Poly DVC affect on hotel

[jerseyduke]

I think that many Poly lovers will buy. I think many people will buy DVC just because they want in. This later group of people, are people who are "taking up room at the poly" that would not have otherwise. (to a degree).

Basically, I am wondering how much the Villas will change hotel supply/demand/cost.

360 rooms are out of inventory at a resort that is getting a total make over.

will it affect the rack rates significantly? Or is this a non issue?

 

[WilsonFlyer]

If those rooms were consistently selling, they wouldn't be being turned into DVC villas.

The trade-off as we have discussed in many threads is that they are high cost. Because of that, some of them will go to cash inventory most weeks. We pay for it all.

Yea us.

 

[disneynutz]

If those rooms were consistently selling, they wouldn't be being turned into DVC villas.

The trade-off as we have discussed in many threads is that they are high cost. Because of that, some of them will go to cash inventory most weeks. We pay for it all.

Yea us.

I don't know if occupancy is the whole reason for turning cash rooms into DVC rooms. There must be another money reason?

Maybe they want their money now and not some every year as with cash reservations?

Maybe the demand for DVC cash stays is high and a money maker for them?

Maybe the idea of having the resort fully booked without having to pay for advertising or offering a 30% discount during slow periods makes financial sense?

Maybe DVC people spend more money than cash guests?

Bill

 

[wdrl]

On the surface, it would appear that if 360 rooms are taken out the the hotel inventory at Polynesian Village, then demand should strengthen for the remaining hotel rooms. But DVC is not the only factor that could impact the Polynesian Village's occupancy rates and room tariffs. The Four Seasons Hotel at Golden Oak opened in the last year or so and is a high-end hotel that competes for some of the same clientele as Disney's deluxe resorts. If guests are siphoned off by the Four Seasons, then Disney may have limited options in raising hotel tariffs.

I don't think we, as outsiders, have enough information to really predict what the future holds for cash rates at the deluxe hotels.

 

[jerseyduke]

If those rooms were consistently selling, they wouldn't be being turned into DVC villas.

The trade-off as we have discussed in many threads is that they are high cost. Because of that, some of them will go to cash inventory most weeks. We pay for it all.

Yea us.

Yes, I do not agree at all.

First, of course all 360 rooms are not selling on any given night, of course. But there is a point where it becomes advantageous to get paid up front. Maybe if Disney is only selling 310 a night of the 360, Time value of money would make it better for the rooms to be villas. I just do not know what that point is.

Also, DVC is a "guaranteed" reservation for them(for 50 years!). A cash room is not.

The bungalows are cash cows.

Management cares about now, this fiscal quarter, this fiscal year.

And finally, although all different business units, with different P&L statements, they still all ultimately go under 1.

Finally...What if it results in more demand and higher prices for the remaining rooms? An extra 50 or 100 a night for them? Offsets the lost revenue.

This last point is what i am worried about.

 

[wdrl]

Finally...What if it results in more demand and higher prices for the remaining rooms? An extra 50 or 100 a night for them? Offsets the lost revenue.

This last point is what i am worried about.

Well, if the possibility of ever increasing cash rates at the Poly is a concern to you, then there is a simple solution: Buy into the PVB DVC and lock in a set rate for the next 50 years. I say that partly in a humorous tone, but there comes a point where paying $160 a point for PVB makes economic sense. If the Poly tariffs steadily climb over the next few years -- whether its due to a reduced inventory or just the 'normal' Disney inflation -- it may cost well over $500-$600 a night in even the cheaper seasons. Someone who wants to regularly stay at the Poly might find it financially viable to buy into the DVC now rather than suffering from cash rates that are increasing every year.

As one frequent Poly guest has stated elsewhere, he was worried that he was slowly being priced out of the Poly, and this was well before the DVC plans became public. If he buys into the DVC, he won't have to worry about what the cash rates will be in 5 or 10 years.

 

[sssteph]

Well, if the possibility of ever increasing cash rates at the Poly is a concern to you, then there is a simple solution: Buy into the PVB DVC and lock in a set rate for the next 50 years. I say that partly in a humorous tone, but there comes a point where paying $160 a point for PVB makes economic sense. If the Poly tariffs steadily climb over the next few years -- whether its due to a reduced inventory or just the 'normal' Disney inflation -- it may cost well over $500-$600 a night in even the cheaper seasons. Someone who wants to regularly stay at the Poly might find it financially viable to buy into the DVC now rather than suffering from cash rates that are increasing every year.

As one frequent Poly guest has stated elsewhere, he was worried that he was slowly being priced out of the Poly, and this was well before the DVC plans became public. If he buys into the DVC, he won't have to worry about what the cash rates will be in 5 or 10 years.

Absolutely, this is the single best reason to buy at Poly. If this is your go to spot and you know you are staying there nearly every year in the future. DVC will likely save you money.

 

[jerseyduke]

Maybe worry was the wrong word.

Just pondering what might happen with 360 rooms coming out of inventory.

If it does raise the market rate for the other rooms, it "subsidizes" the losses from the DVC component

 

[cmrdgrs]

Interesting question. I know Jambo is much bigger resort, but how did DVC affect the price of Jambo cash rooms? Maybe this is an apple to oranges question?

 

[sndral]

Well, if the possibility of ever increasing cash rates at the Poly is a concern to you, then there is a simple solution: Buy into the PVB DVC and lock in a set rate for the next 50 years. I say that partly in a humorous tone, but there comes a point where paying $160 a point for PVB makes economic sense. If the Poly tariffs steadily climb over the next few years -- whether its due to a reduced inventory or just the 'normal' Disney inflation -- it may cost well over $500-$600 a night in even the cheaper seasons. Someone who wants to regularly stay at the Poly might find it financially viable to buy into the DVC now rather than suffering from cash rates that are increasing every year.

As one frequent Poly guest has stated elsewhere, he was worried that he was slowly being priced out of the Poly, and this was well before the DVC plans became public. If he buys into the DVC, he won't have to worry about what the cash rates will be in 5 or 10 years.

Yep, and just hope those MF's don't climb into the stratosphere.

 

[Missyrose]

Well, if the possibility of ever increasing cash rates at the Poly is a concern to you, then there is a simple solution: Buy into the PVB DVC and lock in a set rate for the next 50 years. I say that partly in a humorous tone, but there comes a point where paying $160 a point for PVB makes economic sense. If the Poly tariffs steadily climb over the next few years -- whether its due to a reduced inventory or just the 'normal' Disney inflation -- it may cost well over $500-$600 a night in even the cheaper seasons. Someone who wants to regularly stay at the Poly might find it financially viable to buy into the DVC now rather than suffering from cash rates that are increasing every year. As one frequent Poly guest has stated elsewhere, he was worried that he was slowly being priced out of the Poly, and this was well before the DVC plans became public. If he buys into the DVC, he won't have to worry about what the cash rates will be in 5 or 10 years.

And to give those Poly-dwellers even more incentive to buy Poly DVC, the conversion of resort rooms leaves the cash portion of the resort with even fewer rooms to sell, which means they won't have to include the resort in discounts as often.

 

[CarolMN]

I found an old brochure that had the resort rack rates. Look what's happened to cash rates at the Poly since 2000:

Cash Rack Rates for the Polynesian

[U]Garden View[/u]    [u]2000[/u]      [u]2015[/U]

Value          $279    $483/$518

Reg            $304    $555/$610

Peak           $339    $638/$695

[U]Lagoon View[/U]    [U]2000[/U]      [U]2015[/U]

Value          $355    $648/$694

Reg            $380    $763/$800

Peak           $410    $864/$933

In 2015, Disney charges more for weekend nights (Fr & Sa), 
than they do for weeknights (Su - Th)

Inflation: $1 in 2000 is equivalent to $1.37 in 2014.

Haven't done (and probably won't do) the math, but at least on the surface, it looks like buying DVC ( @ $160 per point) to lock in the price of future vacations at the Poly might not be such a bad deal after all. Those are some pretty hefty price increases compared to inflation!

 

[2DisPrincesses]

Well, if the possibility of ever increasing cash rates at the Poly is a concern to you, then there is a simple solution: Buy into the PVB DVC and lock in a set rate for the next 50 years. I say that partly in a humorous tone, but there comes a point where paying $160 a point for PVB makes economic sense. If the Poly tariffs steadily climb over the next few years -- whether its due to a reduced inventory or just the 'normal' Disney inflation -- it may cost well over $500-$600 a night in even the cheaper seasons. Someone who wants to regularly stay at the Poly might find it financially viable to buy into the DVC now rather than suffering from cash rates that are increasing every year. As one frequent Poly guest has stated elsewhere, he was worried that he was slowly being priced out of the Poly, and this was well before the DVC plans became public. If he buys into the DVC, he won't have to worry about what the cash rates will be in 5 or 10 years.

This is exactly why we are considering buying. We don't plan to stop going and fear getting priced out as well.

 

[wdrl]

I found an old brochure that had the resort rack rates. Look what's happened to cash rates at the Poly since 2000:

Its dollar amounts like these that motivated a lot of us to buy into DVC in the first place. I imagine that even the first group of OKW buyers in 1991 anticipated they would save money in the long run by buying DVC compared to paying rack rates.

By taking 360 hotel rooms out of the cash inventory at Polynesian Village, we may see an acceleration in the percentage increases of the rack rates for the remaining rooms. But even if there was no acceleration due to DVC, I believe the cash rates will be increasing significantly over the coming years.

 

[CarolMN]

Its dollar amounts like these that motivated a lot of us to buy into DVC in the first place. I imagine that even the first group of OKW buyers in 1991 anticipated they would save money in the long run by buying DVC compared to paying rack rates.

By taking 360 hotel rooms out of the cash inventory at Polynesian Village, we may see an acceleration in the percentage increases of the rack rates for the remaining rooms. But even if there was no acceleration due to DVC, I believe the cash rates will be increasing significantly over the coming years.

I agree! (But still not buying, LOL. If I can't stay there a night or two every now and then, I'll still be very happy at BWV. Haven't ever regretted that purchase).

 

[DebbieB]

There is an unnamed agency that has had cheap Poly rooms (under $200), I can't imagine that will continue with the decreased inventory and upgraded amenities.

 

[dizfan]

See AKV (Jambo) and BLT as two examples of hotel rooms being converted to DVC. They provide a small historic example of what may happen with Poly now that DVC is in there.

From the hotel perspective, would you rather stay at a resort with most facilities being 20+ years old, or would you rather stay at a resort that has both pools redone, hot tubs added, Trader Sam's added, restaurants rehabbed, kids splash area added, and more?

If I were paying cash for a deluxe, I would be more willing to stay at the property that received millions in rehabs that are noticeable over a property that hasn't seen anything significant in 20+ years.

 

[cmrdgrs]

CarolMN -- that brochure you shared is pretty compelling. But, the cynical side of me is wondering if Disney pushed the resort prices up on purpose for Polynesian cash rooms to have a handy-dandy selling too that supports the buy for people at PVB. That cynical side of me also makes me wonder if they were willing to do this even if it meant that resort didn't book as many rooms as they would have wanted over the past 5 years.

I only go to that cynical side because I find it hard to believe. Did other resorts see that type of increase too proportionately?

I know that maybe this is an apples to oranges comparison, but it is the only resort I have experience with in the DVC network, so I'll stick my opinion in about the VGC vs. GCH. I have been traveling twice a year to the GCH or VGC since 2006 (before VGC opened). I have been looking at cash rooms every year at the Grand and have not seen anything close to that type of increase. I can say with pretty fair certainty that the least expensive rooms have seen minor increases in price and I would even say they have stayed fairly steady at the $500 per night mark. On the VGC side we have seen our dues jumping at 5% and 6% some years. So, the hotel increases are not matching our dues increases.

IMO, I find the increases on the cash side suspicious in timing with the opening of PVB. But, I'm old and I'm probably being overly cynical Just seems like an awfully handy selling tool and good scare tactic. And having sit through the sales process they always point to past history of cash prices for selling DVC. What better way to sell than to inflate the prices in the years prior to knowing DVC will be opening at that resort.

That's just my opinion. Even if I was going to buy at PVB (which I was until it became clear that there were no 1 or 2 bdrms slated) and I believed all this, it still wouldn't stop me from buying at PVB if I had wanted to own there.

 

[CarolMN]

CarolMN -- that brochure you shared is pretty compelling. But, the cynical side of me is wondering if Disney pushed the resort prices up on purpose for Polynesian cash rooms to have a handy-dandy selling too that supports the buy for people at PVB. That cynical side of me also makes me wonder if they were willing to do this even if it meant that resort didn't book as many rooms as they would have wanted over the past 5 years.

I only go to that cynical side because I find it hard to believe. Did other resorts see that type of increase too proportionately? ....................(snip).......................I find the increases on the cash side suspicious in timing with the opening of PVB. But, I'm old and I'm probably being overly cynical Just seems like an awfully handy selling tool and good scare tactic. And having sit through the sales process they always point to past history of cash prices for selling DVC. What better way to sell than to inflate the prices in the years prior to knowing DVC will be opening at that resort.

That's just my opinion. Even if I was going to buy at PVB (which I was until it became clear that there were no 1 or 2 bdrms slated) and I believed all this, it still wouldn't stop me from buying at PVB if I had wanted to own there.

My brochure only has WDW resorts, so can't give any rates for California Disney resorts. But here's the same info for the Contemporary:

Cash Rack Rates for the Contemporary

[U]Garden View Standard[/u]    [u]2000[/u]      [u]2015[/U]

Value          $219    $400/$413

Reg            $239    $454/$490

Peak           $269    $474/$526

[U]Garden View[/U]    [U]2000[/U]      [U]2015[/U]

Value          $245    $433/$484

Reg            $265    $503/$556

Peak           $205    $552/$614

 

[cmrdgrs]

Interesting and crazy CarolMN. Thank you for sharing. I still stand by my cynical thoughts -- hahaha -- wrong as they may or may not be!