Why Would You Buy Direct Anymore?

[DougEMG]

The ability to purchase an annual pass is an important part of our membership. If it goes away or is eliminated, we will have to rethink WDW vacations.

Owning DVC and having the GOLD annual pass encourages us to make more trips to WDW and to own more points at DVC. Remove the annual pass and we will not make as many trips and we won't need to own as many points. For us DVC and annual passes are tightly linked together. Prior to owning DVC we only ever did the 10 day pass for 1 trip a year. In all likelihood, that is what we would go back to, or maybe more time at Universal using their annual pass

I think/hope that the annual passes will come back eventually.

 

[Drew729]

While I do appreciate the hope that things will return to normal over time at WDW. My concern with AP is that DL has already stopped AP and Chapek has publicly stated that had it not been for the interruption(COVID) it would have been tough to discontinue AP at DL.

I would consider that AP as we know it could look much different in the future and COVID was a good cover to cut, even though some cuts were necessary I wouldn’t count on those perks coming back anytime soon.Sure there are those that have been able to renew but there are still a bunch of new owners who would like AP’s but can’t get them currently.

I would like to be wrong but it’s tough to find a reason to buy direct until AP is back.

 

[Drew729]

Here is Chapek, I am looking forward to having my expectations being exceeded.

 

[KAT4DISNEY]

Here is Chapek, I am looking forward to having my expectations being exceeded.
View attachment 566620

My point about the chance to experiment. And in true Chapek form he mentions reset on the cost side first.

And if it fails they will announce "due to our love of spreading pixie dust and all our thanks to our extraordinary frequent visitors we want to welcome you all back and are finally able to reinstate our AP program". *

*"And just ignore the website failures and phone busy signals while you try and purchase. We know we'll get you anyway".

 

[havoc315]

Back to DIsney and AP's for a second although I'm not certain what you're trying to argue other than that Chapek (and Iger before him) always had that statement in their reports regarding Parks and Resorts. "Annual Passholders spend less than the average guest because they typically stay on site for a shorter period of time and spend less once they’re in the parks" I've come to the conclusion it's a sentence they are required to say. That often gets interpreted as "they hate AP holders" however they've been saying it for years and changed next to nothing. (I'll address DL later)

It's not something they are "required to say." They say it because it's true -- It would be a felony for a public corporation to lie to the investors.

Now, them paying "little" beyond the price of the AP is subjective -- Of course they buy some food and merchandise. Some occasionally book rooms. Some are DVC owners -- but again, that's booking a room at a steeply discounted rate.

So spending "little beyond the price of the AP" -- is in comparison to the family that books a week at the Grand Floridian.
Now, certainly SOME AP holders may spend a ton AT Disney. But on average, in comparison to non-AP visitors, they aren't spending very much.
I believe about 60% of non-AP regular visitors stay on site... Among AP holder, it's far far fewer than the 60%.

 

[havoc315]

What IS the Average Ticket Holder? If Disney sells anything other than 1 day tickets then they are not maximizing their profits.

That's not true. They wouldn't discount the additional days UNLESS that was maximizing their profits.
Now, if they could get a sell out EVERY DAY by selling just 1-day tickets, they would.

But they can't... in fact, the park is rarely "sold out" pre-pandemic. Even during the pandemic, the park has rarely been "sold out."

So offering additional days at a lower price does indeed maximize the profit. Especially as it encourages people to book on-site hotels for longer. They make far more off the hotel than off the tickets.

 

[havoc315]

In normal times, The cost per day that a guest pays for a ticket would only really matter on the few days a year that the parks are above capacity. The $20 fequent visitor is still better than $0 per day if that person doesn't visit and parks arent at or above capacity. Also who spends a day at Disney and doesn't eat/drink or purchase? Not many I would imagine. Never has happened with my family.

Of course $20 per day is better than $0 per day. And of course they buy some food and drinks.
But they still spend MUCH LESS than a family that is staying on site, that is on property 24/7... paying for a hotel, paying for ALL of their meals.

 

[havoc315]

On average, I suspect that it also true of DVC members - no matter what passes they choose.
Not a surprise because there are many internationals who would love to to WDW right now, but cannot due to travel restrictions. It's also not a stretch to think that there are many out-of state residents who choose not to visit right now.

My only point is that I believe annual passes will be sold again for WDW. Prices will be adjusted and perhaps also the perks, but we annual passholders (current & former) will still recognize the Program.

The ability to purchase an annual pass is an important part of our membership. If it goes away or is eliminated, we will have to rethink WDW vacations.

Unless Disney can hit capacity on a daily basis without APs.. they will bring back APs.

 

[RebelScum]

Owning DVC and having the GOLD annual pass encourages us to make more trips to WDW and to own more points at DVC. Remove the annual pass and we will not make as many trips and we won't need to own as many points. For us DVC and annual passes are tightly linked together. Prior to owning DVC we only ever did the 10 day pass for 1 trip a year. In all likelihood, that is what we would go back to, or maybe more time at Universal using their annual pass

I think/hope that the annual passes will come back eventually.

We are in the same boat. Our Gold AP goes hand in hand with our DVC Membership. We literally have 4 times the number of points since we started buying the Gold AP (nearly 4 years ago). If our ability to buy AP disappears, we would not have the desire for nearly as many DVC points. Would be hard for us to separate.

Also, we are fans of Riviera and enjoy being able to book/stay there. So, Direct points come in handy for us for that purpose also.

 

[KAT4DISNEY]

It's not something they are "required to say." They say it because it's true -- It would be a felony for a public corporation to lie to the investors.

Now, them paying "little" beyond the price of the AP is subjective -- Of course they buy some food and merchandise. Some occasionally book rooms. Some are DVC owners -- but again, that's booking a room at a steeply discounted rate.

So spending "little beyond the price of the AP" -- is in comparison to the family that books a week at the Grand Floridian.
Now, certainly SOME AP holders may spend a ton AT Disney. But on average, in comparison to non-AP visitors, they aren't spending very much.
I believe about 60% of non-AP regular visitors stay on site... Among AP holder, it's far far fewer than the 60%.

Way too serious about the "required". It was a joke.

Again, what are you arguing? If it's that a family on a once in a lifetime trip staying at the VGF spends more money on average on a daily basis than what an AP holder spends on a daily basis I don't think anybody has really debated that is likely.

Then you add in that an AP holder pretty much only pays for their AP and that's it.

So either you have more inside info than you're sharing or you're interpreting a simple statement that they say every year to mean they don't spend any more money than admission and I've never heard that statement made.

 

[havoc315]

Way too serious about the "required". It was a joke.

Again, what are you arguing? If it's that a family on a once in a lifetime trip staying at the VGF spends more money on average on a daily basis than what an AP holder spends on a daily basis I don't think anybody has really debated that is likely.

Then you add in that an AP holder pretty much only pays for their AP and that's it.

So either you have more inside info than you're sharing or you're interpreting a simple statement that they say every year to mean they don't spend any more money than admission and I've never heard that statement made.

All I’m saying is that when capacity is limited — whether Christmas, Covid — WDW makes more money off giving those limited spots to regular ticket buyers. And that’s why new AP sales are temporarily suspended. Why only the most expensive types of AP cover Christmas. Etc. Shouldn’t be a very controversial treatment. It’s merely stating the obvious.

 

[Einstein509]

But you potentially save a LOT more than $200 per AP per year.

If you live out of state, an annual pass is $1200. You cannot buy a Gold Pass without DVC.
With DVC, you can buy a Gold Pass for $719 (if it works with your typical travel dates).

So that's a savings of $481. Family of 4 -- That's a savings of $1924 per year.

So if re-sale is $17,000 cheaper: Break even if 9 years, if you are a family of 4 that can benefit from Gold Passes.

Meanwhile, savings are often far less than $17,000. For example -- Direct at Riviera $180 per point for 200 points. vs resale at BCV or BLT or Poly... Where it's $140 to $150 per point. So 200 points, re-sale savings would only be about $8,000.
So the gold pass discount break even point is only 4 years.

So it really depends on the buyer. For many many families, the direct purchase is financially wise IF they are taking advantage of the Gold Passes and IF that perk returns.

Let's also take this into account. I take that $17,000 I saved, invest it and at a very conservative 7% rate of return, in 9 years I have almost $32,000. So the savings, break even points, etc...are even more extended. It's just plain dumb to buy direct from a financial perspective.

 

[crisi]

All I’m saying is that when capacity is limited — whether Christmas, Covid — WDW makes more money off giving those limited spots to regular ticket buyers. And that’s why new AP sales are temporarily suspended. Why only the most expensive types of AP cover Christmas. Etc. Shouldn’t be a very controversial treatment. It’s merely stating the obvious.

Its more than just when the parks at at capacity. You don't want to run the parks with too few people - that isn't cost effective - but there is an optimal number below capacity (everyone with a business degree who had to read The Goal can now raise their hand). Running at capacity burns out your employees, your systems, your machinery, and your customers - and doesn't leave room to grow.

 

[havoc315]

Its more than just when the parks at at capacity. You don't want to run the parks with too few people - that isn't cost effective - but there is an optimal number below capacity (everyone with a business degree who had to read The Goal can now raise their hand). Running at capacity burns out your employees, your systems, your machinery, and your customers - and doesn't leave room to grow.

.... what’s the point if room to grow if you don’t want to grow??

Disney would be thrilled to be at 100% regular capacity every day, if they could do it while preserving their pricing.
If not, they’d cap Easter and Christmas tighter.

 

[havoc315]

Let's also take this into account. I take that $17,000 I saved, invest it and at a very conservative 7% rate of return, in 9 years I have almost $32,000. So the savings, break even points, etc...are even more extended. It's just plain dumb to buy direct from a financial perspective.

Careful with that math. I’ve run it many times. You start looking at alternative investment, you quickly discover that you wouldn’t have done better never buying DVC at all. Just investing the point cost, using the interest and gains towards vacations.

 

[Maistre Gracey]

Let's also take this into account. I take that $17,000 I saved, invest it and at a very conservative 7% rate of return, in 9 years I have almost $32,000. So the savings, break even points, etc...are even more extended. It's just plain dumb to buy direct from a financial perspective.

Not really... you would still need to purchase full freight AP’s (the $$$ difference) every year. Don’t forget to deduct that from the pile of cash.

 

[crisi]

.... what’s the point if room to grow if you don’t want to grow??

Disney would be thrilled to be at 100% regular capacity every day, if they could do it while preserving their pricing.
If not, they’d cap Easter and Christmas tighter.

If they don't grow, their shareholders have issues. Growth is the only way forward for a modern corporation.

 

[havoc315]

If they don't grow, their shareholders have issues. Growth is the only way forward for a modern corporation.

yes...but you grow by increasing capacity and filling it.

 

[crisi]

yes...but you grow by increasing capacity and filling it.

But you have to have extra capacity to create capacity. Its one of the paradoxes of logistics management. Operating at capacity is not efficient and leaves no resources for expansion.

 

[eandt]

We can always agree to disagree on matters of opinion. Facts are facts:

"During yesterday’s third quarter earnings call, Disney CEO Bob Chapek revealed that half of all of the guests visiting Walt Disney World right now are locals. This means that the resort is relying quite heavily on Annual Passholders during the reopening phase. Chapek noted that Annual Passholders spend less than the average guest because they typically stay on site for a shorter period of time and spend less once they’re in the parks. "

https://blogmickey.com/2020/08/disn...reasingly-difficult-to-visit-the-theme-parks/
So feel free to disagree with me. But I doubt you know the financials better than Chapek.

If majority of those visiting now are locals then of course they spend less since many won't stay over night or stay as long if they do. In normal times I would bet that the majority of guests are not locals.

That's not true. They wouldn't discount the additional days UNLESS that was maximizing their profits.
Now, if they could get a sell out EVERY DAY by selling just 1-day tickets, they would.

But they can't... in fact, the park is rarely "sold out" pre-pandemic. Even during the pandemic, the park has rarely been "sold out."

So offering additional days at a lower price does indeed maximize the profit. Especially as it encourages people to book on-site hotels for longer. They make far more off the hotel than off the tickets.

Exactly my point. That is why it really doesn't matter on about 360 days a year that there are many walking around the parks paying "$20 a day"