Recently, the Travel Goods Association just released their Travel Goods Market report for 2008. They state:

The perfect storm of soaring energy prices, new airline restrictions and the bad economy took its largest toll on luggage sales. TGA estimates that luggage sales fell 18.2% by volume and 21.0% by value in 2008. The average price for luggage slipped 3.5% as those few consumers still buying luggage chose to buy at lower price points than in past years.

So with the economy in a recession and huge declines in luggage sales particularly with higher price point items, why in the world would someone think about starting a premium suitcase company for kids?

Well, there are many factors but ultimately five main reasons for starting now as opposed to waiting.

1. You never know when that kernel of an idea may strike and you really have no control over macroeconomic factors.

2. A recession forces discipline: Being in a recession forces us to manage our budget very tightly and grow at a slow and steady pace. This disciplined approach to running a business is actually healthier for a small start-up with very limited capital.

3. Less demand slows down competitors: In a down economy, larger more established brands are heavily focused on their expenses, cost cutting and trying to squeeze out every dollar they can through promotions. The overall market is shrinking so there is excess supply. Many companies will become much smaller and some won’t survive. We believe our premium kids travel products are serving an unmet need in the market place. It may very well be possible that developing high end luggage for kids was on some sort of strategic plan for a larger known brand. However, given the recession, risky expansion concepts like premium kids luggage will most likely take a back seat. This gives us more time to grow our brand and establish dominance in the niche category. We view this recession as a window of opportunity to launch Jr. Luggage and create a well known brand that stands for quality kids travel gear and accessories.

4. Big fish, small pond: If we had major investors with deep pockets pushing for growth, the current economy would be a major challenge to growing rapidly. It would be much more difficult to launch a brand and grow it to $100 million today than even just five years ago. However, like most small businesses, our funds are rather limited. While the overall market pie is shrinking, we don’t need a big piece of it. We’d settle for just a small sliver. Our focus is solely on quality kids travel gear. Not adults, not seniors, not business travelers… just kids. Our brand is all about kids. We want people to hear ‘Jr. Luggage’ and think, “Oh yeah, that is the company that makes amazing travel gear for kids.” This lets us stay focused on what is important such as service, kid oriented product development and outstanding quality. By finding a unique niche, not only are we a big fish in a small pond, we actually create and define our own pond.

5. A recession doesn’t mean ‘no’ buying: Sometimes when you watch the news, you get the feeling that absolutely no one is working or buying anything. The fact is people are still buying. People are just buying less and what they do buy tends to provide better value. Value also doesn’t necessarily mean lowest price. A well made $175 suitcase can be more valuable than a $50 mass department store suitcase if you end up having a frustrating travel experience and need to replace the $50 suitcase every year. Also, there is still demand for outstanding quality and service. That has always been the case and most likely will continue. If you strive to provide the best available product or service, there will be a market for it.

In the end, many people have ideas for starting a business and there are no shortages of excuses to procrastinate. We can’t let our fears overcome that entrepreneurial spirit. The stats of actual successful businesses can be scary. I’ve read that 95% fail within 5 years. However, the 5% that succeeded would not have happened if they sat back and decided not to start their business. Take lessons from this recession to focus on running your business smartly, providing outstanding service and fulfill your brand promise. There is no such thing as a perfect time to start a business because we can’t control tomorrow. That perfect time is now.

For those unfamiliar with Disney Vacation Club, basically it is a timeshare offered by Disney. You are buying points/membership into the vacation club that translate into vacation stays. A lot of members hate the term timeshare because unlike most typical timeshares, Disney Vacation Club membership is quite flexible. You use your points almost like cash and can choose to stay at numerous Disney Vacation Club resorts. In addition, you can also stay at Disney resorts all around the world and hundreds of participating hotels and resorts around the world. You can even use your points to take Disney cruises and go on their adventure tours. The beauty of the point system is the incredible amount of flexibility. You are free to choose when you stay at a resort and do not have to commit to a specific week(s) of the year. Many of us know of people that bought timeshares for a specific week each year at the same resort. Most don’t stay at the vacation resort every year and work on trading their time shares with others in this predicament.

So you use your points like you would money. Rooms cost more points during peak seasons and larger rooms cost more points. So you manage your points to plan your vacation. To add to the flexibility, Disney even allows you to “bank” and “borrow” points. If you don’t use up your points in a year, you can “bank”  your points and roll them into the next year. If you don’t have enough points for your vacation, you can also “borrow” points from the next year. So technically, you could use three years worth of points in a given year.

While Disney Vacation gives you a lot of flexibility to use points outside of Disney, non vacation club locations are much less cost effective. Our family plans to vacation at Disney resorts for the most part so this works for us. They have numerous resorts across the country including:

• The Villas at Disney’s Grand California (California)
• Bay Lake Tower at Disney’s Contemporary Resort (Florida)
• Disney’s Saratoga Springs Resort & Spa (Florida)
• Disney’s Animal Kingdom Villas (Florida)
• The Villa’s at Disney’s Wilderness Lodge (Florida)
• Disney’s Boardwalk Villas (Florida)
• Disney’s Beach Club Villas (Florida)
• Disney’s Old Key West Resort (Florida)
• Disney’s Vero Beach Resort (Florida 2 hrs SE of Disneyworld)
• Disney’s Hilton Head Island Resort (South Carolina)
• Disney Hawaii Resort (Ko Olina, Hawaii coming 2011)

The resorts are mostly near Disneyworld with a few exceptions. There are also hundreds of non-Disney locations in case you get tired of Disney but equivalent room costs may be higher. However, if you are tired of the Disney experience and just want a weekend in San Francisco, the option is available.

So Disney Vacation Club is well run and incredibly flexible so what is the catch. Mainly, it comes down to cost. There is both an upfront cost and ongoing maintenance costs. A typical cost per point is around $100-$120. The best deals are often referrals. All you need is the members name, city and state to use them as a referral. This can save you $10-$20 per point. We ended up buying 240 points at the Villas at Disney’s Grand California. The cost per point was $88 per point which was the lowest cost per point at any resort at the time. The original non-referral cost was $112. So the total cost for 240 points totaled just over $21,000 and expire in 50 years. In addition, the annual maintenance cost is about $600 per year. Our 240 points is roughly equivelant to 2 weeks in a 1 bedroom suite with full kitchen. So for the price of a typical car, we have a couple weeks worth of vacations for the rest of our lives. If we planned carefully, stayed off resort and went during low peak times, we could probably go on 10 annual vacations for the cost of the Disney Vacation Club. So why did we choose to join Disney Vacation Club?

Originally, we lived in Colorado and took a weeks vacation to Disney World. Our daughter was five at the time and absolutely obsessed with princesses. We decided to splurge and make this a once-in-a-lifetime type of vacation. We stayed at the Polynesian Resort on their concierge level with a spectacular view of Cinderalla’s castle and marina. The room ended up costing nearly $700 per night so our 5 night stay was about $4000 with taxes. This is already 1/5 of the cost of our Disney Vacation Club membership. On our final day of vacation, we decided to inquire about DVC and went on a tour and learned all about it. We had such a wonderful time, we seriously thought of joining then. However, after getting back to Colorado, we just felt that we would not make it to Florida that often to make it worth while. Fast forward a year and a new job opportunity takes our family to Santa Barbara, California. We promised to take Ella to Disneyland on her 7th Birthday. This was another wonderful vacation. While Disney is expensive, they are incredible about details. We again attended a DVC tour and discovered, they were actively selling a brand new resort right here in California. The rooms were wonderful and since we only live a couple hours away, we would be much more likely to take advantage of our membership. We also learned that Disney was opening a resort in Hawaii. This was the clincher for us living on the West Coast.

With a seven year old daughter- VP Product Development & Testing for Jr. Luggage and a son on the way as we finalize our second adoption, we figured Disney would be a major part of our vacation plans for many years to come. Disney is amazing at catering to families. In addition, as a somewhat work-a-holic, this will force us to take more vacations. So in the end, the decision to join Disney Vacation Club made sense for us and our circumstances. Everyone has different circumstances but hopefully, this post helps shed some light on the mystery of Disney Vacation Club.

We’ve created this blog to share our product development efforts, business start-up adventures and provide articles and resources for all things family travel related. We hope you join us and feel welcome to contribute.