Is anyone annoyed about Disney's vacation club building?

[YoHo]

Aren't the DVC Resorts considered Deluxe? As far as a 'fanatic only' club ... while there are plenty of members that go 2,3,4 and 5 times a year, there are also many that go once a year (or once every two years) ... not sure what's fanatical about that?

Of course, the fact that we're all here, on the Internet, on a Disney Forum, discussing the topic at hand might lump us all into the 'fanatic' group.

The average time between WDW used to be around 5 years. so even every other year is a big change.

As for your second question, there are 4 levels of AP in Cali. 2 for CA residents only, then deluxe at $250 and Premium at $350. The premium price used to be $250 and many many people by them, because they get the free parking, discounts and access every day of the year.

 

[doubletrouble_vb]

I don't think Disney has overbuilt DVC but I do think their choice of architecture and footprint is somewhat questionable in BCV and SSR. One of the things that really enchanted me about Disney was the feeling of being somewhere else. SSR is lovely as a resort but feels like a multitude of other timeshares. And the Saratoga Springs aspect is a big huh? for me. Maybe someone from Saratoga, NY can explain it to me...I've only seen the area in winter but it sure isn't pastel colored.

I do think Disney made a mistake with the values. Why pursue the money being spent on offsite cheap hotels? It didn't appear they were having trouble booking the moderates.

 

[DancingBear]

What is SoG ?

Shades of Green, the former Disney Golf Resort (located near the Poly between the Magnolia and Palm golf courses), which years ago was long-term leased by Disney to military recreation and is now a military-only resort (at very reasonable prices). SoG did a major expansion recently, and during the expansion Disney leased the North Garden Wing of the Contemporary to the military folks, and all of the folks with SoG reservations stayed in the North wing. (We lucked into this ourselves, what a great deal!).

 

[jdg345]

Shades of Green, the former Disney Golf Resort (located near the Poly between the Magnolia and Palm golf courses), which years ago was long-term leased by Disney to military recreation and is now a military-only resort (at very reasonable prices). SoG did a major expansion recently, and during the expansion Disney leased the North Garden Wing of the Contemporary to the military folks, and all of the folks with SoG reservations stayed in the North wing. (We lucked into this ourselves, what a great deal!).

Sweet! Thanks!

 

[drakethib]

Anyone who thinks DVC saves every member money is nuts.

As an owner I can say that while I have saved on the room charges, that leaves more money to be spent elsewhere on the parks. We can now "afford" to buy more junk "souvenirs" since our "room is paid for"

We go much more often now that we are members. We now bring extended family members and such.

DVC has in essence has allowed to Mouse to get more of my money then before I was a member.

So yes as Tkraz (I think that was the name) said, cash resorts ressies may have gone down since DVC, but I will never believe for one second that the Mouse is getting the money back some other way.

 

[SoCalKDG]

100,000 members does seem like a lot ... isn't the average internest something like 300 points? So that's, 30,000,000 ... times the dues of roughly $4 ... $120 Million in annual revenues that continues to grow just seems like a wise investment ... especially considering these are dues only ... forget the capital outlay.

Those dues aren't revenue for Disney. That money pays for repairs, cleaning, services, etc. and isn't actually run by Disney at all.

Now that 100,000 members really means 300K-500K thousand people visiting each year with approx. 2-3 million park visits per year.

 

[jdg345]

Those dues aren't revenue for Disney. That money pays for repairs, cleaning, services, etc. and isn't actually run by Disney at all.

Now that 100,000 members really means 300K-500K thousand people visiting each year with approx. 2-3 million park visits per year.

I understand where you're coming from ... but ... do repairs/cleaning/etc really amount to $120+ million per year? I'd think that any overhead goes into an investment fund of sorts -- but it's gravy. I believe my dues get paid to DVD, no?

Even then though, that means that property maintenance does not come out of Disney's bottom line. So the capital expense is resolved by the buy-in, maintenance by the dues ... so they really have no costs associated with DVC at the end of the day. And, like you said, they look towards the 2-3 million park vists plus food plus souvenirs etc etc ...

 

[Another Voice]

Those dues aren't revenue for Disney. That money pays for repairs, cleaning, services, etc. and isn't actually run by Disney at all.

What company provides all that maintenance, cleaning, etc. services? I don't ever remember seeing a Molly Maid truck pull up in front of Old Key West.

And don't think for a moment that Disney doesn't include a nice profit margin on all the "services" that provide to the DVC.

 

[Horace Horsecollar]

What company provides all that maintenance, cleaning, etc. services? I don't ever remember seeing a Molly Maid truck pull up in front of Old Key West.

And don't think for a moment that Disney doesn't include a nice profit margin on all the "services" that provide to the DVC.

True.

In fact, the profit margin is not hidden. The "management fee" is right there in the budget. It's about 2%. (And before anyone says, "but the management fee pays for Disney's administration of the DVC resort," allow me to point out that a different budget line, "administration," pays the administrative costs.) 2% may not sound like much, but that's a guaranteed profit in good times and bad. Many corporations would be thrilled if they could net 2% year after year. And remember, that's a profit, not a margin from which costs need to be subtracted.

Also, each DVC budget includes funds for transportation, various service districts, RCID, and even overall WDW management. Yes, it's supposed to represent only the costs attributable to each DVC resort, but it still means that these entities have more cash to work with — and that Disney's own funding to those entities may be lower as a result.

Other timeshare companies like Marriott are thrilled to make money from selling timeshares and from the ongoing management fee — despite high land costs and high marketing costs. Disney has land that they bought 40 years ago for next to nothing. And Disney is able to sell "points" without having to give away expensive premiums just to get people to listen to the pitch.

Finally — and this is the best part of all for Disney — DVC encourages guests to visit much more often than they would have without DVC. Sure there are some DVCers who previously stayed on site for two weeks every year in a deluxe. But I'm sure there are far more who used to visit only for a few days, only every few years, and perhaps even off-site. And those DVCers buy admissions, meals, and merchandise every time they visit.

 

[Sarangel]

And, just to bring in the long-term, don't forget that after all this guaranteed profit, Disney gets the beautifully maintained buildings. What they'll do with them then is anyone's guess (mine is that they'll start the whole thing over agin - talk about built in profit!).

 

[SoCalKDG]

True.

In fact, the profit margin is not hidden. The "management fee" is right there in the budget. It's about 2%. (And before anyone says, "but the management fee pays for Disney's administration of the DVC resort," allow me to point out that a different budget line, "administration," pays the administrative costs.) 2% may not sound like much, but that's a guaranteed profit in good times and bad. Many corporations would be thrilled if they could net 2% year after year. And remember, that's a profit, not a margin from which costs need to be subtracted.

Other timeshare companies like Marriott are thrilled to make money from selling timeshares and from the ongoing management fee — despite high land costs and high marketing costs. Disney has land that they bought 40 years ago for next to nothing. And Disney is able to sell "points" without having to give away expensive premiums just to get people to listen to the pitch.

Finally — and this is the best part of all for Disney — DVC encourages guests to visit much more often than they would have without DVC. Sure there are some DVCers who previously stayed on site for two weeks every year in a deluxe. But I'm sure there are far more who used to visit only for a few days, only every few years, and perhaps even off-site. And those DVCers buy admissions, meals, and merchandise every time they visit.

2% of 120,000,000 iS only 2.4 million, which represents less than one day out of the year of their hotel rooms being filled. Additionally your assuming that its all profit thus Disney doesn't have a single person doing anything for that management fee(at least I think your assuming . I'd assume(now its me) that they have to show what those fees are for).

Its, as you mentioned, the fact they get guarenteed guests every year that makes Disney's Timeshare more profitable as opposed to Marriott. Disney is the tourist attraction while Marriott is just a place to stay while visiting a tourist attraction.

It will be interesting to see what Disney charges for points if they decide to allow DVC owners a chance to renew after 35+ years.

 

[Horace Horsecollar]

2% of 120,000,000 iS only 2.4 million, which represents less than one day out of the year of their hotel rooms being filled. Additionally your assuming that its all profit thus Disney doesn't have a single person doing anything for that management fee(at least I think your assuming . I'd assume(now its me) that they have to show what those fees are for).

I'm not sure I agree with the number of 120 million. Also, it's meaningless to compare a fee that goes to the bottom line to gross revenue that hotels generate in one day; a meaningful comparison would be to the net profit that hotels generate.

Property management budgets have all sorts of lines to cover the cost of maintenance, cleaning, security, other labor, reserves, taxes, and all other actual costs — anything with "a single person doing anything." That's true whether you're talking about Disney Vacation Club Management Corp. (DVCMC) or any other property management company — not just timeshare management companies, but also companies that manage office buildings and residential condominiums.

In addition, property management companies charge a management fee. That's their profit. That why there are companies in the property management business. Such companies don't just exist to break even. DVCMC is no exception. DVCMC is a subsidiary of Disney. I don't begrudge DVCMC (and thus Disney) their annual profit for managing the DVC resorts.

The fee is clearly explained in the budget as being contractually due to DVCMC "under the Agreement." (I have to admit that I'm not sure of the percentage; a few years ago I think it was around 2%.)

People who claim that Disney makes no profit at all from DVC member dues are mistaken.

 

[jaysue]

I'm with you DVC Jen

That is exactly what happened to us. We stayed at BCV last year because we wanted some privacy from our DS4. And until this year (with AS suites)the only place we could get a seperate bedroom was at a DVC resort.

Well that did it! We made a special trip over Memorial day just to buy. If you go on a regular basis (at least every 2 years) it just make sense.

Yep, WDW hooked DW with the DVC rooms 1BR and larger - having laundry facilities in the room when you have young kids is just a huge huge plus

Cheers
jaysue

 

[daannzzz]

Have you noticed that after Old Key West each time they build a new DVC resort the square footage of the units gets lower and lower?

 

[jdg345]

2% of 120,000,000 iS only 2.4 million, which represents less than one day out of the year of their hotel rooms being filled. Additionally your assuming that its all profit thus Disney doesn't have a single person doing anything for that management fee(at least I think your assuming . I'd assume(now its me) that they have to show what those fees are for).

Its, as you mentioned, the fact they get guarenteed guests every year that makes Disney's Timeshare more profitable as opposed to Marriott. Disney is the tourist attraction while Marriott is just a place to stay while visiting a tourist attraction.

It will be interesting to see what Disney charges for points if they decide to allow DVC owners a chance to renew after 35+ years.

I dunno if they'll go for renewal ... my guess is they'll start to bulldoze the older resorts in lieu of newer stuff ... perhaps give some sort of discount to an upgrade or something ... I mean, these places will be 50 years old by then.

 

[jdg345]

Have you noticed that after Old Key West each time they build a new DVC resort the square footage of the units gets lower and lower?

Actually, I think OKW is 20% larger than everyone else ... and everyone else is in the same ballbark. Disney learned a lot from OKW -- it was their 'test resort'. They learned that they dont have to give away free park passes to sell it. They learned that the rooms don't have to be as big. And while 20% smaller isn't necessarily noticeable room to room (with the way things are laid out), it's huge in the grand scheme. For example, let's assume OKW has 500 rooms (to make the math easy). That means that any resort they make using the same overall area would now have 600 units available for sale. Another way to look at it is if OKW pooled 1,000,000 points, this creates an additional 200,000 points in the same sized pool. That's about $20 million at today's point costs.

Disney is doing what every good business does ... they're trying to maximize their profits by figuring out how little they have to give DVC members while still enticing the masses to buy in.

 

[raidermatt]

Disney is doing what every good business does ... they're trying to maximize their profits by figuring out how little they have to give DVC members while still enticing the masses to buy in.

Without getting into the specifics of what Disney is doing, its important to note that not every good business looks for that minimal point. Some believe that if they provide a certain value, regardless of what they can get away with, they will do better in the long term. Ceratinly Disney falls into that category to a certain extent. The question is where they fall on that continuum, and in which direction they are moving.

DVC is still a relatively young business. As has been mentioned, its a different situation than most other timeshares in that Disney is both the timeshare and the destination. Its full impact on the resort as it grows is an unknown. Likewise, how it should be managed is not clearcut.

But in general, its usually a good idea to maintain your philosophy in all areas of your business. If that's not practical for a given business line, you need to ask yourself if you should be in that line in the first place.

 

[mwehttam]

Disney is doing what every good business does ... they're trying to maximize their profits by figuring out how little they have to give DVC members while still enticing the masses to buy in.

I figure you wrote this with tongue in cheek (hence the ) but Disney/DVD/DVC gives more then they need to get people to buy. I realize that in the past they gave away free AP's but that was also when it was just one or two resorts and not as many members as there are today. However the do now give many discounts (yes, they can go away at any moment) including a substantial discount on AP's. Now I know that the skeptical ones here would say that is to get members to come more then once a year but you could counter that many members already did this before the discount.

My point, as I attempt to halt my rambling, is that Disney or actually DVD/DVC, could offer alot less and still get people joining without any problems.

-Matthew

 

[tjkraz]

The fee is clearly explained in the budget as being contractually due to DVCMC "under the Agreement." (I have to admit that I'm not sure of the percentage; a few years ago I think it was around 2%.)

Actually it's around 12% of the resort budget.

In 2006, OKW has an operating budget of $23.6 million. Of that, the Management Fee is $2.4 million. I believe DVC will clear about $10 million in profit on timeshare management alone in 2006.

 

[jaysue]

I figure you wrote this with tongue in cheek (hence the ) but Disney/DVD/DVC gives more then they need to get people to buy. I realize that in the past they gave away free AP's but that was also when it was just one or two resorts and not as many members as there are today. However the do now give many discounts (yes, they can go away at any moment) including a substantial discount on AP's. Now I know that the skeptical ones here would say that is to get members to come more then once a year but you could counter that many members already did this before the discount.

My point, as I attempt to halt my rambling, is that Disney or actually DVD/DVC, could offer alot less and still get people joining without any problems.

-Matthew

I think they are giving the AP discounts to get the members into the parks more often on their trips in order to increase their share of the members vacation wallet - all makes good business sense - I am sure they have some amazing statistics on spend and park access etc. pre and post AP and PAP discount offers

As a member, after a couple of trips we had started to switch to X day tickets and then out came the AP and PAP discounts which economically moved us back into that ticket choice

Cheers
jaysue