Projecting future resale values

I would argue that Disney has raised prices of their hotel rooms at a rate much higher than others - so they created this situation. This is evident by tracking Swan and Dolphin prices over time vs. BWI.

Absolutely -- It's supply/demand/price. But Disney wants to book the rooms at that very high price. And to do it, they need to limit the supply of rooms. There isn't enough demand for rooms at $1,000 per night to keep adding tons of more deluxe rooms. Disney is more interested in protecting that price point.
If they wanted to add more rooms, they would have to decrease prices.

And same eventually becomes true for DVC -- that you can't grow demand unless you decrease prices. Not saying we are there yet, but eventually that happens.
 
No, Disney decided not to compete in that market. Waldorf, Four Seasons, Ritz came in hot and ancient GF couldn't keep up with that kind of luxury offering.

And those hotels actually offer rooms at prices lower than the Disney deluxe resorts. This actually proves my point:

I looked up a week reservation for next week, October 1-8. The Ritz has TONS of availability, starting at $506 per night.

You can't get a deluxe room at Disney anymore for $500 per night.
In fact, most of the deluxe resorts at Disney are fully booked..
The only availability I see is Boardwalk Inn at $1100 per night!

So yes, adding more deluxe inventory would require a significant reduction in prices.
Disney is interested in protecting their high price point. At that price point, they know they can't add more deluxe room space.

Disney doesn't leave money on the table. They haven't just "decided" that they don't want revenue...... But they can make more revenue booking 3 rooms at $1,000 per night than booking 5 rooms at $500 per night.

Under their model, they need to limit the number of rooms. Increasing the number of rooms would require price reductions. That's what happens when you have too many rooms -- you need to cut prices to fill those rooms.

With the notable exception of the Starcruiser, Disney didn't even try for the high end market. They just increased the prices on the same old buildings and threw Moana around a little and reassigned some rooms so we would pay for an old building refurb.

I think it's possible they could, like in the spot between GF and MK or the Epcot-adjacent hotel that was scrapped in Covid. There's no indication they are doing that now.
 
If they wanted to add more rooms, they would have to decrease prices.
No, they'd have to build a property worth the $8-9K at the Ritz/Four Seasons, which they haven't. The high end hotels aren't Disney. The facilities aren't even close to the same standards. They could build one, but they haven't yet.

I'm using the Feb 4-11 from earlier in the thread, which has BW at 4,400. Of course last minute bookings can be crazy.

And these numbers make DVC look better, and I can live with 1ply TP and no robe and a sad view and that sad BW sleeper sofa.
 
No, they'd have to build a property worth the $8-9K at the Ritz/Four Seasons, which they haven't. The high end hotels aren't Disney. The facilities aren't even close to the same standards. They could build one, but they haven't yet.

The Ritz is CHEAPER than Disney deluxe hotels.

Once again -- Adding more rooms would require Disney to cut prices. Which is why they have DECREASED their number of rooms over the last 21 years.


I'm using the Feb 4-11 from earlier in the thread, which has BW at 4,400. Of course last minute bookings can be crazy.

And these numbers make DVC look better, and I can live with 1ply TP and no robe and a sad view and that sad BW sleeper sofa.

That's the game Disney plays. Drive up prices. The higher they drive up resort prices, the higher they can justify DVC prices. But there is a ceiling.

If they can drive up their regular resort prices to $2,000 per night... then DVC suddenly seems like a great bargain at "only" $1800 per night.

But eventually, you can't keep raising prices, especially if you keep adding rooms.
 

The Ritz is off-property. I think the Four Season is a better comparison, and it is still more expensive than the Disney resorts.

I think Disney will probably try for the more high-end hotel market. Riviera was probably a foray into that space.

All of this talk of lagging demand and ceilings also really ignores the reality that by 2042 we will probably have another theme park.
 
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For that week, Feb 4-11, Ritz is 8,400 and BW is 4,400. Ritz alone has 582 rooms.

You apparently found a particular week where Ritz has limited availability (not sure if they are hosting a convention that week).

I went far out so all hotels would have plenty of availability -- mid July, Ritz is $700 per night. Grand Floridian is $726 per night.

(Boardwalk Inn isn't comparable to the Ritz.... Grand Floridian is below the Ritz in quality too, but it's closer).

Tell me..... From the perspective of Disney finance, if they could build another thousand rooms and keep filling them at 95% occupancy at $700+ per night, then why have they been REDUCING the number of rooms over the last 21 years?

And that's another thing you keep missing -- The reason Ritz has last minute cheaper rooms available and Disney has very little last minute availability -- Because Disney is aiming for 95%+ occupancy rates.
 
Ok, this might be another thread but where would you say resale prices would sit without ROFR? I know this kind of happened in pandemic for a few months but what about now? Would you still be happy with these prices if it happened in 2023?

My guesses for WDW resorts
VGF $140
RIV $120
OKW $90
SSR $100
OKWE/AKV $110
BRV $90
PVB $140
CCV $140
BWV $110
BCV $130
BLT $140

RIV isn’t being ROFRd yet so I think the averages right now would be the same because we are not yet far enough in to have a ton of contracts sold.

But I would agree with the rest.
 
Destino Tower is more impressive interior than RIV
Lol, not saying that they're there yet. Just Riviera is more upscale than a lot of what came before. Not sure if you can really balance 5-star style with theming and Imagineering, but we will see what Disney does. They want richer customers, so it only naturally follows that's where they want to be.
 
Disney in not an experienced Hotelier. So they are used to the 95% occupancy which is even high for Ritz. That is why when Animal Kingdom, Wilderness Lodge and recently Floridian slipped to 80/85% occupancy, they flipped to DVC. So like Havoc above mentioned, not only do they keep the 95% occupancy but can continue charging very high rates.
 
The Ritz is off-property. I think the Four Season is a better comparison, and it is still more expensive than the Disney resorts.

I think Disney will probably try for the more high-end hotel market. Riviera was probably a foray into that space.
The hotel attached to Epcot was supposed to be next, I think it even got some permits. It was canceled, with Reflections, in Covid. We would know if they started again on it.

Starcruiser is my personal hell, but I still hope it succeeds, because I think it is so cool to have some creativity like that in general. That's the kind of product Ritz can't deliver and (maybe?) Disney can.
 
And those hotels actually offer rooms at prices lower than the Disney deluxe resorts. This actually proves my point:

I looked up a week reservation for next week, October 1-8. The Ritz has TONS of availability, starting at $506 per night.

You can't get a deluxe room at Disney anymore for $500 per night.
In fact, most of the deluxe resorts at Disney are fully booked..
The only availability I see is Boardwalk Inn at $1100 per night!

So yes, adding more deluxe inventory would require a significant reduction in prices.
Disney is interested in protecting their high price point. At that price point, they know they can't add more deluxe room space.

Disney doesn't leave money on the table. They haven't just "decided" that they don't want revenue...... But they can make more revenue booking 3 rooms at $1,000 per night than booking 5 rooms at $500 per night.

Under their model, they need to limit the number of rooms. Increasing the number of rooms would require price reductions. That's what happens when you have too many rooms -- you need to cut prices to fill those rooms.

In this thread I've seen you come to two separate conclusions that I think are somewhat conflicting so I am curious on your opinion.

The first, is that Disney is smart enough to provide artificial scarcity of their luxury hotels to drive prices up, and have minimum non-occupancy. I think your rationale for this is sound. They could build more rooms and yet they have decreased the number. They sell them for higher amounts than more luxurious, albeit off-property rooms.

Your second point, and a major one in this thread, is that Disney is adding too many points/building too many DVC resorts in a short time frame and that it will drive down prices. You focus on resale prices being driven down, but I think its safe to say that if supply exceeds demand, prices in general would be driven down, or units won't sell.

So, while I don't think the business folks at Disney are infallible, what makes you think that they are smart enough to have a long term plan of hotel price manipulation, but not smart enough to know what the saturation point is for DVC? If they thought that they were close to the saturation point, why not just ROFR and resell points rather than build new resorts?
 
There isn't enough demand for rooms at $1,000 per night to keep adding tons of more deluxe rooms. Disney is more interested in protecting that price point.
There are three giant hotels that added hundreds of rooms at that price point or even more. Waldorf, Ritz, and Four Seasons are all MASSIVE. Disney didn't, but that doesn't mean the demand isn't there. It means someone out-competed them. Having experienced Disney's hotel service and facilities, this is not much of a stretch. I'd never pay the cash rate for many of these rooms.

The place Disney did compete is mid range, with Destino/Coronado. These hotels are much loved, and no one is expecting Ritz service or facilities. Moderate are still EXPENSIVE for what you get, and Disney knows it. I'd argue most of DVC is correctly characterized as moderate.
 
In this thread I've seen you come to two separate conclusions that I think are somewhat conflicting so I am curious on your opinion.

The first, is that Disney is smart enough to provide artificial scarcity of their luxury hotels to drive prices up, and have minimum non-occupancy. I think your rationale for this is sound. They could build more rooms and yet they have decreased the number. They sell them for higher amounts than more luxurious, albeit off-property rooms.

Your second point, and a major one in this thread, is that Disney is adding too many points/building too many DVC resorts in a short time frame and that it will drive down prices. You focus on resale prices being driven down, but I think its safe to say that if supply exceeds demand, prices in general would be driven down, or units won't sell.

So, while I don't think the business folks at Disney are infallible, what makes you think that they are smart enough to have a long term plan of hotel price manipulation, but not smart enough to know what the saturation point is for DVC? If they thought that they were close to the saturation point, why not just ROFR and resell points rather than build new resorts?

Because they are 2 different avenues of profit, designed to operate in different ways.
Similarly, they have tightly controlled the deluxe hotel space, to keep occupancy high at very high prices -- But they have expanded value resorts, to give an avenue to capture large numbers of lower budget guests.

High occupancy rates at high room rates drives up per guest spending on a continuing basis.

DVC is about pocketing a whole bunch of revenue at once, up front.

If Disney has to cut their hotel rates, their per guest revenues go down immediately. If they cut DVC prices, by a few dollars, it doesn't really affect their per guest spending (which is spread over 50 years for a DVC buyer). Conversely, if they stop selling DVC, it is a major hit to their revenue.
In other words....... They are taking fresh revenue off their hotel rooms every single day. If they stop building deluxe hotel rooms (which they have), their existing rooms keep generating hotel revenue. DVC only generates direct revenue once -- when it is sold.


Also importantly, while there is a relationship between the direct and re-sale market, they are really very different markets, and they will grow even more different in time as resale restrictions grow more pervasive.
But I do believe DVC will offer more generous incentives, not raise prices as steeply as in the past.

But regular hotel bookings is about maximizing revenue per guest. DVC is about maximizing total sales. Two very different revenue streams for Disney.
 
There are three giant hotels that added hundreds of rooms at that price point or even more. Waldorf, Ritz, and Four Seasons are all MASSIVE. Disney didn't, but that doesn't mean the demand isn't there. It means someone out-competed them. Having experienced Disney's hotel service and facilities, this is not much of a stretch. I'd never pay the cash rate for many of these rooms.

The place Disney did compete is mid range, with Destino/Coronado. These hotels are much loved, and no one is expecting Ritz service or facilities. Moderate are still EXPENSIVE for what you get, and Disney knows it. I'd argue most of DVC is correctly characterized as moderate.

I can book all 3 of those hotels right now, for next week.
Once again --- proving my point, Disney's model is to keep their deluxe resorts at nearly 100% occupancy, which they wouldn't be able to do with lots more deluxe rooms at the current price points.

This isn't really debatable -- It's not theoretical. It's a fact that they weren't able to fully book Grand Floridian at the rack rates. (Which is likely the reason for the Big Pine Key conversion).
 
You don't have to be 100% booked to make money. And hotels that show "sold out" don't have to be. Disney is the master of FOMO. Anyone on the DVC boards knows that. And Disney has an army of travel agents, so it doesn't rely on this online stuff like other hotels.

You are arguing both that there is not demand for deluxe rooms and that they are completely sold out, and simultaneously that DVC is at saturation while deluxe is completely sold out and impossible to book. Which is it?

There are a lot of other players in the actual deluxe space, and they have a better product that often costs more. So Disney is playing on the margins with a few hundred rooms, like aging BPK, doesn't mean people aren't paying it. They are paying it at the Four Seasons. There's a reason the NBA players ripped out the mattresses at GF. I stayed at BPK and I would have been furious if I paid $800/night for that room, and that was with the renovation.

As DVC has proven to me, Disney is not a good deluxe hotelier. I mean the BW sleeper sofa, and club level with no milk or Mickey bars out. They aren't at Four Seasons standards. And why would they be, when they can get 5-600$ for Coronado.
 
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Also, just a note from Disney's latest earnings call. Disney CFO Christine McCarthy said:

And in another sign of the robust demand we have seen at our parks and resorts, occupancy at our domestic hotels in the third quarter was 90%. Looking ahead, domestic demand at our theme parks continues to look robust with current forward-looking hotel bookings and intent to visit roughly in line with pre-pandemic trends.

As DVC has proven to me, Disney is not a good deluxe hotelier.

Part of this is that the richy rich don't buy timeshares. I think DVC resorts will become more upscale, but whether they'll ever have a four seasons-esque DVC resort I think is really questionable. Maybe a cash hotel, but not a timeshare.
 
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You don't have to be 100% booked to make money. And hotels that show "sold out" don't have to be. Disney is the master of FOMO. Anyone on the DVC boards knows that. And Disney has an army of travel agents, so it doesn't rely on this online stuff like other hotels.

You are arguing both that there is not demand for deluxe rooms and that they are completely sold out

No... I'm arguing that they very precisely control the supply of hotel rooms, so they can maintain full occupancy at high rack rates. They know if they added significantly more hotel rooms, they would have to either cut rates or operate at less than 100% occupancy.

Again, this isn't a theory -- It's a fact. Prior to the Big Pine key conversion, Disney was quietly offloading Grand Floridian rooms on hotwire at 40% off.


, and simultaneously that DVC is at saturation while deluxe is completely sold out and impossible to book. Which is it?

Demand for purchasing a 50-year contract is very different than demand for booking a single vacation.

I didn't say DVC is at saturation -- Suggested it might be, or might be soon.

Simple math -- How many regular deluxe hotel rooms has Disney added from 2015 to 2025?
How many DVC units is Disney adding from 2015 to 2025?
 
No... I'm arguing that they very precisely control the supply of hotel rooms, so they can maintain full occupancy at high rack rates. They know if they added significantly more hotel rooms, they would have to either cut rates or operate at less than 100% occupancy.

Again, this isn't a theory -- It's a fact. Prior to the Big Pine key conversion, Disney was quietly offloading Grand Floridian rooms on hotwire at 40% off.




Demand for purchasing a 50-year contract is very different than demand for booking a single vacation.

I didn't say DVC is at saturation -- Suggested it might be, or might be soon.

Simple math -- How many regular deluxe hotel rooms has Disney added from 2015 to 2025?
How many DVC units is Disney adding from 2015 to 2025?
The Hotwire part I did not know. I do know that at the end of COVID restriction at WDW, Disney was relocating guests to Grand Floridian at no additional cost from other resorts that were over booked, or that had not yet re opened but were accepting reservations. Yet, the Grand Floridian is supposed to be the "Flagship" resort at WDW. I am going to follow the construction of new DVC with great interest up to 2042. Starting in 2042 my best guess is there will be no more "new" resorts, but tear downs and re furbs of existing resorts and sold as new.
 



















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