The Year 1993


The Year 1993


First year sales of $50 million dollars

Disney Designs A Better Mousetrap

The right time for time shares

The Company Thinks It Has Overcome The Poor Reputation Of Time Shares

February 14, 1993 | Orlando Sentinel

Walt Disney Co., with its squeaky-clean reputation, looked long and hard at the time-share resort business before taking the plunge. The profit potential was tempting – estimates in Orlando alone range to $400 million in business a year. Some of the best hospitality companies in the country had entered the market and were doing well. Only the past record of time shares – one tarnished by high-pressure tactics – caused Disney to hesitate.

Now, a little more than a year after getting into the business, the executive brought in by Disney to guide the way says the Disney and time shares are a good fit. The business is profitable. Disney’s image is secure. Its vacation club members are happy campers.

Disney Vacation Club units became available in October 1991. Sales in the first year totaled about $50 million, said Mark Pacala, general manager and senior vice president of the vacation club. A large measure of that success is because of the built-in prospective customer base Disney can tap: The 10 million to 12 million visitors that flock to Walt Disney World each year. Guests at Disney hotels, for example, receive brochures daily describing the time shares.

Disney Vacation Club started with 197 condominiums in a Key West-themed community at Walt Disney World’s Lake Buena Vista Golf Course. 150 units are under construction – the first will be available in March – and another 150 will be launched when this phase is completed. The units are used as Disney hotel accommodations until they are needed for the vacation club.

Vacation club expansion is planned beyond Disney World to Disney theme parks in California, Europe and Japan. “We’re obviously looking at the other parks but not just there (at the other parks),” Pacala said. “If we carry out our vision, we will dot the world with Disney vacation clubs.” The company “is exploring its options in North America” and a major announcement could be made within a few months, he added.

Using a time-share system introduced several years ago in Washington state and Germany as a model, Disney designed a different mousetrap from the usual time-share offering.

Most time shares involve the purchase of a particular condominium for a specific period of time each year, usually a week. In Disney’s Vacation Club, the buyer purchases an interest in a 50-year leasehold in the development, not a particular condominium. That interest is converted to points, which are used to acquire use of the development at any time of year. Prime times, such as June and July, cost more points than off-season times, such as October. A two-bedroom apartment requires more points than a studio.

The minimum purchase is 230 points, and additional points can be bought in 25-point increments. The minimum purchase price has increased to $12,800 from $11,730. The average purchase now is about $15,000, Pacala said. The maximum purchase permitted is 2,000 points, costing $113,000 at the current $56.50 per point price. Several 2,000-point blocks have been sold, primarily to corporate buyers, Pacala said.

Here’s the way it works: With 230 points, a member could get a week in a studio apartment during premier times, such as Christmas and Easter. That costs 151 points. That would leave enough points for another week in a studio apartment in less desirable seasons, such as October. That costs 69 points. Members also have the option to borrow points from future years to upgrade accommodations. A member could borrow points to add to his or her 230 points to get a two-bedroom apartment during premier times at a cost of 420 points per week.

Before it entered the time-share resort business, Disney was concerned because the industry in its early days was rife with high pressure and sometimes deceitful sales practices. Some resorts were poorly run and maintained. A main sales tool was ”the drop,” a false assertion that a specially discounted price was available to a prospective buyer only at that particular time.

But Marriott Corp. got into the business in 1984 and did well with above-board business practices and efficiently run resorts. Other hospitality giants, like Hilton Hotels and Westin Hotels, followed. Kemmons Wilson, founder of Holiday Inns, jumped in with Orange Lake Country Club west of Disney World. Pacala, recruited from Marriott Corp., joined Disney after the company had done more than a year of study on the time-share industry.

Disney would not enter the market, Pacala was told, unless the business would meet Disney standards and image. Pacala didn’t take the charge lightly. Some 1,600 prospects were reviewed before the first 30 salespeople were hired. Compensation is mostly salary with incentive commission.

Disney surveys the system constantly to make sure it is working as designed. Buyers are surveyed to make sure they weren’t pressured and that they understood the program. Those who didn’t buy are checked to make sure their experience was pleasant.

News that Disney is buying 70 acres of oceanfront property near Vero Beach

Disney Shores Up Plans To Build Resort Near Vero Beach

March 31, 1993 | Orlando Sentinel

After building the Grand Floridian Beach Resort, the Caribbean Beach Resort and the Beach Club, the Walt Disney Co. has hit upon a novel idea. Building a beach resort on an actual beach. Disney is buying 70 acres of oceanfront property near Vero Beach, where the company will for the first time open a resort outside the boundaries of its theme parks.

Disney buys 70 acres in Vero Beach 1993
Disney buys 70 acres in Vero Beach 1993 (click for larger image)

The time-share development – intended as part of the Disney Vacation Club – will begin with a 120-room inn and 60 vacation villas, expected to open during summer 1995. Plans call for another 260 villas to be built later.

The resort on Vero Beach, a two-hour drive from Orlando, will allow Disney to hold on to some of the tourists who plan their Florida visit in two stages – Disney World and the beach. “We were interested in the beach from the beginning, when we came to Florida,” said John Dreyer, vice president of corporate communications. “Walt Disney himself knew that the beach was a big draw. He looked at beach sites.”

But his company concentrated on developing resorts on its Orlando property until the success of the Disney Vacation Club in Orlando, a time share that opened in 1991. First-year sales of $50 million paved the way for the Vero Beach expansion, said Steve Carples, director of marketing for Disney Vacation Development.

The Vero Beach resort, to be built in the architectural styles of the Northeastern seaboard, could be the first of many Disney Vacation Clubs across the country.”If we carry out our vision, we will dot the world with Disney vacation clubs,” Mark Pacala, general manager and senior vice president of DVD, said recently.

Disney unveiled preliminary plans for the resort at a meeting of the Indian River Board of County Commissioners Tuesday morning. “I think it’s fantastic,” said Chairman Dick Bird. “It’s some of the most exciting news we’ve had in this county for years.” The county’s economy is based on tourism and agriculture, Commissioner Fran Adams said. Disney told commissioners the resort would employ 350 people. “It’s a great boon for our area,” she said.

Disney will submit a master plan for approval by the County Commission within the next few months, Carples said.

Rumors had circulated for weeks that someone, possibly Disney, was buying three parcels of land owned by Gordon Nutt, an Orlando developer. But even Bird – a friend of Nutt and a commercial real estate broker, himself – couldn’t get confirmation. Neither Disney nor Nutt would say how much Disney paid for the first 15 acres of land, nor how much it agreed to pay for two adjoining parcels on which Disney has options. Nutt did say that he had been discussing the sale with Disney for the last year.

The land was valued in January 1992 at just under $6 million, according to the Indian River County property appraiser. But the 1,600 feet of oceanfront property alone would sell for that much, Bird estimated. The resort property is about 7 miles south of Sebastian Inlet State Park. It is bordered on the north end by County Road 510, and straddles U.S. A1A.

It is the only property in the unincorporated county that is zoned for resort use, Bird said. North and south of the property are upscale neighborhoods. “That (land) has been what we considered our diamond in the rough, a very, very beautiful area,” Adams said.

The pristine beach was a major attraction for Disney, which wants to create the atmosphere of an old-style resort with boardwalks and a 6-acre artificial lake. “We can offer a very unique experience to our visitors to really feel what that natural beach experience was all about,” Carples said. “That’s been lost when you look at a Daytona Beach.”

Disney holds community meeting in Vero Beach

Disney Public Meeting

May 17, 1993 – Sentinel Staff

THE HOT ticket in Vero Beach lately hasn’t been for Elton John or Paul McCartney. It’s for a free – but required – pass to attend a Q&A with Disney brass about the planned beachfront time-share resort. The 633 tickets to the community meeting, organized by the Vero Beach Chamber of Commerce, were gone within seven hours. The meeting Tuesday may highlight what one local official calls a rift between affluent beach dwellers, who oppose the resort, and the rest of Indian River County, which is eager for the jobs Disney will bring. The resort will be the first built away from Disney’s theme parks and is planned as part of the Disney Vacation Club.

Vero Beach Wants To Know: How Much Will Disney Grow?

May 19, 1993 | Sentinel Staff

VERO BEACH — At a public meeting with Walt Disney Co. developers Tuesday night (May 18, 1993), people in this Indian River County town demanded to know three things:

First, is Disney going to expand its beach-front time-share resort beyond the planned 70 acres and 440 units?

Second, does Disney Vacation Development secretly plan to make the resort bigger than the announced 70 acres?

And, finally, the resort isn’t going to get any bigger than 70 acres, is it?

No, no and no, said Mark Pacala, senior vice president with Disney Vacation Development, which plans to start construction next year on the project’s first phase, a 120-room inn and 60 villas at a $6.8 million stretch of beach just south of Sebastian Inlet.

The resort, which will become part of the Disney Vacation Club, is the first built by Disney away from its theme parks. Although the resort is a modest development by Disney standards, some in Vero Beach are worried that, like Topsy, it will just grow. And some objected loudly to the resort, no matter its size.

To boost support for the project, the local chamber of commerce asked Pacala and other Disney executives to present plans for the resort and answer questions. The 633 tickets to the forum – free but required for crowd control – were gone within seven hours of their offering last month, and the Riverside Theatre was packed.

Again and again, people in the audience asked if Disney had its eye on adjoining parcels of land. They asked if Disney planned a seaside theme park, a monorail from Walt Disney World to the beach or expansions to the local airport. Pacala pointed to a slide of the master plan, which was filed with the county planning and zoning board Tuesday, and said, “What you see up there is what you get.”

The crowd seemed largely supportive of the resort, which may bring 350 permanent jobs to a community still suffering from the recession. “I think Vero has to grow,” said Marie Proscia of Vero Beach. “And who better to grow with than Disney?” But Bernard Schwartz was opposed when he arrived at the forum, and he was opposed when he left. Supporters “don’t understand that once Disney comes here, there will be more to follow,” he said. “People think they’re going to be benefitting greatly from Disney, but they’re not.”

Despite the mouse-control sentiments of some, Disney seems to have won the approval of most people in the county – especially those who count. Phone calls and letters to the Indian River County Commission are running 4-to-1 in favor of the resort.

Even the opposition of the affluent beach community just south of Disney’s property has wavered since the commission promised to consider tightening time-share regulations. “Emotions have died down a bit,” Commissioner John Tippin said before the meeting. “I think the project’s a go.”

On the advice of the assistant county attorney, Tippin and the other four commissioners stayed away from the meeting. Their attendance could violate Florida’s government in the sunshine laws. Nonetheless, the five county commissioners seemed eager to approve the resort.

Vero Beach Plans

Disney originally planned to start with the 112-room Inn and 60 villas on beachfront property, and then expand by adding 260 more villas across the street. Disney proceeded with the initial phase, however, due to poor sales, DVC cancelled Phase 2 in 2001 and sold the land in 2006. Because of this, DVC ended up subsidizing the annual dues for early purchasers of Vero Beach.

Original DVCConcept for Vero Beach resort
Original DVCConcept for Vero Beach resort (click for larger image)

The image above shows the original plan for Vero Beach. However, due to poor sales, DVC cancelled Phase 2 in 2001 and sold the land in 2006.

Disney's Vero Beach Site Plan
Disney’s Vero Beach Site Plan (click for larger image)

Plans for initial part of Phase 1 of Vero Beach

Plans for Boardwalk resort

Disney’s original plans for the Boardwalk complex included a Coney Island-style boardwalk, with antique carousel and a Ferris wheel. However, the plans were scaled down and became more modest.

Below are some of the plans for a Boardwalk resort from late 1993.

Disney's Boardwalk Site Plan 1993
Disney’s Boardwalk Site Plan 1993 (click for larger image)


Disney plans Hilton Head Island resort

With plans set for a beach resort at Vero Beach, and plans for a Boardwalk resort at Walt Disney World, Disney Vacation Development’s plans for another resort in South Carolina become know. However things don’t go the way Disney had hoped they would.

Disney Pitches Time Shares

The Entertainment Giant Wants To Build A Development In South Carolina, But Residents Are Balking At The Proposal.

September 11, 1993 | Sentinel Staff

Disney wants to expand its vacation empire to the beaches of South Carolina, but homeowners on Hilton Head Island are gearing up to fight the time-share development.

The Disney Vacation Club plans to build its third resort in Palmetto Dunes, an exclusive development on the oceanside of the barrier island. The resort, targeted to open in 1995, would include 68 villas on 6 acres of beachfront property and 100 villas on a nearby island.

But the beachfront property lies within the private community of Leamington, where covenants forbid the building of time shares. And even as Disney asks property owners to ”de-annex” the beach acreage, a group called ”Common Sense for Leamington!” is hiring lawyers and mailing missives to kill the project.

Executives at the Vacation Club foresee a posh resort – intimate by Disney standards – where the well-heeled clientele will spend an average of $16,000 to buy time in a luxurious setting.

But some people who live in Leamington’s $250,000 condominiums and $600,000 houses foresee traffic congestion, sinking property values and tourists biking down their private streets. ”Nobody wants time shares because of the crowding of beaches, the golf courses and roads,” said John Rosenberg, a Leamington homeowner. ”We have very strict rules about this.”

Disney is hoping homeowners will bend those rules through a referendum that would move control of the beach property from Leamington to a portion of the Palmetto Dunes development where time shares are permitted.

But William Foiles, one of the attorneys hired by the homeowners, said his clients ”are prepared to take whatever legal action is necessary to protect their homes and property.”

To make its case, Disney representatives have recently met with small groups of homeowners, listening to their worries about traffic, security and beach access. ”I think if any of us were residents of that community we’d be concerned,” said Michael Burns, the vacation club’s vice president of sales and new business development. ”But if we’re not there, somebody else is going to be there.”

And Disney’s proposal may be less intrusive than others, he said. The beach property is approved for 120 condominiums, and the builder, Greenwood Development Corp., would likely put up 100 condos in five-story structures, Burns said. Disney proposes 32 fewer units in three- and four-story buildings. ”We feel like we’re bringing less density and a very refined architecture to this site,” Burns said.

The vacation club is preparing a written response to the homeowners’ concerns, Burns said. After that, he hopes the referendum can go before the 500 or so property owners. As Disney spreads resorts away from its property, the company finds that its reputation for doing things in a big way precedes it.

On Hilton Head Island – just as in Vero Beach, where Disney is building its first resort away from its theme parks – some people were worried that the entertainment giant harbored bigger plans for the area. Rumors were flying that the company had bought huge tracts nearby. ”People everywhere we go respect Disney,” Burns said, ”but they fear the magnitude of what we’ve done before. ”They don’t understand this new branch of Disney.”

Meanwhile, plans for that first foray away from home – Disney Vacation Club, Vero Beach – received a boost last Tuesday when the Indian River County Commission approved the master plan. Construction on the 70-acre resort should start in the spring.

Homeowners Rebuff Disney Time Shares

A Beach Community In South Carolina Resists Efforts By The Company To Build Beachfront Units

November 3, 1993 | Sentinel Staff

A small community of affluent homeowners has successfully beaten back a plan by the Disney Vacation Club to build beachfront villas in Hilton Head, S.C.

The oceanside time-share units were to be a key component of Disney’s new Hilton Head resort – only its second such resort outside of Orlando. Vacation Club spokeswoman Keri Lowe said Disney did not consider the loss of the beachfront plans a setback but said it was premature to discuss new options being considered for the Palmetto Dunes development in Hilton Head.

Disney had planned to start building 68 oceanfront villas in Hilton Head next summer. Another 100 units were to be built by 1996 on a nearby island, but Disney officials would not comment on those plans. Neither Disney nor Greenwood Development Corp., the Palmetto Dunes developer, anticipated the vehement community reaction to Disney’s plan. The beachfront villas were proposed in the private neighborhood of Leamington.

When the Mouse roared in Leamington, no one cowered. Residents of the approximately 500 homes in Leamington, mostly retired professionals and corporate executives, organized against the time-share development, saying it threatened both their property values and lifestyles. Homeowners feared traffic congestion and crowded beaches and recreational facilities. “The people who moved in here are not people who have not been successful,” said homeowner Mike Gibbens, a retired communications executive. “Therefore, they are not reticent to get involved. They know how to do it . . . and they have the resources to fund a legal effort if that becomes necessary.”

Property covenants in Leamington forbid time-share units. If Disney were to build the oceanfront villas, property owners would have had to “de-annex” the beach acreage by referendum. But the issue never came to a vote.


The Year 1993