DVC1 vs DVC2

[vernon]

Given that there has been speculation that EPV ( or a later DVC resort) could herald the birth of a " DVC2" I think this brings up a couple of "desirability " questions.

The question is. IF you were looking to buy and your choice was

1) a resale for "DVC1" which is your 6 DVC resorts ( OKW, BW, VWL,BCV,HH and Vero) which has a 38 year life remaining.

2) EPV for 50 years.

Which would you prefer?

Because they would be different entities there could be NO guarantee of being able to switch resorts ( between DVC 1+2 )as easily," DVC 1" is built ( i.e. no construction on the complex) , "DVC 2"you'd have the risk of being in the middle of construction, IMHO "DVC 1" would have more "muscle" for better deals with II, concierge collections and the Disney hotels. No guarantee of future "DVC 2" resorts on WDW ( they could make ALL new DVC resorts "free-standing entities )and almost certainly no beach resorts.

Personally I'd prefer 38 years of the 6 resorts over an extra 12 years but POSSIBLY not having as much flexibility in my choices. You'd know EXACTLY what you're getting with DVC1 and have to hope the Disney didn't "change the rules" with DVC2 ( and any future DVCs they built).
JMHO

 

[Dean]

Vernon, the real question is would you buy at EPV to use the entire system but have a later ending date, which is the way I believe it will happen.

 

[vernon]

I don't see how that can possibly be guaranteed. I agree that would probably be the starting situation BUT there is no way Disney could guarantee that so everyone is trusting Disney's future bosses/owners to honour verbal promises made now for the next 38 years. Also , although I think it likely that a plan similar to DVC will be offered for the resorts expiring in 2042 that is in no way guaranteed. Disney may decide that to use those resorts as "regular" hotels instead of timeshare resorts makes more sense (and money) in the long run IF Disney were to take that option, what would that do to the resale value of DVC2 because I feel it certain in that event the "points per night" cost for the DVC1 resorts would move in line to the "regular" Disney hotels not where DVC resorts are. We all know that using points at "regular" WDW hotels is a poor use of points.

Even if you assume that Disney would honour it's commitment for the first 38 years of "DVC 2s" life almost 25% of what you are buying is impossible to predict.

Dean , I guess you didn't vote, I left the question as simple as possible to allow for people taking their own view on how they think things will work out. There is no, "if my scenario comes to pass would you........" Just would you choose 38 years in DVC1 over 50 in DVC 2. Make your ( pl) minds up on what you think is likely to happen and what you think ( legally) Disney could guarantee and what they would try to imply and suggest. I could be wrong, but looking at the current DVC contracts I can't see Disney legal allowing them to GUARANTEEING anything it would find difficult to back up, if it didn't have to make those promises. IMHO the biggie is the free access between DVC 1 and 2, I feel certain that would be worded in similar terms to DCL,Consierge , Disney hotels and II deals because by definition DVC 1 + DVC 2 would be different legal entities, it is impossible for them both to make that commitment.

 

[Chuck S]

I agree Vernon, I don't see how the points could be freely interchangable.

 

[DanG]

Vernon, the commitment doesn't need to rest on oral commitments over 38 years. All that has to happen is for one related company to enter into a mutual access agreement with another related company to commit to access for the duration of DVC I. In fact, this would likely need to be in place as an inducement to the VEP buyers.

The problem with your poll is that it assumes that the stated options are a choice. I respectfully suggest that those will not be the options.

DanG

 

[kem330]

I agree with Dean and Dan- what makes you so certain they can not just have a longer point life at EPV - It makes perfect sense that purchasers into DVC at a certain time will have different contract end dates then others. So us current members can use points at 7 mos just like we do already into any new additions until our contract is up. I would hope Disney would have a long range plan intact or they wouldn't be adding Eagle Pines.

 

[vernon]

Dan I don't assume my views are correct that's why, as I already said, I put the question as simply as I could and ask people to make their own minds up on the likely outcome. Sure I've given my views on it, but it isn't my job to give your ( or anyone else's) views. I say it as I see it and leave it to everyone else to look at what they think.

A secondary point , yes it would be an inducement to VEP buyers BUT the management of the current DVC are honour bound to look after the interests of the current DVC owners NOT TO ANYONE ELSE. If the board passed something like that, which I doubt would be legally binding, they could,should and would be kicked out. They open themselves up to charges of neglegance, incompetance and "insider deals" because IMHO VEP ON IT'S OWN doesn't bring anything to the party but it takes a hell of a lot out of it. The board has , so far, had an easy ride because it hasn't done anything that is obviously to the detriment of the owners over the interests of Disney. IMHO doing as you describe would not be in the interests of the current owners, please let me know what you think the benefits would be to current DVC owners to include such a scheme and how that would outweigh the losses.



Kem, sorry mate, it might make perfect sense to have different end dates, but it isn't allowed. It is implicit in the literature, anyone buying into the DVC, in it's present state, their interest finishes in 2042. The management structure for DVC BY DEFINITION must wind it up in 2042. They can start again at that time but the current system ends. Anything new MUST be a separate institution.

Further to that point of separate Disney institutions I would draw peoples attention to the hiking of the points required to use DCL and more recently the hike in the price to rent WDW hotels using points ( please read . http://www.disboards.com/forums/showthread.php?s=&threadid=78375 ) Each individual part of Disney is under pressure to make it's budget, if they can squeeze a bit extra out of one of the other parts of Disney they will. Call me a cynic but I do not see either "DVC1"'s board giving "DVC 2" a "leg up" for free at the beginning of the venture any more than I see "DVC2"s signing up that in the late 2030s, when DVC 1 could ( UNLIKELY but COULD) be being run down ( i.e. repairs and maintanance being left because of the short time remaining) IMHO that opens THEM up for similar charges of incompetance and neglegance as ALL SEVEN DVC resorts try to use their points at the nice (relatively new) VEP resort not at those looking a little tired and in need of rehab. I doubt that is going to happen BUT NO ONE is going to sign up for something if they don't have to. Particularly Disney Legal.

I think Disney does have a long term plan for VEP, it ends in 2042.

 

[Joeblack]

I also agree with Vernon. My prediction is that we won't be seeing DVCII for a long while (if at all). All the points Vernon makes are valid.

Any person who's done a financial analysis of DVC will come up with a break-even point of about 6-7 years. That is one of the reasons DVC is selling at the rate it is. Why, then, would Disney make DVC sound outdated by offering DVC II when it will probably be still selling BCV (most likely part of "DVC I" by the time they start selling EPV)?

About charging a lot more for EPV, well, I don't doubt it will be beautiful, but from my point of view, it will not offer any added value over BWV, OKW or WLV. All these latter have a plus (BWV=location, OKW=size and value, WLV=themeing and proximity to MK). EPV will probably be extremely luxurious, but as I stated in another post, how much luxurious than the existing DVC resorts can EPV be? Again, I do foresee a higher price/point for EPV, but one that keeps on par with the increases we have been seeing the last years.

Finally, it would not make any sense to make point/night higher at EPV because then who would want to exchange into it?

Maybe in 2042 we will see DVCII.

 

[Dean]

It's been a while since I've done a financial analysis but last time I looked the break even was longer than 6-7 years if you assume investing the money and earning 8% after taxes which long term is a reasonable option. And that assumes you'd go and stay at a DVC quality place on property which for many of us is not a valid assumption. Obviously there are a multitude of factors that will shift the equasion including vacation habits. Regardless, I would still feel that DVC will have great difficulty selling at $85-95 pp with higher points costs per week AND only having 32 years remaining. I'm really thinking at the end of the resort sales, not the beginning. And no way would I buy either at the current prices if my choices were 32 years remaining resale at say $80 pp or a stand along EPV for 46 years at $90 pp not in the DVC.

As I stated in the other thread, the wording in the POS states that DVC ends 2042 but my assumption is that it's a reference to the end of the current DVC resorts not a firm ending of the DVC itself. Simply that if there are no resorts, there's no reason for the club to continue NOT that the club MUST end then. Regardless, all they have to do is for the Board vote to change it and it's done. And no legal challenge would apply as there's not guarantee of anything with new resorts.

Besides, DVC must have some fairly major incentive to sell that resort in the current situation. A themed pool in a resort that ends 32 years from when it's sold out at $90-95 pp and higher points per week than WLV and equal or higher than BCV; simply will not sell quickly enough for DVC to be happy. A major incentive is in order and I don't see them with free tickets again. A new resort that's in the club but extending for another 50 years is one of the best I can think of. And since everything else will likely be sold out so there's no detriment to any other resort that's selling with only 32 years left. They will be sold out and the current owners will not have anything they can say about it.

We must wait another 2.5-3 years to know the final answer.

 

[jjcollins]

HI GUYS I SAY JUST LIVE FOR TODAY DON'T WORRY ABOUT TOMORROW.


JUST ENJOY!!!!!!!!!!


jj..................

 

[Dean]

Originally posted by jjcollins
HI GUYS I SAY JUST LIVE FOR TODAY DON'T WORRY ABOUT TOMORROW.


JUST ENJOY!!!!!!!!!!


jj..................

That doesn't sound like the life of a timeshare owner where planning and anticipating, even scheming, is the norm and a must to be successful.

 

[Dean]

Originally posted by Joeblack
I also agree with Vernon. My prediction is that we won't be seeing DVCII for a long while (if at all). All the points Vernon makes are valid.

Finally, it would not make any sense to make point/night higher at EPV because then who would want to exchange into it?

Joe, I don't think DVC is worried about current owners exchanging into the new resorts, they're more interested in having current owners and non owners buy the resort. BW, BC and WL all had something extra and so far, all were higher points than their WDW predecessor. I've heard from 2 guides lately that DVC is using both the number of points per unit AND the price per point to recoup their building costs and both were surprised that WLV was the same as BW preferred. I was expecting WLV to be less points than BW and they were expecting more than it ended up.

And to beat the horse, no reason a new resort can't be a different ending date that 2042 AND be in DVC.

 

[vernon]

Come on people, I'm sure there are more than 53 veiws on this. The more votes we get the better reflection it is of "public opinion" .

Given that one of the "key points" on this poll is trust in Disney to honour future promises, because IF you feel 100% certain Disney would allow free movemnt between and future DVC institutions and the original one then the extra 12 years should be the more attractive offer. I guess those that have voted lack trust in the value of Disney's word as much as I do.

VOTE VOTE VOTE !!!!

 

[prplcrzy]

It may not be a lack of trust so much as a lack of money. If your assumption is true, do you really think they would sell DVC II for the same price as DVC 1. I don't think so. the cost would be substantially higher because you have 50 years to enjoy it now. If the point values go up to $85 by the time VEP goes on line for sales, then my guess is that DVC ii would sell for about $120-$130 per point. Who in their right mind would want to pay that kind of premium for the same thing, just a longer time. I'm 37 and have 40 years of vacationing left. I may be wrong, but my wife and I make good money and until a couple of years ago really were not financially stable enough to buy into DVC. I doubt that the 12 year difference vs the price difference would entice people to buy DVC II. I could care less about vacationing when I am 80, I will probably be able to afford to go where I want then or I'll be in a home or god forbid, dead. I am interested in prviding vacations for my family now, while my kids can enjoy it and later when my wife and I can enjoy it by taking our grandchildren once in a while and travelling to other destinations too.

 

[Joeblack]

prplcrzy:

I think like you do. I am 31 and I don't really think I will be very concerned about 8 more years when I am 73. My children might, but it will be a different time then and who knows what will be the best vacation alternative then. Now, there are a lot of people in their 20's who might disagree with me. The thing is, in average, people in their 20's have a lower disposable income and I don't know if they would be willing to pay a price that is double what DVC used to be just one year ago in a resort that will have a Boca Raton themeing...if you know what I mean. They might want to go with a resale instead.

IMHO, the DVCII idea will make sense if:

1)Ending date is longer than "DVC I"
2)Rooms are interchangeable with all the other resorts with the same rules.
3)Points/room are about the same as the rest.
4)Price/point is not outrageously higher. Just enough to make up for the extended use period

 

[vernon]

I'd have prefered a larger cross section but I'd say that's pretty much one sided and in line with what I expected. IF that's a fair reflection of the reality I can't see EPV being offered as a separate item. I'll be interested to see the actuality in the future.

Thanks for everyone that gave their views and please join in anyone that didn't

 

[vernon]

bump
any more ?