I went to the DVC Special Meeting Today

[WebmasterJohn]

You can read about it on another thread I posted on the pod cast board

http://www.disboards.com/showthread.php?p=20973989#post20973989

John

 

[CarolAnnC]

Great information John! Thanks so much for posting for us..

 

[tedisney]

Thanks for the post, John.

 

[Chuck S]

Yes, thank you, John. I was at first going to decline the extension...but at $15 I may go ahead and do it.

 

[midnte0708]

I would be very upset if I just bought resale through Disney directly for OKW for $92 and then find out I need another $15 to extend it 15 years when I could have waited till "now" and paid $96 for the extra 15 years.
I wonder how many people are in that situation.

 

[WebmasterJohn]

There was a woman at the meeting who was very upset becuase she just recently did an add-on at SSR (she claims she did it to have her DVC extended past 2042 for her kids and grandkids). She claims that if she had waited she could have extended her OKW contract for much less than the add-on to get the new expiration date of the contract/points.

The board pretty much advised her to sell her SSR add-on and opt for the OKW extension. Sounds good but she still would be losing money on commissions and closing costs if she sells.

She made it very clear that if Disney would have used a little of it's 'magic' and advised her to wait a month or two to purchase the add-on she would not be this upset.

Same goes for those buying at $92 - I wonder if the DCL rep ever said 'hey, wait a few weeks as something is coming'.

John

 

[dvc at last !]

thanks

 

[ILPHIL]

We just added on in late July - early August and our guide said nothing about an extension possibly being on the horizon.
Oh well...timing is everything in life.

 

[Beca]

I would be very upset if I just bought resale through Disney directly for OKW for $92 and then find out I need another $15 to extend it 15 years when I could have waited till "now" and paid $96 for the extra 15 years.
I wonder how many people are in that situation.

I was thinking the same thing!!! It is hard to understand how DVC can sell an extension for $25 per point, when they package it as part of the whole for only $4 per point??

I really feel for anyone who purchased OKW in the last few months!!!

 

[DVC Mike]

OKW points are now $96 each and will end in 2057.

Wow! Time to consider an OKW add-on...

 

[MinnieGirl33]

There was a woman at the meeting who was very upset becuase she just recently did an add-on at SSR

Not to be sour grapes but I kind of feel the same way.

We did an add-on in August & were seriously considering OKW but decided to add-on ad SSR for the extra years.

Thankfully we got the DDP deal so I'm not that upset but it would have been nice to know what was up so that we could have made the best decision for our family.

 

[Regina]

We're in. DH was leaning towards it anyway. Now that it's $15, it's a slam-dunk as far as he's concerned.

Since we'll be 100+ years old when the new contract expires, we're definitely not doing this on our personal behalf. He wants to do this for our future grandchildren. Make that future great-grandchildren.

I think I should call and let them know our new address. Wouldn't want that time capsule going to the wrong house.

 

[sk8belle]

Hmmm...at $15/point, that deal just became a little more reasonable. Thanks for the info!

 

[salmoneous]

Thanks for the update. In the interest of being positive about this, I'll give Disney credit for taking questions. And I'll congratulate those OKW owners who want such an extension and will get it.

I would suggest owners think long and hard about the implications of how Disney has structured this deal. I'm not an OKW owner, so have no say. Should Disney try something similar at one of my resorts, I'll be asking questions before, during and after such meetings.

 

[Plutofan]

I wonder if Disney is doing this to lower the amount of WDW based contracts that are being sold at low prices. Prior to the extension people could buy OKW in the $70's while other WDW based contracts were selling on the resale boards at high $80 to $90. People who were concerned about paying so much for a WDW based timeshare had a choice between buying OKW in the $70 or buying other DVC resorts either through Disney or resale in the $90 to $100s. With the extension Disney can now buy all they want of OKW contracts in the $70 and then extend then for free and sell them for $96 assuming that there is a higher demand for the extended contracts. just a thought. It may get tough to get a non extended contract through ROFR. The next year will be interesting.

 

[salmoneous]

. Prior to the extension people could buy OKW in the $70's while other WDW based contracts were selling on the resale boards at high $80 to $90.

Just a couple quick points. First, resale for SSR/VWL/BWV is in the low 80's - some SSR contracts (with full points even) have gotten through ROFR in the 70's.

With the extension Disney can now buy all they want of OKW contracts in the $70 and then extend then for free and sell them for $96 assuming that there is a higher demand for the extended contracts. just a thought.

Disney would only want to do that if they had no new-construction to sell. They can build point for a lot less than the $70-something they would have to pay to ROFR points.

 

[Plutofan]

Just a couple quick points. First, resale for SSR/VWL/BWV is in the low 80's - some SSR contracts (with full points even) have gotten through ROFR in the 70's.

Disney would only want to do that if they had no new-construction to sell. They can build point for a lot less than the $70-something they would have to pay to ROFR points.

Disney may be getting concerned that the spread between OKW resale prices and the prices of the new resorts may be getting to big so now they have a way to close the gap and make money. They will now have created a potential demand for OKW contracts purchased directly through Disney where that demand does not exist (unless you want a small amount of points) under the current system since resale prices were much cheaper.

 

[dianeschlicht]

I wonder if Disney is doing this to lower the amount of WDW based contracts that are being sold at low prices. Prior to the extension people could buy OKW in the $70's while other WDW based contracts were selling on the resale boards at high $80 to $90. People who were concerned about paying so much for a WDW based timeshare had a choice between buying OKW in the $70 or buying other DVC resorts either through Disney or resale in the $90 to $100s. With the extension Disney can now buy all they want of OKW contracts in the $70 and then extend then for free and sell them for $96 assuming that there is a higher demand for the extended contracts. just a thought. It may get tough to get a non extended contract through ROFR. The next year will be interesting.

But for the many of us who have already said on this board that we will NOT take the off to extend, wont that mean even lower resale prices for the early ending contracts? It just doesn't make sense to me to do this extension 35 years out!

 

[FLYNZ4]

Disney would only want to do that if they had no new-construction to sell. They can build point for a lot less than the $70-something they would have to pay to ROFR points.

I believe that the 2042 contracts will be reduced significanly in price over the next several years (10 or less). I think this is the first sign of Disney letting go of the ROFR artificial price inflation. I think that within 10 years they will let the price of old contracts fall, and continue to pick up bargains using a highly deflated ROFR. In a few years... it will be easy for them to market against the "old resale" contracts because most new buyers (in their 30's now... and in their 40's then) will view 2042 as too short within their own mortality expectations.

/Jim

 

[LIFERBABE]

Thank you for reporting John.

The numbers are starting to line up.

It's still a no deal for us, but if we were new to DVC and looking to purchase direct from DVC OKW now becomes a major player. These would be our current options:

OKW $96 per point, expires in 2057, low point structure, largest units

SSR $1?? per point, expires in 2054, current incentives, mid range point structure, newer units

AKV $1?? per point, expires in 2057, current incentives, multi point range, new units

So if you want to stay under $100 per point and want a longer contract, OKW will be a no-brainer for new sales. Sort of like car pricing. DVC will be able to appeal to those looking to join but want to save a little more money than the incentives will get them.

They will still excercise ROFR, because if they dont, they are cannibalizing their own sales and they have too much to sell to let the bottom fall out of these OKW contracts with 35 years to go or even 25 years.

They need the cash these extensions will generate, to use ROFR, to buy their stock back cheap, add value that costs them nothing, and sell high.
They are "flipping" OKW and extending little effort besides some paper shuffling.