What's going on with Aulani?

[jani3]

We're considering buying resale Aulani but I just read another thread about how Aulani is "tanking" and "Aulani has bombed". What's going on with Aulani?

 

[Loveallthingsmouse]

I am not sure which tread you read that from, but I have read something similar and was unsure what it was referring to as well. We visited Aulani last summer and are planning another visit in 2016. We loved our 9 day visit beyond words! We are in the process of purchasing an add on to our current contracts, if we didn't live on the EC I know we would have bought resale at Aulani. For us we can easily get to WDW but more planning needed for beautiful Aulani!

 

[disneynutz]

IMO, nice place to visit but I don't need to own there. Longer flight time, no theme park(s), less to do. Disney expected Asian buyers to go nuts but the economy has resulted in a slower than expected response.

Bill

 

[tjkraz]

We're considering buying resale Aulani but I just read another thread about how Aulani is "tanking" and "Aulani has bombed". What's going on with Aulani?

I suspect whatever you read was applying those adjectives solely to DVC point sales. Allegedly sales have been slower than Disney projected. Exactly how much slower is entirely subjective since none of us know what DVC's expectations may have been.

Generally speaking, reviews of the resort itself tend to be excellent. There are some quibbles over food quality & pricing, pool crowds and such. But the architecture and setting are everything you would expect from a Disney + Hawaii combo.

I do think Disney has finally realized that a non-park property will never sell as well as something at Walt Disney World or Disneyland. Aulani was designed to be a huge DVC destination (nearly 500 units) so they will be selling for quite some time. And frankly there isn't much hope for another off-site location in the near future. Concentrating on the park properties is much more profitable.

It has proven quite difficult for non-owners to get a reservation at Aulani during the summer months and over holiday periods. Not impossible, but demand far exceeds the supply of rooms available. During more off-peak periods, it's easier to get a room at 7 months. Adjust your expectations accordingly.

 

[coastalhh]

We're considering buying resale Aulani but I just read another thread about how Aulani is "tanking" and "Aulani has bombed". What's going on with Aulani?

It's probably 50 to 55% sold. Disney area resorts sell faster but for obvious reasons. Many more tourist walk through everyday to hear the sales pitch.

The biggest "bomb" type thing was when it opened they had the annual fees very low per point. DVD found out they could not afford to maintain the resort at those levels..sales were suspended..the dvc top execs and those in charge of aulani were fired and told to move on.

When they later started sales back up again they had new higher maintenance fees that were more adequate for the resort.

That's why you see some on the resale market listed with lower fees. Those were sold before the change and dvc buys those back at a higher rate to convert them to the new rate.

It looks to be a incredible resort. I hope to visit someday and I think it has been successful in cash renting as well but it's not everyday we make a cross country and beyond trip especially with young kids so it will probably be a few years.

If you want aulani buy it. They offer some discounts with it. And Resale isn't that much of a break. The price will only go up over the next 5 years.

 

[wdrl]

Can you include a link to the other thread where people say Aulani has "tanked" or "bombed?"

The Aulani resort is amazing. In my biased opinion, it is the best of the DVC resorts. We bought 100 points at Aulani, which gives us enough points to stay in an Ocean View studio for seven nights every other year.

If Aulani is viewed solely in terms of timeshare sales, I doubt it has met the expectations Disney had when it gave a green light to the project many years ago. Aulani is actively marketed to the Japanese, who normally make up a significant percentage of visitors to the Hawaiian Islands. DVD started selling Aulani points in July 2010 and the resort opened on August 29, 2011. However, in March 2011, Japan suffered the horrendous Great East Japan earthquake off the coast of Tohoku, which had devastating effects on the Japanese economy. I suspect DVD's sales to the Japanese have never recovered from the blow.

Earlier this year I put together some data on Aulani sales (click here to read the article). Given its size (second largest in the DVC system) and its current rate of sales, it will take until 2024 or so before Aulani sells out. Did Disney's board of directors really think Aulani's sale would drag out that long when it agreed to spend upward of $800 million on the project?

When you are sitting by one of Aulani's pools, or floating down the Lazy River, or just enjoying the view from your balcony, you don't really think about things like timeshare sales, projected 'sold-out' dates, return-on-investment, etc.

 

[DenLo]

I think DVC has figured out that you will never get their east coast members to purchase at a Pacific venue. Each DVC resort does depend on new purchasers and the add-on purchases from current members for each resort to be successful. And like wdrl mentioned, sales from the Japanese market has been less stellar than expected. But the local Hawaiians have embraced Aulani and often do staycations at the resort. Many purchasing small contracts too. But unlike at WDW, it is easy to get out of the Disney bubble while there as there is much to do around the island. Although I expect more guests at Aulani spend the majority of their time at the resort compared to other timeshares in Hawaii. It is not for those that sleep late though as the limited night life ends at 10:00 PM and pools close early.

 

[jani3]

Can you include a link to the other thread where people say Aulani has "tanked" or "bombed?"

http://www.disboards.com/threads/dvc-currently-selling.3435527/

 

[JimMIA]

I made one of those comments, and I was referring to the sales difficulties.

It's not just slow point sales. There was also a controversy with the State of Hawaii about the initial maintenance fees being set artificially low to attract buyers. DVC was forced to enter into a settlement whereby they will subsidize contracts sold prior to a certain date for the duration of those contracts. So on resale, you may see a contract listed as "subsidized." If you're going to buy Aulani, you want a subsidized contract.

That investigation and settlement was the primary reason Jim Lewis was fired as President of DVC.

 

[jani3]

We loved Aulani; stayed there last year and cannot wait to go back! My DH isn't too fond of the Disney parks because of the crowds and waiting in line. He'd rather lounge by the pool and beach. We also go to Hawaii every year and we'd like to stay in Aulani for a few days as the last leg of our trip. That's why I think buying DVC there makes sense for us...we'd go there more often than wdw.

It's good to know "tanking" and "bombing" is related to the slower timeshare sales as compared to other DVC sales at the parks. I haven't seen any ROFR exercised by Disney for those resales with subsidized points. I checked the ROFR thread for the last couple of years, but maybe I missed them.

 

[jani3]

I made one of those comments, and I was referring to the sales difficulties.

It's not just slow point sales. There was also a controversy with the State of Hawaii about the initial maintenance fees being set artificially low to attract buyers. DVC was forced to enter into a settlement whereby they will subsidize contracts sold prior to a certain date for the duration of those contracts. So on resale, you may see a contract listed as "subsidized." If you're going to buy Aulani, you want a subsidized contract.

That investigation and settlement was the primary reason Jim Lewis was fired as President of DVC.

Yup, we're actively looking for a subsidized one with the right number of points, use year, and price.

 

[JimMIA]

I don't believe DVC realized their maintenance fees were too low, and out of the goodness of their hearts made an adjustment.

If I recall correctly, the State of Hawaii ordered DVC to stop all sales because the MFs were borderline fraudulent, and then they forced DVC to agree to the subsidization of those contracts until their expiration. That's why Jim Lewis, and I believe also the DVC CFO, got fired.

 

[tjkraz]

Now that @wdrl has been able gather some sales data on Aulani we actually have some numbers to ponder. Over the last 12 months (6 months for Poly), here are the average monthly point sales for the 3 active properties:

Grand Floridian: 96,000 points per month
Polynesian: 59,000
Aulani: 70,000

Those Aulani numbers are stronger than I had personally envisioned. During two months in 2014--when Grand Floridian was the only resort being marketed--Aulani actually out-sold VGF.

Again, we still have no idea what sort of projections DVC made when they commissioned the resort. The dues fubar did nothing to help matters. But this is a much different scenario than Vero Beach which took 10 years to sell a relatively minuscule number of points.

 

[KAT4DISNEY]

We're considering buying resale Aulani but I just read another thread about how Aulani is "tanking" and "Aulani has bombed". What's going on with Aulani?

I read that and think it was a off the cuff remark about sales. Aulani is huge with lots of points and I doubt DVC expected it to sell out in just a couple of years. Since you've been you know what the resort itself is like - very nice. Really I think it's the most beautiful and fairly complete Disney resort but it did take DVC a bit of time to realize that when the removed their resorts away from the draw of the parks they needed to up their game a bit - and they were making changes to Aulani within a couple of years. As tjkraz mentioned there also hasn't been a lot of information available on how the sales are going but now that there is it seems they are chugging along at a steady pace. Both SSR and AKV were very large and were sold over many years too.

Honestly, many east coasters don't give a lot of love to Hawaii. They consider it too far so it's then not a "worthwhile" resort. We are west coast, love Hawaii and have been to Aulani twice and will go back more times.

 

[disneynutz]

I don't believe DVC realized their maintenance fees were too low, and out of the goodness of their hearts made an adjustment.

If I recall correctly, the State of Hawaii ordered DVC to stop all sales because the MFs were borderline fraudulent, and then they forced DVC to agree to the subsidization of those contracts until their expiration. That's why Jim Lewis, and I believe also the DVC CFO, got fired.

If they didn't realize that their maintenance fees were low then all DVC accounting should be in question IMO. We trust that they don't make mistakes or operate in a gray area but we know that the DVD guides bend the truth on a daily bases. We also know that the State of Hawaii made DVD stop selling we don't know if the subsidized dues were ordered or agreed to or done to not have to enter into a legal battle with new owners who were sold a contract with incorrect accounting. Sales were stopped world wide and it took almost a year for Disney to get re-registered to sell in some states, why so long?

You don't fire three executives because someone made an honest mistake.

Bill

 

[chalee94]

i posted this in the original thread before i saw this new thread:

saying it tanked and saying it's amazing are not contradictory.

the DVC execs in charge at the time of building aulani got terminated in something of a minor scandal. disney intended to sell significant chunks of aulani pts to the japanese but the tsunami and struggles of the japanese economy have almost certainly meant they have not hit those targets. getting firm numbers to evaluate the sales for aulani is pretty tough but aulani has already been selling for about 5 years now and dvcnews projects it will likely not sell out for another 10 years from now. even for a fairly large resort, that is a LOOONNG time.

a good offsite resort would draw demand consistently and be booked up at over 95% - a poor choice will mean more aulani owners crowding to use their pts at wdw rather than pay airfares to hawaii. i have read that aulani has rented rooms to locals for 80% off the rack rate - that's not going to go far in keeping the annual dues reasonable for aulani owners going forward.

VB is a nice resort - but it was originally intended to be larger. demand didn't show up and they cut the size of the final resort. demand for VB rooms is high in the summer but from what i understand, it simply doesn't have year-round demand like the wdw resorts do.

aulani sounds like a really great resort from what i've heard...but to the extent that it takes forever to sell out and doesn't balance demand between other DVC owners actually trading to aulani and aulani owners trading to wdw, then it will not encourage disney to take another chance at building an offsite resort.

as JIMMIA said in the context of the other thread: "There is a huge difference between where we might like to GO...and where we would actually BUY." if DVC builds offsite resorts that many of us might like to visit on occasion but most of us wouldn't care to *buy and own*, then it's ultimately a failure as a DVC resort...and will lead to DVC staying away from building more offsite options for DVC owners. (and again, the original comment was in the context of a poster saying, "i hope DVC builds a timeshare in NYC...")

 

[chainkid]

Aulani is a beautiful resort no question but if I'm flying from the east coast I choose Oahu as a stopover destination not a final one. It's actually pretty depressing when getting off the plane and driving to Ko Olina Areas as its dry, arid and not what most people feel represents Hawaii. The resort itself is pure Hawaii but the location is too far from the rest of the island. I recently brought a group of 8 people who had never been to Hawaii and I felt bad that they all looked stunned when we were driving out to resort. I have been a few times and been all around Oahu so it didn't phase me but they sure looked down. When we got to the resort they felt different. We had a great time and I would go back in a few years on the way to another island destination. There was not enough to do for me especially in the evening and food except at breakfast was not worth the price we had to pay. Our Grand villa was probably the nicest villa I have ever stayed at but in the end I wouldn't buy here. I will go back for sure but it will be a few years in between. West coasters will be their market on this one.

 

[jani3]

Earlier this year I put together some data on Aulani sales (click here to read the article). Given its size (second largest in the DVC system) and its current rate of sales, it will take until 2024 or so before Aulani sells out.

Thank you for that link. That's a very interesting data.

Really I think it's the most beautiful and fairly complete Disney resort but it did take DVC a bit of time to realize that when the removed their resorts away from the draw of the parks they needed to up their game a bit - and they were making changes to Aulani within a couple of years.

What sort of changes did they make to up their game?

 

[KAT4DISNEY]

Thank you for that link. That's a very interesting data.



What sort of changes did they make to up their game?

They removed a stingray pool ( which was a nice attraction but really something just to look at for most) and added the new family pool with the grotto. Also converted one of the Grand Villas into a quick service cafe which previously was a small single window service. They also added a private pool deck lounging area to the space just below the restaurant and in general added more pool area for seating and lounging. For a new resort they reworked the pool area quite a bit to be able to accommodate the size of the resort. Even at Disney Workd I think they skimp on the pool facilities when compared to what currently goes in to a more deluxe resort but it's not as obvious because of the parks. At Aulani they had built better facilities than they tend to at WDW but still had underestimated usage IMO.