December DVC Sales Tumble

[kboo]

Currently they’re offering 35% discounts on cash bookings at both the Riviera & the GF

I was shocked to see BCV drop to $127/pt in October of 2023. What’s the value calculation in October 2035 with only 7 years left?

I am not aware of any analysis that can justify financially why BCV is worth about as much as PVB and more than BLT. BLT even has comparable points charts with its Standard view option.

I do agree with you on that point, @DanCali

To show how perspective ad nonmonetary values matter - I got complete rejections making offers on BCV in 2017-2018 around $10 more than I paid for BLT (r). I get why people love BCV (and BWV), but personally don't see the need to pay that premium. We go often enough at low volume times that we have never had a problem getting BCV when we want it, with our cheaper points, and we definitely don't need or want to stay there all the time. In fact, I just looked at whether to modify our August BLT stay to BCV - it's available - and decided not to. Now would I waitlist a BWV BWV 2br? Maybe, but not this trip where we are bringing a family of first timers. BLT --> RIV is what we are sticking with.

Also - if you could only take a family vacation at Christmas, and wanted to do that each year, then you DO need to pick a home resort that you want to stay at every year. (our decision for adding VGF instead of RIV, we already owned both). But, if you're at all flexible with time of year and not having to be in a studio, then I'd say the need to get the "perfect to you" home resort is a little bit more relaxed.

every weekend except 2 of them and Riviera is the opposite with no availability except 2 of them.

I was going to add - a 35% discount is exciting to start looking at a stay, but if you can't get the discount at all...

BTW - BWV was our gateway DVC. We booked something like a 25-35% discount at BWV in a studio, and I just wanted a hotel room. No distinction in my mind between a hotel room v a studio. Made a room request to be "near" our friends who'd also booked cash, but a 1br. (Had been hoping to be the studio to their lockoff 1br). Well, Disney pixie dusted us to a P/G 1br (around $250/nt) and 2 years later we owned DVC. I do wonder if that happens w cash bookings at Riviera and the wow factor from a studio to a 1br is pretty significant.

 

[DanCali]

The value of the contract should over time decrease such that it amounts to a savings vs. the rack rate.

This is pure speculation/assumptions, but using points for a week stay tier 3 in a studio, assuming that the rack rate increases at 3.5%, that the maintenance increases at its historical 3.6%, the current cost per point to be $130, and that the ratio between the current cost per point compared to all potential future savings when comparing the rack rate to the maintenance cost required for the stay remains static over the years, I'd predict about $65/point in 2035, $50 in 2037, $35 in 2039, and $18 in 2041, all else equal.

The reality however could be drastically different if for example people decide that 7 more years isn't enough and start to unload their points in favor of buying newer contracts/points that won't expire, flooding the market and driving down prices. Alternately people could decide that it isn't worth it to sell and just hold to expiration, reducing the supply and driving up prices.

So, the real answer is that we'll see in 11 years. View attachment 830078

That's one way to look at it to try to justify current resale prices, but it's half the picture.

What do you get for BLT if you repeat this analysis using rack rates going to 2060 and starting with the lower MF basis that BLT has and apply that same ratio? $200/pt? $250pt? I still maintain that there is no way to justify (financially) how BLT should be cheaper on the resale market than BCV. Any side-by-side financial analysis would value BLT much higher... But, as I also said in an earlier post, supply and demand are what counts, not spreadsheets. The only think we can forecast for BCV with near certainty is the resale price in 2042.

 

[lowlight]

But, as I said in an earlier post, supply and demand are what counts, not spreadsheets.

We live in a world where there are people that rope drop It’s a small world. Sometimes the heart wants what the heart wants, spreadsheets be damned.

 

[AstroBlasters]

We live in a world where there are people that rope drop It’s a small world. Sometimes the heart wants what the heart wants, spreadsheets be damned.

At DL, it’s Peter Pan…. that ride always has a 35-40 minute wait….

 

[DanCali]

We live in a world where there are people that rope drop It’s a small world. Sometimes the heart wants what the heart wants, spreadsheets be damned.

They probably do that because if you actually get to the 7 Dwarves Mine Train at the start of "early hours" like 8:30am, the line is already 80 minutes long. We found out the hard way that they let people line up an hour before "early hours"...

 

[lowlight]

At DL, it’s Peter Pan…. that ride always has a 35-40 minute wait….

I may have rope dropped Peter Pan’s Flight a few times in my life…

 

[AstroBlasters]

They probably do that because if you actually get to the 7 Dwarves Mine Train at the start of "early hours" like 8:30am, the line is already 80 minutes long. We found out the hard way that they let people line up an hour before "early hours"...

WDW is such a different universe from DL…..

 

[sndral]

Tbh I don’t know where that statement come from either so that’s fair to call out, but it’s gone around a lot so I assume there is some data to back it up even if it’s older information.

I just did a cursory look (this is not a full sample set of data of course) at availability of every weekend (Fri-Mon) from now until the beginning of May and Grand Floridian has availability every weekend except 2 of them and Riviera is the opposite with no availability except 2 of them. Now this changes regularly, true and GF has a lot more rooms available then Riviera does but we’re talking about WDW flagship. I feel like I saw SSR, Old Key West and Animal Kingdom Lodge with less availability for those weekends so the amount of rooms available isn’t a factor at the other resorts. It seems like the cost is the prohibitive factor…expect not with the Riviera.

Discounts are given for many reasons I believe, so yes, it has to do with how much is available but also it’s often proportional to the cost of the rooms so Riviera and Grand almost always get the same discount, maybe at times a bit of both reasons, and others were not privy to.

It could just be the double whammy of too many rooms and too high of a cost but from the outside it does seem like GF has more consistent availability compared to Riviera.

Be aware that Disney’s cash availability can be problematic to ferret out using the booking site because Disney has built in but hidden minimum stays for some time periods & room categories.
Thus if you search for a weekend stay Disney’s site won’t show you all not yet booked inventory. To get a better sense of how many rooms are truly not yet booked you need to search for week long stays.
For example, I just used Disney’s search for a weekend Fri.- Mon. stay 2/23 - 2/26 & the booking site only offered me an expensive 1 br. preferred view at the Riviera. So I changed my search to a week long stay 2/23 - 2/29 & the site now also offered me the more reasonably priced option of a preferred view studio at the Riviera.
I did the same search for a mid month Riviera week long stay for March, April, May, & June & there was always a studio available.

 

[Lorana]

They probably do that because if you actually get to the 7 Dwarves Mine Train at the start of "early hours" like 8:30am, the line is already 80 minutes long. We found out the hard way that they let people line up an hour before "early hours"...

Yeah, we learned that the hard way the other year. It was the first time we had done rope drop since our kids were 7 & 9 and wanted to be Padiwans at Hollywood Studios. Just reinforced rope drop isn’t for this family!

 

[Lorana]

Be aware that Disney’s cash availability can be problematic to ferret out using the booking site because Disney has built in but hidden minimum stays for some time periods & room categories.
Thus if you search for a weekend stay Disney’s site won’t show you all not yet booked inventory. To get a better sense of how many rooms are truly not yet booked you need to search for week long stays.
For example, I just used Disney’s search for a weekend Fri.- Mon. stay 2/23 - 2/26 & the booking site only offered me an expensive 1 br. preferred view at the Riviera. So I changed my search to a week long stay 2/23 - 2/29 & the site now also offered me the more reasonably priced option of a preferred view studio at the Riviera.
I did the same search for a mid month Riviera week long stay for March, April, May, & June & there was always a studio available.

I don’t know if this is the case, but to me forced minimum night stays imply greater popularity / demand.

 

[gobears157]

We live in a world where there are people that rope drop It’s a small world. Sometimes the heart wants what the heart wants, spreadsheets be damned.

I have two toddlers. I'm one of these people. Sometimes the body does what the toddler wants, survival mode beats all.

 

[sndral]

I don’t know if this is the case, but to me forced minimum night stays imply greater popularity / demand.

Well, demand is one side of the equation & supply is the other.
Riviera‘s cash inventory is smaller, it makes sense it’d book its’ 80 something cash rooms before the several hundred cash rooms at the GF are booked to the % that causes the algorithm to kick into minimum stay mode.
If in one month Riviera’s minimum stay kicks in because 60 of it’s 80+ cash rooms are booked but the GF‘s algorithm d/n because in that month only 400 of it’s 600 available cash rooms are booked - which resort was more popular w/ cash bookers? Riviera w/ 60 cash bookings or the GF w/ 400 cash bookings?
I just don’t think there’s a way to quantify how ‘popular’ a resort is w/ cash bookers w/ the information we have access to.

 

[Sandisw]

Well, demand is one side of the equation & supply is the other.
Riviera‘s cash inventory is smaller, it makes sense it’d book its’ 80 something cash rooms before the several hundred cash rooms at the GF are booked to the % that causes the algorithm to kick into minimum stay mode.
If in one month Riviera’s minimum stay kicks in because 60 of it’s 80+ cash rooms are booked but the GF‘s algorithm d/n because in that month only 400 of it’s 600 available cash rooms are booked - which resort was more popular w/ cash bookers? Riviera w/ 60 cash bookings or the GF w/ 400 cash bookings?
I just don’t think there’s a way to quantify how ‘popular’ a resort is w/ cash bookers w/ the information we have access to.

I think the biggest indicator that GF wasn’t meeting cash bookings in a way they were happy is that WDPR and DVD decided to convert it to DVC.

That division isn’t giving up rooms that are booking well. It’s why both AK and WL had DVC conversions.

Now, in terms of RIv? Anecdotally it seems to book up well when looking at the cash available rooms periodically.

And, DVD hasn’t gone out of their way to sell RIV so they have to be content with its rate of sales and what is happening with their cash bookings.

 

[sndral]

I think the biggest indicator that GF wasn’t meeting cash bookings in a way they were happy is that WDPR and DVD decided to convert it to DVC.

That division isn’t giving up rooms that are booking well. It’s why both AK and WL had DVC conversions.

Now, in terms of RIv? Anecdotally it seems to book up well when looking at the cash available rooms periodically.

And, DVD hasn’t gone out of their way to sell RIV so they have to be content with its rate of sales and what is happening with their cash bookings.

I absolutely agree the conversions were partly to reduce the supply of cash rooms thus increasing demand for the remaining cash rooms & up hotel occupancy % numbers & ultimately increase the prices they could charge for those remaining cash rooms. Indeed, the choice to demolish 1/3 of Caribbean Beach to build the Riviera was the same strategy, but w/ a moderate resort rather than a deluxe. That’s why I bought DVC in the first place, they were increasing deluxe room prices at a far faster rate than inflation.
I’m not buying the narrative that DVC is doing a slow roll on Riviera sales because cash bookings are so good there, when both the rate of cash bookings & DVC’s motives are based on speculation.
Given how long Riviera is taking to sell, though, it’s probably a relief that cash bookings are performing well, if they are, given Disney’s recent earning’s reports. I remember years ago when SSR sales were lagging they were overbooking the Allstars resorts & ‘upgrading’ folks by moving them to SSR.

 

[MerlinandtheMouse]

I’m not buying the narrative that DVC is doing a slow roll on Riviera sales because cash bookings are so good there, when both the rate of cash bookings & DVC’s motives are based on speculation.

Ok so you don’t buy this narrative, and I can see where you’re coming from, but then what is your theory as to what DVD is doing with Riviera? Why did they do a fire sale for the VGF this summer and we still haven’t seen any similar incentives for Riviera? We only have speculation and deduction to go off of so, for me, the most simple and logical explanation is the one where they’re ok with current sales and falling back on cash bookings, therefore little change has to be made. I don’t think I’ve heard a better/more reasoned explanation yet.

If they’re truly unhappy with the way things are going, DVD could come up with quite a few clever ideas to get the sales rolling, including giving killer incentives and/or taking away the restrictions all together…but they’re not. What can we do to get a really good sale out of them? That’s all I’m looking for

 

[walt34]

Why did they do a fire sale for the VGF this summer and we still haven’t seen any similar incentives for Riviera?

My guess is that this has more to do with location than cash bookings: they had CFW starting sales in the MK area which will be followed by Poly2 while they don't have anything new coming up in the Epcot area. Which is why they wanted to get VGF out of the way but are fine with continuing to sell RIV.

 

[sndral]

Ok so you don’t buy this narrative, and I can see where you’re coming from, but then what is your theory as to what DVD is doing with Riviera? Why did they do a fire sale for the VGF this summer and we still haven’t seen any similar incentives for Riviera? We only have speculation and deduction to go off of so, for me, the most simple and logical explanation is the one where they’re ok with current sales and falling back on cash bookings, therefore little change has to be made. I don’t think I’ve heard a better/more reasoned explanation yet.

If they’re truly unhappy with the way things are going, DVD could come up with quite a few clever ideas to get the sales rolling, including giving killer incentives and/or taking away the restrictions all together…but they’re not. What can we do to get a really good sale out of them? That’s all I’m looking for

I have no theory.
Riviera has had an uphill sales slog not because of the resort itself, but because of timing, w/ the pandemic shut down, high inflation, rising interest rates, etc..All external factors over which Disney & DVC had no control & couldn’t have predicted.
I think DVC’s first goal is to meet their sales targets, irrespective of which resorts they sell to hit those numbers. W/ multiple resorts on offer they react to which is selling by tweaking the discounts, even sometimes offering great deals on sold out resorts. Sometimes the tweaks work as intended, sometimes they don’t .

 

[MerlinandtheMouse]

I have no theory.
Riviera has had an uphill sales slog not because of the resort itself, but because of timing, w/ the pandemic shut down, high inflation, rising interest rates, etc..All external factors over which Disney & DVC had no control & couldn’t have predicted.
I think DVC’s first goal is to meet their sales targets, irrespective of which resorts they sell to hit those numbers. W/ multiple resorts on offer they react to which is selling by tweaking the discounts, even sometimes offering great deals on sold out resorts. Sometimes the tweaks work as intended, sometimes they don’t .

All this makes a lot of sense. But your last point still doesn’t for me. I won’t pretend I really know what I’m talking about and there’s a lot I’m missing for sure, but as a small business owner, if I’m going to tweak the discounts, I’m gonna do it in favor of the one that’s a harder sell, the older, less desirable one. VGF should have been the easiest sale they’ve made since the last time it was on sale. I’m not sure I buy them giving greater discounts to VGF, cheap hotel flip or not, because…Riviera is harder to sell? I just don’t see it. Again, I know we’re missing a lot so I won’t badger you more with my unanswerable questions lol

My guess is that this has more to do with location than cash bookings: they had CFW starting sales in the MK area which will be followed by Poly2 while they don't have anything new coming up in the Epcot area. Which is why they wanted to get VGF out of the way but are fine with continuing to sell RIV.

This could definitely be part of it. Although, they
haven’t had an Epcot resort for sale for a long, long time before Riviera so it was not like it was particularly important to have an Epcot resort on sale during that time. And another interesting thing, for many years of DVC sales they only had 1, maybe 2 options for sale at a time. But here we are, entering a weird era where we’ll have 4 actively selling resorts, and they’re numbers are telling them they’re ok with it for some reason. They see some distinct benefit to have all these options live at once. I guess @sndral point that DVC’s primary goal is to meet their sales target is the most valid and they are hedging that more options means a larger pool of potential buyers. Otherwise, it comes back to what many of us are saying that if they wanted to move sales and sell out more resorts, they could have but are choosing to leave them as is. I also think it’s crazy to have a restricted CFW go on sale right before a (most likely) unrestricted poly tower so I really understand nothing about their decisions! But that’s a whole different conversation. My inner nerd is certainly having a good time ruminating on the inner machinations of DVC though.

 

[walt34]

This could definitely be part of it. Although, they
haven’t had an Epcot resort for sale for a long, long time before Riviera so it was not like it was particularly important to have an Epcot resort on sale during that time

I think it is more of a reason why they tried to sell out VGF fast (and not RIV): VGF would otherwise have been the third resort at MK on offer at the same time. This was the reason for the VGF incentives last summer. They seem to be fine with Aulani and Riviera being on offer for a long time but I don't think they they try to have an Epcot resort available - otherwise they'd start work on the next one (or an extensions to RIV - poor old CBR).

 

[walt34]

I also think it’s crazy to have a restricted CFW go on sale right before a (most likely) unrestricted poly tower so I really understand nothing about their decisions

This is why I'll only believe unrestricted Poly2 once I see it in writing. I think Poly2 would be much less slowed down by restrictions than CFW will be.