Spring Direct Incentives 2/9-4/27

[AstroBlasters]

Do you think that’s a likely happening? Although I’ve taken macro and microeconomics, I don’t know much about central banks and credit. But I agree that lack of financing options would definitely reduce prices.

Do I think an event could happen that would freeze up lending for niche lenders and make it more difficult for people to get loans for new and used timeshares? Absolutely.

Remember…..most problems start in the credit markets…. not the stock market.

 

[🍀TwinsMom]

I think airfare continuing to go up with jet fuel will have an impact on DVC. Folks have to GET to WDW to learn about/experience the bubble and find DVC. Between TSA furloughs every few months and prices for a family of four to fly, I think it eventually will catch up with the DVC sales side.

I agree the K-shaped economy is real, but if every part of going on vacation to WDW is a pricey hassle, DVC may take a hit.

Next incentives, I feel like Dory with short-term memory loss, but haven't they been doing limited fire sales since VGF a couple years ago?

 

[airjay75]

I’ll add that I straddled this particular direct incentive period last year with my first RIV purchase. Last year, the current period was better than the next one. And, they moved from the $1,000 Disney Visa credit to a $1,000 AP credit for AP holders. I wouldn't be surprised to see that again given the summer VIP pass holder deals they're already promoting.

 

[Patmcpsu]

While I think the next round will be similar, I wouldn’t be surprised if they are more aggressive. Josh is new as CEO and he needs to show some results quickly. While he was leading the division before, he had to align to Iger’s expectations.

I predict the Josh D'Amaro effect will be as follows:

1. Disney lowers hotel rates (as part of a broader "make Disney more affordable" push)
2. DVC resale value decreases as hotels become a better value
3. DVC Direct eventually offers better incentives as demand wanes

The steps would happen in this order, with each steps taking years. There's also a small chance that Disney enters a new golden age and WDW demand skyrockets, increasing DVC value.

 

[Brian Noble]

Disney has generally been willing to play the long game when it comes to DVC specifically, and Parks & Experiences generally. They are hesitant to do too much discounting to non-affiliate groups, becuase discounting begets discounting.

 

[marty3d]

I predict the Josh D'Amaro effect will be as follows:

1. Disney lowers hotel rates (as part of a broader "make Disney more affordable" push)
2. DVC resale value decreases as hotels become a better value
3. DVC Direct eventually offers better incentives as demand wanes

The steps would happen in this order, with each steps taking years. There's also a small chance that Disney enters a new golden age and WDW demand skyrockets, increasing DVC value.

1 - I don't see racks rates on hotels coming down anytime soon. D'Amaro is on the record both before and after his promotion to CEO that they view offering different value tiers and targeted promotions as ways to drive demand rather than cutting the price of tickets or hotel rooms. Promotions also allow them to reduce the cost of rooms during downturns and being able to slowly draw back discounts as the economy improves. The reality is that with Disney's stock stagnating at about $100 for the last 5 years and the experiences segment driving the majority of their operating income, there's no incentive to do reduce prices.

 

[Cfabar1]

I think what we may see - which could impact Disney Parks generally is a reckoning around the fact FLorida is miserable to be in for several months out of the year…

So, I could imagine peak nightly rates going up
And non-peak rates going down somewhat (but probably less so than the peak nightly rates would go up)

I think they will also continue to emphasize this promotional playbook for cash rates…

How that impacts DVC - not sure yet… my gut tells me a few things:
1. If the off-peak nights promotions expand too much, direct incentives will need to increase. This summer we are doing an AoA family suite for about $250 a night… there is an argument to be made by many potential customers - why buy DVC if I can stay that cheaply… We have never stayed value, so I’ll let you know how I feel about that argument after we do it..
2. Points charts will need to be reexamined, and those peak times like February-March-April may need to be repriced higher.

If done carefully and correctly it will increase affordability and revenue.

Keep in mind the parks are already quite crowded… imagine if they brought back the EPCOT world showcase busses.. Where would they go? So, I don’t think Disney wants to be too affordable…