New Resorts for Everyone or New Resorts for DVC?

DVC Logo #1

In the past few years, Disney has focused more and more on building resorts solely for Disney Vacation Club members.  We have seen new villas go in or are in the process of going in at all three monorail resorts.  In that same time, Disney has only built one resort “open to the public:” Art of Animation.

That leads me to today’s question: should Disney be building more resorts which are open to everyone or more DVC resorts?  I’ll try to take a look at from both sides and attempt to come up with a reasonable answer.

Argument For More DVC Resorts

The primary argument for building more DVC resorts is these resorts bring substantial revenue to Disney.  The current cost per point to buy into the Grand Floridian (Disney’s newest DVC resort) is $165.  Add in that most new DVC members buy between 160-200 points for their initial purchase, that’s $26,400 to $33,000 for each new contract that is sold.  Members still have to pay annual dues which are dependent on the number of points bought.  Disney gets two things: a big upfront payment (or paid over time like a mortgage or car payment) and a steady stream of revenue in annual dues.

Disney also gets return business when some purchases a DVC contract.  A DVC member is going to make return trips just about every year to justify the cost of their new purchase.  Members have to pay the annual dues whether or not they use their points or not in any given year.

Many guests, like myself, choose DVC because they want to have room to stretch out in luxury accommodations when they are on vacation.  The standard room, even at a deluxe resort, isn’t much larger than 400 square feet.  Guests can find bigger rooms if they decide to stay in Club Level or Concierge Level.  For a little more than 160 points and traveling at the right time of years, vacation club members can spend five or six nights in a one-bedroom villa which is almost twice the size of a standard room.  Mom and Dad have their own bedroom while the kids can sleep in the living room on the very comfortable sofa sleeper.

All of the one bedroom and larger villas come with a full kitchen and a washer/dryer combination.  Some members prefer to use the full kitchen and save some money on their vacation that way.  My family gets great mileage from using the washer and dryer.  The washer/dryer allows to take less clothes.  We will run a load through the washer/dryer when we return to the room to go swimming in the afternoon.  We can fit everyone’s clothes into one suitcase for now.  We’ll back a change of clothes in a carry-on bag in case something with the Magical Express and we don’t get our luggage until late.

Boardwalk Kitchen Area
Boardwalk Kitchen Area

Disney is building vacation club resorts because there is a demand for them.  People like big things: big cars, big houses, etc.  It makes sense that they want big rooms when they are vacation.  Disney Vacation Club gives people an avenue to have big and luxurious accommodations when they are on vacation.

Argument for Standard Resorts

Art of Animation is the newest non-Disney Vacation Club to be built on Disney property.  Even this resort has family suites which can accommodate more than four guests.  Not everybody has the financial means to afford the Disney Vacation Club but that doesn’t mean that they shouldn’t have new resorts built either.  Their money spends just as well as vacation club members and Disney does not want to turn off this group of people have them start taking vacations someplace else.

That said, Disney shouldn’t build new deluxe resorts.  That could continue to price people out of the market.  Disney should focus its efforts on building more moderate resorts.  These resorts are a step up from the value resorts and provides guests with some of the options like table service restaurants and multiple transportation methods to get to and from the theme parks and Downtown Disney.

There is both a pro and a con to building more moderate resorts.  The pro is during the more crowded periods.  There would be more rooms available in the inventory for guests to choose from, more tables for dining reservations, etc.  It would give guests the impression that the resort, on the whole, isn’t as crowded as it really is.

Art of Animation #1

If Art of Animation is any indication, these new resorts and rooms would be in high demand if they are themed in the proper manner.  Perhaps Disney could theme some of these new resorts around some the older Disney classic movies like The Jungle Book, The Rescuers, and The Fox and the Hound.  Maybe roll all three movies into one resort like they did with Art of Animation with different themed areas.  This is also a great way to introduce kids to the movies that got their parents hooked on Disney and maybe even re-introduce some of the movie characters back into the parks.

The con comes during the less crowded periods.  It’s more rooms for Disney to try to sell.  It’s more tables that it needs to have reservations for.  This could lead Disney to have more expansive free dining promotions with fewer blackout dates and larger room discounts in order fill these vacant rooms.  A filled room, even at a discount, is filled with people who are going to spend money is some fashion.  While this is good for the consumer, it’s not the best for Disney.

So what should Disney do

All of Disney’s recent vacation club expansion has been at existing deluxe resorts.  To create more vacation club resorts, Disney would need to either build brand new stand-alone vacation club resorts (like Saratoga Springs and Old Key West) or start moving down to the moderate resorts and convert some of the existing rooms and space into vacation club resorts.  The downside in converting moderate rooms into DVC is two-fold: 1) it takes away moderate room inventory and 2) would Disney be able to sell the space at the current price point ($165/point).  I don’t like taking away moderate room inventory since that affects many people who want to stay at moderates.  I, also, don’t think that Disney could keep the high price point since people know that it’s a moderate resort.  If DVC were to continue to expand, Disney would need to build more stand-alone DVC resorts.  Maybe one like the Venetian resort that was proposed when the park first opened.

I think the moderate resort level is an untapped market for Disney accommodations.  These resorts provide some of the features like the deluxe resorts but at a reduced cost.  Not everyone can afford to stay at a deluxe resort but want more than the value resorts can provide.  This is where the moderate resorts come in.  There needs to more moderate resorts.  More chances to for people to have a quality vacation in fine accommodations with multiple transportation options and table service restaurants at the resort.  After a long day in the parks, guests need a place where they can put their feet up and have a good meal.

This isn’t to say that the value resorts are terrible.  They are not.  They are quality accommodations at a very reasonable price.  All Disney accommodations are great from value to deluxe villa.  I just think that the moderate level of accommodations has lots of potential for Disney if they choose to tap it.

Yesterday afternoon, the Dad For Disney Facebook Group welcomed its 200th member.  The group has seen a lot of growth this week.  Let’s continue that growth.  Be sure to tell your friends and family about the group.

For those on twitter, you can find me @DadForDisney.  This group welcomed its 100th member yesterday.

Thanks for reading!

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