How will DVC handle a recession/poor economy?

[BWV Dreamin]

People here in the US are in big denial. This is going to be a very turbulent week in our stock market. Several very important figures are to be released, and they are only going to confirm the very bad situation that our economy is currently in. It's not just about automobiles. This fuel crisis spans all markets. Sorry to sound so doom and gloom, but we better get prepared. Once the spin starts, watch out for panic buying. Go ahead, get your laugh in at me now... but folks just better wake up.

 

[bom_noite]

I think folks are worrying too much, yep fuel prices have risen, a gallon is now costing nearly $5, we in the UK pay more than that in tax on each gallon, you would have to go back to the late 1980s to buy it at that price here in the UK.

Tub, I hear you. But, you and others do not understand the impact the raising gas prices have on our economy. I know what you pay in gas - each year I spend 60 days in the UK and 140 in Europe. I know a bit about your country (and Europe) but - would never say I am an expert on your economy. Nor, would I expect you to understand ours.

What you fail to realize is a large number of factors at play in our economy - if it was JUST gas prices, we would be ok, but, it is much more complicated then that:

Fuel Costs: Our transportation system is largely based on Trucks and Trains which both run on Fuel. It is one thing to move a container of goods from Southampton to London. It is a far greater matter to move it from Miami to St. Louis or Wichita.

The trucks (and the freight trains) run on fuel. The dramatic increases in shipping increases the cost of almost EVERY good imaginable.

Some people need to decide: Food or WDW?

The biggest impact, in the short term is to the lower rungs. If your salary is $7.50 to $15.00 an hour, the increase in fuel cost will KILL you. Instead of $20 you are putting in $35 and $40 weekly in gas. Do you expect them to go buy a 50K hybrid?

Loss in JobsThe Middle class in the US is SHRINKING - not expanding! Good jobs have been lost to India and China. I know 4 guys that had good accounting jobs with a very large company. Those jobs are now in the hands of Brazillians.

Now, all of them will find jobs - but - at 60% or 70% their current salary.

The loss of stable jobs (and bad loans) have led to foreclosure rates that we felt we would NEVER see. New construction is DEAD - and - this is the ROCK that held our ship together for the last 4 decades:

• Every house needs workers to grade the land, fabricate the materials and build the house.

• Each new house requires new sinks, appliances, door knobs and carpet.

A 1% decline in New Builds creates a ripple affect in our economy. And, since 2005 housing starts are down over 60%! That is very much like an ATOM Bomb on our economy.

Shrinking Dollar: The dollar has lost against the Pound, the Euro, the Yen and every other currency you can think of. A bottle of French wine that was $10 USD 3 years ago is now $15. But, it is not just French wine - it is everything we buy.

We are not Socialists: If you lose your job their is no free health care system. The unemployment insurance is good enough to live a very meager lifestyle - not one with vacations?

The changing economy has already had a direct impact on me: My company, to save $25 million said: No raises or bonus money will be paid in 2008 and 2009.

Now, I am very fortunate -I do make a very good buck. And, my finances are in good order. I could go ahead with life and DVC even if I was a victim of downsizing. But, there would be an impact.


In the end, in my opinion, this mess we find ourselves in is healthy and long overdue. As the cost of Foriegn goods rise, guess what will happen: Industrious people will start opening up factories and manufacture goods locally.

American High Tech workers are now affordable. I have seen evidence of Euro and UK companys actually looking to pay $50K USD for a programmer vs. 50K Euros or Pounds for a domestic candidate. The infatuation of hiring software factrories in China and India is slowly ending. In the end: You get what you pay for.

You are correct, in time, things will stabalize and we will reach a new economic equilibrium. But, that takes time - and - it is 3 to 5 years away.

 

[Chuck S]

Folks, a gentle reminder, this is a DVC board. Theads need to stay on topic, and this one has strayed from that. If it continues to be a general economic thread instead of focusing on the impact at DVC, I'll have to move it to the Community Board.

 

[gkrykewy]

Folks, a gentle reminder, this is a DVC board. Theads need to stay on topic, and this one has strayed from that. If it continues to be a general economic thread instead of focusing on the impact at DVC, I'll have to move it to the Community Board.

Chuck - sorry, but looking at your last two posts side by side is

On topic, my bet is that DVC sales and Disney attendance will hit a bit of a rough patch, and then we'll see what happens moving forward. Our country will need to be much smarter about how it builds and moves around, and that includes Disney.

 

[Chuck S]

Chuck - sorry, but looking at your last two posts side by side is

I didn't say I was innocent just that the thread needs to turn back to the impact on DVC.

 

[nuts]

Well, as Warren Buffet said...these are times which test whether you believe in buying low...

I think we should look to the past to see how DVC will react during the recession. But, just like all past recessions, we will pull out of this one.

 

[jarestel]

DVC/Disney will deal with recessions/poor economies as they have in the past. To believe that Disney/DVC is immune to these circumstances however, is simply choosing to ignore reality.

 

[rinkwide]

Folks, a gentle reminder, this is a DVC board. Theads need to stay on topic, and this one has strayed from that. If it continues to be a general economic thread instead of focusing on the impact at DVC, I'll have to move it to the Community Board.

Oh come on, I haven't had this much fun reading a thread since Y2K.

 

[djmeen]

I would think there would be a slow down in purchasing of points as new members would be reluctant to make a big investment given economic worries.

This would then lead to either cuts in operating expenses by Disney (reduced hours) and probably incentives. Agree that their growth opportunity is overseas with the weak US dollar.

As for the rest of chatter around the economy - sheesh, I have a strong urge to stuff points (errrrr, I mean money) in my mattress!

If we can get there, at least we'll have a place in DVC to enjoy a smile and nice pool. Can also cook in the rooms. That should save us some money!

 

[bavaria]

Have a look at this example of a Volkswagen Polo Blue Motion it is capable of 88.3mpg on a motorway and 74.3mpg combined (UK GALLON), its diesel which is extremly common in the UK and puts the like of a Prius to shame on economical motoring.

http://www.volkswagen.co.uk/#/new/polo/which-model/engines/fuel-consumption/

that is my favourite vehicle and may just be VW number 6 for me!

Back on topic, I don't see DVC having much growth from the outside North America, other than from UK visitors. I believe that the lastest DisneyFiles lists international ownership at 8,800 - I would guess that at least 1/2 of that is from the UK, and most of the rest from US expats or military owners.

I remember looking at the international map once at a DVC booth, and I believe that the ownership for Germany was under a dozen. The interest for Disney is not that great in many other countries, even if they do benefit from the low dollar. And for those that are interested, it may be a once or twice in a lifetime visit, not a yearly or every other yearly visit.

 

[soozer52]

One of the reasons we originally bought in to DVC was to "recession-proof" future vacations. I never thought we would actually save money buying in, but at least keep rising prices at bay when we did want to travel--and travel to NICE places.

 

[alldiz]

I think with the poor dollar.....DVC will do well in foreign markets. Lots of foreign visitors to WDW with the weak dollar....they will probably buy in with the great price for them.
Kerri

 

[Starr W.]

People here in the US are in big denial. This is going to be a very turbulent week in our stock market. Several very important figures are to be released, and they are only going to confirm the very bad situation that our economy is currently in. It's not just about automobiles. This fuel crisis spans all markets. Sorry to sound so doom and gloom, but we better get prepared. Once the spin starts, watch out for panic buying. Go ahead, get your laugh in at me now... but folks just better wake up.[/QUOTE

I totally agree with you. Maybe because I'm in the midwest and see a lot of homes sit on the market and quite a few foreclosures in all levels of home values.

Does anyone look at how much you are paying for food? I can't see how we all can sit here and look at food prices, gas prices and say everything is just peachy keen and BLt is going to sell out before it gets to non-members.

 

[Chuck S]

I don't think BLT will sell out quickly, it is a medium sized resort, and in a slowing economy, I think sales will slow, too. I do think the location will be the best selling point for this resort, though. They could still change their mind and make it rental suites, not DVC, for the convention crowd.

 

[soozer52]

I shop (mostly) at Whole Paycheck so I've ALWAYS paid too much for food. Hard to tell if prices go up I like their meat and fresh cheeses. Having said that, we live in a fairly stable economy (Houston). WE had severe economic regional recession 20 years ago and had to learn from it. Housing here is stable and there is very little downturn. Also, driving from Orlando back to here just last month was amazed at the building going on. Like Disney, there is construction everywhere-hurricanes (Katrina and Rita, I mean you) be damned. Condos overlooking the gulf as far as the eye can see. Now, that's optimism. They would not build them if people weren't going to buy/occupy them. Like Disney, they will weather (no pun intended) economics. Haven't we seen, such as after 9/11, more people vacation within this country rather than go overseas? Even with gas prices high, it will still be cheaper to drive a fuel efficient vehicle carrying 4 adults and 2 children 900 miles than it would be to fly them. And yes, Disney prices will go up (oh please we've always paid outrageous prices for stuff there) percentage or two. Eat in at your DVC home more than you eat out and maybe don't rent a car (if you had flown) and stay within the parks as much as possible. We need to look up what we did back in the '70s. Get out my WIN button-Whip Inflation Now. Need to dust off that list and take another look at it.

 

[jdg345]

I don't think BLT will sell out quickly, it is a medium sized resort, and in a slowing economy, I think sales will slow, too. I do think the location will be the best selling point for this resort, though. They could still change their mind and make it rental suites, not DVC, for the convention crowd.

There are plenty of "What If's" with regard to costs as well. Is it going to be significantly more expensive per point? Are rooms/views going to be more points per night? What about maintenance fees? If any one of the three are higher than 'normal', I think it would slow things down or cancel out some of the benefits of location. Of course, if all (3) are higher than 'normal', it could be awhile before they sell out.

Also, to consider, is what they're doing with the Treehouses.

I think in the end, the recession may affect DVC growth and it may lead to a bump in resales, but the 'already owners' may find that DVC is their most affordable vacation as they already have the rooms 'paid for'.

 

[Rigatoni]

Oh come on, I haven't had this much fun reading a thread since Y2K.

Yeah...but...this time the sky really is falling!

 

[Rigatoni]

We will probably drive instead of fly for our February trip.

If gas is $5.00 a gallon, the trip is 2000 miles total, and we get 20 mpg, that's $500. We'd probably pay $300 for a rental car if we flew. So it really isn't that much money we are talking about to get four people to WDW.

 

[soozer52]

Just heard on the radio (and looked it up online) about the increase in round trip fuel increases in the last year-June 2007-June 2008--

ex-Atlanta to Orlando-878 miles-Cost increase per car $24.46
increase per SUV $32.54
ex-Denver to the Grand Canyon-1526 miles-Cost increase per car $42.51
increase per SUV $56.55

There are other examples but you get my drift. Would you cancel a family vacation because of $56.55? $75?$100? If you have saved up the money for a vacation (or prepaid like most DVCers) would it stop you from going or would you try to budget in that $56.55--maybe skip out of dining out one or two nights (think sandwiches and chips) or maybe skip that souvenir shop at EPCOT? I always love being in a great place-WDW-with friends/family. I wouldn't let $100 in gasoline keep me from that

Still cheaper than flying....I found the above examples @ BusinessWeek online in the lifestyle section.

PS-You could also go for the $7 bottle of wine rather than the $10 one!

 

[UmmGooD]

I agree with you on the additional cost to drive even if it doubles that is a small amount of the total vacation cost. Where the problem lies is when people end up spending the 2000 dollars a year they would spend to go to their DVC villas on their monthly fuel costs, cost of utilities, and groceries. So yes the cost to get to Disney really hasn't gone up as much but if people are paying 2000 a year extra on all of the above will they have the money to vacation? Especially at Disney with inflated prices on everything.