Disney's Long Term DVC Strategy

[Mirabell Rose]

Honestly, no up-front renovation is really even required, is it? They could pre-sell the existing rooms such that the new owners take possession on Feb 1, 2042, rent the unsold rooms that they own, and take blocks of their own rooms out of service a few at a time so they can renovate without closing the resort. As a buyer I'd want to know that the developer will eventually pay for renovations so it's not hitting the HOA's reserves after I've already paid a premium to acquire the new resort, but I don't think I'd care a ton about timeline.

Don’t they have to distribute any reserves they are holding back to the owners on termination? Under the 2025 law, they would then need to replace those reserves before they can start reselling the units.

 

[Cfabar1]

Honestly, no up-front renovation is really even required, is it? They could pre-sell the existing rooms such that the new owners take possession on Feb 1, 2042, rent the unsold rooms that they own, and take blocks of their own rooms out of service a few at a time so they can renovate without closing the resort. As a buyer I'd want to know that the developer will eventually pay for renovations so it's not hitting the HOA's reserves after I've already paid a premium to acquire the new resort, but I don't think I'd care a ton about timeline.

My personal theory is those resorts are so beloved and the location is ideal they could do nothing to the buildings, make no promises, and increase the points charts by 35-40% and no one would bat an eye and they'd sell out in record time...

BRV they might have to work a little harder...

In the event VB and HHI are kept, I can't imagine they'd do something meaningful to the rooms... maybe if we are lucky they'd add some additional amenities to those properties...

 

[Sandisw]

Honestly, no up-front renovation is really even required, is it? They could pre-sell the existing rooms such that the new owners take possession on Feb 1, 2042, rent the unsold rooms that they own, and take blocks of their own rooms out of service a few at a time so they can renovate without closing the resort. As a buyer I'd want to know that the developer will eventually pay for renovations so it's not hitting the HOA's reserves after I've already paid a premium to acquire the new resort, but I don't think I'd care a ton about timeline.

I actually didn’t even think about that but yes, they could do that, especially under the trust model they created.

Heck, they could decide to put both BWV and BCV into one RTU plan so one gets home resort at both….and do some at each?

They can’t keep any of the current reserves that belong to owners, but since they would be new resorts. it would be no different than how it works now.

They would be responsible for the intial costs of renovations, just like they pay for an initial build, except they’d be doing it slowly and not all at once.

 

[Mirabell Rose]

I actually didn’t even think about that but yes, they could do that, especially under the trust model they created.

Heck, they could decide to put both BWV and BCV into one RTU plan so one gets home resort at both….and do some at each?

They can’t keep any of the current reserves that belong to owners, but since they would be new resorts. it would be no different than how it works now.

They would be responsible for the intial costs of renovations, just like they pay for an initial build, except they’d be doing it slowly and not all at once.

It would be different in that since it is a 50 year old property they would need substantial reserves from the start. Newly built resorts are allowed to start with no reserves because they are new. The older the property the higher the reserve requirements.

 

[Sandisw]

It would be different in that since it is a 50 year old property they would need substantial reserves from the start. Newly built resorts are allowed to start with no reserves because they are new. The older the property the higher the reserve requirements.

It depends on how they structure it and when they begin selling it for for use.

With new resorts, they are paying upfront building costs so in this case, they could simply upfront whatever reserves need to be in place.

And then, as sales happen, replace their own funds. I’m sure they will find a way to make it all work, assuming they intend to keep those locations as DVC resorts…which I can’t imagine they won’t.

I know I keep mentioning the trust, but that model really would give them so many options to handle what to do with those properties, assuming they decide it makes sense to move that way.

The one thing I don’t know is if selling RTU vs leasehold changes the reserves requirements since DVD never gives up ownership of any of the property.

ETA: based on what I read with a quick review, developers have to set up some or all of the initial reserve funds during the sales phase.

 

[Carouselofplanning]

That is a very good point and maybe that will shift DVDs strategy.

We have already seen them taking some RIV in ROFR, so it could end up happening, given that the two products are vastly different.

The O14 are really not at this point.

The RIV buybacks are just restricted resale floor protection. Price can’t get too low or they can’t sell as much at the desired direct price point (and they don’t want to highlight what the restrictions are actually doing).

 

[Carouselofplanning]

My personal theory is those resorts are so beloved and the location is ideal they could do nothing to the buildings, make no promises, and increase the points charts by 35-40% and no one would bat an eye and they'd sell out in record time...

BRV they might have to work a little harder...

In the event VB and HHI are kept, I can't imagine they'd do something meaningful to the rooms... maybe if we are lucky they'd add some additional amenities to those properties...

I don’t see HH being kept. The property is charming and the destination is wonderful but it’s not what it was originally envisioned to be plus their current strategy is to focus on parks and cruises. The way it turned out the resort is behind a large shopping plaza (?) and the beach is a short drive away across a main road. The original idea completely on the beach was the home run idea that got stopped because the development strongly opposed any timeshare properties. The two Atlantic beach resorts lack what the other has: HH is a great destination and a meh location. Vero is a great location but a meh destination. They will both be gone in 2042.

 

[Chili327]

I don’t see HH being kept. The property is charming and the destination is wonderful but it’s not what it was originally envisioned to be plus their current strategy is to focus on parks and cruises. The way it turned out the resort is behind a large shopping plaza (?) and the beach is a short drive away across a main road. The original idea completely on the beach was the home run idea that got stopped because the development strongly opposed any timeshare properties. The two Atlantic beach resorts lack what the other has: HH is a great destination and a meh location. Vero is a great location but a meh destination. They will both be gone in 2042.

Id think Vero is worth keeping just based on being close enough to Orlando, and also Cape Canaveral.
I haven’t been yet, but have a trip coming up and excited for it to be an option to extend vacations beyond the parks.

 

[Cfabar1]

Id think Vero is worth keeping just based on being close enough to Orlando, and also Cape Canaveral.
I haven’t been yet, but have a trip coming up and excited for it to be an option to extend vacations beyond the parks.

Of the two, I think Vero is more likely to survive if you had to pick one... why?
- Closer to the Orlando mothership for synergies
- A larger property
- Has a full-service spa, restaurants
- Oceanfront location
- In my view, tougher to attract a buyer

HHI I could imagine being more attractive to one of the majors who already have significant footprints in HHI...

I don't know if Disney wants to deal with selling VB to a third-rate timeshare operator or hotelier and then deal with headlines about the "former" Disney property...

Now, selling to a developer who would raze the property and put in mega mansions.. that might work for them...

But personally, I think both of them are gonzo come shortly after 2042...

 

[muppets3d]

Every thread on here eventually devolves into baseless 2042 speculation or debates over resale restrictions, doesn't it?

 

[byurick]

Every thread on here eventually devolves into baseless 2042 speculation or debates over resale restrictions, doesn't it?

100%

 

[DVCsloth]

Every thread on here eventually devolves into baseless 2042 speculation or debates over resale restrictions, doesn't it?

And just about the only thing positive for customers is being able buy a very nice resort for a potentially low price, restricted resale.
Edit, this all depends on Disney's plan for BCV/BWV since these properties will almost certainly go way up in price leaving Riviera as a fairly economical resort with almost as good of access "IMO" to Epcot and HS.

 

[gvel]

Every thread on here eventually devolves into baseless 2042 speculation or debates over resale restrictions, doesn't it?

Yes... and I love it

 

[Carouselofplanning]

Yes... and I love it

So true but in this case even though they both happen to be 2042s, the strategy with them is simply Disney has no interest in a non Disney Parks resort portfolio at this time and they are closest to decision time. Heck, Disney already sold off the land where the Vero expansion was supposed to happen.

Curious if they figure out a way to either:
A) Sell some iteration of a DVC ship
B) Throw a 50 year deeded resort on one of the two DCL islands.

 

[Carouselofplanning]

Of the two, I think Vero is more likely to survive if you had to pick one... why?
- Closer to the Orlando mothership for synergies
- A larger property
- Has a full-service spa, restaurants
- Oceanfront location
- In my view, tougher to attract a buyer

HHI I could imagine being more attractive to one of the majors who already have significant footprints in HHI...

I don't know if Disney wants to deal with selling VB to a third-rate timeshare operator or hotelier and then deal with headlines about the "former" Disney property...

Now, selling to a developer who would raze the property and put in mega mansions.. that might work for them...

But personally, I think both of them are gonzo come shortly after 2042...

I agree there is some synergy with Vero being a WDW or DCL add on. That’s probably its most popular use I would imagine.

 

[intamin]

So true but in this case even though they both happen to be 2042s, the strategy with them is simply Disney has no interest in a non Disney Parks resort portfolio at this time and they are closest to decision time. Heck, Disney already sold off the land where the Vero expansion was supposed to happen.

Curious if they figure out a way to either:
A) Sell some iteration of a DVC ship
B) Throw a 50 year deeded resort on one of the two DCL islands.

It's really a shame because they actually are great resorts and help add diversity to the portfolio. Even though there's only 3 off property resorts they really do make it so you don't JUST go to the parks. I'm grateful the best off property resort(I may be biased) is at least with us until the 2060s.

 

[gvel]

So true but in this case even though the both happen to be 2042s, the strategy with them is simply Disney has no interest in a non Disney Parks resort portfolio at this time and they are closest to decision time. Heck, Disney already sold off the land where the Vero expansion was supposed to happen.

Curious if they figure out a way to either:
A) Sell some iteration of a DVC ship
B) Throw a 50 year deeded resort on one of the two DCL islands.

I think there is plenty of interest for a DCL/DVC product. I'm not a lawyer, but the logistics of dealing with a moving asset, extensive maintenance schedules, international laws, etc. might make it complicated.

 

[Dyefrog]

So true but in this case even though they both happen to be 2042s, the strategy with them is simply Disney has no interest in a non Disney Parks resort portfolio at this time and they are closest to decision time. Heck, Disney already sold off the land where the Vero expansion was supposed to happen.

Curious if they figure out a way to either:
A) Sell some iteration of a DVC ship
B) Throw a 50 year deeded resort on one of the two DCL islands.

I too speculate on what other opportunities for non-park DVC resorts might pique their interest but based on resale values I'm inclined to believe Disney is not interested. It does make me wonder what the discussions were that convinced them that HHI, VB, and AUL fit the business model then and not now if true.
I've never been to DCL's private island but that does provide some interestic dynamics and logistics especially when factoring in DCL. On the one hand, what makes it more attractive then AUL as a resort? But I could see it partnering with DCL for a combo 14 day cruise/DVC week. 3 day cruise, 7 night on private island, 4 day return cruise. Could be a win/win for both DVD and DCL. Has anyone crunched the numbers of potential guests when comparing East coast to West coast? Even though AUL has taken longer to sell out than any other resort?, it seems as though it doesn't lack occupancy.

 

[Carouselofplanning]

I too speculate on what other opportunities for non-park DVC resorts might pique their interest but based on resale values I'm inclined to believe Disney is not interested. It does make me wonder what the discussions were that convinced them that HHI, VB, and AUL fit the business model then and not now if true.
I've never been to DCL's private island but that does provide some interestic dynamics and logistics especially when factoring in DCL. On the one hand, what makes it more attractive then AUL as a resort? But I could see it partnering with DCL for a combo 14 day cruise/DVC week. 3 day cruise, 7 night on private island, 4 day return cruise. Could be a win/win for both DVD and DCL. Has anyone crunched the numbers of potential guests when comparing East coast to West coast? Even though AUL has taken longer to sell out than any other resort?, it seems as though it doesn't lack occupancy.

First of all, the private island issue gets fixed easily - just expand the Skyliner which seems to be everyone’s solution when talking Disney resorts lol.

Seriously though, Hilton Head and Vero were conceived in an era when Disney didn’t realize cruise line would be not only a thing but also so successful. They launched those resorts towards the end of the Big Red Boat era which was simply a licensing deal that eventually made a lightbulb go off that Disney should just have their own cruise line. Soon after it became clear the cruise line was highly successful (especially compared to off property timeshares) the plan to expand the off property portfolio of resorts was scrapped and the endless expansion of the cruise ship fleet began.

Aulani is its own thing, capturing both the Tokyo and US Disney market. They changed from their original off property DVC model and “went big” with this resort. It’s been wildly successful. Maybe not as a timeshare as it’s still selling, but they don’t hurt for vacancies and sell those expensive rooms without much trouble. Hawaii is unique- Not sure there are many other locations that make as much sense.

 

[muppets3d]

So much "I said and it sounds cool it so it must be true" on threads like this, lol.