New Disney Vacation Club Resort

[Galahad]

The rate of sale is a good guage of saturation, and based on that DVC has at least a couple of more properties to go before it could possibly reach saturation.

I agree, but with respect to quality of product they are overbuilt and were years ago. DVC worked best when it was a bit smaller, IMO.

 

[bicker]

Quality of product and quantity of product are not mutually exclusive. I understand you to be saying that you feel that DVC worked better for you when it was smaller. I don't find that to be the case, for me.

 

[raidermatt]

While they don't charge as much as other deluxe resorts the hotel is often very busy and many times full. I really wonder sometimes where you get your "facts."

Why do you think they don't charge as much as they do for the other Deluxes? Do you believe that was their intent when they built it?

Are the park and lodge losing money? Nah.

Are they providing the returns the company anticipated? Nah.

Certainly they didn't cancel Beastly Kingdom and build Dinorama because of the park's overwhelming success.

Failure is relative. Its important to keep that in mind before questioning the integrity/sincerity of other posters.

$100 million doesn't seem like the lowest cost they could have come up with.

To "jolt attendance"? I think that's actually a pretty conservative estimate. What could they do for say, $50 million that could really jolt attendance? It seems that they tried to do it more cheaply with Dinorama. While its true some guests like it, its still pretty clear that it didn't significantly impact attendance. Perhaps kept it from falling, but that's it.

I see AK eventually passing DS in attendance if they don't get some new rides into DS.

Well, I can agree with that. If any park is allowed to stagnate, its attendance will eventually suffer. Look at what was happening to Epcot.

Still, in that scenario, it would be more an indictment of the management of DS than praise of the management of AK.


On DVC, I don't see its size creating any real quality issues per say. I do wonder about the long term financial impact on the resort, especially if they continue to build.

 

[Lord Fantasius]

When it comes to building more DVC resorts or even resorts in general, you really don't want to build to saturation...or to the point were there is no further demand. The only way a product retains or increases in value is its desirability by other people; if a resort just becomes one of many the market will push down the price to the lowest amount people will pay for a generic product. Even now you can roughly gauge the inherent value in DVC ownership by how much a DVC owner is willing to rent their points for. Yes, a while back they were going for $5-$6 a point, then up to $9 - $10/pt just last year, and now they seem to be around $8/pt.

Whether that's a long term trend, I don't know, but once Disney starts building DVC resorts just to fill demand without recompense, the "value" of DVC ownership will diminish unless there is added value artificially awarded to current members (discounts, dining plans, etc.). Otherwise, there would be no inducement to buy, for example, at VWL now if I knew they were going to be building three more wings of them right next to the current one; I would just wait until the cost of ownership fell into my budget and Disney would lose out on a big portion of those that buy on impulse - admittedly not everyone or possibly not the majority, but I would gather a good portion!

Honestly, I would have liked to have bought into DVC at its inception (particularly at VWL), but now it's just too pricey for what I can get out of it since I've moved farther away. Ergo, I would much prefer they start looking at value or moderate "studio" type rooms for people like us that can't spend $200+ a night on property. Currently, they are pushing that market into the seconday market of DVC point rentals since that is the only way non-DVC owners can stay in a studio-type arrangement for less than a king's ransom. If Disney, Inc., ever does build reasonably priced studio accomodations, it's the DVC owners that will take the hardest hit against their rental opportunities.

-R

 

[doubletrouble_vb]

Why do you say DVC is renting at $8 per point? There were always people with distressed points who simply wanted to unload them at less than $10 per point but as far as I can tell the majority of people are renting at $10 or more per point. The rental price has been $10 per point for the past few years not "just last year". And the market seems to be sustaining the majority renting at $10 just fine.

As for articificially rewarding owners...DVC has done that all along. The DVC program is more than just the ability to get a DVC unit for points (although that is the privilege each owner actually purchased).

 

[Lord Fantasius]

Why do you say DVC is renting at $8 per point? There were always people with distressed points who simply wanted to unload them at less than $10 per point but as far as I can tell the majority of people are renting at $10 or more per point. The rental price has been $10 per point for the past few years not "just last year". And the market seems to be sustaining the majority renting at $10 just fine.

As for articificially rewarding owners...DVC has done that all along. The DVC program is more than just the ability to get a DVC unit for points (although that is the privilege each owner actually purchased).

Maybe it was a fire sale, but it was on another website. True, currently on the DIS there does seem to be more people wanting to rent than those having points available for rent, though I've seen it the other way around not too long ago, and the price does seem to be around $10/pt, but doesn't that tell you something there? If the rental price has been stagnant at $10/pt for the past several years while rooms at resorts have increased on an average 5% annually since longer than that, that would seem to imply the DVC market is saturated and the non-DVC resorts are not.

-R

 

[G8RFAN]

Actually it means that supply (people who know that DVC studios and suites exist and that points can be rented) is much smaller than the volume of demand channeling thru Disney's CRO. I bet that if there were a safe way to rent points on both sides of the game and that method was marketed as widely as Disney markets its own resorts, you will have the rental price per point closer to the cash ressie price. Right now it is a "cottage industry" so to speak.

I have attempted to get reservations at AKL a number of times and have consistently been told that they were fully booked. Unless they are closing entire wings to reduce overhead, I can not see AKL as a failure. In fact, it has been quite a while since I've seen AP or FL deluxe discount rates applicable to AKL. Most recently, it's been limited to Poly, WL and CR.

EDIT: Oh yeah, and the Happiest Celebration On Earth festivities seem to focus more at MK than AK, so that could explain the large disparity in growth for last year.

 

[raidermatt]

Unless they are closing entire wings to reduce overhead, I can not see AKL as a failure.

Like I said, "failure" is relative. Nothing wrong with your definition, but if we really want to dig beneath the surface and understand what's really going on, we should probably use a bar higher than simply remaining open.

 

[bicker]

That bar would be load-levels. Unless there is hard data on load-levels, that has been released publicly, that would indicate that AKL is doing anything but as good as its contemporaries, it would be inappropriate to conclude that AKL is anything other than "successful."

 

[Lord Fantasius]

Actually it means that supply (people who know that DVC studios and suites exist and that points can be rented) is much smaller than the volume of demand channeling thru Disney's CRO. I bet that if there were a safe way to rent points on both sides of the game and that method was marketed as widely as Disney markets its own resorts, you will have the rental price per point closer to the cash ressie price. Right now it is a "cottage industry" so to speak.

Actually DEMAND would be the no. of people who know they can rent points and desire to do so at a pricepoint while SUPPLY would be the volume channeled through Disney's CRO.

In this case, the pricepoint for supply and demand is around $10/pt, which has remained steady for several years. Though as you said that is a "cottage" industry and not widely disseminated through Disney's CRO.

But you're right, if Disney would go into the DVC Point Rental business directly, either the price per point would increase to the level equal to what CRO charges for a night's lodging at a DVC resort, or a night's lodging at a DVC resort would decrease to fall in line with what someone can rent the points for. Admittedly, as long as DVC owners have the right to rent their points out to whomever they want, the cost/pt would not rise too quickly as long as Disney had to compete against thousands of DVC owners...though I'm sure a majority of people would certainly pay a dollar or two more per point if they had the "confidence" of Disney behind their reservation.

It is interesting that through CRO a person can rent a suite at a DVC resort for almost twice what it could be had if the same person rented it out from a DVC owner at $10/pt, but how many people do that only Disney knows.

Questions - 1) does anyone know whether Disney has ever offered to rent back points from a DVC owner so they could make the space available to someone willing to pay "full price" for suite? Also, 2) are DVC resorts ever full committed point-wise or does Disney always have the availability of utilizing some suites at any given time through CRO?

-R

 

[Horace Horsecollar]

Questions - 1) does anyone know whether Disney has ever offered to rent back points from a DVC owner so they could make the space available to someone willing to pay "full price" for suite? Also, 2) are DVC resorts ever full committed point-wise or does Disney always have the availability of utilizing some suites at any given time through CRO?

Disney "rents back" vast numbers of DVC points every year. DVC members can use their points to book Disney cruises and non-DVC Disney resorts (Disney Collection); deluxe vacation destinations (Concierge Collection); and even safaris and other exotic vacations (Adventurer Collection). When members use DVC points for these three collections, their points are used to reserve DVC resort nights, which are rented out through CRO. As with any rooms and suites in CRO's inventory, some are rented at full price, some at a reduced price, and some stay empty. But, overall, Disney takes in at least as much revenue as they need to pay for the non-Disney and Disney rooms, cruises, and other vacations.

Disney can't legally sell more DVC points (which actually represent resort lease ownership) than total annual capacity of each DVC resort. I understand that Disney sells about 97% of the capacity of each resort. The remaining inventory can used to account for refurbishments and other rooms that a offline. If any rooms aren't need for this purpose, CRO can rent them out. But the vast majority of CRO's DVC inventory comes in when DVC members use the Collections, as described in the previous paragraph.

 

[raidermatt]

That bar would be load-levels.

And pricing...

 

[doubletrouble_vb]

The price for DVC rentals by indivdual owners isn't really controlled by a rationale market. That is to say demand isn't driving the price point. Laziness is. There are a lot of owners looking to rent once in a blue moon who don't really think about getting the most money they can for points. They just put their ad out there at what seems like the going rate. A (probably large but I can't prove it) segment of the buyers market is getting a bargain in that they are paying less than they would be willing to pay to get the reservation they want. Another segment would probably switch to offsite, moderates or values if the price point went up.

If DVC has a point buy back program at a price higher than $10 per point that will become the new rental price. I believe that is the source of the start of the current rental price. It wouldn't surprise me to see that happen if they determine that individual rentals are making any sort of dent in reservations at moderates or values.

 

[raidermatt]

It maybe a market slow to change, but still, if the market would support a higher price, I'm sure it would find its way to the forefront.

That's not to say I think the point rental market is necessarily a good barometer of anything. I haven't looked at it closely enough to make that judgement. It could be, but I don't know that.

 

[drakethib]

That is to say demand isn't driving the price point. Laziness is. There are a lot of owners looking to rent once in a blue moon who don't really think about getting the most money they can for points. .

I don't believe laziness has anything to do with it.

In the rare occasion that I had any points left over and decided to rented them out, if I covered my annual dues for the year I was happy.

I have in fact rented my points for 5 bucks a point. It covered my AD.

I did not buy DVC as a money making opportunity and I still do not think of DVC as an investment.

It is money spent on something that makes my family happy. I paid for DVC in full and I know I will never see that money again. It’s gone, buh bye, adios.

However, IMHO it lets me enjoy nicer accommodations then a moderate and even deluxe resort.

 

[doubletrouble_vb]

Okay well maybe I shouldn't say "laziness" but Drakethib just illustrated my point nicely. He (i guess) isn't driven by the notion of profit by charging what the market will bear but is instead lightly driven by the notion of covering his costs...which isn't the best of business models but he isn't IN business.

 

[DisneyGeek2000]

I saw this rumor over on RADP awhile ago...

Based on aerial shots, using Google Maps, you can definitely see a large space where an AKL DVC building can go; very similar in location to where the VWL is located in relation to the WL; hmm, you would think that the same architect designed them both??? LOL

http://maps.google.com/maps?f=q&sll...8.352054,-81.604643&spn=0.004457,0.007231&t=h

 

[peter11435]

hmm, you would think that the same architect designed them both??? LOL

Actually they did. Peter Dominick was the architect on both WL and AKL.

 

[DisneyGeek2000]

Actually they did. Peter Dominick was the architect on both WL and AKL.

I know! I was being sarcastic, hence the 'hmm' and the 'LOL'.....

 

[ralphd]

According to theme park insider it was the fifth most park visited in North America/USA. But that figure isn't as impressive as it sounds...it had the smallest increase on both an absolute basis (less than half a million visitors) and percentage increase (less than 5%) of any of the four WDW parks over 2004. By comparison, MK increased its attendance by 6.5% or more than a million visitors. However, the only figure that would really matter would be how many visitors only visited AK without park hopping. Unfortunately, only Disney can compile this information and the people that have it are likely sworn to greater secrecy than Area 51.

But they did not have a decrease in attendance as did both Orlando Universal Parks. Seaworld also had a small percentage increase in attendance.