BCV and BWV may have reached peak value

[Genie+]

BW is slated to get its 14 year hard refurb 2023, then refresh 2030, and hard refurb again around 2037. About 5 years before the contracts run out.

BC is flipped from BW for hard/soft refurbs. Only 1 Full refurb left.

BRV is overdue! Similar to BW just a year earlier each go.

I can see BC being the first 2042 resort to be rebuilt for new contracts.

 

[BeachClub2014]

Just look at the advancement of technology over the past 20 years, versus the 20 years prior to that. Now, extrapolate that forward. Arguably, technological growth may be increasing or slowing, depending on your benchmark (see Moore's law), but even at a slowed linear growth (versus exponential), we're talking about 30 more years of advancement.

Exactly. I still enjoy the Carousel of Progress, TTA, and Peter Pan out of a sense of nostalgia, but that won't cut it forever. I do wonder where the ceiling may be for amusement parks as an entertainment venue. Absent the parks, DVC resorts at WDW are just nice hotels in a hot swamp.

 

[Brian Noble]

hard refurb

The hard refurbs only go down to the studs. What Don is talking about is something completely different, and includes building systems that are deep in the "bones" of the structure.

I currently have an office in the 2nd "newest" building on my campus. It's only about 15 years old. Lots of people were very jealous, and not just of the art on the walls, until the newest building came online a year or two ago. That thing is The Future! At least, it will be until our new building comes online in 3-4 years and we reclaim the title of The Future-y-ist digs on North Campus.

 

[Genie+]

WDW could be timeless. What is it really? A safe place that offers a variety of stuff for families and groups to do together. They could just keep incorporating whatever new and popular things come along. Not everybody will want to go to Mars for the summer of 2047 lol.

 

[Brian Noble]

Not everybody will want to go to Mars for the summer of 2047 lol.

Well of course not. We already went there in the late 70s!

 

[Genie+]

The hard refurbs only go down to the studs. What Don is talking about is something completely different, and includes building systems that are deep in the "bones" of the structure.

I currently have an office in the 2nd "newest" building on my campus. It's only about 15 years old. Lots of people were very jealous, and not just of the art on the walls, until the newest building came online a year or two ago. That thing is The Future! At least, it will be until our new building comes online in 3-4 years and we reclaim the title of swankiest digs on North Campus.

It’s a possibility BC could be rebuilt, no? The timing could work well at contract expiration. There’s many ifs but wasn’t OKW 2 supposed to go back there at one point?

 

[Brian Noble]

It certainly could be and probably will be---I think the question is whether that's a raze-and-rebuild or something less extreme. For BCV I would not be surprised by the former.

 

[DonMacGregor]

WDW could be timeless. What is it really? A safe place that offers a variety of stuff for families and groups to do together. They could just keep incorporating whatever new and popular things come along. Not everybody will want to go to Mars for the summer of 2047 lol.

You're missing the point. I'm not talking about nostalgia, or the overall park experience, I'm talking about the real-world functionality and technology of the accommodations on property. The functions people expect to be contemporaneous with their current time frame. By 2042, the homes we all will be living in will be far more advanced than anything we have now, and we will expect at least that same level of advancement in our premium resort accommodations.

If you were going to WDW tomorrow, living your everyday life with 2022 technology, would you be happy with a room that has a black and white TV with a rabbit ear antenna, a refrigerator/freezer with ice cube trays, no USB ports, no WiFi (or any internet whatsoever), no email (just send this signed credit card form back to us via USPS), and a bank of rotary dial pay phones in the lobby. No hair dryer, no microwave or coffee maker? At the rate of technological advancement, a 50 year look backwards is likely a 20 year look forwards.

Now, add to that the advancements of building technology specifically (self-dimming windows and sliding glass doors, sound and thermal insulation double what we have today, smart HVAC, lighting, and other building systems) that will surely have made it into residential home construction by that time and will be the expectation not the exception.

Everyone want's to drive Route 66 and stay in an authentic "Route 66 Motel". That is, until they get there and see the reality. For the rest of the trip, they're looking for the nearest Hilton Garden Inn at each stop.

 

[BeachClub2014]

Everyone want's to drive Route 66 and stay in an authentic "Route 66 Motel". That is, until they get there and see the reality. For the rest of the trip, they're looking for the nearest Hilton Garden Inn at each stop.

Not me. I want the Jetsons!

 

[Genie+]

You're missing the point. I'm not talking about nostalgia, or the overall park experience, I'm talking about the real-world functionality and technology of the accommodations on property. The functions people expect to be contemporaneous with their current time frame. By 2042, the homes we all will be living in will be far more advanced than anything we have now, and we will expect at least that same level of advancement in our premium resort accommodations.

If you were going to WDW tomorrow, living your everyday life with 2022 technology, would you be happy with a room that has a black and white TV with a rabbit ear antenna, a refrigerator/freezer with ice cube trays, no USB ports, no WiFi (or any internet whatsoever), no email (just send this signed credit card form back to us via USPS), and a bank of rotary dial pay phones in the lobby. No hair dryer, no microwave or coffee maker? At the rate of technological advancement, a 50 year look backwards is likely a 20 year look forwards.

Now, add to that the advancements of building technology specifically (self-dimming windows and sliding glass doors, sound and thermal insulation double what we have today, smart HVAC, lighting, and other building systems) that will surely have made it into residential home construction by that time and will be the expectation not the exception.

Everyone want's to drive Route 66 and stay in an authentic "Route 66 Motel". That is, until they get there and see the reality. For the rest of the trip, they're looking for the nearest Hilton Garden Inn at each stop.

By the time 2042 rolls around we’ll all have a much better idea the direction next couple decades will be going. DVC might not flip any expired resorts. If they rebuilt BC in 2043 they’d have a much better grasp than what we imagine today. All of society will be transitioning through stages of functionality. Is WDW and DVC that much different the whole thing becomes outdated?

 

[sethschroeder]

Using your 6% rate, you are looking at a break even price of $134 per point.

Issue is that rentals will outpace MF increases likely over 20 years. Right now rental prices have lagged.

Despite massive inflation, WDW has hit a wall with cash room increases -- Cash rooms have only been increasing by 2-3% in the last 2-3 years... And the rental rates have behaved similarly in the last 2-3 years.

Boardwalk Inn Standard View-
2019: $439-$699
2022: $574-$980
30% to 40% increase in the bottom to top ranges no where near the 2-3% you outlined. Yes discounts exist but they existed previously as well and there is no guarantee they exist or don't exist in the future at certain discount rates.

I've mostly given up trying to convince people of this, but I appreciate and salute you for carrying the torch.

It doesn't matter if it wouldn't have been "invested", or would have been spent on vacation anyway, or for any of a number of other reasons. If someone believes they can ignore opportunity cost on the purchase price, that's equivalent to telling me that they'd happily loan me $10,000, and have me pay them back $500 a year for 20 years.

No because I am not giving you $10k I would have used the money to go on another vacation instead. That money was not going anywhere except to a non-essential usage. It likely actually has a better "return" because my cruise or vacation home rental gives me nothing but memories while my DVC contract has value if I sell it.

The money for DVC comes out of a bucket of money meant to specifically use for fun. Who knows maybe we remodeled part of the house sooner instead? So maybe there is some math in my home being worth more then.

Or if anyone honestly could say they would pre-pay 30 year's worth of hamburgers at McDonald's at full price.

Maybe not McDonald's but the local sushi place? I would lock in todays prices for the next 30 years.

 

[sethschroeder]

And at the same time, "Buy a home away from home, a premium experience! (not a discounted product)"

Maybe 1brs but for 2brs I am not sure I agree unless we start comparing off site.

2BR at VGF for my stay coming up:
Rack - $16,790
Lets give it a 25% discount - $12,592.50

Flip side
Points - 614
$7700 (MFs + Cost)

39% off Disney's 25% discount (which is why I could find when searching discounts the full year not even sure it applies to the week of the 4th)

Yes people will say "if you invested the money" and other things. So the math gets thrown off in some people's books but thing is the profit portion I am locked in on and the only change in my pricing in the future is MFs which is simply the cost of keeping the resort open

 

[sethschroeder]

BW is slated to get its 14 year hard refurb 2023, then refresh 2030, and hard refurb again around 2037. About 5 years before the contracts run out.

One thing I will say is I doubt they keep that schedule. I could see legal issues if Disney makes current DVC members foot the bill for another 15 years of usefulness when only 5 years remain.

I would expect to see a dip in dues as you close down the resort time left. When the contract expires in theory everything should be at 0 years left or very close for useful time left.

 

[havoc315]

Issue is that rentals will outpace MF increases likely over 20 years. Right now rental prices have lagged.



Boardwalk Inn Standard View-
2019: $439-$699
2022: $574-$980
30% to 40% increase in the bottom to top ranges no where near the 2-3% you outlined. Yes discounts exist but they existed previously as well and there is no guarantee they exist or don't exist in the future at certain discount rates.

2022- 574-980
2023- 597-1044

4-6% increase.

No because I am not giving you $10k I would have used the money to go on another vacation instead. That money was not going anywhere except to a non-essential usage. It likely actually has a better "return" because my cruise or vacation home rental gives me nothing but memories while my DVC contract has value if I sell it.

The money for DVC comes out of a bucket of money meant to specifically use for fun. Who knows maybe we remodeled part of the house sooner instead? So maybe there is some math in my home being worth more then.



Maybe not McDonald's but the local sushi place? I would lock in todays prices for the next 30 years.

If true —- then write me a check for the next 30 years worth of sushi, and I’ll then reimburse your sushi for the next 30 years. I expect I’ll make a nice profit.

(If a sushi entree is currently $25… so you pay me now $750 for 1 sushi entree per year for the next 30 years. And if inflation and stock market behaves at its historical level for the last 30 years… then I would make a $9,000 profit. Of course, history is no guarantee. But it would take 30 years of unprecedented economic collapse for it not to be profitable for me. Pre-paying to lock in current prices is always a bad deal unless inflation is greater than investment return long term. Which is almost never the case except for some rare/special commodities )

 

[sethschroeder]

2022- 574-980
2023- 597-1044

4-6% increase.

You said 2-3 years and I showed the last 3 years increase total. You then show rates which haven't even been used yet and likely will be increased before the end of the summer.

It's also still over over the 2-3% originally outlined by 2x.

If true —- then write me a check for the next 30 years worth of sushi, and I’ll then reimburse your sushi for the next 30 years. I expect I’ll make a nice profit.

You wouldn't even breakeven on cost of fish let alone labor which will skyrocket. As an example fish prices are up 12% yoy right now.

But sure go off how it's such a good move. There is a reason you don't see those sorts of offers. If they made sense someone would actually do it.

 

[havoc315]

You said 2-3 years and I showed the last 3 years increase total. You then show rates which haven't even been used yet and likely will be increased before the end of the summer.

Per year. 2019-2020 was high. Been pretty low since. And those are the final 2023 rates — you can book them now.

over the most recent 3 years: 540-890 —- 597-1044. About a 10%-15% increase over 3 years… while inflation is skyrocketing. In other words, Disney now lagging behind inflation in rate increases. (3-5% per year)

It's also still over over the 2-3% originally outlined by 2x.



You wouldn't even breakeven on cost of fish let alone labor which will skyrocket. As an example fish prices are up 12% yoy right now.

They would have to increase by 12% per year for 30 years for me to break even. If they increase less than 12% per year on average, over 30 years, I make a profit. Under 5% per year, I make a massive profit.

But sure go off how it's such a good move. There is a reason you don't see those sorts of offers. If they made sense someone would actually do it.

They do… it’s called an annuity. But nobody would be stupid enough to prepay 30 years of sushi.

 

[Cyberc1978]

But you failed to discount the lost opportunity --- If you put $223 in the bank, and then rented points at $20 per point, assuming your 6% return, that would be break even. But then you're paying dues on top of that, of $8.08 per point per year.
So you really are looking at a future comparison value of:
Renting: $20 per year. Owning: Dues of $8.08 per year, PLUS the lost opportunity of your down payment.
Using your 6% rate, you are looking at a break even price of $134 per point.
Anything under $134 per point, would be a savings. Anything over $134 per point would be a loss.

Curious which bank will give you an interest rate of 6%?

I’m not from the U.S and for the last many many years we have had either zero or a negative interest rate of approx 0,6% so getting 6% would be crazy in my world.

 

[Cyberc1978]

But the other things you spent it on also had value to you. So mathematically, that value is calculated as if it is saved. But the effect is the same as if it is spent. Because you purchased DVC, you have $xxxx less in savings... or you don't have that new kitchen.. or have a cheaper car..
You lost the chance to upgrade your kitchen until 2024... Lost opportunity of having spent that lump sum.
Mathematically, we calculate that by adjusting for present value. Lost opportunity, whether saved or spent.

I never understood the “lost opportunity” if I had I.e $15.000 per year I could spend on vacations then I could either buy more DVC points or spend the money on other type of vacations. The money would never go unused so I’m not seeing the lost opportunity.

If I one year decides not to go traveling or buy more points I do have more money to spend on something else but I wouldn’t consider it a lost opportunity.

 

[Sandisw]

I never understood the “lost opportunity” if I had I.e $15.000 per year I could spend on vacations then I could either buy more DVC points or spend the money on other type of vacations. The money would never go unused so I’m not seeing the lost opportunity.

If I one year decides not to go traveling or buy more points I do have more money to spend on something else but I wouldn’t consider it a lost opportunity.

This is me and I never get how lost opportunity comes into play once you decide to spend your money, whether DVC or something else.

Now, if one would keep it if you didn’t buy DVC, then sure. But, as I shared, my decision this year was more points or update the kitchen. DVC won! So I didn’t lose a thing.

Matter of fact, because I don’t have to pay in full until December, I actually gain a few extra dollars because I would have paid for the kitchen this spring.

 

[havoc315]

I never understood the “lost opportunity” if I had I.e $15.000 per year I could spend on vacations then I could either buy more DVC points or spend the money on other type of vacations. The money would never go unused so I’m not seeing the lost opportunity.

It’s a simple mathematical law, no different than gravity.
Having $15k per year is NOT the same thing as spending $450k prepaying for vacations for 30 years. (As the extreme).

If I one year decides not to go traveling or buy more points I do have more money to spend on something else but I wouldn’t consider it a lost opportunity.

The lost opportunity is if you didn’t pre-pay, you’d actually have a much bigger vacation budget in the future —- or leftover money for other things.

Which would you rather do — take a 7 day vacation in a studio every year for 50 years…
Or 7 days in a studio for 5 years. Then 8 days in. 1 bedroom. Then 7 days in a DVC
plus a 4 day cruise. Then a Grand Villa for a week plus a 10 day luxury cruise.

So that’s the lost opportunity. You have to calculate whether you’re saving enough money by prepaying on that studio, to make it worth giving up that luxury vacation in 50 years. That illustration is very extreme. In reality, once you factor in the lost opportunity, you’re breaking even after 20-30 years on most contracts. Meaning, after 20-30 years, you’ve saved enough to match the growth you would have gotten without prepaying.