DVC's Old Key West Extension Ordeal

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IMO, there are many reasons to NOT extend additional resort contracts. However, never underestimate a desperate executive trying to meet his (or her) numbers for the year. With hindsight being 20/20, that's exactly what Jim Lewis did in the case of OKW. The extension added a few million bucks to DVC sales without requiring any new construction. But mediocre response left behind a mess that DVC will spend the next 30 years cleaning up.

Extensions at BCV and BWV would probably be more popular, but still not universally embraced. I couldn't imagine extending our BWV contract. Certainly not a prices comparable to the OKW offering.
 
For OKW as the original DVC resort, I have to imagine many of the first purchasers will be up there age wise and had no interest in extending their ownership. I know I'll be 82 when BLT expires, and if I was offered an extension today I'd say no. The only reason is maybe if wanted to leave it to our kids, but who knows what they will be into. Obviously it's too early to offer that for BLT, but just an example to use.

Wouldn't it be far easier for Disney to have those rooms as cash rooms by the time they expire? Disney has a building they now own, to rent out that only need to rent enough to break even on. Any profits are gravy, and they can refurbish/rebuild them and resell. Am I wrong in this thinking?
 
The only reason is maybe if wanted to leave it to our kids, but who knows what they will be into...

yeah, extending for the kids' sake has some issues if they don't love disney enough to want to keep paying the annual dues...

Wouldn't it be far easier for Disney to have those rooms as cash rooms by the time they expire? Disney has a building they now own, to rent out that only need to rent enough to break even on. Any profits are gravy, and they can refurbish/rebuild them and resell. Am I wrong in this thinking?

that would be an option, definitely.

the nice thing about timeshares as opposed to hotel rooms is that (for the most part) disney doesn't have to worry about filling them...that is one segment of visitors that is locked into repeat trips. so it's hard to know how they would run the numbers (assuming BLT is structurally in great shape in 2060.)

(if you meant renting OKW after 2042, disney might have to do that...depending on how complete the transition is to OKW-2057 contracts by 2042.)
 
Wouldn't it be far easier for Disney to have those rooms as cash rooms by the time they expire? Disney has a building they now own, to rent out that only need to rent enough to break even on. Any profits are gravy, and they can refurbish/rebuild them and resell. Am I wrong in this thinking?

Disney doesn't appear to view Deluxe resorts as a growth category. Animal Kingdom Lodge was the last to open...back in 2001. And they've since used DVC as a vehicle for removing cash rooms from inventory--like the 5th and 6th floors of Jambo House and the former Contemporary North Garden Wing (now BLT.)

DVC sales are certainly cannibalizing some demand for Deluxe rooms, and point rentals give even non-members are more economical way of affording Deluxe.

I'm sure Disney could try to sell OKW rooms for cash come 2042+, but they may have to heavily discount. It certainly wouldn't be at the top of many guests lists with other options like Poly, GF, Contemporary and BC/YC (Stormalong Bay) available.
 


For OKW as the original DVC resort, I have to imagine many of the first purchasers will be up there age wise and had no interest in extending their ownership. I know I'll be 82 when BLT expires, and if I was offered an extension today I'd say no. The only reason is maybe if wanted to leave it to our kids, but who knows what they will be into. Obviously it's too early to offer that for BLT, but just an example to use.
Some will and some won't. I think there will be enough younger and multiple generations that there will be a potential market if that's the only limitation.

Wouldn't it be far easier for Disney to have those rooms as cash rooms by the time they expire? Disney has a building they now own, to rent out that only need to rent enough to break even on. Any profits are gravy, and they can refurbish/rebuild them and resell. Am I wrong in this thinking?
If they'd make out by owning and renting, they'd simply build more resorts now for that purpose. So currently I don't think that plan would work and while we don't know the future, I think it's even less likely that is a viable option in 30 years. I don't think they can simply renovate and keep the new options for themselves since those "units" will be owned by some members who either extended or bought later getting the extension. It's really hard to think of a good exit strategy with 1/4 of the owners in 2042 as in 2041. I think all they could do would be to let those units sit there and not use them and shrink the size of the resort. I don't think they can destroy buildings that have owners. That doesn't mean they can't simply close off some of the resort and that's likely the outcome. They'd also lose out on the 12% management fee but have higher costs to manage on a per capita basis.

They could offer those points for sale or even as a bonus to other purchasers along the way. They could exchange out deeds to shrink the resort but I think that's require a vote of the actual membership something I understand DVD wants to avoid so as to not have to put other items to the same test. It's also require new deed recordings. The reality is that I'm sure DVD has an idea but not a decision on what they'll do. They should have had a basic plan(s) going in to the extension issue before offering it.
 
Some will and some won't. I think there will be enough younger and multiple generations that there will be a potential market if that's the only limitation.

If they'd make out by owning and renting, they'd simply build more resorts now for that purpose. So currently I don't think that plan would work and while we don't know the future, I think it's even less likely that is a viable option in 30 years. I don't think they can simply renovate and keep the new options for themselves since those "units" will be owned by some members who either extended or bought later getting the extension. It's really hard to think of a good exit strategy with 1/4 of the owners in 2042 as in 2041. I think all they could do would be to let those units sit there and not use them and shrink the size of the resort. I don't think they can destroy buildings that have owners. That doesn't mean they can't simply close off some of the resort and that's likely the outcome. They'd also lose out on the 12% management fee but have higher costs to manage on a per capita basis.

They could offer those points for sale or even as a bonus to other purchasers along the way. They could exchange out deeds to shrink the resort but I think that's require a vote of the actual membership something I understand DVD wants to avoid so as to not have to put other items to the same test. It's also require new deed recordings. The reality is that I'm sure DVD has an idea but not a decision on what they'll do. They should have had a basic plan(s) going in to the extension issue before offering it.

So, do you think DVC will offer an extension for OKW beyond 2057? :teeth:

I agree that they have some options (although nothing likely to make DVD a lot of money), but also feel that the original plan in 2007 was to have a large majority of OKW owners purchase the extension, giving them another 35 years to complete the sell out into 2057. I suspect that arrogant optimism and lack of response to the heavy-handed "offer" went far beyond any worst case scenario they considered at that time and now they are backpedaling before trying to extend any other resorts (none of which even had an original 50 years of life). BWV will be 45+ and BCV will only be 39+ years old when their current ownership expires and affords DVD a very different scenario than OKW will in 2042 (at age 50+) and definitely in 2057 when it is 65+ years old.

Stay tuned!
 
So, do you think DVC will offer an extension for OKW beyond 2047? :teeth:
No, but I wouldn't be totally surprised at a second offering of some type. Maybe an extra 15 years worth of OKW points as an incentive to a current retail offering or even simply another cash offering.

I suspect that arrogant optimism and lack of response to the heavy-handed "offer" went far beyond any worst case scenario they considered at that time and now they are backpedaling before trying to extend any other resorts (none of which even had an original 50 years of life). BCV will only be 39+ years old when its current ownership expires and affords DVD a very different scenario than OKW will in 2057 when it is 65+ years old.

Stay tuned!
That's the only thing I can think of, that they were overly optimistic or greedy. The interesting thing is that I saw it as totally predictable that the response would be lukewarm given the price, the down your throat approach only added fuel to the fire. To me it's much like the sales projections for VB & HH, basically if it's Disney they will come, well they didn't in large enough masses to justify the ventures costing members a larger VB option and at least 3 other off property resorts. They know their numbers far better than I but I'm inclined to think that a far cheaper price plus a small closing cost would have been far better from their standpoint over the long haul. Another alternative would have been to have extended the option of an extension for a vote by the membership though I'm not sure they could have charged a fee but they could have automatically included all owners by that method.

It should be interesting and you can bet this won't be the last time this issue comes up.
 


...That's the only thing I can think of, that they were overly optimistic or greedy. ...

The Jim Lewis Regime - greedy?

That was the time when DVD could do nothing wrong - Oh, except for maybe some minor oversight with Aulani. I guess that worked out pretty well for everyone though. ;)
 
The Jim Lewis Regime - greedy?

That was the time when DVD could do nothing wrong - Oh, except for maybe some minor oversight with Aulani. I guess that worked out pretty well for everyone though. ;)
I know it's not a popular opinion but I'm of the opinion that Jim Lewis likely got too much blame for the issues though I think some was deserved. I know the captain of the ship issue but it wasn't just him without other's input. Plus I think DVD has a long history of being greedy/overly optimistic well before JL.
 
I know it's not a popular opinion but I'm of the opinion that Jim Lewis likely got too much blame for the issues though I think some was deserved. I know the captain of the ship issue but it wasn't just him without other's input. Plus I think DVD has a long history of being greedy/overly optimistic well before JL.

Well, certainly JL had trusted advisors (as he was the one who selected them), but he was well compensated and was the one who received the glory from Disney and in the press. The advisors he chose got none of that press coverage until the Aulani fiasco - which IMO was consistent with the type of decisions made with the OKW extension ... and the same people were in advisory positions at that time. Did he personally make every DVC decision ? - probably not, but he was certainly the one who signed off on those decisions, reaped the praise for the successful ones and earned the blame for the others.

DVD has certainly had a history of greed/optimism for a number of years now (although, IMO, not in the early years), but seemed to carry those flaws to a new high under the guidance of JL.
 
I am interest to know if any other OKW owners have this happen to them. We bought in 92. We declined the offer to extend and sent the notarized form back. Now, every time we check into any DVC resort we get a letter offer to extend our contract to 2057. How many times to we have to say no? Are we alone in this?
 
I am interest to know if any other OKW owners have this happen to them. We bought in 92. We declined the offer to extend and sent the notarized form back. Now, every time we check into any DVC resort we get a letter offer to extend our contract to 2057. How many times to we have to say no? Are we alone in this?

Haven't gotten that one.
 
Haven't gotten that one.
My curiosity is in finding those who owned OKW before the extension but haven't extended and haven't signed off on the paperwork. What type of issues are they having (or not) and what type of communication are they having from DVD.
 
We bought in 92 and we did the extension. I guess my take was different from a lot of folks. My thinking was to view it as a different contract rather than an extension. $15 per point for a 15 year contract seemed then and now at today's prices still seems like a great value. Whether OKW will still be where we and our kids who are grown and still will be going until 2057 want to stay or not remains to be seen, but we know we will have the use of our 270 points to stay where we want. Who knows how many more DVC resorts will be added in the future, but we will have a full 65 years to enjoy them.
 
I am interest to know if any other OKW owners have this happen to them. We bought in 92. We declined the offer to extend and sent the notarized form back. Now, every time we check into any DVC resort we get a letter offer to extend our contract to 2057. How many times to we have to say no? Are we alone in this?

Hasn't happened to me either, but we bought resale after the extension offer had already expired.
 
Hasn't happened to me either, but we bought resale after the extension offer had already expired.

Only the $15 price has expired. The extension offer itself is still there.

I'm sure they'd be delighted to sell you the additional 15 years and that it would make your guide's day if you call and ask! ;)
 
Only the $15 price has expired. The extension offer itself is still there.

I'm sure they'd be delighted to sell you the additional 15 years and that it would make your guide's day if you call and ask! ;)

I'd give it serious consideration at $15, but not $25.
 
I'd give it serious consideration at $15, but not $25.

Sounds similar to the reaction most had 4-5 years ago when the offer was first made. I bet a lot more would have given it serious consideration at $8-10 per point, but not $15.

As we get closer to the end date, I'm sure more owners would be willing to extend at the right price. Question is whether DVC is willing to reconsider that pricing. (And, if they really want to re-visit that mess in the first place.)
 
We declined the extension OKW extension. I remember signing some papers but can't recall having them notarized.

We haven't heard anything from anyone on this again.

BTW, if I travel to WDW when I'm 83 and my contract is expired, I will treat myself to stays at GF, Poly and whatever nice new resorts they have then.
 
I am interest to know if any other OKW owners have this happen to them. We bought in 92. We declined the offer to extend and sent the notarized form back. Now, every time we check into any DVC resort we get a letter offer to extend our contract to 2057. How many times to we have to say no? Are we alone in this?

I purchased resale in 2009 and 2010. My first contract was purchased from people who apparently were repeatedly in and out of foreclosure for several years.
I have never received any offers to extend.
 
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