DVC Ending Dates

[PoohBuddy]

We just got back from Disney and are considering purchasing DVC. I believe that the original contracts were all set for 50 years but for the newer resorts they have changed that somewhat. I was wondering what the difference is in the contract end dates for BRV, CCV and Poly. Thanks for the help.

 

[Ben E N]

BRV - Jan 2042 (24 years remaining)
CCV - Jan 2068 (50 years remaining)
Poly - Jan 2066 (48 years remaining)

 

[PoohBuddy]

Thanks!

 

[disneynutz]

The older resorts may have shorter end dates but do you really expect to own for 50 years or will you decide that a vacation change is due. Buying resale can save you thousands of dollars. The DVC guides will only steer you to new DVC projects where they make the most money.

Bill

 

[Dean]

We just got back from Disney and are considering purchasing DVC. I believe that the original contracts were all set for 50 years but for the newer resorts they have changed that somewhat. I was wondering what the difference is in the contract end dates for BRV, CCV and Poly. Thanks for the help.

I would consider the expiration of the RTU in the valuation determination but I would not let it be the main factor or a trump card. Remember the years on the back end are worth far less today than the ones that are closer. Certainly 24 vs 50 (all else the same) has a significantly different value but no where near 2 to 1. Just spend a few months getting educated but realize that for basically EVERYONE new to DVC, resale at the lower resorts is the best choice up front partly because none of them will really know their real preferences and better to make a $10K less than ideal purchase that you can sell for $9K than a $20K purchase you can only sell for $14K.

 

[WB1971]

I would consider the expiration of the RTU in the valuation determination but I would not let it be the main factor or a trump card. Remember the years on the back end are worth far less today than the ones that are closer. Certainly 24 vs 50 (all else the same) has a significantly different value but no where near 2 to 1. Just spend a few months getting educated but realize that for basically EVERYONE new to DVC, resale at the lower resorts is the best choice up front partly because none of them will really know their real preferences and better to make a $10K less than ideal purchase that you can sell for $9K than a $20K purchase you can only sell for $14K.

Good points for sure. I would caution though, that if expecting to sell out after 10-15 years there's bound to be a huge resale difference in the 2042 contracts and the 2057 and beyond. $100+ per point values are simply not sustainable for contracts with less than 15 years left on them, barring significant new developments in the market. No one can predict what disney may or may not offer to add value to the expiring contracts though.

 

[ziravan]

There are 6 groups of owners that expire in 2042:

OKW non extended
Vero Beach
Hilton Head
BRV
BWV
BCV

DVC can't let them all expire at once, for several reasons.

1. It would create absolute chaos in the last few years to have that many owners trying to cash out final points. It would make the 7 month bookings unusable for years and the 11 month bookings at those resorts the same.

2. It seems pretty clear now that the model DVC wants to follow is CCV/BRV. 2 RTUs 25 years apart. But. If DVC lets multiple resorts expire simultaneously, then they'd have to be resellling something like 4 resorts at the same time. No. Ultimately, I think DVC would love to be reselling its resorts every 25 years, but to do so, they must put them on a rotation.

3. If DVC is looking for a 25 year model, then the first resort to be resold in 2042 will be BRV. All the others will need to be moved out a few years based on their 25 year windows. After Riviera, expect DVC to go back into BWV or BCV to create a new timeshare, and then extend the current RTU to 25 years out from there. For example, Riviera in 2019, let's say BWV2 in 2021. Then BWV1 will be extended until 2046. This will be absolutely necessary to stagger end dates so as not to have to be reselling multiple points at once.

4. It's widely expected that DVC will toss out VB and HH in 2042. But again, what do you do with all those owners? Someway, you have to get them back into the system. It's an awful business model to kiss a group of customers off. My guess is that they stagger those end dates across two sets of new resorts expiring (say 2042 and 2044) and offer a decent discount for current owners to buy into the currently selling resorts (say $25/point discount). That means they'd close one in 2042 and offer a discount on BRV and close the 2nd in 2044 and offer a discount on Riviera2. So 1 of the two might get a 2 yr reprieve.

If DVC planned to phase out of business in 2042, then a set RTU would make sense. They don't.

In order to keep all its balls in the air at once, only one or two can be in the hand (due to expire) at a time. DVC will have to extend a few resorts a few years to stagger end dates.

If you push aside VB and HH for a moment as resorts not likely to be 25 year splits, and OKW as likely to be pushed 15 years down the road because of its previous extension, and BRV as already completed with CCV as a 25 year split, then my guess would be:

2019 Riviera
2021 BWV2 (with BWV1 extended until 2046)
2025 another new resort.
2027 BCV2 (with BCV1 extended until 2052)
2029 SSR2 (with SSR1 expiring on time in 2054).

(There'll be a traffic jam for 2057 with OKW and AKV that can't be fixed by extending out because VGC and BLT occupy 2060.)

I think there are reasons why BWV will go ahead of BCV including size of resort, need to address point chart sooner (BWV is too cheap per night), and proximity to DHS for Star Wars.

My theory adequately staggers end dates. If DVC operated on that theory:

BRV - no extension (but likely a discount on BRV2 (or VWL3 if you prefer))
VB - likely no extension
HH - 2 year extension to stagger end date.
BWV - 4 year extension
BCV - 10 year extension
OKW - 15 year extension (they'll eventually have to figure out how to put all owners on one RTU).

 

[Dean]

Good points for sure. I would caution though, that if expecting to sell out after 10-15 years there's bound to be a huge resale difference in the 2042 contracts and the 2057 and beyond. $100+ per point values are simply not sustainable for contracts with less than 15 years left on them, barring significant new developments in the market. No one can predict what disney may or may not offer to add value to the expiring contracts though.

IMO buying to resell in a number of years is a bad choice 100% of the time.

As for DVC having to extend any or all of the 2042, I would disagree. They have lots of things they can do even if they let them all expire in 2042. They can rent on cash, ramp up the conversions at BW, use them for promo stays or other specials, tie them to cruise packages, etc. And the total number of points/villas involved is a relatively small % of the overall total currently and will be even less by then. OKW is already extended, all they have to do is figure out what they're going to do with the points, maybe they'll give them as promo's for other extensions since selling for the prices that won't undermine other sales will be tough. Now they may do extensions and there are certainly reasons they might, but there is no requirement to do so. One thing that's 100% certain, they don't stagger them with just a few years a a time by doing extensions but they might using cash or other means. The only real issue from DVC's standpoint is that they have an infrastructure they'll need to feed but one that can be adjusted easily with planning in 2042. One thing is for certain, IF they do any extensions it'll have to be quite different than they did with OKW. I think it's possible it'll be different for different locations.

 

[_auroraborealis_]

I think it reasonable to say that they won't take all the 2042s out of service for full gutting at the same time, and they won't turn around and start a new declaration/sales without a refurb of some sort, possibly some reconfiguration based on what is considered woo woo in 2042. But I do see them potentially pulling BWV entirely to gut/refurb/re-sell, while keeping BCV on cash bookings for the duration, then taking BCV out and doing the same.

Those two are not going to be extended to current owners. It will be Buy New. They will be able to charge $$$. Disney are going to prioritize them.

 

[CarolMN]

There are 6 groups of owners that expire in 2042:

OKW non extended
Vero Beach
Hilton Head
BRV
BWV
BCV
.................(snip)..........

Hmmmh! I own at BWV and am definitely NOT planning to expire in 2042!!!!

(I know you meant the RTU lease expires, but technically, that's not what you wrote and I couldn't resist).

 

[Dean]

Hmmmh! I own at BWV and am definitely NOT planning to expire in 2042!!!!

(I know you meant the RTU lease expires, but technically, that's not what you wrote and I couldn't resist).

Didn't you sign up for this as in Logan's Run?

 

[ziravan]

I think it reasonable to say that they won't take all the 2042s out of service for full gutting at the same time, and they won't turn around and start a new declaration/sales without a refurb of some sort, possibly some reconfiguration based on what is considered woo woo in 2042. But I do see them potentially pulling BWV entirely to gut/refurb/re-sell, while keeping BCV on cash bookings for the duration, then taking BCV out and doing the same.

Those two are not going to be extended to current owners. It will be Buy New. They will be able to charge $$$. Disney are going to prioritize them.

Who knows what they'll actually do.

However, I think it's a safe bet that DVC goes back into BWV and BCV soon in order to make them 25 yr turn arounds like VWL is now.

What they do with the extra years between 2042 and 25 yrs out from start of sales, who knows?

My thinking is that timeshares always want to be selling to fund the next build. CRO-ing those resorts for years at a time isn't nearly as safe as collecting MFs for a few more years.

The LAST thing DVC wants is to be millions into a new resort and holding hundreds of rooms during a recession where nothing is moving. Better to have some of that locked in.