Value DVC Timeshares Coming?

[BWV Dreamin]

There has been talk about the possibility of DVC Value Resorts being added. Rumor has it that DVC has requested an allocation of the new Animation rooms for a DVC value offering. The point requirements would be low, as would the MFs. Apparently there is substantial demand within existing members, and it will open up another entire market focus. It seems there are a number of DVC members that would book Sun-Thurs nights, move to value resorts for Fri & Sat nights and then back to DVC rooms on Sun for more nights. Quite a number of "value-price oriented" DVC'ers were up in arms over the point re-allocations from weekends to weekdays and called to voice their extreme disapproval.

Any thoughts? With the new replacement of Jim Lewis, who is sales oriented, maybe this possibility is not so far fetched?

 

[Mickey'sApprentice]

I'd consider staying for HALF the points of standard points. Matter of fact, I would think that they would book pretty quickly at the 7 month window.

I've said for awhile that Disney has overpriced DVC points. However, after paying $84 for BWV resale (back before the prices dropped), I don't see paying $90 or $100 per point for a value DVC.

 

[Dean]

There has been talk about the possibility of DVC Value Resorts being added. Rumor has it that DVC has requested an allocation of the new Animation rooms for a DVC value offering. The point requirements would be low, as would the MFs. Apparently there is substantial demand within existing members, and it will open up another entire market focus. It seems there are a number of DVC members that would book Sun-Thurs nights, move to value resorts for Fri & Sat nights and then back to DVC rooms on Sun for more nights. Quite a number of "value-price oriented" DVC'ers were up in arms over the point re-allocations from weekends to weekdays and called to voice their extreme disapproval.

Any thoughts? With the new replacement of Jim Lewis, who is sales oriented, maybe this possibility is not so far fetched?

It's a little hard for me to fathom how this could fit in as a regular part of DVC. I know there are extensive thread's from a few years ago on the subject here on DIS centering around the unfinished POP project at the time.

 

[hakepb]

I do think the new Art of Animation family suites will make for perceived competition for some (2 bathrooms, sleep 6?) For a reasonable amount.
I don't think any DVC could be there in the same system. (Would have to be an even trade, RCI-like someone has to trade out for another to trade-in)

Imagine a GFV owner only seeing a value room available.

 

[BWV Dreamin]

I'm looking at this from a different angle, from a sales perspective. There is a following for the value resorts. Why not market a DVC to these people? Would this be the start of a tiered system?

 

[hakepb]

I'm looking at this from a different angle, from a sales perspective. There is a following for the value resorts. Why not market a DVC to these people? Would this be the start of a tiered system?

Its not a terrible idea, and I would not mind an occasional point conserving stay (so I get more total WDW days)

But I think DVC is too much into the "deluxe" angle. (Although I think DVC needs to differentiate more if these value suites have the same linens...) Much like BMW and Mercedes are somewhat common cars in other countries (ie cabs) and make smaller and 4 cylinder models. But in America, they choose to be known as high-end and only sell larger cars with larger engines. They could sell more, cheaper cars....

 

[disneynutz]

DVD is number driven. They will build and sell what turns a profit. If that's a value then so be it but I don't think that is part of their business plan.

Bill

 

[Brian Noble]

I'm looking at this from a different angle, from a sales perspective. There is a following for the value resorts. Why not market a DVC to these people? Would this be the start of a tiered system?

It doesn't pass the sniff test to me. Sales are still robust, especially given the overall economic situation. What's more, apparently the Value category is renting like gangbusters---so there's really no need to cannibalize the rental arm for a dubious DVC value proposition of what can only end up being lower-margin sales. They have more need to convert high-end rentals into monetized timeshare sales...and that may be in the cards for part of the Grand.

It seems there are a number of DVC members that would book Sun-Thurs nights, move to value resorts for Fri & Sat nights and then back to DVC rooms on Sun for more nights. Quite a number of "value-price oriented" DVC'ers were up in arms over the point re-allocations from weekends to weekdays and called to voice their extreme disapproval.

But, the people that already bought with that in mind have already bought. Disney doesn't really care if they are no longer happy---they have already spent their money. Sure, more of them than otherwise might put their contracts on the market, but Disney has also made it clear (by more or less abandoning ROFR and going to resale restrictions) that they can live with that.

The only reason is if *new* sales could be spurred with this approach, and it doesn't seem likely to me. A big part of the DVC sales pitch (or, really, *any* timeshare pitch) is aspirational---live a better lifestyle, something that you couldn't really do any other way, by "locking it in at today's prices" etc. These Animation suites *are* nice, but they don't have those eye-popping I-can't-ever-imagine-renting-that rack rates that the DVC rooms typically have. And, without an aspirational marketing angle, it's harder to get better-than-rental-rate returns on the investment.

I suppose it is possible. But it does not feel like the best possible return on investment for Mickey, and so it seems unlikely. If I were a betting man, I'd bet quite a few mickeybars that this isn't happening.

 

[jodifla]

Won't happen.

 

[Chuck S]

Actually, I wouldn't mind a Deluxe DVC resort built where Animation Resort is being built. It is a nice location, and would give those DVC owners easy access to Pop Century's food court and pizza delivery. But I would not want to see a true "value" DVC resort. I don't really think it would fit well into the DVC framework.

1) the per point sales price would need to be low to appeal to people wanting a "value" class DVC. Remember, many people that regularly stay at value resorts are used to free dining, and lower than Deluxe per night rental rates. The value DVC would have to be price very competively to attract members there.

2) The dues per point would also need to be low for the same reasonm...to appeal to those wanting a "value" class DVC.

So now we'd have new members, with both low purchase price AND low dues able to use their value points at existing DVC resorts, basically much cheaper than long time owners. Bad idea, in effect the Deluxe DVC owners would be subsidizing the ability of value owners to stay at deluxe DVCs at 7 months. Unless the Value DVC and Deluxe DVC are totally separate and the points are not able to be used between resort classes.

 

[Finally DVC]

Rumor has it that DVC has requested an allocation of the new Animation rooms for a DVC value offering.

Everyone seems to be jumping to the conclusion that this means DVC will sell points in the new resort. It could also mean that the Art of Animation rooms would be added to the Disney collection. If Disney really has gotten a lot of requests from members to stay at a value resort on weekends, this would be an additional carrot for buying direct.

 

[keaster]

Everyone seems to be jumping to the conclusion that this means DVC will sell points in the new resort. It could also mean that the Art of Animation rooms would be added to the Disney collection. If Disney really has gotten a lot of requests from members to stay at a value resort on weekends, this would be an additional carrot for buying direct.

I agree with this assessment, makes the most sense and wouldn't be too much of a hassle for DVC to implement.

 

[JWG]

The issue with a value DVC is, how will it sustain itself?

They can't charge a reduced rate for points. If I can buy value points for $75 instead of $140 for BLT points, why wouldn't I do that and then just book BLT at the 7 month mark? This would be a disservice to current members and jeopardize the deluxe resorts viability.

The other option is to charge the same for points, but have the rooms be several points less per night. That is not cost effective. A value resort will have similar to same maintenance costs as a deluxe. There really isn't much more other than space and time to clean.

I can't see this working unless they're separate programs operated mostly independently and value owners can't book deluxe without some type of price premium.

I could see them being added to the Disney Collection, but not as an ownership opportunity without a drastically different system.

 

[JimMIA]

If I can buy value points for $75 instead of $140 for BLT points, why wouldn't I do that and then just book BLT at the 7 month mark?

The only way they could do something like that would be to limit the use of those points only to the value resorts. They could create a DVC Express/DVC Lite kind of thing and not include them in the current DVC family of deluxe resorts.

I personally don't see it happening at all. I can't imagine them cheapening the brand.

I don't really see DVC building anything but deluxe as long as there are deluxe resorts remaining with no DVC units. BLT will be sold out any minute nowrolleyes1) and they are still selling (or not selling) SSR and AKV.

And of course, Aulani...

They've still got Grand Floridian, Poly, and Yacht Club at least theoretically available for some kind of DVC presence and they could probably expand VWL and BCV if they wanted to.

 

[BWV Dreamin]

Those proposed resorts require more money upfront for purchase. With the economy like it is, this will appeal to those with jobs but lack the higher income. Definitely a group of people untapped.

The only way they could do something like that would be to limit the use of those points only to the value resorts. They could create a DVC Express/DVC Lite kind of thing and not include them in the current DVC family of deluxe resorts.

I personally don't see it happening at all. I can't imagine them cheapening the brand.

I don't really see DVC building anything but deluxe as long as there are deluxe resorts remaining with no DVC units. BLT will be sold out any minute nowrolleyes1) and they are still selling (or not selling) SSR and AKV.

And of course, Aulani...

They've still got Grand Floridian, Poly, and Yacht Club at least theoretically available for some kind of DVC presence and they could probably expand VWL and BCV if they wanted to.

 

[jlewisinsyr]

A value resort will have similar to same maintenance costs as a deluxe. There really isn't much more other than space and time to clean.

I disagree, the reserves and property maintenance would be significantly different as the theming at Deluxe resorts (pools, refurbishments, etc) are significantly more than non-Deluxe resorts. The maintenance line item is only second to housekeeping.

 

[tjkraz]

It seems there are a number of DVC members that would book Sun-Thurs nights, move to value resorts for Fri & Sat nights and then back to DVC rooms on Sun for more nights.

Problem is they would need to fill the rooms 7 nights per week--not just 2--for it to be a success.

I suspect Disney would much rather see these people book the weekends on cash rather than try to sell them cheap timeshare points.

Quite a number of "value-price oriented" DVC'ers were up in arms over the point re-allocations from weekends to weekdays and called to voice their extreme disapproval.

The first reallocations hit the fan nearly 3 years ago. I can't see DVC using any "extreme disapproval" from members as justification for a move like this--three years after the fact. By this time most members have either come to terms with the increases (buy more points, adjust vacation habits) or moved on. Others who have joined in the last 28 months never knew the "old" system.

Those proposed resorts require more money upfront for purchase. With the economy like it is, this will appeal to those with jobs but lack the higher income. Definitely a group of people untapped.

Just doesn't add up for me. DVC will sell a buyer 100 points at SSR for $99 each. After the downpayment that's about $110 per month for the mortgage. I can't buy into the idea that there is some great untapped market out there that refuses to buy with payments of $110 per month, but would take the plunge at $80-90 per month.

If DVC has done anything over the last 5-7 years it's been to make the program affordable to everyone. Via financing options, incentives, AP discounts, anyone who is used to paying $2000 per year for a Disney vacation is made to think they can afford it if they can handle a monthly debit of about a hundred bucks.

I'll grant that anything COULD happen--particularly with new management in place. But selling a value-priced DVC product seems incredibly short-sighted to me. We've already seen what happened to BLT sales when its net prices run $140 per point vs $99 for SSR and ~$110 for AKV and Aulani...not to mention the impact of resale prices.

Disney can't command $150+ for the Grand Floridian, Poly and other future resorts if they have a competing product available for $75. There's something to be said for selling a smaller volume at higher margins.

 

[BWV Dreamin]

Lots of counters against your statements. We don't really know what Disney wants. We know they want people making MF's towards resorts. Why would Value resorts be excluded from that thinking? MF's offset Disney's costs.

We don't know what price Disney would sell at. Why $75? The family suites are direct competition with the newer deluxe resorts accomodations wise. Some people are tired of waiting and watching for promos. Pop and now maybe the newer Arts of Animation will be enough of a draw that people simply don't want to pay the increased deluxe prices.

It takes time for Disney to feel the effects of discontentment, so 3 years is not a long time for them to be responding to it.

The loans requirements have gotten a lot stricter. The more you want to borrow, the squeaky cleaner you have to be. So lower buy in prices bode well for the not so credit worthy.

Really, I could go on and on...(how have you been Tim? )

Problem is they would need to fill the rooms 7 nights per week--not just 2--for it to be a success.

I suspect Disney would much rather see these people book the weekends on cash rather than try to sell them cheap timeshare points.



The first reallocations hit the fan nearly 3 years ago. I can't see DVC using any "extreme disapproval" from members as justification for a move like this--three years after the fact. By this time most members have either come to terms with the increases (buy more points, adjust vacation habits) or moved on. Others who have joined in the last 28 months never knew the "old" system.



Just doesn't add up for me. DVC will sell a buyer 100 points at SSR for $99 each. After the downpayment that's about $110 per month for the mortgage. I can't buy into the idea that there is some great untapped market out there that refuses to buy with payments of $110 per month, but would take the plunge at $80-90 per month.

If DVC has done anything over the last 5-7 years it's been to make the program affordable to everyone. Via financing options, incentives, AP discounts, anyone who is used to paying $2000 per year for a Disney vacation is made to think they can afford it if they can handle a monthly debit of about a hundred bucks.

I'll grant that anything COULD happen--particularly with new management in place. But selling a value-priced DVC product seems incredibly short-sighted to me. We've already seen what happened to BLT sales when its net prices run $140 per point vs $99 for SSR and ~$110 for AKV and Aulani...not to mention the impact of resale prices.

Disney can't command $150+ for the Grand Floridian, Poly and other future resorts if they have a competing product available for $75. There's something to be said for selling a smaller volume at higher margins.

 

[tjkraz]

Lots of counters against your statements. We don't really know what Disney wants. We know they want people making MF's towards resorts. Why would Value resorts be excluded from that thinking? MF's offset Disney's costs.

Sure we know what Disney wants...they would like to sell for the highest price possible. DVC has never put volume over margins. If they were more interested in volume, they could have left the BLT price at $120 per point and it would have been sold out months ago--perhaps more than a year ago.

Why would value resorts be excluded from their thinking? IMO, for the same reasons they've gone 20 years without any Value or even Moderate DVCs. Elite product; elite price.

We don't know what price Disney would sell at. Why $75?

$75 was just an illustration.

I still see the current products--with loans around $100-110 per month--being as bargain basement as Disney is willing to go. I can't see there being a huge untapped market that simply cannot afford $110 per month, but would buy if there was a solution that cost them $75 (or $70, or $80).

The family suites are direct competition with the newer deluxe resorts accomodations wise.

True. And I think that's why we're seeing more and more Deluxe resorts being converted to DVC. Two floors of Jambo House from hotel rooms to DVC...North Garden Wing at CR. Grand Floridian room conversions may be next. Then Poly. Then the South Garden Wing at CR. When it comes to conversions...the list is endless. If occupancy rates dictated it, Disney could spend the next 2-3 decades converting cash rooms to DVC without ever building a new resort.

IMO, that's the better strategy to loss of cash business at Deluxe resorts.

Here's the real issue I see: When you introduce a value priced product, you not only potentially open up a new market but you also provide alternatives to your existing market.

Yes, there is some group of people who would buy at $75 per point (just to pick a figure) but not at $99. But you also have people who are ready, willing and able to spend $99-140 who would then choose to just spend the $75. So DVC would not only be opening up a new market, they would be undercutting their existing markets.

Again, I'll grant that with new leadership anything is possible. But this strikes me as a move that would diminish the value of the entire DVC product and only hurt "new" sales in the long run.

It may improve sales volumes but at the cost of profitability.

The loans requirements have gotten a lot stricter. The more you want to borrow, the squeaky cleaner you have to be. So lower buy in prices bode well for the not so credit worthy.

If Disney can't get approval on a $110 per month loan for a potential customer, then it's not business worth chasing. Buyers need thousands more per year for park tickets, transportation and food. The lower you go (in terms of approved loan amounts) the higher percentages climb for defaults and repossessions.

Really, I could go on and on...(how have you been Tim? )

Same as always. You?

 

[DVCconvert]

Yes, there is some group of people who would buy at $75 per

In fact they are doing that now....VB is priced at $75 for new members.