Increasing hotel costs everywhere except….

[Maistre Gracey]

Easy. Less people want to go to Disney. If you treat your customers like garbage and insist on destroying the product they love, they leave. No more magical day. No more disney music on the TVs. No more happy cast members. No more decent management. No more wholesome stories that have a basic story arch. Just postmodern management and postmodern stories that go nowhere and teach questionable values. That’s why we’re at Universal right now. Happy cast members and presentable, genuine management that doesn’t give you a forced smile. But it’s a big world. UO is just one place. Lots of other vacation options. Even DVC members are over it. That’s why all the rentals and sales.

Yup. In short, WDW is not the place it once was.
Sad, but true.

 

[Cfabar1]

DVC has become over saturated. In my opinion the original DVC premise was incredibly smart. Build out a network of resorts that offer something unique to the buyer, but allow for meaningful exchanges and choices.

Consider the original resorts:
OKW
VB
HHI
BWV
VWL

Each one was unique, heavily themed, etc.

They decided the off-premises concept didn’t work. I still maintain it could have worked had Disney implemented it differently. But alas…. They quit too soon, and here we are…

To me, SSR showed the beginning of the demise of DVC. Let’s do another OKW, just make the rooms smaller and the points chart higher. And then from there it became building out and converting DVC on the hotel properties. And the points charts have become more and more aggressive.

Now it is moving to removing theming and trying to appeal to a more international/modern client. All while the price is soaring and adding restrictions.

I’m not convinced it is sustainable. However, I think Disney will move to a new model where they just keep converting rooms to “DVC”. If the points don’t sell, they can rent the rooms out for cash. If the points do sell, great, you and I can pay for planting that tree or mowing the grass or whatever else.

 

[cbailey1616]

Easy. Less people want to go to Disney. If you treat your customers like garbage and insist on destroying the product they love, they leave. No more magical day. No more disney music on the TVs. No more happy cast members. No more decent management. No more wholesome stories that have a basic story arch. Just postmodern management and postmodern stories that go nowhere and teach questionable values. That’s why we’re at Universal right now. Happy cast members and presentable, genuine management that doesn’t give you a forced smile. But it’s a big world. UO is just one place. Lots of other vacation options. Even DVC members are over it. That’s why all the rentals and sales.

True. Disney all but ruined their brand over the past 4 years. They switched to an activist company which draws incredibly toxic people.

 

[Cfabar1]

True. Disney all but ruined their brand over the past 4 years. They switched to an activist company which draws incredibly toxic people.

Yes, but sadly that describes nearly every major company out there right now from Nordstrom to American Express to Chase to Comcast.

I think Disney’s problems are somewhat related to that, but more related to a few things:
- Greed
- The disastrous reign of Bob Chapek and the unwillingness to remove the worst of his revenue inventions because they are needed to pad the numbers right now.
- A nebulous and ill-defined streaming strategy that seems to change week by week
- A new/old CEO who is clearly not enjoying his job anymore
- A confusing economy/travel cycle over the past 3 years
- inability/unwillingness to provide significant investments in the parks
- a deeply challenging environment for finding workers
- Franchises that may be reaching end of life/need for generational reinvestment
- a challenging box office environment
- overexpansion in some areas
- lack of innovation/developing new business concepts, etc.

 

[upritbass]

Increasing hotel costs everywhere except…. DVC/WDW. VGC is still going strong.

 

[AstroBlasters]

True. Disney all but ruined their brand over the past 4 years. They switched to an activist company which draws incredibly toxic people.

Yeah, that may be your opinion but it is not universally agreed upon.

 

[we"reofftoneverland]

Yeah, that may be your opinion but it is not universally agreed upon.

The stock price doesn’t lie.

 

[HyperspaceMountainPilot]

Yes, but sadly that describes nearly every major company out there right now from Nordstrom to American Express to Chase to Comcast.

I think Disney’s problems are somewhat related to that, but more related to a few things:
- Greed
- The disastrous reign of Bob Chapek and the unwillingness to remove the worst of his revenue inventions because they are needed to pad the numbers right now.
- A nebulous and ill-defined streaming strategy that seems to change week by week
- A new/old CEO who is clearly not enjoying his job anymore
- A confusing economy/travel cycle over the past 3 years
- inability/unwillingness to provide significant investments in the parks
- a deeply challenging environment for finding workers
- Franchises that may be reaching end of life/need for generational reinvestment
- a challenging box office environment
- overexpansion in some areas
- lack of innovation/developing new business concepts, etc.

Although I don’t agree on the culture war being a major issue (people have been boycotting Disney for being too progressive the majority of my life), I do think it could have an impact on the margins (both the people boycotting Disney from the right and the people boycotting Florida from the left).

I do agree with almost each and every thing @Cfabar1 broke out above. A lot of them stem from one major decision (set in motion by Iger and continued by Chapek) —to spend insane amounts on streaming with no clear path to profitability and then subsidizing a lot of those costs and losses by really squeezing the parks & experiences division—which then trickles down to us guests now paying more for (inferior) fast pass and fewer new parks, lands, and amenities. And of course, they don’t want to pay a premium to get and keep workers in an extremely tight labor market for blue collar workers, which meant bringing back fewer special events and perks for DVC members.

 

[AstroBlasters]

Although I don’t agree on the culture war being a major issue (people have been boycotting Disney for being too progressive the majority of my life), I do think it could have an impact on the margins (both the people boycotting Disney from the right and the people boycotting Florida from the left).

I do agree with almost each and every thing @Cfabar1 broke out above. A lot of them stem from one major decision (set in motion by Iger and continued by Chapek) —to spend insane amounts on streaming with no clear path to profitability and then subsidizing a lot of those costs and losses by really squeezing the parks & experiences division—which then trickles down to us guests now paying more for (inferior) fast pass and fewer new parks, lands, and amenities. And of course, they don’t want to pay a premium to get and keep workers in an extremely tight labor market for blue collar workers, which meant bringing back fewer special events and perks for DVC members.

The streaming strategy now is to push up the ad free prices so high that the overwhelming majority of people go to the ad based model.

Also, now that the Hulu deal is done (pending price) they will lean into making Hulu Live compete more seriously with YouTube TV.

Cable is dead… long live cable.

 

[HyperspaceMountainPilot]

The streaming strategy now is to push up the ad free prices so high that the overwhelming majority of people go to the ad based model.

Also, now that the Hulu deal is done (pending price) they will lean into making Hulu Live compete more seriously with YouTube TV.

Cable is dead… long live cable.

I’m reluctantly rooting for them to figure out streaming (Cable II) so that they can stop looting us Parks enthusiasts.

 

[Chuck S]

The stock price doesn’t lie.

Stock prices are rarely reflective of the actual value of a company these days. Since there are internet "influencers" and scammers, the stock market prices for most companies are based more and more upon rumors and innuendos. The minute a rumor is created, it is plastered all over social media, and if you think social media doesn't influence people, whether the facts are true or not, look at the number of people doing the Tide Pod challenge, and other nonsense. This is especially true of huge multimedia companies. Look at the "value" of Twitter/X over the last few months.

Plus tourism in general has it's peaks and valleys. Look at the overall cruise industry, they are struggling, too. As well as Las Vegas and the gambling locations across the US. And two of the major players in the Amusement Park industry have announced their merger. It just isn't all sunshine and unicorns for any business these days.

 

[Floridian From Afar]

Initially, a DVC contract is 50 years. Many contracts now have less than 18 years left. Every year the contract becomes less valuable as it has less years.

You'll see their values decline every year until 2042, when they will be worth $0.

Possible....
Or Disney offers extensions similar to what they did with Old Key West. In that possibility, the contract could retain value in perpetuity.
No way to know until Disney allows an entire DVC resort to expire, which hasn't happened yet.

 

[Gr8scott]

First, I think that points rental costs have not gone down. I started renting out points with Davids as well as the forum at Disboards this year and see no evidence of a decline.

Second, I do see a general decline in resale contract prices. That is of minimal significance given the perpetually increasing cost of annual dues. Also keep in mind, the resale and rental markets remain a drop in the bucket of the overall DVC market.

Third, many speak of interest rates and the macroeconomic impacts, but at the end of the day, any fluctuation to the DVC resale market and rental market are influenced, by far, by the microeconomics of DVC (base price, restrictions, live sales, incentives). But that’s just what think!

Focusing on just the rental side of things, we have our points listed right now through an agent for less than last year, and when I search the point rental brokers in the U.S. it looks like all are paying less overall than prior. Perhaps David’s has plateaued but certainly not gone up in concert with the rest of the hotel prices that I see when vacation planning.

Perhaps naive but it would seem to me that when hotel prices go up in general the DVC rental prices would get dragged along with it to some extent, especially with year after year increases in dues which again we just got hit with. We do a lot of vacations outside of Disney and what we are seeing is hotel costs on a significant rise all the while getting less for our points to rent out. Just an observation my 0.02.

 

[Chuck S]

Focusing on just the rental side of things, we have our points listed right now through an agent for less than last year, and when I search the point rental brokers in the U.S. it looks like all are paying less overall than prior. Perhaps David’s has plateaued but certainly not gone up in concert with the rest of the hotel prices that I see when vacation planning.

Perhaps naive but it would seem to me that when hotel prices go up in general the DVC rental prices would get dragged along with it to some extent, especially with year after year increases in dues which again we just got hit with. We do a lot of vacations outside of Disney and what we are seeing is hotel costs on a significant rise all the while getting less for our points to rent out. Just an observation my 0.02.

I think vacation demand in general, not just Disney, is down over last year when people were recovering from the lockdown and needed to get out of the house. All theme parks, cruise lines and vacation venues seem to be experiencing a downturn in business. Went to our local Six Flags in what should have been it's busy season this summer. It seemed almost deserted. And while admission was cheaper than Disney, extras like food, beverages, parking, and souvenirs were a lot more $$$ than Disney.

 

[Gr8scott]

I think vacation demand in general, not just Disney, is down over last year when people were recovering from the lockdown and needed to get out of the house. All theme parks, cruise lines and vacation benues seem to be experiencing a downturn in business. Went to outr local Six Flags in what should have been it's busy season this summer. It seemed almost deserted. And while admission was cheaper than Disney, extras like food, beverages, parking, and souvenirs were a lot more $$$ than Disney.

But shouldn’t this drive the cost of hotel costs in down in parallel due to less demand? Granted there is inflation but the accommodation increases we are seeing are outpacing it by quite a bit.

I’ll quit beating the horse at this point, but It seems like everything these days is costing more, with the exception of DVC rentals.

 

[Chuck S]

But shouldn’t this drive the cost of hotel costs in down in parallel due to less demand? Granted there is inflation but the accommodation increases we are seeing are outpacing it by quite a bit.

Remember the increased costs of business. Higher prioperty taxes, higher wages and benefits, the cost of employee retention, property insurance, utilities, liability insurance, repairs and remodeling the rooms have all increased substantially. I'm a landlord, this is also why rents are increasing.

DVC is, however, for the most part, a fixed cost, other than our dues. Some of us bought 30 years ago, we don;t NEED to recover as much per point rental as newer owners.

 

[Brian Noble]

There isn't suddenly some boycott impact that is happening now that didn't also happen last year---the DeSantis feud started in the spring of 2022. If anything, it has receded from the zeitgeist in the past year as other things have taken its place---the Taylor Swift takeover of the NFL, for example.

Overall travel spending, likewise, doesn't seem to explain it. Travel spend continues to increase on the main credit card processors:
https://www.insiderintelligence.com...till-riding-wave-of-travel-cross-border-spend

Prices are generally up in all categories other than airfare.
https://www.nerdwallet.com/article/travel/travel-price-tracker

But, Orlando is down, and it's not just Disney. Comcast/Universal reported declines in revenue at the Orlando complex for the most recent quarter, though they didn't put a number on it:
https://www.cmcsa.com/news-releases/news-release-details/comcast-reports-3rd-quarter-2023-results

I think the easier explanation is that, for whatever reason, Orlando was one of the epicenters of revenge travel and we aren't in that particular phase anymore. Instead, we are reverting to the mean. Part of that is that international travel was iffy until the testing requirement was dropped in the summer of '22. While that was more than a year ago, people don't just decide to take an international trip next week--it takes planning and we are now seeing international airfare that is on the rise. Instead, folks looked to domestic destinations--and the Orlando theme parks were a big draw then. As an aside, so were the National Parks. Most of the Big Ones instituted timed entry to manage the crowds.

I suspect that a little of what explains the theme park/National Parks phenomenon in '22 is that they are outdoor venues, and as travel started opening up I suspect that at least some people were looking to be out in fresh air, rather than in enclosed spaces. In contrast, movie theaters still are well below pre-pandemic levels, and cruises are only now recovering past 2019.

 

[AstroBlasters]

Stock prices are rarely reflective of the actual value of a company these days. Since there are internet "influencers" and scammers, the stock market prices for most companies are based more and more upon rumors and innuendos. The minute a rumor is created, it is plastered all over social media, and if you think social media doesn't influence people, whether the facts are true or not, look at the number of people doing the Tide Pod challenge, and other nonsense. This is especially true of huge multimedia companies. Look at the "value" of Twitter/X over the last few months.

Plus tourism in general has it's peaks and valleys. Look at the overall cruise industry, they are struggling, too. As well as Las Vegas and the gambling locations across the US. And two of the major players in the Amusement Park industry have announced their merger. It just isn't all sunshine and unicorns for any business these days.

“Stock prices are rarely reflective of the actual value of a company these days.”

What?!? Ok, I’m now officially abandoning this thread.

 

[PrinceRaki]

But shouldn’t this drive the cost of hotel costs in down in parallel due to less demand? Granted there is inflation but the accommodation increases we are seeing are outpacing it by quite a bit.

I’ll quit beating the horse at this point, but It seems like everything these days is costing more, with the exception of DVC rentals.

Excess supply, I think a lot of people bought contracts to rent out points

 

[disneylandtour]

To me, SSR showed the beginning of the demise of DVC....Now it is moving to removing theming and trying to appeal to a more international/modern client.

For me, SSR is my least favorite DVC. The underlying problem is that it doesn't conform to many expectations for a Disney resort. The theme (which is minimal) doesn't relate to anything core Disney concepts (the theme horse racing in New York is neither playful nor engaging). So many times I've stayed there and looked out my window or balcony and saw non-Disney business buildings or a local public road. None of this "feels" like Disney World. OKW is far better. The sightlines are mostly good. The boat transportation by hospitality is nice. And the theme, though maybe not the best, is working just fine: Disney has often used theming to recreate historical settings, which is what this is mostly about. I will say the gym and pools at SSR are nice. If you're on the side by the Springs, the walkway is pleasant (though I don't feel particularly safe on it a 11pm). But simply being able to see business high-rise buildings and local highways pulls me out of the bubble every time. It feels like a generic corporate resort, not something I associate with WDW.