CRV ain't in the cards

[tjkraz]

In the past decade, Orlando timeshare growth has skyrocketed compared to hotels. Disney also recoups construction costs for DVC resorts much faster than hotels. I would think growth would dictate Disney’s philosophy.

The 15 story tower likely contains 4-5 years worth of points for DVC to sell. Consider that DVC may not be willing to pay the millions of dollars in dues for the points they would hold over such a long period of time when more economical options are available. We also need to factor in additional expenses that are likely due to the location (beside the water, on a part of the property that isn't the easiest to access in terms of material and heavy equipment deliveries.)

Yes, Disney is a multi-billion dollar company. But that doesn't mean they are going to throw caution to the wind and approve a CR addition if they can build in another site for 70-80% of the cost. If they can build elsewhere in phases and avoid the millions in subsidized dues, so much the better.

CR is different because it already has the infrastructure to support a new resort with hundreds of rooms. The tree house villas are a few small individual units that are inefficient at every level.

I wasn't trying to compare the current structures at each location, rather the potential zoning issues. Multiple sources have confirmed that Disney cannot put new construction on the site of the Treehouse Villas--even though they ARE Reedy Creek. So, is it accurate to assume that Disney can overcome all hurdles and put new construction at the CR site?

I see the same issues with AKL and CR. Both resorts are at the low end of the deluxe category (grade A ?) Disney must see more profit converting AKL to DVC. The same issues could be solved converting CR to DVC.

Except that the AKL is 30% larger than the CR before the DVC repurposing. All of the Deluxes are in the 800-1000 room neighborhood...except AKL with 1300 rooms. If we assume for a moment that AKL and CR have about the same level of popularity with guests, 900 occupied rooms at the CR per night leaves 100 vacancies. On the other hand, 900 occupied rooms at AKL leaves 400 vacancies.

I'll grant you that the CR has historically been the least popular of the 3 resorts on the monorail line. But even "nuts" stated that one of the driving forces behind this change in plans is an upturn in occupancy since the refurb began 18 months ago. If true, the Disney resorts division may well have put roadblocks in DVC's path. After all, there is a lot of other undeveloped land at WDW on which DVC can build without cutting into other revenue streams.

It will definitely be interesting to see what happens. Even if demolition should begin at the CR, I'll remain a bit skeptical until there is some sort of announcement or other preponderance of evidence that the new rooms belong to DVC. As I said previously, it wouldn't surprise me to see Disney put cash rooms there now with the intention of converting them to DVC at some point in the future. I think DVC did a brilliant job with AKV in that they could have the first units open less than a year from announcement. That way the impact on sales of current resort(s) is minimized. With the CR, they would be showing their cards 3+ years ahead of time. That could very easily have a negative impact on sales over that entire period as some potential customers wait for the CR rather than buying what's presently available.

 

[minnie61650]

The 15 story tower likely contains 4-5 years worth of points for DVC to sell. Consider that DVC may not be willing to pay the millions of dollars in dues for the points they would hold over such a long period of time when more economical options are available. We also need to factor in additional expenses that are likely due to the location (beside the water, on a part of the property that isn't the easiest to access in terms of material and heavy equipment deliveries.) .........

.

'

One plausible theory (rumor) I read is that the STOL (short take off landing strip) is going to used to bring in and store the heavy equipment and materials that will be needed for the new building at CR.

 

[dumbo71]

1. Too expensive. Yes, there was a design floating around, but it was rejected because of cost to build.
2. Couldn't build in phases...entire facility would have to be near completion before they could begin sales (Florida timeshare laws). So the cash flow didn't work out.

Nuts thanks for the post about the rumors. I don't buy either one or two from your post.

1) Expensive? Sure but the money brought in from Timeshare sales is ENORMOUS. You have to spend it to make it and DVC certainly has it to spend. If this arm of Disney wasn't so profitable it wouldn't be mentioned at annual reviews and the like. It also wouldn't be expanding anywhere. Lets face it, DVC is a money maker.

2) This doesn't seem true at all. All Timeshares I know of in the state of Florida and elsewhere are built in phases. Resorts, in fact, have pre-sales, all the time. The resort WOULD NOT have to be near completion before sales could begin.

I certainly am not saying CRV are next but this rumor doesn't add up for me.

 

[tjkraz]

Nuts thanks for the post about the rumors. I don't buy either one or two from your post.

1) Expensive? Sure but the money brought in from Timeshare sales is ENORMOUS. You have to spend it to make it and DVC certainly has it to spend. If this arm of Disney wasn't so profitable it wouldn't be mentioned at annual reviews and the like. It also wouldn't be expanding anywhere. Lets face it, DVC is a money maker.

True but as I said elsewhere, if DVC can build on another site at a lower up-front cost, why not do it? This is particularly true if the info about increased occupancy at the CR after the refurb is accurate.

One of the driving forces behind the CR site has always been that it was a solution to a problem--the aging CR at which nobody wanted to pay $400-500 per night for a room. If the refurb has solve that problem, these plans may well have been altered.

2) This doesn't seem true at all. All Timeshares I know of in the state of Florida and elsewhere are built in phases. Resorts, in fact, have pre-sales, all the time. The resort WOULD NOT have to be near completion before sales could begin.

I took that to mean that DVC would FUNCTIONALLY be unable to build in phases since the design is a single large tower. In the case of SSR, they built in three phases over a 4-year period. If they had built all 18 buildings at once, DVC would have been paying the dues on millions of unsold points for several years. Instead they were able to open the buildings gradually, as sales needs dictated.

With the CR tower, they would have to pay all of those operating costs for unsold points for 4-5-6 years while the resort was still for sale.

One plausible theory (rumor) I read is that the STOL (short take off landing strip) is going to used to bring in and store the heavy equipment and materials that will be needed for the new building at CR.

That's kinda my point. Having a "staging area" that is 1-2 miles removed from the worksite would certainly add expense to the project that you wouldn't have with somthing like SSR or the AKV add-on where they have plenty of wide open space.

 

[vonpluto]

Actually it would be too short for a jet. that runway is less than 2000 feet.

But Walt didn't fly around in a jet, he flew around in a twin Gruman G-159 Gulfstream, which I believe is still on display and you can still see when you take the Back-Stage tour at MGM. It has tail number N123MM. The N designates a North American registered aircraft. The normal call sign for his plane would have been "november one two three mike mike", but he was given a special from the FAA, and their I.D. was "november one two three mickey mouse."...

Only 201 airplanes of that model were produced, between 1958 and 1969. It cruised at 350 mph, much slower than a jet today.

Actually, I'm not sure even that plane could land there on that strip. Larger STOL aircraft have special feataures not found on regular aircraft, that's why they're called STOL aircraft.

When Walt's Gulfstream was brought to WDW, World Drive was used as the landing strip.

 

[DVCPAT]

Yes, Disney is a multi-billion dollar company. But that doesn't mean they are going to throw caution to the wind and approve a CR addition if they can build in another site for 70-80% of the cost. If they can build elsewhere in phases and avoid the millions in subsidized dues, so much the better.

I think your assuming too much. How did you arrive at a 70-80% savings? I also doubt it will be 15 stories. The zoning issues (if any really exist) will be solved if a profit can be made. Reedy Creek can install a nuclear reactors if it chooses. I doubt the wetlands (that Disney installed) would pose a problem.

Disney seems to be starting a trend for selecting new DVC resorts. I don’t think it’s a coincidence Disney injects DVC villas into low occupancy resorts. Disney benefits with lower construction costs and solves the problem of discounting empty rooms.

 

[nuts]

I think your assuming too much. How did you arrive at a 70-80% savings? I also doubt it will be 15 stories. The zoning issues (if any really exist) will be solved if a profit can be made. Reedy Creek can install a nuclear reactors if it chooses. I doubt the wetlands (that Disney installed) would pose a problem.

Hmmm, so Disney (Reedy Creek) can magically make the federal Wet Lands act go away?

 

[salmoneous]

Although Reedy Creek is controlled by Disney, that doesn't mean they are a pushover. The big advantage to Disney is that they are consistent, focused and attentive to the needs of the corporation. Another way to put that is that Disney doesn't have to put up with the BS and red tape that developers have accept dealing with "normal" government agencies

But Reedy Creek has never been easy. Their fire codes, for instance, have always been some of the toughest in the country. They required in-room sprinklers for the original WDW resorts, back when almost no jurisdiction required them. We take sprinklers for granted today, but back then it was a significant expense Disney had to pay for something that was unusual. Reedy Creek has also had very strict water usage / wetland rules. They aren't going to just waive them to help Disney Development make a buck.

Reedy Creek drives academic urban planner-types crazy. In the rest of the world, there is this huge conflict with developers that are always trying to shortcut rules to improve the bottom line. And yet with RCID - a developer that actually controls the government making the rules - they aren't slimy, but actually one of the most progressive and responsible government bodies anywhere.

 

[DVCPAT]

Although Reedy Creek is controlled by Disney, that doesn't mean they are a pushover. The big advantage to Disney is that they are consistent, focused and attentive to the needs of the corporation. Another way to put that is that Disney doesn't have to put up with the BS and red tape that developers have accept dealing with "normal" government agencies

But Reedy Creek has never been easy. Their fire codes, for instance, have always been some of the toughest in the country. They required in-room sprinklers for the original WDW resorts, back when almost no jurisdiction required them. We take sprinklers for granted today, but back then it was a significant expense Disney had to pay for something that was unusual. Reedy Creek has also had very strict water usage / wetland rules. They aren't going to just waive them to help Disney Development make a buck.

Reedy Creek drives academic urban planner-types crazy. In the rest of the world, there is this huge conflict with developers that are always trying to shortcut rules to improve the bottom line. And yet with RCID - a developer that actually controls the government making the rules - they aren't slimy, but actually one of the most progressive and responsible government bodies anywhere.

I agree. I’m not saying Disney is going to break the rules to make a buck. Disney wins many environmental awards and is highly respected. Disney also has a long history of successfully building waterfront resorts, so I don’t see a problem rebuilding the CR wing.

Disney’s mission statement…..

Mission
The Walt Disney Company is committed to balance environmental stewardship with our corporate goals throughout the world.

Disney also has Corporate goals and must answer to shareholders.

 

[dumbo71]

I took that to mean that DVC would FUNCTIONALLY be unable to build in phases since the design is a single large tower. In the case of SSR, they built in three phases over a 4-year period. If they had built all 18 buildings at once, DVC would have been paying the dues on millions of unsold points for several years. Instead they were able to open the buildings gradually, as sales needs dictated.

With the CR tower, they would have to pay all of those operating costs for unsold points for 4-5-6 years while the resort was still for sale.

Good post although I still don't agree with the quoted part. I didn't take things that way when it came to the phases. The post I quoted was not worded that way. It stated they couldn't begin recouping money during phase building according to Florida Timeshare law. This IS NOT true. They would be recouping money as soon as they released points for sale. How long the project takes is irrelevant. I also feel there would be a way to open a portion of the CRV prior to completion.

We do agree that DVC chose AKV because it was more cost affective.

Thanks for the thoughts. Only time will tell how it plays out, that is what makes speculating so much fun.

 

[DVCPAT]

Hmmm, so Disney (Reedy Creek) can magically make the federal Wet Lands act go away?

Where in the wetlands act, does it prohibit Disney from converting CR hotel rooms into DVC rooms?

 

[nuts]

Where in the wetlands act, does it prohibit Disney from converting CR hotel rooms into DVC rooms?

It doesn't. Just dramatically increases the cost. So, again, you are corporate. Do you fund an expensive conversion, or do you go with other sites. Simple financial rule...exploit the profits (low hanging fruit) before you go the more costly route.

My source believes that CRV is out because of this simple fact. DVC can make A LOT MORE MONEY developing elsewhere. Simple economics. I can't argue beyond that. She obviously is not going to share the Disney financial analysis with me

You may not like the answer, but them are the facts.

 

[minnie61650]

It doesn't. Just dramatically increases the cost. So, again, you are corporate. Do you fund an expensive conversion, or do you go with other sites. Simple financial rule...exploit the profits (low hanging fruit) before you go the more costly route.

My source believes that CRV is out because of this simple fact. DVC can make A LOT MORE MONEY developing elsewhere. Simple economics. I can't argue beyond that. She obviously is not going to share the Disney financial analysis with me

You may not like the answer, but them are the facts.

Well, I for one have stated many times that DVC will not get any of my money until they build a DVC on the monorail line.

I know there are many others who feel the same as I do.
I have been watching and hoping for 15 years and I will wait until I die if I need too.
I had the money to buy OKW when they first started selling then but
I feel the home resort is very important and I want my home to have access to the monorail.
I have the money to invest right now but until a monorail DVC is built I will not buy!

I do not think the less costly stand alone DVC
are in demand right now since OKW and SSR are two huge resorts.
A monorail DVC however ,would be in great demand.
IMHO DVC would have buyers lining up to buy on the monorail.
No doubt about that.

 

[DVCPAT]

It doesn't. Just dramatically increases the cost. So, again, you are corporate. Do you fund an expensive conversion, or do you go with other sites. Simple financial rule...exploit the profits (low hanging fruit) before you go the more costly route.

My source believes that CRV is out because of this simple fact. DVC can make A LOT MORE MONEY developing elsewhere. Simple economics. I can't argue beyond that. She obviously is not going to share the Disney financial analysis with me

You may not like the answer, but them are the facts.

Help me out……. If you build a completely new resort, you have to run new utilities (sewage, water, electric). You also have to build new roads, parking lots, transportation facilities, ect… You also have to hire a full DVC staff, losing the benefits of splitting labor/transportation costs with the a Disney resort.

Managing storm water run off in new resorts is also a huge cost. Older resorts don’t have to comply with the new rules.

How can it be less expensive than a DVC retrofit???

I also think Disney disagrees with your logic. The last two DVC resorts (SSR & VAK) are retrofit,s and that’s a fact

 

[nuts]

I do not think the less costly stand alone DVC
are in demand right now since OKW and SSR are two huge resorts.
A monorail DVC however ,would be in great demand.
IMHO DVC would have buyers lining up to buy on the monorail.
No doubt about that.

Your premise is incorrect. DVC has already stated that SSR has sold at TWICE THE RATE OF BWV AND BCV. SSR demand remains at a record pace. AKV will continue that trend (if not increase it). Yes, there are people like you who won't purchase until a monorail site is built...however the demand for those who won't wait remains strong. Again...economics.

 

[tjkraz]

Good post although I still don't agree with the quoted part. I didn't take things that way when it came to the phases. The post I quoted was not worded that way. It stated they couldn't begin recouping money during phase building according to Florida Timeshare law. This IS NOT true. They would be recouping money as soon as they released points for sale.

Then I guess we have a different interpretation of the same passage.

Obviously DVC can begin selling a resort in phases just as they did with SSR and will soon do with AKV. The way I interpreted "nuts"' comments was that since the proposed design is a 15-story tower, DVC has to build the entire structure at once and would thus be on the hook for years of operating costs while the points were actively selling.

From a cash-flow standpoint, if they build on a different site with small villa units like SSR / OKW or even larger units like the separate AKV building, they defer a lot of those operating costs by staggering the opening dates of the units. They can also spread the cash outlay over a longer period of years.

Like I said pages ago, it wouldn't surprise me a bit if they did actually build at the CR. But I simply cannot ignore the rationale detailed in nuts' post. IMO, those are all very valid reasons why DVC could bypass the CR.

I'm also more than a bit jaded by all of this because these CR rumors are nothing new. They've been circulating for 8-10 years and still we have nothing to show for it than some proposed artwork. I could also show you artwork for the Eagle Pines resort and that one is no closer to reality.

The one constant that seemed to drive all of these rumors was that DVC was a perfect solution for the real problem with the CR...that being the horribly outdated accommodations which held little appeal to WDW guests. Now here we are 18 months after an extensive refurbishment and suddenly the CR is one of the most attractive destinations on property. In my mind, the urgency to sacrifice cash rooms to DVC doesn't seem nearly as compelling as it once did.

 

[tjkraz]

I think your assuming too much. How did you arrive at a 70-80% savings?

I made the figure up. Now convince me that DVC could build an equal number of villas on the CR site for the same cost as an easily-accessible, stable site like SSR or AKL.

I also doubt it will be 15 stories.

That's the CR project that DVC has (had?) on the table...

The zoning issues (if any really exist) will be solved if a profit can be made. Reedy Creek can install a nuclear reactors if it chooses. I doubt the wetlands (that Disney installed) would pose a problem.

Can they?

The provisions for operating a nuclear reactor are already in place. I don't see what one has to do with the other.

Disney seems to be starting a trend for selecting new DVC resorts. I don’t think it’s a coincidence Disney injects DVC villas into low occupancy resorts. Disney benefits with lower construction costs and solves the problem of discounting empty rooms.

Now who is making assumptions? Can you tell me what the occupancy statistics are like at the CR over the last 12-18 months?

Just because Disney didn't give the CR room rates a 20% bump for 2007 doesn't mean that occupancy hasn't increased dramatically. The newly redesigned rooms are clearly an improvement and I'm certain that occupancy has gone up as well.

 

[ralphd]

I think your assuming too much. How did you arrive at a 70-80% savings? I also doubt it will be 15 stories. The zoning issues (if any really exist) will be solved if a profit can be made. Reedy Creek can install a nuclear reactors if it chooses. I doubt the wetlands (that Disney installed) would pose a problem.

Much of the wetlands existed before Disney.

Not true, Disney must deal with the environment just like other companies.
They currently have a problem developing the area around the Tree Houses, which are occupied by the Epcot exchange students,

Disney does own The Reedy Creek Development District, but they are monitored by and must get approval from the State and Federal Gov't as required by law.

 

[DVCPAT]

I made the figure up. Now convince me that DVC could build an equal number of villas on the CR site for the same cost as an easily-accessible, stable site like SSR or AKL..

Are you saying CR is sinking?? CR foundation is designed to carry a specific load. As long as the new structure doesn’t exceed the rated load…a new structure is good to go. Accessibility is not an issue.

The provisions for operating a nuclear reactor are already in place. I don't see what one has to do with the other..

If Disney/Reedy Creek can manage a nuclear facility, I would trust them to solve any water related construction issues.

Now who is making assumptions? Can you tell me what the occupancy statistics are like at the CR over the last 12-18 months? .

I might be wrong, but supply and demand usually dictates the rates. The CR room rates are the lowest on the monorail line and Epcot area.

Just because Disney didn't give the CR room rates a 20% bump for 2007 doesn't mean that occupancy hasn't increased dramatically. The newly redesigned rooms are clearly an improvement and I'm certain that occupancy has gone up as well.

Why wouldn’t they raise the rates….If demand exceeds supply, the prices go up, even in WDW (pontoon boats tours, CRT dinner, ect…)

Retrofitting DVC units into existing facilities seem to be the new trend. It reduces construction costs and eliminates low cost deluxe rooms.

 

[nuts]

Help me out……. If you build a completely new resort, you have to run new utilities (sewage, water, electric). You also have to build new roads, parking lots, transportation facilities, ect… You also have to hire a full DVC staff, losing the benefits of splitting labor/transportation costs with the a Disney resort.

Don't assume a new resort is after AKV. There are other retrofits available. CRV is just the most expensive one. She does feel STOL is still in the running. It does already have water and sewer under it. I don't know the details...can only repeat what I was told.

As to the individual who will not purchase until CRV is built...how often do you travel to Disney? Just on economics alone have you thought of buying now? Doesn't preclude you from doing an add-on in the future if they do a CRV.