I wonder if DVC is a bit anxious

[OneMoreTry]

that their big announcements fall near the worst day for the market since 9/11.
Banks are on the brink of collapse. Most say this is the worst financial crisis since 1929.

I hope they're not over confident because they seemed fairly bullet proof over the past 7 years. They'll need to continue to finance these sales for buyers. If they can't raise the capital to do that at a reasonable rate (especially at the pp cost they want) it seems they'll have some beautiful empty buildings. I can't imagine Disney has that sort of internal cash flow -- they must be dependent on the financial jungle at large.

I would be nervous.

 

[tjkraz]

Disney isn't held hostage by prime lending rates and they don't have to deal with mortgage defaults.

Well, I guess they do have to deal with defaults, but they aren't getting back a house that will sit empty--they get points that can be immediately re-sold. And with DVC interest rates in the 11-15% neighborhood, financing is still a cash cow for Disney.

 

[bookwormde]

With the number of points coming available at 4 resorts in the next year, they have to be nervous. It has to be close to the amount for SSR and those came available over several years as SSR was “built out”. On the other hand each of the new offerings has a special draw so CRO will probably be happy to rent the empty rooms (Kidani may be more challenging).

bookwormde

 

[moredisneyplease]

i think DVC as a whole right now is a bit ambitious for the economy but they have a back up plan: non DVC people coming to WDW. They can get these rooms filled w/ low resort rates and promotions. Times will change and there will be an up swing in the market and DVC will be fine...............

 

[Granny]

I'd say that announcing most of their past resorts under these circumstances would be quite a challenge. I think BLT will attract a lot of sales due to location, views, monorail, etc. It may be a little slower than projected in sales, but in general it is probably as "recession proof" as any new DVC resort could be.

 

[keys2kingdom]

Funny, I was thinking exactly the same thing. It was like the worst possible day. I'm watching my mutual funds melt down and the last thing on my mind right now is an add-on. I think they're going to have plenty of inventory for quite a while although BLT is definitely the best thing to be selling right now. At least it will have the selling power to carry them through.

 

[Golden Rose]

That and the high gas prices probably do have them concerned about Hawaii, though. I would think Ko'Olina is likely to not happen soon or at all if existing offerings don't sell well. (Construction there is likely to be slow anyway - I've got family in Hawaii, and they say you can't get many contractors to show up when the surf's up. ) I think it would be too bad; we're not likely to buy in Hawaii, but we'd love to go to a DVC property there from time to time. Unfortunately, I suspect there are a lot of people who will feel about it like we do. People on the west coast may be willing to go more often, though, as their plane fights won't be quite so grueling in terms of fatigue or cost...

I don't think they'll have too much trouble selling BLT, or GC when it comes on board. Both offer something really unique, in high demand, and never previously available that will draw in sales. (One could say the same thing about AKV, but it has been available for a while and the people most excited about it have likely already bought in.)

 

[CarolA]

i think DVC as a whole right now is a bit ambitious for the economy but they have a back up plan: non DVC people coming to WDW. They can get these rooms filled w/ low resort rates and promotions. Times will change and there will be an up swing in the market and DVC will be fine...............

BINGO!

Disney could easily close a resort and push the overflow to the unsold DVC for example. It's been done before.

Personally as a stockholder I hope they don't panic and sell low just for cash.

That said I am not sure about their "off property" expansion plans, but I really think that Disney needs to stick to Disney. Thier model of "just because we put Disney on it we can demand a premium" doesn't fly once you leave a park IMHO! And the failure of Aloha airlines and continuing cut backs by airlines mean that those cheap West Coast flight to Hawaii are GONE! It's gone up dramatically lately!

 

[Anthony1971]

I would say Time shares in general are going to be fine in this economy as people are looking for a cheaper vacation and this certianly fits. If you stay at CR BLT is certianly cheaper then paying cash.
Marriot has set up a sales booth in a subway station here in NY. They are offering something for 199.00..never took the time to read where. You can view this as times are hard but the smater time share knows this and can offer a cheaper flexiable vacation.
For anyone intersetd it is in the 34th street Path station --entrance on 31-32by and in the Manhatten mall.

 

[OneMoreTry]

I must say that Wall Street seems to like disney as their stock has help up as well as anything over the past year.

Does anyone know what percentage of its loans DVC sells and what percentage it keeps -- overall?

 

[DisFlan]

Tourism is a tough market at the moment, but DVC is thinking long-haul and not basing decisions on the current economic climate. DVC is still selling and reselling points from 1992 and 1996 - for increased amounts. And they'll be selling 2008 points in 2118 and beyond. The ambitious DVC building plan will work to Disney's advantage over the coming years. People who "own" a chunk of the Mouse use it, will continue to use it - and many will want a larger chunk. And they spend money while using it. (As others have said, think "cash cow".) Yes, there's probably a saturation tipping point, but that's likely been calculated.

I'm sure this is why we're seeing a whole lot of new DVC resorts being built - and no new stand-alone hotel resorts going up. DVC usage, dues/fees and sales are more resilient than hotel usage, which tends to be more sensitive to the immediate economic climate. It's a smart plan.


DisFlan

 

[GuySmiley]

My hope is that when we get this election over with, the media wont feel the need to talk people into a recession anymore.

 

[PamOKW]

The way DVC is integrated into Disney, what they don't sell they can "rent" as hotel rooms. I have to say I'm a bit surprised with the number of folks racing to purchase. If there is this much excitement during such an economic bad news week, I think they'll be okay. DVC has been through several economic drops since they opened and manages to keep on ticking.

 

[snackyx]

I would guess the initial reaction to BLT will be positive and sales will start out strong. No resort in DVC history has had this kind of drama and anticipation preceed it and there are enough DVCers who have been chomping at the bit to buy into it. I would think as the excitement--and sales--calm down, there may be some incentives to help stimulate sales if the economy is still stalling--and projections are this will continue well into 2009. The mortgage mess is not done yet, folks, and the tremors from that are still being felt. While DVC is, indeed, thinking longterm, they do have to keep the contracts rolling on a regular basis.

 

[OneMoreTry]

I realize people WANT to buy. I want to buy and was seriously thinking of doing so. But I cant rationalize pulling $30,000 out of the market when I'll be getting "pennies on the dollar."

However, I don't think most people realize the possible consequences of this economic situation. Ever since the early 30's things have worked out during rough times. But we're in a situation that might call for the government to continue to pony up hundreds of billions of dollars (or convince the private sector to do so) to rescue the dominoes one by one before they all come crashing down. If the government can't or won't -- then the loan money to buy these condos could become prohibitively expensive.

(I think the major media has UNDER-REPORTED the seriousness of this and not exaggerated. Watch cnbc over the next couple of weeks.)

Then NEEDS will take precedence over WANTS.

The chances of this "nuclear" scenario are greater than I like to think and the falout could go on for a decade at least. I wouldn't want to be positioned with my **** hanging out with lots of expensive real estate to sell.