NEW VGF Building

[Nabas]

Yes, I did miss your point. I was commenting on this point of view that you expressed:

“VGF2 doesn't make much financial sense over $200 per point.”

It was not clear to me that you were expressing that this math was only pertinent to your unique situation, where cash 20 years from now is of no importance.

Since we don't know what the initial price-per-point will be, it's difficult to calculate an exact number.

Assuming it will be higher than RIV, the VGF2's breakeven point (compared to simply renting points) is probably going to be 15-to-20 years. This means that for the first 15-to-20 years, a WDW vacationer would have spent less simply renting points.

However ...

As you correctly point out, the VGF2 buyer will have an asset that (likely) will be worth close to its original purchase price. This means that someone probably could hold onto VGF2 for 15-to-20 years, sell it at that time, and end up paying something close to the Maintenance Fees only for their 15-to-20 years of DVC stays.

DVC is unique among timeshares in that it retains most of its value over time.

 

[sethschroeder]

However, after looking at the number of dedicated and lockoff Studios per DVC resort:

WARNING

Your math has a hole in it. Its not about the number of studios. Its about the % of studios to points and the % of studios to all bookable rooms.

Now it works out for VGF because the Studio % is going to be through the roof but I wanted to call this out just so you and others make sure to account for it when comparing resorts and doing some calculations on how likely you will get a room.

 

[Nabas]

But why? You keep saying quick return. They don't need a quick return in FY'22 when they will have 100% capacity in the parks, people with excess funds who haven't traveled in 2 years, and the 50th anniversary giving them pixie dust eyes.

In April 2020, Disney took out a $5 billion line of credit. They need cash to pay that off.

Disney might net something around $100-$200 million from a conversion of one (small for Disney) hotel building. Every "little bit" helps.

 

[sethschroeder]

In April 2020, Disney took out a $5 billion line of credit. They need cash to pay that off.

Disney might net something around $100-$200 million from a conversion of one (small for Disney) hotel building. Every "little bit" helps.

Except VGF is such a small part of that and Disney in general is going to absolutely rake in profit once they get to 100% capacity and we hit October 1st.

Profit
2015 - $8.38b
2016 - $9.39b
2017 - $8.98b
2018 - $12.6b
2019 - $11.05b
2020 - -$2.86b (negative)
2021 - $941m (through Q2)

As of March 31, 2021 $15.89b cash on hand.

Selling out VGF is nothing when you compare how much they make, how much revenue Disney goes through, and how much cash they have on hand.

If they are trying to push VGF through quickly they would be doing is this FY not next FY. It simply seems to come down to likely inability to fill those super expensive rooms for a number of years.

 

[Nabas]

Your math has a hole in it. Its not about the number of studios. Its about the % of studios to points and the % of studios to all bookable rooms.

Now it works out for VGF because the Studio % is going to be through the roof but I wanted to call this out just so you and others make sure to account for it when comparing resorts and doing some calculations on how likely you will get a room.

VGF2 buyers will be just like any other DVC buyers. Over time, a lot will want to stay at other DVC resorts.

This means that while (for example) they are booking "my" BWV room in May, I'll be booking "their" VGF2 room in May.

Currently, VGF1 has no dedicated Studios, 47 lockoffs, 47 dedicated 2BR, and 6 Grand Villas. With VGF2, it's going to have 200 dedicated Studios.

PVB has 360 dedicated Studios and 20 (very expensive) cabins.

If you assume cabins cost roughly twice the number of points as a 2BR, VGF1/VGF2 and PVB end up with somewhat similar ratios of dedicated Studios to everything else. It's by no means exact but the booking patterns at VGF might end up closer to PVB than any other WDW DVC resort.

 

[sethschroeder]

VGF2 buyers will be just like any other DVC buyers. Over time, a lot will want to stay at other DVC resorts.

This means that while (for example) they are booking "my" BWV room in May, I'll be booking "their" VGF2 room in May.

Currently, VGF1 has no dedicated Studios, 47 lockoffs, 47 dedicated 2BR, and 6 Grand Villas. With VGF2, it's going to have 200 dedicated Studios.

PVB has 360 dedicated Studios and (very expensive) 20 cabins.

If you assume cabins cost roughly twice the number of points as a 2BR, VGF1/VGF2 and PVB end up with somewhat similar ratios of dedicated Studios to everything else. It's by no means exact but the booking patterns at VGF might end up closer to PVB than any other WDW DVC resort.

Correct originally the other post only stated studio counts. I was trying to outline that simply counting studios was going to lead to flawed conclusions. What you are outlining is what I was more so saying to look at.

 

[Nabas]

Except VGF is such a small part of that and Disney in general is going to absolutely rake in profit once they get to 100% capacity and we hit October 1st.

Profit
2015 - $8.38b
2016 - $9.39b
2017 - $8.98b
2018 - $12.6b
2019 - $11.05b
2020 - -$2.86b (negative)
2021 - $941m (through Q2)

As of March 31, 2021 $15.89b cash on hand.

Selling out VGF is nothing when you compare how much they make, how much revenue Disney goes through, and how much cash they have on hand.

If they are trying to push VGF through quickly they would be doing is this FY not next FY. It simply seems to come down to likely inability to fill those super expensive rooms for a number of years.

OK, then you explain why Disney has decided to do this quick return on cash, because clearly they have.

And they can't do it this fiscal year. Remember, we're talking Disney here. The same Disney that spent a couple of years planning out the Tangled Toilets. In "Disney time", next year is lightning fast.

Furthermore, DVC sales still haven't recovered - they are only about 68% of pre-COVID levels. Why the heck would they rush to sell VGF2 this year when RIV is not selling at desired levels?

By next year, WDW will be full of Guests eager to take the DVC plunge.

 

[Nabas]

Correct originally the other post only stated studio counts. I was trying to outline that simply counting studios was going to lead to flawed conclusions. What you are outlining is what I was more so saying to look at.

Just keep in mind that SSR and OKW have no dedicated Studios, cost fewer points per night than most DVC rooms, yet tend to be the easiest to book.

Heck, less than 10% of AKV is dedicated Studios, yet those Studios tend to be the third easiest to book.

The total number of Studios (and the desirability of the resort) is important in understanding how difficult it is to book a Studio at that resort.

VGF2 is going to have a lot of dedicated Studios. It's going to be relatively easy to book at 7 months. (I'm not saying easy, just easy compared to Studios at many other DVC resorts.)

 

[sethschroeder]

OK, then you explain why Disney has decided to do this quick return on cash, because clearly they have.

Explain what? VGF? Like outlined they can't fill the rooms on cash and likely know they won't be anytime soon. Supposedly there was a cash side refurb coming next year as well so they decided to flip the rooms.

Info out there about the Four Seasons taking the VG cash guests.

And they can't do it this fiscal year.

Well actually they could if they needed the cash so bad. Its just selling the resort not having it finished. Lets be honest they didn't just think of this VGF switch last week and post it.

they are only about 68% of pre-COVID levels.

Exactly with.... 25% to 35% to now higher capacity.

Also historical for April and random couple other months:

• Apr 2015 - 224k
• May 2015 - 169k
• Apr 2016 - 191k
• May 2016 - 165k
• Feb 2017 - 152k
• Apr 2017 - 245k (CCV launched)
• Apr 2018 - 156k
• Apr 2019 - 268k
• Apr 2021 - 152k

 

[sethschroeder]

The total number of Studios (and the desirability of the resort) is important in understanding how difficult it is to book a Studio at that resort.

Desirability is big when calling out OKW/SSR/AKV as they go last because people who own there are more likely to try to go for a different resort and people looking to stay somewhere else are less likely to try for those resorts.

Just to call out percentages of Studios though across a couple different resorts.

% of room totals:
CCV - 23%
SSR - 33%
OKW - 30%
VGF - 32%
Poly - 95%
VGF After - 71%

% of point totals for Studios:
CCV - 8%
SSR - 16%
OKW - 14%
VGF - 15%
POLY - 72%
VGF After - 49%

VGF After - I just split the 200 new rooms between Standard and Lake View at todays point charts. Obviously this is wrong but just to give a rough idea.

 

[Brian Noble]

The question (for me) becomes, do I pay over $200 per point to stay at VGF1 or VGF2 each May? Or will VGF1/VGF2 become easier to book in May because of 200 additional Studios, so I can use my existing points and pay nothing (other than my current MF)?

My advice is use your current points there until it no longer works. Dont spend thousands of dollars solving a problem you don’t even have yet.

 

[BWV Dreamin]

A lot will depend on what these rooms actually turn out to be plus it will depend on when you would like to stay there. If it's the last 4 months of the year it's probably still going to be a have to own there to reliably stay there.
There hasn't been a recommendation to own sleep around points for studios for quite a long time. 1BR's - absolutely can still work. 2BR's - it can work. And it CAN for studios but the question is about flexibility. Even PVB had been starting to show some tightening up of availability at times.

I am amazed that with the addition of 200 studios people think there will be all of this availability suddenly happening at 7 months. Right now availability is tight everywhere. VGF is popular. The pandemic put a big hold on purchasing in general. VGF had little direct points available so while people say not many purchased at $255 there just wasn’t a lot to purchase, especially in certain UY. If these points are not restricted, IMO sales will be robust, even near or at $255/pt.

 

[Nabas]

I am amazed that with the addition of 200 studios people think there will be all of this availability suddenly happening at 7 months. Right now availability is tight everywhere. VGF is popular.

Right now, there’s a glut of unused DVC points, making everything difficult to book. Booking should return to normal in 2 or 3 years.

No one thinks VGF is ever going to be easy to book. But with 200 dedicated Studios (more than anywhere except PVB) booking a VGF Studio eventually will become a lot easier than it is today.

 

[ProudMommyof2]

For me the big question is, will white card members be able to book at VGF2?
After many years of research and renting points, we are finally in a position to buy. We have been trying to decide between 125 SSR points direct, SSR resale or BLT resale.
If VGF2 is considered a “ new” resort (I know it’s the same condo association but could still be considered new- right? People are wondering if it will have the same resale restrictions as RIV.), then that that would tip us towards that affordable blue card purchase.

 

[sethschroeder]

For me the big question is, will white card members be able to book at VGF2?

People will say yes because its in the same condo association. I personally wouldn't bet on it since Disney can be weird sometimes and they will push the envelop at times on whats allowed to be changed.

 

[Bing Showei]

People will say yes because its in the same condo association. I personally wouldn't bet on it since Disney can be weird sometimes and they will push the envelop at times on whats allowed to be changed.

Suppose a tree is blown during a hurricane into the Big Pine Building causing significant damage. Subsequently, an insurance claim is filed and a special assessment is levied against the Association. If it is indeed one association, how does Disney levy that cost on white card members at VGF if bearing that cost yields no benefit.

I remain convinced that unless Disney designates Big Pine into a separate association, the additional points sold on it will have to bear the same rights and restrictions as the current association.

 

[davidl81]

Explain what? VGF? Like outlined they can't fill the rooms on cash and likely know they won't be anytime soon. Supposedly there was a cash side refurb coming next year as well so they decided to flip the rooms.

Info out there about the Four Seasons taking the VG cash guests.



Well actually they could if they needed the cash so bad. Its just selling the resort not having it finished. Lets be honest they didn't just think of this VGF switch last week and post it.

I agree, the idea that Disney needs this cash super quickly is vastly overrated. Sure 2020 sucked, but 2021 is better, and 2022 will be amazing for Disney on multiple fronts. Right now it is 10x more important to Disney to get people back into movie theaters than it is to sell $300 Million of DVC timeshares. They are doing this mostly because they long term forecast having trouble renting out $700 per night rooms at VGF to a decent capacity, and they can build these as a bridge between RIV and whatever DVD does after VGF2. So it's a win all around for Disney.

 

[4luv2cdisney]

Sure, for the last 3-4 months of the year, you have to (mostly) book your Home Resort. We already have the points at other DVC resorts for that. (F&WF at BWV, Christmas at Jambo.)

Really, what we want is May at VGF.

The question (for me) becomes, do I pay over $200 per point to stay at VGF1 or VGF2 each May? Or will VGF1/VGF2 become easier to book in May because of 200 additional Studios, so I can use my existing points and pay nothing (other than my current MF)?

After a great stay at VGF last week, my spouse and I were ready to buy at VGF to assure that we could stay there every May. (This happened to be right before VGF2 was announced. We traveled home convinced we just had to buy at VGF.)

However, after looking at the number of dedicated and lockoff Studios per DVC resort:

• BRV = 65
• CCV = 78
• BCV = 110
• BLT = 133
• OKW = 230
• BWV = 246
• VGF1 + VGF2 = 247 (approximate)
• AKV = 296
• PVB = 360
• SSR = 432

I've realized there's a reason PVB Studios seem relatively easy to book - there are so many of them.

With about 247 Studios, VGF1/VGF2 is going to become one of the larger DVC resorts, at least when it comes to Studios.

Adding 200 studios to the system should decrease the pressure for studios all the way around. Lots of people like to try to move at 7 months, even if just for a few nights.

This is just good news for studio people regardless of where you own!

Suppose a tree is blown during a hurricane into the Big Pine Building causing significant damage. Subsequently, an insurance claim is filed and a special assessment is levied against the Association. If it is indeed one association, how does Disney levy that cost on white card members at VGF if bearing that cost yields no benefit.

I remain convinced that unless Disney designates Big Pine into a separate association, the additional points sold on it will have to bear the same rights and restrictions as the current association.

I agree that this will not be VGF2, this is just another building at VGF and they've already said it will be the same association.

However, white card vs blue card has nothing to do with your example. There are white card vs blue card members at every resort and a special assessment applies to all. The benefit is the accommodations you paid for staying usable. Some bought the "extras", some did not.

 

[OKW Lover]

Suppose a tree is blown during a hurricane into the Big Pine Building causing significant damage. Subsequently, an insurance claim is filed and a special assessment is levied against the Association. If it is indeed one association, how does Disney levy that cost on white card members at VGF if bearing that cost yields no benefit.

It doesn't matter what facility the tree damages. It doesn't matter what color card the owner has. A special assessment will be levied equally against all the owners.

 

[sethschroeder]

Suppose a tree is blown during a hurricane into the Big Pine Building causing significant damage. Subsequently, an insurance claim is filed and a special assessment is levied against the Association. If it is indeed one association, how does Disney levy that cost on white card members at VGF if bearing that cost yields no benefit.

I remain convinced that unless Disney designates Big Pine into a separate association, the additional points sold on it will have to bear the same rights and restrictions as the current association.

Well if they split it then you don't.

Also difference between white card VGF owners and white card DVC owners being able to book there. They could go for a hybrid where they allow all VGF owners to book there but future white card DVC (non-VGF) owners can only book the old building. If they do it then it would again be something that is only impacting new buyers of resale contracts.

I am not saying it will happen I am saying we should wait to see.

At RIV its not about locking out RIV resale owners from parts of RIV. Its about not letting white card points in or out for the rooms.