The Timeshare Explosion at WDW
Several folks in the Internet community are up in arms that DVC is expanding to Animal Kingdom Lodge. I think this is because AKL is seen as private and exclusive, while DVC is somewhat akin to the McDonald's and Wal-Marts of the world (and less expensive than AKL).
While that might be true, the company has been marching toward this goal for some time now. Saratoga Springs hasn't stopped construction yet, for instance. And a brand new tower will go up next to the Contemporary Resort (completely ruining line of sight from Tomorrowland, some say).
What's behind all of this? Extremely simple: money. Or more accurately, short-term money. DVC involves booking a ton of money at this exact moment (in the current quarter) and then reaping only a steady stream of money later on. It's like selling hotel rooms for a guaranteed price every year... only the price is quite a bit less than you would have gotten for "rack rate." The two upsides are a big addition to the bottom line in the current year, when the DVC membership is first purchased, and then a better occupancy rate in future years.
No doubt in my cynical mind that the motivation here is the short-term profit. It's how the publicly-traded Disney company works these days, alas.
While that might be true, the company has been marching toward this goal for some time now. Saratoga Springs hasn't stopped construction yet, for instance. And a brand new tower will go up next to the Contemporary Resort (completely ruining line of sight from Tomorrowland, some say).
What's behind all of this? Extremely simple: money. Or more accurately, short-term money. DVC involves booking a ton of money at this exact moment (in the current quarter) and then reaping only a steady stream of money later on. It's like selling hotel rooms for a guaranteed price every year... only the price is quite a bit less than you would have gotten for "rack rate." The two upsides are a big addition to the bottom line in the current year, when the DVC membership is first purchased, and then a better occupancy rate in future years.
No doubt in my cynical mind that the motivation here is the short-term profit. It's how the publicly-traded Disney company works these days, alas.
2 Comments:
Kevin, I agree that DVC has been a "cash cow" for Disney for the last few years. However, as a new DVC member, Disneyland AP holder and former Cast Member, I feel that DVC actually has an exclusive feel. DVC members get special discounts, including a deeper WDW AP dicount than any other group. We get invited to video tapings with free admission to the park (this year's WDW parade filming for instance). Weekly mixers at the DVC resorts, And new attraction previews. Of course this comes at a steep price, DVC is not cheap! As for AKL having an exclusive feel, this might be because bookings for that resort were among the lowest for any Disney Deluxe resort. DVC will help reverse that trend. On another note, your reference about DVC members being equal to DLR AP holder is right on. I am a DLR AP holder who visits monthly. My first trip to WDW will be in December. I have a March and August trip planned as well. I will be just as observant at WDW as I am at Disneyland. Great Blog site, Keep up the good work!
It doesn't seem right from an accounting standpoint that they would book all the revenue from DVC sales in the current period. I'm not familiar with Disney financial processes, but it seems like they would only be able to record a portion of a DVC sale as current revenue, and the rest would have to be deferred to later periods over the life of the DVC contract.
Disney still makes a great cash flow (and I imagine does quite well on financing) and guarantees themselves a future revenue stream, but I don't think it's possible they could book all of a DVC contract's revenue at the time of the sale.
I also agree about WDW DVC members becoming more of the watchdogs of WDW like the AP holders are at DL. I almost posted that in reply to one of Al's columns but didn't take the time to do it right then, and you, Kevin, had it in your column the next day!
Sue in TX
...former DL AP, not yet DVC...
Post a Comment
<< Home