The VGF 2 pricing thread

[BWV Dreamin]

FYI, Disney beat earnings estimates as reported yesterday. No reason DVC needs to sell VGF cheap. They ain't hurtin one bit.

 

[Ssplashhmtn]

Plus figure in that these are imitation studios. The actual studios with kitchenettes may disappear very quick with all the new booking competition. Smoke and mirrors calling these studios.

I much prefer the new (aka vgf2) studios. Not sure what’s ”imitation” about them, but I definitely like them better from the floor plan, drawings, layout, and location.

 

[Jwaire]

FYI, Disney beat earnings estimates as reported yesterday. No reason DVC needs to sell VGF cheap. They ain't hurtin one bit.

Was it expected to be cheap? I thought most of the discussion was whether or not it's going to come in below or above Riviera's current pricing.

I much prefer the new (aka vgf2) studios. Not sure what’s ”imitation” about them, but I definitely like them better from the floor plan, drawings, layout, and location.

I'm not sure I prefer it, but I do like that we will now have an additional option in the collection. I know they did it primarily to save costs, but it's nice to have other room configurations other than 1 bed, 1 murphy available. I think they'll be popular with families that travel with older children, grandparents, etc.

 

[zebsterama]

I have an April Use Year . . . So hoping sales start before then. Would love to get the added points from this year and next, which is less than 2 months away. Of course, all this assumes it is priced right!

We've got a March UY .... not looking good .... oh well -- first world problems.

 

[BWV Dreamin]

Was it expected to be cheap? I thought most of the discussion was whether or not it's going to come in below or above Riviera's .

Much speculation as to the opening price. Opening up at the current Riviera price is considered "cheap". IMO, Riviera is not on par with VGF and DVC could( and maybe will) get much more for VGF. As Ive said all along Disney is not gonna leave money on the table. YMMV.

 

[Nabas]

Was it expected to be cheap? I thought most of the discussion was whether or not it's going to come in below or above Riviera's current pricing.

I think most of the guesses are that it will be at RIV prices or slightly above it, maybe 10% above.

But strong earnings could embolden Disney management.

My opinion is that it’s easy to quickly raise prices if demand is hot. It’s a lot tougher to offer meaningful discounts if sales are weak. (Deep discounts call into question the entire product. “Gee, no one wants to buy it. What’s wrong with it?”)

RIV sales have not been particularly strong for a long time now. I’m not sure it makes sense for Disney to jump in with both feet right away with VGF2. Maybe see how the first month of sales go and make a decision from there?

Disney announcing, “Due to incredible demand, we are increasing the price of VGF2 by $20pp” is one thing. Reporting poor first month sales requires an entirely different spin.

 

[Royal Consort]

FYI, Disney beat earnings estimates as reported yesterday. No reason DVC needs to sell VGF cheap. They ain't hurtin one bit.

Disney is a large company containing a number of different divisions. Some divisions can perform well but that doesn't mean all divisions will. It's unknown whether DVD is performing to internal targets and profit margins. That directs the price, not the success of the company as a whole.

 

[RamblinWreck]

FYI, Disney beat earnings estimates as reported yesterday. No reason DVC needs to sell VGF cheap. They ain't hurtin one bit.

I don't think any of the pricing guesses had anything to do with Disney's current financials.

They will price it in the way that they think will work out best for them.

Which will most likely be in line with RIV, in my opinion.

 

[macman123]

I really think they will be the current direct rate, but with some incentives.......

 

[PinkPixel]

I really think they will be the current direct rate, but with some incentives.......

You can’t buy VGF, I tried multiple times this year.

 

[BWV Dreamin]

You can’t buy VGF, I tried multiple times this year.

Which begs the question. If Disney plans on an opening price near Riviera’s direct price, why not capitalize on those that want to purchase at $255/pt, ? I think it has nothing to do with caring about our feelings if they come in lower at the open ( finances are non-emotional with businesses).

 

[Nabas]

Which begs the question. If Disney plans on an opening price near Riviera’s direct price, why not capitalize on those that want to purchase at $255/pt? I think it has nothing to do with caring about our feelings if they come in lower at the open (finances are non-emotional with businesses).

The guess is that Disney does not want to sell a relatively small number of VGF1 points at $255pp and anger a bunch of DVC members once they start selling VGF2 at a much lower price.

At $255pp, VGF was selling on average about 2200 points per month. At $255 per point, there are a small number of buyers.

An actively marketed (and lower priced) DVC resort frequently sells over 100,000 points per month.

From Disney's perspective (and looking at this simplistically):

• $255 per point X 2200 points per month = $561,000 per month
• $207 per point X 100,000 points per month = $20,700,000 per month

So even 12 months of VGF1 sales ($561,000 X 12 = $6,732,000) is a fraction of a single month of VGF2 sales.

In fact, the actual amount of lost revenue is really the difference: ($255 - $207) X 2200 X 12 = $1,267,200.

So for about $100K per month, avoid the headache, build up the reserve of VGF1 points, and wait for VGF2 to go for sale.

 

[BWV Dreamin]

I still think it has nothing to do about angering any members ( plenty of that going on already, ie: no annual passes, 50% borrowing rule, etc). There is some other logic that we just don’t have privy to.

 

[Nabas]

I still think it has nothing to do about angering any members ( plenty of that going on already, ie: no annual passes, 50% borrowing rule, etc). There is some other logic that we just don’t have privy to.

Right, create a backlog of demand so that VGF2 sells like gangbusters right out of the gate. Impress your boss with strong sales rather than go through gyrations explaining why sales did not meet expectations.

Behind closed doors, business is very emotional, even if everyone in the room pretends that it is not. It's all about perception. You sure as heck want to impress The Powers That Be.

Internal expectations almost certainly are that VGF2 will be a cash cow. That's a high bar to have to meet.

 

[mort1331]

I still think it has nothing to do about angering any members ( plenty of that going on already, ie: no annual passes, 50% borrowing rule, etc). There is some other logic that we just don’t have privy to.

This is true about the collective here...but we are a small minority...the majority dont know the ins and outs even after owning for years. But if it gets out that they bought a product $40 more per point just a couple of months before, well then they could be very vocal as to why were they not told to wait for the reduction in price,,or want that lower price now.
Just messy for min payout.

 

[SusieQ93]

At $255pp, VGF was selling on average about 2200 points per month. At $255 per point, there are a small number of buyers.

An actively marketed (and lower priced) DVC resort frequently sells over 100,000 points per month.
association.

That’s really interesting. Curious, how do you find that sales data? I assume maybe there’s some kind of public record with it being tied to a condo

 

[Sandisw]

Which begs the question. If Disney plans on an opening price near Riviera’s direct price, why not capitalize on those that want to purchase at $255/pt, ? I think it has nothing to do with caring about our feelings if they come in lower at the open ( finances are non-emotional with businesses).

I think the fact that they have not continued to sell supports the lower price.

I also think that the new sales for January might help to to see how things are going.

 

[Nabas]

That’s really interesting. Curious, how do you find that sales data? I assume maybe there’s some kind of public record with it being tied to a condo association.

dvcnews.com reports monthly direct sales data.

Here's a graph of sales for the actively marketed WDW DVC resorts since 2013:

 

[SusieQ93]

dvcnews.com reports monthly direct sales data.

Here's a graph of sales for the actively marketed WDW DVC resorts since 2013:

View attachment 646572

Cool! Thanks for sharing!

 

[Sandisw]

I still think it has nothing to do about angering any members ( plenty of that going on already, ie: no annual passes, 50% borrowing rule, etc). There is some other logic that we just don’t have privy to.

I also think it’s so they can sell points from the start that new buyers can book in the short term and not wait for the new studios to open.

Current VGF points will be available for that use.

As a side note, I talked to one of the DVC people at RIV this week and mentioned VGF and my interest vs more RIV.

He was very neutral when talking the two up and played up how both are great resorts and that when they start sales there will be both an MK and Epcot option.

Now, I don’t think that means anything regarding price but I do think trying to sell DVC won’t be easy if you have a huge price difference between the two.