Future Recession: Which DVC resale Resorts drop fastest

[disneylandtour]

I called Member Services yesterday to merge 2 reservations, before I talked to anyone, as I was going through the prompts, there was one that you agree that reservations are for personal use. That kind of shocked me. I’ve never rented, nor do I intend to but I always had it in the back of my mind that I could if necessary (cancellation).

About merging reservations, I originally emailed and I got an email back that it had to be done by phone or chat. That was new. I called and they put me on hold and did it right then.

They ask that for every request now. I called to request a "non-parking lot" view--and got the same question.

 

[intamin]

There is an assumption here that aulani is owned by mostly non-locals. I’m guessing that’s true but I might be wrong

Isn't a good chunk of AUL owned by locals who want a staycation? I'd imagine it's not that different from Floridians staying at WDW or Californians going to DLR for a weekend stay. I'd also be curious to know how many of them are from Japan. When I was at the hot tub a couple weeks ago in Aulani there were definitely some foreign travelers who had member bracelets on.

 

[VGCgroupie]

Isn't a good chunk of AUL owned by locals who want a staycation? I'd imagine it's not that different from Floridians staying at WDW or Californians going to DLR for a weekend stay. I'd also be curious to know how many of them are from Japan. When I was at the hot tub a couple weeks ago in Aulani there were definitely some foreign travelers who had member bracelets on.

Ive seen many locals that own. And Id be willing to bet the % of Japanese owners is just as high as American owners, maybe more.

 

[Carouselofplanning]

https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States

Your post got me googling history of recessions - particularly interested in how recent ones measure up in terms of GDP declines. Setting aside COVID, you actually have to go back to the 1930s and 1940s to find recessions that had double digit GDP declines. And, since 1945, the only one that broke 5% was the 2007-2009 "Great Recession." The COVID recession was quite large at a 19.2% decline in GDP - in terms of a percentage decline in GDP, that is actually the largest since the Great Depression. (Of course, assuming all those stats on wikipedia are correct).

I go back to my earlier comment - I feel like recent recessions disproportionately affected lower and middle income classes. COVID hit service workers the most. The white collar class just got to work at home in their pajamas for several years. People left the job market and never came back. And, when the economy got roaring again and inflation got going for the first time in 40 years, it was again those with the least disposable income that got the squeeze. The upper middle and upper income classes probably shifted some of their expenses or skipped vacations for a few years, but they stayed put in their homes locked into historically low rate mortgages.

Back to 2007-2009, sure, there were plenty on Wall Street who lost their jobs, but those who really got smacked were those with mortgages where they were suddenly upside down and had little choice but to the let the bank foreclose. The upper income classes cut back for a few years, and Wall Street found other ways to keep making money other than securitizing mortgages and other debt (although they still do plenty of that).

But, notably, these two recent recessions were really quite significant historically in terms of percentage GDP declines.

Assuming that sort of trend continues, I don't think DVC is completely immune from the effects - I'm sure there are plenty of solidly middle class folks who go into debt for DVC. Even looking at the latest DVC News article on direct sales - of the 5.7M RIV points sold to date, a little over 100k have been taken back through foreclosures - but, that's less than 2%. Maybe that pops up to 5-10% during a recession?

So, who knows what the future holds, but I don't think the prediction that we just won't see huge declines in DVC resale prices is an unjustified one.

There are tons of people buying DVC that can’t afford it. They get caught up in the magic and the sales guide tells them it’s a way to “save money”. Then they finance it which of course obliterates any math that suggests you’re saving money. They tell them pay it off quickly but at least this gets you in the game but many people build their lifestyle on their ability to make the payments that support said lifestyle and not to get ahead.

I hear you on the logic that defaulted direct loans won’t hit the resale market, Disney will just take back the contract and sell them when the market allows. But two things:
1) Resale finance won’t get absorbed. Monera will take back contracts and flip them.
2) If people stop buying generally, the premium priced resorts stand to lose the most demand, especially the premium priced resorts with restrictions that devalue your purchase so quickly right away.
3) The Aulani argument makes a lot of sense. It’s expensive to get there. Those pricy airline tickets are the first casualty in a tight economy.

 

[Carouselofplanning]

Ive seen many locals that own. And Id be willing to bet the % of Japanese owners is just as high as American owners, maybe more.

100% there is a sizeable locals market. Hung with some last trip. It’s a nice Disney fix for the family without having to fly to the mainland.

 

[GrumpyInPhilly]

I’ve been preparing for financial collapse since 1970 I’m much older than the rest of you and therefore raised by parents that lived during the 1920’s … what a fun bunch they were! I stop short of washing and reusing my plastic sandwich bags, but I’ve seen it done! IYKYK …

Or nicely folding aluminum foil to reuse for the next day's sandwich along with the brown paper lunch bag.

 

[HyperspaceMountainPilot]

True recession? I’ll vote for aulani gets hit the worst. People gotta fly to Hawaii and that’ll stop during recession.

All the other dvc locations can at least be used by locals driving.

I was so excited to come here and drop the AUL dark horse suggestion but you just barely beat me too it. It’s not just that it’s an expensive vacation to get to (for most visitors) it’s expensive to be at, and also, United is projecting jet fuel could be basically 2x for the next 18 months already (even if the Iran war doesn’t continue) so we’re going to see fewer flights and higher fares across the board (book your flights now, people!) if he’s correct or even if he’s wrong but the other handful of airline CEOs agree.

The only reason I’m not certain AUL (where I’m a direct owner, btw) will drop MORE than RIV is because it’s already dropped so much, it can only drop so much more… also, I think the fact that so many RIV buyers (presumably all direct with financing?) are underwater means we might see far less RIV on the resale market, with Disney quietly taking them back under duress and selling them with moderate incentives. PVB strikes me as another strong candidate (that has already been dropping a lot)— there are a huge number of points in the system and the gap between direct and resale is not so giant that people who bought at $180ish might not be willing to cough up $10-30/pt to resell at $130-150 and avoid a foreclosure.

 

[muppets3d]

Predicting a recession is easy, they are a certainty eventually and people have been doing it since the end of the last one. Predicting WHEN is difficult because you can't just keep saying "we are about to be in a recession" for 10 years and expect to be taken seriously.