What will happen when BWV expires?

ziravan · Jul 4, 2015

I bought my 2042 BCV points under the assumption that there would be a mechanism to extend. I believe that.

If I'm wrong, I'll be 74 years old in 2042 with more than 2 and a half decades of Disney vacations under my belt (and another 2.5 decades of PVB points remaining). I'll survive.

I wouldn't let a 2042 expiration greatly influence my purchasing decision. In fact, I didnt.

Dean · Jul 4, 2015

ziravan said:
I doubt very seriously that any of the 2042 resorts will close in 2042. In the case of VWL, BCV, and BWV, it seems the plan is to revamp the resort and sell more points that extend the resorts out another 25 or so years and then offer extensions and/or reclaim points in the out years.

I've thought about this and posted on it quite a bit. I think DVC will issue a special assessment based on the cost of the extended ground lease and assess it as either part of a voluntary extension or as a lien against resale.

4 options after 2042:

1. Owner holds "new" points with an ~2070 end date.
2. Owner pays a fee to voluntarily extend to 2070. This might involve a variety of carrots and sticks.
3. Owner sells as 2042 approaches and the resale triggers the lien and DVC gets paid for the extension and the new owner gets 2070 points.
4. Owner turns over 2042 points to DVC at end of contract and DVC resells as 2070 points.

Since option 4 involves owner losing all value and option 3 involves transferring some value and the cost of extension to new owners, very few people will exercise option 4. DVC isn't going to be stuck with many points.

This will extend the resorts, make DVC money on new owners, money on extending current owners, and money on forcibly extended resale owners without alienating current owners into a mandatory extension.

Money, money, money. That's the mouse way.

This is how DVC will make a new boatload of money every 25 years or so on each resort. Under this scenario, there is no worries on how to close a resort; the contracts are essentially renewably perpetual.

Regardless of the end date, this is an issue at the end of the RTU that must be dealt with. I haven't seen anything that would suggest they have a specific plan for extension or the end point. If they extend, one can bet they'll do it differently than they did with OKW but in such a way to minimize any complaints from OKW owners.

Dean · Jul 4, 2015

ziravan said:
I wouldn't let a 2042 expiration greatly influence my purchasing decision. In fact, I didnt.

I wouldn't let it determine which resort to buy but I would let it determine the price paid and fee projections to a degree.

SpaceMountain77 · Jul 4, 2015

I, too, agree that it is not a matter purchasing based on speculation of what will happen in 2042, but, rather, is the price fair given the contract duration.

It is important to remember that DVC is just one division of The Walt Disney Company, which is a multinational mass media and entertainment conglomerate. TWDC may own its North American parks, but it licenses or owns a minority stake of its other parks. Licensing the North American parks has been discussed in the past and, most recently, just a few years ago under Iger.

DVC purchase and add-on decisions should be based on one's financial situation and vacationing needs, not speculation on the potential decision making of a segment of a conglomerate. The CEO of TWDC is responsible to its shareholders, not families that enjoy vacationing at its resorts. If one truly wants to engage in fruitless speculation, attention would best be directed at the future of the Walt Disney World resort.

ziravan · Jul 4, 2015

SpaceMountain77 said:
I, too, agree that it is not a matter purchasing based on speculation of what will happen in 2042, but, rather, is the price fair given the contract duration.

It is important to remember that DVC is just one division of The Walt Disney Company, which is a multinational mass media and entertainment conglomerate. TWDC may own its North American parks, but it licenses or owns a minority stake of its other parks. Licensing the North American parks has been discussed in the past and, most recently, just a few years ago under Iger.

DVC purchase and add-on decisions should be based on one's financial situation and vacationing needs, not speculation on the potential decision making of a segment of a conglomerate. The CEO of TWDC is responsible to its shareholders, not families that enjoy vacationing at its resorts. If one truly wants to engage in fruitless speculation, attention would best be directed at the future of the Walt Disney World resort.

Disney is responsible to its shareholders and THAT is why they've gone all in on DVC. They haven't done so to give me great vacations. They've done so because it's been a cash printing press for them to do so.

It will keep the printing presses going to continue.

If you owned a restaurant where the lines are around the corner every night no matter how much you raise your prices, would you shut it down?

It's not going that far out on a limb to say that there is no way in heck the 2042 resorts will close in 2042. I'm not saying that because I think DVC is sentimental towards me and my vacations.

I'm saying that because I know that DVC is responsible to its shareholders. Closing those resorts or ending their DVC relationship in 2042 would be financial malpractice.

Plus, the writings on the wall. The outlines of their plans for the future of the 2042 resorts is going on right now at VWL. We won't have to wait decades to know the plan.

Dean · Jul 4, 2015

ziravan said:
Disney is responsible to its shareholders and THAT is why they've gone all in on DVC. They haven't done so to give me great vacations. They've done so because it's been a cash printing press for them to do so.

It will keep the printing presses going to continue.

If you owned a restaurant where the lines are around the corner every night no matter how much you raise your prices, would you shut it down?

It's not going that far out on a limb to say that there is no way in heck the 2042 resorts will close in 2042. I'm not saying that because I think DVC is sentimental towards me and my vacations.

I'm saying that because I know that DVC is responsible to its shareholders. Closing those resorts or ending their DVC relationship in 2042 would be financial malpractice.

Plus, the writings on the wall. The outlines of their plans for the future of the 2042 resorts is going on right now at VWL. We won't have to wait decades to know the plan.

IMO this is far too complicated an issue for any of us to assume what DVC will do. Obviously they will make a business decision that includes both the specifics of each resort and the need for critical mass for the DVC infrastructure as well as the legalities of fitting in with how thing were done at OKW (poorly and not within the rules IMO). While I'm sure they discuss this issue periodically, I doubt DVD has made any specific plans or has a specific decision in mind at this point. I think it's unlikely VB and HH will be extended, I'd say it's about 50/50 for the WDW 2042 resorts. If they extend, they'll likely do it either very late in the course and/or they'll do it much differently than OKW was done. Then there's the question of whether it's financially reasonable to continue to participate in 27 yrs, it may or may not be.

ziravan · Jul 4, 2015

Dean said:
IMO this is far too complicated an issue for any of us to assume what DVC will do. Obviously they will make a business decision that includes both the specifics of each resort and the need for critical mass for the DVC infrastructure as well as the legalities of fitting in with how thing were done at OKW (poorly and not within the rules IMO). While I'm sure they discuss this issue periodically, I doubt DVD has made any specific plans or has a specific decision in mind at this point. I think it's unlikely VB and HH will be extended, I'd say it's about 50/50 for the WDW 2042 resorts. If they extend, they'll likely do it either very late in the course and/or they'll do it much differently than OKW was done. Then there's the question of whether it's financially reasonable to continue to participate in 27 yrs, it may or may not be.

My bet is that they have thought things through, they've made a decision on how to proceed, and the current work at VWL is the result (along with rumored move to BCV and BWV in due time).

They can't wait any longer to put a plan in place. In 10 years or so, as 2042 points start to dwindle, the resale market for those points will dry up.

DVC cannot afford the kind of hit to the resale market that will bring. DVC markets itself as being completely different from other timeshare and its vibrant resale market is an essential part of that equation.

I think they realize that the OKW extension was a bust and they need a different plan. The expansion at VWL is that plan.

chalee94 · Jul 4, 2015

ziravan said:
DVC cannot afford the kind of hit to the resale market that will bring.

disagree. other timeshares have long continued selling direct even when their resales were worthless.

DVC markets itself as being completely different from other timeshare and its vibrant resale market is an essential part of that equation.

disagree again. the group of people on this website are aware of resale value as a benefit of DVC but i don't believe i have ever seen DVC themselves market resale values as a plus of the program. DVC - like all other timeshares - prefers not to talk about resale when marketing their timeshare as it is counter-productive to selling directly. when they do talk about resales, it's just to make it sound like too much trouble (or of lesser value since you don't get all the "benefits") and to steer the buyer back to paying direct prices.

there are a lot of knuckleheads out there who will drop tens of thousands of dollars on a timeshare and never ask themselves, "what happens if my circumstances change and i need to sell?"

(and i can also go back and pull the quote from the article when DVC first applied restrictions to resale owners when the DVC spokesperson supported the change with the reasoning: "well, other timeshares do it, so why shouldn't we?" disney is different, but not as different as they used to be - and i know dean will argue that they never were really that different in the first place.)

The expansion at VWL is that plan.

this will be worth watching. after the debacle at OKW, i am not optimistic that disney management has carefully thought things through.

SpaceMountain77 · Jul 4, 2015

ziravan said:
I bought my 2042 BCV points under the assumption that there would be a mechanism to extend. I believe that.

One should never enter into a binding contract with the expectation of an undefined term.

I sincerely hope that individuals are not purchasing and adding VB and HHI contracts with the same expectation. If they are, then these individuals will be greatly disappointed if the resorts are put on the market and sold.

Dean · Jul 4, 2015

ziravan said:
My bet is that they have thought things through, they've made a decision on how to proceed, and the current work at VWL is the result (along with rumored move to BCV and BWV in due time).

They can't wait any longer to put a plan in place. In 10 years or so, as 2042 points start to dwindle, the resale market for those points will dry up.

DVC cannot afford the kind of hit to the resale market that will bring. DVC markets itself as being completely different from other timeshare and its vibrant resale market is an essential part of that equation.

I think they realize that the OKW extension was a bust and they need a different plan. The expansion at VWL is that plan.

They'd be foolish to finalize plans now unless they were going to proceed soon. I think it's unlikely they have a plan in place though it's very likely they have a list of scenarios and a framework with a what if set of options. Certainly DVC can afford a hit on resale prices, they can afford it if they go to zero like some are now but they would have to make some adjustments if this happened. VERY few people go in knowing or thinking about resale but some do. All they really have to do is make the resale unappealing enough, not to prop up the price, even for the ones that are aware of those options. As for VWL, we really don't know how it'll unfold. I think it's very likely they'll make the VWL expansion (if it happens) a new and legally separate resort which does not force them to figure out an extension for the current setup but we'll see. They should have made THV separate as well. As I've said many times, the perfect extension option is to tie it to a retail purchase.

valentinasdad · Jul 5, 2015

They cant let all the resorts with 2042 dates expire. It wouldnt make sense. With that said they wont keep them all either. But with the okw extension that hurts the others because okw will be staying for sure. Plus i am sure they are planning on adding new resorts in the next 25yrs. They will have to get rid of some old to bring in some new

Dean · Jul 5, 2015

valentinasdad said:
They cant let all the resorts with 2042 dates expire. It wouldnt make sense. With that said they wont keep them all either. But with the okw extension that hurts the others because okw will be staying for sure. Plus i am sure they are planning on adding new resorts in the next 25yrs. They will have to get rid of some old to bring in some new

Sure they can even if they want to continue the resorts. They could let them expire and resell them or they could RAZE them and rebuild and then sell new. Actually only part of OKW would have to stay as it stands right now. IMO it'd be scary to own there as a 2057 owner as dues might go a lot higher.

BeachClub2014 · Jul 5, 2015

Obviously nobody knows what will happen at this point. We have a badly managed try at "extending" existing contracts at OKW. One would hope that DVC management learned a lot of lessons there. I think DVC will actually address each resort individually, as each resort really has their own "circumstances". For instance, I could see DVC just letting BCV "expire" in 2042 and re-sell all of the points anew. There is such a demand for BCV that it would certainly make for a larger return to sell the points as a "new" offering. Why short-change your ROI by just extending to current owners? I don't see that same strategy working at BWV. It is much larger and doesn't seem to be as "hot" a commodity on the resale market as BCV.

valentinasdad · Jul 5, 2015

I think Boardwalk could be so much better. That is a great location. If they improve the pool and possibly better options for restaurants that would atleast for me spark more of a desire.

BeachClub2014 · Jul 5, 2015

....of course, having said that, I should say that I just bought a 200 point BWV resale contract. I got what I believe to be a good deal, and think the resort will continue to hold value over the long term. 2042 doesn't worry me at this point.

BeachClub2014 · Jul 5, 2015

valentinasdad said:
I think Boardwalk could be so much better. That is a great location. If they improve the pool and possibly better options for restaurants that would atleast for me spark more of a desire.

I definitely agree with you on this.

DougEMG · Jul 7, 2015

Is there anything stopping DVC from allowing the current banking and booking options to continue even once a resort contract has expired. For example with BWV expiring in 2042, what is stopping them from allowing an owner to bank their points into 2043. I think it is safe to assume that even if an owner isn't booking into BWV into 2042, someone else will be.

supersnoop · Jul 7, 2015

DougEMG said:
Is there anything stopping DVC from allowing the current banking and booking options to continue even once a resort contract has expired. For example with BWV expiring in 2042, what is stopping them from allowing an owner to bank their points into 2043. I think it is safe to assume that even if an owner isn't booking into BWV into 2042, someone else will be.

I'm pretty sure your membership would cease when the term expires. Any BWV points would be invalid and worthless at that point.

ziravan · Jul 7, 2015

I just don't see DVC telling tens of thousands of owners that it was nice doing business with you, have a nice life...

DVC will almost certainly extend the life of those resorts, and they will almost certainly tap current owners as their preferential market.

Dean · Jul 7, 2015

DougEMG said:
Is there anything stopping DVC from allowing the current banking and booking options to continue even once a resort contract has expired. For example with BWV expiring in 2042, what is stopping them from allowing an owner to bank their points into 2043. I think it is safe to assume that even if an owner isn't booking into BWV into 2042, someone else will be.

They could but unlikely. It's not like Disney to give free benefits with no benefit to themselves. Plus they'll want finality one way or another as they should. I also think it's optimistic to assume the resort will be open and functional, it's certainly not a given.

What will happen when BWV expires?

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