I mean at this point, why is anyone buying direct?

[AnnaKristoff2013]

What exactly would they do though to make it so DVC goes to zero?

Zero is probably an exaggeration here, I agree, but a more accurate statement might be to say that just because DVC has historically increased in value is no reason to think that will happen in the future. If the delta between what the market will bear for rental rates and the cost of annual dues shrinks significantly, for example, then yeah I think the price can go down significantly. Vero Beach is probably somewhat of an example of this. It’s hard to parse out how much of that are the points expiring in 18 years and how much of that are the maintenance fees, but if those maintenance fees keep increasing faster then the relative value of the points vis a vis rental rates, then it might go to zero before the contracts actually expire.

 

[AnnaKristoff2013]

Is WBC sold out ?

I think it’s “no longer in active sales.” I admit I’m not an expert on that and not sure if that is the same thing as “sold out.” Wyndham also uses points from all resorts for it’s CWA program so it’s not an apples to apples comparison.

 

[sethschroeder]

but if those maintenance fees keep increasing faster then the relative value of the points vis a vis rental rates, then it might go to zero before the contracts actually expire.

Thing is cash rates at Disney are holding because Disney wants to make money on those rooms. Discounts are not increasing though.

I picked randomly Boardwalk (I really like the resort and has a cash side and DVC side). I also picked first 7 days of October I use this for all my comparisons of anything because I see it as the "mid season".

The increase for cash rates from 2022 to 2023 below:

Deluxe Studio - Standard View	Deluxe Studio - Garden or Pool View	Deluxe Studio - Boardwalk View	1 Bedroom Villa - Standard View	1 Bedroom Villa - Garden or Pool View	1 Bedroom Villa - Boardwalk View
7.994%​	8.099%​	6.999%​	7.063%​	8.096%​	8.096%​

 

[AnnaKristoff2013]

Thing is cash rates at Disney are holding because Disney wants to make money on those rooms. Discounts are not increasing though.

I picked randomly Boardwalk (I really like the resort and has a cash side and DVC side). I also picked first 7 days of October I use this for all my comparisons of anything because I see it as the "mid season".

The increase for cash rates from 2022 to 2023 below:

Deluxe Studio - Standard View	Deluxe Studio - Garden or Pool View	Deluxe Studio - Boardwalk View	1 Bedroom Villa - Standard View	1 Bedroom Villa - Garden or Pool View	1 Bedroom Villa - Boardwalk View
7.994%​	8.099%​	6.999%​	7.063%​	8.096%​	8.096%​

Yeah, I agree, and I think people are misunderstanding my posts. I am not saying that DVC is going to zero. Right now, if current trends continue, then DVC is very likely not. However, I also think it’s a mistake to buy DVC assuming that you will get what you paid into it back if you sell it in 10 years. Or that you will necessarily even get close to that. A lot can happen in 10 to 15 years, and it doesn’t take Disney World actually closing to significantly devalue the product, there are a number of scenarios (like the ones I’ve outlined) that could do it. Again, I’m not saying these **will** happen, but I’m just saying they’re not 1 in a million shots either.

WDW has made a lot of decisions lately that might make WDW unable to sustain the cash price increases outlined above.

 

[sethschroeder]

WDW has made a lot of decisions lately that might make WDW unable to sustain the price increases outlined above.

Thing is Disney is a for profit company and if their hotel business starts to waffle at WDW they will start to get aggressive to fill those rooms with park discounts, food discounts, transportation discounts, and other ideas.

The reason you see the direction as down for WDW is because the revenge travel has been so strong and they had Chapek who the company pushed out.

Heck I could honestly see the opposite where DVC increase dramatically. What do I mean? If WDW starts to go down the hole I could see them put in place a requirement to stay on site to get things like park reservations or even entry to the park at all.

 

[we"reofftoneverland]

Thing is Disney is a for profit company and if their hotel business starts to waffle at WDW they will start to get aggressive to fill those rooms with park discounts, food discounts, transportation discounts, and other ideas.

The reason you see the direction as down for WDW is because the revenge travel has been so strong and they had Chapek who the company pushed out.

Heck I could honestly see the opposite where DVC increase dramatically. What do I mean? If WDW starts to go down the hole I could see them put in place a requirement to stay on site to get things like park reservations or even entry to the park at all.

You are dealing with a company that makes a “big” announcement with lots of fanfare, drumroll please… about scheduling minutiae like they’ve come up with some genius invention. Let me see if I get this right— if you have an annual pass after 2 pm you no longer have to schedule to get into a second park except Magic Kingdom, where you do have to schedule. Wow. Thanks overlords. Inspiring. That really makes people want to buy DVC. No, actually, it makes people want to sell DVC. This is no longer a serious company. It is priceless and truly inspiring that universal announces on the same day, we are building another theme park, this time in a new place, Texas. Universal is a serious company. And the people who made you want to buy DVC are all working over there now because the Bob Chapecks and Bob Igers and Josh D’Amaros made Disney a miserable place to work for anyone with half a brain. So it is very easy for DVC to go to zero. And I say this as someone, again, who has evidence of Disney love all over the house. I say this as someone with direct contracts who will lose a lot of money if it does go to zero. It is painful to look at Disney objectively. But Disney’s decline is dramatic and real. All you have to do is go to universal for a day in order to gain objectivity about Disney. DH jokes all the time that Mickey is sending out SOSs, “Save me from these fools destroying my company! I’m being held hostage! Help!”

 

[jimmymc]

If I lived near the parks and could regularly take advantage of Moonlight Magic and other DVC events, I would probably go with the cheapest direct points I could buy. As someone who books trips in advance and flies in, I don't think the premium is worth it. I want to try Riviera at some point but I'll figure out a trade with a points rental company.

 

[zavandor]

Members typically have 12 months of time to use their share of a resort.

February owners have 12 months to use their 2023 points. March owners have 12 months to use their 2023 points. April owners have 12 months to use their 2023 points. And so on.

But consider how much less time every owner will have to use their 2041 points:

- February: 12 months
- March: 11 months
- April: 10 months
- June: 8 months
- August: 6 months
- September: 5 months
- October: 4 months
- December: 2 months

All things being equal, owners can borrow points to use them sooner, but that simply squeezes out 2040 points. That's not even taking into account the gradual decline of point banking, which will also apply pressure on availability.

The last few years are likely to get quite messy. I guess it depends on how messy DVC wants it to be.

Yes and in addition to that, UY distribution is not equal, so a Resort might have sold more points in the December UY than any other UY aggravating the issue (some have). I have a December UY, so I am a bit anxious about the whole thing

However Disney could do something else:
- stop pre-booking breakage inventory (some have speculated that they can anticipate how many points go to waste and pre-book rooms to sell) to increase available inventory in the final 2-3 years
- allow borrowing up to 3 years in advance
- stop banking

The lockoff premium opens up a bit of availability every year and there are always points that go to waste for various reasons. I cannot estimate how much, maybe in the region of 5-10% depending on resort? (Higher at BWV with just no dedicated 2BR, nearer zero at PVB). If they allow longer borrowing, it would accumulate and "create" some extra inventory for the final year.

It would be great if they allow extra time to use the points, but it's not just an opportunity cost (resell them immediately vs wait a few months) but an actual cost to keep open the resort without MF paid by owners. Maybe they could ask a fee to use the points after expiry, still better than letting them go to waste.

They'd also have to ask to pay MF in advance to borrow points in the final years, which could make my plan unrealistic.

 

[AnnaKristoff2013]

They'd also have to ask to pay MF in advance to borrow points in the final years, which could make my plan unrealistic.

This is an interesting question. I wonder what percentage of DVC owners will borrow their last year’s points into 2040 and then fail to pay the 2041 dues? I wonder what Disney would try to do to those who failed to pay those dues? It’s not like foreclosure would make any sense at that point or accomplish anything for Disney.

 

[CarolynFH]

This is an interesting question. I wonder what percentage of DVC owners will borrow their last year’s points into 2040 and then fail to pay the 2041 dues? I wonder what Disney would try to do to those who failed to pay those dues? It’s not like foreclosure would make any sense at that point or accomplish anything for Disney.

I’m pretty sure that there are other TS systems that require prepayment of dues in order to borrow points or otherwise use ownership early, so DVC wouldn’t be out of line with such a requirement.

 

[AnnaKristoff2013]

I’m pretty sure that there are other TS systems that require prepayment of dues in order to borrow points or otherwise use ownership early, so DVC wouldn’t be out of line with such a requirement.

I don’t think they can add that in retroactively though. Is the ability to add that in somewhere in the existing docs?

 

[CarolynFH]

I don’t think they can add that in retroactively though. Is the ability to add that in somewhere in the existing docs?

AFAIK, there’s nothing in the existing docs that addresses the specifics of ending the condominium association. Our deed only says that our ownership ends on January 31, 2042. Since the documents do state that banking and borrowing can be suspended or modified by DVC management at any time, I wouldn’t be surprised if that gave them the right to require prepayment of dues in order to borrow points.

However, everything is speculation now. I don’t think anyone knows how it will all play out, least of all DVC management.

 

[Brian Noble]

I don’t think they can add that in retroactively though.

I bet the language around borrowing has plenty of wiggle room, including the ever-present "in the sole and unfettered discretion" out. After all, borrowing has already been modified several times. This could well be just another example of such a modification.

 

[CarolMN]

Lots of things DVC could do during the last few years. My best guess is that they will suspend banking and borrowing for the last few years, along with other things. I doubt they have even begun to think about it

 

[Sandisw]

I don’t think they can add that in retroactively though. Is the ability to add that in somewhere in the existing docs?

The rules for banking and borrowing are part of the home resort rules and regulations.

Those can be changed if needed ti balance supply and demand, like done with Covid.

So, suspending is definitely possible. In terms of a charge for MFs? I don’t know if that can be implemented or not.

It would more likely be they will suspend the last few years the ability to borrow.

 

[HIRyeDVC]

Yes and in addition to that, UY distribution is not equal, so a Resort might have sold more points in the December UY than any other UY aggravating the issue (some have). I have a December UY, so I am a bit anxious about the whole thing

However Disney could do something else:
- stop pre-booking breakage inventory (some have speculated that they can anticipate how many points go to waste and pre-book rooms to sell) to increase available inventory in the final 2-3 years
- allow borrowing up to 3 years in advance
- stop banking

The lockoff premium opens up a bit of availability every year and there are always points that go to waste for various reasons. I cannot estimate how much, maybe in the region of 5-10% depending on resort? (Higher at BWV with just no dedicated 2BR, nearer zero at PVB). If they allow longer borrowing, it would accumulate and "create" some extra inventory for the final year.

It would be great if they allow extra time to use the points, but it's not just an opportunity cost (resell them immediately vs wait a few months) but an actual cost to keep open the resort without MF paid by owners. Maybe they could ask a fee to use the points after expiry, still better than letting them go to waste.

They'd also have to ask to pay MF in advance to borrow points in the final years, which could make my plan unrealistic.

I need a lesson on breakage points and inventory

 

[tjkraz]

I need a lesson on breakage points and inventory

Technically breakage is any room inventory that DVC members have not booked 60 days prior to arrival. It's turned over to Disney cash reservations so they can attempt to sell the rooms rather than having them sit empty. Members actually receive a credit toward our annual dues for a portion of the monies earned from breakage.

But Disney apparently goes one step further, forecasting breakage and releasing some rooms earlier than 60 days. It SHOULD be whatever rooms are statically least desirable: one bedroom villas, bungalows, other rooms during the slowest periods at the largest / least sought after resorts. I think @zavandor's point is that during the waning years of DVC, breakage should decline steeply with members doing anything-and-everything to use their points. Hopefully DVC responds accordingly.

 

[Cfabar1]

Those last couple years are going to potentially be quite tricky if borrowing and banking are not allowed. Many points will be “wasted”, especially if DVC decides to reduce or limit the number of 1 time use points you can purchase as well. I’m sure that will be a factor as well.

I wonder if they could start selling “new contracts” at existing resorts that ran from say, 2025-2075 for any points they happen to ROFR, pick up in other ways, etc. Would they have that flexibility?

 

[zavandor]

The rules for banking and borrowing are part of the home resort rules and regulations.

Those can be changed if needed ti balance supply and demand, like done with Covid.

So, suspending is definitely possible. In terms of a charge for MFs? I don’t know if that can be implemented or not.

It would more likely be they will suspend the last few years the ability to borrow.

If they suspend the ability to borrow, then people with a December UY will only have 2 months to use their points. And for resorts where December is one of the most sold, there might not even be enough nights to accomodate everyone. Add also that some people with an earlier UY will want to book December, since it's a popular time and they might start walking months in advance (people with Decmeber UY wouldn't be able to do that). It would be extremely unfair.
Suspending borrowing has been often offered as a possibility, but I don't see how it can work.
I think @tjkraz is right in sayin it's in Disney best interest to find a way to give everyone a fair chance to use their points.

 

[Sandisw]

If they suspend the ability to borrow, then people with a December UY will only have 2 months to use their points. And for resorts where December is one of the most sold, there might not even be enough nights to accomodate everyone. Add also that some people with an earlier UY will want to book December, since it's a popular time and they might start walking months in advance (people with Decmeber UY wouldn't be able to do that). It would be extremely unfair.
Suspending borrowing has been often offered as a possibility, but I don't see how it can work.
I think @tjkraz is right in sayin it's in Disney best interest to find a way to give everyone a fair chance to use their points.

I agree that we don’t know and it might make it difficult for different UYs. But, I think they could also institute the policy for some and not others?

Another option is to change the non home resort booking at those resorts so owners have a long time to book. Nothing requires that to be the same.

So, at the 2042, trading in changed to only 3 or 4 months vs, 7 months? I just think there will Be creative ways to handle things.

They could also decide to do what they did during Covid with banked points that expired. They used their own points to book rooms for people,

So, i could see that for those Sept to Dec UY people…give them the equivalent number of points of their own to use at the other resorts.