The Disney Vacation Club (DVC) announced some groundbreaking changes early in 2019. They altered the rules of the program in a way that seems to arbitrarily punish a resort that hasn’t even opened yet, Disney’s Riviera Resort. We wanted to ask the experts what they thought about this change. We picked their brains about the most unique DVC room design to date, also. Finally, we asked them for their thoughts about Disney’s recently canceled Downtown Disney resort. A lot is happening with DVC right now, and we wanted to provide you with the most informed opinions on these hot-button topics.Here’s what they have to say.
Do you expect Disney’s Riviera Resort to do well in spite of the changes or do you believe it’s facing an uphill battle? Why?
Image: DisneyRachel Thompson, Resales DVC: I would have to think twice before purchasing Riviera, especially direct from Disney, knowing that when I sell the property, there will be much less value to the property due to the restrictions Disney has implemented. On the other hand, if you are particularly looking for Riviera and want to only stay there, I would buy resale. This way, if you do have to resell the property in the future, you will not see as big of a loss. Only time will tell what will happen with Riviera pricing, so I would probably wait until they become available on the resale market to see what pricing does.
Melissa Mullett, David’s Vacation Club Rentals: I think Disney’s Rivera resort has the potential to do very well. However, at this point, I think that the Rivera is at a disadvantage right out of the starting gate and it will be difficult to overcome. I feel this way due to the restrictions established by the Disney Vacation Club. What the Disney Vacation Club has inadvertently done is increased expectations about the luxury, service, and amenities offered. I do think it was the Disney Vacation Club’s intention to set this property apart from others. If you look at the announcement that was available to DVC Members, there is some strong wording in there that gives the reader the feeling of the exclusivity of this resort.
Image: Disney“This Spring, Members can begin booking stays at Disney’s Riviera Resort with Vacation Points, accessing exclusive, protected inventory which is being held just for our Members.”
Hopefully, the Rivera can deliver on its message. If it does, I think that it could be very successful. The flip side is if it doesn’t deliver superior service or if the resort doesn’t appear to be as exclusive as it boasts, then it will scare many owners away. The new rule changes require a level of commitment from Members that no other DVC contract has ever required, and this will leave Members scrutinizing what really sets the Rivera apart from other DVC resorts.
Lastly, although many are hesitant, the gondolas could be a transportation feature of the Rivera, especially once Star Wars: Galaxy’s Edge opens, and later on Guardians of the Galaxy and Ratatouille over at Epcot. If the Rivera can offer this type of transportation and it turns out to be effective and efficient, then I believe that the Rivera will gain momentum in popularity due to its proximity to all of these amazing new experiences.
Image: DisneyNick Cotton, DVC Resale Market: While I feel it is a risky move, if I had to make a projection, I believe the odds are still in favor of it doing fine.
I sold directly for DVC for almost seven years, and during that time I sold DVC on land, sea, and over the phone. For the land channel (the bulk of direct sales), I believe the restriction may boost sales, or at least they will likely stay flat as a result of this change. The reason I say this is that the majority of people who come on a DVC tour during their vacation know little to nothing about DVC. So, they may know just enough to ask about resale but not really be familiar with all the facts. In today’s world, the Sales Guides counter resale with not being able to use resale points on Disney Cruises, and that doesn’t really matter as the value is not there. They also counter with not being able to get discounts that would never add up to the savings you get with resale. Keep in mind that top performing guides have a great way of making these relatively minor restrictions sound like a mountain, while other Sales Guides may still struggle against resale.
Now, with a restriction of just being able to use points at the resort you purchase if you buy Riviera resale, all Sales Guides can deliver a strong message. While this message may work on your less informed prospect, for your more researched guest, they will likely avoid buying direct even more given the potential loss in resale value. However, DVC may be assuming they are losing most of those prospects who have thoroughly researched resale already.
Image: DisneyAnd this is where phone sales and sales on the ships for DVC could be more negatively impacted by this change. Over the phone you tend to get the a more researched consumer, and at sea you often see more seasoned Disney vacationers, as they have typically done a few land vacations before they go to sea.
Keep in mind that even if direct sales are flat or even lose a little as a result of this change, DVC may still come out ahead financially with likely higher margins made in buy backs, an increase in foreclosures and potentially more revenue opportunity in the “Breakage Period”. For more details, please see: https://www.dvcresalemarket.com/blog/new-dvc-resale-restrictions-and-who-is-most-impacted/
Kristen Tutas: The flexibility of being able to choose from multiple resorts has always been a strong selling point with DVC as a direct purchase and for resale. So the newer resorts being drastically restricted could cause some issues for owners in the years to come. I’d personally have a hard time purchasing that property knowing from the start that when I go to sell it one day, its restricted to use at one resort only, which will impact the value. Riviera will have to be a very special, “one of a kind” resort to entice owners to pay a premium and only be able to book that particular resort.
What do you think of the Tower Studio as a DVC room type? Do you expect it to prove popular?
Image: DisneyMelissa Mullett: I think that the Tower Studio as a DVC room type is really exciting and innovative. It seems like a unique use of space in order to maximize the number of rooms that the resort can offer. Also, when my husband and I travel to Disney, very little time is spent in the room. We are always out exploring, so for the purpose of an adult only trip, this would be ideal. Although the pricing isn’t as compact as the rooms, after reading all of the gossip and news about this resort, such as the exclusive character dining experience, rooftop dining, elegance, and architecture, it definitely has my interest peaked, and it’s still affordable. I do expect this room type to be popular among adults traveling without children.
Nick Cotton: For the right guests, perhaps just a couple, especially those who tend to be heavy park goers and less concerned with their accommodations, it can be a great option.
If the points for this studio are 33% less or greater than the typical studio on points like the cash rate that has already been released, then yes, it will probably be a popular option. DVC Members have already shown a willingness to book a lesser accommodation if the points savings is there. For example, the Value Rooms at Animal Kingdom are very popular and get booked quickly.
Image: DisneyKristen Tutas: I think it will be a nice option for fewer points but will most likely be like the Animal Kingdom Value rooms, which are very hard to book and fill up quickly. You will probably need to own there and book 11 months out to secure those rooms.
Rachel Thompson: I agree with Kristen. Having the option of a room that uses fewer points is a big draw for people and will likely book up at the 11 month window.
What’s your perspective on the canceled Downtown Disney resort project and the DVC room crunch at Disneyland? What would you suggest that Disney do to address the problem?
Image: DisneyNick Cotton: Overall, as a fan of Disney and visiting Disneyland, it is sad. You want such a great place to continue to grow and thrive, and when it gets halted over politics, it is frustrating not only for Disney but also to the Disney fan base that visits Anaheim. Perhaps this has been a positive for the resale value of Grand Californian, as it continues to be the only DVC option there, but outside of that I would think most Disney folks like myself are disappointed.
Looking at this situation from the outside, it appears it has become very political with the local government, and Disney has to decide if it’s the highest and best use of their money and time to continue to pursue expansion opportunities there. If deemed worth it, then it appears they have no choice but to continue to navigate the politics and traditionally, Disney has been fairly effective at this over the long run.
Kristen Tutas: I don’t think the demand is really there for another DVC or timeshare resort in general. Most people visiting Disneyland stay three, maybe four days, compared to Walt Disney World, where most vacationers are coming for five to seven days or more at a time. Most people who buy DVC are vacationing for longer periods or more frequently throughout the year, so I doubt the demand for DVC is large enough for Disney to make financial sense of another timeshare property there.
Image: DisneyRachel Thompson: I feel Disneyland is a much smaller venue, and the demand is not near as great as Disney World. It may not make financial sense for Disney to build more DVC there at the moment. A solution may be to add some value resorts first to see if there is a growing demand.
Melissa Mullett: As a fan of all things Disney, it’s always disappointing when a plan doesn’t come to fruition. It’s a shame that the Downtown Disney resort project has been canceled. However, I hope that this will give the Walt Disney Imagineering and Disney development teams an opportunity to re-theme some of the closed businesses in the West Side of Downtown Disneyland. Wouldn’t it be great if they added more Disney-themed entertainment like a permanent stage? Another suggestion I saw was recommending an Indiana Jones-themed restaurant where the Rainforest Cafe used to be? When one door closes, another one opens. Hopefully, Disney can work with the city of Anaheim to find an amicable solution if they were to propose a new plan for building a resort.
