Why Disney Favors Expansion Towers

Have you paid attention to a recent Disney Vacation Club trend? In 2023, The Villas at Disneyland Hotel opened as an expansion tower near the historic Disneyland Hotel. Later this year, the Island Tower at Disney’s Polynesian Villas & Bungalows will debut. 

In between those events, Disney has rebooted The Cabins at Disney’s Fort Wilderness Resort to turn it into a DVC property. Even if we circle back five years, Disney’s Riviera Resort debuted in 2019. Early rumors described that project as a DVC expansion at Disney’s Caribbean Beach Resort. 

The similarity of all these recent projects raises a pertinent question: Why does DVC favor expansion towers over other projects? Let’s discuss the origins of a relatively recent phenomenon.

Here’s How DVC Has Gradually Changed over Time

During the early days of DVC, Disney built massive resorts on entirely new campuses. Some of the best examples are Disney’s Old Key West Resort, Disney’s Hilton Head Island Resort, Disney’s Vero Beach Resort, and Disney’s BoardWalk Villas. 

Over time, fans expressed their desire to stay in some recognizable resorts, particularly ones at Walt Disney World. Thus, DVC made the pragmatic decision to add DVC inventory at properties like Disney’s Wilderness Lodge and Disney’s Beach Club Villas. Later, Disney gave fans what we really wanted by introducing DVC properties at all three monorail resorts. 

Still, Disney never abandoned the concept of full construction projects. An excellent example is Aulani, Disney Vacation Club Villas, which some would argue is DVC’s most expansive project of the 21st century. 

Then, we have Disney’s Saratoga Springs Resort, which could fall into either category. At first, this campus hosted the Disney Institute. Once that idea failed, management cleverly pivoted to the massive DVC campus we know and love today. 

Overall, you can tell how Disney gradually changed over time. During the early days of DVC, plans called for standalone facilities. Eventually, Disney listened to its customers and offered more of a combined approach.

DVC Practices Frugality 

Lately, we’ve witnessed a different approach, although I’ll readily acknowledge part of the explanation is happenstance. In fact, let’s go ahead and discuss the one glaring exception to DVC’s recent trending.

Do you remember Reflections: A Disney Lakeside Lodge? At Destination D in 2018, executives announced that it would reboot the former Disney’s River Country water park as a nature-themed resort. So, this example falls into the same category as Saratoga Springs in that it would have been a new build on an existing site. 

None of us has stayed at Reflections because it doesn’t exist. This was arguably the first project to die during the pandemic. Well, I say it died, but a recent construction filing gives Disney five more years to do something here if so inclined. That’s important for reasons I’ll discuss in the final section. 

Still, with Reflections never built, all of DVC’s recent additions came at existing resorts. Yes, the expansion towers at Disneyland Hotel and Disney’s Polynesian Village Resort are/appear to be magnificent structures, but Disney needed to do less work here. 

Similarly, replacing dated modular Cabins with new Cabins at Disney’s Fort Wilderness Resort is a simple conversion. That’s the explanation for DVC’s recent strategy. It’s all about the money. 

DVC has practiced frugality, sometimes due to convenience and sometimes due to necessity. For instance, the conversion of Big Pine Key into a DVC presence at Disney’s Grand Floridian Resort & Spa happened because members demanded more inventory. 

Walt Disney World park planners had grand ambitions for the Disney Skyliner. A complementary DVC resort made perfect sense there. Also, Disney was in an expansion phase at the time because all these plans occurred before the pandemic. 

DVC May Change Soon

The truth is that the pandemic changed everything for Disney and, as a byproduct, DVC. Executives quickly announced that Disney would cut $900 million in planned capital expenditures in fiscal 2020 alone. Many plans fell by the wayside, but one truth remained. 

Disney still needed hotel inventory, particularly in the DVC program. So, some of the expansion tower projects we’ve mentioned partially exist due to their cheaper construction costs. When the pandemic threw DVC a curveball, officials adapted quickly.

At an existing resort, DVC officials don’t concern themselves with location or logistics. Someone else previously solved those problems. Thus, all you need to build is the expansion tower itself, which requires a significantly smaller financial outlay. 

Disney chose this path in 2020 after a government feud, but this one happened in California, not Florida. DVC proposed a Downtown Disney property. Alas, the Anaheim City Council refused to allow Disney to use a $267 million tax incentive if it moved the potential DVC property two blocks. At that point, the Anaheim City Council and Disney were no longer friends. 

Eventually, Anaheim government officials and Disney made up and agreed to a new deal. As part of the DisneylandForward project, the Anaheim City Council suggested that a DVC property was a strong possibility. 

Thankfully, history is (hopefully) about to repeat itself at Disney. On June 12th, the Central Florida Tourism Oversight District (CFTOD) will vote on a new Walt Disney World development plan proposal, which receive preliminary approval on June 5th. 

While nothing is official, the parties have negotiated an exciting new deal akin to DisneylandForward. If/when the proposal passes, Disney will invest $8 billion over the next decade. 

From now through 2044/2045, Disney World will spend $17 billion in capital expenditures. Yes, some of that would involve new hotels, including DVC properties, as the agreement allows for up to 53,467 hotel rooms at Disney World, a total well beyond what Disney offers now. 

That aspect may or may not factor into the aforementioned filing at Reflections. Still, the pressing point is that DVC improvised on the fly largely due to the pandemic, adding new inventory at an affordable price to build. So, the DVC program maintained its momentum in the face of an unprecedented event.

Now, Disney has filed the paperwork to spend $60 billion on Disney Experiences over the next decade. Presuming that the CFTOD accepts Disney’s proposal, a minimum of $8 billion will go toward Walt Disney World projects over the next decade. We’re about to enter a growth phase, and I fully expect DVC to start building entirely new hotel campuses once more. Still, don’t be surprised if expansion towers become a standard part of DVC enhancements.