Rumor: Disney Vacation Club Raising Sold-Out Resort Prices

[TexasChick123]

Any word on whether these price increases went into effect today? I know what the website shows isn’t always necessarily accurate.

 

[E2ME2]

If we look at the overall trend of what we’ve seen with The Walt Disney Company, Inc., I would say the move to continue raising the prices on “sold out” resorts, a second time notwithstanding, is consistent with everything else we have seen lately.

- sudden overnight increase in APs
- steadily increasing gate prices
- increasing EMM offerings while decreasing EMH
- increased prices on moderate and value resorts on an unproven Skyliner
- increased food costs across all parks

This, of course, all speaks to your reaction to the inane notion that Disney would ever lower prices, but it also shows a continued pattern that should surprise no one. The restrictions are merely an extension of this pursuit of increasing the bottom line.

To that end, with the influx of direct purchases being diverted from Riviera due to the restrictions, of course Disney is going to raise prices where the money goes. We are at the height of Disney timeshare popularity. Why would Disney not try to capitalize on that if people continue to buy?

I’m just not convinced it can be attributed to Riviera sales results, however we choose to see them.

If we are at the height of DVC popularity, does that mean we can only go down from here?
Will the DVC bubble bust, as it does in cycles in Real Estate, and perhaps prices will stabilize (maybe lower on resale) in the near future?
Do laws of Supply & Demand and Point of Diminishing Returns apply to DVC ??

 

[ELMC]

If we are at the height of DVC popularity, does that mean we can only go down from here?
Will the DVC bubble bust, as it does in cycles in Real Estate, and perhaps prices will stabilize (maybe lower on resale) in the near future?
Do laws of Supply & Demand and Point of Diminishing Returns apply to DVC ??

All good questions. Unfortunately it's not just about economics when it comes to DVC, there's also a lot of psychology involved. I'll say that I (along with others) thought we hit the pricing ceiling when BLT was raised to $165. But then people kept on buying it and that basically gave Disney the green light to keep raising prices.

The tricky part is that DVC prices are somewhat tied to rack rate room prices. And as we all know, Disney controls room prices. So they are able to raise room prices which in turn leads to higher DVC prices as well. I think it will take a pretty significant economic event to correct this pattern. Otherwise, Disney has shown that they can raise prices just about everywhere and we'll still pay. I just paid $1 more for popcorn than I did a few months ago. 20% increase...no big deal right? Sigh.

 

[emchen]

I'll say that I (along with others) thought we hit the pricing ceiling when BLT was raised to $165. But then people kept on buying it and that basically gave Disney the green light to keep raising prices.

Many people, including me, have long thought the same the same of Disneyland Park prices. Disney's experience with ticket prices, I think, informs them across all their businesses...that they essentially have carte blanche when it comes to setting prices, within reason, and 20-30% (even for skeptics like you @ELMC) is within reason. They have figured out the psychology (behavioral economics) of their consumers long before any of us.

 

[Brian Noble]

Unfortunately it's not just about economics when it comes to DVC, there's also a lot of psychology involved.

Exactly so. Timeshare is a product that is sold, not bought. That's sometimes hard to keep in mind here in the DVC corner of DISboards (or over at TUG, etc.) because this is a community of knowledgeable timeshare owners who, by and large, are happy they are owners. But, the typical timeshare purchase is usually aspirational, not a dollars-and-cents decision. That's true even of folks who are not first time buyers!

 

[ELMC]

Many people, including me, have long thought the same the same of Disneyland Park prices. Disney's experience with ticket prices, I think, informs them across all their businesses...that they essentially have carte blanche when it comes to setting prices, within reason, and 20-30% (even for skeptics like you @ELMC) is within reason. They have figured out the psychology (behavioral economics) of their consumers long before any of us.

Agreed (and thanks for the interesting read). Although I will say that if anywhere other than Disney decided to raise prices by 20-30% there would be outrage. We seem to consistently take it in stride.

The fact of the matter is that Disney can continue to raise prices because there is a segment of the population (that shrinks with each price hike by the way) that will pay for them. There was a podcast with Len Testa where he basically cited that Disney has an entire department whose sole purpose is to figure out how much they can raise prices on everything before people balk. Chapek seems to have seized onto this as has DVC. On one hand, I applaud their efficiency. On the other hand, I'm starting to feel like I'm being grabbed by my ankles and held upside down until my pockets are empty. That's not a very magical feeling.

 

[emchen]

On the other hand, I'm starting to feel like I'm being grabbed by my ankles and held upside down until my pockets are empty.

Ha! For sure! ...until you look around at the giant Mickey Pumpkin and all the holiday decorations while in the popcorn line and you think, "must be expensive to put all this stuff up, and the special overlay at HM, and Halloween Screams Fireworks Show, and then it's magical again! That grabbed by the ankles hanging upside down feeling is just part of the Halloween Spirit...Magical!

 

[ELMC]

Ha! For sure! ...until you look around at the giant Mickey Pumpkin and all the holiday decorations while in the popcorn line and you think, "must be expensive to put all this stuff up, and the special overlay at HM, and Halloween Screams Fireworks Show, and then it's magical again! That grabbed by the ankles hanging upside down feeling is just part of the Halloween Spirit...Magical!

I wish I could see it that way, I really do. But all I see is a bunch of hard work exerted by CMs making less than a living wage while we pay ten times the hourly cost of one CM for a single day's park ticket all the while the parent company has earned close to TEN BILLION dollars in the first three quarters of this year alone. Not to mention the fact that all those Halloween decorations are already paid for by the (by all estimates) three to five million dollars they bring in for each and every MNSSHP. Don't get me wrong, I love Disney, I love going there, I love being there, I love the time I spend with my family there. But it is the ultimate exercise in suspension of disbelief. There's simply no way to justify the strip-mining Disney performs on its customers' wallets each and every day. You can acknowledge it, and probably stop going. You can ignore it and enjoy your time in the parks. But what I won't do is try to rationalize it.

Sorry if I harshed anyone's mellow.

 

[RaymOOOnd]

I wish I could see it that way, I really do. But all I see is a bunch of hard work exerted by CMs making less than a living wage while we pay ten times the hourly cost of one CM for a single day's park ticket all the while the parent company has earned close to TEN BILLION dollars in the first three quarters of this year alone. Not to mention the fact that all those Halloween decorations are already paid for by the (by all estimates) three to five million dollars they bring in for each and every MNSSHP. Don't get me wrong, I love Disney, I love going there, I love being there, I love the time I spend with my family there. But it is the ultimate exercise in suspension of disbelief. There's simply no way to justify the strip-mining Disney performs on its customers' wallets each and every day. You can acknowledge it, and probably stop going. You can ignore it and enjoy your time in the parks. But what I won't do is try to rationalize it.

Sorry if I harshed anyone's mellow.

If Disney were charging too much, the parks would empty out. And then they would lower the prices until the parks were full again. In this way the costs can never be anything but what they should be.

If CMs had opportunities which suited them better, they'd quit and pursue them. Nobody is forcing them to work at Disney world.

The unspoken suggestion I always encounter is that Disney should charitably lower prices to less than what people are willing to pay, and that they should charitably pay workers more than is necessary to retain them. This is unnatural.

 

[emchen]

Don't get me wrong, I love Disney, I love going there, I love being there, I love the time I spend with my family there. But it is the ultimate exercise in suspension of disbelief. There's simply no way to justify the strip-mining Disney performs on its customers' wallets each and every day. You can acknowledge it, and probably stop going. You can ignore it and enjoy your time in the parks. But what I won't do is try to rationalize it.

I feel you, but isn't "suspension of disbelief" just another way to rationalize it. Perhaps the only true way to not "rationalize it" is to walk away.

 

[ELMC]

I feel you, but isn't "suspension of disbelief" just another way to rationalize it. Perhaps the only true way to not "rationalize it" is to walk away.

Um, maybe. But I view it more as willful ignorance. I don't think it's right, I'm not trying to justify it, I'm simply ignoring its existence. But to your point, that's probably not any better and possibly even worse. But the fact of the matter is that I still get a ton of enjoyment out of WDW so walking away isn't an option. So instead I'll be a hypocrite.

 

[ELMC]

If Disney were charging too much, the parks would empty out. And then they would lower the prices until the parks were full again. In this way the costs can never be anything but what they should be.

If CMs had opportunities which suited them better, they'd quit and pursue them. Nobody is forcing them to work at Disney world.

The unspoken suggestion I always encounter is that Disney should charitably lower prices to less than what people are willing to pay, and that they should charitably pay workers more than is necessary to retain them. This is unnatural.

I don't really see a way to respond to your points without this thread getting super political, so I'm going to respond broadly. Hopefully if we keep the discussion at 10,000 feet it won't get charged.

What I will say is that there is a difference between what anyone, or any company, could do and what they should do. Disney can actually raise prices even more if they wanted to. All they would do is limit their target market even more but my guess is that if they just targeted the 2% they would be even more profitable than they already are. So I guess I should congratulate them on exercising restraint? But bigger than that, corporations should not be seeking to maximize profits for shareholders to the exclusion of all other factors. What I'm saying is that Disney has reached a level of profit maximization that is aggressively combative towards its customers. The pendulum has swung too far.

 

[sethschroeder]

I respectfully disagree. When people buy resale Disney does not get their money. Listen to the salespeople...they care a lot.

That said, I agree with your statements regarding CRO reservations being the competition for sales as well as the fact that they care about point renters for the same reason that they care about resale...they're not getting the money. On every rental transaction the owners are getting paid and the brokers are getting paid and Disney is getting zip, zilch, zero, nada. You know they're not happy about that.

I think there is a difference between salespeople and DVC leadership though. The salesperson has a quota and if they don't hit it then they are not getting paid/bonus.

I personally think they are looking to push ever so slightly in directions that gets them lower ROFR prices so they can buy back super cheap contracts and basically double sell resorts.

As for rental I think they dislike the commercial renters but like the stand alone renters that give people a taste who then end up being DVC themselves. If they could do away with renters they probably would but allow it knowing some pain gives them more potential in the long run.

The unspoken suggestion I always encounter is that Disney should charitably lower prices to less than what people are willing to pay, and that they should charitably pay workers more than is necessary to retain them. This is unnatural.

Here is the thing today is not 1990 or 1950. I know people don't like it but the US and the western world is slowly migrating towards a socialist society (and no not the fake socialism of USSR or China). People push on and expect more from Disney because of how powerful and profitable they have been. There is hope that Disney will lead the way instead of needing to be drug along to the future.

Not saying you should agree or disagree with what the future holds. I am just stating a fact of how society is going to continue to evolve and what peoples expectations will be. A great example is by paying employees more possibly you draw in more visitors who feel better about visiting Disney vs another vacation location that is not "forward thinking". That being said Disney is not exactly the leader in the clubhouse for the forward thinking that people point to at other companies.

Personally from my view I always said I would pay more if I knew crowds would be lower. Doesn't mean at the same time I won't question how Disney goes about raising prices.

 

[emchen]

If Disney were charging too much, the parks would empty out. And then they would lower the prices until the parks were full again. In this way the costs can never be anything but what they should be.

If CMs had opportunities which suited them better, they'd quit and pursue them. Nobody is forcing them to work at Disney world.

I didn’t read his comment as Disney is charging too much, but rather, not paying the CMs enough.

As a former CM (culinary host at Coke Corner on Main St) from1987-1990, I can tell you that I was paid over a bit over $10/hr. Minimum wage was still under $5/hr. As a high school student in Socal, it was a huge point of pride to work at DL.

Then I went off to university and grad school and post grad and life, and saw that everything had changed for the worse for CMs. I was shocked to learn that a 16 yr old CM is still making around $10/hr, 30 yrs after I was a CM. They’re now barely above minimum wage...no wonder there is a seeming lack of pride at being a CM.

I agree witH @ELMC that CM wages need to be boosted and disagree w you that the invisible hand of the market will somehow fix it.

 

[RivShore]

I don't really see a way to respond to your points without this thread getting super political, so I'm going to respond broadly. Hopefully if we keep the discussion at 10,000 feet it won't get charged.

What I will say is that there is a difference between what anyone, or any company, could do and what they should do. Disney can actually raise prices even more if they wanted to. All they would do is limit their target market even more but my guess is that if they just targeted the 2% they would be even more profitable than they already are. So I guess I should congratulate them on exercising restraint? But bigger than that, corporations should not be seeking to maximize profits for shareholders to the exclusion of all other factors. What I'm saying is that Disney has reached a level of profit maximization that is aggressively combative towards its customers. The pendulum has swung too far.

Who's to decide when profit maximization has been reached? Ultimatly, when that point is truly reached, the customers will decide and just not show up. They could very well be reaching that point but time will tell.

 

[AvidDisReader]

To emchen, when you worked at DL there were no Unions. There are now. The latest Union contracts will boost the minimum pay to $15hr in 2023 (I believe in 2020 it will be somewhere around $13.5hr but not exactly sure). This is the single biggest reason for the DVC Dues very large increase last year and the anticipated large increase for this coming year. Why the increase in the amount per point, because they can.

 

[Sandisw]

Reminder...please let’s stay on topic and not get into a discussion that could lead to a closed thread!

 

[Cyberc1978]

Do we have any confirmation of prices increasing?

 

[TexasChick123]

Is there somewhere on the DVC site which lists all the prices for the resorts?

 

[anomamatt]

Is there somewhere on the DVC site which lists all the prices for the resorts?

DVCexplorer.com (username: welcome, password = home) has all the new prices listed, but not in an easy to use table. You have to look at each resort, click on the resort name and you'll get the loan & dues information.

But the price increase did go into effect. VGC is listed @ $280/point, for example. OKW @ $165, etc.