dvc at CBR???? true or not

[lockedoutlogic]

You are both right and wrong. Part of what has Disney selling points at BLT/VGF and eventually Poly at higher prices and premium point count is the is the preimium location. They are going to HAVE to back off on price when they look at something like additional points for the Wilderness Lodge. The location just isn't that primetime.

I do agree that DVC makes little sense at $165 a point. I bought at $74 a point and found the break even point to be about 10 years. At $165 a point, break even is something like 24 years. It's even worse when you think about that I can use my $74 points to stay at those locations. (Albeit at VGF its extremely hard right now, but will probably get easier with the passage of time.)

But, we all say it's a rip-off, yet there's no doubt they'll sell out VGF and I am sure the Poly as well.

Oh jeez, Pete...

You're bringing up the same argument we have every week about "premium locations pricing"

Listen,
You gotta ease off the pipe with the monorail motor lodges...

They are nice and convenient to magic kingdom...but there is no reasonable assertion that they would be worth 2x the points in a DVC scenario.

This is usually where I get the
"It's worth it to us!!"

Great...your wrong. They are ripping you off for those properties and I don't even think they will tell you otherwise at this point.

Currently, the two most convenient dvcs in terms of access are BEACH AND BOARDWALK. You can do the most with the least hassle there.

Polynesian may soon eclipse that... Because of direct monorail line access.

But come on now...it has nothing to do with premium Locations...they were selling animal kingdom at $125 a point and Saratoga at about $110 if I recall before the fictitious "sellout"...
Far more than boardwalk or beach and close to contemporary at the time.

It's just about them jacking the price up to push it.

If you come at me with this...I'm ending the ceasefire

 

[lockedoutlogic]

http://www.disboards.com/showthread.php?t=2823943

price from disney was about $62 at that point. inlaws either got a killer deal on a resale contract or i suspect they forgot what they paid if they bought direct.

i'm not really disagreeing with this.

apparently, buyers are still coming in droves. while i don't think DVC is a good deal now and would prefer disney executives not overdo it, if DVC can find buyers at $165 per pt, i suppose it would be unamerican of them not to sell DVC to those willing (if math-challenged) buyers...

1. They got a killer deal...it included a CM discount of 15%...grain of salt but still nowhere near 62. I went back and checked on mine...we got $13 off per point and that was at the real estate/ Saratoga boom.

2. GOOD!....don't let me catch you disagreeing with me again...

3. Now, I gotta say the reaganomics capitalist take is wearing a little. Wdw is not the "free market"...it is a highly manipulated near monopoly that is based much more on psychological factors than a textbook "market". Some people are paying it...but they are limiting their long term growth by shrinking the market on purpose. The " free market" wouldn't... And indeed may not... Reward that enterprise longterm.

The bottomline on laisse faire and wdw is that the consumers have been Incredibly stupid in the aggregate - partcularly the last 5-10 years. Economics assumes that some power of purchase is used to affect the market. Wdw patrons...have been self destructively bad at this.

 

[skier_pete]

Oh jeez, Pete...

You're bringing up the same argument we have every week about "premium locations pricing"

Listen,
You gotta ease off the pipe with the monorail motor lodges...

They are nice and convenient to magic kingdom...but there is no reasonable assertion that they would be worth 2x the points in a DVC scenario.

This is usually where I get the
"It's worth it to us!!"

Great...your wrong. They are ripping you off for those properties and I don't even think they will tell you otherwise at this point.

Currently, the two most convenient dvcs in terms of access are BEACH AND BOARDWALK. You can do the most with the least hassle there.

Polynesian may soon eclipse that... Because of direct monorail line access.

But come on now...it has nothing to do with premium Locations...they were selling animal kingdom at $125 a point and Saratoga at about $110 if I recall before the fictitious "sellout"...
Far more than boardwalk or beach and close to contemporary at the time.

It's just about them jacking the price up to push it.

If you come at me with this...I'm ending the ceasefire

No, you are right that in part it is just them jacking the price. But the reason they can get away with it is those "It's worth it to us" people. GO over on the DVC boards and you see them come through. "I don't care if it's twice as much money - I HAVE to be on the monorail. You know, for the kids!"

I agree with you, the BC/BW is a MUCH handier location. But look at the Poly in general. It's a resort that looks like it hasn't been updated since the 70s, yet people are willing to pay $600 a night to stay there. Now their refurbing it and turning it 2/3rds DVC and they'll be starting it at $180 a point, and people will snatch it up.

So is Disney stupid, or is the public stupid?

The answer is "Disney is greedy, and the public is stupid."

 

[Andrew015]

I personally feel that the "premium" point cost per night at VGF is relatively reasonable as compared to other DVC resorts. In comparing weekly VGF point requirements against VWL and BW, that premium is somewhere between 20-30% depending on room category and season, with the average hovering around 25%. Compare that against rack rates for cash rooms, and the difference is more like 70%. Not bad by comparison, if you ask me.

In my opinion, they had to do this in order to keep lowly people like me, who paid $50 a point at VWL, from coming in and snatching up all availability at the 7 month window. This premium will keep cheapskates like me at bay, and will keep the resort from being a mob-scene with a waitlist longer than Iger's nose.



To me, the most ridiculous thing in today's DVC offer is the upfront cost, and that is where Disney is simply porking it to us. Justifying the initial investment @ $165/point is an incredibly difficult thing to do. For me, it was a no-brainer @ $50/point, but I struggle with how anyone can make the financial justification at today's direct pricing.

 

[lockedoutlogic]

No, you are right that in part it is just them jacking the price. But the reason they can get away with it is those "It's worth it to us" people. GO over on the DVC boards and you see them come through. "I don't care if it's twice as much money - I HAVE to be on the monorail. You know, for the kids!"

I agree with you, the BC/BW is a MUCH handier location. But look at the Poly in general. It's a resort that looks like it hasn't been updated since the 70s, yet people are willing to pay $600 a night to stay there. Now their refurbing it and turning it 2/3rds DVC and they'll be starting it at $180 a point, and people will snatch it up.

So is Disney stupid, or is the public stupid?

The answer is "Disney is greedy, and the public is stupid."

Ok...agree.

We can be friends again

 

[lockedoutlogic]

I personally feel that the "premium" point cost per night at VGF is relatively reasonable as compared to other DVC resorts. In comparing weekly VGF point requirements against VWL and BW, that premium is somewhere between 20-30% depending on room category and season, with the average hovering around 25%. Compare that against rack rates for cash rooms, and the difference is more like 70%. Not bad by comparison, if you ask me.

In my opinion, they had to do this in order to keep lowly people like me, who paid $50 a point at VWL, from coming in and snatching up all availability at the 7 month window. This premium will keep cheapskates like me at bay, and will keep the resort from being a mob-scene with a waitlist longer than Iger's nose.

http://s366.photobucket.com/user/AKRanger22/media/VGFComparison_zps6e092c20.jpg.html

To me, the most ridiculous thing in today's DVC offer is the upfront cost, and that is where Disney is simply porking it to us. Justifying the initial investment @ $165/point is an incredibly difficult thing to do. For me, it was a no-brainer @ $50/point, but I struggle with how anyone can make the financial justification at today's direct pricing.

I think Olds contention was correct, but phrased wrong.

The point charge per room has been much higher at GF, BLT, Aulani, one would assume the Poly, etc....than for the same sized rooms in the past.

The difference is rack rate/point chart pricing as a percentage does not apply.

Because a point is a point...I.e. there is no preference to "new points" as opposed to "old points" if all things are equal a you go to book a room.

So the vgf is still far "cheaper" for someone using 1992 OKW points than a home member...
And the opposite is that you can book two nights at OKW as compared to one at vgf...and if you break it down by the cost the old member still cleans up.

If they started restricting certain point usage to certain properties... Then you have a conversation.

 

[Andrew015]

I think Olds contention was correct, but phrased wrong.

The point charge per room has been much higher at GF, BLT, Aulani, one would assume the Poly, etc....than for the same sized rooms in the past.

The difference is rack rate/point chart pricing as a percentage does not apply.

Because a point is a point...I.e. there is no preference to "new points" as opposed to "old points" if all things are equal a you go to book a room.

So the vgf is still far "cheaper" for someone using 1992 OKW points than a home member...
And the opposite is that you can book two nights at OKW as compared to one at vgf...and if you break it down by the cost the old member still cleans up.

If they started restricting certain point usage to certain properties... Then you have a conversation.

Maybe I'm not understanding the heart of the discussion, but the crux of where things "come off the track" always goes back to the upfront cost ($/point) paid, not the nightly point requirements of a given room/resort. I think we are in agreement there, no?

The nightly point cost for any DVC member, regardless of home resort or what they paid $/point when they joined, to book any DVC room regardless of resort or room class is the same for everyone. Again, I think we're on the same page here.

You can argue whether or not the 25% premium (in terms of nightly point requirements) for a studio at VGF as compared to the same studio at VWL is justifiable. Again, while I personally am not willing to spend 25% more of my points for the VGF studio, I understand the logic behind it and don't feel it to be "outrageous". Generally speaking, rack rates at WL, BW, YC/BC, AKL are in the same ballpark, and on the DVC side of things, these resorts are very comparable in terms of nightly point requirements. By comparison, rack rates at Poly, GF and Contemporary are on another level, so why is it unreasonable that we see a similar trend in terms of a "nightly premium" for these same resorts on the DVC side? Again, the rack rate difference from the "regular" deluxe resorts to the "premium" deluxe resorts is in the neighborhood of ~70%. On the DVC side, that premium is roughly ~25%. I guess the sticker shock of the rack rate delta makes the DVC delta seem like a deal for me.

Again, if "all were equal", Saratoga Springs would be emptier than it is today, and everyone and their brother... regardless if they paid $40/point or $165/point... would be lining up for VGF. I think the nightly point premium helps to spread things out a bit, and I have never been outraged by that. $165/point on the upfront purchase is a totally different animal...

 

[lockedoutlogic]

I see where you're coming from...I guess I look at it from my perspective...

The key thing that made me buy it was the flexibility to rotate...so a point is a point.

If that's your stance and a room is a room is a room with different view/experience...then the higher point charge IS paying more. Double that with the upfront cost...it's a double whammy.

You pay more and your points don't go as far if you stay at your home.

 

[tjkraz]

My inlaws got Hilton head in 1998 at $42 a point...

(snip)

When I did buy it years later at Saratoga it was $83 (I think...had to go back and check) a point after incentives

So it was 2x more expensive now...for the same room

Real estate doesn't follow the same conventions as most consumer products, though.

Developer charges $30K per lot in a subdivision. Sales are brisk and all of the lots are sold well ahead of projections.

So they open a neighboring Phase 2 with identical lots selling for $50K each. That's not inflation...it's charging what the market will bear. And the DVC market is holding up surprisingly well under $160 prices.

Personally I would call DVC's increases more of a "cost correction" than inflation. During the DVC "boom"--which even you acknowledge--the product was clearly underpriced.

(In fact, if DVC had responded by raising prices faster, we may have been spared from the oversized SSR property which...while nice...has too many units relative to its demand. If they'd pressed prices over $100 per point in the '04/05 timeframe, sales would have slowed, per-point profits would have risen and perhaps they'd have had the sense to move on to another property when SSR was still around 400 rooms rather than 800+.)

The real inflation IMO is the increasing points-per-night room cost. While they have done a decent job of improving the quality of villas built in the last 5-6 years, side-by-side comparisons of nightly rates for the likes of BoardWalk, Bay Lake and Grand Floridian really don't hold up.

It's not a "deal" now...it's an absolute dog of it goes higher.

Depends on what you're comparing against. It's still a "deal" if you're resigned to staying on Disney property for many years to come.

Despite any (supposedly) objective cost/benefit analysis of paying premium rates for Disney hotels, people still do it in droves. And we could come up with countless examples of how people spend their money irrationally. (Does a $60K car perform 3x as well as a $20K car?)

Even at today's rates, DVC still pays for itself in a fraction of the 50-year ownership window and resale values are impressively high.

 

[Josh Hendy]

...

3. Now, I gotta say the reaganomics capitalist take is wearing a little. Wdw is not the "free market"...it is a highly manipulated near monopoly that is based much more on psychological factors than a textbook "market". Some people are paying it...but they are limiting their long term growth by shrinking the market on purpose. The " free market" wouldn't... And indeed may not... Reward that enterprise longterm.

The bottomline on laisse faire and wdw is that the consumers have been Incredibly stupid in the aggregate - partcularly the last 5-10 years. Economics assumes that some power of purchase is used to affect the market. Wdw patrons...have been self destructively bad at this.

I think you're right, this ain't exactly a free market. But I think that the distortion or deviation away from laissez-faire isn't because of a monopoly situation or a psychological factor. It's because of the government and banks working together to print money and then hose it around as much as possible. Not because it's good for anyone else to do so, but because it's good for them. Banks make money on the flow of money by taking a slice out of everything that comes out of the nozzle. Governments make money from inflated currency by constantly borrowing larger and larger amounts of money to constantly expand the size of their, um, "services".

If I understand some of the things I've read, most people are borrowing money to buy into DVC. Disney is lending most of them the money to buy into DVC. Disney is probably themselves borrowing the money to lend to their customers, to pay for their "points". The money didn't come from people who diligently earned, saved and invested for growth in solid, well-managed bonds and stocks. It came from business end of the fire hose that is spewing the largest debt and credit bubble in history.

It's a free market in that nobody in any government is forcing Disney through regulation or direct financial incentives to slip and slide out of the hotel and theme park business and into the moneylending and real estate speculation businesses. Nobody is forcing customers to sign up for the next 50 years or whatever of vacations + condo fees. But it's a completely un-free market in that the entire economy, and therefore the way that persons and companies think about money, is being completely distorted by government in connivance with the largest banks.

If WDW customers have been incredibly stupid, it's not so much in the miscalculation of cost/benefit of timeshare condos, but more in the way of being completely oblivious to the big picture of how the entire economic fabric of the world is being shredded by people whom they trust, but in whom they really should really have no trust whatsoever.

 

[OldsDr]

I think Olds contention was correct, but phrased wrong.

The point charge per room has been much higher at GF, BLT, Aulani, one would assume the Poly, etc....than for the same sized rooms in the past.

The difference is rack rate/point chart pricing as a percentage does not apply.

Because a point is a point...I.e. there is no preference to "new points" as opposed to "old points" if all things are equal a you go to book a room.

So the vgf is still far "cheaper" for someone using 1992 OKW points than a home member...
And the opposite is that you can book two nights at OKW as compared to one at vgf...and if you break it down by the cost the old member still cleans up.

If they started restricting certain point usage to certain properties... Then you have a conversation.

I was at lunch and probably did not spend enough time explaining myself. My intention was that if you bought 150 points at VGF compared to 150 points VWL your percentage ownership in VGF is less than in VWL. You need to own more points to stay there and at the same time those points cost more it is a double increase.

I know points can be used at any DVC, right now, but the contract only guarantees you to be able stay in your home resort so that should be taken into account when purchasing.

I don't have time right now, but since each point is a smaller percentage of the resort the dues per point should reflect that. Unless because it is VGF they are planning on spending more on upkeep.

 

[skier_pete]

I know points can be used at any DVC, right now, but the contract only guarantees you to be able stay in your home resort so that should be taken into account when purchasing.

It doesn't even do that. All it guarantees you is an opportunity to get in at 11-months. I've been watching the VGF, and if you want to get in there on particular dates, you gotta book at the 9-10 month mark, and SOME dates are gone right near the 11-month mark. So, even if you OWN there, you could easily be shut out of your desired dates if you are not on top of it. And certain dates, such as Christmas week, may be impossible to get since they are also selling week-long ownerships as well there.

Again, I couldn't IMAGINE paying that premium for points and getting "stuck" with VWL or some "lesser" resort. As has been said, most resorts are going for $70-$90, so the $165 is almost a 2X premium, and the advantages you get are as great as paying 2X for a car. It's more like you paying 2X to lease a Mercedes, but if you're not one of the first 10 to the lot, you get a Toyota instead.

 

[Andrew015]

I was at lunch and probably did not spend enough time explaining myself. My intention was that if you bought 150 points at VGF compared to 150 points VWL your percentage ownership in VGF is less than in VWL. You need to own more points to stay there and at the same time those points cost more it is a double increase.

I can understand where you and LockedOut are coming from with this perspective. I simply look at GF/VGF as the "premium" resort. It costs more than all other resorts on a per-night cash basis, so I have no problem with this same logic of a nightly premium translating over to the DVC side. I do not view a "room is a room is a room" with DVC. If I did, I would have simply purchased the cheapest resort via resale at the time and just rolled the dice at the 7-month window. For me, which resort I stay at is a very important part of my vacation. VWL is the "be-all, end all" for me, so I was forced to live with the going asking price and associated nightly point requirements at the time. Luckily for me, I bought via resale when DVC was in the tank, and the nightly point requirements for VWL are quite reasonable. If my "itch" were on a "Grander scale", I would be forced to pay the piper on a nightly basis, and I would have to be OK with that (in reality, I probably would just not buy into DVC at all, and stay on "cash" on a less frequent basis). Thankfully, I don't have that "itch".

Again, the asking price ($165/point) is a totally different story. But, I can say with certainty, if and when the VWL expansion takes place, I'd be willing to bet you a Dole Whip that it will be priced in and around the same neighborhood as VGF (within $10-15 per point). This almost forces you to view the "buy-in cost" and the "nightly room costs" (per point) as two separate issues. I know it seems like a "double whammy" at VGF (and quite frankly, it is), but folks who wish to add onto VWL will face similar asking prices, but will enjoy a lower point/night, as I feel they should given the fact that VWL is a notch below VGF.

 

[skier_pete]

Again, the asking price ($165/point) is a totally different story. But, I can say with certainty, if and when the VWL expansion takes place, I'd be willing to bet you a Dole Whip that it will be priced in and around the same neighborhood as VGF (within $10-15 per point). This almost forces you to view the "buy-in cost" and the "nightly room costs" (per point) as two separate issues. I know it seems like a "double whammy" at VGF (and quite frankly, it is), but folks who wish to add onto VWL will face similar asking prices, but will enjoy a lower point/night, as I feel they should given the fact that VWL is a notch below VGF.

I think the hard part they will have with charging $165 a point for an add-on at VWL will be competition with the resale market. Unless they do it as two separate resorts -which seems like a difficult sale - how do you convince people to pay $165 a night for the same resort that's going for $85 a night. Sure, some portion won't have a clue about resale, but enough will. I suppose part of it will be the new resort will probably have a longer end-of-term date, but that doesn't get you $165 a night. Do they get into the ROFR market big-time to drive the price up? (Snatch up any unit that's selling under $100.)

It will be interesting.

 

[OldsDr]

I think the hard part they will have with charging $165 a point for an add-on at VWL will be competition with the resale market. Unless they do it as two separate resorts -which seems like a difficult sale - how do you convince people to pay $165 a night for the same resort that's going for $85 a night. Sure, some portion won't have a clue about resale, but enough will. I suppose part of it will be the new resort will probably have a longer end-of-term date, but that doesn't get you $165 a night. Do they get into the ROFR market big-time to drive the price up? (Snatch up any unit that's selling under $100.)

It will be interesting.

I see this as a multiple part strategy.

1) when the new VWL contracts start selling they offer an extension to existing owners that has the same end date as the new contracts
2) ROFL most resales that are not extended and still have a 2042 expiration
3) once ROFR happens do whatever accounting magic they have to do and DVD pays for the contract extension
4) now they sell all the ROFRs with the new date.
5) let the 2042 management worry about the mess of some of the contarcts expiring and some going on longer

I am not sure how the contract is written, but if they can part of my number 1 will be to limit resales to home resort use only. I left this out becasue I am not sure if they can do this.

 

[OldsDr]

come to think of it there is no mess in 2042, just a new marketing strategy.

in 2042 they actively sell all the 2042 contracts they get back. The brochure will be OKW, BW, BC, VWL VB and HHI (if VB and HHI are still DVC) choose which one you want.

 

[Andrew015]

I think the hard part they will have with charging $165 a point for an add-on at VWL will be competition with the resale market. Unless they do it as two separate resorts -which seems like a difficult sale - how do you convince people to pay $165 a night for the same resort that's going for $85 a night. Sure, some portion won't have a clue about resale, but enough will. I suppose part of it will be the new resort will probably have a longer end-of-term date, but that doesn't get you $165 a night. Do they get into the ROFR market big-time to drive the price up? (Snatch up any unit that's selling under $100.)

It will be interesting.

This is my opinion only (take it for what it's worth), but I don't anticipate asking price for New VWL to be $165. Again, I suspect it will be "in the same ballpark" as VGF, but there will be a difference (maybe $150ish?). Secondly, the end date for New VWL will surely not be 2042. I suspect this will be handled much like the OKW extension - same property, same rooms, same point charts, just different (extended) end dates for the New contracts. There is no other way around this, as no one in their right mind would pay Disney's direct asking price when the same thing could be had on the resale market for $70/point. Again, my opinion only.

I really doubt that they will do much to restrict resale market sales, as to date, Disney has never made much of an effort to control this market (aside from limiting certain resale benefits like not being able to use resale points for cruises, Disney Collection resorts, etc., which most would probably argue wasn't much of a loss). Surely, there are times that ROFR has been used to "shore things up" a bit here and there, but not on the scale of what you are suggesting. My speculation is based on Disney's past performance, which is usually a pretty good indicator of their future behavior.

 

[beer dave]

Here's how I see it--- The buy in price is increasing because the entire DVC package has become larger than it was originally. Think of it as My Inflation Plus. Even though the buy in has doubled, it still isn't the major cost of DVC---- If you buy a new contract of 100 points at 165 a point, you get 5000 points over the lifetime of the contract. That comes to 3.30 a point each time you use one. If you buy the same amount of points resale at 80 a point, expiring in 42, you get 2800 points, costing 2.86 a point.

The argument will be that what if you don't plan on keeping them for the full contract.... And the answer is in how long each contract will retain it's value. In 20 years, the resale will have a mere 8 years left on the contract, while the new will still have 30. I think in ten years or so, we will start to see a drop in resale for the sooner to expire points.

The real expense in DVC is the maintenance. Clearly right now it is double the buy in price, and climbing every year. When maintenance starts to approach the 8 and then 10 dollar range, in another 10 years, everyone will stop looking at their buy in price so negatively.

It will also be interesting to see what the future increases in MF will do to resale. I will just be watching as an outside observer, beings as I have no intentions of selling. If I don't use them, my kids will.

 

[OldsDr]

......

Surely, there are times that ROFR has been used to "shore things up" a bit here and there, but not on the scale of what you are suggesting. My speculation is based on Disney's past performance, which is usually a pretty good indicator of their future behavior.

They also have never started selling new points into an exisiting location, that is a big difference here. If they are already performing a ROFR reviews and can get points at $70 to $100 and then resell them at $165 especially when it is the resort they are actively selling I can not see them passing it up.

 

[skier_pete]

They also have never started selling new points into an exisiting location, that is a big difference here. If they are already performing a ROFR reviews and can get points at $70 to $100 and then resell them at $165 especially when it is the resort they are actively selling I can not see them passing it up.

That thought occurred to me too - that now might be a good time to buy at VWL.

On the other hand, they may just go with the difference in lease as a sell point. Still gotta imagine they won't want VWL prices to be too low during that time and could easily decide to ROFR anything below a certain mark.