The resort at the golf course
Image: Disney
A developer cannot build 500 units near Walt Disney World in a short period of time. Well, they couldn’t in 1990. Disney accepted bids for this critical project under their other new umbrella, Disney Vacation Development, Inc. Once they settled on the perfect builders, they broke ground fairly quickly, announcing that 190 villas would come available soon.
These new rooms would spread across multiple buildings at a Disney resort that they were selling as a condominium. You know it as Old Key West, but people at the time referred to it as the hotel interspersed around Holes 2 and 8 of the Lake Buena Vista Golf Course. Each of the villas offered at the hotel would offer convenient, free transportation to Walt Disney World plus a hotel room view of the golf course below. Disney accomplished all of these plans during the first half of 1991.
By October, Disney was ready to open their Disney Vacation Club Welcome Center, which eventually became known as the Commodore House. Two months later, the first DVC property debuted to the public. It was less than ambitiously named Disney’s Vacation Club Resort during the first four years of its existence. Still, the actual building process revealed a great deal about Disney’s immediate and long term plans for their new endeavor.
First of all, only 50 of the villas would be ready at the start. The first DVC property would remain under construction for its first two years of existence, a familiar refrain over the years with regards to new DVC resorts. More important, Disney had requirements and incentives for their new enterprise, the one they were officially calling the Disney Vacation Club prior to its opening.
A points club, not a timeshare
The requirements to join involved the precise implementation of the new “club.” Disney eschewed conventional timeshare practices while accepting the genius of the basic premise. They too were selling a small set of short term condominium apartments to a large volume of customers.
The key difference is that Disney chose to place a time limit on their deeded properties. People who invested at Disney’s Vacation Club Resort would enjoy an ownership stake for 50 years. At that point, their rights and privileges would cease to exist. Yes, their titles were deed-able, passed down in wills, but they also came with an expiration date.
Through this tactic, Disney wasn’t ceding their coveted property near Walt Disney World forever. Instead, they were building a gigantic new resort while simultaneously guaranteeing high occupancy rates. Most cleverly of all, they’d have their new DVC participants foot the bill for the development. It was a business practice so perfect in design that Walt Disney would’ve felt tremendous pride if he’d lived to see it.
The key variance from standard Central Florida timeshares is that people wouldn’t possess fixed weeks of ownership. Instead, Disney added a clever flexibility to their real estate proposition, one they learned from the floating week concept. People could purchase as many “points” as they wanted in lieu of fixed weeks. This way, DVC members had the ability to stay onsite as much as they wanted for a set purchase price.
Those guests who wanted to stay more days, thereby visiting Walt Disney World more often, could buy a larger point amount at the start. Alternately, they could add on to their current total at a later date. This particular business practice was a savvy one for Disney since DVC members jokingly refer to their accumulating points obsession as Addonitis. Through this tactic, Disney keeps selling the same land to the same people. It’s a masterstroke of ingenuity.
The high cost of vacation
Image: Disney
The set rules were somewhat restrictive at first. For starters, Disney required a minimum buy-in of $11,730, the equivalent of $20,412.70 today. Amusingly, Disney has gone in an entirely different direction since then. Today, a person can actually buy into DVC for less than what they would’ve had to pay in 1991, and that’s not including inflation or the DVC resale market. A 50-point purchase at Disney’s Hilton Head Resort currently costs only $5,500.
Why did Disney soften their stance on DVC point requirements? They started high. Initially, the corporation looked at what Marriott had accomplished with a fair amount of envy. Disney appreciated that as they sat on the sidelines, debating whether to participate in the timeshare marketplace, Marriott jumped in with both feet. They quickly proved that a reputable company could make inroads in an industry perceived as shady.
While planning the Disney version of the timeshare concept, execs meticulously examined Marriott’s tactics. They even hired a couple of Marriott employees with experience in the timeshare side. What Disney learned from their workers is that people preferred villas over basic hotel rooms. The explanation is that they felt more like a home away from home, a notion Disney has since emphasized in their program. Every person staying at a DVC resort enjoys the same greeting, “Welcome home.” It’s oddly soothing and re-assuring, causing people to feel as if a massive Disney property capable of hosting thousands of guests is oddly personal and intimate.
Comments
The article seems to imply that it was Disney who invented the points-based system. This is not strictly true. The points-based timeshare system Disney used was not invented by them, but actually dates back to "the Father of Timeshare", Dr. Guido Renggli. In 1963, Dr. Renggli and German developer Alexander Nette co-founded Hapimag, which started selling timeshares in Europe. Hapimag was the first timeshare operator in the world and is by far the largest in Europe. It was Dr. Renggli who first pioneered the points system. Vacation Internationale introduced the points system in the US in the mid-1970's, beginning in Hawaii. Trendiest Resorts, based in the state of Washington, was the first timeshare company to only sell a points-based timeshare. Disney patterned its system on these models.