prices anyway.

 

[tjkraz]

It would be nice if they fed the cows a few times while milking them for this type of profit. Is a coffee maker and microwave in every room too much to ask?

Every DVC villa has a coffee maker and a microwave. They contemplated omitting microwaves from the new GF villas, but by the end of opening week every room had one installed.

 

[vint43]

Every DVC villa has a coffee maker and a microwave. They contemplated omitting microwaves from the new GF villas, but by the end of opening week every room had one installed.

Good to hear! I saw a review on the opening day and they were not there. So, small steps

 

[Disney mac]

Every DVC villa has a coffee maker and a microwave. They contemplated omitting microwaves from the new GF villas, but by the end of opening week every room had one installed.

Just a small correction....the new GF rooms are NOT villas, they are "studios" if you go looking for them. I think you all should book every one and ignore the Villas from now on....that way I can get the room I want easier.

 

[CarolynFH]

Just a small correction....the new GF rooms are NOT villas, they are "studios" if you go looking for them. I think you all should book every one and ignore the Villas from now on....that way I can get the room I want easier.

I think DVC’s full name for them is Resort Studio Villas, similar to the Deluxe Studio Villas found elsewhere in DVC resorts.