More WL DVC?

[Andrew015]

Many folks on here – most of whom are either non-DVC owners or simply folks who dislike DVC for one reason or another – often bring up the argument or viewpoint that “DVC has been Disney’s downfall, because these people are “captive” and are locked into return trips to WDW, so Disney doesn’t feel the need to reinvest in the parks as a result of having these people “captive”.” While some of this may be true to an extent, I am going to share a contrasting viewpoint. And perhaps this may be an unpopular viewpoint, even amongst some or many DVC owners, but I’m going to share it anyways.

When someone purchases a timeshare on the beach in Ft. Lauderdale, no one expects that the beach, scenery or surrounding areas are going to change much from year to year. In fact, most people would probably prefer that the surroundings DO NOT change, as they purchased this timeshare for a reason – because they liked the location and its surroundings “as-is”. In fact, they liked it enough to purchase a real-estate interest so that they would be able to come back and enjoy the same beach, scenery and surroundings over and over again, year after year. For these people, the only changes that would be welcome are maintenance / necessary upkeep to the grounds and facilities, and perhaps a “refresh” every so many years as required.

When one makes the commitment to purchase an interest in DVC, there is absolutely no promise, hope or guarantee from Disney stating that they will make ANY effort to change the product offering in any way, shape or form, aside from keeping the grounds and facilities “current” (courtesy of your annual maintenance fees). I, for one, purchased my interest in VWL because I knew, much like the person who buys the ocean front Ft. Lauderdale timeshare, that I liked the product offering enough “as-is” to enjoy coming back year-after year, even if no changes were made to the product offering (i.e. new rides / attractions). In fact, I am one that usually despises change. In an instant, I would gladly take back Horizons and Journey into Imagination over the existing offerings, but that’s for another thread. For me, I didn’t purchase DVC with the understanding that things would remain the same year-in and year-out. Quite the opposite, actually. Rather, I knew that Disney would “tinker” with the product mix, and by tinker, I mean change things (usually, not for the better), but I purchased anyways.

Many folks on these boards like to make the comparison to Universal – “Look at how much investment Universal has done, and they’re really taking it to Disney”. Sure, by percentage, Universal had a great year thanks to their investment in Harry Potter. But with a smaller park such as Universal, it’s not quite as difficult to move the needle from a percentage standpoint. In comparison, Disney also had a “great” year in 2013 – even with minimal change / investment by comparison. Sure, the percentage increases weren’t anywhere near as significant as what Universal saw, but in fact, Disney actually had 33% more new guests enter their Orlando gates as did Universal for 2013, despite the lack of “new product offering” (not too many people are talking about this statistic, which I feel is quite impressive and very telling).

What can one take away from this? My thought is that perhaps Disney brass isn’t as “dumb” as some make them out to be, and that maybe they understand that the core of their customers - at the very least, the DVC portion (which is the primary focus right now) likes the product “as-is”, so why make significant changes? Forget the financial benefits that Disney reaps from DVC - it's a great indicator of strategic direction. If enough people are willing to buy in and commit to the product offering long-term as it sits today, why fix what isn't broken? Sure, this isn’t a one-size fits all philosophy, hence why we see some development here and there to try and stimulate growth and entice new guests. But DVC is a great indicator of "how are we doing". Evidently, the indicator is telling Disney "Everything is good", as DVC continues to be a great sell for them, and more importantly, attendance and profitability continues to rise.

Again, maybe I’m in the minority with my views, but like it or not, Disney is making money hand-over-fist with their current philosophy of minimal investment (comparatively speaking) AND by pushing nothing but DVC – which tells me that maybe the thought process of Disney brass goes something like this: "We're doing SOMETHING right, so let's keep doing whatever it is that we are doing" . I suspect that this will continue to be the philosophy until DVC reaches a saturation point, at which point, we will also see attendance and profitability numbers hit the proverbial wall. If and when this happens, I suspect that you will see Disney scurry into "investment mode", much like we saw from Universal the past few years. At that point, Disney will actually have to deliver on the innovation and creativity that the parks were once known for. Until then, it's business as usual.

Maybe you'll think I'm crazy, but this is my contrasting take on the going's on at LBV.

 

[tjkraz]

I understand what you are saying, but the number they bandied about was 5-10% of total gate traffic is DVC. There was general frustration that DVC is such a small percentage of total gate, that the execs don't care what they think anyway. Fair enough, but they can't have it both ways: 5-10% of total traffic guaranteed is enough to convince them to coast on P&R, or it's not enough to merit attention:

Which is it?

My take is that it's a wash. The top corp brass does care about what DVC members think because word of mouth is a powerful sales driver. But. That business is locked in.

I just don't see how this translates to DVC ruining the park experience.

What I think: the naysayers would love to see P&R development move as fast as DVC development, so DVC becomes a scapegoat for all things not perfect in the parks. As you say, dollars spent in the parks have no relationship to those spent on DVC. Equating their frustration with the speed of park development to the speed of DVC development is intellectually lazy, or at least too convenient, if you ask me.

Well, your question was why DVC members seem to be vilified in certain circles and I stand by my answer. Walt Disney World is frequently compared to Disneyland and the perception is that DL receives more frequent (and often more elaborate) investment because they are so heavily reliant on SoCal residents who must be wooed on a continuing basis.

WDW, on the other hand, has a much greater percentage of "occasional guests" (many coming in from outside the US) and a dramatically higher DVC population. (DVC percent at DL is practically non-existent.) Among the armchair theme park executives, the WDW combination requires less investment because the occasional guests aren't sensitive to change and DVC owners are practically obligated to come regardless.

As for the percentages, the numbers you cited are low. 10% is a bare minimum and 15% neighborhood is probably more typical. During slower periods, it can go much higher as a percent since they struggle to bring in cash guests.

That's 10-15% higher than it would be without DVC. And execs would like nothing more than to grow it's guaranteed business to 20%...25%...etc.

Those numbers are increasingly important to Disney, particularly when you consider the fixed costs involved in operating the parks. It costs Disney about the same to operate a restaurant regardless of whether they fill 40% of the tables or 80%.

DVC revenues are a nice little footnote in Disney financials, but rarely is it anything to crow about. What's more important are the decades of ancillary revenue attached to every single contract sold.

 

[sleepydog25]

Many folks on here – most of whom are either non-DVC owners or simply folks who dislike DVC for one reason or another – often bring up the argument or viewpoint that “DVC has been Disney’s downfall, because these people are “captive” and are locked into return trips to WDW, so Disney doesn’t feel the need to reinvest in the parks as a result of having these people “captive”.” While some of this may be true to an extent, I am going to share a contrasting viewpoint. And perhaps this may be an unpopular viewpoint, even amongst some or many DVC owners, but I’m going to share it anyways.

When someone purchases a timeshare on the beach in Ft. Lauderdale, no one expects that the beach, scenery or surrounding areas are going to change much from year to year. In fact, most people would probably prefer that the surroundings DO NOT change, as they purchased this timeshare for a reason – because they liked the location and its surroundings “as-is”. In fact, they liked it enough to purchase a real-estate interest so that they would be able to come back and enjoy the same beach, scenery and surroundings over and over again, year after year. For these people, the only changes that would be welcome are maintenance / necessary upkeep to the grounds and facilities, and perhaps a “refresh” every so many years as required.

When one makes the commitment to purchase an interest in DVC, there is absolutely no promise, hope or guarantee from Disney stating that they will make ANY effort to change the product offering in any way, shape or form, aside from keeping the grounds and facilities “current” (courtesy of your annual maintenance fees). I, for one, purchased my interest in VWL because I knew, much like the person who buys the ocean front Ft. Lauderdale timeshare, that I liked the product offering enough “as-is” to enjoy coming back year-after year, even if no changes were made to the product offering (i.e. new rides / attractions). In fact, I am one that usually despises change. In an instant, I would gladly take back Horizons and Journey into Imagination over the existing offerings, but that’s for another thread. For me, I didn’t purchase DVC with the understanding that things would remain the same year-in and year-out. Quite the opposite, actually. Rather, I knew that Disney would “tinker” with the product mix, and by tinker, I mean change things (usually, not for the better), but I purchased anyways.

Many folks on these boards like to make the comparison to Universal – “Look at how much investment Universal has done, and they’re really taking it to Disney”. Sure, by percentage, Universal had a great year thanks to their investment in Harry Potter. But with a smaller park such as Universal, it’s not quite as difficult to move the needle from a percentage standpoint. In comparison, Disney also had a “great” year in 2013 – even with minimal change / investment by comparison. Sure, the percentage increases weren’t anywhere near as significant as what Universal saw, but in fact, Disney actually had 33% more new guests enter their Orlando gates as did Universal for 2013, despite the lack of “new product offering” (not too many people are talking about this statistic, which I feel is quite impressive and very telling).

What can one take away from this? My thought is that perhaps Disney brass isn’t as “dumb” as some make them out to be, and that maybe they understand that the core of their customers - at the very least, the DVC portion (which is the primary focus right now) likes the product “as-is”, so why make significant changes? Forget the financial benefits that Disney reaps from DVC - it's a great indicator of strategic direction. If enough people are willing to buy in and commit to the product offering long-term as it sits today, why fix what isn't broken? Sure, this isn’t a one-size fits all philosophy, hence why we see some development here and there to try and stimulate growth and entice new guests. But DVC is a great indicator of "how are we doing". Evidently, the indicator is telling Disney "Everything is good", as DVC continues to be a great sell for them, and more importantly, attendance and profitability continues to rise.

Again, maybe I’m in the minority with my views, but like it or not, Disney is making money hand-over-fist with their current philosophy of minimal investment (comparatively speaking) AND by pushing nothing but DVC – which tells me that maybe the thought process of Disney brass goes something like this: "We're doing SOMETHING right, so let's keep doing whatever it is that we are doing" . I suspect that this will continue to be the philosophy until DVC reaches a saturation point, at which point, we will also see attendance and profitability numbers hit the proverbial wall. If and when this happens, I suspect that you will see Disney scurry into "investment mode", much like we saw from Universal the past few years. At that point, Disney will actually have to deliver on the innovation and creativity that the parks were once known for. Until then, it's business as usual.

Maybe you'll think I'm crazy, but this is my contrasting take on the going's on at LBV.

Not a totally authoritative article, but it's a fun read: http://www.fool.com/investing/gener...to-none.aspx?source=isesitlnk0000001&mrr=0.33

 

[Andrew015]

Not a totally authoritative article, but it's a fun read: http://www.fool.com/investing/gener...to-none.aspx?source=isesitlnk0000001&mrr=0.33

Interesting read, and even more interesting that an article can be written comparing Disney to other theme parks without even mentioning US.

 

[chipdale74]

I would love if they made more wl villas. That's our favorite place to stay. Sometimes it's hard to get in there since it's not our home resort

 

[Reddog1134]

My thoughts precisely.

Anyone want to bet a quarter that that OP's "long time CM" role is as a bus driver? Or maybe a "transportation leader." Certainly seems like the kind of rumor one occasionally hears on the evening bus back to OKW.

I'm not much of a gambler, but I would be willing to lay a pretty large wager that the prediction and rumor of that thread is simply false. After that, it's basically a lot of people whining about DVC. Probably wishing they had bought in, back when it cost 1/3 of current direct prices...

The OP of that thread has a pretty good track record when it comes to rumors. Is is possible that this may never happen? Yes. But I don't doubt that his information is CURRENTLY correct.

That being said, he's very condescending and elitist. He doesn't seem to value a conflicting opinion and he's very fond of calling people "fanbois" and "media W****s" (rhymes with "bores").

 

[sleepydog25]

Interesting read, and even more interesting that an article can be written comparing Disney to other theme parks without even mentioning US.

I thought it odd, too, Andrew.

 

[bmcd1998]

Moved

 

[disneynutz]

Glad to see my original post has sparked some healthy debate. I have certainly learned a lot reading all the speculation about where DVC goes from here, and some things that separate BCV and BWV.

I am a Certified Financial Planner in Charlotte, and when I decided to make an offer on some BLT points (currently in ROFR) I made a spreadsheet that I believe helped me make a realistic financial decision about if/which resort to purchase. It does not, or course, account for preference and emotional attachment of any kind.

Not sure how to share that spreadsheet on here, but if anybody is interested just let me know. I can email it to you.

If your spreadsheet doesn't include the emotional element than you might as well not use it.

Disney is all emotion, if it wasn't the place would be empty and we would all have a lot more money.

Bill

 

[twinklebug]

If your spreadsheet doesn't include the emotional element than you might as well not use it.

Disney is all emotion, if it wasn't the place would be empty and we would all have a lot more money.

Bill

Agreed, however, if it weren't for Disney's DVC I'm sure I'd have a beach house somewhere. Can't say for sure I'd have a lot more money, most likely would have less.

I'm also at a point where I can/want to buy more points. Weighing in the locations, dues & remaining time on the contracts to cost and 11 month window. VWL is on the list, just don't like the price/pt being asked alongside the end date of the contracts. Wish they'd extend them like they did for OKW, but not looking for expiration dates so far out that the contract has to be mentioned on the will.

 

[disBOBney]

In regard of the OP asking about the idea of changing hotel rooms to DVC, over all I like the idea regardless if at WL or other hotels. There has been a big discussion of conversions to concierge or club level rooms or value rooms. Those are not only welcomed, but probably needed. However,, I would be most excited by adding simply a new category of room as they did at Aulani, Hotel Room. The hotel room is fewer points than a studio, and as a single person who likes to bring a variety of guests (family or friends) it would be nice to have the option to have two beds instead of a bed and pull out sofa. Being a DVC owner has changed my traveling habits considerably and I do relish more time at the resorts but most of the time my guests are Disney newbies and want to be in the park all day and are only looking for a place to get a good night's sleep. So having the option to have two beds instead of someone getting stuck on the sofa would be a welcome relief. Yes, I know that generally hotel rooms are available through the Disney collection, but through that medium they are nearly as expensive as a 1 br villa, and only those who bought their points direct can use that option to begin with.
So my vote is yes, convert some more hotel rooms to DVC, and don't turn them into studios or club, etc.

 

[disBOBney]

So my vote is yes, convert some more hotel rooms to DVC, and don't turn them into studios or club, etc.

BTW this not only is cost effective, as there is really only an administrative change, but it has the added benefit of freeing up more studio and 2 bedroom villas.

 

[bwvBound]

... I am going to share a contrasting viewpoint. And perhaps this may be an unpopular viewpoint, even amongst some or many DVC owners, but I’m going to share it anyways.

Thanks for your thoughts -- very interesting and nicely presented perspective. I've given it some thought ... and have concluded that my expectations are different for different timeshares and/or timeshare locations.

I'll agree with the desires and intentions as put forth on behalf of the buyer of the beach property. I'd feel the same. However, I have different expectations of my major points-club (I expect growth, new locations, etc.) and different expectations of the Disney properties. It is just the way it is ...