The Year 1990

Timeline
Timeline

1991
1991
The Year 1990

1990

The Disney Decade

In the late 1980’s, Disney Chairman Michael D. Eisner unveiled a massive and ambitious ten-year building plan. He called it The Disney Decade.

The Disney Decade
The Disney Decade (Click for larger image)
1987 construction of the Swan and Dolphin
1987 construction of the Swan and Dolphin (click for larger image)

Given the opportunity for profit in an industry racking up sales in the billions, Eisner and team had decided in 1989 that Disney would go into the time-share business.

It was a difficult decision, because it would be a marriage of two opposites: squeaky clean Disney and tarnished time-sharing, an industry known in the 1970s and early 1980s for its sleazy, fly-by-night operators. “We looked at time-sharing for seven years [does this mean the idea for DVC was suggested by someone in 1983?]. There was a serious concern that we didn’t want to put our name on a negative consumer image. We didn’t want to be associated with deplorable sales and marketing practices,” said Don Goodman, Disney’s vice president of real estate venture development. “But here we were in Orlando, the largest time-share market in the world. We concluded that there would be a lot of appeal for time-shares built by a stable developer,” Goodman said.

An article in the Chicago Tribune said:

Given its creative history, the entry of Disney into the timeshare field virtually assures a continued diversity of products. The giant entertainment firm, which decided a few months ago to proceed with timeshare development, is assembling a staff for its first ventures.

“It is a big business, and clearly there is an opportunity there for us,” said Peter Rummell, president of Disney Development Co. in Orlando. “But we had to ask ourselves, will it detract from our franchise, which in its simplest terms is family entertainment,” Rummell said. “And in our consumer research we found the reaction to timeshare was mixed.”

The reason for the mixed reaction is the timeshare industry`s sales tactics, which have been questioned across the country.

“The (timeshare) industry has a sloppy past, but over time it has gotten to where we are comfortable with it,” Rummell said. “We think the Disney name will add a level of credibility to the product. There is a level of trust and expectation from people that we will deliver a quality product.”

Disney`s first project will be in Orlando, a logical start for the company since the city is home to Disney World, Epcot Center and the new MGM/ Disney movie theme park.

Rummell said Disney`s timeshare resorts will complement the company`s other hotel and resort plans, which include the addition of 12,000 hotel rooms to the Orlando market over the next 7 years.

“We feel there is a safety in having a diversity of product,” Rummell said. “If all we were doing is robbing ourselves of a resort guest (to sell a timeshare) it doesn’t make any sense. But we`re comfortable we`re not just trading dollars around.”

Rummell said Disney estimates that its first 450 timeshare units to be offered in Orlando will have the effect of reducing by about 800 the need for hotel rooms in the company`s planned resorts. But he said that effect will not be felt for many years.

“We’ve been studying it for a couple of years, probably a year longer than we should have,” Rummell said. “There was a siding we got pushed onto, the one major mistake we made in analyzing the business.

“We decided early on, wrongly, that we couldn’t enter the business unless we could control it entirely, that we would need a network of resorts from Day One because we knew that exchange network was important and that without it the concept would not be viable.”

But to build in Orlando and three or four other locations simultaneously would have cost at least $300 million, a figure Rummell called big even for Disney. That forced the company to shelve the timeshare idea initially.

About a year later, however, executives decided that Disney could join the Resort Condominiums International exchange network and solve the exchange question.

“But we came back, revisited the idea and examined RCI and as we did we got more comfortable with it,” Rummell said. “It will allow us to learn the business and grow into it realistically.”

In 1990, Disney established Disney Vacation Development, Inc., a subsidiary of Walt Disney Parks and Resorts, a unit of The Walt Disney Company, to move forward with their timeshare plans.

One of the first indications of this decision was this news article from United Press International about timeshares coming to Walt Disney World.

Disney enters timeshare industry

January 14, 1990 | UPI

LAKE BUENA VISTA, Fla. — Walt Disney Co. Chairman Michael Eisner Sunday revealed that Disney plans to sell time share vacations at its Florida theme parks. Eisner gave no details about Disney’s ‘shared vacation ownership’ program but said 500 units would be built at the company’s Florida complex and offered to time share investors.

Time share resorts sell the same piece of property, usually a condominium, to several investors but allow each investor to use it only a limited number of days per year. Time share operations have been plagued by complaints of consumer fraud and deception, high pressure sales tactics and mismanagement. ‘There are a lot of things that had bad reputations. Amusement parks had bad reputations before Disney came into the process,’ Eisner said.

‘We didn’t use the word time share, not that we’re afraid to use it,’ Eisner said. ‘We’ve hired the best people in the industry to work for us,’ he said. ‘We feel that we can do it in a really attractive, honest and capable way, and we’re very excited about it,’ he told reporters.

Later that same year, this short 4-sentence blurb in the Orlando Sentinel told us that site work had begun.

Site work has begun on the first time-share…

November 26, 1990 | Orlando Sentinel

UNDER WAY. Site work has begun on the first time-share units at Walt Disney World. The villas are planned around the front nine of the Lake Buena Vista golf course. The venture involves memberships, rather than selling an interest in each unit. Marketing is expected to begin in the summer.

Timeline
Timeline

1991
1991
The Year 1990