Will rising park entry costs affect the resale value of DVC contracts?

[Helaman]

How do you think the rising costs of a disney vacation will affect the DVC retail market and the value of our contracts in the next year? Will Genie, paid fast passes, more expensive annual passes, upsell Photopass, upsell water park entry, etc. push the resale value down?

 

[RoseGold]

The number that matters is hotel rooms. DVC has a product it is competing with, cash rooms. With all these nickels and dimes flowing, you can bet the mouse wants a few more on the hotels.

 

[eMoneyBug]

doubt it, wages are higher, economy is not in bad shape, my crystal ball says everything will continue to increase a tad.

 

[Sandisw]

It all comes down to supply and demand. Some owners will decide to sell because of it.

If that happens, we could see an impact. If WDW decides to offer better discounts on the rooms to encourage cash guests to stay onsite..without the benefits that one once had…it can make ownership less valuable and thus dry up some of the demand.

It is getting harder to make the numbers work for DVC given the new costs.

 

[Heather07438]

Personally I find the value of staying DVC over cash rooms improved since genie announcement. Renting DVC was already a good deal to us because it included taxes, parking, and up to 5 adults in studios without added fees.

Now DVC will probably help us avoid needing many Genie upcharges as we plan doing most of the individually paid LL rides during Early Entry and pmEMH. DVC gives us extra options to accomplish the most popular rides without long lines or an upcharge. When I do budget comparisons across different places to stay on & offsite DVC still comes out way ahead.

 

[Brian Noble]

How do you think the rising costs of a disney vacation will affect the DVC retail market and the value of our contracts in the next year?

I'm a contrarian, but I don't think it will make much of a difference to demand. There's a lot of sturm und drang around these changes, but at the end of the day it will make less of a dent in attendance than most people think. I bet Disney was already catering to the "above-median" household for the most part. And while overall inflation is below these increases, all of the economic gains are flowing to above-median households; those at or below the median have been stagnant for 50 years now, while those above the median have seen real, meaningful growth.

https://www.census.gov/library/visu...me-at-selected-percentiles--1967-to-2014.html
I don't have the data on the tip of my fingers, but it seems as though that trend has been accelerating over the past five to ten years.

The families who come to Disney regularly---and certainly those who are able to commit five figures up front to those trips---have been the beneficiaries of increasing economic inequality. Disney wants their share of it, and I bet they will get it.

 

[OKW Lover]

How do you think the rising costs of a disney vacation will affect the DVC retail market and the value of our contracts in the next year? Will Genie, paid fast passes, more expensive annual passes, upsell Photopass, upsell water park entry, etc. push the resale value down?

I think resale values are more directly tied to the price/point that Disney sells DVC for. I don't think you'll see any impact from the factors mentioned.

 

[chalee94]

Now DVC will probably help us avoid needing many Genie upcharges as we plan doing most of the individually paid LL rides during Early Entry and pmEMH.

I sure wish pmEMH included DHS and AK.

 

[crisi]

I'm a contrarian, but I don't think it will make much of a difference to demand. There's a lot of sturm und drang around these changes, but at the end of the day it will make less of a dent in attendance than most people think. I bet Disney was already catering to the "above-median" household for the most part. And while overall inflation is below these increases, all of the economic gains are flowing to above-median households; those at or below the median have been stagnant for 50 years now, while those above the median have seen real, meaningful growth.

https://www.census.gov/library/visu...me-at-selected-percentiles--1967-to-2014.html
I don't have the data on the tip of my fingers, but it seems as though that trend has been accelerating over the past five to ten years.

The families who come to Disney regularly---and certainly those who are able to commit five figures up front to those trips---have been the beneficiaries of increasing economic inequality. Disney wants their share of it, and I bet they will get it.

At the same time, those same people may discover that other destinations are bargains in comparison to Disney. International travel in particular looks really attractive in costs compared to Disney - whether that's sitting on a beach in Mexico or riding a double decker bus through London. And in terms of quality - people who have benefitted from increasing income inequality have also "benefitted" from increased expectations in terms of what their money will get them. Influencers, the internet, travel sites, the food channel - they are all telling them that their food and their hotel room should be better than what Disney offers.

When we started to go to Disney it was possible - likely even - to spend less money going to Disney than spending a week in Europe. We are pretty price insensitive when it comes to vacations - but that doesn't mean we don't want a great experience for our dollars. Its harder and harder for WDW to provide that - and easier and easier for other destinations to do so.

Disney CAN keep that market, but they are going to need to up their game to do so.

 

[EM Lawrence]

I can only say that for me personally, the new changes have devalued staying on-site, which I think does ultimately devalue DVC. I make two types of trips, big family trips about every other year and quick two-three day trips several times a year. For big family trips, we will use our DVC points as far as they will go. But I don’t think I’m interested in adding any more points. For those quick weekend trips, instead of staying at Pop I’ll stay offsite, and pay less money for the hotel room, plus get free parking and free breakfast. Even after paying the $15 for Genie+, I’ll come out ahead vs staying on site.

I’ve been looking around online, and there are some really nice resorts very close to WDW. Unless some significant onsite perks come back, those are places we are likely to split stay at if our DVC points don’t stretch far enough.

 

[SCDVC2000]

I think people are underestimating the draw/benefit of extra magic hours on select evenings for deluxe resort guests. As far as resale goes, I think people will consider this factor and help retain (or increase) its value

 

[chalee94]

I think people are underestimating the draw/benefit of extra magic hours on select evenings for deluxe resort guests. As far as resale goes, I think people will consider this factor and help retain (or increase) its value

If you swap DHS with Epcot, that may be true.

Epcot with Guardians and the Rat (not on the Evenings list) might be nice but currently, the appeal isn't there at all for me for Epcot late nights.

 

[CBMom01]

I was set to buy before my last trip. Current owners discussions about difficulty finding availability, along with the cost and reduced service quality at the parks are what really convinced me not to consider it.

So for me the answer is a solid yes.

Edited to add: I only considered direct, because if I’m going to incur that outrageous cost I’d want the maximum benefit

 

[Brian Noble]

At the same time, those same people may discover that other destinations are bargains in comparison to Disney.

I’m with you. We spent three weeks in Hawaii this summer and are planning two weeks in Spain next summer.

But as long as a trip to Disney is viewed as a right of passage for kids of a certain age (and they keep making more kids) Disney will get their share. Some of those families will get the bug and come back for a half dozen years or so. A few will continue past that. And so there will be replacements.

 

[Brian Noble]

I’ve been looking around online, and there are some really nice resorts very close to WDW.

We really like Bonnet Creek. The villas are better equipped and larger than the typical DVC unit, the pools are great, and you drive past it between OKW/SSR and most other Disney points of interest.

 

[crisi]

I’m with you. We spent three weeks in Hawaii this summer and are planning two weeks in Spain next summer.

But as long as a trip to Disney is viewed as a right of passage for kids of a certain age (and they keep making more kids) Disney will get their share. Some of those families will get the bug and come back for a half dozen years or so. A few will continue past that. And so there will be replacements.

Agree, but I think that as Disney moves to being more and more an upper upper middle class expense the conversion rate from "one trip for the kids (or maybe two)" to "got bitten by the bug" is going to decrease. There are just so many more options people with money have for their vacation dollars - and more importantly - their vacation time. In so many ways, WDW is a middle class experience. As I said, they are going to need to up their game to get the same conversion rate for upper class dollars.

There will continue to be people who stretch to afford one trip. And there will continue to be people who stretch to afford repeat trips. But the income gap is widening, and at the price point the people who can afford those stretches gets smaller and smaller. And I do really think that the "winners" in the income gap increase are going to want a better Disney to spend that much over and over again. When I pay $60 for a steak, I expect a $60 steak. Le Cellier provides a $30 steak for $60. You can't do that and expect people who eat $60 steaks outside of WDW to keep coming back.

(We are heading off to Peru. Two people. First class airfare, in country flights, ten days including an Amazon cruise and Machu Picchu, hotels, meals and seven people (we are going with friends) sharing a single guide - $8000 total.)

 

[ofcabbagesandkings]

The truly wealthy don't buy timeshares, nor do they even stay at Disney Deluxe hotels. They stay at the Four Seasons, if they go at all. And they take short trips and hire a VIP guide for two days instead of going for a week. They spend less cash on souvenirs. If that was who Disney was courting with DVC, they would be in trouble, but they're not. They're after the middle class and upper middle class who want to feel like they're getting an exclusive membership, who will loyally visit WDW year after year even as perks disappear and prices increase.

 

[crisi]

The truly wealthy don't buy timeshares, nor do they even stay at Disney Deluxe hotels. They stay at the Four Seasons, if they go at all. And they take short trips and hire a VIP guide for two days instead of going for a week. They spend less cash on souvenirs. If that was who Disney was courting with DVC, they would be in trouble, but they're not. They're after the middle class and upper middle class who want to feel like they're getting an exclusive membership, who will loyally visit WDW year after year even as perks disappear and prices increase.

I'm not talking about the truly wealthy. I'm talking about what is sometimes called the professional class - people who have to work, but in working, can put their kids through college, save for retirement, AND take regular vacations and go out for a $60 steak on a Tuesday night just because. Often two income professionals like doctors, lawyers, upper corporate management, and well paid professions like IT Developers. Sometimes the high end of those fields, with one income.

The truly wealthy might get their kids to Disney once so their kids have that experience - or they may not. But I agree, they aren't staying in DVC units.

 

[ofcabbagesandkings]

I'm not talking about the truly wealthy. I'm talking about what is sometimes called the professional class - people who have to work, but in working, can put their kids through college, save for retirement, AND take regular vacations and go out for a $60 steak on a Tuesday night just because. Often two income professionals like doctors, lawyers, upper corporate management, and well paid professions like IT Developers. Sometimes the high end of those fields, with one income.

The truly wealthy might get their kids to Disney once so their kids have that experience - or they may not. But I agree, they aren't staying in DVC units.

I agree with you completely. The problem Disney is going to run into is that the professional class often has similar expectations for their vacations. They don't want to wait in long lines, or pay $60 for a $30 steak. Just because they have disposable income, that doesn't mean they want to spend it where the value isn't there. And because they work, often long and hard hours, they don't want to work when they're on vacation. If Genie+ had simply copied Universal's (limited) Express pass, it would have been a brilliant move. Professionals would gladly pay for it or fork over the cash for Deluxe rooms to have it included. If DVC had included it (even just for blue cards), they wouldn't be able to build new units fast enough for the demand. But instead, the perception is nickel and dime micro transactions and a lot of effort early each morning of a vacation. That doesn't scream luxury, which is the fantasy DVC is trying to sell. And recent cuts, like MDE, make it clear that buyers will be on the hook for dues each year with no perks guaranteed. I expect prices to drop, especially after the 50th.

 

[RanDIZ]

I think all of these increases will surely hinder resale values. If a flood of contracts hits the market, prices will begin a downward trend. It probably won’t be substantial, but enough to cause a stir. Disney has begun to price themselves out of the huge middle to lower class market. I know many die hard Disney fans who have spent years going 2-3wks a year that have now turned to off property resorts/Airbnb. I’ve already began dropping park days which I would normally do 5-7 days per stay. And I’m fine with that and will be enjoying resort only days. I’m a new DVC owner (2020) and have already considered selling one of my contracts.

At the end of the day, it’s still cheaper being a DVC owner compared to paying cash. But the more Disney reaches in my pockets with ridiculous increases, the more I don’t want to be there anymore.