Could CRO buy a block of DVC (SSR) rooms

[Mississippian]

I have always thought SSR was terribly overbuilt, and it's showing up now in the number of resales that are being offered are fairly low prices. My guess is that Disney is going to have a hard time supporting the market through ROFR.

Is it possible that the hotel side could buy say enough points to take 150 or 200 units out of the SSR system completely and move them over to the CRO system? Perhaps they could take a whole section, such as the dreaded Carolsel section.

At what dollar level would it make sense for them to do this? Just curious.

 

[Chuck S]

I don't see that happening. If the market is so weak that Disney has to make the hard choice of either repurchasing a huge portion of points or seeing lower resale prices, I think they'd also halt all new DVC construction, and sell the DVC brand to another well known timeshare company, like Marriot or Hilton.

Plus, since those rooms are declared into DVC inventory, and are legally "owned" by a large number of members, I dont think they could easily purchase a particular block or section of rooms. They'd have to buy out each owner in that section to physically remove the section from DVC.

 

[CarolA]

Can you imgaine the posts on here if they did?

1. CRO is not paying thier fare share of dues
2. CRO is putting five people in a one bedroom
3. CRO is undercutting my rental business
4. Those CRO people don't respect our property and shouldn't be allowed to use the "main pool" community hall etc....
5. Since CRO took over those rooms there are MORE people on the buses...

And on and on and on... LOL!

And rather then take it over, Disney could just quit supporting the resale market. They don't have to do it....

 

[CarolMN]

.....(snip)......And rather then take it over, Disney could just quit supporting the resale market. They don't have to do it....

What if they stop supporting just one or two resorts via the resale market?

 

[CarolA]

What if they stop supporting just one or two resorts via the resale market?

They could do that....
And to an extent they do. HH for example is allowed to sell at a MUCH lower price point then BCV. Right now it looks like SSR is selling lower then BW/BC/VWL for example.

So they could just lower the 'point for ROFR' to something like $50 and let it go for example.

Since I bought assuming resale income of ZERO I am fine either way

That said.... it's cyclical. SSR and AKV will have the highest number of resales for a while IMHO because there are always buyers who buy in the "first" rush at Disney and then six months later go "what was I thinking" Or there are buyers who get a room they don't like and can't get over it and sell.... etc.

It settles down over time.

(And to be honest based on some threads on various boards, I think some folks are REALLY selling to free cash for BLT... )

 

[DebbieB]

It seems CRO is having trouble renting these rooms now, why would they want more? They even offered discounts at OKW and SSR during free dining. I saw a post where someone recently got upgraded from POR to SSR for free. They probably figure they can sell rooms at POR easier, so they overbook and move some people to empty rooms at SSR. I doubt too many people are paying rack rate to CRO for SSR.

I wonder about DVC's long term planning (or lack thereof). If they knew what they were going to build at AKV and BLT (if it comes off), would they have built SSR so big?

 

[Mississippian]

It seems CRO is having trouble renting these rooms now, why would they want more? They even offered discounts at OKW and SSR during free dining. I saw a post where someone recently got upgraded from POR to SSR for free. They probably figure they can sell rooms at POR easier, so they overbook and move some people to empty rooms at SSR. I doubt too many people are paying rack rate to CRO for SSR.

I wonder about DVC's long term planning (or lack thereof). If they knew what they were going to build at AKV and BLT (if it comes off), would they have built SSR so big?

Yikes! If CRO can't rent them now, then I guess it wouldn't make sense to buy more.

Of course, if CRO were actually to own 150 units outright, they might actually put in some more amenities that would make SSR more attractive to everyone.

 

[Chuck S]

SSR already has some nicer features than OKW. SSR has a full service spa, a zero entry pool and an improved counter service food area. If there really is a "problem" with SSR, I think it is that they simply made the point chart a little too high for a condo style resort...but they are locked into it.

 

[disneynutz]

I have always thought SSR was terribly overbuilt, and it's showing up now in the number of resales that are being offered are fairly low prices. My guess is that Disney is going to have a hard time supporting the market through ROFR.

Is it possible that the hotel side could buy say enough points to take 150 or 200 units out of the SSR system completely and move them over to the CRO system? Perhaps they could take a whole section, such as the dreaded Carolsel section.

At what dollar level would it make sense for them to do this? Just curious.

SSR is a huge resort with a large number of new DVCers who bought when the economy was better. Now since the economy has slowed, reality has struck and they have decided to feed their families and pay their home loans rather than keep their SSR contracts.

DVD should stop construction and wait for the economy to pick up again. Disney only saw $ with all of the sales the last two years. They jumped on the opportunity and got too aggressive, building three new resorts and plans for more and their own new office building.

I don't see them converting DVC units to CRO. The market will turn around in a year or two and things will get back on track.

 

[Dean]

I have always thought SSR was terribly overbuilt, and it's showing up now in the number of resales that are being offered are fairly low prices. My guess is that Disney is going to have a hard time supporting the market through ROFR.

Is it possible that the hotel side could buy say enough points to take 150 or 200 units out of the SSR system completely and move them over to the CRO system? Perhaps they could take a whole section, such as the dreaded Carolsel section.

At what dollar level would it make sense for them to do this? Just curious.

Theoretically they could buy contracts to rent through CRO. I agree I wouldn't expect it. From a cash standpoint they have trouble renting out the units they get now for a decent price so more availability would be even worse, not to mention it'd kill the DVC cash exchange options which helps drive sales even though it's not a good use of points. Besides, DVC really doesn't care who owns a contract, they care about the cash they get up front and the maint fees being paid. The only reason for ROFR is to protect retail sales, not to churn sales of the resale variety of which they don't make much money. What it does do is prop up the resale price driving many people to retail. One of the big benefits to Disney in general is that DVC puts butts in the seats to to speak for other sales (food, merchandise, parks, etc).

 

[Dean]

Can you imgaine the posts on here if they did?

1. CRO is not paying thier fare share of dues
2. CRO is putting five people in a one bedroom
3. CRO is undercutting my rental business
4. Those CRO people don't respect our property and shouldn't be allowed to use the "main pool" community hall etc....
5. Since CRO took over those rooms there are MORE people on the buses...

And on and on and on... LOL!

And rather then take it over, Disney could just quit supporting the resale market. They don't have to do it....

Contrary to popular belief here, my info suggests that DVD actually pays pays the fees on the points they own other than that attributable to commercial areas like restaurants, etc.

 

[CarolA]

Contrary to popular belief here, my info suggests that DVD actually pays pays the fees on the points they own other than that attributable to commercial areas like restaurants, etc.

Yes, Dean but on the DIS we NEVER let the facts get in the way of our rants!

 

[Dean]

Yes, Dean but on the DIS we NEVER let the facts get in the way of our rants!

Unfortunately there is a lot of truth in that statement.

 

[hakepb]

SSR already has some nicer features than OKW. SSR has a full service spa, a zero entry pool and an improved counter service food area. If there really is a "problem" with SSR, I think it is that they simply made the point chart a little too high for a condo style resort...but they are locked into it.

They might be able to find a few weeks that CRO could sell a lot of SSR (If the rest of WDW is booked), that are average to lower DVC times, and really jack up those points, to give the rest of the year a discount.
Or SSR could appeal to short trippers and make the "weekend" double point nights on Thurs and Mon..

 

[tjkraz]

Contrary to popular belief here, my info suggests that DVD actually pays pays the fees on the points they own other than that attributable to commercial areas like restaurants, etc.

IIRC, some document includes language which states that they do not have to pay dues on points held for maintenance purposes. That makes sense since, in theory, DVD wouldn't be reaping any financial benefit from those points. Over the years some have interpreted that clause to mean that DVD doesn't pay dues on ANY points that they hold.

The one thing I'm unclear on is whether there are any limitations to what DVD can do with points held for maintenance. 2% holdings would give them the ability to take every room out of service for up to 2 weeks per year. If they don't need all of that time for room repairs/refurbs, can the time be sold via CRO? Any ideas, Dean?

As for the original premise of the post, I don't see why the size of SSR or number of resales would be of any relevance. SSR is only a threat to DVC sales if people view it as a viable alternative to the resort(s) they are marketing. If customers DO view it as an alternative, then resale values will stay at an acceptable level. If not then prices will drop and DVC has no reason to use ROFR to prop-up prices.

SSR will always have the most resales because it's the largest resort. If things appear excessive right now, the economy is largely to blame. Look at the number of AKV resales. When I checked last week there were TWENTY-TWO AKV resales, and points just went on sale 18 months ago.

To expect DVC to continue to build 200-400 unit boutique resorts is simply not realistic. We're 17 years into the DVC concept and they've already built two stand-alone resorts, one hybrid (BWV) and added-on to three existing deluxes (with a fourth on the way.) That leaves only two more deluxes suitable for DVC additions and 33 years before any of the 2042 resorts start reverting back for re-sale.

I doubt that Disney will be looking to shutter DVC sales anytime soon. I'll be surprised if the next WDW-based property isn't an 800-1000 room monster. But I also think we will see more off-site locations announced. Slowing construction at WDW-based sites would only increase demand for the existing theme park locations via resale. And yes, that even includes SSR.

 

[hakepb]

IIRC, some document includes language which states that they do not have to pay dues on points held for maintenance purposes. That makes sense since, in theory, DVD wouldn't be reaping any financial benefit from those points. Over the years some have interpreted that clause to mean that DVD doesn't pay dues on ANY points that they hold.

The one thing I'm unclear on is whether there are any limitations to what DVD can do with points held for maintenance. 2% holdings would give them the ability to take every room out of service for up to 2 weeks per year. If they don't need all of that time for room repairs/refurbs, can the time be sold via CRO? Any ideas, Dean?

As for the original premise of the post, I don't see why the size of SSR or number of resales would be of any relevance. SSR is only a threat to DVC sales if people view it as a viable alternative to the resort(s) they are marketing. If customers DO view it as an alternative, then resale values will stay at an acceptable level. If not then prices will drop and DVC has no reason to use ROFR to prop-up prices.

SSR will always have the most resales because it's the largest resort. If things appear excessive right now, the economy is largely to blame. Look at the number of AKV resales. When I checked last week there were TWENTY-TWO AKV resales, and points just went on sale 18 months ago.

To expect DVC to continue to build 200-400 unit boutique resorts is simply not realistic. We're 17 years into the DVC concept and they've already built two stand-alone resorts, one hybrid (BWV) and added-on to three existing deluxes (with a fourth on the way.) That leaves only two more deluxes suitable for DVC additions and 33 years before any of the 2042 resorts start reverting back for re-sale.

I doubt that Disney will be looking to shutter DVC sales anytime soon. I'll be surprised if the next WDW-based property isn't an 800-1000 room monster. But I also think we will see more off-site locations announced. Slowing construction at WDW-based sites would only increase demand for the existing theme park locations via resale. And yes, that even includes SSR.

not to nitpik, but would 2% holdings be 1 week? (.02*52=1.04)

It has been said that units not scheduled for remodelling may be rented via CRO...

 

[Chuck S]

I wouldn't be surprised to see a stand alone DVC built on the site of the incompleted portion of Pop Century. The infrastructure is there, the existing check-in food court building, if still viable, could be easily remodeled to include a table service venue as well as adding groceries to the store area. They could give the individual buildings a little "era" theming.

 

[tjkraz]

not to nitpik, but would 2% holdings be 1 week? (.02*52=1.04)

Sorry bout that.

It has been said that units not scheduled for remodelling may be rented via CRO...

I know that "it has been said", but many things that are said are simply not accurate.

 

[Dean]

IIRC, some document includes language which states that they do not have to pay dues on points held for maintenance purposes. That makes sense since, in theory, DVD wouldn't be reaping any financial benefit from those points. Over the years some have interpreted that clause to mean that DVD doesn't pay dues on ANY points that they hold.

The one thing I'm unclear on is whether there are any limitations to what DVD can do with points held for maintenance. 2% holdings would give them the ability to take every room out of service for up to 2 weeks per year. If they don't need all of that time for room repairs/refurbs, can the time be sold via CRO? Any ideas, Dean?

As for the original premise of the post, I don't see why the size of SSR or number of resales would be of any relevance. SSR is only a threat to DVC sales if people view it as a viable alternative to the resort(s) they are marketing. If customers DO view it as an alternative, then resale values will stay at an acceptable level. If not then prices will drop and DVC has no reason to use ROFR to prop-up prices.

SSR will always have the most resales because it's the largest resort. If things appear excessive right now, the economy is largely to blame. Look at the number of AKV resales. When I checked last week there were TWENTY-TWO AKV resales, and points just went on sale 18 months ago.

To expect DVC to continue to build 200-400 unit boutique resorts is simply not realistic. We're 17 years into the DVC concept and they've already built two stand-alone resorts, one hybrid (BWV) and added-on to three existing deluxes (with a fourth on the way.) That leaves only two more deluxes suitable for DVC additions and 33 years before any of the 2042 resorts start reverting back for re-sale.

I doubt that Disney will be looking to shutter DVC sales anytime soon. I'll be surprised if the next WDW-based property isn't an 800-1000 room monster. But I also think we will see more off-site locations announced. Slowing construction at WDW-based sites would only increase demand for the existing theme park locations via resale. And yes, that even includes SSR.

I am aware of the language you refer to but my understanding it is related to common and commercial areas, not points held. Still, according to the CFO Sept, 2006, DVC does pay fees on the points they hold, I asked at least 2 or 3 times. Other than making sure the maint gets done, I know of no other limitations and they can rent them out if they want.

 

[TisBit]

Isn't SSR really just the new OKW. Before SSR wasn't there more OKW on the market much cheaper because it was larger, therefore more owners=more resales.

I don't see SSR ever having a "high" resale value, unless something particularly stellar comes in to replace Pleasure Island, etc.

I agree that SSR might be too aggressive of a point schedule, unless the new DVC pale in comparison.