This issue has already been discussed a lot on these boards in other threads. The points needed for the bungalows are very high, higher than even VGF GVs. When you combine them with the high dollar cost per point, the cost is extreme. For a yearly one week stay, the purchase price ranges from $138,000 to $238,000. And you don't even get daily cleaning service with that, most of your beds are barely comfortable pull-out couches or murphy beds, the deck pool is not even heated, and you also get to pay high annual dues. For the total cost for a week, you could easily purchase a nice condo in the area for year round use and spend less total and stay all year if you want.
Thus, you have a group of bungalows that cost far too much for the
DVC target audience to afford it -- those who come mainly once a year for a week or so who still live on budgets and do Disney because they consider their place to go but still have to control expenses to do it. The bungalows will also not entice the multi-millionaires that could afford them for the same reasons I just mentioned above, i.e., they do not have services and comfort levels those guests would expect.
So has Disney gone crazy? From a viewpoint that would look at whether there will be a lot of purchasers doing so to get the bungalows, the answer would be yes, Disney would be crazy to think large numbers are going to buy to get those bungalows . But Disney is far more intelligent and devious than that. Sure, there will likely be times when those bungalows fill with member reservations: possibly very high demand times like first two weeks of December, Christmas week, Thanksgiving and some times in Oct, and probably some other times with members who just want to get a bunglaow for a couple nights. But as Disney already knows from having only 6 high cost VGF GVs that are open much of the year well past the seven month window, it is likley members will not fill those bungalows the majority of the year.
However, the real point overlooked is that Disney does not care whether members ever stay in those bungalows. All it cares about is that the points applicable tp those bungalows are purchased. Here is the theorectical meeting that one might surmise occurred a couple years or so ago among Disney execs: Wouldn't it be a great idea if we could build a bunch of bungalows on the lake to rent out at a high price that we could probably discount in packages that included tickets, have usual daily cleaning service, and throw in some extras like allowing use of concierge lounge and services at the resort, while at the same time paying essentially nothing to construct those bungalows and having someone else pay for all their maintenace, refurbishment and tax costs going forward and thus even if we cannot rent all of them, we lose no money. Great idea, we could even promote the place for wedding groups, but how do we do it?
The answer is make them part of a DVC resort that is mostly studios. Though the studios are expensive, they are still within the range of affordability for the target audience for DVC sales. Likely the Poly will sell out, including all the points appicable to the bungalows, in a few years mainly to purchasers wanting studios. The demand for studios will likely become problematic, particularly is those high demand times in the last quarter of the year because far more points are chasing stays in those studios than contemplated by the number of points applicable just to the studios. And what does Disney get with that sell-out? It recovers all its building costs of the bungalows and adds a large profit via the sales. It then gets to charge to all those members who bought to get only studios annual dues that cover all the maintenance, refurbishment and tax costs of the bungalows. And on top of that it gets to rent the bungalows most of time, and to entice rentals it can do many things including discounts, ticket packages, wedding pacakages, offer use of concierge, etc., And almost all of that rental income will be pure profit to Disney because the only amount it has to return to members is a small percentage to set off 2.5% of the annual dues (less taxes) that members pay for the resort.
Disney is not crazy. It is a genius.
