New DVC Villas at CBR?

[SCOTLORR]

I know it's from the website that may not be named, but some pretty exciting news regarding the first ever moderate resort DVC came out today. It would be located at Caribbean Beach across the lake from the Pirate rooms (Trinidad South). the picture is courtesy of the same website, I'd post the link if it were allowed. Anyway, thoughts on a moderate DVC resort?

 

[EOD K9]

Moderate DVC resort? So, would you still have the same options in just a smaller size? Or just based at a moderate resort?

 

[Tom]

Build one at Riverside and I'll buy another contract tomorrow.

 

[SCOTLORR]

Moderate DVC resort? So, would you still have the same options in just a smaller size? Or just based at a moderate resort?

Not really sure since there isn't any current resort to base it on, but it seems what you said would be on the right track. lower point prices, but also less amenities available. Just a guess though.

 

[EOD K9]

Not really sure since there isn't any current resort to base it on, but it seems what you said would be on the right track. lower point prices, but also less amenities available. Just a guess though.

I can deal with lower points for less amenities, but the idea of all the DVC rooms is to give the people more space.

 

[Tom]

I can deal with lower points for less amenities, but the idea of all the DVC rooms is to give the people more space.

And to provide a simply defined standard feature sets that can be offered at each DVC. Some of those can't translate to a Moderate.

 

[DVC Mike]

It doesn't necessarily mean it will be a moderate DVC.

Next DVC to be at the Caribbean Beach Resort?

 

[DisDadWoz]

If it's not going to be part of CBR let the rumor mill start about theming, name, etc. I would personally love to see another DVC resort.

 

[GoofGoof]

Just to give credit where credit is due @WDW1974 broke this rumor a while back in one of the spirited threads. I'll go back and look for the thread when I get a chance. It wouldn't be the first time someone found info here and claimed it as their own.

As far as a a "moderate" DVC goes I will be shocked if it actually has "moderate" prices. More likely than not it will be priced the same as the rest and just located at a moderate resort.

Edit: the discussion was here:
http://forums.wdwmagic.com/threads/...er-wdws-future-you.887031/page-3#post-6221736

It seems this is something they have considered for a few years at least.

 

[EOD K9]

It doesn't necessarily mean it will be a moderate DVC.

Next DVC to be at the Caribbean Beach Resort?

You said it better. I don't know if that would be an oxymoron. DVC is quasi-luxury.

 

[GoofGoof]

The land in question here doesn't seem to be very large unless they plan to go verticle. A tower could potentially have viewing areas for both Illuminations and DHS fireworks if it is tall enough. There was also some discussion of potentially building a canal to link to either the back entrance to EPCOT or DHS or possibly both. Not sure how feasible it would be, but it could go a long way to making it a lot more popular for new buyers. If you look at the map below the area in question is the southern part of CBR so it makes it a little further to connect. Getting to EPCOT would require going under Buena Vista Dr and DHS would need to cut through existing wetlands.

 

[wdwhoneymooner]

As a business decision, this makes sense to me regardless of it being positioned at a moderate resort location. If they were to create a slightly lower price point vs. existing dvc locations, it would be the equivalent of an entry-level model in a luxury car brand. Provide a premium feel within this dvc location for those who are interested in joining but have reservations about paying $160/point. And given that there is available space that could be used to generate revenue, why not?

 

[wdwhoneymooner]

The more I think about this, is it certain to be a DVC resort, or is it going to be something similar to what they have at Art of Animation: one bedroom suites? Since these type of rooms are always in high demand there, I could see this happening at CBR more than a lower-tier DVC.

 

[GoofGoof]

As a business decision, this makes sense to me regardless of it being positioned at a moderate resort location. If they were to create a slightly lower price point vs. existing dvc locations, it would be the equivalent of an entry-level model in a luxury car brand. Provide a premium feel within this dvc location for those who are interested in joining but have reservations about paying $160/point. And given that there is available space that could be used to generate revenue, why not?

I've thought about the concept of a moderate version of DVC a lot since it was first rumored but I'm not sure that the economics could work. I can definitely see why people would want to be able to buy into DVC at a lower price point, but I don't think the economics work for Disney. There are 2 ways to do a true "moderate" DVC resort.

1. Make the price per point lower
   
2. Make the number of points per night lower

If you make the price per point lower you have issues with transferability which is one of the key components to the DVC program. It would make no sense to allow someone to buy 150 points at $110 a point at a moderate DVC and then trade them in to stay at BLT when someone buying directly at BLT would have to pay $160 for the same points. One answer is to price the points at half the price of a deluxe but make it 2 for 1 to trade in. So if I want to trade in 150 Moderate DVC points they are only worth 75 points at BLT. That could solve that issue, but brings up a second issue, Disney would not be making as much money from the sales. Let's assume for discussion sake that they built a BLT size moderate DVC resort with 5M total points. If they sell the points at $80 instead of $160 they making $400M on those sales vs $800M so are losing $400M in profits. That's a substantial amount of money. My understanding is that a large portion of the expense for DVC sales is the sales cost which would still be significant for a moderate DVC. The rooms could be smaller with less deluxe amenities, but it would be difficult to cut the cost enough to make up for lost revenues. In other words Disney has to settle for less profit.

If you keep the price per point the same but make the number of points per night lower it might make better sense. The points per night wouldn't be half the deluxe but it could be low enough that the minimum initial buy is down to 100 or even 80 points. That way you lower the total buy-in cost for new buyers without making an issue with trading in points. The economics are still not favorable for Disney compared to a deluxe resort, but if they make the resort larger (similar to how the moderates are larger than the deluxe resorts) then they could make up for the lost profits per room. A larger resort with lower amenities would also allow for lower maintenance fees which would appeal to moderate buyers.

I think the concept of a moderate DVC only makes sense to Disney economically if they feel that the deluxe market is tapped out. Right now only the deluxe product exists so if you want it you have to go deluxe. Many people who would have preferred a moderate DVC took the plunge and bought in at higher price points. As soon as you introduce a moderate product you loose those upgraders.

 

[lostpro9het]

1. Make the price per point lower
   
2. Make the number of points per night lower

My limited experience says that #2 is the best route to go. They can still charge their ridiculous rate of $165+/point but then a week's stay at this moderate facility would be less than, say, a week in an AKL value room, maybe 6ish points/night. Yeah their new customer base would only be interested in 80 point contracts but DVD will probably have an easier time selling new $13k contract vs a $26k contract. The equal buy in makes it fair at the 7-month mark when the moderate folks go to use their points at a deluxe. I could also see many deluxe owners liking a lower point/week trip every now and then too.

 

[EOD K9]

My limited experience says that #2 is the best route to go. They can still charge their ridiculous rate of $165+/point but then a week's stay at this moderate facility would be less than, say, a week in an AKL value room, maybe 6ish points/night. Yeah their new customer base would only be interested in 80 point contracts but DVD will probably have an easier time selling new $13k contract vs a $26k contract. The equal buy in makes it fair at the 7-month mark when the moderate folks go to use their points at a deluxe. I could also see many deluxe owners liking a lower point/week trip every now and then too.

But as I said earlier, could you really make smaller DVC rooms? The idea is to have bigger rooms for whatever people need that particular size room.

 

[GoofGoof]

But as I said earlier, could you really make smaller DVC rooms? The idea is to have bigger rooms for whatever people need that particular size room.

I don't think they could make the rooms much smaller. They could have less amenities available at the resort but that can only save so much money. If they don't offer any alternate transportation and the resort is just serviced by buses that would save some money. Probably the only way to make this work would be to go for a larger quantity of rooms. Build a resort with as many rooms as SSR or larger to make up for the lower points per night.

 

[EOD K9]

I don't think they could make the rooms much smaller. They could have less amenities available at the resort but that can only save so much money. If they don't offer any alternate transportation and the resort is just serviced by buses that would save some money. Probably the only way to make this work would be to go for a larger quantity of rooms. Build a resort with as many rooms as SSR or larger to make up for the lower points per night.

Other than that, what else would/can be cut?

 

[lostpro9het]

But as I said earlier, could you really make smaller DVC rooms?

Sure, it could be the size of a moderate room to conform to a "moderate DVC" model.

The idea is to have bigger rooms for whatever people need that particular size room.

That's the idea of the "Deluxe Villa" model that we have been accustom to. I don't think these new rooms, if they follow their rumored nomenclature, will look much different than a typical mod room. I believe their sales force will focus on the "save on years of vacations" angle rather than the "look at all these extras" angle.

 

[ParentsOf4]

I don't think they could make the rooms much smaller.

Other than that, what else would/can be cut?

Looking at AKV's smaller Value Rooms as a model, a Value Studio is 95 points per week during the summer whereas an AKV Standard Studio is 116 points per week. That's 22% more.

Then let's assume a purchase price of roughly $140/point for a moderate resort, the same as today's price at SSR and OKW.

That works out to a purchase price of $13,300 (95 X $140).

With PVB currently at $171/point and a Standard View Studio requiring 169 points per week in the summer, a purchase there costs $28,899 without promotional discounts.

A DVC Resort full of smaller "value" Studios could appeal to a group of consumer who has been priced out of Disney's current timeshare model.

I'm assuming Maintenance Fees will be priced at the current WDW average of roughly $6/point. With these Guests typically buying fewer points, they'll be reluctant to stay elsewhere onsite knowing that other DVC Resorts require more points-per-night.

What it potentially hurts is the existing DVC Resale market since a direct purchase at this more modest DVC Resort will be priced much lower. Experienced DVC members will know the difference but, to the average consumer, they'll simply see a "DVC stay" purchased directly from Disney costing much less than it has in the recent past.