Is DVC over-expanding?

[Dean]

I do own at OKW.

My problem as a member is only concern about decline of the resorts should DVC outbuild its capacity to care for the them should the economy fail again in the future -- personally I think there will likely be bigger economic problems in the future than what we just saw over the past 5 years.

My concern about overbuilding in general was largely triggered by the ugly Grand Floridian addition. I don't care whether it was DVC or not.

Timeshare history suggests to us that the largest risk for lack of upkeep is lack of expanding. One of the issues with resort maintenance and appearance is as a sales incentive for unsold or new resort points. Once decisions for a timeshare are made on a financial basis alone, the resorts are essentially guaranteed to decline somewhat, even at Disney.

 

[Dan Murfman]

Timeshare history suggests to us that the largest risk for lack of upkeep is lack of expanding. One of the issues with resort maintenance and appearance is as a sales incentive for unsold or new resort points. Once decisions for a timeshare are made on a financial basis alone, the resorts are essentially guaranteed to define somewhat, even at Disney.

Should define mean decline?

 

[Dean]

Should define mean decline?

Yes, darn autocorrect.

 

[lodge]

Going to be interesting as time goes on and pointflation takes over. Your two bedroom home resort points probably won't get you a studio in value season at the latest resort in 2035.

Or when your maintenance per point is going to exceed the price to rent them.

If the maintenance fees are higher than a room rental, there'd be no point to having the timeshare points. I'm sure they know this.

 

[SpaceMountain77]

My concern about overbuilding in general was largely triggered by the ugly Grand Floridian addition. I don't care whether it was DVC or not.

Personally, I am thrilled that the architectural style of VGF mirrors that of the Grand Floridian. From a thematic and stylistic perspective, I find that not all of the DVC annexes, which were inspired by their main hotels, blend as well.

Unless there is significant variation from the preproduction photos, VGF should nicely continue the GF storyline.

 

[jerseyduke]

If the maintenance fees are higher than a room rental, there'd be no point to having the timeshare points. I'm sure they know this.

Not to mention, if maintenance fees are that high, does that not also suggest the cost to maintain a room that is a cash room, will also go up? And therefore the rate for that cash room will go up?

Correct me if I am wrong, but historically haven't maintenance fees gone up at a lower percentage than rack room rates?

Also, even if they go up at the same pace, maintenance fees still go up slower, because they are not being taxed at the hotel tax rate.

 

[CarolMN]

....(snip).......Correct me if I am wrong, but historically haven't maintenance fees gone up at a lower percentage than rack room rates?

Yes, so far.

Also, even if they go up at the same pace, maintenance fees still go up slower, because they are not being taxed at the hotel tax rate.

But remember that Disney can discount the rack rates to maximize revenue. There have been times in the recent past where it definitely was less expensive to book cash through Disney than pay to rent points at "average" rental prices.

I'm personally not worried about it, but there is always some degree of risk associated with a long-term lease.

 

[jerseyduke]

But remember that Disney can discount the rack rates to maximize revenue. There have been times in the recent past where it definitely was less expensive to book cash through Disney than pay to rent points at "average" rental prices.

Oh absolutely! However, In the past 3 years, I have used the slow season discounts (DECEMBER) twice. It has gotten less each year. This year most room types are not even available! Makes me glad I bought in this year!

 

[disney54us]

Charles, you mean you never opened the shutters in the master bedroom and watched tv from the jetted tub at OKW? And I can sit down instead of standing up. OKW has GFV beat with bathroom tv.

 

[OneMoreTry]

DVC sells 100,000 - 150,000 points every month...in addition to what already changes hands on the resale market. Prospective owners would decline if DVC were not actively marketing the product, but it wouldn't take long for the number of interested buyers to exceed available resale points.

If Disney weren't actively marketing then demand/supply/price would reach a new equilibrium.

My wife and I once attended a time share presentation at Heavenly at Lake Tahoe. We actually considered buying after the presentation even though we live no where near there and prefer to ski in Colorado. In fact we had no previous plans to ever visit there again. It was such a great presentation and the place was so beautiful -- it was so convincing.

My point is that some of the market is manufactured and I'm not convinced that demand would exceed supply by that much if DVC slowed down.

I'm not trying to convince anyone that DVC should do anything different. I just hope they're not stoned on Ben Bernanke's cash while making decisions. Actually, I like the new resorts and the options to stay different places -- 7 month window notwithstanding.

 

[SpaceMountain77]

I find it surprising that villa construction has not been spaced out more over time. After the Polynesian Villas are built, I do wonder how many resorts will be built at WDW from now until 2042.

After the Polynesian Villas, there will be 9 DVC properties at WDW. Personally, I just do not see 15, 20 or 25 DVC resorts at WDW.

 

[lodge]

Maybe a Fort Wilderness DVC, but that still doesn't space well enough to get to 2042.

 

[SpaceMountain77]

Maybe a Fort Wilderness DVC, but that still doesn't space well enough to get to 2042.

After the Polynesian Villas, I believe there are three likely possibilities for WDW, which I have listed below in no particular order:

(1) BLT - South Tower
(2) Another OKW or SSR style resort somewhere on property, perhaps the rumored Californian-themed resort near Blizzard Beach
(3) Eisner's Buffalo Junction project is reimagined as DVC for the Fort Wilderness area

 

[sweetdana]

I find it surprising that villa construction has not been spaced out more over time. After the Polynesian Villas are built, I do wonder how many resorts will be built at WDW from now until 2042.

After the Polynesian Villas, there will be 9 DVC properties at WDW. Personally, I just do not see 15, 20 or 25 DVC resorts at WDW.

What about the other side if swan or even other side of BW. What about a 2nd gate the other side of MK. What about next to BB or TL? What about the FW lazy river/ river rapids pool resort/ river country? What about a 4th on the monorail? What about a 2nd tower at BL? (the shape has to be the most awkward design I cannot fathom the intention wasn't 1 more bldg. What about the other side of HS ? What about designing a 5th park with specific plans to walk from 3-4 more resorts? Sorry I see more as they sell out they will come up with new ideas. This is without being creative.

 

[Dean]

I find it surprising that villa construction has not been spaced out more over time. After the Polynesian Villas are built, I do wonder how many resorts will be built at WDW from now until 2042.

After the Polynesian Villas, there will be 9 DVC properties at WDW. Personally, I just do not see 15, 20 or 25 DVC resorts at WDW.

Does it matter? IMO it's good if they keep building and stay active and I don't see much downside to expanding at WDW. I also don't see any real issue if they're inventory of new options has hills and valleys over time. Plus one option would be to purposefully let the 2042 resorts expire to allow continued growth of new resorts. I realize there are minor issues either way but I don't see any big ones from a members perspective.

 

[SpaceMountain77]

What about the other side if swan or even other side of BW. What about a 2nd gate the other side of MK. What about next to BB or TL? What about the FW lazy river/ river rapids pool resort/ river country? What about a 4th on the monorail? What about a 2nd tower at BL? (the shape has to be the most awkward design I cannot fathom the intention wasn't 1 more bldg. What about the other side of HS ? What about designing a 5th park with specific plans to walk from 3-4 more resorts? Sorry I see more as they sell out they will come up with new ideas. This is without being creative.

This is true. One can side chair imagineer countless possibilities for the WDW resort. Maybe Dark Kingdom will be the 5th gate. Perhaps the monorail will be expanded to include several resorts along Bay Lake. Eventually, there may be a push to green light many of Eisner's Disney Decade projects, like Buffalo Junction. There are certainly many possibilities one could envision.

However, eventually, DVC will hit a development point where future development will need to grown in tandem with the overall resort. During busier seasons, the parks already reach occupancy maximums. I am quite certain that DVC and Parks & Resorts already knows how many villas can be comfortably added without negatively affecting crowd control with the existing infrastructure.

 

[SpaceMountain77]

Does it matter? IMO it's good if they keep building and stay active and I don't see much downside to expanding at WDW. I also don't see any real issue if they're inventory of new options has hills and valleys over time. Plus one option would be to purposefully let the 2042 resorts expire to allow continued growth of new resorts. I realize there are minor issues either way but I don't see any big ones from a members perspective.

Hi Dean,
From a DVC systems perspective, I, too, do not see much downside to expanding at WDW. However, if DVC continues to add a new resort to the WDW collection every 3 or so years, from now until 2042, then it seems reasonable to assume that the Parks & Resorts division would have to account for this expansion through increased entertainment, dining, and transportation.

It is not uncommon for the theme and water parks to close after reaching capacity (phase 3). It is my speculation that future DVC growth may be predicated on overall guest area enhancements and expansions.

 

[KAT4DISNEY]

Hi Dean,
From a DVC systems perspective, I, too, do not see much downside to expanding at WDW. However, if DVC continues to add a new resort to the WDW collection every 3 or so years, from now until 2042, then it seems reasonable to assume that the Parks & Resorts division would have to account for this expansion through increased entertainment, dining, and transportation.

It is not uncommon for the theme and water parks to close after reaching capacity (phase 3). It is my speculation that future DVC growth may be predicated on overall guest area enhancements and expansions.

Increased DVC may not mean increased park attendance - just a shift from offsite to onsite stays.

 

[luckyman_apd]

Increased DVC may not mean increased park attendance - just a shift from offsite to onsite stays.

I can see a south BLT being built and just incorporated into the existing BLT resort as far as points/dues/expiration date. As a BLT owner, I would love more SV rooms to stretch my points

 

[Dean]

Hi Dean,
From a DVC systems perspective, I, too, do not see much downside to expanding at WDW. However, if DVC continues to add a new resort to the WDW collection every 3 or so years, from now until 2042, then it seems reasonable to assume that the Parks & Resorts division would have to account for this expansion through increased entertainment, dining, and transportation.

It is not uncommon for the theme and water parks to close after reaching capacity (phase 3). It is my speculation that future DVC growth may be predicated on overall guest area enhancements and expansions.

Doubtful if this is the only change. Even a 500 villa resort will only add maybe another 2000 on property at a given time, a relatively small number in comparison. Even at adding that every 5 years, the additional volume at a given park or location is pretty negligible even if those additions don't delete other rooms and thus numbers. Obviously there are other factors. There are already plans that should have some affect on density (Disney Springs, DHS expansion) and I'm sure they'll continue to add as needed.