The Spirited 8th Wonder (WDW's Future & You!)

[doctornick]

Do you typically have any issue getting a room at VWL? Maybe I have just been lucky, I don't know.

Probably depends on what type of room you want (as well as what time of year). 1 BR, for example, tend to be fairly easy to get at most resorts.

 

[bhg469]

So, I have 2 questions that have been coming to mind based on some of the info that has been dropped here by @WDW1974 that maybe some of you fine folks, and perhaps 74 himself, could offer some insight into.

Edit: I think I'll break this up into 2 posts for ease of response

1) Regarding the DVC conversion.
So, in assuming that they have decided to take a percent of an existing deluxe resort and convert this to DVC, that means somewhere, some analytic minded person has had to have crunched some numbers to present to business. If the going assumption was that hotel occupancy is dropping, but the demand for DVC is high enough that it remains a more profitable alternative, then someone had to do the following math comparison.
Option 1: Compute the cost of the conversion, taking into account the potential loss of income of the regular hotel space (given existing occupancy rates and average room rates), the reduce in Mousekeeping wages (since DVC doesn't have daily service), the cost of the actual construction itself, any new staff that will be needed to service DVC members specific (likely a very small number), and any other costs associated with the maintenance and upkeep of DVC rooms as they compare to hotel rooms (is it more, or less?).
Option 2: Given the current occupancy rate compared against competition in the area, model different pricing scenarios. If we reduced the price of our deluxe resorts by 5%, we could realistically expect to pull in X number of new guests, which would calculate out to $Y per year in added revenue. Now run it for 6%, 10%, etc.

So, taking both option 1 and 2 into account, somehow the cost of gut-rehabbing the resorts to switch to a more DVC centric business model made more financial sense.
My questions then: Does this mean that they have little to no confidence in their ability to draw new/more business over an extended period of time by reducing the rates, so much so that they'll swallow a much larger upfront cost of conversion? Has the market already shifted past a point in WDW where they expect that drawing more people to stay at their hotels is now too difficult that the much simpler route of adjusting the pricing model is the less appealing option? Has the competition (both Uni as well as other 3rd party resorts) just outside the gates put too many well-appointed options in the vicinity that they've lost the competitive edge to the point of waving the white flag on it?

This is just my opinion but disney seems to get away with doing nothing because people who eat up that stuff, Disney loyalists, and the plain guest that does no research will still come.. then you have people that will still come, but spend less time. You have the guests that come to see universals new stuff and spend a few days at wdw. They won't get hit hard enough to stagger until universal adds that third gate.

I don't think they are bothered at all because they're happy with their scraps for now.

 

[JEANYLASER]

I would like Caribbean Beach Resort family suites. I would like it happen.

 

[wm49rs]

If all the DVC profits go back into DVC, what business/shareholder value does Disney get from DVC?

It's another division showing profit and growth that impacts the earnings of TWDC. But DVC is a separate entity onto itself....

 

[flynnibus]

No. Not the everyone gets a trophy strategy.

They are in a service industry - they are expected to maintain a quality image and service. They should not get praise for doing the baseline to stay afloat in the industry - especially given the differentiator they build the company on was being MORE and better. The rest of the world has caught up... And you want to pay them on the back for meeting the minimum. All the while their competitive differentiator has been lost because they treat water while everyone else is racing to catch up to them.

So, no I don't think praise is prudent when their job is to lead the company, not just do the minimum required and let their competitive advantage evaporate.

 

[flynnibus]

It's another division showing profit and growth that impacts the earnings of TWDC. But DVC is a separate entity onto itself....

A unit within the same division reporting to the same exec and in a bu who all report aggregated numbers together.

Sure they would operate their own PnL but that doesn't mean their profits aren't used by the company outside the division. The money is not locked into only dvc activities. They are gains the company will reapply wherever it's leadership decides....

And given how they report, the dollars can also help support the financials of other groups within the division as they report aggregated results

 

[Nemo14]

This is just my opinion but disney seems to get away with doing nothing because people who eat up that stuff, Disney loyalists, and the plain guest that does no research will still come.. then you have people that will still come, but spend less time. You have the guests that come to see universals new stuff and spend a few days at wdw. They won't get hit hard enough to stagger until universal adds that third gate.

I don't think they are bothered at all because they're happy with their scraps for now.

I think you're right, but sooner or later those scraps will dry up too unless there are major changes, and not just rumors of things that might happen in the next decade.

I think a lot of people bring their families to WDW because they have sweet memories of the place when they were kids. Their experiences as kids there were truly magical,and there was always something new and exciting to look forward to and return to. But what about today's kids? When they grow up and have families of their own will they feel that same nostalgic draw, will they really see any value to investing in DVC?

 

[wm49rs]

A unit within the same division reporting to the same exec and in a bu who all report aggregated numbers together.

Sure they would operate their own PnL but that doesn't mean their profits aren't used by the company outside the division. The money is not locked into only dvc activities. They are gains the company will reapply wherever it's leadership decides....

And given how they report, the dollars can also help support the financials of other groups within the division as they report aggregated results

Ok....

 

[sshindel]

This is just my opinion but disney seems to get away with doing nothing because people who eat up that stuff, Disney loyalists, and the plain guest that does no research will still come.. then you have people that will still come, but spend less time. You have the guests that come to see universals new stuff and spend a few days at wdw. They won't get hit hard enough to stagger until universal adds that third gate.

I don't think they are bothered at all because they're happy with their scraps for now.

Got lost in pronouns here. Who is happy with the scraps of whom? Disney is happy with Uni's scraps? Uni is happy with Disney's scraps? People that still go to Disney are scraps because they are not staying away and thus Disney is happy with them? Just trying to get that last statement straight in my head, it's probably obvious and I'm just missing it

 

[PrincessNelly_NJ]

I would like Caribbean Beach Resort family suites. I would like it happen.

I would like to see any of the Moderates get some love! Or even a new moderate resort!

They are updating food courts at value resorts and just opened AOA not too long ago. They are building DVC left and right. Updating the deluxe rooms (if that is what you want to call that hack job at the GF. )
Yet moderates get nothing...

CBR needs love. Lots. Idc if they turn them into family suites (which would be great for families of 5+ to have more options than POR) or split it like they did Dixie Landings.

As soon as possible. You know the one thing they have little trouble in building quickly is timeshares. I can say pretty confidently that folks will be staying in the new units at WL before all of Pandora is open, let's put it that way.

And, no, no BLT South as I alluded to.

Two reasons on that:

1.) The land there can't currently support it without some major infrastructure work (think erosion, think water bridge);
2.) The Contemporary is already at that tug of war point between lucrative conventioneers and DVCers. Thus far, it's a balance (not that there aren't issues both sides tend to have with the other groups). You add the BLT South and that resort is done as a MAJOR convention hotel.

Indeed, I have heard that every deluxe hotel is in play and that they are trying to determine if it would be possible to add DVC units at moderates. What would that take? A lower buy in per point? Would that harm the business as a whole? But imagine if at CBR, they bulldozed all of Trinidad South and replaced it with DVC. Imagine it, because they have.

BTW, the idea of DVC at a moderate has come up before internally. Someone high up and no longer with the company (think Aulani and you'll figure it out) pushed for DVC at Coronado Springs and was told to basically shut his trap by the Convention folks.

I can't even picture where DVC would go at CSR. I love CSR but many times when those convention come, it's hard to get a room. What are occupancy rates at CSR averaging these days?
I figured by eliminating free dining from POR & POFQ they were trying to push up rates at CBR & CSR. I guess we will know if that worked come next year.

 

[PrincessNelly_NJ]

I guess the trend is going to be over the water bungalows?

Soon they will start building ones over the Sassagoula river for POR & POFQ!

 

[DonaldDoleWhip]

I would like to see any of the Moderates get some love! Or even a new moderate resort!

They are updating food courts at value resorts and just opened AOA not too long ago. They are building DVC left and right. Updating the deluxe rooms (if that is what you want to call that hack job at the GF. )
Yet moderates get nothing...

POR and POFQ both received extensive room refurbishments over the past 2-3 years, and Caribbean Beach is receiving one now (along with the addition of queen beds and a pull-down bed under the TV - I think the new rooms look much nicer). CSR's refurb was probably around 2009-2010 (it was the first moderate to start with queen beds, and the other moderates have followed). So I don't think the moderates have gotten nothing, but it would be interesting to see if anything larger is planned for them.

 

[flynnibus]

If the going assumption was that hotel occupancy is dropping, but the demand for DVC is high enough that it remains a more profitable alternative, then someone had to do the following math comparison.

The smart guy balances the lost opportunity of those rooms over time to the upfront gains of dvc... Trying to include operating cost changes (like you said)... And even tries to include cannibalization into the opportunity compute.

Or the short timer says "these rooms are empty, let's flip them and take the money now... The upfront costs are easily beat by the sale dollars"

There is a cost to market, fill, and maintain those rooms. If you are struggling to do that successfully now... Doesn't it sound amazing to just remove your problem and get paid to do so?

This is why it comes back to short term vs long term. The long term takes both time and effort. Dvc is get paid now AND take less effort over time.

Does the farmer work the fields or does he sell the property to the developer for a one time profit ?

Look around... You see it in so many parts of TWDC... Desiring ownership of the operation is less desirable than just collecting money while someone else does the heavy lifting.

Desiring to do it in house to control the quality and execution has taken a backseat to financial justifications

 

[bhg469]

Got lost in pronouns here. Who is happy with the scraps of whom? Disney is happy with Uni's scraps? Uni is happy with Disney's scraps? People that still go to Disney are scraps because they are not staying away and thus Disney is happy with them? Just trying to get that last statement straight in my head, it's probably obvious and I'm just missing it

Disney is happy with their scraps.. sorry, you're right.

But the Disney drones apply as well, case in point, the frozen shenanigans at dhs.

 

[PREMiERdrum]

Caribbean Beach is receiving one now (along with the addition of queen beds and a pull-down bed under the TV - I think the new rooms look much nicer).

Are there pics out there of the new rooms?

 

[PrincessNelly_NJ]

POR and POFQ both received extensive room refurbishments over the past 2-3 years, and Caribbean Beach is receiving one now (along with the addition of queen beds and a pull-down bed under the TV - I think the new rooms look much nicer). CSR's refurb was probably around 2009-2010 (it was the first moderate to start with queen beds, and the other moderates have followed). So I don't think the moderates have gotten nothing, but it would be interesting to see if anything larger is planned for them.

CBR is under refurb right now? I haven't heard anything about it besides rumors.

 

[DonaldDoleWhip]

CBR is under refurb right now? I haven't heard anything about it besides rumors.

Yep, I've seen pictures of the updated rooms (and reports of someone staying in one) on another Disney site. Will look for a link now.

 

[PrincessNelly_NJ]

Yep, I've seen pictures of the updated rooms (and reports of someone staying in one) on another Disney site. Will look for a link now.

Got a link or could your share? Id appreciate it.

 

[danlb_2000]

CBR is under refurb right now? I haven't heard anything about it besides rumors.

There was a permit filed back in February for this, so it is definitely in progress.

 

[sshindel]

The smart guy balances the lost opportunity of those rooms over time to the upfront gains of dvc... Trying to include parting cost changes (like you said)... And even tries to include cannibalization into the opportunity compute.

Or the short timer says "these rooms are empty, let's flip them and take the money now... The upfront costs are easily beat by the sale dollars"

There is a cost to market, fill, and maintain those rooms. If you are struggling to do that successfully now... Doesn't it sound amazing to just remove your problem and get paid to do so?

This is why it comes back to short term vs long term. The long term takes both time and effort. Dvc is get paid now AND take less effort over time.

Does the farmer work the fields or does he sell the property to the developer for a one time profit ?

Look around... You see it in so many parts of TWDC... Desiring ownership of the operation is less desirable than just collecting money while someone else does the heavy lifting.

Desiring to do it in house to control the quality and execution has taken a backseat to financial justifications

Sure, I totally get the long-term vs short-term argument.
I guess I'd be amazed if they didn't have someone run the numbers to model that out over time. It doesn't mean that they didn't do it of course, but it'd be one of the first questions I'd ask if I were making this decision AND all I cared about is the bottom line (like we suppose folks there do).
If all I cared about is $, I'd have someone prove to me that the bird in hand is worth the two in the bush over the long term.