How did OKW extension work?

[ProudMommyof2]

OP here- thanks everyone. I think i get it!

 

[g.armor]

Regardless of your age, if you wanted to put an additional $4,800 into DVC, would you want your points to start in 2042? Or would you buy fewer points that would be available right away?

We had no interest in adding on anyway, so we declined. But if we had wanted to add on, I would have bought a smaller non-extended contract.

But isn't adding on over $100/point? If so, and I wanted my contract extended, and didn't need any more points, why not just pay the $15 per point and know I have my contract extended 15 more years? In other words, it was cheaper to extend than to add on, right?

 

[JimMIA]

But isn't adding on over $100/point?

Yes, if you purchased direct somewhat higher actually. If you purchased resale, you'd get substantially more points for the same money.

If so, and I wanted my contract extended, and didn't need any more points, why not just pay the $15 per point and know I have my contract extended 15 more years? In other words, it was cheaper to extend than to add on, right?

If I didn't need more points, I wouldn't buy more points -- at any price.

If I didn't need any more points for 30 years, I'd wait 30 years to buy them!

 

[pmaurer74]

I would have jumped at the $15 per point extension. For me that would be $3,000 for 15 years of trips. I may not be alive to use them, however it sou likely keep the value of my DVC contract viable so it will be worth something longer. Also buying points at the end of the contract will be more than I can ever afford 26 years from now.

 

[Dean]

In addition to keeping the number of units needed to cover the active points, they also need to maintain the same amenities (ie pool, etc) specified in the Membership Agreement.

From a legal standpoint, I'm not sure if they have to keep the same buildings but I understand that we each own a percentage of a specific building at OKW. So, could they tear down a building that I own a piece of before the extended expiration of my contract?

They would have to do some legal maneuvering to tear down part of the resort though I believe they could do so. They could easily close it off or use it for other things like college housing or discounted stays for timeshare sales promos.

 

[disneynutz]

A 50 years old resort is going to need a lot of work to maintain it, a 75 year old resort even more. Tearing down and building a new, larger, modern resort seems to make better sense.

Bill

 

[a742246]

We are considering a HHI contract. I assume, eventually, an extension on the 2042 termination will be offered as it has been for OKW. Is that correct?

How did that work? How much was it? Just trying to anticipate.

The may be a possibility that Disney may even sell their Hilton Head Resort in 2042.

 

[Dean]

The may be a possibility that Disney may even sell their Hilton Head Resort in 2042.

I think it's likely both VB & HH will go away. VB I suspect they'll sell, HH I suspect they'll raze and build new.

 

[DVC-Don]

We extended one of our OKW contracts as our daughter would like to take it over later in our lives. All our other OKW & VWL contracts we sold 5 years ago when we purchased a second home in central Florida.

 

[wdrl]

A 50 years old resort is going to need a lot of work to maintain it, a 75 year old resort even more. Tearing down and building a new, larger, modern resort seems to make better sense.

Bill

Keep in mind that the Polynesian Village and the Contemporary Resort are already 44 years old. With ongoing maintenance and renovations, they have held up pretty well. I don't see any reason why the Poly and CR wouldn't remain viable hotel resorts for several more decades.

The same could be said about the DVC resorts. Just because they could be 40 or 50 years old doesn't mean they have outlived their usefulness.

 

[Deb & Bill]

Keep in mind that the Polynesian Village and the Contemporary Resort are already 44 years old. With ongoing maintenance and renovations, they have held up pretty well. I don't see any reason why the Poly and CR wouldn't remain viable hotel resorts for several more decades.

The same could be said about the DVC resorts. Just because they could be 40 or 50 years old doesn't mean they have outlived their usefulness.

But, Disney has paid for those renovations (except for the new lobby and pools at the Polynesian which new owners there paid for). Once 2042 hit, they don't have member money anymore to upgrade and repair.

 

[disneynutz]

Old is old and keeping an old building alive can be costly. Drain and water supply issues, HVAC and electrical, energy efficiency, water heater, rotten wood, and the biggest reason to tear down a rebuild is to increase the size of the resort and increase occupancy. Why keep a resort that has a million points when you can rebuild and sell 2 million points?

Bill

 

[ziravan]

I think what DVC will have to do and what the quitclaim offer represents, is either buy and hold or buy and sell at reduced costs 15 yrs of points in 2042.

Should DVC buy and hold quitclaim deeds, they needn't raze buildings in 2042. They'll simply be a very large tenant with tons of points to rent out.

All of us owners who rent our points see a profit over MFs. DVC will too, on a much larger scale after 2042. It's not their perfect business model, but hey, they still have a de facto deluxe resort where a good chunk of the upkeep is subsidized.

Between renting out their own points and reoffering extensions closer to 2042, DVC certainly isn't going to lose money on OKW.

At worse, they just won't make as much as they could have if they had planned better.

I think they are planning better now. We'll see what VWL does with extensions when the new resort opens. My guess is that they wouldn't be planning to systematically revisit 2042 resorts unless they also have a plan for how to keep all the resort's MF payers happily paying after 2042.

 

[Dean]

I think what DVC will have to do and what the quitclaim offer represents, is either buy and hold or buy and sell at reduced costs 15 yrs of points in 2042.

Should DVC buy and hold quitclaim deeds, they needn't raze buildings in 2042. They'll simply be a very large tenant with tons of points to rent out.

All of us owners who rent our points see a profit over MFs. DVC will too, on a much larger scale after 2042. It's not their perfect business model, but hey, they still have a de facto deluxe resort where a good chunk of the upkeep is subsidized.

Between renting out their own points and reoffering extensions closer to 2042, DVC certainly isn't going to lose money on OKW.

At worse, they just won't make as much as they could have if they had planned better.

I think they are planning better now. We'll see what VWL does with extensions when the new resort opens. My guess is that they wouldn't be planning to systematically revisit 2042 resorts unless they also have a plan for how to keep all the resort's MF payers happily paying after 2042.

I doubt they'll be able to rent enough to justify the dues. They could rent some and use the rest for other options. It's not really subsidized, they'll have to cover the dues on what they own. In a sense they'll be subsidizing the owners that still own there if things work as they should.

 

[WilsonFlyer]

But, Disney has paid for those renovations (except for the new lobby and pools at the Polynesian which new owners there paid for). Once 2042 hit, they don't have member money anymore to upgrade and repair.

But they can get all they want right up until 2041.

 

[Dean]

But they can get all they want right up until 2041.

No, I don't think they can use the expiring owners to revamp the resort but there might be a fine line on some of those choices. The capital reserves should evaporate for expiring owners the last couple of years.