dvc contract extensions

[jtheodore]

Does anyone thinks any of the other contracts expiring in 2042 will offer extensions?

 

[dvcterry]

i just was joking with my guide that he'll be selling all our expired 2042 bcv contracts to our children for how much $350 per point then, more maybe?

 

[CRobin]

IMHO they all will, on a schedule based upon when they opened.

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[Dean]

Does anyone thinks any of the other contracts expiring in 2042 will offer extensions?

I have mixed thoughts. The OKW extension was a disaster on several fronts. However, they really need to extend the resorts to support the infrastructure of the system starting for 2042. They also need to do so in such a way that the OKW owners (both who did and did not extend), don't have reasonable recourse for a complaint or action. To me that means either late in the course for little money or in conjunction with others options such as a new retail purchase. They can't take the OKW approach because not enough people will bite plus their approach of a Special assessment isn't legal within the POS. That they tied to expiration to the ground lease in the POS creates a lot of problems and limitations for them.

 

[jtheodore]

Interesting

 

[disneynutz]

It's all about the money. If a greater profit can be made extending the existing contracts, then that is what Disney will do.

If the buildings are at the end of their useful life and Disney can make more money tearing them down and building a larger resort with more units to sell at a higher price, then that is what will happen.

I expect that the second option is what we will see in most cases.

Bill

 

[RobDoc]

IMHO they all will, on a schedule based upon when they opened.

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If that's the case, we should already have seen extensions offered for VB, HH and BWV. OKW opened in 1991 and the extension was voted on and offered in 2007. VB opened in 1995, HH and BWV in 1996 so all are beyond a schedule based on opening dates.

I would not expect extensions for VB or HH, but feel that BWV would be a reasonable resort to extend if DVC could find a better way to offer it than the stronghanded method and price used for OKW. Perhaps they have been unable to find either.

 

[Chuck S]

I think they will let the contracts expire, refurbish or rebuild, and give any 2042 owners a discount on repurchase. I don't think we'll see contract extensions like at OKW.

At the pace technology is changing, the resorts may need to be rebuilt or a major refurb just to keep up.

 

[tjkraz]

I think they will let the contracts expire, refurbish or rebuild, and give any 2042 owners a discount on repurchase. I don't think we'll see contract extensions like at OKW.

At the pace technology is changing, the resorts may need to be rebuilt or a major refurb just to keep up.

That's my thinking, too. The other day there was a post from someone upset over the lack of electrical outlets at BWV. That's just one example of how times have changed in just 15 years. Those buildings will slide further and further toward "outdated" over time. Being a timeshare, Disney doesn't have the luxury to shut down entire DVC wings for months at a time to refurbish as they've done with older structures like the Disneyland Hotel or Polynesian.

Some people would still renew because of their love for the Beach Club or BoardWalk but extensions wouldn't be universally embraced. Some would decline over price. Some over long-term maintenance concerns. Some because they are at an age where they just don't need it.

Overall, I think Disney has a lot more to gain by waiting until the contracts expire, refurbishing / rebuilding and then selling again "new."

That said, I wouldn't rule it out entirely. Never know what sort of desperate actions Disney may take during the next economic slowdown (or the one after that, or the one after that...)

 

[dianeschlicht]

I have mixed thoughts. The OKW extension was a disaster on several fronts. However, they really need to extend the resorts to support the infrastructure of the system starting for 2042. They also need to do so in such a way that the OKW owners (both who did and did not extend), don't have reasonable recourse for a complaint or action. To me that means either late in the course for little money or in conjunction with others options such as a new retail purchase. They can't take the OKW approach because not enough people will bite plus their approach of a Special assessment isn't legal within the POS. That they tied to expiration to the ground lease in the POS creates a lot of problems and limitations for them.

I agree with you, Dean. The only reason we didn't bite on the extension is because we probably wont be around by the time our original contract expires. I'd rather leave it up to my offspring to decide on their own if they want the dues etc, once that time comes. Come to think of it, since my "kids" will also be in there late 60's early 70's by then, I'm pretty sure our decision not to extend so far ahead was a good one.

I would hope the other resorts would at least wait until there was 10 years or less left on the contracts.

 

[nuts]

I wonder what happens to the capital fund if Disney lets the contracts expire. Do they get to keep it (use to build/update the infrastructure for new sales)?

 

[luckyman_apd]

I think they will let the contracts expire, refurbish or rebuild, and give any 2042 owners a discount on repurchase. I don't think we'll see contract extensions like at OKW.

At the pace technology is changing, the resorts may need to be rebuilt or a major refurb just to keep up.

I agree. They can't take rooms out of service for major renovations and updating like other Disney resorts. If the sales of the points pays for the building construction, and dues for the maintenance and upkeep, then I can see them tearing them down one by one and rebuilding, or at least major refreshing and remodel. The real curious part it what about the other resorts? I'm curios as to why so many have the same expiration of 2042. Why didn't they extend the end dates a few years? I don't know the history, but whatever resort came after old key west, if it was a year or two, why not have that date a year or two after OKW? This way one resort at a time could have been taken out as it expires, rebuilt/refurbished and sold as new.

 

[Dean]

I wonder what happens to the capital fund if Disney lets the contracts expire. Do they get to keep it (use to build/update the infrastructure for new sales)?

No, any excess funds would have to be returned. They also can't use the money's to get it ready for the future (within reason of course). Most likely what will happen is they'll reduce the fees the last few years with this in mind. In addition, they'll have to find a way to prorate the fees on the points late in the time because not everyone will be able to use all points the last couple of years at DVC resorts (mathematical fact).

 

[Chuck S]

I'm curios as to why so many have the same expiration of 2042.

I think initially was because they wanted a set cut off date if they wanted to get out of the timeshare business altogether, and there was no need to offer end dates after 2042 at that time, they were selling well with the 2042 cut off. Once they saw the prospect of continuing income from added locations, they knew that to increase the price, they needed to extend the end date of a new resort. No one would pay $100 per point for a 20 to 25 year leasehold.

 

[lilpooh108]

What have other companies done? Aren't there some Hawaiian timeshares w/the same leasehold concept?

Just curious.

 

[Dean]

What have other companies done? Aren't there some Hawaiian timeshares w/the same leasehold concept?

Just curious.

I'm sure some of the HI properties are leasehold but I can't think of any that are RTU and have expired though some would have been at their end point by now. Most RTU options are not in the US which is hard to compare. The Royals in MX are likely the best comparison as far as it goes. They've had one expire so far. IIRC they redid it and resold it giving current owners first crack and a significant discount, I haven't kept up with that system for a few years. I'm not personally aware of other resorts that have gone through this situation so far though some must have since some of the early ones in HI were RTU 40 YEARS. Timesharing is only about 43 or so years old in the US.

 

[BestDadEver]

I would like to think they should offer it late as possable . So the people that get dvc in an estate would be able to make the choice . Most of us won't be around to see the contacts expire .

 

[Dean]

I would like to think they should offer it late as possable . So the people that get dvc in an estate would be able to make the choice . Most of us won't be around to see the contacts expire .

They tried to extend OKW and make some money on it but they failed miserably. Now they've gotten themselves in a pickle I believe. They've got a relatively small % of the membership at OKW extended and the majority ending in 2042. In addition they likely have owners in every single building that are extended. That means they can't really close down part of the resort without getting a significant proportion of those extended to redo their contract and deed. DVCMC, the management portion, is really where they'll make their money on the extensions. Any extensions that are similar, but less than what OKW members were offered, is a risk for DVD that I doubt they'll be willing to take.

If extensions are offered, I doubt DVD will care about the trusts or estates other than as it affects their ability to get participation. Second generation owners might not be as gun ho so that might be one valid reason for them to offer something sooner than later. Personally, if I were in their shoes, I'd tie it to a a minimum add on, maybe 50 points or some type of matching program. They could also do the same with converting non qualified to qualified benefits.

 

[DougEMG]

Rather than a complete tear down, another option would be to let the contracts expire, then do a complete refurbishment on all the rooms (ie gut and renovate) and then sell the resort as new. I imagine they could get a nice price for a new BWV and BCV.

Now with OKW they certainly have a problem what with two seperate end dates for owners.

 

[disneynutz]

In construction it's usually cheaper to level and start over. Especially if you want to change the building configuration with a bigger foot print or extra floors to make more units to sell.

Bill