Any thoughts about being the last 25 years of BWV points?

[Orsino]

I'm split on this issue. They will likely have to continue some of the resorts at expiration, likely not OKW, HH or VB. But that doesn't mean that they will offer a deal to current members and if they do, it may not be a reasonable one. The OKW extension was a failure as far as getting members to extend. If they do offer an extension, they'd have to either make the same poor choices or do it significantly differently than at OKW. I've long held they should do so by combining an extension with a new retail purchase but this presents some challenges since the memberships are tied to the land lease as I read it.

OKW failed because it doesn't make financial sense to fork over money now (or 2000-whatever it was) for a room in 2042. If Disney enacts an extension, it would likely be much closer to the end of the contract, like 2040-ish. Also, if it happens, I expect it to be a short extension, like 3-5 years, just so Disney can kick the can down the road for some properties (not all). For example, Disney could sell extensions for BCV but not BWV, prep BWV for a whole new round of sales in 2042, and then sell BCV in 2044. SSR is the first non 2042 expiry right? And that expires in 2054? That's 12 years that Disney will want to bridge.

 

[Dean]

OKW failed because it doesn't make financial sense to fork over money now (or 2000-whatever it was) for a room in 2042. If Disney enacts an extension, it would likely be much closer to the end of the contract, like 2040-ish. Also, if it happens, I expect it to be a short extension, like 3-5 years, just so Disney can kick the can down the road for some properties (not all). For example, Disney could sell extensions for BCV but not BWV, prep BWV for a whole new round of sales in 2042, and then sell BCV in 2044. SSR is the first non 2042 expiry right? And that expires in 2054? That's 12 years that Disney will want to bridge.

I don't disagree with your thoughts on the reason for the failure. IMO they priced it too high even at the discounted rate of $15 pp. I also think the way they did it turned people off by suggesting they'd issue a special assessment which they don't have the right to do for this reason as I read the POS. IF they do an extension it'll need to be done differently. That could be much later or some other method. Part of the issue is to a degree, they've tied their own hands with the OKW offering. 3 yrs is too short though, 5 might be pushing it. If they do it they'll want a large % of participation.

 

[rg35]

It's possible the OKW extension was a failure because of the timing. In 2007, the 2042 expiration was still 35 years away. Who really is thinking about their situation that far in the future?

I feel like an extension <5 years away from expiry would make more sense. There is more urgency, people would need to decide about something that they are going to lose in the realtive short term.

 

[tjkraz]

It's possible the OKW extension was a failure because of the timing. In 2007, the 2042 expiration was still 35 years away. Who really is thinking about their situation that far in the future?

I feel like an extension <5 years away from expiry would make more sense. There is more urgency, people would need to decide about something that they are going to lose in the realtive short term.

There's no question that an extension would fare much better closer to the expiration. But at that stage, it's not even worth calling it an extension. Assuming Disney plans to continue operating the resort, it will be a full-blown reselling of the points. If current owners choose not to purchase again, their points will be sold to new buyers with a start date of 2/1/2042.

And the price will be whatever the prevailing rate is at that point in time, perhaps with some modest "buy now or pay more later" discount.

 

[Dtw002]

I was thinking that too, but a whole new resale would mean they plan on having that resort around another 50yrs - which I'm not sure Disney would sign up for considering the place will be 100yrs old by expiration.

Unless they do a small term resale (extension) which would necessitate a lower price. Now whether that would be offered to the public or current owners is up for grabs - but you could see where offering to the public would then canabolise selling new/long term/full price resorts.

 

[tjkraz]

I was thinking that too, but a whole new resale would mean they plan on having that resort around another 50yrs - which I'm not sure Disney would sign up for considering the place will be 100yrs old by expiration.

Problem with extensions is not everyone will extend, which (likely) leaves Disney holding millions of points with little marketability. Not many new buyers would be interested in purchasing a 15 year BoardWalk contract running from 2042 to 2057. And the prices DVC would have to offer would undercut other locations they're selling at 50 years.

If the age of the building is a concern, they could address it before/during the process of re-selling. Announce that the resort will close down for all of 2042 and undergo a complete restoration. Buyers would get 50-year contracts which begin in 2043, or whenever the building is projected to reopen.

I think the likelihood of any short-term extension gets smaller and smaller as we get closer to contract end dates.

 

[Dean]

It's possible the OKW extension was a failure because of the timing. In 2007, the 2042 expiration was still 35 years away. Who really is thinking about their situation that far in the future?

I feel like an extension <5 years away from expiry would make more sense. There is more urgency, people would need to decide about something that they are going to lose in the realtive short term.

It depends on the specifics. The OKW extension into the future at $15 a point was the rough equivalent of retail price retail. for an extra 15 years.

 

[dclpluto]

it would of been nice if they had what old key west did had them 15 extra years you could of bought at one time.

 

[Dtw002]

I actually think a shorter contract at a lower price would sell well. Two biggest downsides to DVC is the high price and long length. A shorter/cheaper contract might pull in a different demographic that do not want to pay dues for 50 years or rely on the resale market staying strong.

 

[zemra406]

I bought BCV last year. I actually liked that I was only committed to 25 years and the financials still made sense. I do wish the market discounted the shorter duration (easier on the wallet!) but the fact that it doesn't speaks to the demand at these resorts.

 

[ScubaCat]

Problem with extensions is not everyone will extend, which (likely) leaves Disney holding millions of points with little marketability

Fair point, but the marketability part is debatable. I think the resorts adjacent to theme parks are just much, much more popular. BCV and BWV will sell much faster than OKW. Current resale (and direct, for that matter) prices as well as contract turnover time are evidence of that.

IMHO it would make more sense to simply sell new deeds starting after the expiration, possibly with a discount to existing owners. That way all the current deeds will be terminated and there will be no gray area like there is at OKW (meaning people who did not extend but also did not sign the quit claim deed for the last 15 years)

 

[Dean]

Fair point, but the marketability part is debatable. I think the resorts adjacent to theme parks are just much, much more popular. BCV and BWV will sell much faster than OKW. Current resale (and direct, for that matter) prices as well as contract turnover time are evidence of that.

IMHO it would make more sense to simply sell new deeds starting after the expiration, possibly with a discount to existing owners. That way all the current deeds will be terminated and there will be no gray area like there is at OKW (meaning people who did not extend but also did not sign the quit claim deed for the last 15 years)

They are certainly going to have a dilemma with the different ending dates and needing critical mass to support the system infrastructure. I suspect what they'll do depends in large part on their long term plan for the system as a whole. They make much more money on selling than they do on management but obviously they are additive and different arms. IMO the OKW extension was over priced at $15, I judged the real value at the time to be at most around $8 pp but obviously that's a moving target as prices fluctuate and the end draws closer. I suspect they'll cut HH & VB lose at 2042 but we'll see. Focusing on the 2042 resorts since they'll be the first to come up and the larger difference between then and the other endings, it does make sense they'd want to extend in some way OR to RAZE and sell new.

But that's where the problems start and to a degree one would have to look at each individually.

• OWK ends now 2057 but by reports well over half will be owned by DVD in 2042 based on current info, likely right around half by the time it transitions unless they offer some additional extension options later.
• BRV (VWL) will have the other resort next door with a later ending date. Of all it makes the most sense to extend to the same date.
• BCV & BWV are attached to hotels that presumably will be still going strong and are in some of the best locations.

Part of my premise is they tied their hands with the OKW extension. Obviously they could do almost anything they wanted in this area but realistically they can't do something anytime soon that those who extended would see as a lot better deal than what was offered to them back when. So they've got to either do it very late or totally differently. One of the problems, and the one that they were up against with OKW, was that the RTU was legally tied to the land lease so they can't extend any without extending all. I seriously doubt they'll take them back and try to sell just 15 years worth and I don't think they could legally enforce a SA or one to sign as they tried with OKW. I am sure they don't want to have all of that inventory to sell "used" at one time anyway. They could take them back, do a full rehab or even RAZE them and sell as new and do them one at a time or even some combo. Realistically if they just extended for free and keep the system going would be worth it to DVCMC/DVD but I'm sure they'll be more greedy than that.

 

[tjkraz]

Fair point, but the marketability part is debatable. I think the resorts adjacent to theme parks are just much, much more popular. BCV and BWV will sell much faster than OKW. Current resale (and direct, for that matter) prices as well as contract turnover time are evidence of that.

No question BCV and BWV hold more mass appeal than OKW. Still, no matter the resort, there will be thousands of owners who refuse to extend. We have some BWV points and will be in our 70s when 2042 rolls around.

As Dean implied, the present value of the OKW extension offer back in 2007 was only about $8 per point while DVC was charging $15 (then later $25.) DVC was asking owners to purchase an asset they couldn't use for another 35 years. Owners likely would have been better off investing that money for 35 years and using proceeds toward a short-term contract purchase in '42.

The closer we get to the end date, higher their asking price will be. They aren't going to come to owners in 2040 with a 15-year extension at $15 per point.

In the case of OKW, when 2042 rolls around DVC will recover millions of points which are only valid for 15 years. Entirely different situation than the current trickle of ROFR and foreclosure points. Not sure how they market those points to buyers without undercutting price / demand on whatever 50-year "new" property is also being sold at the time.

 

[ScubaCat]

No question BCV and BWV hold more mass appeal than OKW. Still, no matter the resort, there will be thousands of owners who refuse to extend. We have some BWV points and will be in our 70s when 2042 rolls around.

Right, assuming they're even alive to do so. A good chunk of current owners won't be around in 2042, myself included (although I hope so... I'm not THAT old yet, I don't think?!) That's why I figured they'll simply sell new deeds and offer a discount to anyone who owns on 1/31/2042.

The "extension" concept clearly didn't work very well with OKW. Letting the current ground lease expire and starting over would also give them the ability to re-declare the condo association, including all the changes and updates (aka "close loopholes and address things that were overlooked the first time around") they've made over the years.

 

[kniquy]

If current owners choose not to purchase again, their points will be sold to new buyers with a start date of 2/1/2042.

And the price will be whatever the prevailing rate is at that point in time, perhaps with some modest "buy now or pay more later" discount.

This sounds like the most realistic method for dealing with the 2042 expiration. Push people towards the end of their contracts, offer a discount to re-purchase their points or to pre-purchase a totally new contract at a discounted rate of $250 per point compared to $300 for new sales.

I wonder if this sort of scenario would actually drive a resale market for those who want out and those who want in and possibly able to buy a new contract (50 years) at a better price then what the "new" resort would be sold at.

All very speculative but it will be interesting to see how this all plays out. It seems that timeshares make too much sense for the company who owns them to then just give it up and have the hotel revert back to disney -- or whomever it would be handed to.

 

[kniquy]

A good chunk of current owners won't be around in 2042

for those who are too old or no longer around to use their contract there will always be family who inherits it or a resale market to sell it on. I guess it is just a revolving door.

There is always someone selling and always someone looking to buy. It is amazing to actually see the number of poly contracts already being sold and it has only been around a couple of years.

 

[Dean]

This sounds like the most realistic method for dealing with the 2042 expiration. Push people towards the end of their contracts, offer a discount to re-purchase their points or to pre-purchase a totally new contract at a discounted rate of $250 per point compared to $300 for new sales.

I wonder if this sort of scenario would actually drive a resale market for those who want out and those who want in and possibly able to buy a new contract (50 years) at a better price then what the "new" resort would be sold at.

All very speculative but it will be interesting to see how this all plays out. It seems that timeshares make too much sense for the company who owns them to then just give it up and have the hotel revert back to disney -- or whomever it would be handed to.

I don't think just revolving the timeshare with a new 25, 30 or 50 years is going to be feasibly with some type of investment. I don't think they can put a major facelift on the expiring owners though I'm sure they'd like to. They'll either have to discount significantly or they'll have to have a fairly decent capital investment possibly both.

for those who are too old or no longer around to use their contract there will always be family who inherits it or a resale market to sell it on. I guess it is just a revolving door.

There is always someone selling and always someone looking to buy. It is amazing to actually see the number of poly contracts already being sold and it has only been around a couple of years.

Someone will own late in the course but some will be counting on the expiration.

 

[jasonv1]

I'm almost 43, a 2042 resort is fine for me (VWL). I got a fair price back when I bought in 2013 (resale), but even then when I ran the numbers there were savings to be had. If 2042 hits and I'm still up for the park I'll buy some SSR, which should be really cheap by then.

Think of it this way, what is the difference between a 50 year resort at $180 a point, and a resort with 25 years left for $90 resale? Yes I realize perks and maintenance fees factor into things, but even then the cost per point per year is awfully close. There are plenty of resorts available resale for less than $90 a point too.

Eventually the 2042 resort resale prices will start to trend down, but the popularity of Marvel, Star Wars, and Avatar land are putting that off for 5 years at the minimum because room prices aren't going down any time soon.

If a Disney recession hits I suspect the resale price of all resorts will be impacted equally, so even then the 2042 folks won't be any worse off.

 

[Beca]

At some point, prices will go down, but I am still waiting for that to happen. We've owned at BCV for 13 years, and availability is getting harder. And, it is not just because of the number of DVC members. Availability during the 7-11 timeframe is getting more difficult. I really think it is because when we first purchased there, a lot of the members who owned there only did so because that was what WDW was selling at the time they wanted to buy. I think many of those members have sold their contracts over the years, and have been replaced with members who have purchased "where they want to stay".

 

[KAT4DISNEY]

At some point, prices will go down, but I am still waiting for that to happen. We've owned at BCV for 13 years, and availability is getting harder. And, it is not just because of the number of DVC members. Availability during the 7-11 timeframe is getting more difficult. I really think it is because when we first purchased there, a lot of the members who owned there only did so because that was what WDW was selling at the time they wanted to buy. I think many of those members have sold their contracts over the years, and have been replaced with members who have purchased "where they want to stay".

A good point. People buying resale have all the options and with the more expensive resorts are going to buy there because that's where they usually want to stay.