How much is the lack of AP sales affecting DVC?

[Mle8308]

I don't think it has much effect on new buyers at all. Most probably don't even know it was a benefit at one point. I wouldn't have know if I didn't follow this board. It's the economy that is holding people back from new sales (increase in interest rates by the Fed again today) or encouraging sales of current contracts, the dues can definitely add up in an unstable economy.

 

[AmishGuy91]

From the sales side, numbers were good (some would say excellent) until fall 2022. That included nearly a year without any AP sales.

In the winter, direct sales have declined. But that decline has been coupled with a poor economy, massive direct price increase, falling resale prices and the looming start of VDH sales. If the only thing that changed was resumption of AP sales, I'm not convinced direct point sales would be significantly better.

And the same is true on the selling side. The volume of resale contracts has been building since February / March of last year. IMO it started with the usual seasonal increase that comes with dues bills arriving in January '22. Then it was compounded by things like Chapek, the whole HB 1557 thing, people realizing they didn't need as many points coming out of COVID, Disney reducing ROFR activity and surprisingly low launch day prices on VGF.

(Sidebar: think about this...when VGF sales re-opened in March 2022, a current member could add 200 points for as little as $186 each. At that same time, points for BWV and BCV were selling in the $170s-180s resale. You could flip a 2042 report for almost the same cost as a resort that doesn't expire until 2064--more than double the years--picking up all of the direct purchase benefits in the process. I know there are people who did exactly that. Or at least tried until prices began to fall in earnest.)

When someone decides to sell, I think there are a variety of factors which play into that decision. While lack of APs is probably one of those factors, I'm not sure that it's a tipping point for many owners. If AP sales resumed tomorrow, I don't think a lot of contracts would be pulled off the market with owners exclaiming "never mind, I'll keep all of my points now."

An argument could be made that people always assumed APs would be coming back. Fall 2022 marked a year since APs had been sold and with no hints of them coming back, people could now be losing hope and thus it is affecting DVC sales.

 

[Brian Noble]

I think that the recent direct sale woes are also at least in part because the delta with resale is getting so much larger over the past few months.

Maybe. I'm not so sure about even that.

It's definitely the case that here on DISboards, the resale vs. direct sentiment has shifted and that shift is due in part to changing resale prices. But again: DISers are a small and un-representative set of owners.

The "typical" DVC owner might know that a resale market is a thing, but they do not have any idea what the "market price" would be. (It's my claim that most DISers don't either, but that's another topic for another time.)

For the typical DVC prospect, the situation is even more stark, and that's because timeshare is a product that is sold and not bought. The prospect may have some vague sense of what DVC is, and know they are kind of interested, but they don't really know any details. After watching the in-room infomercial, and maybe talking to a Kiosk CM, they decide to do the tour.

They are taking this tour while they are on vacation. They are having the time of their lives! And the helpful Guide explains how they can bottle this magical feeling and have decades of Disney vacations "at today's prices." The prospect thinks that sounds great, and makes the down payment. They feel really good about that decision: they are investing in family time and togetherness.

Fast forward a day or two. Our prospect is still in their rescission window. The resale information is there on the Internet for the taking. But, they do not go looking for it. How many new buyers find DISboards and ask if they should rescind? Very very few. I believe that's because people do not want to know that a decision that they feel really good about was not a good decision. Very few people go looking for reasons that a "good" decision was really a bad one.

 

[Brian Noble]

An argument could be made that people always assumed APs would be coming back. Fall 2022 marked a year since APs had been sold and with no hints of them coming back, people could now be losing hope and thus it is affecting DVC sales.

Sure. But I'd expect a large group of people to "lose faith" over a more protracted period of time. Some people would lose faith at six months. Others not until eighteen. It doesn't seem likely that one year is the sudden threshold that breaks open the dam.

 

[mz-s]

Big purchases of all sorts are down. Homes, cars, yes timeshares. It's the economic cycle we're in. It will come out in the wash, it always does.

 

[tjkraz]

No doubt the economy is a factor. But not being able to purchase AP’s further degrades ownership and causes more expenses. DVC is suppose to save us money. Removing perks causes more expenses. Magical Express, TIW, as well as AP’ s all contributed to savings on a WDW trip.

They did, but it doesn't get us any closer to knowing how members act in the aggregate. Just to share my personal experience:

- I bought TIW exactly once, close to 20 years ago
- We probably had APs about 20% of the time
- We used DME about 50% of the time

None of those impact me in any massive way. Like the loss of non-expiring tickets a decade ago, we've found ways to work around it. Taking longer trips, buying tickets for a portion of our stay and visiting non-WDW locations are all options that are in play.

The loss of DME prompted me to start looking at other options for air transport. For our 2023 trip, I found good rates on a discount airline into Sanford, and the rental car will basically pay for itself. While adding the flexibility to buy groceries, avoid Disney buses and travel off WDW property if needed.

I don't expect that everyone mirrors my feelings here. But that's exactly the point. I think APs are a non-issue for prospective members (can't miss what you never had) and a marginal issue for current owners. Many DVC owners still have APs.

 

[Matty B13]

As small a group as Disboarders are there is also a lot of chatter on Facebook as well and a lot of groups that I have joined. So it might be a larger group of disenfranchised owners than one might think. It is just tough to quantify, since I'm sure there is some overlap between groups, but only a little.

 

[BWV Dreamin]

Magical Express ended more than a year ago. TIW has been gone since the pandemic started. Do these things matter at the margins? Sure. Are they anywhere near the most important reasons why direct sales have slowed and resale prices dropped over the last several months? I'm skeptical.

Yes they matter. The debacles people are having getting transportation to the resorts, the ever increase in food prices with poor quality, and ticket prices breaking the banks for families, well they have had it. Yes it took a couple of years to come to that determination as people have tried to navigate the cutbacks. It’s just not working.

 

[Brian Noble]

"This time, they've gone too far!"

It's an old refrain. It comes out after every price increase, every service discontinuation, every "negative" change. It's never happened yet. If the Mouse steps too far over the line, they will throw some lifeline of a discount and people Will.
Come. Running.

The Parks, Experiences, and Resorts segment is generating plenty of profits--to the point where they are subsidizing other parts of the company. Parks and Resorts earned three billion dollars in the most recent quarter. One billion, with a B, every month. Profit. No one at Disney thinks this is a problem.

Yes, Bob 1.0/3.0 talked about "being too aggressive" about price changes, but what has he really done? Reduced ticket prices in a few more dates in September, and dropped the parking charges that were instituted when he was in charge.

 

[tjkraz]

Yes they matter. The debacles people are having getting transportation to the resorts, the ever increase in food prices with poor quality, and ticket prices breaking the banks for families, well they have had it. Yes it took a couple of years to come to that determination as people have tried to navigate the cutbacks. It’s just not working.

In 1Q 2023 (October - December 2022), revenue was up 21% and profit up 25% over the prior year. The parks made more money in those 3 months of '22 than the same period in 2019 pre-pandemic.

I realize that sounds very clinical and doesn't take into account Disney's "core" customers, good will, etc. But hypothetical losses in business don't really matter until they matter. All we have are anecdotal stories from people who claim they've reached their breaking point. In truth, WDW has weathered decades of individuals reaching their breaking point because there are always others ready to fill the void.

Arguing that this is the one time these things finally matter is...difficult.

 

[tidefan]

"This time, they've gone too far!"

It's an old refrain. It comes out after every price increase, every service discontinuation, every "negative" change. It's never happened yet. If the Mouse steps too far over the line, they will throw some lifeline of a discount and people Will.
Come. Running.

The Parks, Experiences, and Resorts segment is generating plenty of profits--to the point where they are subsidizing other parts of the company. Parks and Resorts earned three billion dollars in the most recent quarter. One billion, with a B, every month. Profit. No one at Disney thinks this is a problem.

Yes, Bob 1.0/3.0 talked about "being too aggressive" about price changes, but what has he really done? Reduced ticket prices in a few more dates in September, and dropped the parking charges that were instituted when he was in charge.

It can happen though, just ask the Coca-Cola folks about that great “New Coke” idea

 

[Sammie]

Does not affect us. I was never a fan of buying them. I would prefer a discount on other ticket media. For now I use AAA so I am good to go.
If members are selling theirs because of a lack of a discount on AP, they were not a good fit anyway. I doubt many that are buying today, even factor into the purchase the idea of APs.

People that only buy DVC for perks are setting themselves up for disappointment and it has nothing to with DVC. It has more with them not knowing what they are purchasing, and that is on them. Once rideshares became popular DME was on it's way out anyway and the loss of the luggage transfer company was the final blow.

 

[BWV Dreamin]

They did, but it doesn't get us any closer to knowing how members act in the aggregate. Just to share my personal experience:

- I bought TIW exactly once, close to 20 years ago
- We probably had APs about 20% of the time
- We used DME about 50% of the time

None of those impact me in any massive way. Like the loss of non-expiring tickets a decade ago, we've found ways to work around it. Taking longer trips, buying tickets for a portion of our stay and visiting non-WDW locations are all options that are in play.

The loss of DME promoted me to start looking at other options for air transport. For our 2023 trip, I found good rates on a discount airline into Sanford, and the rental car will basically pay for itself. While adding the flexibility to buy groceries, avoid Disney buses and travel off WDW property if needed.

I don't expect that everyone mirrors my feelings here. But that's exactly the point. I think APs are a non-issue for prospective members (can't miss what you never had) and a marginal issue for current owners. Many DVC owners still have APs.

The work arounds are not working and the options that are available are far more inferior. AP’s were a reason to make multiple trips, thus enhancing the DVC savings even more. Rental car rates are very very high. Many are losing the magic to greed and cut backs. Glad you can find suitable workarounds. I for one don’t want all the extra stress and planning.

 

[Brian Noble]

It can happen though, just ask the Coca-Cola folks about that great “New Coke” idea

The fact that you have to reach back almost 40 years for your example suggests it's pretty rare.

And three months later they brought the original back and it flew off the selves---the point that some folks though it was all a marketing stunt. Sort of like the International House of Burgers.

 

[BWV Dreamin]

Does not affect us. I was never a fan of buying them. I would prefer a discount on other ticket media. For now I use AAA so I am good to go.
If members are selling theirs because of a lack of a discount on AP, they were not a good fit anyway. I doubt many that are buying today, even factor into the purchase the idea of APs.

At the price they are asking for AP’s, no no one is buying them. It’s a domino effect.

 

[BWV Dreamin]

In 1Q 2023 (October - December 2022), revenue was up 21% and profit up 25% over the prior year. The parks made more money in those 3 months of '22 than the same period in 2019 pre-pandemic.

I realize that sounds very clinical and doesn't take into account Disney's "core" customers, good will, etc. But hypothetical losses in business don't really matter until they matter. All we have are anecdotal stories from people who claim they've reached their breaking point. In truth, WDW has weathered decades of individuals reaching their breaking point because there are always others ready to fill the void.

Arguing that this is the one time these things finally matter is...difficult.

Profits up due to price increases, what about revenue? Disney is still very cash strapped and laying off 4,000 employees. No Cherry Tree Lane in Epcot. The target audience is the one and done vacationers. Most families are being priced out. And, the pandemic has kept people trave in the US. There are only so many them parks.

 

[Matty B13]

As a current AP holder and DVC owner, not only are we not going to renew our AP's after they expire but we also just sold 150 points that would have let us go to WDW twice in one year.... which I didn't think we would really ever do. So there is that one piece of data.

 

[BWV Dreamin]

Disney does not care about DVC. “Build and they will come “ is about as much as they seem interested. Ever go to the meetings in December? They are a joke. There is no loyalty to DVC and the resale numbers are indicative of this.

 

[tjkraz]

Profits up due to price increases, what about revenue? Disney is still very cash strapped and laying off 4,000 employees. No Cherry Tree Lane in Epcot. The target audience is the one and done vacationers. Most families are being priced out. And, the pandemic has kept people trave in the US. There are only so many them parks.

Parks, Experiences & Products revenue for quarter ending in December:

2018: $6.8 billion
2019: $7.4 billion
2021: $7.2 billion
2022: $8.7 billion

 

[HIRyeDVC]

you know how I feel about this. I think it's a minimal factor. And I think APs are way underpriced. Wait till they go on sale again, with no discounts. There will be a mob at the gates like we've never seen.