NEW VGF Building

[Nabas]

They closed the permits for Reflections. They've got nothing even planned for new construction. VGF is it for years, and it's only maybe 2M points. If they sell out, they're back at RIV/Aulani.

Sure, maybe they can kick the can down the road and flip some Jambo, but they're in no rush to sell through VGF.

Lol, Disney is in no rush to sell.

I'm sure that will make Guides happy.

 

[RoseGold]

Lol, Disney is in no rush to sell…

Well, if they are, they could cut the price on the millions of Aulani points they are still sitting on. That hasn't happened yet.

 

[BWV Dreamin]

If they are not selling, then they are sitting on inventory.

In modern business, inventory is viewed as wasteful.

You want a constant quick turnover of inventory.

Do you think Disney is happy to be sitting on all that Aulani inventory?

They can rent out the inventory for cash.

 

[FinallyFL]

No but you might start entertaining Riviera…..

Absolutely no interest in RIV . I'm one of those weirdos that considers one roundtrip on the Skyliner more than enough.

 

[davidl81]

If they are not selling, then they are sitting on inventory.

In modern business, inventory is viewed as wasteful.

You want a constant quick turnover of inventory.

Do you think Disney is happy to be sitting on all that Aulani inventory?

Pricing is also about volume.

Let's look at direct sales in the 12 months prior to COVID:

BLT: 3000 points per month (direct price $245pp)
POLY: 2200 points per month (direct price $250pp)
VGF: 2200 points per month (direct price $255pp)

VGF2 is going have to sell somewhere around 100,000 points per month.

Pricing is about price point. I get 10 buyers at $100 but 50 buyers at $75.

Disney has to find that sweet spot. Something that maximizes price per point while also maximizing points sold. The more quickly they sell RIV and VGF2, the quicker they can sell something else.

No one knows what the sweet spot is, which is why we are having so much fun speculating!

Also I think people here don’t really realize how many of new direct buyers are buying and financing them through Disney. It’s a lot, and I think what RIV is showing is there is a point where high $per point combined with high point requirements are starting to make the monthly payments too high for a family that wants a week in a studio once a year. All of the savings make sense, but still DVC needs to be able to say something along the lines of we can get you into DVC for $300 a month with 10% down etc. VGF and RIV are right at 150 points for a week in a regular studio (yes that will vary by room type and time, but 150 is about the average). So 150 points at 300 a point will make people put $4500 down, plus closing, and a payment of something like $550 a month for 10 years. It just gets too rich for a lot of potential DVC buyers. Also remember that actual interest rates are down, but Disney is still charging the same rates they always have, and they make a huge amount of profit from those interest charges.

 

[Nabas]

Absolutely no interest in RIV . I'm one of those weirdos that considers one roundtrip on the Skyliner more than enough.

I'm no fan of the Skyliner.

I've already been stuck too many times because it's closed for weather.

Some of my attempts to get back to the Riviera in a thunderstorm have turned into mini disasters.

But we all know central Florida never has thunderstorms.

 

[Nabas]

Well, if they are, they could cut the price on the millions of Aulani points they are still sitting on. That hasn't happened yet.

Disney undoubtedly has a multiyear plan.

Disney already has a plan for what they will sell after RIV and VGF2. Disney has a nearly endless list of future DVC endeavors.

They can't admit defeat on AUL. Imagine if Disney dropped the direct price or offered a 50% discount. It would destroy DVC-brand invulnerability.

Remember, DVC is widely considered to be the best timeshare to own, largely because of its incredibly strong resale market. Some years ago there was a ranking of the top timeshares to own and I think nearly all DVC resorts finished in the top 20. It's what justifies DVC's direct prices.

An Aulani fire sale would destroy the DVC mystique.

Imagine what would happen if Aulani direct was sold for $100pp (for example). Imagine what it would do to the entire DVC system. You'd get a ton of buyers with no intention of every staying at Aulani. The DVC system at WDW would crumble. No, Disney needs Aulani buyers who mostly want to stay at Aulani, which means they need buyers willing to pay the current $201pp (plus incentives), just like Riviera.

Disney is stuck with Aulani but the executives who are responsible for that debacle are gone.

 

[KTownRaider]

They've got nothing even planned for new construction. VGF is it for years, and it's only maybe 2M points. If they sell out, they're back at RIV/Aulani.

Sure, maybe they can kick the can down the road and flip some Jambo, but they're in no rush to sell through VGF.

I think VGF2 could turn into something akin to a longer term marketing decoy by maintaining it's pricing spread with RIV. As has been alluded to earlier, a lot of first time buyers make an impulse decision when they visit the parks (let alone research these boards or have any clue re resale). As people flood MK during the 50th (the actual park that is turning 50), everyone (regardless if they are staying on property or not) gets exposed to VGF either by monorail or ferry. Because of it's location, I just don't see Riviera getting that same level of exposure- especially from those staying off property who have little reason to ride the skyliner. VGF2 gives DVC a relatively well known 'weenie' I think will be used to drive/divert tour traffic to Riviera when VGF2 sticker shock sets in. A cheap VGF conversion of an existing building (adding about 1.5-2M points) to help clear 4M+ points (RIV) might make sense.

I hear the arguments that VGF2 needs to come down and be priced similar to RIV. I respect that logic and the reliance on past is prologue perspective. That is entirely possibly. I just don't know (and I'm sure someone here will enlighten me) if we've seen a similar potential Aulani type situation in the past on WDW property.

From DVC News direct sales article:

'In the past, the resort that is the focus of Disney’s marketing efforts would account for 75% or more of all points sold for the Walt Disney World resorts. From May 2018 to March 2019, as Copper Creek Villas & Cabins was finishing its run as the primary resort, it accounted for 77% to 86% of all point sales in a given month.

By comparison, in May 2021 Riviera accounted for only 45% of all direct sales.'

Was BLT having trouble selling when the VGF1 push started? Or Boulder Ridge (2000) when Beach Club (2002) started. I honestly don't know if there is a historical parallel to apply for guidance. All this is to say, that I don't see VGF2 or RIV pricing working in a vaccum and risking cannibalization of sales. A cheap conversion investment by Disney in VGF could be a way to help speed sales of the Riviera's 70% of still remaining unsold points.

Now that I've said that, watch VGF2 be priced at $201 come December- lol. Great food for thought on this thread...

 

[Matty B13]

They closed the permits for Reflections. They've got nothing even planned for new construction. VGF is it for years, and it's only maybe 2M points. If they sell out, they're back at RIV/Aulani.

Sure, maybe they can kick the can down the road and flip some Jambo, but they're in no rush to sell through VGF.

I'm actually wondering if Poly 2.0 will happen now????? Seems like Disney doesn't mind their Hotels being converted to DVC resorts. Maybe this time they will do it right and add 1 & 2 bedroom villas.

 

[MicheyMouse]

What are most predicting to be the contract end date for the new direct contracts once the addition is available?

 

[ParkHoppers]

I personally do not think VGF will need low pricing to sell out. My guess is they will go high on ppp for VGF to push people TOWARDS RIV. Though I hope VGF 2 pricing is near RIV I highly doubt it will happen.

 

[Nabas]

What are most predicting to be the contract end date for the new direct contracts once the addition is available?

Disney has said it's an extension of VGF, so that should mean the same MF and end date.

 

[AvidDisReader]

We keep coming back to the mistake of the resale restrictions on RIV. Recent new DVC resorts have had their sales helped by existing owners wanting in on the new offering. While some have purchased (I know a couple on this thread have mentioned they purchased), it just was not the same numbers as prior offerings. Disney underestimated how many would take a pass on RIV to go with points on the O14 resorts. Just take a look at the number of combined points sold at the O14 resorts the last 3 month both direct and resale and compare the points sold at RIV.

 

[Paul Stupin]

I personally do not think VGF will need low pricing to sell out. My guess is they will go high on ppp for VGF to push people TOWARDS RIV. Though I hope VGF 2 pricing is near RIV I highly doubt it will happen.

I don't think deliberately overpricing a new resort offering just to divert attention to another is a smart business strategy. I'm sure they'll want to see healthy sales on both right from the start. Having more than just Riviera and Aulani to sell, especially when the new product has what appears to be a reasonable price, will reinvigorate all sales, like during the summer when there are a bunch of good movies playing in the local theater. They all drive business to each other.

 

[4luv2cdisney]

If VGF gets re-priced at $255 or higher it will be an excellent lesson in marketing. There will be nothing really new/special/different about VGF when it goes back on sale. It is still the same VGF that has been available at $255 all along - just with some extra studios. People are supposed to suddenly be lining up to get points for $255 or more pp????? If anything, I view it as less valuable because you will likely no longer need to own there to stay there. I guess I just don't get it.

I'm on the sidelines with the plan to possibly buy if the price is close to RIV, because I like direct / unrestricted points and it will be a "good deal". If not, it's more SSR for us and we will play the 7 month / stalking game to stay there sometimes.

I guess I don't really care either way. We are good on points for now.

 

[Nabas]

If anything, I view it as less valuable because you will likely no longer need to own there to stay there. I guess I just don't get it.

This is what I'm most excited about - similar to PVB, it should become much easier to book a Studio at VGF.

With 200 more Studios, only SSR (432), PVB (360), and AKV (296) will have more Studios.

Everything is tough to book late September to early January, but VGF should get a lot easier to book than it is today.

 

[KTownRaider]

We keep coming back to the mistake of the resale restrictions on RIV. Recent new DVC resorts have had their sales helped by existing owners wanting in on the new offering.

I think there may be some truth to that. The eventual O14 ecosystem probably did help prop up sales at new resorts with existing owners. It's always easier to sell to an existing customer rather than a new one. The thing I find interesting is that RIV resale looks pretty healthy to me. Granted, not enough time has passed for an accurate sample size, but the resale contracts that are out there look to be priced in the $150s per point- not all that far off from direct pricing when considering the use restrictions.

 

[BWV Dreamin]

If VGF gets re-priced at $255 or higher it will be an excellent lesson in marketing. There will be nothing really new/special/different about VGF when it goes back on sale. It is still the same VGF that has been available at $255 all along - just with some extra studios. People are supposed to suddenly be lining up to get points for $255 or more pp????? If anything, I view it as less valuable because you will likely no longer need to own there to stay there. I guess I just don't get it.

I'm on the sidelines with the plan to possibly buy if the price is close to RIV, because I like direct / unrestricted points and it will be a "good deal". If not, it's more SSR for us and we will play the 7 month / stalking game to stay there sometimes.

I guess I don't really care either way. We are good on points for now.

Remember very few points have been available direct through DVC. That has contributed to lower sales. Not the same as an active resort for sale such as RIV.

 

[Paul Stupin]

If VGF gets re-priced at $255 or higher it will be an excellent lesson in marketing. There will be nothing really new/special/different about VGF when it goes back on sale. It is still the same VGF that has been available at $255 all along - just with some extra studios. People are supposed to suddenly be lining up to get points for $255 or more pp????? If anything, I view it as less valuable because you will likely no longer need to own there to stay there. I guess I just don't get it.

I'm on the sidelines with the plan to possibly buy if the price is close to RIV, because I like direct / unrestricted points and it will be a "good deal". If not, it's more SSR for us and we will play the 7 month / stalking game to stay there sometimes.

I guess I don't really care either way. We are good on points for now.

Partially disagree. It will be a slightly better VGF because the biggest complaint is lack of studios, and there will soon be no shortage. And maybe they'll spiff up the resort with a little extra magic here and there. But no one will be lining up if the price point is anywhere near $255. The cost will be in line with Riviera.

 

[davidl81]

I don't think deliberately overpricing a new resort offering just to divert attention to another is a smart business strategy. I'm sure they'll want to see healthy sales on both right from the start. Having more than just Riviera and Aulani to sell, especially when the new product has what appears to be a reasonable price, will reinvigorate all sales, like during the summer when there are a bunch of good movies playing in the local theater. They all drive business to each other.

Not to mention by pricing VGF significantly higher than RIV and then trying to sell RIV as the “value” resort sets the precedent that there are tiers to DVC resorts. And RIV would be a lower tier resort than VGF. To me this is something that DVC has actively tried to avoid. All of their resorts are sold as “deluxe” resorts, wether they are or not is a different story. But actively selling one resort significantly higher than another when both are active would be a clear implication of DVC tiers, and I do not see that happening.