DVC prices per point increasing in March

[WWWD]

Disney Vacation Club has scheduled massive price increases for March. Some resorts will see as high as a $30-$40 per point increase. New rates are as follows:

Effective March 20, 2013

Villas at Disney’s Grand Californian Hotel: $165 per point
Aulani, Disney Vacation Club Villas: $145pp
Disney’s Animal Kingdom Villas: $145pp
Disney’s Beach Club Villas: $130pp
Disney’s BoardWalk Villas: $130pp
Disney’s Old Key West Resort: $130pp
Disney’s Saratoga Springs Resort & Spa: $130pp
Villas at Disney’s Wilderness Lodge: $130pp
Disney’s Hilton Head Island Resort: $115pp
Disney’s Vero Beach Resort: $115pp

Information provided by DVCNews.com

 

[Phonedave]

Wow, that is crazy.

Step one. Build a resort, at a cost of $75 per point
Step two. Sell those points for $100 each and make $25 per point
Step three. Buy those points back on the re-sale market for $80 a point
Step four: Resell those same points for $120 a point and make $40 per point.

Talk about a cash cow.

-dave

 

[WWWD]

I wonder if they will continue to reduce benefits to resale contracts to support those increases? How else do you get people to buy direct at an older resort at those prices?

 

[Phonedave]

I wonder if they will continue to reduce benefits to resale contracts to support those increases? How else do you get people to buy direct at an older resort at those prices?

I was thinking that myself.

If anything, adjusted for inflation, the prices for older resorts should go DOWN - as there are less years on the contract. To increase them, even when you take into account inflation, tells me there has to be some sort of additional value in them (or else some very strong demand for some unkown reason)

-dave

 

[WWWD]

This increase could also be a way for Disney to justify DVC's new Grand Floridian prices. There's going to some sticker shock when those prices come out!

 

[Nero the dog]

If they are not selling at the moment because of the economic situation the they can set any price they want and it will make no difference.
However, when things start to improve they can pretend that there is a huge discount and sell them at the original price.

 

[DisneyJoe]

There's going to some sticker shock when those prices come out!

How so? With the GF having the highest prices on property, I'd expect the GF DVC prices to be the highest on property too. Anyone expecting less is fooling themselves.

 

[xdan0920]

WHOA!!!

Those are some serious increases.

I agree with Dave, what are they doing to justify these prices?

They must be planning on further restricting the resale market, otherwise why would anyone pay this kind of premium?

Unless they are having a ton of success selling to the completely uneducated?(as in DVC education)

 

[WWWD]

How so? With the GF having the highest prices on property, I'd expect the GF DVC prices to be the highest on property too. Anyone expecting less is fooling themselves.

I expect GF to be the highest prices on property - it's just how high will they be? 200 a point has been thrown around and that was before these increases.

 

[Phonedave]

I expect GF to be the highest prices on property - it's just how high will they be? 200 a point has been thrown around and that was before these increases.

But here is the thing. Disney likes to promote the flexibility of the DVC. You can use your points for your home resort, or any other DVC resort, or take a cruise, or use the classic collection (or whatever it is called) or go into the RCI pool.

If I paid $200 for a point, and somone else paid $120 for a point, and our points have the same 'value' for all these other things, then I am not going to be happy. To have such a price difference and the only benefit that you get is a 4 month advantage in booking at the GF - that is a tough pill to swallow. It is one thing to pay %10 more per point to get early booking at a resort. It is a totaly other ball game to pay %60 more.

-dave

 

[tissandtully]

But here is the thing. Disney likes to promote the flexibility of the DVC. You can use your points for your home resort, or any other DVC resort, or take a cruise, or use the classic collection (or whatever it is called) or go into the RCI pool.

If I paid $200 for a point, and somone else paid $120 for a point, and our points have the same 'value' for all these other things, then I am not going to be happy. To have such a price difference and the only benefit that you get is a 4 month advantage in booking at the GF - that is a tough pill to swallow. It is one thing to pay %10 more per point to get early booking at a resort. It is a totaly other ball game to pay %60 more.

-dave

Oh, you know people will pay to get the Home Resort Priority, this seems to be the biggest issue lately as I'm constantly booking 7 months ahead if I want to stay longer than a couple days, I can imagine 11 monthers will be filling GF up continuously. Also, GF will not be as big as the other DVC resorts, so there's that. The only good I can see from this price increase is to slow down demand and maybe make reserving places a bit less stressful.

 

[tissandtully]

So I'm looking on the bright side... we bought into the WL Villas last June (direct from Disney). My wife now thinks I am LESS insane .

This is the exact reason I bought direct. The fact that Disney can change their mind on these things at any time, it seemed more stable, and also I like the other perks that went a long with it.

 

[ParentsOf4]

Wow, that is crazy.

Step one. Build a resort, at a cost of $75 per point
Step two. Sell those points for $100 each and make $25 per point
Step three. Buy those points back on the re-sale market for $80 a point
Step four: Resell those same points for $120 a point and make $40 per point.

Talk about a cash cow.

-dave

BLT cost approximately $140,000,000 to build while offering 5,618,859 points to sell. That's about $25/point. Add in sales commission, administration, etc. and BLT's net cost is probably closer to $40/point.

That's a cash cow!

It also suggests why Disney isn't going crazy on ROFR. They make more money building new DVCs.

 

[Genie of the Lamp]

BLT cost approximately $140,000,000 to build while offering 5,618,859 points to sell. That's about $25/point. Add in sales commission, administration, etc. and BLT's net cost is probably closer to $40/point.

That's a cash cow!

It also suggests why Disney isn't going crazy on ROFR. They make more money building new DVCs.

Any idea of what the rates/price per points will be for the new GF DVC?

 

[George]

I wonder if they will continue to reduce benefits to resale contracts to support those increases? How else do you get people to buy direct at an older resort at those prices?

I made both my purchases retail before there were any reduction in benefits. About $75/pt at VWL and a couple of years later, $75/pt at Beach Club. No way I'll ever pay what Disney asks per point. I'm probably done buying resale as well due to the restrictions.

 

[ParentsOf4]

Any idea of what the rates/price per points will be for the new GF DVC?

Rumors are GF will start at $200/point but no one publically knows. Considering BLT was at $165/point and they are pushing AKV to $145/point, $200/point seems like a good guess for WDW's flagship resort.

 

[Genie of the Lamp]

Rumors are GF will start at $200/point but no one publically knows. Considering BLT was at $165/point and they are pushing AKV to $145/point, $200/point seems like a good guess for WDW's flagship resort.

On second thought, I hear the Swan and Dolphin calling my name. No GF DVC stay for this Geine!

 

[flynnibus]

It also suggests why Disney isn't going crazy on ROFR. They make more money building new DVCs.

Yes, but reselling points means you keep making money over and over without actually doing much... I think that was the poster's point.. that the cash cow keeps on giving when Disney sells the same points over and over..

 

[ParentsOf4]

Yes, but reselling points means you keep making money over and over without actually doing much... I think that was the poster's point.. that the cash cow keeps on giving when Disney sells the same points over and over..

The people making these decisions are looking at financial spreadsheets and making decisions based on ROI.

Disney is not selling the "same points over and over." It costs them money to buy them back. If I'm Disney, I can exercise ROFR at BWV at ~$60/point and then try to sell the points on a 17 year old facility for $130/point (BWV's new price), having to pay the DVC sales rep's commission above the $60/point that it cost me to exercise ROFR. Or I can build a brand new DVC next to the GF for under $30/point (see previous BLT example) and then sell it for close to $200/point.

5 or 6 years ago Disney used to exercise ROFR aggressively, snapping up about 40% of the sales. Now it's down to less than 10%. Disney has plenty of inventory at their older DVC resorts but when someone sits down for a discussion with a DVC sale rep, they're immediately drawn to the newest properties. The new resort is almost always going to be the faster moving sale than the well-established resort, even at a higher price.

There's a reason Disney keeps building these things.

 

[flynnibus]

You're seriously playing its more burden to move money around than it is to undergo capital construction that takes years to complete??

I know that the new properties are huge profit centers... But to suggest that simply flipping contracts is hard is simply stupid.

It's a paper shuffle that can give Disney 50+% return on their dollar without doing anything than paying a few white collar workers.