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DVC direct sales fall again in 2015
- Thread starter DVC Mike
- Start date
Tony the Tigger
Well-Known Member
There's an Internet now. Very easy for people to Google and find out they can either rent DVC points without the commitment or buy "used" and save a ton of money.
Plus – the persistent, consistent increases in park fees make an investment less reliable. Their room fees may stay the same, but they end up paying hundreds more for park tickets in one increase. And then they're stuck with that increase and have no option but to go anyway or to sell. And selling won't be as easy when the ticket prices shot sky high during relative downtime and will probably go up again by the time the new top attractions open. In short, there's no certainty. Even relative certainty.
Plus – the persistent, consistent increases in park fees make an investment less reliable. Their room fees may stay the same, but they end up paying hundreds more for park tickets in one increase. And then they're stuck with that increase and have no option but to go anyway or to sell. And selling won't be as easy when the ticket prices shot sky high during relative downtime and will probably go up again by the time the new top attractions open. In short, there's no certainty. Even relative certainty.
Considering how high the prices are now, they are probably still making as much or more on these sales. We'll see if they continue the rise. If they level off for a few years, that might be an indication that they feel that they have reached the tipping point for prices. Resale prices are also going up as well. We bought into SSR at under $90/point, and they are selling for $84-90 right now. We could sell (though we never will 
), and actually break even or even make a small profit on our original outlay. And we have had 17 DVC vacations just in the last 6 years, and over 30 over-all.
), and actually break even or even make a small profit on our original outlay. And we have had 17 DVC vacations just in the last 6 years, and over 30 over-all.
Tony the Tigger
Well-Known Member
I'd be curious to see comparable numbers for rentals and secondhand sales.
Considering how high the prices are now, they are probably still making as much or more on these sales. We'll see if they continue the rise. If they level off for a few years, that might be an indication that they feel that they have reached the tipping point for prices. Resale prices are also going up as well. We bought into SSR at under $90/point, and they are selling for $84-90 right now. We could sell (though we never will
How much longer can they raise prices so they can keep profits the same as points slide? Do you think the tipping point is around the corner or years away? Disney keeps moving towards a more upscale set of guests.
I think if the prices remains fairly stable with minimal increases, the points will stabilize as well. I think they are very close to the tipping point already. We have 40 more points to purchase direct, to keep our contracts even for our 2 sons and their wives when we pass them along. After that, we will probably purchase additional points resale. DVC would have to come up with a significant discount for us to even consider direct in the future.
Now, there is a rumor going around that they are considering further limits on resale points, so that if you purchase them say at SSR, you would only be able to use those points at SSR, and no other resort. I really hope that doesn't happen, as it will prove just how clueless they are about their members.
Could the drop be due to the focus on building niche DVC offerings around MK resorts? When was the last theme park based full DVC resort built?
The only 2 "full" DVC resorts are SSR and OKW. I'm not sure how you can call the DVC offerings around MK as "niche". All other DVC offerings at WDW are part of a larger resort, so all of them could be called "niche" then.
Good point. We owned at SSR. For some reason I was thinking BW, BC were stand alone DVC.
Phonedave
Well-Known Member
Two reasons:
1) There is no real difference between direct sales and secondary market sales, aside from price (anybody who has done any research would know that the small differences in perks really do not matter). So, why would anyone buy direct, unless they were trying to add on to an existing contract.
2) While DVC is about more than just WDW, lets face facts, the lions share of DVC usage is for WDW vacations. WDW has gone downhill, and has become much more expensive. DVC is marketed towards a preimum clientel. (or as DVCMike said "upscale"). However, while WDW charges upscale prices, they do not provide an upscale product. Crowded, dirty, stagnant parks. For the same price (DVC + park admission + food) you can purchase a much more upscale experience and any number of all inclusive resorts.
-dave
1) There is no real difference between direct sales and secondary market sales, aside from price (anybody who has done any research would know that the small differences in perks really do not matter). So, why would anyone buy direct, unless they were trying to add on to an existing contract.
2) While DVC is about more than just WDW, lets face facts, the lions share of DVC usage is for WDW vacations. WDW has gone downhill, and has become much more expensive. DVC is marketed towards a preimum clientel. (or as DVCMike said "upscale"). However, while WDW charges upscale prices, they do not provide an upscale product. Crowded, dirty, stagnant parks. For the same price (DVC + park admission + food) you can purchase a much more upscale experience and any number of all inclusive resorts.
-dave
flynnibus
Premium Member
look at the last three DVC properties... all very high end costs.. and Poly isn't that big in number of units.
Add to that the incredible climb in costs...
DVC doesn't have to worry about the points trend if they can keep the real numbers where they need them. They aren't reporting that kind of metric to the street.
Add to that the incredible climb in costs...
DVC doesn't have to worry about the points trend if they can keep the real numbers where they need them. They aren't reporting that kind of metric to the street.
wdwfan100
Active Member
Won't lower point trends lead to lower occupancy? It's a question, not a statement. If so, does that call into question the long term strategy of the DVC prioritzation? Sure you can hit revenue targets by jacking up prices, but won't that be offset if in the future, less people are coming? It's kind of what started the DVC swing into high gear. Hotel occupancy falls, Disney raises prices to make up for lost revenue. Then they sell DVC as a discount on future trips. What happens if points trends deplete due to higher costs and DVC occupancy stagnates?
ParentsOf4
Well-Known Member
I don't believe it's a matter of "lower occupancy" or "less people coming". Disney reported record theme park attendance in 2015 while hotel occupancy was nearly at pre-recession levels.
DVC direct sales have slowed but as Disney continues to add or convert DVC rooms, the percent of DVC members at WDW increases. At the moment, DVC makes up over 11% of WDW's onsite rooms, the highest it's ever been. That number will increase further with the latest conversion/addition at the Wilderness Lodge.
DVC used to be about saving money on Deluxe WDW stays. However, with direct prices what they are, it now takes decades of membership for direct DVC purchases to make financial sense. Clearly, Disney is targeting those who are susceptible to timeshare pitches, not those who spend more cautiously.
With a strategy like that, Disney's focus is to sell at the highest price possible, not high volumes.
It can be disconcerting for Disney. DVC's target audience are those who visit the theme parks. Domestic theme park attendance was up 7% in 2015 (including an extra week compared to 2014), another record year. Yet DVC sales are declining.
More and more are exposed to DVC kiosks yet fewer and fewer are buying.
Clearly, DVC has a problem. I believe there are 2 contributing factors.
First, Disney has already plucked the low-hanging fruit. Those who are most likely to buy have already bought. Now Disney has to target the more traditional impulse timeshare buyer.
Second, entry prices scare away potential buyers. For example, with PVB now at $165/point and its pricey point chart, a week's stay at a PVB Lake View Studio for the summer requires coughing up $33K to buy into the dream. Very different than when a BLT Lake View Studio cost half that with incentives about 5 years ago.
Again, Disney seems to be targeting impulse buyers.
flynnibus
Premium Member
That's where the cash rentals always give Disney a relief valve...
My big question is how long doc can continue with one big pool of properties where everyone's points are equal value... While prices continue to climb.
dreamfinder
Well-Known Member
From the home resort booking advantage. If the new resorts have a real must have location, catch, cache, whatever, then that home resort advantage actually gives those points/contract more value. Now the problem becomes that the locations many people were clamoring for, GF and Poly now both have DVC means they have to step it up to make other new locations have some desired element.