just across the bay from San Diego the Hotel Del Coronado is a historic beachfront hotel renowned for its iconic architecture in history when it first opened in 1888 it was the largest Resort Hotel in the world and since then has hosted presidents royalty and celebrities with such a prestigious history it's no surprise that Disney looked to it for inspiration when wanting to construct their own luxury hotel the Grand Floridian at Walt Disney World built in 1988 was inspired by these very Victorian Arab beach hotels aiming to replicate The Prestige and glamour of a historical highly
acclaimed and architecturally significant Resort without actually being a historical highly acclaimed and architecturally significant Resort and yet despite its flattering imitation Disney's Grand Floridian regularly charges prices per room above that of the very place it was designed and inspired after how did Disney do this how did Disney's Resort fake luxury at insane prices I've always been fascinated by Disney's Deluxe Resorts some like the Grand Floridian Wilderness Lodge and Boardwalk Inn are absolutely stunning and they better be with room rates averaging roughly $700 per night but here's the twist these glamorous facades are just elaborate costumes
masking a well-established framework whether you're splurging on a deluxe day or opting for a budget friendly Disney Resort the underlying structure benefits and amenities are strikingly similar Disney prioritizes operational efficiency broad accessibility and themed environments over genuine exclusivity this clever design results in an experience that feels luxurious and unique on the surface but is fundamentally Geared for Mass accommodation we call this artificial opulence and it works there is no shortage of people who would happily stay in this Bland box with a bed versus this Bland box with a bed despite there being almost $600 per
night between the two to understand how we got here we need to explore some important context regarding Disney and their hotels Disney hasn't always been in the themed hotel business when Disneyland first opened in 1955 the respective Disneyland hotel located right next door to the theme park was neither owned nor operated by Walt Disney and his company Disney at the time barely had enough money to open his Park let alone a hotel what personally approached Brands such as sherian and Hilton but they had no idea where Anaheim was at the time so promptly declined it
might seem like a mistake on their part now but Disneyland was a gamble Anaheim was not the Baseline City it is today but quite literally just a bunch of orange groves the concept of a theme park was brand new and businesses were right to be skeptical eventually Disney sought out and struck a deal with Jack rather a Texas oil millionaire turned film producer who agreed to fund and operate the resort project under the provision that he and his company have total ownership of the Disneyland Hotel Walt agreed and despite missing the original opening of the
park by a couple of months due to various strikes the hotel would go on to be a Smash Hit alongside the theme park as with many of his decisions regarding Disneyland the success of the hotel and its proximity to the park would ultimately rub Walt Disney the wrong way as Disneyland grew so did Anaheim the Orange Groves were quickly replaced with a whole assortment of businesses trying to get a slice of the Disneyland pie from CD hotels to restaurants and tourist traps all fighting for the Public's attention in a flourish of neon glow Walt knew
he had something special with Disneyland and needed to expand but this time he'd do it on the other side of the country when it came to designing Walt Disney World Disney knew that he wanted to do things differently and designed three hotels that would go along the banks of Bay Lake and the future 7even Seas Lagoon that would be owned and operated by Disney themselves Walt Disney himself would pass away before he ever saw it but upon opening day of the Magic Kingdom on October 1st 1971 the only two resorts at Walt Disney World were
Disney's Polynesian Village Resort and Disney's contemporary resort Fort Wilderness would go on to open just a month later and the golf resort would open in October of 1973 while there were plans for additional hotels just outside the Magic Kingdom including the Asian Persian and Venetian hotels Disney would go quiin building in new hotels for quite a while it wasn't until Michael Eisner came along as CEO in 1984 when things really started to take off at Walt Disney World eiso was a big proponent of creating what was unofficially known as the Disney bubble the idea would
be to create an ecosystem of resorts shops dining entertainment and of course theme parks all meticulously interconnected with free transportation to keep guest permanently on site during their vacation to Orlando this meant that no matter what a guest decided to do whilst visiting Walt Disney World Disney would make money off it in the first 10 years of Michael is's tenure Walt Disney World would go from four official on-site hotels to 13 and by the end of his tenure there would be as many as 19 placed on the proposed land for the never constructed Asian Resort
the Grand Floridian would be the first new hotel project approved and built under Michael Eisner and would become the self-professed flagship hotel at Walt Disney World it would be designed in house by Disney and executed by the architectural firm wimbley Allison Tong and goo also known as Wata probably w a TG in newspaper and magazine advertisements Disney promoted the Grand Floridian Beach Resort as the most luxurious Hotel on Disney property where guests can Journey Back to the turn of the century to another time and another place the backstory that Disney had fabricated said that Grand
Floridian bright white towers and gabled roofs Echo the Victorian architectural influence that has come to symbolize Florida's Carefree Winters and barmy Summer Night according to WG the Grand Floridian Resort reflected the error of the railroad magnets who built new rail routes to Florida with a large Grand Hotel at the Terminus of the line it's a it's a lot of buzzword for a hotel watg worked closely with imagineer wing Chow on the design and construction of the Grand Floridian Chow was their primary contact and by their accounts was the driving force on the Disney Team Construction
was fast-tracked thanks to a great deal of land preparation work having already been done years prior for the Asian Resort groundbreaking took place on April 23 1986 and according to watg the construction process was between 20 to 24 months imagineers working on the Disney team affectionately dismantled the designs and features of many hotels to bring their own ideal Vision to life it was no secret that the Grand Floridian was heavily inspired by the aformentioned Hotel Del Coronado and when the project was finalized almost a decade after the original opened on June 28th 1988 side by
side you'd barely tell them apart the Victorian Elegance picturesque waterfun and sprawling lobbies echoed the charm of the Hotel del Coronado but this was just the beginning for Walt Disney World's rapid Resort expansion shortly after the Caribbean Beach resort opened on October 1st 1988 and was their first moderate Hotel on property demanding a slightly more humble asking price a year later the Beach and Yacht Club were opened around the corner from Epcot followed by port orans in 1991 so we've established where these Resorts came from but how did they come to be so unbelievably expensive
it's easy to point a finger at Disney and blame it all on Greed but it's actually a bit more complicated than that especially when it comes to DVC and we'll get to that soon firstly by operating their own resorts on the land surrounding their theme parks which they already owned Disney can capitalize on this Prime real estate and people are willing to pay a premium for this convenience Resort like Disney's Grand Floridian and contemporary resort are connected to the Magic Kingdom by walkways and a complimentary monor rail service while those near Epcot are within walking
distance of its second entrance known as International Gateway each of these Resorts is a deluxe Resort offering not just a pleasing thematic environment but unparalleled convenience Disney has recognized that guests are willing to pay substantial amounts to to be closer to the action parks like Tokyo Disney CA Disneyland Paris and Disney California Adventure have taken this even further with Resorts inside their Gates and they are wildly successful the hotel Mira Costa Grand Californian and the Disneyland Paris Hotel demand some of the highest asking prices across all of Disney's properties Disney is even looking at options
to add a new resort to the the Magic Kingdom in the bottom left corner of Adventureland to capture some of the excitement generated by these Resorts around the world one even just opened at Fantasy Springs in Tokyo Disney sea now this strategy is an exclusive to Disney for centuries hotelier have capitalized on similar Prime real estate nearby major attractions or city centers to attract tourists seeking convenient accommodation Disney simply learned from their mistakes with the Disneyland Hotel and instead of dishing out this land and opportunity to third parties for short-term gains they instead kept it
all to themselves if Disneyland hotel was never purchased by somebody else in Another Universe the Magic Kingdom might be surrounded by a Ritz Carlton Four Seasons or a best Weston which would just be awful Disney essentially holds the key for all things Disney and they're keeping that to the themselves they have an exclusivity on the benefits they dish out to guest and they can use those benefits to bolster the value of their resorts in any way they see fit that no other Resorts or hotels can provide likewise they have access to their entire catalog of
intellectual property to similarly entice gas with all of this in mind is it fair to call Disney's Resorts fake luxury if you meticulously C at the ideal aspects of multiple luxurious settings and apply them within your themed environment alongside added benefits does that not itself constitute luxury It ultimately depends on the individual's perspective imagine you buy a celebrity autograph online only to discover it was forged by another famous celebrity while the autograph is not authentic and cannot be argued as such the context of the forgery still gives it an inherent value similarly Disney's Resorts may
not be traditional luxury they carefully crafted experiences and benefits they provide for their guest still holds significant value for many and so long as people find Value in these Resorts the prices aren't going anywhere likely just up but that doesn't explain everything there is one more Factor we haven't discussed yet and that is the curse of Disney's Vacation Club in the early 90s Disney started work on their next Endeavor that would go beyond just lavish themed Resorts Florida was a tourist destination which led to some rather dramatic seasonal fluctuations when it came to guest attendance
whilst there were high highs there were also low lows and Disney wanted a way to smooth this out year round enter Disney Vacation Club Disney Vacation Club or DVC is a time share they didn't want to call it that but that's exactly what it is members buy a real estate interest in a resort and receive an annual allotment of points which can be redeemed to book stays at Disney's DVC resorts in addition to the initial Purchase cost usually around $30,000 members also pay annual dues for maintenance and operations whilst the time share industry has a
sloppy past the DVC program was genius for Disney it helped alleviate some of the pressures caused by those aention seasonal fluctuations and offered long-term Financial stability through recurring Revenue year round not just when guests visited the resorts the Disney Vacation Club resort now known as Old Key West would go on to open in December of 1991 though it would take two missteps for Disney to realize what guests were actually buying after Old Key West Disney went on to open the Vero Beach Resort in 1995 and Hilton Head Island Resort in 1996 Old Key West was
a Smash Hit but these last two not so much adoption of DVC here was slow and Disney initially couldn't work out why Vero Beach and Hilton Head Island were popular tourist destinations but they were much much further away from Disney's theme parks and that was EX L the problem people stayed at Disney's Resorts because they were near their theme parks and included the benefits to match outside of this Disney's Resorts just weren't all that special after this Disney rapidly expanded their DVC offerings around the parks all around the world not just Walt Disney World it
wouldn't be until almost two decades later that they would even attempt another DVC Resort away from their theme parks but this time in Hawaii and with all the knowledge that they had learned from virau Beach and Hilton Head Island known as orani it by all accounts is a Smash Hit the guest not interested in DBC it was something that many felt they could comfortably ignore but there was one huge problem that would affect absolutely everybody even if you weren't a DVC member year after year Disney's Hotels get more expensive the increase in hotel prices can
directly be seen as a way to try and sell more DVC if you can lock in the next 50 years of hotel stays at Disney for a lower price and staying onside in a non DVC Hotel they can make it look like a bargain at first glance lock in your price now and you don't have to worry about those price increases or inflation DVC generates significant revenue for Disney to keep this Revenue growing Disney needs to expand DVC offerings and raise hotel prices as hotel prices rise DVC memberships seem like a better deal Drive in
more sales with more sales Disney gains more Capital to invest in further DVC properties leading to expansion to justify these new offerings Disney raises hotel prices again the cycle affects all gas even those not interested in DVC the rapid expansion of Walt Disney World's Resort and DVC Consolidated the idea of the Disney bubble where staying onsite when visiting Disney's theme parks became the logical choice for most families this Choice was further cemented through the 2000s and 2010s with the sheer amount of benefits provided to on-site guests such as extra magic hours free Magic bands additional
time before other guests to book Fastpass passes and restaurants transportation to and from the airport and much much more and with all of that Disney effectively holds a monopoly over the best access to their Parks through their Resorts no hotel or Resort can even come close to the benefits that Disney provides for their guest even though they continue to strip these benefits further and further back now is it fair for Disney to hold a monopoly well they're entitled to reap what they sow they might be getting the Lion Share of guests accommodation budgets but they
also accept the most risk this all-in mentality doesn't give them any leeway if their theme parks are suddenly less popular Four Seasons can support struggling Resorts with their successful ones but Disney doesn't have the same luxury if the theme parks the resorts the hotels and DBC all feel like a precarious House of Cards that's basically because it is theme parks and resorts are expensive to operate Disney makes a profit as demand is high thanks to the quality of the experience they provide if demand lowers then the costs become too high so they need to cut
Corners lowering the quality and in turn lowering demand and the cycle repeats people will say well that's impossible Disney isn't going anywhere but this has already happened before to Disney Disney's California Adventure Park Euro Disneyland Hong Kong Disneyland and Walt Disney Studios park Paris have all required massive cash injections to save them this heightens the quality to what people expect for the price and guess return to the property but what happens if Disney simply doesn't have the cash to do this what happens if Disney just spent $71 billion acquiring another company and then there's a
global pandemic they go all in on streaming which is losing them tens of millions of dollars every quarter nobody knows but this is where we are for review time I'm Dom thanks for watching
