NEW VGF Building

[Bjaiken77]

I’m just so anxious to hear the pricing. I know we don’t know anything now, but how long would you expect it takes for some of this stuff to start leaking out? They are opening Summer 2022, so it can’t be that long, right?

 

[JETSDAD]

I’m just so anxious to hear the pricing. I know we don’t know anything now, but how long would you expect it takes for some of this stuff to start leaking out? They are opening Summer 2022, so it can’t be that long, right?

I'd guess Dec/Jan before we hear much.

 

[Days In the Sun]

Don’t you think a good thing about VGF2 all studios compared to Poly is they don’t have point monsters like the bungalows? First of all, you don’t have a ton of points sold that account for the bungalows yet go to people who will rarely use them. Second, you don’t have to worry about the possibility of a point chart adjustment where they drop the points cost of the bungalows but add them to the studios.

Yes definitely. I do however think there are people who don't purchase Poly because there aren't 1 and 2 bedrooms as an option and would consider VGF now as it will be mostly studios but with a few larger units. We currently book studios and 1 bedrooms there so this is a concern for us.

 

[miTnosnhoJ]

Arbitrage is when you can buy a commodity in one market and sell it in a different market at a profit.

So that is what Disney is doing here. They have hotel rooms they cannot sell. Let’s say on average, they have an entire building that is unsold.

Yet, they have a core clientele that happily pays $1000+ per night for club level service in the main building, and in one of the outer buildings. So anything they do has to not destroy this golden egg.

They could fill this up (maybe) with convention guests, but that requires some price cutting and could quickly become a race to the bottom. They can either go after elite conventions and meetings, or they can cut prices and go after cost-conscious conventions and meetings. And after a convention guest pays $300-$500 per night, are they ever going to want to pay full rates for personal travel?

They could fill up the rooms by offering discounts to vacationers who do not value the club level amenities. But the Grand is the price umbrella for all other Disney Properties, so discounting GF means discounting everything.

Yet there is an arbitrage opportunity. DVC at VGF is selling at an all time high price, and runs at 100% occupancy. So you can take empty hotel rooms out of the hotel market, resell them in the timeshare market at an all-time high price, and guarantee 100% occupancy, while simultaneously increasing the occupancy for the remaining buildings. Plus you get your cash now (actually next year), rather than a highly variable cash flow over the next 45 years.

This is a no-brainer.

 

[DougEMG]

One more thought: When they split Saratoga springs into standard and preferred, they proved they could move points around between units.

I prefer to think that they proved they can break the contract and then see if anyone complains.

 

[Prince John Robin Hood]

I'm curious what the legal responsibility is to current VGF owners vs. all DVC owners. Disney is saying that this addition is a positive to the program but what about for existing VGF owners? If it makes booking the existing Villa's more difficult than clearly the change is a negative. Should they implement a high point chart for these new studios I have to think there is a good chance that a lawsuit will be filed. More and more it makes me think the price charts will be similar/reasonable. Otherwise, it would have made way more sense to just separate this from the current VGF.

 

[lizdis1]

What would the minn add on points be? 50? We own at VGF and I’m so glad I didn’t add on direct this year. Hoping the add on pricing is lower than the current $255.

 

[lizdis1]

I’m just so anxious to hear the pricing. I know we don’t know anything now, but how long would you expect it takes for some of this stuff to start leaking out? They are opening Summer 2022, so it can’t be that long, right?

I am anxious about pricing too. I would love to do a small add on to our current VGF.

 

[CastAStone]

If it makes booking the existing Villa's more difficult than clearly the change is a negative. Should they implement a high point chart for these new studios I have to think there is a good chance that a lawsuit will be filed. More and more it makes me think the price charts will be similar/reasonable. Otherwise, it would have made way more sense to just separate this from the current VGF.

Let’s not jump too far ahead here. We have no reason to think that Disney will do anything untoward here. We don’t know if the new rooms will be better, worse, or just different. We don’t know if they’ll cost more points, fewer points, or the same. As @KAT4DISNEY mentioned a few pages back, the current leadership if anything tried to price CCV fairly by matching BRVs point chart - pro it was actually in the main building, con the rooms were smaller, net net, same point chart. CCV isn’t ancient history, the currently active resort promotion is the first to not include it. You can be mad now if you want to that is certainly your right, but I’d suggest we wait and see and get mad later if the naysayers are right.

 

[Paul Stupin]

Two quick thoughts. I don’t think many VGF2 owners are going to be booking one bedrooms. They’re monumentally expensive in comparison to practically everywhere else. If you’re a new buyer and want one bedrooms, there are a lot more cost effective options. Clearly, DVC is placing a big bet on demand for studios, just like they are at the new Disneyland Tower.

I also believe a price per point around $201 is pure wishful thinking. It might be lower than the sold out price of $255, but not that low. And you can bet there will be a few additional surprises when the selling starts, and they won’t be to the buyers’ advantage.

 

[sethschroeder]

current leadership if anything tried to price CCV fairly by matching BRVs point chart

You mean the group that burried millions of points in cabins that don't get taken?

We will have to wait and see I do think whatever they do it won't be that obvious.

No kitchenette but closer to main building so same point chart as existing resort.

 

[zavandor]

One more thought: When they split Saratoga springs into standard and preferred, they proved they could move points around between units.

Not exactly. When they splitting SSR in two categories, they only proved they thought they could move points between units.
With the 2020 point charts we raised the issue and they rolled it back. They didn't admit it was because of the issue with units, but I think the objection has solid legal grounds.
Currently at SSR the declared points for many units are not enough to book the whole unit for the whole year. This is contrary to the Florida law, which has a requirement at a Vacation home level.

 

[zavandor]

I'm curious what the legal responsibility is to current VGF owners vs. all DVC owners. Disney is saying that this addition is a positive to the program but what about for existing VGF owners? If it makes booking the existing Villa's more difficult than clearly the change is a negative. Should they implement a high point chart for these new studios I have to think there is a good chance that a lawsuit will be filed. More and more it makes me think the price charts will be similar/reasonable. Otherwise, it would have made way more sense to just separate this from the current VGF.

Signing the contract you have accepted to delegate to the DVCMC to take decisione about what is in the best interest of the membership as a whole. Which means some owners might get screwed for the greater good.
As long as what they do is legal and it brings some advantage to the membership, a member has little leverage against the DVCMC. They can easily show a judge booking patterns showing how difficult it is to book a studio and how 1BR are the last to go. So adding studios is a net gain for the membership even if people who book 1BR must now book quicker at 11 months.
Also, DVC never guarantees you can book a certain room, it's first come first serve.

 

[fumanchu2488]

We bought resale 10 years ago. I have closely tracked how much I have spent on the original purchase and annual MF compared to rack rate.

At the moment, I'm at 59.5% discount off of rack rate. In other words, a $500/night room at a Disney Deluxe Resort has cost me about $200/night so far. Over time, my discount should continue to improve as the original purchase gets spread across more years.

It's hard to imagine I'll ever be able to come close to that with a direct purchase of RIV or VGF.

Still, my spouse and I really would like to be able to book VGF every year in May, and common sense goes out the window when you really want something.

I have been thinking a lot about this lately as a relatively new owner (2019). I think you are missing the other side of the equation which is rack rates. Right now WDW has a lot of resorts not open and still can’t fill their deluxe properties while moderates and Pop have no rooms. Like a lot of people have been saying that is definitely a driver for this. I have heard 3 different people who had booked at Pop and Destino Tower who got pixie dusted to the Grand Floridian. That tells me they are trying to open space at the cheaper resorts for more booking. So, what happens if the demand on deluxe continues to go down because like Bob Chapek says, the Four Seasons is a way better value than spending money at Disney deluxe? Two things:

1. WDW has to lower rack rates at these properties to compete.

2. Or offer other pricing/package deals that make it a better value like free dining, free tickets, extra fast passes, or other things that differentiate from off site.

The problem for us as DVC is that lowering rack rates and adding discounts to cash stays changes our equation. I wonder what the comparison was like in 2008 if you bought direct versus if you took advantage of their crazy cash offers for stays. I think in general the demand for WDW is super high but I think they have been pricing their deluxe resorts way too high and there isn’t the same demand there.

 

[Nabas]

Two quick thoughts. I don’t think many VGF2 owners are going to be booking one bedrooms. They’re monumentally expensive in comparison to practically everywhere else. If you’re a new buyer and want one bedrooms, there are a lot more cost effective options. Clearly, DVC is placing a big bet on demand for studios, just like they are at the new Disneyland Tower.

We can expect Disney to advertise VGF2 as Studio rooms to potential buyers. Overwhelmingly, those buyers initially will want Studios.

Long-term, we simply don't know how VGF1 and VGF2 buyers will behave.

We might end up with some VGF2 buyers deciding to stay at VGF1 one-bedroom villas, while some VGF1 buyers will decide to stay at VGF2 Studios. But the exact mix will depend on several factors, including the point chart at VGF2.

I also believe a price per point around $201 is pure wishful thinking. It might be lower than the sold out price of $255, but not that low. And you can bet there will be a few additional surprises when the selling starts, and they won’t be to the buyers’ advantage.

The current $255 price is designed to discourage direct sales. If you look at the 12 months prior to COVID, VGF was averaging only 2200 points per month. Most buyers there are adding points to existing contracts.

In the 6 months prior to COVID, RIV averaged 132,000 points per month. In April 2021, RIV was at 88,700 points for the month. Sales are not yet back to normal.

My guess is that VGF2 will start at $210-230 per point, depending on how quickly sales at RIV pick up.

 

[Nabas]

I have been thinking a lot about this lately as a relatively new owner (2019). I think you are missing the other side of the equation which is rack rates. Right now WDW has a lot of resorts not open and still can’t fill their deluxe properties while moderates and Pop have no rooms. Like a lot of people have been saying that is definitely a driver for this. I have heard 3 different people who had booked at Pop and Destino Tower who got pixie dusted to the Grand Floridian. That tells me they are trying to open space at the cheaper resorts for more booking. So, what happens if the demand on deluxe continues to go down because like Bob Chapek says, the Four Seasons is a way better value than spending money at Disney deluxe? Two things:

1. WDW has to lower rack rates at these properties to compete.

2. Or offer other pricing/package deals that make it a better value like free dining, free tickets, extra fast passes, or other things that differentiate from off site.

The problem for us as DVC is that lowering rack rates and adding discounts to cash stays changes our equation. I wonder what the comparison was like in 2008 if you bought direct versus if you took advantage of their crazy cash offers for stays. I think in general the demand for WDW is super high but I think they have been pricing their deluxe resorts way too high and there isn’t the same demand there.

If you look at the order in which Disney has been reopening its hotels, Deluxe Resorts have opened first.

Indeed, the next resorts with announced opening dates are:

• Beach Club
• Wilderness Lodge
• Boardwalk Inn
• Polynesian

There still are no announced dates for POR, POFQ, ASMusic, and ASSports.

We hear that the Grand Floridian is not reaching 100% occupancy and yet Disney is still opening Deluxe Resorts first.

The takeaway is that $400 per night rooms at lower occupancies are more profitable for Disney than $200 per night rooms at higher occupancies. This is especially true at resorts that are already operating because they have associated DVC buildings. Disney is going to have a higher margin with a 70% filled Poly than a 100% filled All Stars. (Historically, anything below 80% is a very low occupancy for WDW.)

Still, if some Deluxe Resort rooms are unfilled, it makes sense to convert them to DVC, which will get them filled. The Grand Floridian has 867 rooms. Converting 200 to DVC instantly solves the GF's occupancy problem.

The driving force right now is theme park capacity. Due to COVID restrictions, Park Passes are reaching their limits at all 4 theme parks. This means that Disney will open hotels in the most profitable sequence possible.

By the time VGF2 is open, these COVID restrictions should be lifted and WDW should be back to normal.

 

[Matty B13]

The driving force right now is theme park capacity. Due to COVID restrictions, Park Passes are reaching their limits at all 4 theme parks. This means that Disney will open hotels in the most profitable sequence possible.

By the time VGF2 is open, these COVID restrictions should be lifted and WDW should be back to normal.

I also think that Disney in general is working towards a more premium/expensive experience for guests, their price increases over the last 3 years shows this. Also, they are coming out with a lot more paid ticket events than they use to.

 

[Bjaiken77]

As exited as I am about possibly buying into VGF, it still has to make sense, both on a per point price and point chart basis. I’m assuming the point chart will at least be equal to VGF1, so I’m going to need a deal on the price per point. If it’s not around $200 point, it probably won’t be for me, and that’s ok.

 

[davidl81]

As exited as I am about possibly buying into VGF, it still has to make sense, both on a per point price and point chart basis. I’m assuming the point chart will at least be equal to VGF1, so I’m going to need a deal on the price per point. If it’s not around $200 point, it probably won’t be for me, and that’s ok.

Yeah, $200 per point is where I’m good at. Much more than that I am not.

 

[fumanchu2488]

Yeah, $200 per point is where I’m good at. Much more than that I am not.

Agree. If I can get a 75 point contract at $200-$210 per point you can sign me up. If they push $225 while RIV is still around $200 then I will just add on there.