Poll: Are you going to buy at Riviera

[skier_pete]

So I don't know if everyone has changed their polling answer, but find it interesting that the "Yes I'll buy" is still 10 out of 357 votes, with 38 "Maybe"'s still hanging around. I would say getting 2.8% of existing members to buy into the new resort sounds low, but if there's really 200,000 members already out there - that's 5,600 members buying at DRR and if on average its 100 points - that's 560,000 points to existing members - or 10% of the resort. And my guess is if they sell 10% of the resort to existing members they'd actually be pretty thrilled.

 

[Matty B13]

And my guess is if they sell 10% of the resort to existing members they'd actually be pretty thrilled.

Unless, they are use to selling 20-25% to existing members.......

 

[ClarksDad]

Just posted this in another forum... This resort looks lovely, but by my break-even analysis using our vacationing particulars, there's no way to justify this purchase. The only way I can get to a break-even is assuming the same rate of increase in dues (actually 5.5%/yr since we've owned), as in rack rates (actually 3.6%/yr since we've owned DVC) -- and even there I arrive at 40yrs. If you pull together our 3 DVC past purchases (in 2006, 2009, 2013), we broke even in 12yrs. They've changed the economics of DVC, and it no longer makes sense for us.

We'll probably try renting at 7mos. to check it out. But that's a big MAYBE -- because we can get BLT for just slightly FEWER points per night (which seems insane to me given location and walkability).

Not buying at DRR but not due to any resale restrictions. In fact, we loved having a chance to preview the villa and the resort rooms are great. Probably the highest standard of luxury on the DVC properties, albeit, why did they get rid of the 2 bathrooms? I love having that at AKV.

Our DVC story though is probably the main reason I won't buy DRR. It's a whole different kind of experience that the save more DVC we imagined when we purchased AKV.

Our main resort, AKV, really fits that definition well with the point chart, and also we really love the animal views! We purchased a resale 2 years ago and then did the 25 pt add on to become a member in 2017. Since then, we've stayed at AKV as well as other resorts, including BLT and PVB, mostly using the cheaper AKV points. On our last trip, we did BLT for 3 days in a 1 br and suddenly realized how convenient being that close to the magic kingdom every night was! We were ready to expand and considered immediately buying there until we realized we had now to pay 225 a pt /direct (we are working on a resale instead).

At the same time, however Disney tempted us with a tour of Riviera and CCV while we were visiting last weekend. We bit for the free ice cream and a chance to meet our guide in person, and we were already staying at SSR for this 2 night stay. Got to see the villa models probably before 99% of others, since its only for members at the moment.

We liked DRR a lot. From the layout of the resort (we do like the towers and having everything centrally -vs the OKW/SSR style) - and the upscale feel of the resort, the marble like features, art work on the rooms and copper fixtures, really really cool. The wrap around room gets rid of the caverns feel of some DVC rooms. ondola's will be great, and Epcot being less than a mile away as the crow (or gondola ) flies is a game changer since we thought all future DVC resorts will have less favorable locations and therefore, not be of interest to us. But the few negative factors, point chart included and views limited to mostly the caribbean beach resort, we just did not see it working out.

Later, I did my own break-even analysis and I don't think its quite 40 years - I consider it based on a resale of the contract in 10-15yrs at about 60% of purchase price, but compared to other resorts, it wasn't that favorable at all. I think the resort however, will do well with drawing new members who don't have the built in economic advantages that current DVC members have.

 

[bianca]

I probably would've voted "No, was never going to." But never say never. I guess my point is, if I do decide that I need another contract (which is unlikely) the restrictions would not affect my decision of where to buy. I would probably buy at the newer resort, so that my heirs could have at least some points beyond my OKW 2042 end date.

This was our position initially. We thought we were good with our 525 points. However, because it has become darn near impossible to get a studio anywhere you don't own, we are ending up doing a small add-on. We always get a 2 bedroom AND a studio to accommodate everybody. Since we know we would like to stay at Riviera occasionally, we felt we had to buy there to assure that happens. We will secure the studio, then come in at 7 months for the 2 bedroom. Even though DH and I will be 110 when it expires, Riviera memories will be there for our kids. We are good with that.

 

[MickeyMinnieMom]

Later, I did my own break-even analysis and I don't think its quite 40 years - I consider it based on a resale of the contract in 10-15yrs at about 60% of purchase price, but compared to other resorts, it wasn't that favorable at all. I think the resort however, will do well with drawing new members who don't have the built in economic advantages that current DVC members have.

Agreed it's not as high as 40yrs if I adjust down my opportunity cost of capital. If I shift my opportunity cost calc to assume funds instead just sit in the bank with the stupid-low interest rates these days, let's say (instead of in the market at a "reasonable" rate of return), I can get my break-even on DRR way down to about 15 yrs. Still not as good as the past, but not insane. I suspect Disney doesn't include this at all in their analysis...

 

[aoconnor]

I think it will be very tough to book studios here, despite the lack of cabins/bungalows.

The point chart is so much higher than CCV that more people than ever will only be able to afford studios. A week in a preferred studio in Magic Season is 190 points- i.e. $34,200 after a $1.5k incentive for new members. Compare that to $23,100 for a week at CCV with the current $750 incentive and you're looking at a 48% premium for Riviera.

I wonder how many new buyers are really spending more than $34k? A one bedroom in the same season would be a staggering $71,600 assuming a $3k incentive- yikes!

(Note that I used the preferred view because I read somewhere that was 75% of all units.)

 

[skier_pete]

(Note that I used the preferred view because I read somewhere that was 75% of all units.)

That's the rumor, but I have yet to see any documentation indicating the ratio of the two.

 

[we"reofftoneverland]

I think it will be very tough to book studios here, despite the lack of cabins/bungalows.

The point chart is so much higher than CCV that more people than ever will only be able to afford studios. A week in a preferred studio in Magic Season is 190 points- i.e. $34,200 after a $1.5k incentive for new members. Compare that to $23,100 for a week at CCV with the current $750 incentive and you're looking at a 48% premium for Riviera.

I wonder how many new buyers are really spending more than $34k? A one bedroom in the same season would be a staggering $71,600 assuming a $3k incentive- yikes!

(Note that I used the preferred view because I read somewhere that was 75% of all units.)

Those are incredible numbers. Now I see why new resale cannot stay there. But, I don't think this strategy will work out quite as they plan.

 

[ELMC]

Those are incredible numbers. Now I see why new resale cannot stay there. But, I don't think this strategy will work out quite as they plan.

I don't think we know what their plan is. But here's how I see it most likely playing out...studios will book up, new resales won't be able to trade in, upon not being able to get a studio Riviera owners will try to book studios elsewhere instead of paying the ridiculously high point costs for 1BRs, and 1BRs and some 2BRs will break at a rate much higher than the reimbursement rate set forth in the contract and there will be surplus revenue for Disney. That sounds like a win to me. Just not for owners.

 

[TexasChick123]

I don't think we know what their plan is. But here's how I see it most likely playing out...studios will book up, new resales won't be able to trade in, upon not being able to get a studio Riviera owners will try to book studios elsewhere instead of paying the ridiculously high point costs for 1BRs, and 1BRs and some 2BRs will break at a rate much higher than the reimbursement rate set forth in the contract and there will be surplus revenue for Disney. That sounds like a win to me. Just not for owners.

We book 1- and 2-bedrooms only. We aren’t unicorns. We do exist...

 

[vint43]

The point chart for the Riviera is better than GFV.

They sold 2.5m points for the GFV, never offering a discount, in a relatively short amount of time opening at $150 per pt to new owners (which was very high at that time).

Many current owners gasped at the point chart, the price, etc. Several also felt “it looks like my grandmas house”. They were not the target buyer. DVC has offered a range of properties that appeal to different buyers. I think the Riviera target is similar to the GFV target. I think it is a mistake to think Disney builds every DVC to appeal to every DVC member or potential member.

Riviera has a similar aesthetic to GFV and is trying to go after the “luxury” buyer that wants an Epcot resort.

This time they need to sell 6.5m pts.

So it has a slightly better point chart and is offering opening incentives to try and capture more luxury buyers.

To me, the strategy was probably as simple as that. We will see if it works.

I was appalled when Poly was only studios. I have never booked a studio when using our DVC points. I thought “who would buy that?” Turns out, I was never the target buyer. There is a large chunk of the club that only books studios.

There is a percentage of the club that values more luxury, wants an Epcot location, and will pay the premium in cost and points to get it.

So I think the largest risks for the riviera is not the price or the point chart. It is if it will be seen as “luxury enough” for the target buyer in terms of location (very close to a moderate - don’t think upgrading the common grounds of Caribbean beach was all about that resort - it was also to make sure it looked fresh for the riviera), the gondolas, etc. That, to me, was the gamble they took.

Poly showed me just because I was not the target buyer does not mean Disney does not have plenty of other customers that might be.

 

[TexasChick123]

The point chart for the Riviera is better than GFV.

They sold 2.5m points for the GFV, never offering a discount, in a relatively short amount of time opening at $150 per pt to new owners (which was very high at that time).

Many current owners gasped at the point chart, the price, etc. Several also felt “it looks like my grandmas house”. They were not the target buyer. DVC has offered a range of properties that appeal to different buyers. I think the Riviera target is similar to the GFV target. I think it is a mistake to think Disney builds every DVC to appeal to every DVC member or potential member.

Riviera has a similar aesthetic to GFV and is trying to go after the “luxury” buyer that wants an Epcot resort.

This time they need to sell 6.5m pts.

So it has a slightly better point chart and is offering opening incentives to try and capture more luxury buyers.

To me, the strategy was probably as simple as that. We will see if it works.

I was appalled when Poly was only studios. I have never booked a studio when using our DVC points. I thought “who would buy that?” Turns out, I was never the target buyer. There is a large chunk of the club that only books studios.

There is a percentage of the club that values more luxury, wants an Epcot location, and will pay the premium in cost and points to get it.

So I think the largest risks for the riviera is not the price or the point chart. It is if it will be seen as “luxury enough” for the target buyer in terms of location (very close to a moderate - don’t think upgrading the common grounds of Caribbean beach was all about that resort - it was also to make sure it looked fresh for the riviera), the gondolas, etc. That, to me, was the gamble they took.

Poly showed me just because I was not the target buyer does not mean Disney does not have plenty of other customers that might be.

We posted at the same time.

I agree with everything you said. You summed it up very nicely.

 

[rob5589]

I was a hard no with Riviera at first, but after seeing the room layouts and sizes I actually like it more than I originally thought. I might wait a bit until I see how the Skyliner works out though with the wait times in the morning and at park closing.

Its the next best thing in the Epcot area being the other resorts expire in 2042. I'm in my late 20's so having a longer expiration date matters to me. I'm also so curious how much contracts will eventually sell for on the resale market.

Who knows, if the Skyliner is a success, I can definitely see Disney connecting more parks and resorts which I would certainly welcome with open arms.

 

[Littlelulu01]

What do you think rental rates will be in 2027, 2032, and 2037? Dues?

Points are renting for roughly $9 / pt above dues right now. So, I'm going to stay with that constant. I know I'd be willing to save "just a little" to be in control of my own points and reservations. It will also be a great way for renters to give ownership a try. Not a lot of $ and not a lot of risk. At 15 years this could be very attractive to people who figure they will be "done" with Disney by then. They've go littles and figure they'll be shipping them off to college in 15. The other resorts will be approaching the $200 / pt range even resale. Some people just don't have the cash.

I'm gonna go just a little higher......nearly $7/ pt per year on the last 15.....

2027 - $95-$105
2032 - $60-$70
2037 - $30-$35

The hype of SWGE will keep resale high for the next 3 years and it will start to drop off. Riviera will start showing up on resale at a bargain price (with limits).

The question is, will DVC start dropping direct prices? I can't believe they're going to raise prices again. Will people pay?

Maybe we should start a new thread where everyone can give their best guess. Copy and paste mine if someone starts one! lol I want credit if I "win"

As far as mf go and rental rates- not sure the two can go hand in hand. Rental rates are very dependent on cash rates. A rental rate needs to be a good chunk better than cash. Cash can be heavily discounted and free dining... during slow times and prices jacked up in high demand times. Dvc is a steady cost. Even today some room categories don’t pencil out as a savings rental vs cash rates. All depends on season, mfs, how many points and cash discount alternative.

Dvc advertised up till a couple years ago that savings on a dvc purchase began around year seven and savings over the life of contract at up to 70% over similar cash non discount rates. It also used to assume a average annual increase of around 3% in mfs. Not sure what they assumed inflation but now they assume up to 50% savings over non discount cash and annual increases for mf’s of 4.5% and inflation at 3.9%.

So I can take my mf today and it’s safe to say according to dvc anyway, that I’m going to see 4.5% average increases per year and at minimum I’ll likely be paying 1% more In mf every year compared to inflation.

To figure it out you take mf today and add 4.5% for next year. Then take next year and add 4.5 to that number... which for the 2057 akv will land around $35/point in mf likely best case scenario. Could easily be north by a good chunk seeing that dvc has adjusted their assumptions upward in the last couple years.

I own dvc more for the joy in it. I know some do ok rental wise but I don’t think it’s a great prospect for myself.

 

[ELMC]

As far as mf go and rental rates- not sure the two can go hand in hand. Rental rates are very dependent on cash rates. A rental rate needs to be a good chunk better than cash. Cash can be heavily discounted and free dining... during slow times and prices jacked up in high demand times. Dvc is a steady cost. Even today some room categories don’t pencil out as a savings rental vs cash rates. All depends on season, mfs, how many points and cash discount alternative.

Dvc advertised up till a couple years ago that savings on a dvc purchase began around year seven and savings over the life of contract at up to 70% over similar cash non discount rates. It also used to assume a average annual increase of around 3% in mfs. Not sure what they assumed inflation but now they assume up to 50% savings over non discount cash and annual increases for mf’s of 4.5% and inflation at 3.9%.
[SNIP]
I own dvc more for the joy in it. I know some do ok rental wise but I don’t think it’s a great prospect for myself.

I respectfully disagree with your statement that rental rates and maintenance fees cannot go hand in hand. I have observed a strong correlation over the past 6 years and I actually think that the two are directly tied together while at the same time inextricably linked to cash prices. Rental prices are made up of two major drivers, supply and demand, and maintenance fee costs. And actually maintenance fees indirectly impact supply (one's desire to rent out their points for a cash alternative is dependent on how enticing that cash alternative is). Typically brokers raise rates when they experience a large scale difficulty in meeting customer requests. When they start to pay more, the backlog clears and a new rental rate floor has been established. On the private side, when maintenance fees go up, individuals start to ask for more per point and others follow suit. To your point, however, the demand for DVC rentals only exists because the alternative (booking a room directly through Disney) is so cost prohibitive by comparison. But the delta between rack rate and rental rate for a room is so large that it is logical to conclude that while capped on the high end by rack rates, rental prices are more influenced by maintenance fees than not.

But the smartest thing I have read on these forums in a long time is highlighted above in bold, italics, and underlined. A lot of times over analyzers such as myself overlook this very simple fact. We own DVC for the joy of it. I have yet to see an Excel spreadsheet quantify joy. And probably not for a lack of trying.

 

[4luv2cdisney]

As far as mf go and rental rates- not sure the two can go hand in hand. Rental rates are very dependent on cash rates. A rental rate needs to be a good chunk better than cash. Cash can be heavily discounted and free dining... during slow times and prices jacked up in high demand times. Dvc is a steady cost. Even today some room categories don’t pencil out as a savings rental vs cash rates. All depends on season, mfs, how many points and cash discount alternative.

Dvc advertised up till a couple years ago that savings on a dvc purchase began around year seven and savings over the life of contract at up to 70% over similar cash non discount rates. It also used to assume a average annual increase of around 3% in mfs. Not sure what they assumed inflation but now they assume up to 50% savings over non discount cash and annual increases for mf’s of 4.5% and inflation at 3.9%.

So I can take my mf today and it’s safe to say according to dvc anyway, that I’m going to see 4.5% average increases per year and at minimum I’ll likely be paying 1% more In mf every year compared to inflation.

To figure it out you take mf today and add 4.5% for next year. Then take next year and add 4.5 to that number... which for the 2057 akv will land around $35/point in mf likely best case scenario. Could easily be north by a good chunk seeing that dvc has adjusted their assumptions upward in the last couple years.

I own dvc more for the joy in it. I know some do ok rental wise but I don’t think it’s a great prospect for myself.

My post was pure speculation on the value of BWV in 10 or 15 years.

MFs are based on taxes and expenses to upkeep the resort. Future increases are best guesses as well.

Cash rates even with the best discounts are outrageous. What cash rates are you comparing against DVC? I am breaking even or doing better with my direct points DVC purchase than stays in moderates with a discount

I do think rental rates go hand in hand with dues.... owners have to rent at a rate equal to their dues + at least some of their initial purchase price or why rent their points? Sure, some may rent if distressed (a one-time issue or until they sell) but you won't see members renting their points with any consistency if they are losing money.

I'm not renting my points. I don't have enough for myself!

 

[Bing Showei]

The point chart for the Riviera is better than GFV.

Not for 1BRs. The breakdown for 1BRs at VGF are as follows:

30 Standard 1BRs (64%)
17 Lake View 1BRs (36%)

Given the weighted average of what a week would cost at VGF, during various seasons, comes out to as follows:

Adventure - 265 points
Choice - 287 points
Dream - 329 points
Magic - 364 points
Premier - 495 points

Assuming rumors that 75% of RR is Preferred View

45 Standard 1BRs (25%)
133 Preferred View 1BRs (75%)

Given the weighted average of what a week would cost at RR, during the various season, comes out as follows

Adventure - 270 points (+1.9%)
Choice - 291 points (+1.4%)
Dream - 342 points (+4.0%)
Magic - 374 points (+2.7%)
Premier - 477 points (-3.8%)

Despite the per week numbers being lower at RR point charts, on average, most owners staying in a 1BR will pay more than the "higher" point charts at VGF.

If there is truth to the standard to preferred view rumor of a 1:3 ratio, there is something grossly misleading about the RR point charts that guides are presently selling against.

Despite Disney's protestations to the contrary, we all know 1BRs to be generally the last rooms to book. DVD is setting up RR to sell well with lower point charts for studios (weekly point totals for standard view that rival CCV/BRV), but securing those studios will be a challenge if indeed it represents 25% of the views. 1BRs, with its already disproportionately high point charts, will prove challenging to secure a standard view for owners even. And given that there is as little as a 7-point spread between a preferred 1BR and a standard 2BR (in Dream Season), 1BRs will become an issue at RR.

And this is my biggest concern about ownership at RR. How will DVCMC clean up after DVD when owners are finding they were sold enough points for a standard view (be it a studio/1BR/2BR) and are unable to book there? Recent history does not bode well for the owners.

 

[MickeyMinnieMom]

The point chart for the Riviera is better than GFV.

They sold 2.5m points for the GFV, never offering a discount, in a relatively short amount of time opening at $150 per pt to new owners (which was very high at that time).

Many current owners gasped at the point chart, the price, etc. Several also felt “it looks like my grandmas house”. They were not the target buyer. DVC has offered a range of properties that appeal to different buyers. I think the Riviera target is similar to the GFV target. I think it is a mistake to think Disney builds every DVC to appeal to every DVC member or potential member.

Riviera has a similar aesthetic to GFV and is trying to go after the “luxury” buyer that wants an Epcot resort.

This time they need to sell 6.5m pts.

So it has a slightly better point chart and is offering opening incentives to try and capture more luxury buyers.

To me, the strategy was probably as simple as that. We will see if it works.

I was appalled when Poly was only studios. I have never booked a studio when using our DVC points. I thought “who would buy that?” Turns out, I was never the target buyer. There is a large chunk of the club that only books studios.

There is a percentage of the club that values more luxury, wants an Epcot location, and will pay the premium in cost and points to get it.

So I think the largest risks for the riviera is not the price or the point chart. It is if it will be seen as “luxury enough” for the target buyer in terms of location (very close to a moderate - don’t think upgrading the common grounds of Caribbean beach was all about that resort - it was also to make sure it looked fresh for the riviera), the gondolas, etc. That, to me, was the gamble they took.

Poly showed me just because I was not the target buyer does not mean Disney does not have plenty of other customers that might be.

I agree with just about everything you said! My only qualm is that DRR is not VGF — not sure that’s the same buyer, but point values aren’t too dissimilar.

Point values are actually closer to BLT — and with BLT I can walk to MK. I’m not stuck with a gondola — that is rumored to shut down when there’s lightning in the area — and that is the same transportation option as some value and moderate resorts have.

I can envision our Aug trips when there’s lightning almost every day around the time we head to the hotel for a break, and having only the bus as an option. That doesn’t scream luxury or VGF/BLT competition to me, personally. But it is priced that way.

Not to mention that VGF and BLT are in proximity to the most popular park in the world (I believe that’s correct?). I know SWGE is coming to DHS, but two gondolas away from DHS doesn’t equate to walk or monorail to MK. Not to me, anyway.

 

[MickeyMinnieMom]

A lot of times over analyzers such as myself overlook this very simple fact. We own DVC for the joy of it. I have yet to see an Excel spreadsheet quantify joy. And probably not for a lack of trying.

Mine bring joy when I see a breakeven point <8yrs...

I can’t get near that period on DRR though. I’m already a DVC owner and enjoy those benefits. I can get joy out of renting DRR at 7 mos or paying rack to check it out — because I’ll still get the experience and know that it’s a better deal for our particular situation.

 

[ELMC]

Mine bring joy when I see a breakeven point <8yrs...

I can’t get near that period on DRR though. I’m already a DVC owner and enjoy those benefits. I can get joy out of renting DRR at 7 mos or paying rack to check it out — because I’ll still get the experience and know that it’s a better deal for our particular situation.

Great point. I think it's important to distinguish between wanting to STAY there and wanting to OWN there. They're two separate things.