The Disney Vacation Club: A Quick History

Today I want to talk about the history of
the Disney Vacation Club, otherwise known as the DVC. What is it? Well, in short, it’s Disney’s own timeshare
program, and its creation was just one more piece of a larger puzzle that made up the
Disney Decade. What we know today as timeshares began as
a trend in the UK in the early 1960s called vacation home sharing. The concept was simple. Three or four families who knew and trusted
each other would all chip in to buy a vacation home, and then they would share the use of
that home across the seasons of the year. It was a way to have your own vacation home
without paying the full price for one. In 1963 in Switzerland a company called Hapimag
took that concept to the next level. While it happens occasionally, most of the
time a family isn’t going to spend an entire season at a vacation home. So rather than let the property sit unused
for most of the year, why not split up the ownership into one week segments rather than
whole seasons? That way you could sell the use rights to
upwards of fifty people instead of just three or four. In 1965 the concept made its way to the US and first showed up in Maui at the Hilton Hale Kaanapali. Later, in 1969, the first non-hotel condominium
timeshare was sold on the island of Kauai. So why Hawaii? Well, it was perfect. If your goal was to sell off access to the
space every week of the year, you’re going to have a much easier time selling off those
winter weeks when the resort is in beautiful sunny Hawaii. Over the following two decades the industry
would grow and grow and grow. The problem however is that along with it,
a bad reputation for the industry would also grow and grow and grow. And to be clear, that bad reputation is entirely
deserved. Trying to use free gifts like theme park tickets
to lure travelers into long winded sales pitches that lasted hours and hours. Offering free alcoholic drinks at those sales
pitches to try and lower people’s inhibitions. High pressure sales tactics that sometimes
involved trying to guilt people into signing on. Intentionally confusing and complex contracts
that made it nearly impossible to back out. This is a major long-term investment and
it’s the kind of decision that should be made with a clear mind and time to work out
the details. All of these tactics were used to influence
people to do the exact opposite, and unfortunately, it worked. By the early 1990s, despite the negative image,
the timeshare industry was booming, and as it would turn out, Orlando was the most popular
spot for them. In fact, that region alone accounted for an
estimated 400 million dollars that were being spent every year. Why? Well similar to places like Hawaii, the weather
was ideal for selling off weeks in the off-months. There was another reason though: it was close
to Disney World. Now at this point Disney CEO Michael Eisner
had already turned the Disney Company around and saved it from a takeover. It was on an upswing and was doing so well
that he had declared the 90s the “Disney Decade.” One of the many tactics Eisner employed that
decade was that whenever they recognized a business opportunity that was directly or
indirectly benefiting from Disney, they would step into that business themselves and create
their own unique “Disney” version of it. Disney owned hotels, the Disney store, the
cruise line. They all had their ups and downs, but for
the most part they’d turn into successful business ventures. It was a growing $400 million dollar a year
industry right in their backyard, and with plenty of land to spare, there was no reason
not to seek out a piece of that pie. And so in September of 1991, the Disney Vacation
Club was born. Now right from the get go, right there, with
the “Disney Vacation Club” they were acting on their intention to distance themselves
from the negative reputation the industry had. Mark Pacala, senior VP of the DVC said Sure enough, Disney took efforts to make sure
the DVC capitalized on all of the better aspects of the business model without leaning into
the unethical practices that plagued it. For one, the DVC is a point-based timeshare
program. That means that instead of purchasing a specific
or rotating week at one specific resort, you instead invest generally into a “home”
resort and in return get annual points that you can use to book at a number of different
resorts. You can save up your points for future years
or even borrow future points early. Disney wasn’t the first to use such a system,
but out of the different timeshare varieties, this was the most flexible. In terms of selling memberships to the DVC,
Disney initially decided that no gifts would be offered in return for sitting through sales
pitches. On top of that the 90 minute sales pitches
were also paired with three separate opportunities for guests to leave. In fact, salespeople were even trained to
look out for guests who appeared bored or restless so that they could offer them a chance
to leave with no questions asked. The process for picking salespeople who fit
within Disney’s culture where guest experience came first was extensive, and it took 1,600
applicants before the first 30 salespeople were hired. Additionally, without specifying how, Pacala
said that the feedback guests would give to Disney at the end of their exchange would
impact the earnings for those salespeople, disincentivizing them from using uncomfortable
high pressure sales tactics. When Disney began selling memberships that
September they had set aside 51 units of their upcoming Old Key West resort for the program
before expanding it to 197 units. By the end of the first year sales of memberships
totaled up to almost fifty million dollars. By 1993 another 150 units were under construction
with another one hundred and fifty planned after that. By the end of the Disney Decade they had built
2,100 units across seven resorts that included one resort in Vero Beach and one in Hilton
Head, South Carolina. In 2011 they opened their furthest standalone
DVC resort, Aulani, which as fate would have it, brought them back to where it all began
in the US: Hawaii. The DVC was a successful venture that still
grows to this day, and it stands as another example of the idea that when Disney approaches
a concept and tackles it themselves, focusing on the guest experience that they’re famous
for, even something as vilified as timeshares can work.

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