Is DVC over-expanding?

[OneMoreTry]

I am concerned (as a DVC member who is planning on 30 more years of visits) that DVC is expanding too much.

As long as the economy is doing well it's not a problem. However, if too many members begin to have problems paying their dues, there will not be enough money for upkeep. The real problem would occur when those members can't sell because the market is saturated with millions and millions of points. Even if they drop their sale prices, potential buyers would be reluctant to take on the maintenance fees in a bad economy.

DVC would be faced with hundreds of accounts in arrears with no money coming in and a bunch of aging resorts that need to be maintained.

(As a WDW lover, my concern is that the magic is being diluted by steel and concrete, however well-themed.)

 

[myzel]

Look at it on a positive note. More opportunity for cheap points to add on.

 

[Dean]

I am concerned (as a DVC member who is planning on 30 more years of visits) that DVC is expanding too much.

As long as the economy is doing well it's not a problem. However, if too many members begin to have problems paying their dues, there will not be enough money for upkeep. The real problem would occur when those members can't sell because the market is saturated with millions and millions of points. Even if they drop their sale prices, potential buyers would be reluctant to take on the maintenance fees in a bad economy.

DVC would be faced with hundreds of accounts in arrears with no money coming in and a bunch of aging resorts that need to be maintained.

(As a WDW lover, my concern is that the magic is being diluted by steel and concrete, however well-themed.)

They should be in a better situation than most. What you fear happens now at seasonal and poorly run resorts. My view is that if we get to that point, the entire timeshare system likely will have collapsed and it won't matter anyway.

 

[lilpooh108]

My understanding is that DVC is easier to work with in terms of deeding back your property if the property is itself paid off.

DVC then holds the points, deposits them into RCI or otherwise rents out the rooms via CRO. Members get the money from these types of things assuming there is a "net" after the MFs are paid from these same points.

There are also other waitlists currently for direct sales at alot of the resorts, so it's not like no one wants these points.

I'm sure its much more complicated than that, but since the demand for DVC rooms (whether it be from members, exchangers or cash clients) is better than say, a run-down resort elsewhere, I'm not too worried about it.

 

[DizBub]

I'm not too worried about more on-site DVC resorts. I'm not experienced with other timeshares and how they work but it seems like it would be unwise for them to build more off-property resorts.

I got into DVC to stay at WDW. So far it's working for us.

 

[ssawka]

"I got mine, now close the door"? I see this type of thing all the time where I live. People move into the area, buy a house, and then want the local government to limit development of new homes.

 

[brertoad]

I'm glad they are building more DVC resorts. I'm looking forward to the opening of VGF, and hopefully a Poly DVC.

 

[Garthilk]

Going to be interesting as time goes on and pointflation takes over. Your two bedroom home resort points probably won't get you a studio in value season at the latest resort in 2035.

Or when your maintenance per point is going to exceed the price to rent them.

 

[tjkraz]

My understanding is that DVC is easier to work with in terms of deeding back your property if the property is itself paid off.

DVC then holds the points, deposits them into RCI or otherwise rents out the rooms via CRO. Members get the money from these types of things assuming there is a "net" after the MFs are paid from these same points.

There are also other waitlists currently for direct sales at alot of the resorts, so it's not like no one wants these points.

I'm sure its much more complicated than that, but since the demand for DVC rooms (whether it be from members, exchangers or cash clients) is better than say, a run-down resort elsewhere, I'm not too worried about it.

DVD foreclosing and re-selling is an ongoing process today but there's no guarantee it will continue. We've already seen financial slowdowns which prompted DVD to change its ROFR philosophy. When money is tight, buyers disappear and DVD is holding millions of points of "new" inventory, foreclosures and ROFR will be the first processes to end.

But as Dean said, DVC is likely to be in better shape than many.

Resale prices will fall dramatically but a run-of-the-mill owner who still plans to hold and use his/her points probably will not be impacted to any great degree.

As for the idea of DVC expanding too much, I don't think members will be any better off if DVC ceases active sales. Many of the member "perks" may seem like gracious thank-yous to owners (AP discounts, dining, recreation, etc.) but the greater role they play is to make DVC ownership appealing.

How long do you think they'll keep discounting WDW APs by $150 per person, per year, if that perk no longer helps sell $20,000 DVC contracts?

 

[Missyrose]

Going to be interesting as time goes on and pointflation takes over. Your two bedroom home resort points probably won't get you a studio in value season at the latest resort in 2035.

Or when your maintenance per point is going to exceed the price to rent them.

There's no such thing as "point inflation." The total number of points for a DVC resort have to stay the same from year to year. If they raise the point requirement for one villa size or season, another has to drop correspondingly.

 

[bookwormde]

As long as they keep the new resorts on site I do not see a problem, to many off site DVCs would create major booking issues on site.

 

[BestDadEver]

DVD foreclosing and re-selling is an ongoing process today but there's no guarantee it will continue. We've already seen financial slowdowns which prompted DVD to change its ROFR philosophy. When money is tight, buyers disappear and DVD is holding millions of points of "new" inventory, foreclosures and ROFR will be the first processes to end.

But as Dean said, DVC is likely to be in better shape than many.

Resale prices will fall dramatically but a run-of-the-mill owner who still plans to hold and use his/her points probably will not be impacted to any great degree.

As for the idea of DVC expanding too much, I don't think members will be any better off if DVC ceases active sales. Many of the member "perks" may seem like gracious thank-yous to owners (AP discounts, dining, recreation, etc.) but the greater role they play is to make DVC ownership appealing.

How long do you think they'll keep discounting WDW APs by $150 per person, per year, if that perk no longer helps sell $20,000 DVC contracts?

Yup that's when I'll start worrying about loosing perks . IMO when they are actively selling new properties they will keep the perks to get the numbers they want .

There's no such thing as "point inflation." The total number of points for a DVC resort have to stay the same from year to year. If they raise the point requirement for one villa size or season, another has to drop correspondingly.

What they are saying is that with each new resort the point are going up and by 2035 you won't have enough points from your home resort to trade into the new resorts .

 

[Dean]

There's no such thing as "point inflation." The total number of points for a DVC resort have to stay the same from year to year. If they raise the point requirement for one villa size or season, another has to drop correspondingly.

I think they're talking about points creep with new resorts. I think one can argue that it happened with GF and maybe others already.

 

[Dean]

As long as they keep the new resorts on site I do not see a problem, to many off site DVCs would create major booking issues on site.

I don't see that the onsite vs off site matters from a booking standpoint (I'm sure you're assuming they'd be lower overall). What does matter is the relative demand of a given resort year around. IMO it'd be difficult to negatively affect the 7 mo window further (not impossible though). You'd have to generate a large # of points for a resort or resorts of equal or lower demand to SSR. Anything above SSR demand should be neutral or actually help some. IF they were to create good resorts in good places rather than try to compromise by doing good resorts in decent places like HH and VB, off site may make sense. Say Kaanapali Beach Maui or ocean front Kauai or the Big Island.

 

[jerseyduke]

There's no such thing as "point inflation." The total number of points for a DVC resort have to stay the same from year to year. If they raise the point requirement for one villa size or season, another has to drop correspondingly.

Very true, but I think the post was suggesting that a new resort, built in 2035, will be 150 points per night for a studio. Most likely due to the fact that the VGF(newest) is very "point expensive", and OWK(oldest) is very point-cheap.

 

[chalee94]

Very true, but I think the post was suggesting that a new resort, built in 2035, will be 150 points per night for a studio. Most likely due to the fact that the VGF(newest) is very "point expensive", and OWK(oldest) is very point-cheap.

that's an obviously flawed comparison, though.

OKW compared to SSR shows a small amount of point inflation IMO. sure.

but GF is the flagship wdw resort on the monorail...it's going to cost more than OKW, which has a location more like a moderate hotel. (at OKW, you can't even watch tv in the bathroom... )

i think 150 pts for a studio is pretty unrealistic.

 

[Deb & Bill]

that's an obviously flawed comparison, though.

OKW compared to SSR shows a small amount of point inflation IMO. sure.

but GF is the flagship wdw resort on the monorail...it's going to cost more than OKW, which has a location more like a moderate hotel. (at OKW, you can't even watch tv in the bathroom... )

i think 150 pts for a studio is pretty unrealistic.

Charles, you mean you never opened the shutters in the master bedroom and watched tv from the jetted tub at OKW? And I can sit down instead of standing up. OKW has GFV beat with bathroom tv.

 

[luckyman_apd]

The whole "point flation" doesn't bother me. I didn't buy DVC with Poly or VGF built, so if they charge more points to stay there, well, I don't own there anyway. We bought in and have the points to stay at our home resort. Staying at others for less points is a bonus for us, and it actually has let us squeeze in a few extra trips. While BC, BWV, and VWL will all close in 2042....we still will have SSR, OKW (who knows how much with the extention), and AKV (we are BLT owners) to book at for less points than BLT if we need to. So no, I'm not worried about "point flation". The only downside I see is that from time to time I've seen DVC members act as if they are more entitled than other WDW guests because they are "owners". If more and more people buy in to future resorts with this attitude, I will find myself wanting to punch more and more people in the face as I walk down Main Street.

 

[bwvBound]

If more and more people buy in to future resorts with this attitude, I will find myself wanting to punch more and more people in the face as I walk down Main Street.

If/when you reach that point ... go book a cruise!

Call me Ishmael. Some years ago - never mind how long precisely - having little or no money in my purse, and nothing particular to interest me on shore, I thought I would sail about a little and see the watery part of the world. It is a way I have of driving off the spleen, and regulating the circulation. Whenever I find myself growing grim about the mouth; whenever it is a damp, drizzly November in my soul; whenever I find myself involuntarily pausing before coffin warehouses, and bringing up the rear of every funeral I meet; and especially whenever my hypos get such an upper hand of me, that it requires a strong moral principle to prevent me from deliberately stepping into the street, and methodically knocking people's hats off - then, I account it high time to get to sea as soon as I can.

 

[BestDadEver]

This point inflation has been happening since BLT just look at the point charts . Its easy to see