Poly DVC expansion coming 2024!

[Jwaire]

I believe Reflections was going to be both cash and DVC. So, 900 rooms was not all DVC, right???

I think a same association will mean higher fees for everyone.

Oh, you're right. It was a mixed-used resort unlike RIV.

Currently PVB has one of the lowest maintenance fees. I would expect if PVB and PVB2 were the same association and became supersized like SSR, it would still remain one of the lowest. However, you never know. OKW saw a big uptick this year.

Just for fun, Michael Eisner once said:

"The problem with architecture, as opposed to movies, if you do a bad movie, you put it in a vault and hide it, nobody remembers it, you do a bad building and there's not enough ivy in the world to cover it. So you're sitting there with a pretty monstrous looking thing there, your testament to your legacy."

I miss 1997 Eisner.

 

[CraigInPA]

I think a same association will mean higher fees for everyone.

I think just the opposite. The fact is that the point hungry bungalows over the water are often "breakage", which goes directly into Disney's pocket, while DVC is paying the maintenance for them. I believe they represent 40% of the points of PVB, so the current studio owners are subsidizing these. If the new tower is part of the same association, the points represented by the bungalows will be a much smaller percentage, which will allow lower costs to the existing studio owners.

Here's the math, using 1000 total points (for simplicity):
400 points = bungalows
600 points = studios
Let's be generous and assume a 25% breakage (which I suspect is half of the actual breakage). This means that Disney's getting 100 of the 400 bungalow points for free.
So, today the studios and bungalows are paying 100% of the maintenance and using 900 of 1000 points.
That's 11% more than they would if the bungalows were always fully utilized.

Now, let's add another 1000 points in for the Tower:
400 points = bungalows
600 points = original studios
1000 points = tower
Now, those 100 points in breakage are over 2000 total points, so the premium is now only 5.5%
This rather simplistic explanation ignores breakage for studios, 1 BR, 2 BR, and 3 BR in the tower, and the original studios. However, we all "know" that the Poly is in demand, and will continue to be in demand after the tower is built. We can safely assume that DVC will be able to sell all of the Tower points, and these rooms will also be in demand.

 

[Lorana]

There's a lot of members that like to get as many nights as possible for lowest points but there's also a big subset that likes larger and improved accommodations for a similar cost as the resort hotel rooms. The 1st time around Poly was a bit of a disappointment in sales - an all studio resort wasn't actually appealing to everyone. For whatever reason with all the data the DVC has to have they still have a hard time figuring out the correct ratio of rooms though.

I honestly think this is one of the reasons VGF2 remained part of VGF1: so that they could market the 1/2/3 BRs alongside the new studios. All the marketing materials emphasize the choice of accommodations. Even the giveaway is for a 1BR at VGF1, despite being a promotion for VGF2!

You mean considering that they haven't been able to get some rooms refurbished at one of the smallest resorts at WDW in the same length of time they say they'll build an entire new giant building?

Don’t even get me started on the BRV refurb. I am *furious* as an owner that Disney keeps postponing this refurb. I wrote in last year and I’m definitely writing in again. My dues pay for this refurb that was supposed to happen years ago. It shouldn’t matter what else is happening at other resorts. I want it to get done, no more excuses.

 

[Brian Noble]

Though of course there’s a high density of hotels in Waikiki, the food, dining and shopping are great, though a tad pricey, and it’s a super fun place to walk around and explore!

This is true. But, you could put great food and shopping like this almost anywhere---the middle of the desert (Las Vegas), a swamp (Disney Springs), or the frozen tundra (Mall of America). Waikiki is sitting in a place that could have been many, many other things.

Don't get me wrong; we like Oahu enough to re-visit it. But, of the "big four" islands, it's the one we return to least often.

Of course Disney was smart enough at the time to not move forward with those original plans.

There are lots of reasons why that might not have happened; aesthetics is only one. They may not have had the capital---or if they did, they might have decided to allocate it differently. They may have also decided that one park did not warrant that much hotel infrastructure. (Euro Disneyland over-built hotels early on, which was part of its problem.)

 

[Sandisw]

I think just the opposite. The fact is that the point hungry bungalows over the water are often "breakage", which goes directly into Disney's pocket, while DVC is paying the maintenance for them. I believe they represent 40% of the points of PVB, so the current studio owners are subsidizing these. If the new tower is part of the same association, the points represented by the bungalows will be a much smaller percentage, which will allow lower costs to the existing studio owners.

Here's the math, using 1000 total points (for simplicity):
400 points = bungalows
600 points = studios
Let's be generous and assume a 25% breakage (which I suspect is half of the actual breakage). This means that Disney's getting 100 of the 400 bungalow points for free.
So, today the studios and bungalows are paying 100% of the maintenance and using 900 of 1000 points.
That's 11% more than they would if the bungalows were always fully utilized.

Now, let's add another 1000 points in for the Tower:
400 points = bungalows
600 points = original studios
1000 points = tower
Now, those 100 points in breakage are over 2000 total points, so the premium is now only 5.5%
This rather simplistic explanation ignores breakage for studios, 1 BR, 2 BR, and 3 BR in the tower, and the original studios. However, we all "know" that the Poly is in demand, and will continue to be in demand after the tower is built. We can safely assume that DVC will be able to sell all of the Tower points, and these rooms will also be in demand.

Remember, DVD doesn’t pay MFs on any of the points they own that are declared into the assocation.

Breakage inventory doesn’t impact MFs, other than the cap we receive..
which every resort reaches, so no matter which ones Disney makes money oh, it doesn’t impact our fees.

So, it is back to the costs of running the new tower and the costs to run the current PVB. IMO, the costs for the new tower per point will be more than what PvB owners current pay, enough so that it will raise the fees overall for current owners.

Until we know exact number of points at new, it’s hard to predict. We do know that there are over 4 million points at PVB.

I just don’t see a situation where the costs for the new tower come out less to maintain given the larger units…higher housekeeping costs, pool, etc.

For example, simplicity sake, the current owners pay $5/point and the tower is $7/point, those current owners will see an increase, it may not be huge, but it will increase.

Only way I see it going down for current owners is by keeping it separate so that you now have a third resort splitting the shared costs with Poly resort.

Like the monorail…right now, PVB and Poly resort split the cost of that based on a portion of rooms, If one association, current charge for that will be larger because DVC now has a larger share of rooms,

However, if it is a new association, those owners will now pay a share of the
monorail which reduces the cash side and PvB side of the equation. So current PVB owners would see a smaller share of that cost.

So, my guess…and it is just that..that two associations help current owners MFs in the long run.

 

[dvc lover 1970]

Besides, if Chapek completely gets rid of APs, which seems to be the path they're on, he won't have to worry about many of us crowding up his parks.

If he gets rid of APs there go Any incentives to buy direct. I don't think they will get rid of APs. I do think we will see more deluxe hotel conversions or additions between now and 2042, maybe a new BLT tower. But the incentive for direct are the APs if those do not return direct buys are no longer Worth the cost, even if the resorts are restricted. People will buy their restricted resort choice. I will not buy RIV at 207, but I am waiting and watching resale prices there for points to use only there.

 

[Sandisw]

If he gets rid of APs there go Any incentives to buy direct. I don't think they will get rid of APs. I do think we will see more deluxe hotel conversions or additions between now and 2042, maybe a new BLT tower. But the incentive for direct are the APs if those do not return direct buys are no longer Worth the cost, even if the resorts are restricted. People will buy their restricted resort choice. I will not buy RIV at 207, but I am waiting and watching resale prices there for points to use only there.

I agree and I do not see APs ever going away. If anything, they will simply raise the price to a level that discourages people, other than a select few willing to pay it,

Best of both worlds. And, while DVD doesn’t have a say in what products DPEP sells, I do think they want to have something to sweeten the pot for direct buyers.

 

[Jwaire]

Remember, DVD doesn’t pay MFs on any of the points they own that are declared into the assocation.

I understand they wouldn't on breakage inventory, but what about resale points they've acquired through ROFR? And what about undeclared units (isn't RIV only around 50% sold out)?

Only way I see it going down for current owners is by keeping it separate so that you now have a third resort splitting the shared costs with Poly resort.

Like the monorail…right now, PVB and Poly resort split the cost of that based on a portion of rooms, If one association, current charge for that will be larger because DVC now has a larger share of rooms,

However, if it is a new association, those owners will now pay a share of the
monorail which reduces the cash side and PvB side of the equation. So current PVB owners would see a smaller share of that cost.

Except they've just spent millions on redoing the monorail station and front entrance, so we know fees won't ever go down even if they create two associations. Also, there's no way they'll make PVB2 pay for the entire new pool area either. They'll declare that a shared asset and PVB1 & PVB2 will share the cost of the 3 pools. PVB2's new pool looks to be a fancier quiet pool, so families with kids will still want to use the (overcrowded already) volcano pool and splash pad. I really wish they'd build a new splash pad for that side of the resort too.

 

[Jwaire]

You mean considering that they haven't been able to get some rooms refurbished at one of the smallest resorts at WDW in the same length of time they say they'll build an entire new giant building?

Another reason I think they might stick to one association for the PVB expansion. I'd love to know the actual backstory on Boulder Ridge, but something happened. The budget is just not there or something. I was floored they skipped it to soft refurb PVB and GFV. It's so run down. If I was an owner there, I'd be furious.

 

[psc85]

This new tower has certainly piqued my interest in buying at the Poly. Looking forward to learning more about if the tower will have its own F&B and Gift Shop etc, maybe it’s own bus station even?

If Poly2 allows for some sort of seclusion from the hustle and bustle of the great ceremonial house, that would be a huge win.

The last time we stayed at the PVB, we were just so turned off at the amount of non resort guests that come to use the resort. Which is fine, we get it, but at the same time we decided to stop staying there at least for a few years.

This was one of the main reasons we were so interested in Riviera, a small resort, with no “Big attraction”, plus everyone was so negative on it until recently. We figured it had to be nice a quiet, relaxing, etc!

 

[tjkraz]

I understand they wouldn't on breakage inventory, but what about resale points they've acquired through ROFR? And what about undeclared units (isn't RIV only around 50% sold out)?

The dues calculations include a "developer guarantee" which states that DVC is not required to pay dues on any points they own. In return, they agree to cover any amount of money between the operating budget and what members have contributed via dues. If a resort's operating budget is $10M and member dues totaled $9.5M, Disney pays the other $500k regardless of how many points they are holding.

I'm sure that has worked in members' favor at times. 2022 transportation budget probably didn't forecast gas prices in the $4-5 range. They may not have budgeted for whatever salaries and bonuses they've been forced to offer to maintain staffing.

But it also has the potential to work in Disney's favor if costs come in below the annual budget. Going back to my original example, if members pay $10m and the actual operating costs end up being $10m, DVC pays nothing. It's probably a bit of a wash over the long run, but we simply don't know for certain.

 

[Sandisw]

I understand they wouldn't on breakage inventory, but what about resale points they've acquired through ROFR? And what about undeclared units (isn't RIV only around 50% sold out)?



Except they've just spent millions on redoing the monorail station and front entrance, so we know fees won't ever go down even if they create two associations. Also, there's no way they'll make PVB2 pay for the entire new pool area either. They'll declare that a shared asset and PVB1 & PVB2 will share the cost of the 3 pools. PVB2's new pool looks to be a fancier quiet pool, so families with kids will still want to use the (overcrowded already) volcano pool and splash pad. I really wish they'd build a new splash pad for that side of the resort too.

They pay costs of undeclared but not MFs per se because they are not DVC until the do.

All other points they own are not charged MFs because they guarantee owners that the amount they determined for the year will not rise. If expenses go up that year over what was estimated, DVD covers the shortfall.

 

[CaptainAmerica]

The dues calculations include a "developer guarantee" which states that DVC is not required to pay dues on any points they own. In return, they agree to cover any amount of money between the operating budget and what members have contributed via dues. If a resort's operating budget is $10M and member dues totaled $9.5M, Disney pays the other $500k regardless of how many points they are holding.

I'm sure that has worked in members' favor at times. 2022 transportation budget probably didn't forecast gas prices in the $4-5 range. They may not have budgeted for whatever salaries and bonuses they've been forced to offer to maintain staffing.

But it also has the potential to work in Disney's favor if costs come in below the annual budget. Going back to my original example, if members pay $10m and the actual operating costs end up being $10m, DVC pays nothing. It's probably a bit of a wash over the long run, but we simply don't know for certain.

But the operating budget is only one component of the dues. Does Disney contribute in any way to the capital reserve?

 

[Sandisw]

I understand they wouldn't on breakage inventory, but what about resale points they've acquired through ROFR? And what about undeclared units (isn't RIV only around 50% sold out)?



Except they've just spent millions on redoing the monorail station and front entrance, so we know fees won't ever go down even if they create two associations. Also, there's no way they'll make PVB2 pay for the entire new pool area either. They'll declare that a shared asset and PVB1 & PVB2 will share the cost of the 3 pools. PVB2's new pool looks to be a fancier quiet pool, so families with kids will still want to use the (overcrowded already) volcano pool and splash pad. I really wish they'd build a new splash pad for that side of the resort too.

Yes, I know costs won’t go down but for shared amenities, my understanding is it is a % owned.

So, let’s say the monorail is $5 million a year to operate. Right now, let’s assume there is a 50\50 split between PVB association and cash because it’s similar in number of rooms..making those numbers up for sake of this example.

DVC owners would pay 2.5 million and Disney pays their 2.5 million.

Now, you add another 200 rooms to the current DVC association,, making the split now 75/25.

Disney gets the reduced rate. Of course more units means more fees but it still means more is charged to the current DVC owners and it may or may not be offset by new.

Now you add a new DVC association. Each would pay their share. Bur, instead of 50%, the current DVC would pay less because they will no longer own 50% of the total rooms.

Again, it’s speculation until we have more info but I just believe that current owners MFs will be adversely impacted if these are added to their association.

 

[Sandisw]

But the operating budget is only one component of the dues. Does Disney contribute in any way to the capital reserve?

Here is the actual language from my RIV document.

 

[DVCSunDevil]

Agreed... my resale Poly points are set to get a healthy bump in value, but I love it too much to cash in.

Interesting, because I was actually kicking the tires on a Poly resale contract before this announcement happened. Now I am pumping the brakes on wanting to own at Poly. If Poly2 does becomes part of the original Poly association, the amenities and restaurants are going to be even more crowded than they already are. When we went to the Poly pool over our last trip in Feb, we had to get there at 10:15 in order to get loungers…by 10:45 there was nothing available. The Poly restaurants are already a tough ADR to get, so imagine what it will be like with a new tower on property. I still may want to own there depending on the association announcement, but I don’t think that announcement will happen anytime soon. The only way I would buy Poly right now is if there was a contract that was majorly discounted. There are too many unknowns right now to risk it otherwise.

 

[princesscinderella]

Maybe the building will stretch more toward the bottom of your picture, more toward Aotearoa and less toward the wedding chapel? There is a good bit of green space there that is mainly paths and plants.

I agree with this. We rode the resort monorail yesterday and unless they move the track, run it through the building or fill in a portion of the beach there to the north of the luau space there’s not a lot of room for a big building to go. The green space area below the luau area is much larger and they can put a parking lot right as you turn the corner onto Floridian way (I think that’s the street name ).

 

[zavandor]

At one point it says: "during the guarantee period".
Are you sure this didn't apply to the first year only? It makes sense, because operating budget is just estimated, to include a guarantee that early purchased won't be charged more for this first year. But later? It seems wrong that they don't pay MF on points they own.

 

[KAT4DISNEY]

At one point it says: "during the guarantee period".
Are you sure this didn't apply to the first year only? It makes sense, because operating budget is just estimated, to include a guarantee that early purchased won't be charged more for this first year. But later? It seems wrong that they don't pay MF on points they own.

Others have said DVC uses this annually. I believe @drusba for one follows this and I'm not 100% but it may be that DVC has never or only maybe a couple of times ever had to cover a shortfall. Since they make the budgets that isn't an unlikely thing. Overages are rolled over - into Cap Reserves I think but I'd have to research that to be certain.

 

[Slakk]

I like Slakk’s guide better. LOL

Ha Ha I love him he has been with Disney for I think he said 30 years. We were just talking as I was doing my add on. It was a casual convo not me trying to get gossip or anything. He just said he was shocked that they released it without starting to build yet.

I asked him if it was going to be an expansion like VGF and he said yes. I guess we will find out, I have to think it would suck for the current PBV owners if they did a second association, to me it seems like it would make more sense to do it like VGF but I guess we will find out.

More interesting to me was how fast they did it after the VGF2. I think there must be a reason they announced them so quickly.