A few new DVC rumors

[TheBeatles]

I don't think they will really be building anything truly new for some time. The current trend seems to be to add to existing resorts so that these additions can use the existing resort infrastructure and reduce costs. I could however see them de-annexing this area and selling it off similar to the current Four Seasons/Golden Oaks area.

don't fill anybody's head with this idea.

 

[Phonedave]

It seems like it would be the other way around if they were trying to lower/remove operating expense for those "combined" DVC/hotel resorts... It seems Disney would bill DVC, which in turn covers those expenses directly with MF's.

That would:

1. Greatly lower Disney's "resorts divsion" expenses to operate the hotels, directly tying those costs to income (the bill to DVC).
2. Allows DVC to directly tie the expenses they're billed for at the combination resorts to the members via MF's (maybe at a profit?).

If your customer base is paying for the vast majority of expenses to run resorts directly, then a higher percentage from tickets, meals, resort services, etc, goes directly to the bottom line.

There are rules and laws governing MF's and how they have to be laid out, etc... There aren't rules like that for what they do with the other revenue they bring in. That's why I wonder if they do it this way. Follow the letter of the law on the MF's but load expenses in to the fullest extent possible, even covering "shared" resort expenses... Which allows freedom to do as they please with the other revenue they bring in, because nobody is privvy to what they do with that.

By law, they cannot make a profit off of Dues. Dues are to cover expenses and only expenses. They can (and do) make a profit off the initial sale of the units.

Now they could do what you said, shift WDW resort expenses over to the DVC and then claim them as required expenses and bill them out in the annual dues. For example, lets say it takes $100 to run BC. In reality it could be $25 DVC and $75 BC resort. They could say its $50 / $50 and bill the DVC members and then come out + $25 on the resort end. The only problem with that is there are independent auditors that check that such a situation is not happening. I don't know exactly where my last annual report for my DVC share is right now, but they are audited. There are also some people who have a real thing for watching the DVC board and it's expenditures. I do watch to see what is happening (for example if groundskeeping goes up %40 y/y I want to know why) but not to the extent that some people do.


-dave

 

[DVCOwner]

I think that there is a lot of cost that Disney can save on combining resorts with DVC. For example: I am sure that there is only a small main desk staff for late nights. Without increasing the size of the staff some of this cost could be passed onto DVC members allowing Disney to decrease its budget for this function. I am sure there are many other places that you can add DVC rooms to a resort and pass on cost that Disney would have to pay all of if DVC was not there.

 

[s8film40]

I think that there is a lot of cost that Disney can save on combining resorts with DVC. For example: I am sure that there is only a small main desk staff for late nights. Without increasing the size of the staff some of this cost could be passed onto DVC members allowing Disney to decrease its budget for this function. I am sure there are many other places that you can add DVC rooms to a resort and pass on cost that Disney would have to pay all of if DVC was not there.

Yeah this definitely seems to be their plan. Only Three deluxe resorts are left, and then they'll probably start in on the moderates.

 

[Pioneer Hall]

Yeah this definitely seems to be their plan. Only Three deluxe resorts are left, and then they'll probably start in on the moderates.

For some reason I don't see this happening. I think that they would build a new resort before going the moderate route. If they were to build moderates it would seemingly be hard to market. Why would anyone choose to stay at a moderate when they have the option of a deluxe level resort? Unless there was a strong point incentive to stay there (which they really can't do) there wouldn't be a market for it. Also, consider the size of the moderate resorts; T each has over 2,000 rooms already (counting Port Orleans as one here since it shares services). Adding more rooms to those resorts without greatly improving the infrastructure would be a difficult task to accomplish. Personally I think that you would see a fresstanding DVC resort be built before any of this was even considered.

 

[s8film40]

Yeah I think when they get to the moderates they may go the rout they did with SSR and just do a full conversion.

 

[DVCOwner]

Or they might try something different like they did at Vero Beach and build on or renovate existing moderate hotel rooms in DVC. The hotel rooms at Vero Beach use less points per night and might appeal to a new group of people that would want to buy into a DVC "hotel" vs "villas".