I am sure it is a rumour but ....

[Brian Noble]

Not sure how to word this but isn't there a reason they are not building more mod/value rooms now even for CRO?

They aren't building any Deluxe rooms for CRO, either.

Since POP opened, every single hotel room built or even proposed at WDW---every single one---is either part of DVC, or is being built by a third party (Four Seasons, the Western Way expansion). What's more, there are at least two instances of existing "cash" hotel rooms being converted to DVC stock---the upper two floors of AKL, and the North Garden Wing of CR.

If you'll recall, POP was under construction during the period where tourism literally fell through the floor after 9/11. In addition to delaying the opening of the Classic Years half by more than a year, they also closed part of Port Orleans for a good chunk of time, and mothballed the Legendary Years at POP completely.

My take is that Disney realized just how much risk they had with all that captial tied up into resort development---another seismic shock to tourism could really leave them holding the bag. So, they very intentionally moved almost entirely to the DVC model. In this model, the customer gets a discount on lodging costs, but in exchange the customer promises to remain a customer year after year, in good times and in bad. This softens the blow of any future tourism slumps (such as the one we are in right now), and provides a built-in buffer against risk. Plus, Disney recovers their capital investment on development much more quickly than they would in a rental model, further reducing risk.

For a variety of reasons---many expressed in this thread---if you're going to sell timeshare, you've got to sell darn nice units. People aren't going to spend thousands/tens of thousands of dollars for "just a hotel room."

I don't know if they'll ever change back to a "standard hotel" model---so far, it looks like they have been willing to farm out new cash-rental development to third parties. This is also a pretty good deal for Mickey. Those external companies take on the risk of captial, but I'm sure Mickey gets a very nice lease payment for the land, etc. that is due and payable whether guests are coming or not.

 

[vonpluto]

They aren't building any Deluxe rooms for CRO, either.

Since POP opened, every single hotel room built or even proposed at WDW---every single one---is either part of DVC, or is being built by a third party (Four Seasons, the Western Way expansion). What's more, there are at least two instances of existing "cash" hotel rooms being converted to DVC stock---the upper two floors of AKL, and the North Garden Wing of CR.

If you'll recall, POP was under construction during the period where tourism literally fell through the floor after 9/11. In addition to delaying the opening of the Classic Years half by more than a year, they also closed part of Port Orleans for a good chunk of time, and mothballed the Legendary Years at POP completely.

My take is that Disney realized just how much risk they had with all that captial tied up into resort development---another seismic shock to tourism could really leave them holding the bag. So, they very intentionally moved almost entirely to the DVC model. In this model, the customer gets a discount on lodging costs, but in exchange the customer promises to remain a customer year after year, in good times and in bad. This softens the blow of any future tourism slumps (such as the one we are in right now), and provides a built-in buffer against risk. Plus, Disney recovers their capital investment on development much more quickly than they would in a rental model, further reducing risk.

For a variety of reasons---many expressed in this thread---if you're going to sell timeshare, you've got to sell darn nice units. People aren't going to spend thousands/tens of thousands of dollars for "just a hotel room."

I don't know if they'll ever change back to a "standard hotel" model---so far, it looks like they have been willing to farm out new cash-rental development to third parties. This is also a pretty good deal for Mickey. Those external companies take on the risk of captial, but I'm sure Mickey gets a very nice lease payment for the land, etc. that is due and payable whether guests are coming or not.

Four Seasons purchased the land from Disney.

http://blogs.orlandosentinel.com/business_tourism_aviation/2008/08/walt-disney-w-1.html

The last I read, Flamingo Crossings parcels are to be sold off, and not leased as at DTD and the Hotel Plaza.

 

[Brian Noble]

My impression was that not all of the Four Seasons land was sold---only that portion that was designated as whole-ownership and fractional. After all, Mickey would not want non-Disney employees to be voting residents of RCID. I may have mis-understood the terms of the deal, though.

 

[drakethib]

Maybe it has been asked in this thread, but I may have missed it.

Give the scale of POR & POFQ, as well as the theming, if DVC were to either build or new construction of a "side" unit of DVC rooms (as per specs for Studio's, 1BR, 2 BR, etc.) do you really think it would fail based on the area being a moderate resort?

Again, I am a DVC member and I am sure it is personal taste but I think it would do pretty well.

I look at SSR and OKW and the rooms are nice but what else do they offer that POR couldnt? Olivas and the Turf Club? A couple of pools?


Granted Boardwalk and Beachclub have the proximity to Epcot, and BLT to MK, but again, I don't see what is so different if the rooms were built to "DVC Spec" unless it is a prestige thing.

Great comments on this thread all.

 

[Chuck S]

Maybe it has been asked in this thread, but I may have missed it.

Give the scale of POR & POFQ, as well as the theming, if DVC were to either build or new construction of a "side" unit of DVC rooms (as per specs for Studio's, 1BR, 2 BR, etc.) do you really think it would fail based on the area being a moderate resort?

Again, I am a DVC member and I am sure it is personal taste but I think it would do pretty well.

I look at SSR and OKW and the rooms are nice but what else do they offer that POR couldnt? Olivas and the Turf Club? A couple of pools?


Granted Boardwalk and Beachclub have the proximity to Epcot, and BLT to MK, but again, I don't see what is so different if the rooms were built to "DVC Spec" unless it is a prestige thing.

Great comments on this thread all.

I don't know that it is location as much as perception. I think potential buyers would still perceive a POR-DVC to be "less" because of it being "attached" to a Disney moderate resort, and would expect a lower point chart. That would mean less points for sale, and lower profit per square foot of construction, whereas construction cost are always increasing (or will be once the economy improves). That would be a disadvantage to DVD, the construction/sales arm of DVC.

 

[Dean]

Maybe it has been asked in this thread, but I may have missed it.

Give the scale of POR & POFQ, as well as the theming, if DVC were to either build or new construction of a "side" unit of DVC rooms (as per specs for Studio's, 1BR, 2 BR, etc.) do you really think it would fail based on the area being a moderate resort?

Again, I am a DVC member and I am sure it is personal taste but I think it would do pretty well.

I look at SSR and OKW and the rooms are nice but what else do they offer that POR couldnt? Olivas and the Turf Club? A couple of pools?


Granted Boardwalk and Beachclub have the proximity to Epcot, and BLT to MK, but again, I don't see what is so different if the rooms were built to "DVC Spec" unless it is a prestige thing.

Great comments on this thread all.

IMO and as I stated earlier, I think a purpose built DVC quality addition to PO or CS is very workable, CBR would be a slightly harder sell IMO but still has some potential. Points costs and specifics would determine how workable things were from a sales AND perception standpoint. Remember that in many ways, OKW and SSR to a degree, are in many ways more moderates in amenities and location once you look past the units themselves.