Buying DVC dilemma

[Dean]

If someone can't plan vacations 7 months or more in advance, than they may as well get the cheapest resort (even my broker suggested this), but only if they would be happy staying at SSR/OKW (since that is more often what might be available) and could be flexible with dates/room types (since you can often still piece together stays with less lead time). Otherwise owning DVC might not be the best fit.

IMO if they can't plan close to 7 months out, they likely shouldn't buy in.

 

[crazywig]

IMO if they can't plan close to 7 months out, they likely shouldn't buy in.

Agree. That's a recipe for frustration at this point in dvc history. And only going to get worse in the future.

 

[Pluto777]

Actually I'm trying to work out the logic: would MORE resorts mean MORE availability at 7 months or less?

 

[iheartglaciers]

Actually I'm trying to work out the logic: would MORE resorts mean MORE availability at 7 months or less?

It does create more rooms, but the difficulty comes because some resorts are in higher demand than others. So while Riviera adds more rooms, for every person who buys in there but decides they’d rather be able to walk to Epcot, they become another person waiting at 7 months to book BWV and BCV.

 

[Bing Showei]

With new resorts selling direct at the park, there will be a lot of people buying in without much information, or having actually stayed in the resort they are buying. The likelihood of that group realizing they would like to try BCV, AKL, BWV is probably pretty high. Being sold on the idea that "you can stay anywhere at 7 months!" also sets up an expectation that people will likely try to book on, maybe even before taking that flight they've always wanted to take to Hawaii. Aloha, PVB.

 

[skier_pete]

Actually I'm trying to work out the logic: would MORE resorts mean MORE availability at 7 months or less?

It all depends - for instance, in my view (and I am in the minority - the Poly created MORE availability - because roughly 80% of the room-points that came out of the Poly are studios). Meanwhile, CCV will have the opposite affect, because will all the cabins and grand villas there, only 9% of the points are in studios, so it's likely more than 9% of owners there are going to want studios.

I really thought DVC learned it's lesson with the GFV realizing they needed a higher fraction of studios, and that showed up in the Poly, but now CCV is going to be worse than GFV. Hopefully they will be smart enough at Riviera to have some dedicated studios.

What really happens is that MORE resorts leads to MORE demand at the more popular resorts, and faster sell-outs of those resorts at the 7-month mark. The best that can happen is they build resorts that are all popular in the right ratios...resorts like SSR are what really hurt the system, with people buying there for cheaper but not wanting to stay there. If people want to stay at their home, then the system doesn't get as strained.

 

[skier_pete]

With new resorts selling direct at the park, there will be a lot of people buying in without much information, or having actually stayed in the resort they are buying. The likelihood of that group realizing they would like to try BCV, AKL, BWV is probably pretty high. Being sold on the idea that "you can stay anywhere at 7 months!" also sets up an expectation that people will likely try to book on, maybe even before taking that flight they've always wanted to take to Hawaii. Aloha, PVB.

I remember when Poly started selling people said "Oh, owners there won't ever want to move elsewhere because they are paying so much for points." But I thought that isn't really the case, because most people buy-in being mostly ignorant of what other people have paid, and they will just look at it like everyone else - "Oh I like my home resort, but I want to try Beach Club and AKV, and Wilderness Lodge..." etc. And we are seeing that is the case, even with the resort 90% sold, there is almost always availabilty at 7 months, meaning Poly owners are still looking elsewhere. It won't be any different with CCV or Riviera. IF there's any resort this doesn't happen as much, it's VGC (because of location) and possibly VGF (because of small size and level of luxury).

 

[crisi]

More resorts is in the end a zero sum game - all resorts sell out for practical purposes.

If a resort is large enough and desirable enough to pull demand away from - lets say BCV - over the long term, it might free up some BCV availability, but at the cost of its own availability. However, the system has gotten so large, that I don't think it would be noticeable unless it was a huge resort with huge draw.

As the system is in existence for longer, more contracts are sold resale and buyers and owners become savvier. People buy BCV (again, for instance, but it will work with any resort with seven month booking problems) to stay there - and they aren't necessarily enticed by a new resort - not enough to really change seven month demand.

People who bought whatever Disney was selling and have no attachment to their home resort would free up the seven month window - but that isn't the profile of many DVC members. Especially those that are paying more for a VGF or BCV resale than for an SSR or VAKL resale.

 

[iheartglaciers]

It all depends - for instance, in my view (and I am in the minority - the Poly created MORE availability - because roughly 80% of the room-points that came out of the Poly are studios). Meanwhile, CCV will have the opposite affect, because will all the cabins and grand villas there, only 9% of the points are in studios, so it's likely more than 9% of owners there are going to want studios.

I would buy CCV in a heartbeat if I didn’t think the studio situation was going to be so bad :-( I love WL. I just can’t be comfortable with being shut out at my own home resort at 11 months.

 

[Dean]

More resorts is in the end a zero sum game - all resorts sell out for practical purposes.

If a resort is large enough and desirable enough to pull demand away from - lets say BCV - over the long term, it might free up some BCV availability, but at the cost of its own availability. However, the system has gotten so large, that I don't think it would be noticeable unless it was a huge resort with huge draw.

As the system is in existence for longer, more contracts are sold resale and buyers and owners become savvier. People buy BCV (again, for instance, but it will work with any resort with seven month booking problems) to stay there - and they aren't necessarily enticed by a new resort - not enough to really change seven month demand.

People who bought whatever Disney was selling and have no attachment to their home resort would free up the seven month window - but that isn't the profile of many DVC members. Especially those that are paying more for a VGF or BCV resale than for an SSR or VAKL resale.

It would take live the entire VGF resort to offset even one 2 BR villa points at SSR. Using VGF as an example, most buying there are doing so to stay there and if they don't stay there, they're often only trading out if they can get another higher demand resort. Even if they don't plan to use the points I suspect the chances of them renting those points are higher than many of the other resort owners. The principles hold for other higher demand resorts but less so because VGF and VGC are the highest demand overall. Thus it doesn't take much to make it worse but it is almost impossible to make it better by adding new resorts. The other option is to try to increase the demand of the lower demand resorts but there isn't much incentive for DVCMC to do so. And since there is a home resort priority and those trying to reserve from other resorts are essentially doing a timeshare exchange, I'm not suggesting there should be a lot of emphasis. I know many people look at this as a club first and a single timeshare second but legally and in function, it's the reverse.

 

[Pluto777]

It would take live the entire VGF resort to offset even one 2 BR villa points at SSR. Using VGF as an example, most buying there are doing so to stay there and if they don't stay there, they're often only trading out if they can get another higher demand resort. Even if they don't plan to use the points I suspect the chances of them renting those points are higher than many of the other resort owners. The principles hold for other higher demand resorts but less so because VGF and VGC are the highest demand overall. Thus it doesn't take much to make it worse but it is almost impossible to make it better by adding new resorts. The other option is to try to increase the demand of the lower demand resorts but there isn't much incentive for DVCMC to do so. And since there is a home resort priority and those trying to reserve from other resorts are essentially doing a timeshare exchange, I'm not suggesting there should be a lot of emphasis. I know many people look at this as a club first and a single timeshare second but legally and in function, it's the reverse.

You said "The other option is to try to increase the demand of the lower demand resorts but there isn't much incentive for DVCMC to do so."
Why not? Shouldn't owners pressure DVC to do so? What about future transport projects? (gondolas etc)?

 

[crisi]

You said "The other option is to try to increase the demand of the lower demand resorts but there isn't much incentive for DVCMC to do so."
Why not? Shouldn't owners pressure DVC to do so? What about future transport projects? (gondolas etc)?

I personally don't think gondolas are going to be that much of a draw. They will make the CBR area more desirable, but they really still can't compete with walking back to your room. And the Riveria looks like nothing but a high rise hotel - if you value Disney theming, it looks like they haven't bothered - you might as well be staying in Vegas.

After all VAKL has a freakin' savannah out its window with elephants and giraffes, and it hasn't created a significant enough draw to impact the near park resorts. And its big.

Its difficult to compete with location - which will always make the MK and Epcot resorts a draw. Its hard to compete with low point price - which makes the resorts with an old expiration date a draw. What is really hard to compete with is nostalgia. We've been staying at BWV since our kids were little - they are college age now. Its packed with memories for us. How many Disney folks do you know who consider the Poly "their" resort? Or the BC? My husband and I aren't likely to change our patterns for a new resort - we might try something different here and there, but you really need most people to move around at seven months to create the sort of availability patterns people would like.

Disney isn't likely to invest in increasing that demand - it costs them money with zero potential ROI and probably won't work. As a DVC member, when thinking about what Disney should do - make sure to ask yourself "what's in it for Disney" - keeping in mind that their bottom line is their bottom line. If you can't answer that question in a way that will increase revenue for them - then it isn't likely to happen, no matter how much pressure the membership puts on them.

 

[skier_pete]

The whole dynamic really does continue to shift over time. And in another 15 years or so, the dynamic will start to shift even more with the leases on the oldest properties start to become very short. Will people pay $100 a point for BCV when they only have 10 years left? Unlikely. With BCV and BWV both being up in 2042, will that swing most resale buyers on those properties to Riveria - being potentially the only "Epcot" resort with an extended shelf-life? Or will people favor the shorter/cheaper commitment available?

And how will Disney handle lease 'renewal'? They tried an extension at OKW, and it didn't go over very well, but that might have been because there was still so much time left on the contracts. (My suspicion is when these contracts get down to around 10 years left - Disney will try again to offer extensions like they did at OKW. Maybe similar to the 15 year extension, but could also see it being somewhat longer (20-25 years). Depending on the price - this could also "goose" the resale market. (If a 20 year extension is price significantly lower than a "new" resort, it may be seen as favorable, especially if it brings re-sale owners under the "direct" banner.

Of course, that's a ways away.

 

[skier_pete]

I personally don't think gondolas are going to be that much of a draw. They will make the CBR area more desirable, but they really still can't compete with walking back to your room. And the Riveria looks like nothing but a high rise hotel - if you value Disney theming, it looks like they haven't bothered - you might as well be staying in Vegas.

After all VAKL has a freakin' savannah out its window with elephants and giraffes, and it hasn't created a significant enough draw to impact the near park resorts. And its big.

Its difficult to compete with location - which will always make the MK and Epcot resorts a draw. Its hard to compete with low point price - which makes the resorts with an old expiration date a draw. What is really hard to compete with is nostalgia. We've been staying at BWV since our kids were little - they are college age now. Its packed with memories for us. How many Disney folks do you know who consider the Poly "their" resort? Or the BC? My husband and I aren't likely to change our patterns for a new resort - we might try something different here and there, but you really need most people to move around at seven months to create the sort of availability patterns people would like.

Disney isn't likely to invest in increasing that demand - it costs them money with zero potential ROI and probably won't work.

The truth is - Disney could care less about 7 month availability unless it truly affects new unit sales.

I think a lot of the gondola appeal will depend on how fast you get to the park from the resort. Sure, a some people like to walk from Boardwalk, but it's still a 10 minute walk to DHS and Epcot. If the gondolas provide a typical 5-10 minute transit, then I could see people loving this. Remember, whether you travel by boat, bus or monorail, part of your travel time usually involves waiting for your vehicle. So maybe you wait 10 minutes for that boat from Baordwalk to DHS, and another 15 minutes riding the boat from Boardwalk to DHS. If I step out of Riveria to the gondola station - wait 5 minutes in line for the gondola, and 5 minutes transit to DHS - well now that's going to be viewed pretty favorably by a lot of people.

I do give nostalgia some credence, but I don't think everyone is like that. I have no nostalgia for any particular resort - maybe because i never stayed at one in childhood. Our daughter is unlike to either, as she's stayed at at least 10 different resorts, none of them more than 3 times. (POFQ-3, Pop-2, CBR-2, AKV-2, Poly-1, BCV-1)

I think location still plays an even bigger factor than nostalgia, I think everyone favors that close location to Epcot/DHS or MK.

 

[Dean]

You said "The other option is to try to increase the demand of the lower demand resorts but there isn't much incentive for DVCMC to do so."
Why not? Shouldn't owners pressure DVC to do so? What about future transport projects? (gondolas etc)?

It would cost money and the owners would have to pay for it. I personally don't think Riviera will be nearly the demand that BWV/BCV are but time will tell. Plus it would take a lot to increase the demand at low demand resorts. MOST of the options to do so would have had to be in the plans from the start. They have no obligation to even out the 7 month demand, only the home resort demand.

 

[Pluto777]

The whole dynamic really does continue to shift over time. And in another 15 years or so, the dynamic will start to shift even more with the leases on the oldest properties start to become very short. Will people pay $100 a point for BCV when they only have 10 years left? Unlikely. With BCV and BWV both being up in 2042, will that swing most resale buyers on those properties to Riveria - being potentially the only "Epcot" resort with an extended shelf-life? Or will people favor the shorter/cheaper commitment available?

And how will Disney handle lease 'renewal'? They tried an extension at OKW, and it didn't go over very well, but that might have been because there was still so much time left on the contracts. (My suspicion is when these contracts get down to around 10 years left - Disney will try again to offer extensions like they did at OKW. Maybe similar to the 15 year extension, but could also see it being somewhat longer (20-25 years). Depending on the price - this could also "goose" the resale market. (If a 20 year extension is price significantly lower than a "new" resort, it may be seen as favorable, especially if it brings re-sale owners under the "direct" banner.

Of course, that's a ways away.

BTW, does anyone know how much Disney was asking for those 2057 extensions on OKW? (direct price obviously). I am just curious how it worked.

 

[Pluto777]

It would cost money and the owners would have to pay for it. I personally don't think Riviera will be nearly the demand that BWV/BCV are but time will tell. Plus it would take a lot to increase the demand at low demand resorts. MOST of the options to do so would have had to be in the plans from the start. They have no obligation to even out the 7 month demand, only the home resort demand.

I think Skier Pete makes a great point on 'shelf life'. I don't know when Riviera is scheduled to open, but assume it opened in a few years. Anyone think if it was near BW or BC and instead of a 2042 expiration date like BW, BC, or several others, it had a 2055 or 2065 expiration date people would pay more for a Riviera contract?

 

[skier_pete]

I think Skier Pete makes a great point on 'shelf life'. I don't know when Riviera is scheduled to open, but assume it opened in a few years. Anyone think if it was near BW or BC and instead of a 2042 expiration date like BW, BC, or several others, it had a 2055 or 2065 expiration date people would pay more for a Riviera contract?

It will open in 2019 - and based on previous resorts will likely end in 2070 (roughly 50 years), versus the 2042 of BCV and BWV - so 28 more year shelf life. So amazing to think people pay $110-120 a point for BC versus probably $190 for Riviera when it opens at less than half the lifetime. But people want what they want. However, I still say in the next 10 years the value on BC and BW contracts will drop precipitously. It's easy now to say "Oh, 24 years is plenty of time." but when its 15 years, or 10 years or 5 years left - the value just won't be there. (And another reminder - in 24 years those BCV contract will be worth flat ZERO - while a Riviera contract will have 28 years left.)

 

[chadwick61]

It will open in 2019 - and based on previous resorts will likely end in 2070 (roughly 50 years), versus the 2042 of BCV and BWV - so 28 more year shelf life. So amazing to think people pay $110-120 a point for BC versus probably $190 for Riviera when it opens at less than half the lifetime. But people want what they want. However, I still say in the next 10 years the value on BC and BW contracts will drop precipitously. It's easy now to say "Oh, 24 years is plenty of time." but when its 15 years, or 10 years or 5 years left - the value just won't be there. (And another reminder - in 24 years those BCV contract will be worth flat ZERO - while a Riviera contract will have 28 years left.)

I think you buy at BCV and BWV when it isn't an investment...which it shouldn't be. We bought so we could vacation there with minimal additional cost for the next 25 years. I doubt I will be going to WDW in my nineties so the additional 50 years doesn't really appeal to us. However, if we ended up also buying at the Riviera we would do so because we also want to stay there, not because it is a better investment.

 

[momtwoboys]

I think you buy at BCV and BWV when it isn't an investment...which it shouldn't be. We bought so we could vacation there with minimal additional cost for the next 25 years. I doubt I will be going to WDW in my nineties so the additional 50 years doesn't really appeal to us. However, if we ended up also buying at the Riviera we would do so because we also want to stay there, not because it is a better investment.

same! we are buying in NOW to lock in our next 24 years worth of trips as a couple, paying ahead for our WDW lifestyle now and enjoying it for the time left. Not interested in anything longer, or leaving it to our sons to deal with. THey both love Disney, but we will let them choose how and when they vacation.