BCV and BWV may have reached peak value

[havoc315]

There are a couple of things about DVC that are very odd compared to other timeshares, and the Studio under-pointing is one of them. (The other is the lockoff premium).

Either way, I did not get into timesharing to stay in a glorified hotel room. I

This sentence reflects a change in DVC as it evolved..
Is it a "luxury product" -- A way for people to get elevated vacations at a premium. And this really was how DVC started -- Large rooms and resort with extra amenities over a regular hotel, the original DVC.. Buy DVC because it is offering something you can't get in a regular hotel.

Or is it a money-savings vehicle for the masses -- Save money on annual/frequent trips to Disney. Stay in "deluxe" for the price of AOA.

And as DVC has grown, it has largely evolved into the latter. Even the GFV expansion, with 200 regular resort rooms -- It's "get the luxury of the GFV at the prices of a Disney mod hotel."

 

[Brian Noble]

And this really was how DVC started -- Large rooms and resort with extra amenities over a regular hotel, the original DVC..

It was in a way. OKW is the resort that is the "most like" other top-tier Orlando-area timeshares. It has large well-appointed rooms, full-sized appliances, and spacious balconies. The rooms are designed so that even though there are mutiple units per floor, there aren't too many places where you are peering into your neighbor's room---and this means the footprint of the buildings is a little larger. The early marketing message was "Home away from Home." The model seemed to be that a couple would probably have a 1BR most of the time, and a family would book a 2BR. You could stay in a split-off studio if you needed to stretch points, but I'm not sure they were marketed as a destination, particularly given the 210-point minimum in the early days.

But it still had under-pointed studios; DVC's original sin as it were.

The "2nd generation" resorts (BCV, BWV, SSR, and VWL) all seemed to be designed after someone in DVD quickly figured out that no one really cares all that much about the room, they just want a place to sleep. The living rooms are far too small in the 2BR configuration. Apartment-sized fridge without an ice maker (my personal pet peeve). Dining tables that comfortably seat maybe three people. Maybe. Balconies that approximate a postage stamp. Viewed strictly as timeshare units, the 2nd gen resorts were arguably inferior to most of the good-and-better timeshares in Orlando.

And people ate it up.

From where I sit it seems as though DVD pivoted to meet what was there all along, giving up (maybe too soon?) on the idea of the timeshare product being something truly different.

 

[havoc315]

From where I sit it seems as though DVD pivoted to meet what was there all along, giving up (maybe too soon?) on the idea of the timeshare product being something truly different.

They didn't totally give it up. They just tried to have their cake and eat it too.

They have done plenty of "small cheap rooms for the masses" -- Converting regular hotel space to mostly studios -- CCV, Poly, GFV...

But they have also still tried to put forth some products for those that want "more" -- The CCV cabins, the Poly Bungalows.
Riviera, as an entire resort, feels like a bit of both -- Overall larger rooms, lots of large 1 and 2 BR units.

But here is the thing -- The way the pricing works with undervalued studios -- Those that see is as a discounted hotel, truly get a pretty nice discount. Those that see it as "home away from home", larger-unit living, they are paying a premium, without much in terms of savings.

So in that sense, in a lot of ways, Disney is successfully simultaneously selling 2 completely different products at the same time:
At the same time, they are selling, "Save money by purchasing your hotel rooms decades in advance!"
And at the same time, "Buy a home away from home, a premium experience! (not a discounted product)"

Two almost entirely different products, but sold as one product. It's kinda ingenious.

 

[Brian Noble]

"Buy a home away from home, a premium experience! (not a discounted product)"

This brings me back to my question from earlier today though:

whether or not DVC ownership makes sense at all for someone who wants to stay in 1BRs most of the time.

The basic value proposition for a timeshare is that the customer commits in advance to vacationing regularly in lodging built by the developer, taking on some increased risk of future changes. In exchange the developer gives a discount on that lodging. If I'm not getting a discount, why would I take on the reduced flexibility and increased risk of ownership when I can instead just pay cash for what I want, when I want it---including on vacations other than DVC?

I suppose if this form of lodging were exclusive and owning were the only way of staying there, that might be the argument. But, at WDW that's called "Golden Oak." (And even those might be on VRBO; I confess I've never checked.)

If the point values had been better balanced from the beginning---and more in line with what other timeshare developers do---they could generate the same ROI on the overall development, sell pre-paid hotel rooms at a (less generous but still compelling) discount, and provide a decent value proposition to the home-away-from-home buyer.

Take Marriott's Grande Vista as an example. There, the studios cost a shade under 74% of what a 1BR costs ("my" week: 1275 pts. vs. 1725). That ratio is almost identical to how Disney prices the rooms at e.g. OKW at rack ($4,014 vs. $5,433 for "my" week, or just a shade under 74%).

Having the points values so far off that (just under 1:2 instead of 3:4) is a head-scratcher for me. I guess that's okay at the end of the day, because I can rent what I want when I want rather than buy-in-bulk at no discount.

 

[havoc315]

This brings me back to my question from earlier today though:



The basic value proposition for a timeshare is that the customer commits in advance to vacationing regularly in lodging built by the developer, taking on some increased risk of future changes. In exchange the developer gives a discount on that lodging. If I'm not getting a discount, why would I take on the reduced flexibility and increased risk of ownership when I can instead just pay cash for what I want, when I want it---including on vacations other than DVC?

I suppose if this form of lodging were exclusive and owning were the only way of staying there,

Ahhh, but you do need to own there to stay there. Sure, you could get SIMILAR lodging. But it's not that easy to book a BLT Grand Villa or a CCV Cabin as a cash room. Sure, you could get an off-site condo. Sometimes those rooms may be available as a cash rental, but not reliably. For example, I just checked cash availability of Poly bungalows for next Memorial day week (about 11 months away), and there were no cash bungalows available.

Same with 1 and 2 BRs... there tends to be very limited cash availability. So it is a somewhat unique and semi-exclusive lodging.

that might be the argument. But, at WDW that's called "Golden Oak." (And even those might be on VRBO; I confess I've never checked.)

If the point values had been better balanced from the beginning---

The effect is speculative. A better balance may have hurt overall sales, as it would result in smaller discounts for studio-users, who are the bulk of buyers.

Which will generate more sales:
1 -- Studio users, you can save up to 40%! Large-unit users, you may save up to 10%!
Or
2 -- Studio users and large unit users, you can all save 20-25%!

I don't know the answer. But Disney seems to think #1 is more profitable.

and more in line with what other timeshare developers do---they could generate the same ROI on the overall development, sell pre-paid hotel rooms at a (less generous but still compelling) discount, and provide a decent value proposition to the home-away-from-home buyer.

Take Marriott's Grande Vista as an example. There, the studios cost a shade under 74% of what a 1BR costs ("my" week: 1275 pts. vs. 1725). That ratio is almost identical to how Disney prices the rooms at e.g. OKW at rack ($4,014 vs. $5,433 for "my" week, or just a shade under 74%).

Having the points values so far off that (just under 1:2 instead of 3:4) is a head-scratcher for me.

I am with you in my distaste for it. From many angles, it is illogical. But it is entirely logical from one angle-- To be able to offer the biggest possible discount on the smallest rooms. And thus, attract the largest mass of potential buyers.

I guess that's okay at the end of the day, because I can rent what I want when I want rather than buy-in-bulk at no discount.

 

[Brian Noble]

Same with 1 and 2 BRs... there tends to be very limited cash availability.

Right now, for "my" '23 week, I can get a 1BR at the following from Disney for cash, just over 8 months prior to check-in--before non-home resort owners can book them in DVC:

SSR (both views)
OKW
RIV (both views)
BLT (lake)
Kidani (std. and sav.)
Jambo (all views)
BCV
BWV (all views)
BRV
CCV

The only one I can't get is GFV (and Poly, which doesn't have them). Many of these had 2BRs, though I didn't check carefully. That's hardly exclusive. These are all at rack, but how many of them will make it into a discount at some point? At least a third, and probably as many as half---and that's assuming consumers don't get spooked between now and then.

Cabins and bungalows are a different beast, as are the Grand Villas, but those are all relatively niche compared to the number of 1BR/2BR Villas in the system.

I don't know the answer. But Disney seems to think #1 is more profitable.

I'm usually in the camp of "The Mouse knows more than I do when it comes to money;" I am no armchair CEO. But this is one place where I am not so sure. There are lots of other companies who are better at the business of running hotels and/or sell timeshares at much higher volumes without the benefit of world class theme parks in the properties' back yards. All of them do things differently---and in particular, they all have point charts balanced roughly similarly to cash rental prices.

Maybe the Mouse is crazy smart compared to Marriott, Hilton, Hyatt, et. al. when it comes to the business of selling timeshares. Or, maybe they just got this one wrong.

 

[Brian Noble]

Maybe the Mouse is crazy smart compared to Marriott, Hilton, Hyatt, et. al. when it comes to the business of selling timeshares. Or, maybe they just got this one wrong.

It occurs to me that there is a third possibility: consumers are not financially literate enough for this difference to matter.

 

[havoc315]

Maybe the Mouse is crazy smart compared to Marriott, Hilton, Hyatt, et. al. when it comes to the business of selling timeshares. Or, maybe they just got this one wrong.

Or maybe there is another key difference -- It's not the same product.

Why would I pre-pay for a smaller-than-average room at a Hilton? (To me, it's note worthy that for many DVC, such as BLT, the studios are actually smaller than the cash rooms).
WDW has exclusive real estate for which people will happily pay a premium price, just for the experience and location.

"Regular hotel at a discount at the Marriott" doesn't sound like a compelling sales pitch to invest in a 50-year-commitment. "Regular hotel room at Disney World on the monorail at a discount!" -- that has a very different appeal.

 

[Brian Noble]

That is fair; many of the hotel-branded timeshare resorts don't have anything equivalent to a DVC studio. The smallest unit in many of these might best be described as a cross between a studio and a 1BR: there is a King bed behind a lockable door, but the other side is a very small LR with cramped pull-out and a kitchenette.

But, many of the Marriott timeshare studios are not your average airport Marriott. This one comes to mind. I've been on the resort grounds after dinner at nearby Duke's; it is very nice. If I were a studio person, this is a studio I'd consider.

https://www.marriott.com/en-us/hotels/lihka-marriotts-kauai-beach-club/overview/

If you are right, this may be why I can't wrap my head around DVC. It doesn't make sense to me, because I am not looking for a cheap hotel room.

 

[havoc315]

That is fair; many of the hotel-branded timeshare resorts don't have anything equivalent to a DVC studio. The smallest unit in many of these might best be described as a cross between a studio and a 1BR: there is a King bed behind a lockable door, but the other side is a very small LR with cramped pull-out and a kitchenette.

But, many of the Marriott timeshare studios are not your average airport Marriott. This one comes to mind. I've been on the resort grounds after dinner at nearby Duke's; it is very nice. If I were a studio person, this is a studio I'd consider.

https://www.marriott.com/en-us/hotels/lihka-marriotts-kauai-beach-club/overview/

If you are right, this may be why I can't wrap my head around DVC. It doesn't make sense to me, because I am not looking for a cheap hotel room.

That is very nice... But let's examine my theory in that context:

So that Marriott is in Hawaii.... The entire island is a destination that is very much its own attraction. Note, Aulani has not been a super-success -- So maybe, the Marriott-timeshare model works best in Hawaii. Aulani Hawaii has no inherent advantage over Marriott Hawaii.

On the other hand --- Marriott Orlando isn't exactly the same thing DVC WDW.
So where Disney is selling the unique geography and experience of an on-site deluxe Disney hotel -- it just isn't your regular timeshare.
On the other hand, stick it in Hawaii --- it does become much more like a regular timeshare. And the DVC model may not go over as well.

So...... I'll be at Aulani in 4 days.... and then at Marriott (well.. not time share... the Marriott Andaz in Maui). If I wasn't already a DVC owner, I probably wouldn't be staying at Aulani at all. I'd stay at the Four Seasons, etc. On the other hand, whether I was a DVC owner or not, I'd want to stay at WDW deluxe resorts.

 

[Brian Noble]

I'm not sure if the non-theme-park resorts suffer because of the financial model, or because they are in substandard locations compared to many of the competitors. Oahu is not my favorite island---it is fourth out of the four I've visited. If I'm going to go to Oahu, I'd rather be closer to the thing that makes it different (Waikiki) than stuck on a man-made lagoon. Granted, Marriott was at Ko Olina before Disney was, so what do I know? But there are lots of places in Hawaii I'd rather be, and most of those places have very very nice timeshares.

(As an aside, we did snag a 3BR penthouse at Hilton's Lagoon Tower in Waikiki some years back. To date it was my best exchange ever. Two story floor-to-ceiling windows with views out over the rest of the island and a wraparound lanai that included a sidelong view of the ocean---that was the "bad" view of the four of these units.)

The other two non-park DVC resorts suffer from the same problem. Vero is nice, if a little sleepy, but also a little far north to really swing it as a snowbird destination. HHI is on the wrong side of the ring road. I wonder if the DVD folks just couldn't get their heads around "desirable land costs money" after so much building in swampland that was bought on the sly decades ago.

 

[Royal Consort]

If I wasn't already a DVC owner, I probably wouldn't be staying at Aulani at all. I'd stay at the Four Seasons, etc.

 

[thelionqueen]

Math discussions are always interesting. But they do not consider the SUBJECTIVE value, and in the case of BCV & BWV, that is a very important factor in many purchase decisions. It's not just about the money for those folks. I compare it to buying one's dream car versus one that provides the same transportation capability for a lot less money. The heart wants what the heart wants. Good/Best/Shorter Break-Even "deals" are soon forgotten if you can't stay where you want to be. That's worth something - actually a lot to those of us who love the EPCOT resorts.

If one wants to stay at BCV or BWV during the busy seasons, you pretty much NEED the home resort booking priority window. Renting is not a sure thing for those resorts, and owning still beats Disney cash prices.

100000% this!!!
If you want to stay at BCV in a studio, for more than 3 nights during F&WF you must own there. Heck, almost any season, it’s near impossible to get a studio for more than 3 nights. And forget about a standard view at BWV and not own there (by far the best use of DVC points), IMO these 2 resorts are the absolute most sought after for those renting and rental brokers. Not to mention, if any owner had a desirable reservation at these 2, the price per point would be drastically higher than $22 per point.

 

[MFMont]

With the present economic picture, the value is likely to sink over the next year or two. The pp costs of 2023 will likely be very different to 2025 if there is a strong recovery. In 2011 I picked up a fully loaded BWV contract that after the the rental of 450 points, cost me $27pp. A few short years later, the contract was worth 4 times that. I would bet by next year, a BWV contract will sell at roughly $100pp. By the time we get to 2025 they will be back to a bit over where they are now and will flatten out until 10 years to go. It will be interesting to see the value in the last 10 and how that is addressed.

 

[havoc315]

100000% this!!!
If you want to stay at BCV in a studio, for more than 3 nights during F&WF you must own there. Heck, almost any season, it’s near impossible to get a studio for more than 3 nights.

I've done it with rental points (studio) and cash rooms (BWI rooms) many times, never had a problem.

 

[kanerf]

A number of years ago I did trade into BCV with RCI. I have not seen it in RCI for the last 5 years or so.

 

[thelionqueen]

I've done it with rental points (studio) and cash rooms (BWI rooms) many times, never had a problem.

You got lucky. That rarely happens

 

[thelionqueen]

With the present economic picture, the value is likely to sink over the next year or two. The pp costs of 2023 will likely be very different to 2025 if there is a strong recovery. In 2011 I picked up a fully loaded BWV contract that after the the rental of 450 points, cost me $27pp. A few short years later, the contract was worth 4 times that. I would bet by next year, a BWV contract will sell at roughly $100pp. By the time we get to 2025 they will be back to a bit over where they are now and will flatten out until 10 years to go. It will be interesting to see the value in the last 10 and how that is addressed.

I disagree. Yes as the contract nears 2042 it will decrease of course. But with disneys prices increasing so will the need to buy into DVC imo

 

[havoc315]

You got lucky. That rarely happens

Not that hard at all. Just find someone who has points to rent more than 11 months in advance, with arrangements for them to book at the 11 month mark. Several people with BWV points for rent on the board right now at 18-$20 per point.
Now yes, if you want until under 11 months, it will be hard to get F&W. But same if you own at BWV. Whether you own or rent, you need to make reservations at the 11 month mark.

 

[MISCdisney21]

2042 will be interesting. I know the old key west extension was a disaster but have to think Disney does something.

There will be so many points disney will have to sell if they just acquire all the 2042 resort points. So I could definitely see current owners getting some kind of priority or discount. It’ll just be very different than what they did with OKW. Not that you buy into a 2042 resort with any sort of expectation of that.