Is it reasonable to expect other conversions?

[Bjaiken77]

One of the major discussions surrounding VGF2 is the easy cash grab with the conversion. If it’s so easy, cheap, and lucrative, and Disney is looking for a quick infusion of cash, is it fair to possibly anticipate more conversions to DVC? It makes sense, right?

 

[Brett Wyman]

One of the major discussions surrounding VGF2 is the easy cash grab with the conversion. If it’s so easy, cheap, and lucrative, and Disney is looking for a quick infusion of cash, is it fair to possibly anticipate more conversions to DVC? It makes sense, right?

Oh yes. If it makes more money, more consistently than cash rooms, you can guarantee it. But wheres left? CR Garden Wing? Part of Yacht Club?

 

[_auroraborealis_]

One of the major discussions surrounding VGF2 is the easy cash grab with the conversion. If it’s so easy, cheap, and lucrative, and Disney is looking for a quick infusion of cash, is it fair to possibly anticipate more conversions to DVC? It makes sense, right?

Possibly. I think there is not a lot of low hanging fruit in that sense, past VGF.

YC/BC/BWI are essential to their convention business at the Boardwalk Convention Center, and converting units there (and adding them to a 2042 association) would be an admission that the convention business is dead, which is premature. The 2042 association also represents an issue.

Poly has a space they could do a tower add in, but they would have to find a way to add pool capacity as well. So that is a big construction project.

Contemporary Garden Wing or the Contemporary Convention Center have been teardown prospects for years. But again, big construction projects.

The PO resorts would be a pretty significant project to turn into deluxe units. Not sure it could be a straight conversion - the outside corridors and lack of balconies are problematic.

They could take the rest of Wilderness Lodge and make it a DVC-only resort. They could convert more of Jambo. But those are the only straight conversions that seem possible/profitable/sensible in Orlando. Everything else is a real development project.

 

[davidl81]

Oh yes. If it makes more money, more consistently than cash rooms, you can guarantee it. But wheres left? CR Garden Wing? Part of Yacht Club?

Yacht Club I can see, BWI into a villa (not sure if they would do that with BWV expiring in 2042, but they can figure it out), CR Garden wing IMO would be torn down and BLT2 would go there. Of course Poly can make an easy conversion if they want to add room rooms.
It all depends on how Disney forecast their deluxe resorts booking over the mid to long term. At some point though just the shear amount of DVC owners has to hurt deluxe resort bookings. That’s a lot of Disney fanatics who are not booking cash rooms.

 

[Nabas]

Where could they do more conversions?

Another Grand Floridian Building? Yes.

Another Polynesian Building? Yes.

Contemporary? The ground under the remaining Garden Wing reportedly isn't stable enough for another BLT-like Tower. I suppose they could simply turn one of the Tower floors into a DVC, similar to what happened at Animal Kingdom Lodge.

Beach Club? I don't see why. Occupancy there is very good.

Yacht Club? Several say this is the next one, but the land is not there and WDW does a pretty good business with conventions. Others might think differently but I don't see this changing.

Boardwalk? DVC rooms (383) already outnumber hotel rooms (372). Any more and you might as well convert the entire resort to DVC.

Wilderness Lodge? A similar situation here. Any more and you might as well convert the entire resort to DVC.

Animal Kingdom Lodge? This is the one Deluxe Resort with no announced opening date. Presumably, Disney is in no hurry to reopen this. In terms of number of rooms, this is the largest Deluxe Resort (972). Once the Grand Floridian loses 200 more rooms, AKL is going to have about 300 more rooms than the next largest Deluxe Resort. Is it time to convert another floor to DVC?

 

[Bjaiken77]

It might be good time to decide what they are going to do with some of these 2042 resorts. Are they going to extend them? If so, that’s be a big cash influx without building a thing.

 

[_auroraborealis_]

Most conventions at the Boardwalk center require a minimum of 750-1000 rooms in the room block. That is why I say BWI, YC and BC are not likely unless Disney is approaching the convention center as a dead business.

 

[Nabas]

Most conventions at the Boardwalk center require a minimum of 750-1000 rooms in the room block. That is why I say BWI, YC and BC are not likely unless Disney is approaching the convention center as a dead business.

Don't forget that the Contemporary also has a convention hall, although if I'm an adult at a convention, I'd much prefer being within walking distance of the World Showcase.

It never occurred to me before today but Animal Kingdom Lodge has so many hotel rooms for a Deluxe Resort. Maybe it does make sense to convert another floor there.

 

[_auroraborealis_]

Don't forget that the Contemporary also has a convention hall, although if I'm an adult at a convention, I'd much prefer being within walking distance of the World Showcase.

It never occurred to me before today but Animal Kingdom Lodge has so many hotel rooms for a Deluxe Resort. Maybe it does make sense to convert another floor there.

They just did a major renovation of the Boardwalk center. Contemporary is badly outdated and is definitely second tier. It is why I keep pointing at it as prime redevelopment land. They either need to seriously invest in the CC at Contemporary, or get rid of it. The updates at Boardwalk strongly suggest the latter, especially with the additional space at Swolphin, and the new Marriott spaces being built.

Based on the work done, Boardwalk is the target for large/premier conventions, and CSR is for the mid level stuff. Small meetings will continue to use the supplemental spaces at YC and GF. (The small spaces at YC are traditionally high demand for CME stuff.)

 

[MomOTwins]

I could see them gutting the rooms at CR garden wing for a DVC. Also one more GF building takeover.

What about that new Epcot hotel they are supposedly building? A couple floors of that would sell like hotcakes for Epcot festivals.

I know it is a moderate, but Riverside is a such a huge resort and doesn’t really get used by the conference crowd...Gut a couple Mansion buildings to install some suites or at least larger studios and voila—“The Manors” a Resort Villa DVC property.

 

[jlb727]

I would buy Riverside DVC points in a heartbeat. I’d probably overpay for them too.

 

[sethschroeder]

Wilderness Lodge? A similar situation here. Any more and you might as well convert the entire resort to DVC.

I think this is #2 on the list

Animal Kingdom Lodge? This is the one Deluxe Resort with no announced opening date.

I think this is #1 on the list because of age of the resort. You need to flip it right after VGF otherwise honestly the resort will be too "old" to get a good price out of. Could they make a AKV 2.0 though in tandem with a skyliner being built in 10 years time maybe? Easy way to foot DVC with a larger portion of the cost of building the Skyliner to AK from the HS/Epcot area.

I know it is a moderate, but Riverside is a such a huge resort

This and CBR are the two I was thinking of. I could see them flipping the room between the two skyliner stations after RIV is sold off as the new Epcot area conversion.

I also think they could look to go super cheap and convert something like POP or AOA. Sell it with low point costs per night that is under the AKV Value cost.

 

[DonMacGregor]

I would buy Riverside DVC points in a heartbeat. I’d probably overpay for them too.

Man, I love that resort.

 

[Nabas]

Disney will never convert a Moderate Resort, and I doubt Disney will ever build on another Moderate Resort site.

Starting with conversions, Moderate Resort rooms are too small and lack balconies. Creating a new class of “Moderate DVCs” hurts the brand and results in future pricing turmoil.

Looking at construction, CBR lost buildings because it was the least popular (i.e. lowest room rates) and was on the Skyliner, Disney’s push to create a modern version of the Monorail.

CSR just got an expansion (GDT), POFQ is too small, and POR (along with the other two Moderates) is far from the Skyliner. None of the three remaining Moderate Resorts are positioned for a Riviera treatment.

We’ll see some version of Reflections resurrected before any Moderate Resort DVC.

 

[_auroraborealis_]

What about that new Epcot hotel they are supposedly building? A couple floors of

That construction is a Marriott.

 

[Nabas]

That construction is a Marriott.

Assuming he means the Swan Reserve, and not the often rumored (but never built) "Epcot hotel" with a direct entrance to Epcot, similar to the Grand Californian.

 

[kinkin201]

I’m all about adding more studios to the inventory but my biggest question resolves around how they will sell more direct contracts or not. We know there is a demand based on the resale prices and how quickly they go. Additionally, once they are converted how quickly do we think the inventory will be able to be booked, does it have to be declared?

 

[_auroraborealis_]

I’m all about adding more studios to the inventory but my biggest question resolves around how they will sell more direct contracts or not. We know there is a demand based on the resale prices and how quickly they go. Additionally, once they are converted how quickly do we think the inventory will be able to be booked, does it have to be declared?

Yes, it will have to be declared.

 

[havoc315]

One of the major discussions surrounding VGF2 is the easy cash grab with the conversion. If it’s so easy, cheap, and lucrative, and Disney is looking for a quick infusion of cash, is it fair to possibly anticipate more conversions to DVC? It makes sense, right?

Not like VGF2 is the first conversion..

Most DVC in the last 10 years has been conversion.
Couple cases of demolition/conversion: Garden building of Contemporary becoming BLT. Demolition of part of CBR to become Riviera.
Then lots of pure conversion:
Wilderness Lodge --> CCV
Polynesian Longhouses converted to DVC
Jambo house rooms converted to AKV DVC
Now, GFV2

Basically, when they have trouble filling a resort at a high enough rack rate, they consider cutting the number of cash rooms by converting them to DVC.
If they are filling the deluxe rooms with high paying cash guests, no reason to convert.

So most likely conversions in the next 5 years:
More Jambo house rooms converted to DVC -- They have trouble with AKL demand, which is why it's the only deluxe resort that is still closed.
Yacht Club -- Doesn't fill as quickly as the sister Beach Club. More dependent on convention travel, which could be slow to return after covid. And it's now the only deluxe resort without a DVC sister. A small Yacht Club DVC would be super popular.

Conversions are also a cheap way to continuously sell DVC until 2042, at which point you can re-start many of the older properties as new again.
Potential timeline:
- Riviera and Grand Floridian on sale through 2025ish
- AKL converted room points go on sale 2024-2026ish, closing around 2027-2028
- Yacht Club DVC goes on sale between 2026-2028, on sale through 2030-2032
-Reflections or whatever replaces it finally gets moving... Going on sale around 2031, closing sales around 2035
...... Now not long until they can start re-selling Boardwalk, Beach Club, huge chunk of OKW, and Boulder Ridge. Not to mention Vero Beach and Hilton head. I don't expect all those properties to immediately start with new contracts in 2042. Likely, new contracts will be immediately available at a couple of them (like OKW). While I'd expect a couple properties to go through massive multi-year renovations.

 

[havoc315]

I also think they could look to go super cheap and convert something like POP or AOA. Sell it with low point costs per night that is under the AKV Value cost.

I could totally see them doing that, but it would require re-thinking how you brand and market DVC, which for years have been marketed as purchasing into "deluxe resort."
Looking at it more like, "save by pre-paying your vacations" -- Mod/Value DVC would make a lot of sense. Very low point charts. Points themselves are similarly priced as other DVC, and with strict re-sale restrictions, so they don't become a cheap source of sleep-around points.
With economy studios going for 5-10 points per night, you sell a lot of 50-100 point contracts. Don't even give blue card perks necessarily. So give budget guests a way to buy into DVC direct from Disney for under $10,000.

Ironically, I suspect you'd get lots of regular DVC owners jumping at the chance to use their points to book cheap rooms at the value/mod DVCs, for the same reason standard studios are the fastest booking category.