Has DVC Stalled the Parks and Created Complacency in TDO?

[Computer Magic]

However, people are not "locked in" to DVC. Even in today's economy, DVCs are a hot commodity. A reasonably priced DVC membership sells within a few days on the secondary market. Demand is there, just like demand is there for Disney's onsite resorts. (WDW has a very high occupancy rate.)

Do you think the people selling are getting a good deal? From what I see the $$ per point in resale is very low. Peope may be getting out of DVC but at what cost? Is it like those upside down mortgages out there? I don't see many people making a profit or breaking even which is what many thought when buying.

DVC is consistent with what I've seen mentioned by others on this website. Disney is not trying to increase park attendance but instead is trying to attract a crowd that will spend more money per visit. DVC is for people who want to stay at a Deluxe Resort and are willing to plunk down a good chunk of change to do so. On average, these people already have deeper pockets than most. In this sense, the relatively recent emphasis on DVC and continued price jumps indicate that Disney is trying to price the less financially well-off vacationer out of the market.

Does this mean that DVC has caused complacency in TDO? I'm not sure.

I would be careful saying all the DVC owners are rich. I know a few people that bought DVC but couldn't afford it....

 

[Computer Magic]

. You've got to be doing pretty well to plop down $20,000 (for example) for a multi-year vacation commitment to a place that's going to cost you even more every visit (i.e. tickets, travel, food, etc.)

Can't you just get a loan :lookaroun and charge everything once there :lookaroun :lookaroun

Yes it not the perferred method but is the American way. :lookaroun

:ROFLOL: having a little fun but sadly also truthful

 

[GoofGoof]

Do you think the people selling are getting a good deal? From what I see the $$ per point in resale is very low. Peope may be getting out of DVC but at what cost? Is it like those upside down mortgages out there? I don't see many people making a profit or breaking even which is what many thought when buying.

I would be careful saying all the DVC owners are rich. I know a few people that bought DVC but couldn't afford it....

If you buy into DVC now hoping to sell later for a profit you will be disappointed. You are "prepaying" for future stays. As the years go on the number of future stays goes down and so the value drops and the price goes down. BLT expires in 2060 and the avg resale seems to be in the low 90s per point. Some of the older resorts that expire in 2042 are priced between $55 and $70 on average. The variation in prices based on popularity and availability. BCV sell for more that OKW on average since there are less units and it is very popular even though they both end in 2042.

It seems there is a common perception on this board that the resale market is not very active and you will not be able to get out of your contract. I am not an expert on this or anything but I spent about 6 months tracking available units for sale and their prices before I bought. I was focused primarily on BLT but it seemed in general that a pretty large number of units changed hands during that time. Maybe since it is one of the newest resorts the turnover was higher, but there were definitely units moving. The number of points sold seemed to be a big factor. The smaller points sold fast the large chunks of points didn't seem to move as fast. This makes sense since you would need to find a buyer who could absorb the maintenance fees.

This is just one man's observation Does anyone know of any websites or actual facts published on the volume of units resold or available for resale.

 

[Wesleyjohn]

DVC members have an annual meeting and from what I've heard is that they are making there voices heard. When DVC started discounts on parks, food , etc were a regularity. Prior to this year they were becoming minimal. This past year or two there was a lot of barking at the meeting about discounts and this year AP and TIW discounts appeared. I think DVC members are very similar to stock holders and can become a force in the future to say that we want value. This may translate in the future to saying that the parks are stale get something going here. I feel that FLE and avatar are nothing to sneeze at so I don't feel that things are going to be stale right now but I can see how people think that Disney needs more upgrades since the past 10 years have been slower with new stuff but I'm not sure how DVC would get the blame for why it stale or stagnant. To me they all have to work together in balance.

 

[flynnibus]

Maintenance costs are the responsibility of DVC members not Disney correct? That to me is a money loophole in the "fixed points" system, a loophole that favors Disney.
The one time fee and points that you buy are fixed so that it appears to be a good deal for guests decades down the line. Your cost for purchasing points can never increase. (essentially after figuring out the system).

But maintenance costs can change at any time. That means theoretically that Disney can always get more money from DVC members if they choose.

The amount fees can change are capped year to year. And this isn't a 'loophole' in any sense. It's 'cost of ownership', just like in any condo or other owner maintained facility. The organization maintains reserves and other planned savings to account for unexpected, or large lifecycle costs.

Plus Disney saves money in only having Mousekeeping clean your room every four days. Conversely members aren't paying for Mousekeeping so are they really getting a deal or cost cutting when it comes to that.

Disney doesn't save - the owner's save. Having it the other way would simply mean the owners pay more to have it. Disney makes all the money in selling the points and having an audience locked into visiting. They are for all intensive purposes... 'out of the loop' when it comes to the fiscal pros and cons of operating the property itself. The only place Disney (parks) has their hand in the cookie jar is in how they get to bill the properties for things like transportation or other services they provide to the property.

I've often thought this was the case. The only thing that seems to be always announced as being planned and actually built are the DVCs. Hyperion Wharf? nope. But Bay Lake Tower, its up and running.

Meanwhile, WOL in Epcot is gone but the building's still there for conventions (just wrong on so many levels) , Imagination is in need of a major upgrade, it took years and years after the paving over of 20k to build TLM. That was a rumor since that closed. Yet the only thing that seems to be definite are the DVCs. All this worry and outrage over the Avatar land in AK, I have doubts that it will never be built. There will be a DVC announced, probably for Poly (which just seems wrong to shoehorn these everyplace), and that will be built instead. AK will get a playground and that will be that.

But you are really comparing apples and oranges. You might as well be saying 'Disney keeps putting out all these DVDs and toys... instead of building new park attractions!'. Building something like DVC is about making something to sell... building attractions that you don't charge to use do not generate revenue themselves. They are only supporting cast used to entice people to come stay. As such, to simply add an attraction doesn't mean it will be cash positive. Compared to something like DVC... which as long as there are buyers.. is directly generating profit. No need to extrapolate indirect benefits or return.. it prints money itself.

 

[jeff59rt]

Why is everyone stating you are locking into wdw with a dvc? Dvc is just like any other timeshare, you want to have the best home resort to have first choice for your stay but we exchange with rci timeshares and can you your points anywhere in the world!..we stayed in Vegas for 10 nights with our 170 points exchange one year. Dvc saves us money every year on the rooms we get, it works for us.

 

[flynnibus]

However, people are not "locked in" to DVC. Even in today's economy, DVCs are a hot commodity. A reasonably priced DVC membership sells within a few days on the secondary market. Demand is there, just like demand is there for Disney's onsite resorts. (WDW has a very high occupancy rate.) Yes, a radical change (e.g. $1500 AP) will adversely affect the price of DVCs. But I think Disney wants to sell more DVCs. In the example you provide, I think raising AP prices would scare people away from DVC.

You are 'locked in' in the sense you are committed and responsible for it... The prior post was that the demand for your product could change tomorrow and you have no control over it what-so-ever... yet you would still be on the hook for it. You can only sell when there is demand to buy. If those changes include something that dramatically hurt demand to buy... well in turn your ability to get out by resale is significantly altered.

Does this mean that DVC has caused complacency in TDO? I'm not sure.

When you have a customer base that can not flee easily... it's a ripe opportunity for a company to be complacent. They will be slower to adapt because they know things take longer to change.

My bigger concern is... DVC represents a HUGE return on a short basis now. It's a cash cow to develop and sell DVC. So what happens with WDW hits saturation for DVC properties. Then what does the company do? That's the real concern I have on the operations of the parks. The company can't turn around and say 'oh, and numbers are down 20% this year because there were no more places to build DVC...'. They are going to be DESPERATE to replace that revenue.. so what drastic thing will they come up with?

 

[WDW1974]

A dangerous question because there's no doubt the increase in DVC development has coincided with a huge and gaping drop in quality of the WDW resort as a whole. Is it the fault of DVC? Or those who buy in? Is it Disney knowing it in essence has a constant revenue stream of 'sucker income'?

I'm not really sure, to be honest. I think there's truth in all of the above to some extent. I do know that I recently viewed videos of WDW in 12/90 (in other words, just before the first timeshares opened at what is now OKW) and the overall product was a vastly higher, vastly better maintained type of experience.

Does Walmarting go hand in hand with people buying into Disney's best kept secret (which it isn't, but if I wrote what is, it would disappear very quickly and Steve would likely hear from Legal!)? I'd say it sure looks that way ... as the Grand Flo DVC goes up understand that world class resorts don't feature kitches where people are heating up frozen pizzas and sailsbury steak dinners and making bologna and American cheese sandwiches. They just don't have that at true 4 and 5 star resorts.

 

[JWG]

There is no relationship between DVC and the parks. Separate budgets, separate operating units (DVC is operated by DVD), etc. And, if anything, repeat guests demand better - just look at Anaheim. Just because we're locked into DVC doesn't mean we're locked into the parks. We've done Universal, Tampa, Cruise line, etc. And, we are definitely vocal about our experiences.

DVC has 400,000 members. And, many of them are same family. Our family has 4 members on one account. That's a minimal population against the total population of visitors to WDW. I've sent more complaints to WDW as a result of being a member than when we weren't.

Has DVC stalled the addition of additional hotel resorts? Sure. Work in the parks? No chance.

 

[menamechris]

Has DVC stalled the addition of additional hotel resorts? Sure. Work in the parks? No chance.

So it's just a coincidence that there is huge development, expansion, and innovation with DVC - and very little by way of the parks?

 

[disney fan 13]

In his resignation letter, Roy Disney thought Eisner and Frank Wells (died in 1994) did a great job for the first 10 years. I think it's generally accepted that Eisner saved the Walt Disney Company from take-over in 1984. I'm not sure this counts as "saving" the company. Disney (and the theme parks) would have existed as the Disney brand but would have been under the umbrella of a larger corporation.

IMHO, Disney's pre-1984 corporate culture had stagnated. Unless you've been alive long enough, you might not realize that there was a time when Disney was decidedly un-cool, even among children.

However, after 1994, Roy (and many others) thought Eisner was a disaster. This is why Eisner ultimately was ousted. I suggest you read Roy's letter. It's available on the Internet.

Here it is.

November 30, 2003

Mr. Michael D. Eisner, Chairman​

The Walt Disney Company​

500 South Buena Vista Street​

Burbank, CA 91521​

​

Dear Michael,​

It is with deep sadness and regret that I send you this letter of resignation from the Walt Disney Company, both as Chairman of the Feature Animation Division and as Vice Chairman of the Board of Directors.​

You well know that you and I have had serious differences of opinion about the direction and style of management in the Company in recent years. For whatever reason, you have driven a wedge between me and those I work with even to the extent of requiring some of my associates to report my conversations and activities back to you. I find this intolerable.​

Finally, you discussed with the Nominating Committee of the Board of Directors its decision to leave my name off the slate of directors to be elected in the coming year, effectively muzzling my voice on the Board — much as you did with Andrea Van de Kamp last year.​

Michael, I believe your conduct has resulted from my clear and unambiguous statements to you and the Board of Directors that after 19 years at the helm you are no longer the best person to run the Walt Disney Company. You had a very successful first 10-plus years at the Company in partnership with Frank Wells, for which I salute you. But, since Frank's untimely death in 1994, the Company has lost its focus, its creative energy, and its heritage.​

As I have said, and as Stanley Gold has documented in letters to you and other members of the Board, this Company, under your leadership, has failed during the last seven years in many ways:​

1. The failure to bring back ABC Prime Time from the ratings abyss it has been in for years and your inability to program successfully the ABC Family Channel. Both of these failures have had, and I believe, will continue to have, significant adverse impact on shareholder value.​

2. Your consistent micro-management of everyone around you with the resulting loss of morale throughout this Company.​

3. The timidity of your investments in our theme park business. At Disney's California Adventure, Paris, and now in Hong Kong, you have tried to build parks "on the cheap" and they show it, and the attendance figures reflect it.​

4. The perception by all of our stakeholders — consumers, investors, employees, distributors and suppliers — that the Company is rapacious, soul-less, and always looking for the "quick buck" rather than the long-term value which is leading to a loss of public trust.​

5. The creative brain drain of the last several years, which is real and continuing, and damages our Company with the loss of every talented employee.​

6. Your failure to establish and build constructive relationships with creative partners, especially Pixar, Miramax, and the cable companies distributing our products.​

7. Your consistent refusal to establish a clear succession plan.​

In conclusion, Michael, it is my sincere belief that it is you who should be leaving and not me. Accordingly, I once again call for your resignation or retirement. The Walt Disney Company deserves fresh, energetic leadership at this challenging time in its history just as it did in 1984 when I headed a restructuring which resulted in your recruitment to the Company.​

I have and will always have an enormous allegiance and respect for this Company, founded by my uncle, Walt, and father, Roy, and to our faithful employees and loyal stockholders. I don't know if you and other directors can comprehend how painful it is for me and the extended Disney family to arrive at this decision.​

In accordance with Item 6 of Form 8-K and Item 7 of Schedule 14A, I request that you disclose this letter and that you file a copy of this letter as an exhibit to a Company Form 8-K.​

With sincere regret,​

Roy E. Disney​

cc: Board of Directors​

 

[stlbobby]

This is one of those cynical threads that assumes from the get-go that the parks are in some sort of disarray. I have been going an average of 2-3 times since the early 90's and I am always amazed at how much the parks and resorts change and how there is always something new to explore. Sometimes those things are incremental like the HM refurb. Sometimes they are bigger like the new Star Tours. Sometimes they are monumental like the FLE appears to be--on a side note I was just down last weekend and that expansion looks even bigger than purported. Amazing.

I honestly think the parks are better now than they have ever been. The rides are not only great they are varied. M:S, ST, ToT, RnR, Soarin', EE, and Space Mountain, all provide big thrills but in seriously different ways. You add in the amazing innovation of Turtle Talk/MILF, tons of opportunities to meet characters, small things like the Pirates League/Jedi Academy, and an amazing variety and quality of food and I really don't see how you can say things are stalling or complacent.

The complacency/it was better in 199o-whatever argument really comes from the fact that the parks aren't doing what the complainer wants or doesn't personally like what has been done. WDW has built several big attractions in the last ten years, but more so they have concentrated on finding ways to give the guest a more personal and intimate experience--hence meet n' greets, participatory shows, and interactive rides and experiences. These things might not be classic Disney and they might not be big and splashy, but they are extremely popular.

WDW is giving most, not all but most, guests what they want.

Two other points on DVC specifically. One you shouldn't be buying DVC as an investment or to make money. You buy because you know you will be visiting regularly and DVC is cost effective and convenient.

Secondly, DVC resort construction is part of the magic of the world and part of the experience. I love going to the new resorts and looking around. I love going to older resorts and seeing what is new. WDW isn't just four parks. It is a collection of parks, resorts, and other entertainment options. This is what Walt intended. He didn't want WDW to just be parks he wanted an all-encompassing experience, and new DVC resorts only enhance that experience.

 

[tl77]

It seems to me that Disney's strategy for WDW has changed in the past 15 years or so...

For the first 25 years the game plan was "build new rides and parks to keep people coming back" Mk opened in '71, added Space Mountain in '75, Big thunder in '80, Epcot '82, MGM '89, AK '98 ect...

But in the early 90's after Universal Orlando opened the strategy shifted from "keep building new stuff" to "keep the guests on the property". DVC is a way to keep guests on property, but so are the Value resorts and the Magical Express Bus system

And instead of building new rides to keep guests coming back they've been adding special events... The Star Wars Weekends, Food and Wine fest, Flower Show, Halloween and Christmas party nights don't just bring people in the parks but they bring them in during what used to be called "the off- season". 20 years ago the parks closed around dusk in the winter months, now they stay open late all year, there really isn't any "off-season" anymore

So I don't think they've stopped building rides because of the DVC, think they've found new ways of getting people in the door

 

[JWG]

So it's just a coincidence that there is huge development, expansion, and innovation with DVC - and very little by way of the parks?

Yes. It's no secret that park expansion or a 5th gate is no longer a big attendance draw but simply spreading existing crowds around. We benefit from a 5th gate as resort attendance is further disbursed. But, I'm guessing many many studies show that the "new" attendance bump isn't worth it - while DVC helps WDW enjoy what DL has - recurring guests. You can thank DVC for saving WDW in 2001 when tourism collapsed. The only people coming to the parks (at least staying in resorts) were DVC guests already "locked in". Pop didn't sit half built because DVC looked better, it sat half built because they didn't need the rooms. And now, over 10 years later, they're finally finishing that area.

Disney will try to maximize it's revenue from all streams - which includes all options within parks and resorts. The revenue is only helpful. DVC has pumped good revenue into resorts.

 

[flynnibus]

There is no relationship between DVC and the parks. Separate budgets, separate operating units (DVC is operated by DVD), etc.

They are both under the same Parks&Resorts division within the company.. and to the financial world are reported together from a P&L perspective. So they are very much related where it gets the most scrutiny from the outside world.. in the financial reporting.

 

[flynnibus]

This is one of those cynical threads that assumes from the get-go that the parks are in some sort of disarray. I have been going an average of 2-3 times since the early 90's and I am always amazed at how much the parks and resorts change and how there is always something new to explore. Sometimes those things are incremental like the HM refurb. Sometimes they are bigger like the new Star Tours. Sometimes they are monumental like the FLE appears to be--on a side note I was just down last weekend and that expansion looks even bigger than purported. Amazing.

I honestly think the parks are better now than they have ever been.

well since your baseline is the 90s... when the creative nose dive really took off.. and the shift in priorities happened. You're saying its great compared to the start of the emptiness. Yes its better now in a lot of ways than that time, but still well off the 2 decades prior to that.

You highlight ride additions.. but these sediments are not just about 'where is the next E-ticket'. Adding TSM or LMA didn't change the lost of identity of DMGM.

 

[kittybubbles]

I am not a DVC owner, but I do not think Disney selling DVC means they have locked those vacationers in to WDW visits. Someone how has pre-paid for time at a certain accommodation can just as easily do other nearby activities. It is not that far of a drive to places like Sea World and Universal.

There is nothing to say an owner couldn't stay on property and never visit a Disney park.

I think Disney is lucky right now for (just from what I have read from members) many folks like to visit the parks, eat at the the parks. I think all Dvc's have a kitchen or at least a mini one. Folks could spend a lot less money in the parks if they choice to just by stocking there room for their stay.

Anyway, I for one do not think it would by wise for Disney to take DVC members $ for granted and feel Disney still needs to work (at least) as hard as they would to get additional $ from them as they would a Florida resident who likes the parks but has been many times.

 

[Wesleyjohn]

IHMO, most people see lots of DVCs being built. Meanwhile the last theme park was added 14 years ago. Except for FLE (not fully realized yet) and Avatarland (still in planning), WDW's park improvements have been in individual rides. Meanwhile, Disney has built Villas at Wilderness Lodge, Beach Club Villas, Saratoga Springs, Animal Kingdom Villas, and Grand Floridian Villas. That's a lot of new DVCs with no "significant growth" (depending on how you want to define it) in the parks.

I'm guessing (just guessing) that TDO crunched the numbers and decided that adding DVCs are more profitable than major theme park development. Therefore, I understand how the perception is that DVCs have caused the parks to stagnate. Perhaps that perception will change once FLE and Avatarland are open.

Okay I get it, and since someone else mentioned that the two work under the same management, I see how the thread could come up. I still say that the two have to work together.

Hypothetical : Disney continues to build DVC after DVC for another 15 years with minimal upgrades or new rides, similar to the last 15 years. There has to be a breaking point, or at least one would think. They would have to do upgrades to parks to keep those DVC members happy. Hopefully it's sooner rather then later and we see more and bigger updgrades in the future. Hopefully FLE and Avatar are the start.

Now, 2 things, I'm guessing that this thread was brought up by a disney veteran and has been going for 20-30 years and the parks have differtent growth then years ago. But these people aren't the only people Disney has to please.
1. I'm 33, business owner, bought into DVC to force us to go on vacation. Gone to WDW 3 years in a row and headed again in March. I'm sure there are tons of young people like me who Disney is VERY fresh to and love it. I still haven't been to everything to see and I'm looking forward to it for years to come. In Disney's defense maybe there are lots of people like myself and they know it and they are taking advantage of it. Just a thought.
2. The person that led me to DVC is about 50+, DVC member and barely steps foot into the parks for rides. Just loves the atmosphere. He rides a few rides at best, eats a small meal, sits at the pool all afternoon then goes out for drinks to watch dueling pianos at the Boardwalk
These are just two examples of people that visit Disney, where Disney doesn't need to make upgrades for. So what if Disney knows that there is tons of guys like me. If I know that I dont have to do something new in my business to entice new customers when I have a everything that customers need. Then why should I do something new. Makes no sense.

DVC is not the reason the parks are stagnant. IMO resorts are resorts and Parks are Parks. If attendance was down and revenues were down then I would bet Disney would be on it to fill the void. I'm betting that DVC has been a new moneymaker for some time and may continue to be until its time for the parks to start to bringing in more money then the resorts

There is a time to build and a time to tear down. Maybe there is a time to build resorts and a time to add to the parks. (I think that's in Eccesaties 3)

 

[menamechris]

Yes. It's no secret that park expansion or a 5th gate is no longer a big attendance draw but simply spreading existing crowds around. We benefit from a 5th gate as resort attendance is further disbursed. But, I'm guessing many many studies show that the "new" attendance bump isn't worth it - while DVC helps WDW enjoy what DL has - recurring guests. You can thank DVC for saving WDW in 2001 when tourism collapsed. The only people coming to the parks (at least staying in resorts) were DVC guests already "locked in". Pop didn't sit half built because DVC looked better, it sat half built because they didn't need the rooms. And now, over 10 years later, they're finally finishing that area.

With all due respect - do you have a source for that assumption? In 2001, DVC consisted of, I believe, Old Key West and the Boadwalk Villas at the time. In 2001, it really was Disney's best kept secret. DVC really didn't start to take off until the mid to late 2000's as the cruise line continued to develop and Adventures By Disney was introduced - giving them more to market and promote. In 2001 - while the select DVC members who had signed up may have helped - WDW has locals and Floridians to thank for keeping the lights on. Which incidently didn't keep them from firing thousands of cast members, Imagineers that would end up working for the competion, and seriously considering operational changes that we probably never would have gotten reversed had they been implemented...

 

[disney fan 13]

With all due respect - do you have a source for that assumption? In 2001, DVC consisted of, I believe, Old Key West and the Boadwalk Villas at the time. In 2001, it really was Disney's best kept secret. DVC really didn't start to take off until the mid to late 2000's as the cruise line continued to develop and Adventures By Disney was introduced - giving them more to market and promote. In 2001 - while the select DVC members who had signed up may have helped - WDW has locals and Floridians to thank for keeping the lights on. Which incidently didn't keep them from firing thousands of cast members, Imagineers that would end up working for the competion, and seriously considering operational changes that we probably never would have gotten reversed that they been implemented...

I blame Bush