Increased value at BWV or BCV?

[ziravan]

They cannot have 5 resorts in flux at the same time (2042). 6 if you count OKW’s issues.

I do believe that their intent will be to resale the EPCOT resorts at a higher price and a higher point chart.

Realigning and extending them to their otherwise 50 year terms would only slightly delay that process (10 years for BCV, less for others), and it would provide an orderly transition to the process.

It’s what they SHOULD do. What they WILL do, who knows? They likely don’t even know yet.

But creating a temporary process to spread out the potential mayhem of 2042 across a few years has enough of a benefit to be worth the whatever transitory delay it would create in turning those properties over at the same time.

It’s not just that they’d have to be selling them at the same time; they’d have to take them out of the system to renovate them for months at a time: they’d have to significantly contract the current exchange system and THEN massively expand it.

I think they will come to see the value of reselling those resorts with new charts but doing so ONE AT A TIME is of considerable value.

 

[CraigInPA]

BCV has 3 million or so points. If DVC sold extensions for 80% of those points (either now or before 2042 in resale required purchase), that would be $50 million dollars in sales, the effective cost of renovating the resort in 2052. Even BWV, with almost 5 million points at $8/extension ($2/year for 4 years) at 70% sales would still give DVC $30 million to renovate, a huge head start on their 2046 renovation of BWV.

There is no way the mouse would sell an extension for $2/year per point. If you look at Riviera, it's $188 for 50 years, which is nearly $4 per point per year. The mouse collects the equivalent of nearly $20 per point when they rent out DVC villas. I suspect BCV will become part of BC's room offerings in 2042, until BWV has finished its renovation.

 

[Frederic Civish]

Do you really have faith that management is this forward thinking? I don't believe they have as much knowledge as people on these boards, nor are they as committed to their product. IMO their only thought is about how much money they can get out of it now. Given they have a product that has a history of selling very well (except Aulani), I don't see the logic in some of the restrictions added in the past few years.

I agree with you, unless the people who are in control start to take a look into the future, they're going to have a big mess on their hands. I don't think anyone has thought about the repercussions of the restrictions on Riviera.

Anyway, I'll be 85 in 2042 and glad I'm not leaving my maintenance dues bill to my kids.

I came so close to buying Riviera, and if I bought it, I would love to hold onto it for 50 years, so I don't think I (or my family) would sell it. But then I look at the resale restrictions, again, and even though I wouldn't PLAN to sell it, I realize that plans change, conditions change, Disney might start doing even stranger and more harmful things, and selling it might become a necessity. And that is when their restrictions put the brakes on any desire to buy Riviera. If Disney had just left well enough alone, I would have had their contract on my desk last week. But I just get sick every time I think of what it would mean, now.

So, I agree with you. Disney management doesn't understand their product, or doesn't know how to manage it in the way that would be best for them. Which MUST also include many things that are great for their purchasers, otherwise, why purchase? They have totally screwed up Riviera, and they have taken a big hit in their reputation, at least among the more knowledgeable and experienced 'Disney People.' Disney, through stupidity, is creating a very big mess.

Hey, you'll be 85 in 2042. I'll be 88. That doesn't mean that we can't continue to enjoy life, and visit Disney. My father, who is 88 years old, lives by himself and takes care of himself. He just drove his motor home 1,500 miles, by himself, to go see two of his daughters. He is considering going across the country to do a book tour (he has several published books, some of which he wrote after he turned 80). I hope to also be so capable when I am his age.

 

[Katie L]

IF DVC learned its lesson from extensions, it will extend the ground lease and offer an extension at a set price and require that all owners either pay that price now or the price comes due upon sale. The only points DVC "gets back" in 2042 would be from owners at the time of the extension that neither buy the extension nor sale before 2042 (to a new owner that would be required to buy the extension).

That would be a very small group of owners. Unlike the OKW disaster, we've moved closer to the 2042 dates. The ability to extend BWV by four years, BRV by 8 years, and BCV by 10 years would likely be viewed as a benefit to current owners, either to extend their personal use or their value to sell. If not current owners, it would be a considered a valuable accommodation for sell:

If you were buying resale (or direct for that matter) today, would you rather consider buying a BCV resort that ends in 2042 or 2052? Would you pay $2/year or $20/point more for those 10 years?

BCV has 3 million or so points. If DVC sold extensions for 80% of those points (either now or before 2042 in resale required purchase), that would be $50 million dollars in sales, the effective cost of renovating the resort in 2052. Even BWV, with almost 5 million points at $8/extension ($2/year for 4 years) at 70% sales would still give DVC $30 million to renovate, a huge head start on their 2046 renovation of BWV.

This would solve multiple problems, the chief of which is to clear the 2042 logjam.

I think extensions along these lines are going to happen, not because DVC is magnanimous or otherwise considerate of owners, but because it works to their advantage, both to unblock the 2042 jam and to provide the seed money for the renovations of these resorts at their new prospective (50 year) end dates.

At this point, ziravan, I feel like the mouse should be offering you an executive position with Disney Corp. Love your take. As usual.

 

[Katie L]

Hey, you'll be 85 in 2042. I'll be 88. That doesn't mean that we can't continue to enjoy life, and visit Disney. My father, who is 88 years old, lives by himself and takes care of himself. He just drove his motor home 1,500 miles, by himself, to go see two of his daughters. He is considering going across the country to do a book tour (he has several published books, some of which he wrote after he turned 80). I hope to also be so capable when I am his age.

#lifegoals #awesomeDad!!

 

[ljmiii]

IF DVC learned its lesson from extensions, it will extend the ground lease and offer an extension at a set price and require that all owners either pay that price now or the price comes due upon sale...This would solve multiple problems, the chief of which is to clear the 2042 logjam...

I think extensions along these lines are going to happen, not because DVC is magnanimous or otherwise considerate of owners, but because it works to their advantage, both to unblock the 2042 jam and to provide the seed money for the renovations of these resorts at their new prospective (50 year) end dates.

I feel fairly confident they will NOT extend BCV and BWV. They will restructure those resorts to higher point values on par with BLT/VGF/Poly. (Looking at increasing per point night costs 20-30%.) They can't do that under current contract but starting a brand new contract they can.

It feels like you are talking past each other. Ziravan's argument is that 'extending' some of the 2042 resorts will result in benefits for Disney...while skier_pete's argument is that they will never 'extend' the contracts because DVD will want to increase the point prices.

But I'm fairly confident that if WDW does 'extend' DVD's leases for BCV and BWV then DVC 'owners' will have to sign new agreements w/higher point prices and whatever other restrictions DVD puts in place in the intervening years. It won't matter if the new RTU date is 2052 or 2092 - it seems likely DVD will call it an extension but it would be a new contract to you and me.

 

[stewart715]

"Rebuilding" BWV would be nearly impossible. Of the two, I think BWV is the likely one to be extended to finance a refurbishment (or simply to extend it). Consider the fact that the villas are a cohesive part of the Boardwalk itself, contain businesses within itself, and is essentially the 2nd half of the Boardwalk resort. Not to mention it contains the main pool for the Boardwalk Inn. The Villas building is too tightly coupled and intertwined to the Inn and surrounding area for them to do a massive rebuild without a major disruption to the hotel, boardwalk and businesses. Another refurbishment is likely all we will see there.

As for BCV, it is a completely separate building off behind the main hotel and there is plenty of unbuilt land adjacent to it. There, I would not be surprised to see a major rebuild with far more rooms. Rebuilding it would not disrupt the hotel (other than the noise) or the surrounding area experience.

 

[skier_pete]

It feels like you are talking past each other. Ziravan's argument is that 'extending' some of the 2042 resorts will result in benefits for Disney...while skier_pete's argument is that they will never 'extend' the contracts because DVD will want to increase the point prices.

But I'm fairly confident that if WDW does 'extend' DVD's leases for BCV and BWV then DVC 'owners' will have to sign new agreements w/higher point prices and whatever other restrictions DVD puts in place in the intervening years. It won't matter if the new RTU date is 2052 or 2092 - it seems likely DVD will call it an extension but it would be a new contract to you and me.

Oh, I fully could see them offering existing owners "first dibs" on a new contract and even at a slightly discounted price (say 10%). But if you have say a 120 point contract that used to get to 7 nights, that contract will only give you 5 nights at the new point assignments. I'm just saying, don't expect some huge "deal" for owners. They know BCV and BWV will be in extremely high demand.

 

[stewart715]

Oh, I fully could see them offering existing owners "first dibs" on a new contract and even at a slightly discounted price (say 10%). But if you have say a 120 point contract that used to get to 7 nights, that contract will only give you 5 nights at the new point assignments. I'm just saying, don't expect some huge "deal" for owners. They know BCV and BWV will be in extremely high demand.

Yes and no. Customer loyalty is proven to be a tremendous driver of revenue. Would not be shocked to see something more substantial than a simple 10% developer credit for existing members. They have a slew of people that they know are willing to throw thousands of dollars at them in an extension.

 

[DougEMG]

One thing we can do is look at the resorts that are expiring in 2042 and estimate how many points there would be coming online all at once if there were no extensions.

• BCV 3M points + 20% increase in point costs = 3.9M points
• BWV 4.8M points + 30% increase in point costs = 6.2M points
• BRV 1.9M points + 5% increase in point costs = 2.0M points
• OKW 7.6M points , assuming 50% have not be extend + 5% increase in points = 4M points
• HH and VB are removed from the system

So that is roughly 16.1M points which is bigger than all of SSR (14M points).

Perhaps DVC will come up with a way to stagger the expiry dates while increasing the point charts for those extensions at the same time. Then the mouse could have their cheese and eat it too!

 

[Frederic Civish]

One thing we can do is look at the resorts that are expiring in 2042 and estimate how many points there would be coming online all at once if there were no extensions.

• BCV 3M points + 20% increase in point costs = 3.9M points
• BWV 4.8M points + 30% increase in point costs = 6.2M points
• BRV 1.9M points + 5% increase in point costs = 2.0M points
• OKW 7.6M points , assuming 50% have not be extend + 5% increase in points = 4M points
• HH and VB are removed from the system

So that is roughly 16.1M points which is bigger than all of SSR (14M points).

Perhaps DVC will come up with a way to stagger the expiry dates while increasing the point charts for those extensions at the same time. Then the mouse could have their cheese and eat it too!

Yeah, but you need to take OKW out of the equation. I think they estimate that about half the people did the extension, OR have purchased at Direct resale from Disney, with the extension, since then. Over the next 24 years, with ROFR, I'm pretty sure that Disney will take ALMOST ALL of the contracts that are not already extended. So, when 2042 arrives, OKW will be off the table, and will already be extended out another 15 years.

So, that will leave around 9.5 million points from BCV, BWV an BRV. That is a lot of points, but not an exceptional amount. Disney handled the sales for SSR, OKW and AKV quite well, and they were fairly comparable in points. At least in the same general point range. So, if you assume they do a quick, minor refurb of BRV and BWV and put them back on the market immediately, with 6.7 million points, while they take a year or so to do a major refurb on BCV, i think they will be able to handle the influx of points quite well. And probably will sell them out at a record pace.

Assuming they don't jack up the price on those 'resurrected' resorts to some outrageous level, all 3 resorts will have a ready made, built in market. First in line will be all the people who liked them and wanted to buy there, but didn't, because of the 'age' of the expiring contracts. Second will be all the people who already owned there, who liked it a lot and would be willing to jump in again. That will leave a much smaller pool of points available for 'New' buyers.

If you look at it this way, I don't see why Disney would be panicking at all about expiring contracts.

As the contracts count down their last few years, I could also see Disney doing something like offering a $20 per point discount on a "Future 'Resale' purchase" of the expiring properties, for people who would put down a Cash Deposit of 25%, or maybe finance the deposit. They could tell people that by putting down the deposit, they would save the $20 per point on ANY purchase within the first year after the resurrected resorts come back on the market. The deposits would apply towards the purchase, AND they could even make the deposit 100% refundable, if the purchasers decide not to go through with it. After all, what would this really cost Disney? And once the resorts came back on the market they would have a whole line of people ready to jump right in. Instant sales.

Again, I don't think Disney is worried about what they will do to resell these in 24 more years.

 

[CarolMN]

........................................ I don't think Disney is worried about what they will do to resell these in 24 more years.

I'm don't think so, either. 24 years - how many executive changes will there be in 24 years? These days, it seems a lot of mid-level executives are not all that interested in long-term planning (more than 3-5 years or so).

 

[zemra406]

I also wonder if they will restrict reservations in the last few years of the contracts. How will they handle all the BCV owners wanting to get the last stay in before their points expire - me included You won’t be able to bank your points.

 

[skier_pete]

I also wonder if they will restrict reservations in the last few years of the contracts. How will they handle all the BCV owners wanting to get the last stay in before their points expire - me included You won’t be able to bank your points.

Unlikely. You will still have option to take your points to other resorts if BCV fills up. You are probably right that last year there will be a lot of owners staying "home".

 

[DougEMG]

Yeah, but you need to take OKW out of the equation. I think they estimate that about half the people did the extension, OR have purchased at Direct resale from Disney, with the extension, since then. Over the next 24 years, with ROFR, I'm pretty sure that Disney will take ALMOST ALL of the contracts that are not already extended. So, when 2042 arrives, OKW will be off the table, and will already be extended out another 15 years.

So, that will leave around 9.5 million points from BCV, BWV an BRV. That is a lot of points, but not an exceptional amount. Disney handled the sales for SSR, OKW and AKV quite well, and they were fairly comparable in points. At least in the same general point range. So, if you assume they do a quick, minor refurb of BRV and BWV and put them back on the market immediately, with 6.7 million points, while they take a year or so to do a major refurb on BCV, i think they will be able to handle the influx of points quite well. And probably will sell them out at a record pace.

Assuming they don't jack up the price on those 'resurrected' resorts to some outrageous level, all 3 resorts will have a ready made, built in market. First in line will be all the people who liked them and wanted to buy there, but didn't, because of the 'age' of the expiring contracts. Second will be all the people who already owned there, who liked it a lot and would be willing to jump in again. That will leave a much smaller pool of points available for 'New' buyers.

If you look at it this way, I don't see why Disney would be panicking at all about expiring contracts.

As the contracts count down their last few years, I could also see Disney doing something like offering a $20 per point discount on a "Future 'Resale' purchase" of the expiring properties, for people who would put down a Cash Deposit of 25%, or maybe finance the deposit. They could tell people that by putting down the deposit, they would save the $20 per point on ANY purchase within the first year after the resurrected resorts come back on the market. The deposits would apply towards the purchase, AND they could even make the deposit 100% refundable, if the purchasers decide not to go through with it. After all, what would this really cost Disney? And once the resorts came back on the market they would have a whole line of people ready to jump right in. Instant sales.

Again, I don't think Disney is worried about what they will do to resell these in 24 more years.

Assuming OKW is out of the picture then, it does indeed look like DVC could just turn over BWV/BCV/BRV fairly quick and put them up for sale all at once. So the potential of an extension is not very good, not that I will need one personally as I'll be in my 80s when they expire now.

 

[crvetter]

Assuming OKW is out of the picture then, it does indeed look like DVC could just turn over BWV/BCV/BRV fairly quick and put them up for sale all at once. So the potential of an extension is not very good, not that I will need one personally as I'll be in my 80s when they expire now.

Yeah this is why I'm hesitant on buying BWV/BCV at today's prices. I don't believe any extension will be offered, and certainly not on BCV which is the one I would love to own at. When they resell BCV, if they do, I'll be too old to want to buy that expensive contract that it is bound to be.

 

[DarkSideDad]

I came so close to buying Riviera, and if I bought it, I would love to hold onto it for 50 years, so I don't think I (or my family) would sell it. But then I look at the resale restrictions, again, and even though I wouldn't PLAN to sell it, I realize that plans change, conditions change, Disney might start doing even stranger and more harmful things, and selling it might become a necessity. And that is when their restrictions put the brakes on any desire to buy Riviera. If Disney had just left well enough alone, I would have had their contract on my desk last week. But I just get sick every time I think of what it would mean, now.

So, I agree with you. Disney management doesn't understand their product, or doesn't know how to manage it in the way that would be best for them. Which MUST also include many things that are great for their purchasers, otherwise, why purchase? They have totally screwed up Riviera, and they have taken a big hit in their reputation, at least among the more knowledgeable and experienced 'Disney People.' Disney, through stupidity, is creating a very big mess.

Hey, you'll be 85 in 2042. I'll be 88. That doesn't mean that we can't continue to enjoy life, and visit Disney. My father, who is 88 years old, lives by himself and takes care of himself. He just drove his motor home 1,500 miles, by himself, to go see two of his daughters. He is considering going across the country to do a book tour (he has several published books, some of which he wrote after he turned 80). I hope to also be so capable when I am his age.

Disney has this all wrong it’s really sad. So I’m a potential new member. I love all things Disney but my heart is Star Wars. I was all in on the new riviera so I could have access to Hollywood and it’s new. That’s all I knew. I was ready to buy 250 points in cash, then I saw the resale restrictions and my thought was “resale, what’s that? You can actually sell and buy these? Can I get a better deal? 14 resorts vs 1?” That’s what brought me here eventually.

What Disney should be doing is saying riviera is the only resort where you can sell and the buyer gets all the new resorts and old (up to deed expiration dates, meaning no bcv after 2042). This would make it sell like hot cakes, basically the exact opposite of what they are doing.

As someone who is very successful in sales you want to give your customer the piece of mind if a potential out, even if they won’t use it. The resale is the out, it’s what separates dvc from other timeshares. Why ruin that or give people pause? Anyone with critical thinking will see that clause and research resale, which is the exact opposite of what they should want.

 

[ScubaCat]

As someone who is very successful in sales you want to give your customer the piece of mind if a potential out, even if they won’t use it. The resale is the out, it’s what separates dvc from other timeshares. Why ruin that or give people pause? Anyone with critical thinking will see that clause and research resale, which is the exact opposite of what they should want.

It's a deadly cocktail of strong built-in brand loyalty mixed with friendly sales people (guides), pristine model rooms, free fastpasses and gift cards, and free snacks, POG juice, and ice cream. These things cause people's critical thinking skills to go out the window and they sign up without further thought. It'll sell just as well as all the prior results, and I'll bet the same pattern will continue with the "Reflections" resort coming in a couple of years.

 

[Frederic Civish]

Disney has this all wrong it’s really sad. So I’m a potential new member. I love all things Disney but my heart is Star Wars. I was all in on the new riviera so I could have access to Hollywood and it’s new. That’s all I knew. I was ready to buy 250 points in cash, then I saw the resale restrictions and my thought was “resale, what’s that? You can actually sell and buy these? Can I get a better deal? 14 resorts vs 1?” That’s what brought me here eventually.

What Disney should be doing is saying riviera is the only resort where you can sell and the buyer gets all the new resorts and old (up to deed expiration dates, meaning no bcv after 2042). This would make it sell like hot cakes, basically the exact opposite of what they are doing.

As someone who is very successful in sales you want to give your customer the piece of mind if a potential out, even if they won’t use it. The resale is the out, it’s what separates dvc from other timeshares. Why ruin that or give people pause? Anyone with critical thinking will see that clause and research resale, which is the exact opposite of what they should want.

Yes. Disney tried to make some claim that the reason they were putting restrictions on Resale purchasers of the L14 resorts, was because they wanted to 'differentiate' their own Direct Sales product, and give people 'increased value' through their own Direct Sales. So, they restricted the L14 Resale Purchasers in the future to ONLY being able to book/stay at the L14 resorts. Oh. Boo hoo. You mean I have to be satisfied with staying at Wilderness Lodge or Beach Club or Boardwalk or BLT or Animal Kingdom or Poly or Grand Floridian? (etc) It's only the greatest collection of Timeshare resorts, EVER. Boo hoo. That is just horrible. But, wait. Now you are saying that Resale purchasers at Riviera WON'T BE ABLE TO DO THAT? Riviera Resale purchasers can ONLY stay at Riviera? Wow. Talk about differentiating your product! Who is running things over there? Bozo the clown? I'm serious. Someone really needs to be fired because this is a monumental screw up, on their part.

It's a deadly cocktail of strong built-in brand loyalty mixed with friendly sales people (guides), pristine model rooms, free fastpasses and gift cards, and free snacks, POG juice, and ice cream. These things cause people's critical thinking skills to go out the window and they sign up without further thought. It'll sell just as well as all the prior results, and I'll bet the same pattern will continue with the "Reflections" resort coming in a couple of years.

Yes, you are right. Disney grabs the happy vacationers from, "The Happiest Place On Earth," and takes them to show them some amazing stuff, and they sprinkle Pixie Dust all over it, and people buy. Yay! Disney made a sale! But wait. Now what happens in 10 or 15 or 20 years when they go to sell? What happens even before then, as they gradually become more knowledgeable, now that they are in, and they find out about their Resale restrictions. They find out that THEY are in a separate, tremendously restricted class, and it wasn't obvious to them when they bought. I'll tell you what. THEY ARE GOING TO SCREAM, "BLOODY MURDER," AND SAY, "YOU CHEATED ME, DISNEY. YOU DELIBERATELY SCREWED ME, AND YOU WEREN'T EVEN HONEST ENOUGH TO SAY THAT IN YOUR SALES PITCH." A whole bunch of disgruntled DVC owners (at Riviera) will be a slow acid, eating away at the foundations of Disney's reputation. You will see this brought up over and over. You will see blogs and news media and The New York Times covering this and discussing this. Yes. Really. Because everyone will find it so peculiar, considering Disney's awesome reputation. It will be repeated over and over.

Wow, Disney. Is there any way you can really make this right?

 

[skier_pete]

One thing we can do is look at the resorts that are expiring in 2042 and estimate how many points there would be coming online all at once if there were no extensions.

• BCV 3M points + 20% increase in point costs = 3.9M points
• BWV 4.8M points + 30% increase in point costs = 6.2M points
• BRV 1.9M points + 5% increase in point costs = 2.0M points
• OKW 7.6M points , assuming 50% have not be extend + 5% increase in points = 4M points
• HH and VB are removed from the system

So that is roughly 16.1M points which is bigger than all of SSR (14M points).

Perhaps DVC will come up with a way to stagger the expiry dates while increasing the point charts for those extensions at the same time. Then the mouse could have their cheese and eat it too!

BTW - I don't think this is an argument against them selling all these resorts at once.

1) OKW is already extended to 2057 - they have no choice here but to sell 15 year extensions. They'll likely do this at some lower price point ($50/point) for people that want short-term benefits of DVC. I suspect in 2057 that OKW just closes down. It doesn't fit to the current (and future) DVC model.

2) The other three (BCV, BWV, BRV) are simply refurbished and put back on the market as Disney's "new" resorts in 2042. Sure 12.1 million points will last them 5 years or longer. But think about it this way - Riviera might cost them $300 million to build (plus the gondola) and they're gonna make 6.7 million x $188 = $1.26 Billion, so roughly a billion in profit. Let's say they spend $200 million in 2042 money to refurb those 3 resorts. By then they're selling at $300 a point - that's $3.6 BILLION dollars on a $200 million investment. If it takes 5 years to sell them, who cares. The profit margin will be huge.

In fact, they'll likely want to stretch it over a period of time. There will be a point where DVC is "built out". The ultimate point (and not in most of our lifetimes) is when they start recycling all these resorts one at a time. Minimal cost and maximum profits.

I will agree though I would be surprised if they really have a plan in place right now. Corporations typically have a 5 year plan - not a 25 year plan. DVC MAY have a plan out a little longer than that, but it isn't more than a 10-year plan. They are too concerned about what happens in the now.

It is also fully possible they start re-selling those resorts to existing owners in say 2040. I will hopefully be around to see what happens to my BWV contract! (I'll be 72 in 2042 when it expires.) And I admit I could see a future were I extend it. It's a small contract (75 points) and even at $300 a point I might consider it to give to my daughter. Of course on the new points charts It'll probably only give me 3-4 nights a year. (Right now we can get 6-7 in a standard view studio in the fall.)