11 month home resort booking advantage, how important is it?

[jerseyduke]

Shafted, no. But the quality of the surroundings, dues for the remaining buildings in the association, etc. might decline (in the case of dues, quality decline = OW WENT UP). Hard to say how they deal with returning some of the property but not all, because the contractual ownership interests likely span many buildings.

I think you buy OKW right now because you love OKW and are okay if the contract becomes essentially worthless in 2042, regardless of end date. Right now, 2057 contracts don't seem to be commanding premium pricing in resale. I'm seeing $75-95/point, and while the 2057 contracts are sitting on the high end of that, there are 2042 contracts asking more. Not sure any of them are getting it, particularly as at least one of the higher price contracts is stripped into 2017.

It is a totally valid point, and something people should be cognizant of.

I think OKW will be going strong in 2057. Population projects are for the US population to increase by 50 million people by 2040. Disney is going to need more rooms, not less!

Unless of course the zombies come....

Disney also has another unique aspect with their lodging; tradition and nostalgia. With DVC, and families going every year, every other year, etc, all the children who "grew up going to OKW" will romanticize it. I know I do that to the Poly. The resorts get fan bases like they are a sports team! I would not be surprised if by 2050, there were not literally tens of thousands of people that would be outraged if they tore OKW down (or any other resort for that matter)

So, now I am totally off topic...

But it is an interesting "what if" discussion

 

[jerseyduke]

Seems to me that the dues would be a big question mark for OKW as 2042 approaches. How will Disney choose to deal with those? It doesn't seem right that 2042 owners should contribute equally to capital reserves and the like if their participation will end while others continue on for an additional 15 years.

Do DVC resort owners have an obligation to turn over like new" resorts when time runs out?

Also a very good question!!! Really for any resort.

My guess is they get prorated.

For example, if a roof is good for 30 years, over 50 years, you pay for a full one. then over the last 20 years pay for 2/3 of one. After all you have used that 2nd room for 2/3 of its projected life. But who knows. And certainly an interesting question.

 

[Dean]

Scare you how? (Not arguing, just asking, since you are very knowledgeable)

I was just throwing it out there since it is another longer term option. IF you see an extended one.

I mean, I know the whole thing is sort of a mess, but if you have, or buy a 2057 OKW contract, are you at risk? Whatever happens in 2042, I would think that people with 2057 contracts would go on for another 15 years as if nothing has happened, or am I missing something?

It offers risk and negative potential. Based on reports it appears only about 25% of members extended if that, I'm guessing it's up to about 25% after the ROFR and resales but the number is unimportant unless it's VERY high. Obviously there are a lot of variables that we don't know and won't for many years. Will they reduce the size of the resort, will they resale later, will they take over and use for college housing like they did formerly with THV, how will dues fare long term with the inherently higher upkeep costs compared to say SSR and I'm sure there are others we could put on the list. It might be fine but it might not be and the remaining members there will have to pay whatever it is. So my position is it creates risk that's generally avoidable. Is the risk worth it, IMO no unless a 2057 were cheaper over the life of the contract compared to SSR accounting for inflation long term as well. To a degree the entire system has similar but somewhat lower risks after 2042 IMO. Will DVC be able to reduce staff and overhead after the 2042 resorts go away or will they need to with extensions & expansion?

 

[Dean]

Also a very good question!!! Really for any resort.

My guess is they get prorated.

For example, if a roof is good for 30 years, over 50 years, you pay for a full one. then over the last 20 years pay for 2/3 of one. After all you have used that 2nd room for 2/3 of its projected life. But who knows. And certainly an interesting question.

Many possibilities here as well, there simply aren't enough points to go around for everyone to get full 2041 points. They could get prorated but so would the points, they could have a lottery, they could just do a free for all, they could do voluntary opt out, etc. My guess is 2040 will be the last regular points awarded and some combination of the other options for 2041 with stopping of banking the last 3-4 years and borrowing the last year or 2. Time will tell, I'm guessing we'll have a much more clear picture by around 2035 or 36.

 

[CarolMN]

Many possibilities here as well, there simply aren't enough points to go around for everyone to get full 2041 points. They could get prorated but so would the points, they could have a lottery, they could just do a free for all, they could do voluntary opt out, etc. My guess is 2040 will be the last regular points awarded and some combination of the other options for 2041 with stopping of banking the last 3-4 years and borrowing the last year or 2. Time will tell, I'm guessing we'll have a much more clear picture by around 2035 or 36.

Sounds like you are thinking about the points for the last few years. Jerseyduke and I were talking about annual dues - although, I suppose they are related.

 

[Dean]

Sounds like you are thinking about the points for the last few years. Jerseyduke and I were talking about annual dues - although, I suppose they are related.

Both, I do think or at least hope they are related. I'm sure hoping members don't have to pay THEN full dues and not to get full points both. I'd venture that if you get the full points you'll pay the full dues though hopefully the full dues will be reduced because of the lack of need to upkeep late in the game. So speaking only for dues I think there are 2 components, how many points you actually get and the reduced need for upkeep late. The timeframe related to upkeep should start to diminish in the lat 5-7 years depending on where they are in the refurbishment cycle. My guess is they'll do a major and complete refurbishment about 5-6 years out hoping they can get the members to pay for it but have the benefits carry over to after the RTU expiration. Anything later and they risk legal action alleging they are getting members to pay for something that Disney benefits from. I'd say another possibility is a major hard refurbishment about 8-10 years out with a soft refurbishment about 4 years out. I think this creates an additional risk for OKW and other extended resorts, that one will have to pay full dues through the full RTU cycle. I'm guessing that's somewhere around $10 a point total difference in todays dollars over the last few years.