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Thread: Do declining DVC point sales signal a shift in sales strategy?

  1. #1
    DVCInfo.com DVC Mike's Avatar
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    Do declining DVC point sales signal a shift in sales strategy?

    Looking at the total number of points sold by Disney Vacation Club from 2011 on, it is very apparent that there is a distinct downward trend in the number of points being sold by DVC year over year.


    Over the same period, the cost per point to purchase direct from DVC has been going up and the point charts for the most recent DVC resorts show point inflation (it costs more points to book a reservation than it does at older resorts).


    The inflated point charts and the falling quantity of points being sold also indicates a decline in the number of new DVC members that Disney Vacation Development is pulling in each year.


    This seems to signal a shift in the sales strategy for DVC when compared to prior years. They are less focused on a volume business (more points at a lower price) and more focused on a smaller volume business at a higher price.


    So, even though they are selling less points, they have a greater profit margin on every sale. Their strategy of converting existing hotel rooms into DVC units (at PVB and likely WL) reduces capital expenditures - decreasing the cost of the goods they are selling, resulting in a higher profit margin.


    Perhaps their options for building more DVC units at WDW are growing smaller - at least in terms of the "low hanging fruit" where they can add DVC onto existing Deluxe resorts - and they realize their volume business is not sustainable, or at least not the best approach.


    I've only included one chart here in this post. For the full set of charts and graphs, please see this post on MouseOwners.


    Point sales fell from 2.47 million in 2011 to 1.70 million in 2014.


    DVC Mike

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  3. #2
    Read Everything-Assume Nothing GusMan's Avatar
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    The inflated point charts and the falling quantity of points being sold also indicates a decline in the number of new DVC members that Disney Vacation Development is pulling in each year.

    This seems to signal a shift in the sales strategy for DVC when compared to prior years. They are less focused on a volume business (more points at a lower price) and more focused on a smaller volume business at a higher price.
    I dont think it takes much to see that these two components are indicators that DVC has shifted their sales focus. However, its not really stopping people from buying and its not stopping DVC from seeking out new resort offerings. What does the income math looks like if you compare point prices vs # of points sold compared year to year? Im betting that the revenue chart will either show a slight upward trend or at the worst case a much shallower downward trend than the total number of points sold per year.

    Personally, I am a huge fan of the DVC and I love my membership. My biggest regret is not buying in sooner.
    At the same time, unless you really want to use points for non-DVC resorts, it no longer makes sense to buy direct from DVC. I have some friends that became members just over a year ago and they bought into VGF direct from DVC. We acquired the same number of points 8 years ago at SSR yet at the going rate, etc, they paid something like 50% more than I did. Granted, they wanted to buy in at the VGF because of the location and the like, and they are enjoying their membership, but the fact still stands - it still costs more in points to stay at their own home resort than the number of points needed to stay at my home resort - or nearly anywhere else for that matter. And being that points are points, they can still get more "usage" from those points if they want to stay elsewhere. (This of course ignoring the argument of "stay where you want" vs. "buy with lowest cost.) In essence, it still costs someone who buys in at GFV now more to stay at any given resort once you add in all the costs.

    But the overall thing to remember is the whole purpose of being a DVC member is to eventually see a savings in overall vacation lodging costs. That will still happen. With the price per point where they are now from DVC, it just may take longer to get to a break even point and see the overall savings. To add to that, DVC used to tout the idea that a member would save up to 70% on accommodations. Now they are saying 50%. Given what I mentioned above, that makes sense.

    None of this should be taken as me being critical of the DVC or anything like that, because that is not my intention... but its something of a real-world illustration to the conversation.
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  4. #3
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    I agree that this feels more like a premium price play. They've built more than a critical mass of base members, and with the buildouts happening at the Deluxe resorts that lends itself to the higher price point.

    I was a bit shocked to realize just how much prices have increased - over 50% since we first bought our points in 2006. (Has it really been 9 years? Wow!) That translates into about 5.6% annual increases which are not horrible, but still faster than we have been seeing at WDW resort pricing. Especially when you factor in promotions like free dining, etc

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  5. #4
    Read Everything-Assume Nothing GusMan's Avatar
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    When it comes to price increases, the membership prices now make the resale market look great.
    At the same time, if I am not mistaken, dues costs have been kept at bay, under the overall increase of hotel rates in general.

    To get the most out of it, DVC is not a short term investment in vacation lodging, which I think (respectfully) some newer members dont necessarily understand.
    It took me 5 years to reach my "break even" point.... and for some, it may even take a bit longer to do so. But once that happens, its all savings.

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  6. #5

    I am glad we bought in when we did in 2010. I paid under $100 per point. I could not imagine buying direct right now. With the number of stays and types of accommodations, I am just now hitting my break even point after 5 years.


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