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

[bhg469]

Yeah I've stayed at the values many times and will continue to do so. I do stay offsite sometimes too.

I usually prefer moderates, but pop was much better than cbr. I am not spending over 150 though, they just aren't worth it. Sadly I don't even thing pop is worth the rate but it's still my next voice if I can't swing the good moderates.

 

[Mike S]

I usually prefer moderates, but pop was much better than cbr. I am not spending over 150 though, they just aren't worth it. Sadly I don't even thing pop is worth the rate but it's still my next voice if I can't swing the good moderates.

The only time I stayed at a moderate was earlier this year when I stayed at Coronado Springs. We used a friends CM discount for the room and the dining plan and split the price of both between the four of us.

 

[GiveMeTheMusic]

I've never had a good moderate experience. Overpriced value rooms in resorts the size of small cities. Bus service each time was awful. Went back to Pop - similar rooms (less theming obviously), fantastic bus service, manageable resort size. Never tried POFQ, it looks like it might be okay. Loved loved loved the look and feel of POR, but would never stay there again. Either I'm spending deluxe money at AKL or value money at Pop/AOA mermaid.

 

[Quinnmac000]

I will take Shades of Green over any Disney owned property...can't beat 87 bucks a night.

 

[John]

Okay let's go this way. You run a hotel business. You are guaranteed 15,000 rooms can be filled every night 365 days a year. 100% percent capacity. Do you build 15,000 rooms or more? Now the problem for you to decide is that if you can fill 26,000 at 100% for 2 weeks and the rest of the weeks you are in between how many rooms would you build? What is you could sell 30,000 rooms for 3 or 4 nights a year? No hotel will ever be at 100% capacity because it would not be maximizing profits. That is like manufacturing capacity. No one can afford to be at 100% because they would not be maximizing profits and would have to turn down sales. Please tell me an industry or business that is at 100%. Maybe you should ask spirit. He knows this is right but has never commented on this because he knows I am right. Further hotel companies keep adding more and more rooms in Orlando outside of Universal and Disney even though off site capacity is below 75%. Why? Are they stupid? You think they are, all of them. Hotels are not based on anywhere near capacity to break even or make a profit.

I don't know how many ways I can explain this. I understand that this is a difficult thing to understand because 20% sounds like a large number but 50% for most hotels is still profitable although only slightly.

Seriously.......your going to argue numbers with PO4?......smh.....Good luck wit dat.

 

[Longhairbear]

We've actually been caring less about WDW, and splurging using points on accommodations we normally would not do. We don't go to WDW anymore, so we go on a cruise, stay in the top level suites, at DLR. We got concierge at DLH for gay days in Oct. No more saving points by going to OKW, or SSR. We're staying in California and living the high life, blowing off points at the highest quality available to us on points. And could care less if DVC is able to rent our points at our Wilderness home base to cover the cost, if that is how it all works.
Staying at DLR on points means we can also go to the newly redone Knotts Berry Farm attractions, and also not far from Universal Hollywood, and their version of Harry Potter once built. Honestly, why should we even consider Orlando at all? If we go back it will be to go to NASA.

 

[GoofGoof]

You got that right!
They reap the benefits of this twice.
DVC looks like a better deal when the nightly rate is $500 - $800.
And like you said, they offer discounts that make cash guest think they are getting a deal.

When I seen the GF going for $311 a night on Orbitz, I thought mmm that's what it should be PERIOD.
If I ever pay over $400 a night for any hotel, someone stop me! Please cut up all my credit & debit cards!

Here's the thing though, the price is $500 to $800. If you want to stay at those resorts that is the price. DVC is a better deal compared to paying that. It's like buying a car. If you want a BMW and one dealership is selling it for $50,000 and one is selling it for $40,000 the one that's selling it for $40,000 is a good deal for a BMW. You can get a Kia for $12,000 and it will get you from home to work just as well so if you compare the BMW to the Kia it looks like a real bad deal. I personally would never spend $40,000 or $50,000 on a car, but I have spent over $400 a night for a hotel (mostly not at Disney). Vacations are what I spend my money on.

 

[Lucky]

There's another point we haven't mentioned: the majority of Deluxe rooms are sold at some sort of discount. Few GF and Poly rooms are actually sold at rack rate. When you need to discount to sell something, your prices are too high.

In the last few years they've implemented a more aggressive airline-style price discrimination strategy. They have a more complex resort pricing structure, coupled with heavy use of discounting, to get more revenue from guests able and willing to pay full price without losing too many of the guests they earn smaller margins on. A few years ago they added many more "seasons" with different resort rates, and started pricing differently by day of the week, and some mods are now priced higher than others.

As part of this strategy, rack rates went way up, by around 12% just last year alone, but discounts seem to be just about as frequent as when the economy was weaker. They don't expect most guests to pay exorbitant rack rates, but they're there for those who can and will pay it, just like the person sitting next to you on a flight may have paid twice as much for his seat.

 

[GoofGoof]

In the last few years they've implemented a more aggressive airline-style price discrimination strategy. They have a more complex resort pricing structure, coupled with heavy use of discounting, to get more revenue from guests able and willing to pay full price without losing too many of the guests they earn smaller margins on. A few years ago they added many more "seasons" with different resort rates, and started pricing differently by day of the week, and some mods are now priced higher than others.

As part of this strategy, rack rates went way up, by around 12% just last year alone, but discounts seem to be just about as frequent as when the economy was weaker. They don't expect most guests to pay exorbitant rack rates, but they're there for those who can and will pay it, just like the person sitting next to you on a flight may have paid twice as much for his seat.

I would be curious to see how many guests are actually paying rack rates. I suspect it may be higher than we think. We are a group of people who frequently post on a Disney fan site. Of course we know all of the tricks to save money. I bet there are some tourists who just go to the Disney website and book a room. If they happen to have a blanket 20% or 30% off deluxe rooms deal then they take it, but if not they might pay rack. Especially at times like Spring Break or Christmas.

The airline analogy is really good. It seems like Disney's room pricing may actually be more complex and convoluted then even the airlines if that's possible.

 

[ParentsOf4]

@WDW1974 and @ParentsOf4

How close is DVC to a saturation point? Once it does reach critical mass....then what? I mean you can't easily convert those rooms back to hotel rooms. I would assume there would be contracts DIsney would have to buy out to get the rights back?
Is this truly a ticking time bomb?

In 2013, VGF added 2.5M DVC points representing 100 2-bedroom equivalent villas. (Compared to a total of 47M DVC points & 3100 DVC rooms at WDW.) As of June 2014, 55% of VGF's points have been sold. As its current rate, VGF should sell out within 12 months. That's roughly 2 years to sell 2.5M points.

IMHO, this sell rate represents the sustainable DVC market for the next several years.

Early in its history, DVC was targeted at stealing away business from offsite timeshares. OKW and BWV appealed to those looking to buy timeshares and who might not spend their lodging dollars at Disney. Both resorts opened with DVC rooms.

DVC began to cannibalize its own Deluxe Resort business with the opening of VWL in 2000. This expansion added timeshare rooms to an existing hotel. The market for those rooms overlapped the market for Deluxe Resort rooms. However, the numbers were small (136 rooms) so its effect wasn't noticeable.

The problem slightly worsened with the opening of BCV in 2002. Y&BC was (and still is) a popular resort. Expanding DVC there began to pull away guests from other Deluxe Resorts. Again though, the numbers were small (208 rooms).

Where DVC jumped the shark was with the rapid expansion of SSR (2004), AKV (2007), and BLT (2009). Combined, these 3 resorts more than doubled the number DVC rooms. Rather than remaining exclusive (in 2003, DVC represented only 5% of total WDW room inventory), DVC was turned into timeshares for the masses.

With the rapid expansion of these 3 resorts, DVC kiosks began to pop up everywhere, targeting all sorts of guests, often those who already were spending big bucks to stay onsite.

It was after the opening of AKV that WDW's hotels occupancy began its steady decline, a decline that continued as Disney raised hotel rack rates in an effort to justify the 'cost savings' of DVC. (The same way that we've seen the price of food at WDW increase in order to justify the price of DDP.)

WDW now has over 3100 2-bedroom equivalents, representing 9300 physical rooms tied to DVC. (Recall that prior to the opening of Cabana Bay, Universal had a total of 2400 onsite rooms.) These 9300 rooms represent a tremendous loss of potential revenue to WDW, as DVC members pay in annual dues only a fraction of what cash guests pay for equivalent hotel rooms.

WDW is seeing the adverse effect of DVC, both in terms of much lower occupancy rates at the Deluxe Resorts as well as in the need to offer 30-40% discounts for the majority of the year. (It wasn't that long ago when WDW never offered discounts.)

Going forward, the damage is done. WDW is losing potential hotel revenue because of DVC.

Recognizing that even 'long-term' strategic planners rarely look beyond the next 3-4 years, converting (mostly empty) hotel rooms to DVC is exactly the right way to recapture some of that lost potential revenue. It's a matter of, "If you can't beat them, join them."

However, it's thoroughly depressing because it means that WDW is simply continuing its current trend of optimizing business rather than taking Universal's current approach of growing business. In other words, conversion of hotel to DVC is consistent with a company that's focused on steps such price increases, quality cuts, delayed investments, etc.

There is nothing in this move to signal anything besides the continued slow downward spiral that we've seen at WDW for the last 15 years or so.

 

[GoofGoof]

In October 2013, VGF added 2.5M DVC points representing 100 2-bedroom equivalent villas. (Compared to a total of 47M DVC points & 3100 rooms at WDW.) As of June 2014, 55% of VGF's points have been sold. As its current rate, VGF should sell out within 12 months. That's less than 2 years to sell 2.5M points.

IMHO, this sell rate represents the sustainable DVC market for the next several years.

Early in its history, DVC was targeted at stealing away business from offsite timeshares. OKW and BWV appealed to those looking to buy timeshares and who might not spend their lodging dollars at Disney. Both resorts opened with DVC rooms.

DVC began to cannibalize its own Deluxe Resort business with the opening of VWL in 2000. This expansion added timeshare rooms to an existing hotel. The market for those rooms overlapped the market for Deluxe Resort rooms. However, the numbers were small (136 rooms) so its effect wasn't noticeable.

The problem slightly worsened with the opening of BCV in 2002. Y&BC was (and still is) a popular resort. Expanding DVC there began to pull away guests from other popular Deluxe Resorts. Again though, the numbers were small (208 rooms).

Where DVC jumped the shark was with the rapid expansion of SSR (2004), AKV (2007), and BLT (2009). Combined, these 3 resorts more than doubled the number DVC rooms. Rather than remaining exclusive (in 2003, DVC represented only 5% of total WDW room inventory), DVC was turned into timeshares for the masses.

With the rapid expansion of these 3 resorts, DVC kiosks began to pop up everywhere, targeting all sorts of guests, often those who already were spending big bucks to stay onsite.

It was after the opening of AKV that WDW's hotels occupancy began its steady decline, a decline that continued as Disney raised hotel rack rates in an effort to justify the 'cost savings' of DVC. (The same way that we've seen the price of food at WDW increase in order to justify the price of DDP.)

WDW now has over 3100 2-bedroom equivalents, representing 9300 physical rooms tied up in DVC. (Recall that prior to the opening of Cabana Bay, Universal had a total of 2400 onsite rooms.) These 9300 rooms represent a tremendous loss of potential revenue to WDW, as DVC members pay in annual dues only a fraction of what cash guests pay for equivalent hotel rooms.

Disney has seen the adverse effect of DVC, both in terms of much lower occupancy rates at the Deluxe Resorts as well as in the need to offer 30-40% discounts for the majority of the year. (It wasn't that long ago when Disney never offered discounts.)

Going forward, the damage is done. Disney is losing potential hotel revenue because of DVC.

Recognizing that even 'long-term' strategic planners rarely look beyond the next 3-4 years, converting (mostly empty) hotel rooms to DVC is exactly the right way to recapture some of that lost potential revenue. It's a matter of, "If you can't beat them, join them."

However, it's thoroughly depressing because it means that WDW is simply continuing its current trend of optimizing business rather than taking Universal's current approach to growing business. In other words, conversion of hotel to DVC is consistent with a company that's focused on steps such price increases, quality cuts, delayed investments, etc.

There is nothing in this move to signal anything besides the continued slow downward spiral that we've seen at WDW for the last 15 years or so.

Again, you speak the truth.

Here is a slightly more optimistic slant to the current DVC expansion. Back in the day TWDC partnered with large corporations to build EPCOT Center. Without the corporate sponsors and foreign nations it would have been a lot more expensive to build and the project may not have been finished. Flash forward to today and many of the same pavilions are in desperate need of some love. Corporations aren't willing to spend as much anymore to be a part of WDW. The company is unwilling to foot the bill alone to fix these pavilions. With DVC instead of corporate sponsors they are enlisting an army of average guests to "foot the bill" for much needed improvements at the resorts. Can anyone really argue that the Poly didn't need a major refurb of the common areas? Disney found a way to partially fund the refurb. If 40% of Poly rooms are being converted to DVC I'm sure at least 40% of the cost of the common area refurbs will be paid for by selling DVC points. The silver lining is that a portion of current and future resort upkeep and maintenance is now covered by DVC owners. In other words they won't cut back on those services since they are no longer "expense" to TWDC. They are definitely losing future revenue from converted rooms but they are also avoiding large expenses as well.

 

[Figments Friend]

Disney Cruise Line actually has this, it's called the Castaway Club. You automatically become a member of the club if you take a second cruise, and it comes with several benefits, which become larger as you take more cruises. We recently took our 11th cruise, which allowed us perks like gifts left in the stateroom each night, free dinners at the up-charged restaurants, onboard merchandise discounts, and the ability to make excursion reservations extra early — and all we've ever done is go on more cruises. The wonderful treatment caught our attention, since it made us realize how much DCL seems to value their repeat customers, while WDW does little to nothing for them.

Well then this is great to hear Mr. Twain.
Nice to know there is at least some type of program...somewhere...'out there'.

 

[GiveMeTheMusic]

why not stay at POR again?

my upcoming visit in sept , im staying there for 1st time...

It's gorgeous, but the food options suck and the place is GINORMOUS. Five bus stops in one resort. Our walk to our room felt like an eternity - a beautifully themed eternity, while hauling our own luggage because no one was available to assist us. Rooms are just okay - not much nicer than values, unless you spring for a princess room, and let's be real - why. We had the great fortune of being closest to the last bus stop - nothing like a bus full of people that pulls over just to tell you it's full and to wait a half hour or more for the next one! We got into the habit of getting onto whatever bus had room for us, regardless of where it was going, and then transferring to another bus once we got there if need be.

For the money, if I must be on-site, it's deluxe (AKL specifically) or value (Pop/AOA Mermaid). Pop and AOA have dedicated, efficient bus service, great food courts and while your room can be a bit of a walk, it's not miles.

 

[John]

Again, you speak the truth.

Here is a slightly more optimistic slant to the current DVC expansion. Back in the day TWDC partnered with large corporations to build EPCOT Center. Without the corporate sponsors and foreign nations it would have been a lot more expensive to build and the project may not have been finished. Flash forward to today and many of the same pavilions are in desperate need of some love. Corporations aren't willing to spend as much anymore to be a part of WDW. The company is unwilling to foot the bill alone to fix these pavilions. With DVC instead of corporate sponsors they are enlisting an army of average guests to "foot the bill" for much needed improvements at the resorts. Can anyone really argue that the Poly didn't need a major refurb of the common areas? Disney found a way to partially fund the refurb. If 40% of Poly rooms are being converted to DVC I'm sure at least 40% of the cost of the common area refurbs will be paid for by selling DVC points. The silver lining is that a portion of current and future resort upkeep and maintenance is now covered by DVC owners. In other words they won't cut back on those services since they are no longer "expense" to TWDC. They are definitely losing future revenue from converted rooms but they are also avoiding large expenses as well.

And that's a positive slant? Avoiding large expenses while making a ton of coin?

 

[GoofGoof]

And that's a positive slant? Avoiding large expenses while making a ton of coin?

I've never had any problem with Disney either avoiding large expenses or making a ton of coin. They have done some of both throughout the history of the parks. What bothers me is letting things go stale or not fixing broken things in order to save a few bucks. In this case what I'm saying is the refurbs are happening or going to happen, they are just being paid for by someone else. At the end of the day, as a paying customer, I want the refurb done. I could give a rat's behind if it comes from some TDO operating budget or if they front the cost by selling DVC points.

 

[Cosmic Commando]

It's gorgeous, but the food options suck and the place is GINORMOUS. Five bus stops in one resort. Our walk to our room felt like an eternity - a beautifully themed eternity, while hauling our own luggage because no one was available to assist us. Rooms are just okay - not much nicer than values, unless you spring for a princess room, and let's be real - why. We had the great fortune of being closest to the last bus stop - nothing like a bus full of people that pulls over just to tell you it's full and to wait a half hour or more for the next one! We got into the habit of getting onto whatever bus had room for us, regardless of where it was going, and then transferring to another bus once we got there if need be.

For the money, if I must be on-site, it's deluxe (AKL specifically) or value (Pop/AOA Mermaid). Pop and AOA have dedicated, efficient bus service, great food courts and while your room can be a bit of a walk, it's not miles.

I love Pop. Even though the average room might be further from the bus stop, it's fairly straightforward once you're there. You won't be making three other stops before you actually head to the park, nor will the bus be full when it arrives. The rooms open up a lot if you push the beds together, as well. And a whole cheese pizza from the food court was a pretty good deal last time I was there in 2011 (probably $35 now! )

 

[Mike S]

I love Pop. Even though the average room might be further from the bus stop, it's fairly straightforward once you're there. You won't be making three other stops before you actually head to the park, nor will the bus be full when it arrives. The rooms open up a lot if you push the beds together, as well. And a whole cheese pizza from the food court was a pretty good deal last time I was there in 2011 (probably $35 now! )

Last time I stayed at the Pop we got that Pizza nearly every night. I THINK it was $13 or something. Pretty good too

 

[Stevek]

Curious if you could provide evidence of of your claims on the level of ammenities at WDW resorts? Granted, as I live in Orlando, I've only stayed at Disney hotels twice in the past couple years (once @ Contemporary, once @ AS Movies) and thus am not an expert on WDW lodging. However, even at the value resort, I didn't "see the matress through the sheets" and found the bath linen to be sufficiently soft. The alarm clock was a new w/ ipod dock, hardly a vinyl "wood" artifact from 25 years ago. Oldest thing in the room was the 720p, 60 hz flatscreen. Got a custom, made-to-order omelette at Chef Mickey's, could get one at the food court at all-star. could have ordered a mimosa if I desired, as well.

I've only been to WDW 3 times. AKL (2006) was spectacular top to bottom. Great service, great rooms. Pop Century (2010) not quite as great on the room but all other amenities were very good i.e. small but comfortable bed, TV, Food, service. CBR (2014), ugh. Closest I would come to describing as a Holiday Inn. The grounds are nice enough but the rooms were very dated and weren't worth the (even discounted) price we paid. Won't stay there again to be sure. I really expected CBR to be significantly better than POP but no way IMO.

 

[tirian]

True.

I'm very familiar—personally familiar—with how pricing strategies were determined.

In the last few years they've implemented a more aggressive airline-style price discrimination strategy. They have a more complex resort pricing structure, coupled with heavy use of discounting, to get more revenue from guests able and willing to pay full price without losing too many of the guests they earn smaller margins on. A few years ago they added many more "seasons" with different resort rates, and started pricing differently by day of the week, and some mods are now priced higher than others.

As part of this strategy, rack rates went way up, by around 12% just last year alone, but discounts seem to be just about as frequent as when the economy was weaker. They don't expect most guests to pay exorbitant rack rates, but they're there for those who can and will pay it, just like the person sitting next to you on a flight may have paid twice as much for his seat.

 

[ASilmser]

So very true! Everything at Disneyland seems to be done with heart. There's no reason that WDW MK couldn't have been done that way!

Those who are going to say that everything at Disneyland is AWESOME and Walt Disney World is crap-on-a-stick need to get a little bit of perspective on the business model of the parks. I don't have any inside data on the topic, but you need to cut WDW a little slack for doing things differently than Disneyland. First, I will go on record as saying that I wholeheartedly agree that Magic of Disneyland is superior in almost every way to Disney World's Magic Kingdom.

There are some wonderful, unique parts of Disney World, but there is an entirely different "vibe" there compared to Disneyland Resort. Disneyland is a gem. However, DL relies on a very different business model than Disney World, and for good reason:

First, Disneyland makes GOBS of Money compared to Disney World on a per square footage basis. I would also venture to say that overall, the dollars per guest are higher as well. The reason is simple: Disneyland resort is a relatively small chunk of property smack in the middle of a metropolitan area that (if you count San Diego) is roughly 20 million regular residents. The sheer number of residents who can afford it and who choose to patronize it is HUGE. Not only that, but Southern California is super popular tourism area. Disneyland resort is a must for most of the tourists who visit that area--for at least one day, and more for others.

20 million locals plus tourism stats that come pretty close to Orlando's plus a lot less hotel rooms equals $$$$--even in the midst of a lengthy recession.

Any economic downturn, however long or hard, affects Disneyland much less than Disney World. The sheer number of locals can keep it going and make it profitable. If things get really bad, Disneyland just has to offer a few incentives to them to get them to hop in their cars and come on over. Usually, there are so many that they really don't have to do much of anything at all.

Do a comparison of passes for Disneyland and Walt Disney World, including season passes. Then, for giggles, look up the price for a night at the Paradise Pier hotel--a bland "value plus" (I made that category up) hotel on Disney property. They get those rates because they have so few rooms compared to the amount of tourists who visit the area, even in down times.

Orlando? They have ONE TENTH of the local population that Disneyland has, with more space and 10 times more rooms to fill. When there is a small glitch in people's traveling habits, Disney World gets SLAMMED. They feel it everywhere. Honestly, I don't think they have fully recovered from 9/11 and the great recession being so close to one another. I think that the upgrades and improvements that they are planning are really about all they can do right now. I am not saying I like it--I think they should take more risks and re-boot EPCOT, the Studios, and Tomorrowland.

But it's easy to spend a corporation's cash for them. It's a lot scarier when your job is on the line if you mess up, or if you want to avoid laying off a ton of people and closing a bunch of real estate because of an unforeseen economic downturn.

I think WDW probably feels that one of the ways to combat these economic "bumps" is to create a steady stream of people who will practically have to visit regularly--a group of "out of town locals." They really aren't trying to be cute when you check in at a DVC resort and they say "welcome home."

I am a DVC member, and like Spirit, torn about this. I am happy on some levels to have more options for my stay, but I am not so thrilled about the dependence on DVC to reboot the deluxe resorts.

I am also a realist. If I were to sum up Disney World's long term planning problems, I would say this: "It's the economy, stupid."

The economy is better than it was a few years ago, but it's NOTHING like the "glory days" we are all wishing for. I would argue that the economy is coughing and sputtering through a recovery, but it's not robust enough for anyone bet on major growth in the foreseeable future. Without that, you aren't going to be seeing as many pile-drivers and cranes as you used to.

I don't like it, nor do I necessarily agree with it--but it's understandable considering the economic pitfalls that have occurred since 2001.