Is it possible for DVC to overbuild?

[Jon99]

I apologize if this is a silly question, but we are planning on buying into AKV by the end of 2007 and this is a concern for some reason..

Over the last few years Disney has been pushing the DVC much more, with SSR and AKV being built, rumors of CRV and others, are there downsides out there, such as Disney not being able to support ROFR?

 

[Doug Wolfe]

I actually don't think you have asked a silly question. In fact it is a very good question.

I suspect it is possible to over build, etc. I just don't think it is going to happen anytime soon. DVC has been pretty careful, since early problems with selling Hilton Head & Vero Beach, to sell only what they are capable of selling.

They did not start BCV until VWL was about sold out...SSR was announced when it was clear they were going to sell out BCV. And AKL was not announced until SSR was/is getting closer to completion. As long as their is a demand they will keep building. They can probably even weather a severe economic downturn where sales slow for awhile.

Others may disagree, but I think over the years DVC has figured out the pitfalls and worked their way around them.

As for concentrating on DVC members, it is a sound business decision. The average person may only come to Disney a few times in their life. DVC members have a financial investment in Disney that has them coming every one to two years. How many members are there now? That's thousands of people coming to Disney year after year with their money.

That's my opinion. I am sure others will quickly give you their thoughts.

 

[dwelty]

I agree with Doug. I even think they could sell three properties at once as long as the third was at a different location (Disneyland, Hawaii, Etc.) There is very little risk for Disney because if sales slow, so does construction. They have complete control.

 

[4Pluto]

Over the last few years Disney has been pushing the DVC much more, with SSR and AKV being built, rumors of CRV and others, are there downsides out there, such as Disney not being able to support ROFR?

If DVC does not continue to build and grow, then there wouldn't be any reason to exercise ROFR at all. They keep the price up to support the price points for new sales not to boost resales. IMO, if DVC were to stop growing, I think we should all be braced for a loss of perks and no ROFR shoring up resale prices. To some extent, that might be offset by resales not having to compete with new inventory, but I have to believe that DVC creates the buzz and excitement over the program and without their advertising dollars and constant push, the resale market would also suffer. Just my opinion.

 

[DeeCee735]

I am wondering if DVC will venture out any time in the near future and build something outside of WDW or DL. It would be interesting to see where and how sales go.