How will DVC members be treated after DVC is sold out?

[donaldbuzz&minnie]

The fast pass issue got me thinking. What do you all think about how DVC members will be treated after the last DVC property is built? Right now Disney has an incentive to keep DVCers happy with service comparable to that found in the deluxe resorts. They need to or they wouldn't be able to sell points in their new DVC properties. But what will happen after SSR, maybe the Contemporary (which would be very small), and perhaps one more large property (Eagle Pines?) are all developed? At some point Disney may decide they have enough DVC units. Other than keeping the properties in reasonably good physical condition, will they lose interest in maintaining our good will??

 

[Alphatexana]

Will they lose interest in maintaining our good will??

Interesting question. A couple of thoughts:

1) Disney (the developer) owns alot of the undeclared points in each resort. They sell these to cash customers. Accordingly, they will have some motivation to make sure that the DVC resorts are operated well in order to make sure that they can still sell these for a tidy profit.

2) How long do you think it will take to do those three you mention? Another ten or fifteen years? By the time they finish the three you mention (and add one or two in California and Colorado/Hawaii) they may already be tasting the handsome profits they will realize when the original resorts revert back to them and they get to sell them all over.

3) Disney is still able to make a tidy sum just buying contracts through the right of first refusal and reselling them to new buyers and existing owners wanting add-ons. This gives them some motivation as well to keep us coming back for more.

4) This is Disney. While it has made mistakes, and will make more in the future, I still have faith that this is a company that will work to maintain my good will. Along those same lines, I would think that DVC owners are great repeat customers when it comes to park passes purchased/meals consumed/other revenue for Disney.

You think any of these are persuasive?

 

[TammyAlphabet]

Boy, is that alot to think about. Personally, I think that DVC members will always be treated well. JMHO. Our children and grandchildren will get their impression of Disney from the trips that they take with us.

This is a great market for the DVC of the future. And, can we be sure that DVC's will ever stop being built? I mean, we are paying for the maintenance of the buildings and providing a sure source of revenue on an annual basis.

 

[jctwizzer]

That's probably dead last on my list of things in life to be concerned about!

 

[pplasky]

In about 35 years they will start to refurbish and resell those units that have contracts ending in 2042. I don't see an end to DVC, just modifications along the way. No reason to get hiped up with what if's.

 

[dianeschlicht]

I agree! I think DVC will go merrily on its way as long as there is a WDW and other Disney destinations.

 

[tjkraz]

1) Disney (the developer) owns alot of the undeclared points in each resort. They sell these to cash customers. Accordingly, they will have some motivation to make sure that the DVC resorts are operated well in order to make sure that they can still sell these for a tidy profit.

Define "alot".

My understanding is that DVC retains about 4% ownership at each property for room rehabs only (giving them the ability to take each room out of service for about one week per year.)

They get some points via ROFR and hold them until re-sold to members. But the majority of the rooms that are available at cash rates should be via members trading-out to non-DVC locations and breakage.

That said, I think your point is accurate, but for a different reason. Member dues pay 100% of the operating costs of the resort. Therefore, DVC / Disney has every reason to maintain the properties in pristine condition--it doesn't cost them a penny.

3) Disney is still able to make a tidy sum just buying contracts through the right of first refusal and reselling them to new buyers and existing owners wanting add-ons. This gives them some motivation as well to keep us coming back for more.

True, but they probably don't make much from ROFR--at least not as much as you might think.

It appears contracts are being ROFRed in the $75 range now. By the time you add in current year's maintenance and fees (closing costs, transfer costs, etc.), you're up over $80 per point that DVC is typically paying to re-acquire many contracts.

The selling point is $89, and each time they re-sell the points, another set of fees are involved (contracts, closings, etc.) If they ROFR a 200-pt contract and re-sell as (4) 50-pt add-ons, they have administrative costs x4 for that one contract.

 

[bicker]

I think Alphatexana hit the target.

 

[SoCalKDG]

2/3's of Disney's Park income comes from admissions and food/merchandise, with 1/3 coming from their hotels(from Disney 2004 financials). So if they aren't getting any money from us for the hotel portion, what are they going to do? With membership approaching 100,000 this year, they sure want to make sure you spend money on them. I'd guess they continue offereing discounts and specials for DVC members to keep us interested in their parks. Remember, we can just enjoy our wonderful resort, watching free fireworks, riding their monorail and boats, and not spend a dime on Disney.