DVC direct sales very very low in Feb

[AnnaKristoff2013]

Not sure they had planned just 30k of sales at RIV or even have the level of control on sales to make them be this low. Could be Something more significant going on, maybe the demand for DVC is generally not there, if It can take 8 years to break even on direct purchase against renting then just rent when you want and don’t bother.

The breakeven point for renting versus a **direct** purchase is way further out than 8 years.

 

[Sandisw]

Not sure they had planned just 30k of sales at RIV or even have the level of control on sales to make them be this low. Could be Something more significant going on, maybe the demand for DVC is generally not there, if It can take 8 years to break even on direct purchase against renting then just rent when you want and don’t bother.

It’s not just RIV selling poorly either,,,it was both of them…so definitely finding buyers for direct contracts right now is going to be difficult and since the products have not changed since last fall when sales were better, it’s outside factors.

The new Disney Visa savings may help some…but as I said, I would think we will see VDH stay at $217 point foe the base.

 

[Frugal Fairy Tales]

They just added a new incentive for Disney Visa card holders but they have committed to current incentives until end of May now so they are a bit stuck (apart from VDH which may have very good initial offers)

Yes, but you need to spend about 50k to get the Visa discount.

 

[KAT4DISNEY]

The guide isn't really Disney. Of course they are concerned their commissions are lower but Disney (again not DVC since they are sub-entity) just simply isn't concerned and DVC isn't concerned else we would see incentives being better than where they are now.

I'm not certain who you meant to reply to but this doesn't seem to be towards my post.

 

[HIRyeDVC]

Could this be the lull before the VDH gold rush?

 

[Bo1203]

Could this be the lull before the VDH gold rush?

Partly that, partly huge influx of inventory on the resale market since January, and partly destroying direct perks

 

[Frugal Fairy Tales]

Greed gone wild.

 

[hhisc16]

Wow! Somebody bought 750 points at VB!

 

[AnnaKristoff2013]

Wow! Somebody bought 750 points at VB!

Direct? Oy.

 

[wdrl]

Wow! Somebody bought 750 points at VB!

It was not a single person. There were three deeds sold to three different buyers: a 400-point deed; a 200-point deed; and a 150-point deed.

 

[BrianLo]

I don't get a sense Disney is that desperate (they are fully capable of offering better incentives, but don't seem to be).

VGF I do think there is a general motivation to slow roll. I get the feeling they like being able to offer an MK and an Epoct / DHS product simultaneously. While VGF does not look on track to sell out before Poly anymore, it may be down to 75-85% sold through; which starts to put pressure on the 'nearly sold out' adverts.

VDH is going to massively boost overall sales shortly.


Disney did have troubles selling VGF for cash bookings (partly motivating the conversion where there was excessive demand from the DVC side) and has not had trouble on cash bookings for RIV.

 

[Stank]

Zero surprise DVC is grinding to a halt; I’m perplexed why I got so much pushback. We’re having credit conditions deteriorate across the board—the largest bank for tech startups is down over 80% today + after hours. Deposits are being drained as companies are burning through cash, and the bank is selling securities and issuing more equity for emergency raise.

Again, I’ll revisit $100 BLT next year if not sooner and see everyone insist that it was obviously going to happen.

DVC is pulling back on ROFR for all of the reasons economic. Disney as a whole sees vacation packages slumping as the year progresses. Glut of DVC rental and contract inventories. Folks, the economy is spitting out some pretty bad numbers. Worst productivity numbers since May 2009?? Biggest 2 month jump in used car prices since early 2008?? Inflation isn’t going away and it’s an absolute economic tapeworm. Jeff Bezos said hold onto your cash last year. It’ll be king even in a world of high inflation.

 

[Stank]

Sure but they weren't my point. My point was that Riviera is a cash cow now, and they can't sell out before PVB 2 is online or they run the risk of having little to no DVC resort in Florida. That would be more negative then not selling out Riviera right away. They will fire-sell Riviera when cash rooms no longer sell, which is why DVC went through this huge expansion after the Financial Crisis cash rooms weren't selling anywhere, but that isn't an issue anymore. Also my guess on why VGF expanded was more likely to do with a fear of running out of points to sell than an issue with VGF cash bookings, it was a cheap turn over until PVB 2 could come online since Reflections was cancelled (or delayed).

No way. Stockpiling inventory doesn’t make good business sense. Way more preferable to get the cash in one lump sum (Direct sale) upfront with the new owner covering all the costs associated with upkeep vs. spreading out cash sales over years and discounting that future dollar to present.

There are reasons why Disney is going DVC-heavy and converting hotel to DVC. It’s far less risky, you get $30,000+ cash today vs. renting a fraction of that with a hotel room and having to wait a year to revisit and re-rent. Meanwhile, all the risk is transferred to the new owner to pickup the maintenance and overhead tab.

By selling out today, those Disney “employees’” salaries are being funded by member dues with a guaranteed stream of money. If Disney has a vacancy, they get nothing and carry all the obligation.

I’d rather own a toll booth than the ski resort. Feast or famine with cash rentals. DVC removes all the risk while getting all the ancillary revenue as the DVC owners go to parks/spend on Disney property.

 

[Stank]

I got a call last month because my old guide left DVD so the new guide wanted to touch base.

I think there's some truth to Disney being okay with lower sales but these numbers are terrible and difficult to spin.

Yeah, there’s absolutely no way Disney builds a DVC resort with the intention of gradually selling it out over a decade. They want the cash back ASAP. They have an entire DVC sales division to pay for—to sit around and sell negligible points? Sneaky like a fox because they can go cash rooms on the DVC property.

Then why ever build Riviera and bother with a direct sales team if hotel is better? Because clearly, DVC is a far superior business model vs. cash rooms.

Timeshares are incredibly more lucrative than cash rooms. They wouldn’t bother inventing or building timeshare properties if this wasn’t true.

 

[HIRyeDVC]

Zero surprise DVC is grinding to a halt; I’m perplexed why I got so much pushback. We’re having credit conditions deteriorate across the board—the largest bank for tech startups is down over 80% today + after hours. Deposits are being drained as companies are burning through cash, and the bank is selling securities and issuing more equity for emergency raise.

Again, I’ll revisit $100 BLT next year if not sooner and see everyone insist that it was obviously going to happen.

DVC is pulling back on ROFR for all of the reasons economic. Disney as a whole sees vacation packages slumping as the year progresses. Glut of DVC rental and contract inventories. Folks, the economy is spitting out some pretty bad numbers. Worst productivity numbers since May 2009?? Biggest 2 month jump in used car prices since early 2008?? Inflation isn’t going away and it’s an absolute economic tapeworm. Jeff Bezos said hold onto your cash last year. It’ll be king even in a world of high inflation.

My only reservation of a doom and gloom is the labor market. Jobs numbers are still the strongest in 50 years.

 

[zavandor]

Let's not forget that Disney makes a margin also on out MF.
DVCMC contracts Disney services for almost everything. When they pay for housekeeping or transportation, they're not paying the bus drivers or the housekeepers directly, they contract them from another Disney division. And that division is allowed to make a margin. And while on the cash side if they don't sell the room they pay the employees anyway for nothing, with DVC there is no risk. So more DVC rooms means more steady income.

 

[dvc lover 1970]

But at some point, if they keep building and converting hotel rooms to DVC, the DVC market will be flooded. Which will mean resale value will decreases. I think if and when that happens the value overall in dvc declines.
In terms of low Feb sales, i think the economy is at play. In addition, VGF outsold RIV - which, to me means that when the prices are the same, people will opt for the resort without restrictions

 

[Matty B13]

It is always the economy that determines how DVC sells, not restrictions or other tiny factors. The Fed seems determined to kill inflation.... which almost guarantees a recession, even with the way the labor market it currently. GM just sent out notice to all its non-union employees about getting bought out. This is going to take a long time to work it's way out.

 

[Sandisw]

Yeah, there’s absolutely no way Disney builds a DVC resort with the intention of gradually selling it out over a decade. They want the cash back ASAP. They have an entire DVC sales division to pay for—to sit around and sell negligible points? Sneaky like a fox because they can go cash rooms on the DVC property.

Then why ever build Riviera and bother with a direct sales team if hotel is better? Because clearly, DVC is a far superior business model vs. cash rooms.

Timeshares are incredibly more lucrative than cash rooms. They wouldn’t bother inventing or building timeshare properties if this wasn’t true.

Of course they don't build without wanting it to sell at a decent rate. But, given the pandemic and the economy, if the unsold inventory is making them money via cash stays, then they are more able to weather the storm and not have to increase crazy incentives.

Honestly, given the incentives they just came out with last week, I am surprised the sales were this low. Those incentives were marginally better which tells you they at least content to stay the course for the current active resorts.

If not, we would have seen a bigger change in the pricing before VDH hits the market..

 

[RamblinWreck]

Maybe, and I don't know, but maybe they should let DVC owners buy annual passes again. But what do I know? I'm sure Bob's got this one figured out!

Edit: Also, and hear me out, maybe there should be a real, actual, AP discount for direct purchasers.

If all of a sudden they were only selling AP's to florida residents and DVC members, that would be a nice perk!