The VGF 2 pricing thread

[davidl81]

Does this mean you are planning to buy at $275pp?

Prices at $275-$285 a point as others have suggested would highly likely prove shall we say difficult to sell. The only reason it was selling in small amounts at $255 a point is that was people with current contracts who wanted to add on mostly small amounts to get a few more days a year etc. On smaller contracts the $pp is less evident. But is DVC is trying to sell 100k points a month they will not be able to do it at those higher prices at this time IMO.

 

[davidl81]

I'm looking to unload some VGF points. If VGF2 opens at $275, my resale at $180pp will look juicy. If they open at $210, I won't be able to sell my VGF at what I got them for. The reason RIV isn't selling is because of the resale restrictions

You are making the assumption that most new DVC buyers are even familiar with resale, much less how resale restrictions may hurt the future value of their contract. Think how many timeshares are sold direct around the world where those same timeshares can be had for free (or pennies on the new dollar)on the resale market, yet those direct sale still happen.
People in these boards may have reservations on RIV because of the restrictions (yet there are a lot who have bought direct regardless), but in the DVC tour the restrictions are not even mentioned. I think overall RIV’s struggle come down to cost and points needed per night. I think someone did the math and a 150 point RIV contract financed through Disney (which is the majority of their sales) is around $550 a month for 10 years when factoring in annual dues. So about $6500 a year. Most people think about that dollar amount and think they are not really saving any money buying DVC. Sure they own it in 10 years, but 10 years is a long time.

 

[emmymac17]

But is DVC is trying to sell 100k points a month they will not be able to do it at those higher prices at this time IMO.

Exactly this! They are moving a small amount monthly right now at $255pp, but this expansion may almost double the number of points at GFV, Disney will want to move them and it will be hard to do volume at $285pp when there are options like Riviera and Aulani which will be presumably significantly less

 

[Paul Stupin]

I'm looking to unload some VGF points. If VGF2 opens at $275, my resale at $180pp will look juicy. If they open at $210, I won't be able to sell my VGF at what I got them for. The reason RIV isn't selling is because of the resale restrictions

It will open at less than $210, with incentives, but resale availability will still be limited, so you might not get 180 but probably not too much less. And long term the price will still go up.

 

[BWV Dreamin]

I mean they are having tons of trouble selling RIV right now at $201 a point with a fairly aggressive incentives based on larger point purchases. The idea that in 6 months they are going to raise direct prices 37% for VGF is absolute insanity. It would be different if RIV was close to selling out with record sales etc, but that’s not at all the case.

The problem with RIV may not be the pricing but restrictions.

 

[Marionnette]

I mean they are having tons of trouble selling RIV right now at $201 a point with a fairly aggressive incentives based on larger point purchases. The idea that in 6 months they are going to raise direct prices 37% for VGF is absolute insanity. It would be different if RIV was close to selling out with record sales etc, but that’s not at all the case.

But are they having tons of trouble selling RIV? There are those who would argue that the data suggests that RIV is selling as expected.

OTOH, I cannot foresee DVC dropping their base price for VGF. If direct was selling at $255 before the announcement then I would expect it to be priced similarly when sales begin anew. However, I also expect incentives to bring that down somewhat to the point where the RIV - VGF differential is not that great. And I expect to see one, maybe 2, RIV price hikes between now and when VGF2 goes on sale, which will make that $255 price tag a little more plausible.

 

[KTownRaider]

But is DVC is trying to sell 100k points a month they will not be able to do it at those higher prices at this time IMO

I think this is true for new resorts (RIV) when your trying to clear 6M pts and and anticipate 3-5 years to clear. VGF2 is not a new resort- its joining an recognized brand, and its adding a comparatively small lot of 1.5-1.75M new points that won't carry the resale restriction burden. Does Disney really want to have VGF2 sold out in 15-17months (100k pts/month)? Sure- I could see that as most people here have acknowledged the cheap conversion/money grab nature of this move. This would imply a cheaper price point which frankly, I hope is true. I'm in the middle of a small contract VGF resale and would definitely look to add on some well priced, unrestricted points.

Depending on how they position VGF2/RIV, I could also see them wanting the VGF2 sale cycle last a little longer to drive overall DVC buyer traffic, and therein help RIV which will inevitably take longer to sell. That would imply a higher price point. Riviera is a gorgeous, first class resort, but outside of these boards/ people who really follow WDW, it just doesn't get the exposure and recognition that it should with the casual park vacationer who never rides the skyliner. A longer VGF2 sales cycle could help with that and thus potentially improve DVC's overall bottom line.

Love the respectful, thought provoking discussion here. Just sucks that we probably have another 6 months before this debate is settled!!

 

[drusba]

VGF is currently at $255 a point through DVD. Because the new studios will be part of the original VGF Resort, the price per point will be the same as the price for VGF generally. But DVD has two ways of effectively raising prices for the new rooms before they go on sale:

1. It can make the new rooms need higher points per night than the current studios. DVD needs a valid justification for doing that, but that appears to be a real possibility, e.g., the hotel rooms being converted are about 440 sq ft compared to the current stuios at 374 sq ft, i.e., square footage of a room is an important factor that goes into determining level of actual ownership interest and the nightly point price differences of the rooms at the DVC resorts.

2. DVD can raise the price per point for VGF, and possibly other resorts, overall. Currently VGF is $255 per point. We are probably at least a year away, probably longer, before the points for the new rooms are offered for sale. DVD, price-wise, considers VGF its premier WDW DVC resort. For those who were around for the approximately two-year before VGF first went on sale in 2013, you may remember the numerous price increases of other resorts that occurred between late 2011 and early 2013 during that time so that VGF could be offered at a high price, e.g., BLT point price in that period increased overall close to 40%, from $120 to $165 per point, and that was during a time when the economy was still in the tank and DVD sales were down as a result of the Great Recession. An interesting factor of those increases in the period before VGF first went on sale is that those increases for BLT, that totaled about 40%, were all done after BLT was essentially sold-out, i.e., they were increases obviously manufactured so VGF could be priced very high and new purchasers would not realize that it was excessively priced.

Thus, I am guessing there is going be two or possibly three price increases before the new studios at VGF go on sale. I doubt DVD will attempt to raise them at the same percentage level it did before VGF first went on sale, but I suspect you could see a $295 per point price before sales begin, maybe somewhat less if DVD also does 1 above and makes the points needed per night higher than the current studios.

 

[KAT4DISNEY]

Just for a little history - quotes from November 2012 when VGF was announced but had not gone on sale yet and no pricing nor point charts had been released. These were from loooonggg time DISboard members and also long time DVC owners:

"I've always said the only thing that would make me want to sell my BWV is GF. But not at the rumored price of $200 a point."

Yes - back in 2012 many were convinced that VGF was finally going to be the one that DVC priced at $200/pt as it's the "flagship" resort.

"GFV will be somewhere around $160 a point give or take with price increases and specials"

VGF started sales 7 months later for $145/pt to current members. A little over a month later it went on sale to everyone at $150/pt. At the time the main marketed resorts - BLT and AKV - had a base price of $160/pt and $130/pt respectively. The wild guesses did not come to fruition and even the guesses of it being priced the same as the highest priced current didn't either - it was priced lower to kick off sales. There's little worse to a business to have their new product stutter out of the gate. They want to be able to hype up what a hit it is. Then they can go to work on raising prices if they feel they can get it. It's not to say that DVD always jumps in with both feet on marketing the new resort although that has almost always been the case. However when CCV went on sale they continued with PVB as the main focus. It made a lot of people decide CCV was a bust but then the sales focus changed, PVB "sold out" and CCV took the lead in sales.

And do not forget that even at the same or slightly lower price/pt DVC still would make more as VGF has the highest price chart. This isn't just an apples to apples comparison. They sell someone points to stay a week in a studio at VGF vs RIV they're getting 5%, 7% even 14% more in that sale of a week long stay. And VGF will be all studios of some form which for square footage requires more points than including 2BR's which uses tripled the square footage but does not demand triple the points. Plus DVC has done it's work to get the higher minimum established so new buyers will be required to purchase 150 pts or more initially which will align pretty well with VGF studio point charts. DVD can price it the same as Riviera and if they sell the week long studio stay at each of the resorts they'll still have a larger sale to VGF buyers.

 

[ScarSimone]

VGF is currently at $255 a point through DVD. Because the new studios will be part of the original VGF Resort, the price per point will be the same as the price for VGF generally. But DVD has two ways of effectively raising prices for the new rooms before they go on sale:

1. It can make the new rooms need higher points per night than the current studios. DVD needs a valid justification for doing that, but that appears to be a real possibility, e.g., the hotel rooms being converted are about 440 sq ft compared to the current stuios at 374 sq ft, i.e., square footage of a room is an important factor that goes into determining level of actual ownership interest and the price differences of the rooms at the DVC resorts.

Spot on. Number 1 is what scares me some for lack of a better word. I think its the way they will go - "resort studio", "pool view" "theme park view" etc, etc, and that is going to strain the studios in the existing building more. I think a good portion of "old" vgf owners may end up buying small add ons, because they are having even more trouble getting the old "stardard view" rooms they had been getting in the past.

It will be interesting to see sales data when its available, but my guess is the average number of points purchased will be lower because this is going to cause a lot more 25 point add ons than normal.

 

[Sandisw]

I'm looking to unload some VGF points. If VGF2 opens at $275, my resale at $180pp will look juicy. If they open at $210, I won't be able to sell my VGF at what I got them for. The reason RIV isn't selling is because of the resale restrictions

RIV is selling at an acceptable level and the resale restrictions do not seem to be a big deterrent for new buyers.

Where it is falling short is current owners not adding on at a similar rate as previous resorts.

 

[KAT4DISNEY]

VGF is currently at $255 a point through DVD. Because the new studios will be part of the original VGF Resort, the price per point will be the same as the price for VGF generally. But DVD has two ways of effectively raising prices for the new rooms before they go on sale:

1. It can make the new rooms need higher points per night than the current studios. DVD needs a valid justification for doing that, but that appears to be a real possibility, e.g., the hotel rooms being converted are about 440 sq ft compared to the current stuios at 374 sq ft, i.e., square footage of a room is an important factor that goes into determining level of actual ownership interest and the price differences of the rooms at the DVC resorts.

2. DVD can raise the price per point for VGF, and possibly other resorts, overall. Currently VGF is $255 per point. We are probably at least a year away, probably longer, before the points for the new rooms are offered for sale. DVD, price-wise, considers VGF its premier WDW DVC resort. For those who were around for the approximately two-year before VGF first went on sale in 2013, you may remember the numerous price increases of other resorts that occurred between late 2011 and early 2013 during that time so that VGF could be offered at a high price, e.g., BLT point price in that period increased overall close to 40%, from $120 to $165 per point, and that was during a time when the economy was still in the tank and DVD sales were down as a result of the Great Recession. An interesting factor of those increases in the period before VGF first went on sale is that those increases for BLT, that totaled about 40%, were all done after BLT was essentially sold-out, i.e., they were increases obviously manufactured so VGF could be priced very high and new purchasers would not realize that it was excessively priced.

Thus, I am guessing there is going be two or possibly three price increases before the new studios at VGF go on sale. I doubt DVD will attempt to raise them at the same percentage level it did before VGF first went on sale, but I suspect you could see a $295 per point price before sales begin, maybe somewhat less if DVD also does 1 above and makes the points needed per night higher than the current studios.

I see a lot of the same work having gone into the higher minimum requirements and it may not be so much on the price/pt side this time. I do expect a price increase or two between now and when sales start but I don't know that it will be at the same level that was done leading into the launching of VGF. Back then they were dropping the minimum point requirements almost with each purchase. This time they've got it back up to levels not seen since AKV was the focus.

 

[Sandisw]

I see a lot of the same work having gone into the higher minimum requirements and it may not be so much on the price/pt side this time. I do expect a price increase or two between now and when sales start but I don't know that it will be at the same level that was done leading into the launching of VGF. Back then they were dropping the minimum point requirements almost with each purchase. This time they've got it back up to levels not seen since AKV was the focus.

To add, 150 at $225 gives them more than selling it at $255 with the previous 125 minimum.

So I agree the strategy could play out that raising minimum purchase allows some drop in price to
be closer to RIV to make it appear competitive.

And we could very well see it 175 before that goes on sale which allows them to start lower too!

 

[davidl81]

But are they having tons of trouble selling RIV? There are those who would argue that the data suggests that RIV is selling as expected.

RIV sold 61k points in May which is horrible for DVC active sales, but let’s give it an exception because of COVID. But what’s more worrying is that RIV only made up about 40% of direct DVC sales which is historically poor compared to the 75-80% average. SSR was talking a bunch of direct sales and I’m sure that is what caused the SSR price increase more than anything else. They want RIV sales to increase.

 

[ScarSimone]

RIV sold 61k points in May which is horrible for DVC active sales, but let’s give it an exception because of COVID. But what’s more worrying is that RIV only made up about 40% of direct DVC sales which is historically poor compared to the 75-80% average. SSR was talking a bunch of direct sales and I’m sure that is what caused the SSR price increase more than anything else. They want RIV sales to increase.

They sold almost 89K RR points in April and 72K in March. May was a steep drop, Maybe it was just an off month, but it does raise a bit of an eyebrow.

 

[davidl81]

They sold almost 89K RR points in April and 72K in March. May was a steep drop, Maybe it was just an off month, but it does raise a bit of an eyebrow.

May also had an increase in price of $6pp (technically a reduction in the incentives). IDK if that’s enough to move the needle, and we do need to see more months of data to make a conclusion, but with the rebound we are seeing in the economy (and the increase of people at WDW) RIV sales dropping over the last two months is the opposite of what I’m sure DVC would have expected.

 

[Nabas]

Here are the average number of points sold during the first 12 months at the most recent DVC additions:

VGF (opened in 2013): 108,000 points per month
PVB (opened in 2015): 79,400 points per month
CCV (opened in 2017): 78,300 points per month
RIV (opened in 2019): 114,400 points per month

Based on this, I don't think RIV restrictions had an impact on direct sales.

 

[Paul Stupin]

Just for a little history - quotes from November 2012 when VGF was announced but had not gone on sale yet and no pricing nor point charts had been released. These were from loooonggg time DISboard members and also long time DVC owners:

"I've always said the only thing that would make me want to sell my BWV is GF. But not at the rumored price of $200 a point."

Yes - back in 2012 many were convinced that VGF was finally going to be the one that DVC priced at $200/pt as it's the "flagship" resort.

"GFV will be somewhere around $160 a point give or take with price increases and specials"

VGF started sales 7 months later for $145/pt to current members. A little over a month later it went on sale to everyone at $150/pt. At the time the main marketed resorts - BLT and AKV - had a base price of $160/pt and $130/pt respectively. The wild guesses did not come to fruition and even the guesses of it being priced the same as the highest priced current didn't either - it was priced lower to kick off sales. There's little worse to a business to have their new product stutter out of the gate. They want to be able to hype up what a hit it is. Then they can go to work on raising prices if they feel they can get it. It's not to say that DVD always jumps in with both feet on marketing the new resort although that has almost always been the case. However when CCV went on sale they continued with PVB as the main focus. It made a lot of people decide CCV was a bust but then the sales focus changed, PVB "sold out" and CCV took the lead in sales.

And do not forget that even at the same or slightly lower price/pt DVC still would make more as VGF has the highest price chart. This isn't just an apples to apples comparison. They sell someone points to stay a week in a studio at VGF vs RIV they're getting 5%, 7% even 14% more in that sale of a week long stay. And VGF will be all studios of some form which for square footage requires more points than including 2BR's which uses tripled the square footage but does not demand triple the points. Plus DVC has done it's work to get the higher minimum established so new buyers will be required to purchase 150 pts or more initially which will align pretty well with VGF studio point charts. DVD can price it the same as Riviera and if they sell the week long studio stay at each of the resorts they'll still have a larger sale to VGF buyers.

Though I’ve disagreed with you previously, your logic and DVC knowledgeability has won me over. I think you‘re exactly right. And I want to add on about 300 direct VGF points, not as much because they’re direct but more because my March UY is impossible to find resale anyway, and what’s out there is just priced too high anyway. So I’m hoping for as low a price point as posssible!

 

[poofyo101]

RIV sold 61k points in May which is horrible for DVC active sales, but let’s give it an exception because of COVID. But what’s more worrying is that RIV only made up about 40% of direct DVC sales which is historically poor compared to the 75-80% average. SSR was talking a bunch of direct sales and I’m sure that is what caused the SSR price increase more than anything else. They want RIV sales to increase.

You should not give any sales numbers an exception due to covid. If anything it should sell faster now.

 

[sethschroeder]

You should not give any sales numbers an exception due to covid. If anything it should sell faster now.

Ummmm no

If 65% of the homeowners had to leave your city for the last year do you think the contractors would still have too much work?

DVC is not the same as other industries. They have had restrictions on various methods of creating interest in DVC. Parks have been at 35% capacity, DL was closed, DCL was closed, no rich foreigners travel to WDW, and you have many members who might have been short and adding on not needing to because of cancelled trips.

So you absolutely need to give a pass.