November Direct Sales

[KTownRaider]

Slightly lower than October...

https://dvcnews.com/dvc-program/financial/news-34867/5189-direct-sales-remain-flat-november-2021

 

[hudakjr]

I’m keeping a close eye on this wondering if it will ever lead to bigger incentives

 

[Brian Noble]

Not at all surprising, and probably not something that will spur lots of incentives. From the November 2019 report:

November is usually the slowest month of the calendar year for direct sales, averaging only 140,130 points from 2010 to 2018.

Given the overall depressed sales number in 2022 due to lower tour flow generally, my guess is that the Powers That Be think that while this isn't great, it's probably not out of line with expectations.

 

[Matty B13]

It is tough selling 150 points at a $180/200 a point that's $27k+ for a studio for a week, especially when everyone's grocery bill is going up 20-30%.

I wonder if we will see a lowering of the minimum buy of points back down to 100 points. Even then, buying DVC at $180/200 a point is pricing out a lot of the middle class.

 

[KAT4DISNEY]

Not at all surprising, and probably not something that will spur lots of incentives. From the November 2019 report:



Given the overall depressed sales number in 2022 due to lower tour flow generally, my guess is that the Powers That Be think that while this isn't great, it's probably not out of line with expectations.

And the general Disney mantra now - "increase the price!"

 

[Matty B13]

And the general Disney mantra now - "increase the price!"

I'm not sure if Chapek understands that most of what Disney sells is "discretionary", I know some people need to go to WDW & DL, but for most it is a nice diversion but not necessary.

 

[Sandisw]

It is tough selling 150 points at a $180/200 a point that's $27k+ for a studio for a week, especially when everyone's grocery bill is going up 20-30%.

I wonder if we will see a lowering of the minimum buy of points back down to 100 points. Even then, buying DVC at $180/200 a point is pricing out a lot of the middle class.

Which will be interesting how they use the data for setting the price for VGF2.

Personally, I think they have changed expectations for sales right now and willing to weather the storm a few more years.

 

[hhisc16]

At this rate, when would Riviera sell out?
How did Aulani sales compare?
It is interesting how minimum went from 75 to 150 in 2 years. We would have bought direct at 75 or 100 points!

 

[poofyo101]

Hoping for some more RIV incentives.

 

[Brian Noble]

pricing out a lot of the middle class.

Well, that depends on what one means by "middle class." The definition most people use is "someone who makes about what I do."

A more traditional definition would be, for example, between 2/3ds and 2x the median household income. That puts the upper bound at about $135K in 2020 dollars. 20% of households have income above this range. So, if DVD conceded that the middle class was priced out, they'd still be able to market to one in every five families in the US---and almost certainly a much higher fraction of the families who walk through the gates of one of their theme parks.

Are they okay with that? Arguably, yes.

Looking at this another way: If you are a family who would consider buying a new car, the price tag of DVC is not so much different (and probably smaller than many new cars).

 

[Vulnox]

Yeah, and I think people are more comfortable with long term loans where I feel it wasn't as widely accepted even 15 or so years ago. To Brian's point about cars, people that are willing to buy a new car are sometimes doing so with 90+ month loans. My parents worked for the credit arm of a major US automaker, and I remember when I was a kid how much of a big thing it was when they started doing 72 month loans. Now some lenders for auto loans have gone well beyond that with the ever increasing new vehicle purchase prices but not ever increasing average wage.

Offering long terms and accepting them are different things of course, but last I heard those 72+ month loans were extremely popular. All that lending to the idea that even if below that upper bound, there are probably a lot of people more on board with 10% interest (and that's if they get the best rate) for 10 years that would have run for the hills before.

 

[KVacc]

It is tough selling 150 points at a $180/200 a point that's $27k+ for a studio for a week, especially when everyone's grocery bill is going up 20-30%.

I wonder if we will see a lowering of the minimum buy of points back down to 100 points. Even then, buying DVC at $180/200 a point is pricing out a lot of the middle class.

The 150 minimum is what kept us from buying direct. It’s just too many points for our family. They kept trying to sell on the fact we could bank them and get a larger room but even at that we are paying for something we don’t need.

 

[andyman8]

They can’t be that disappointed in these sales if they’re increasing the price:

You better hurry! The price-per Vacation Point increases from $201 to $207 at Aulani, Disney Vacation Club Villias, Ko Olina, Hawaiʻi and Disney’s Riveria Resort starting Febuary 3, 2022.

 

[nuhusky123]

They can’t be that disappointed in these sales if they’re increasing the price:

You better hurry! The price-per Vacation Point increases from $201 to $207 at Aulani, Disney Vacation Club Villias, Ko Olina, Hawaiʻi and Disney’s Riveria Resort starting Febuary 3, 2022.

they are without doubt disappointed. But I’m betting the price increase is done for gfv. Gfv price will start at $207

 

[Sandisw]

they are without doubt disappointed. But I’m betting the price increase is done for gfv. Gfv price will start at $207

The price increase is for VGF sales, But, they just let the bonus incentives expire after seeing the November sales. If they were concerned, those would have been extended “for a limited time” to carry them into the new year.

 

[Brian Noble]

they are without doubt disappointed.

In the voice of Jeff Lebowski: "That's just, like, your opinion, man."

As I wrote above: seen in historical context, and adjusted for the reduced attendance and consequent reduction in tour flow, the sales data is more or less just what you'd expect. I've also written this elsewhere, but DVD's sales numbers compared to 2019 are right in line with the major timeshare companies.

So, all things considered: Probably no one at DVD is jumping for joy, but no one is polishing their resume, either. At least not for reasons beyond the Great Resignation.

 

[DonMacGregor]

Yeah, and I think people are more comfortable with long term loans where I feel it wasn't as widely accepted even 15 or so years ago. To Brian's point about cars, people that are willing to buy a new car are sometimes doing so with 90+ month loans. My parents worked for the credit arm of a major US automaker, and I remember when I was a kid how much of a big thing it was when they started doing 72 month loans. Now some lenders for auto loans have gone well beyond that with the ever increasing new vehicle purchase prices but not ever increasing average wage.

Offering long terms and accepting them are different things of course, but last I heard those 72+ month loans were extremely popular. All that lending to the idea that even if below that upper bound, there are probably a lot of people more on board with 10% interest (and that's if they get the best rate) for 10 years that would have run for the hills before.

Along those lines, and maybe more on point re: DVC, is the fact that 120 month loans have almost been the industry standard for RV's (a ridiculously rapid depreciating asset) for more than a decade. The vast majority of travel trailers, RV's and boats (hundreds of thousands of them) are financed over at least 10 years, so financing a static versus mobile vacation solution isn't too far off that line of thinking.

 

[KAT4DISNEY]

In the voice of Jeff Lebowski: "That's just, like, your opinion, man."

As I wrote above: seen in historical context, and adjusted for the reduced attendance and consequent reduction in tour flow, the sales data is more or less just what you'd expect. I've also written this elsewhere, but DVD's sales numbers compared to 2019 are right in line with the major timeshare companies.

So, all things considered: Probably no one at DVD is jumping for joy, but no one is polishing their resume, either. At least not for reasons beyond the Great Resignation.

Well, DVC did fairly quietly get a new VP in charge of it just a couple months ago.

 

[sethschroeder]

At this rate, when would Riviera sell out?

2026 if nothing changes and they sell around what they have been.

Pace before Covid shutdown had it sold out by September 2022 but it would have likely sold out quicker as it was selling mostly quickly right after the resort opened.

 

[DVCsloth]

Probably wouldn't look good for them if they advertise "prices good to so and so" then add more incentives or lower the price after that date.