Addonitis - Considering Riviera Resale

[Brian Noble]

I think Disney had already realized it prior to Covid, but the pandemic probably convinced anyone who needed convincing.

I'm pretty sure that it dates at least to 9/11, if not before.

And to think: pandemics only represent one of so many risks out there!

Way back in the day---before fracking became a thing that drove the price of oil through the floor---Kevin Yee had an article at MiceAge that reported on a (claimed) Disney-internal study that asked the following question: At what price is oil (and hence air travel) so expensive that WDW is no longer a viable vacation destination? The number was a lot lower than you'd think. (But also pretty far from where we are now: $160/bbl in 2009 is about $250 today.)

But they also have to think if its so terrible some people will just stop paying...

But it's not a bit you flip. DVC Members have such a large sunk cost that they'd tough it out a lot longer than other random guests---especially as that cost becomes non-recoverable. Yes, there is a point at which even they balk, but that's farther out than when other guests stop coming in the same numbers. Plus, some of those Members will rent their points out for anything they can get, because something is better than nothing. We saw this during the Great Recession, when it was a fantastic time to be someone renting DVC stays.

 

[atthebeachclub]

But it's not a bit you flip. DVC Members have such a large sunk cost that they'd tough it out a lot longer than other random guests---especially as that cost becomes non-recoverable. Yes, there is a point at which even they balk, but that's farther out than when other guests stop coming in the same numbers. Plus, some of those Members will rent their points out for anything they can get, because something is better than nothing. We saw this during the Great Recession, when it was a fantastic time to be someone renting DVC stays.

You have to think people who financed might walk away sooner though. Less to lose! Plus if you've been a member for a year before financing, I am not even sure Disney reports you to a credit bureau. In this way, financing is less risky than paying outright for DVC. But you will pay for that if nothing goes wrong.

 

[Brian Noble]

It's not just a financial tie, it is also an emotional one.

 

[Sandisw]

But they also have to think if its so terrible some people will just stop paying...

There will always be people wanting to go to Disney so someone who doesn’t want to remain an owner is more likely to sell than let it be foreclosed on, especially if there is no loan on it.

So, that original buyer may want out, someone will come along and take it over.

 

[Girlstar30]

You have to think people who financed might walk away sooner though. Less to lose! Plus if you've been a member for a year before financing, I am not even sure Disney reports you to a credit bureau. In this way, financing is less risky than paying outright for DVC. But you will pay for that if nothing goes wrong.

I have a feeling most people finance and if theyre on a 15 year plan and a long ways out to it pay if off, I dont see why they'd keep it for long with problems