Could this be the reason for OKW extension?

[dianeschlicht]

I have been thinking about the OKW extension and the fact that they are selling quite a few "new" OKW contracts that end in 2057. It occured to me that perhaps the reason for extending OKW and not BWV, BCV, or VWL at this time might be because of the point structure.

We have heard here many times how people want DVC to put "value points" out there for a new resort. Maybe this is their answer to a lower points stay without the building costs! Since OKW already has that lower point structure, it makes sense to promote selling new extended contracts and not have the expense of building a new resort.

With all the levels of points available at AKV (value up to concierge), I can see that being an important aspect for them. Maybe that is also why they have not yet announced BLT (or whatever they are going to call it) just yet. I suspect the point structure AND cost will be great there. It might not be feasible if they can't first sell out AKV and OKW with some less costly point structures.

 

[drusba]

Personally, I think they started the extension with OKW simply because it is the oldest resort -- no one can complain that DVD did not give the longest standing members first shot. Also, they did it at only one resort because it was an experiment to see how well it would do and that will be a key factor as to if and when they will offer it at other resorts.

I am guessing they have not announced BLT because they want to play the string of AKV being the front runner a while longer first. If and when BLT comes out, it most likely is going to have a higher point structure than others and they will likely increase the price of points somewhat at about the same time. Moreover, the point structure could have variety not seen before -- not just differences in bay and MK and possibly other views, but also possible differences based on floor level.

 

[dwelty]

I have been thinking about the OKW extension and the fact that they are selling quite a few "new" OKW contracts that end in 2057. It occured to me that perhaps the reason for extending OKW and not BWV, BCV, or VWL at this time might be because of the point structure.

We have heard here many times how people want DVC to put "value points" out there for a new resort. Maybe this is their answer to a lower points stay without the building costs! Since OKW already has that lower point structure, it makes sense to promote selling new extended contracts and not have the expense of building a new resort.

With all the levels of points available at AKV (value up to concierge), I can see that being an important aspect for them. Maybe that is also why they have not yet announced BLT (or whatever they are going to call it) just yet. I suspect the point structure AND cost will be great there. It might not be feasible if they can't first sell out AKV and OKW with some less costly point structures.

Diane,

You may be on to something. Lets look at it this way. You have a young family that needs a 1 bedroom, once a year for a week. They go to a DVC presetaiton and find out that it takes 171 points in value season for a Standard View room at AKL. The points are a little out of their price range, and they decline. If I was their guide, I would then offer them OKW points (160 points for the same period). This might be enough to get them to buy. It's certianly better than loosing the sale all together.

 

[JimMIA]

I know this will sound a little crass, but I think they did it for the money! They will reap millions of bucks from owners who extend - as Diane says, at minimal cost to DVC.

In addition, the extension provides important support for ROFR. Every couple of years, DVC has been sending out emails to owners telling us they have thousands of points in our UY. If you add those up, you'll find that DVC is sitting on tens of thousands of points from ROFR that they are having trouble selling. Now, they can ROFR non-extended points, magically transform them into extended, and sell them much more easily and at a higher price.

To me, the OKW extension is just found money.

I don't see the "low-points" stays as being an incentive. Except for a few time periods, any DVC owner can get availability at OKW at seven months. GV's are probably the only exception. You don't need to own there to get the low points cost.

 

[Laurabearz]

I have to agree with the Money side of this.

But wanted to say WOOT WOOT Diane... ONE MORE POST for 31,000!!!

 

[chalee94]

To me, the OKW extension is just found money.

word.

(give me $15 per pt now, and in 2043, i'll give you something in return...that sounds like easy money to me...)

 

[broncoblue399]

So if I buy points for OKW from Disney They are all extended? And what are they selling for?

 

[chalee94]

So if I buy points for OKW from Disney They are all extended?

yes.

And what are they selling for?

$101 per pt.

 

[Starr W.]

I know this will sound a little crass, but I think they did it for the money! They will reap millions of bucks from owners who extend - as Diane says, at minimal cost to DVC.

In addition, the extension provides important support for ROFR. Every couple of years, DVC has been sending out emails to owners telling us they have thousands of points in our UY. If you add those up, you'll find that DVC is sitting on tens of thousands of points from ROFR that they are having trouble selling. Now, they can ROFR non-extended points, magically transform them into extended, and sell them much more easily and at a higher price.

To me, the OKW extension is just found money.

I don't see the "low-points" stays as being an incentive. Except for a few time periods, any DVC owner can get availability at OKW at seven months. GV's are probably the only exception. You don't need to own there to get the low points cost.

I agree with Jim, I think it was 2 financial quarters ago, DIS reported a good chunk of revenue for DVC came from the OKW extension.

 

[dianeschlicht]

Diane,

You may be on to something. Lets look at it this way. You have a young family that needs a 1 bedroom, once a year for a week. They go to a DVC presetaiton and find out that it takes 171 points in value season for a Standard View room at AKL. The points are a little out of their price range, and they decline. If I was their guide, I would then offer them OKW points (160 points for the same period). This might be enough to get them to buy. It's certianly better than loosing the sale all together.

That's exactly my point!

 

[dianeschlicht]

I have to agree with the Money side of this.

But wanted to say WOOT WOOT Diane... ONE MORE POST for 31,000!!!

LOL! Once again I totally missed it!!!

 

[tjkraz]

I still have the same theory that I had when I first heard about the extension--that it was done to help move the OKW points Disney is holding.

As the oldest resort and one of the largest, OKW has certainly had a large percentage of points change hands. And DVC has reacquired many of them via ROFR. But with the identical ending dates of OKW, VWL, BVC and BWV (not to mention HHI and VB), I suspect disney was having a difficult time reselling the OKW points. With the extension, OKW is not on equal footing with the more recently constructed resorts. That fact alone makes them more appealing to buyers.

In all likelihood it was a combination of several factors (goodwill gesture, test the waters for extensions, etc.) but I'm convinced the ability to market OKW as a 50-year resort was the primary motivation.

 

[dianeschlicht]

I still have the same theory that I had when I first heard about the extension--that it was done to help move the OKW points Disney is holding.

As the oldest resort and one of the largest, OKW has certainly had a large percentage of points change hands. And DVC has reacquired many of them via ROFR. But with the identical ending dates of OKW, VWL, BVC and BWV (not to mention HHI and VB), I suspect disney was having a difficult time reselling the OKW points. With the extension, OKW is not on equal footing with the more recently constructed resorts. That fact alone makes them more appealing to buyers.

In all likelihood it was a combination of several factors (goodwill gesture, test the waters for extensions, etc.) but I'm convinced the ability to market OKW as a 50-year resort was the primary motivation.

Tom, I am sure you are correct, but I also wonder if it wasn't to point out the allure of the smaller point costs.