As you know, I listen to a lot of podcasts while I write my articles.  Over the weekend, I was listening to the Mighty Men of Mouse Podcast.  They spent a couple of minutes discussing the possibility of Disney Vacation Club resorts making their way down the moderate level of Disney resorts starting with Caribbean Beach.  This got me thinking: Is this a good idea for Disney?  Does it make sense of Disney to start branching out into moderate resorts to expand the Vacation Club?

DISCLAIMER: EVERYTHING IN THIS ARTICLE IS PURE SPECULATION AND OPINION.  DISNEY HAS ANNOUNCED NO PLANS TO EXPAND INTO MODERATE RESORTS.

Let’s address why Disney would even consider this.  The moderate resorts have a lot of rooms at them.  During slower times, some of these rooms often go un-sold or get offered at a discount or part of a “free dining” package.  This is done to boost capacity in the resorts and give people an incentive to come to the parks during a slow period.

If Disney were to expand DVC into the moderate resorts, it would reduce the number of rooms in the moderate resorts since rooms would be converted into studios, one bedrooms, two bedrooms, etc.  Two or even three rooms would suddenly become one room.  Do this enough times and Disney can drop the number of rooms in a resort from 2000 to 1000 rooms with 300 to 500 villas.

What does this do for the average Disney traveler that isn’t a DVC member, it reduces supply.  By reducing supply, the resorts are going to be closer to capacity.  This means that Disney is going to be less likely to offer incentives.  It could mean the days of deeply discounted rooms and “free dining” could be over leading to a more expensive trip for the average traveler since guests could be paying closer to the rack rates.

The only benefit, I see, for the Vacation Club member is it increases supply.  But at the same time, it also increases the number of members that are part of the Vacation Club.  These members could see the Vacation Club at a moderate resort as an “easy gateway” to gain access to the deluxe level DVC resorts via waitlist which could potentially make it more difficult for waitlists to go through.  Guests could be “locked in” to their home resort more frequently.

It’s great for Disney since they could no longer need to have deeply discounted rooms or “free dining” to incite guests to come to the resorts.  1000 rooms at close to rack rates + 300-500 villas = more $$$ in Disney’s pocket.

The other reason Disney would possibly want to expand to the moderate resorts is there will be villas at all of the deluxe resorts, except for Yacht Club, once the construction of the DVC villas at The Polynesian Village Resort is completed.  Building new DVC-only resorts would be expensive.  Converting rooms into the DVC villas and properties is more “cost effective.”

Do I think this is a good idea?

I think this is a terrible idea for Disney to move into the moderate resorts.  First, a lot of guests like staying at moderate resorts.  They want an upgrade in amenities from the value resorts or they can not afford or want to stay in a deluxe resort.  The moderate resorts provide an excellent value to Disney guests.  Most of them have a table service restaurant for guests who want to relax from a day at the parks and order from a menu that isn’t above their heads.  They are have a bit more “leg room” than the value resorts allowing guests some space once they are in their rooms.  They have some Disney magic with Pirate themed rooms at Caribbean Beach and Princess themed rooms at Port Orleans.

Disney should recognize the value in this and not expand Vacation Club into the moderate resorts.  They could be pushing people down into staying at value resorts or even off-property.  Both of those scenarios could mean less resort revenue for Disney.  However, this could be probably be offset by the incoming DVC revenue.

As a Disney Vacation Club member, I do not want Disney expanding into the moderate resorts because it could potentially start to devalue the membership.  Right now, it costs $165 per point to become a member at the newest property, the Grand Floridian Villas.  The cost will probably jump another $10 to $15 when the Villas and Bungalows at the Polynesian are completed.

What happens when the entry price point is $175 to $180 and the newest resort is, hypothetically, Caribbean Beach.  Are people going to pay $180 per point for Caribbean Beach Villas?  I find it very unlikely because most people have in their mind that The Polynesian is a deluxe resort and Caribbean Beach is a moderate resort so “why should be paying deluxe resort pricing for a moderate resort.”  The price would have to drop and probably continue to drop in order to incite buyers into the moderate DVC markets.  Or, even worse, it could create two tiers of DVC: moderate and deluxe with different pricing structures and markets.  Who knows what restrictions and policies Disney would put in place to navigate between the tiers.

If you are also against this idea, this is time to tell Disney and Disney Guest Relations.  Telling them after the fact does not do any good.  In order to get them to reconsider or at least give them some pause in making this decision, it needs to be done now not later.

Thanks for reading!