Price Increase Coming.....

[sethschroeder]

don’t rely on buying RIV $30k today and then getting that money or even half of it back in 2035 for the kid’s college

Eh I think in 13 years you will be able to cash in Riviera for $30k for 150 points that you are buying today. Not inflation adjusted maybe not though.

There is no chance you are not getting half back unless Disney closes down WDW because Universal buys them (its a joke because its not really landed in reality).

 

[sethschroeder]

I highly doubt DVC will maintain the same resale value it has over the past 15 years. Supply and demand is always a factor too and as dvc expands supply increases. Due to supply increase I would guess resale will over the next five to ten years willnot remain as robust as the past five to ten years.

This matters more to sleep around points it has less impact on stay where you want resorts. Additionally in 2042 you are expiring 5.5 resorts within DVC.

It also comes down to math in the end. You do the math compared to cash rates and then its rationalized as to why you are buying it. If it goes to low Disney can buy back the points to turn a profit on renting the rooms followed by selling the contract again.

What we are seeing right now is removing the 50th bump in resale values (which was called out a couple years ago) and the bump due to revenge travel/excess unused travel budget. The market will correct itself then start to slowly increase over time. Sure there might be an additional short term downturn based on the economy but we are talking about 15 years not 5 years.

 

[sethschroeder]

Disney can barely staff the parks and resorts as it is.

That is their fault and I won't listen to people trying to spin it otherwise.

Chapek even stated himself that they had no issues getting people back to work when they asked them (this was during the early days of reopening). Disney dug themselves a hole and has chosen to not be aggressive in filling the gap.

COVID19 is no longer an excuse and "this economy" is not an excuse either as travel has been hot hot hot hot. It will cool off but the major positive everyone talked about with DIS on their recent quarter financially was the parks.

 

[HIRyeDVC]

That is their fault and I won't listen to people trying to spin it otherwise.

Chapek even stated himself that they had no issues getting people back to work when they asked them (this was during the early days of reopening). Disney dug themselves a hole and has chosen to not be aggressive in filling the gap.

COVID19 is no longer an excuse and "this economy" is not an excuse either as travel has been hot hot hot hot. It will cool off but the major positive everyone talked about with DIS on their recent quarter financially was the parks.

I don’t disagree. Their fault or not, staffing will be hard for every organization going forward. The only way to attract more talent is to increase pay, which means more price increases.

 

[Genie+]

Eh I think in 13 years you will be able to cash in Riviera for $30k for 150 points that you are buying today. Not inflation adjusted maybe not though.

There is no chance you are not getting half back unless Disney closes down WDW because Universal buys them (its a joke because its not really landed in reality).

Genie+ said:
“My intent was more of something to think about for new buyers. Like my niece who has young children, she did express the idea of having something of value to cash in. Which it probably will have… just not near the values we’ve witnessed where owners were actually selling at a profit after 10 years. In my niece’s case, the clear point being don’t rely on buying RIV $30k today and then getting that money or even half of it back in 2035 for the kid’s college, lol.”

It was about relying on that money, not an actual forecast into future DVC values.

If you were a bookmaker, what kind of odds would you give me to bet 150 pts RIV resale gets full $30k buy-in cost 13 years from now? How about 17 years? And in all honesty, no, we should not even rely on seeing half of that money back 15yrs into RIV if it is crucial to our family’s financial plans.

 

[Jack Kerouac]

I came late to this board, but wanted to add some things that Brian and Don were discussing. My wife and I just passed ROFR on the Polynesian for our first contract. This is after our first trip as a family (three boys, ages seven, five, and two) in April. My parents are DVC members so they treated us. I joke that it was the most expensive free trip ever. But not having paid much attention to the previous prices per point or incentives that have been taken away, I only know the current benefits and costs. I was okay making the plunge after realizing the cost of DVC would allow us to have better accommodations at a greatly discounted cost per year. I think if we didn’t have the funds and we were considering financing, it would be different though. I wouldn’t finance a vacation.

I grew up going to Disney almost every year. But that was staying off-site and my parents did timeshare tours for free tickets. Times were different and things change. Disney is a lot like America; you don’t get to grow old in the America you grew up in.

 

[sethschroeder]

If you were a bookmaker, what kind of odds would you give me to bet 150 pts RIV resale gets full $30k buy-in cost 13 years from now?

You would be a pretty good favorite.

Maybe +150 area where you bet $1 to win an extra $1.50

You took a step further though and outlined even 50% which in reality wouldn't be on the board.

And in all honesty, no, we should not even rely on seeing half of that money back 15yrs into RIV if it is crucial to our family’s financial plans.

You can already get 50% of the money back. Plus you could strip the contract and transfer points as well.

RIV would have to be selling under $100/point to not get half your money back.

I think you need to look at what prices are, what typical changes occur over time, see how resale tracks to direct pricing, calculate inflation in, ect.

In the last 13 years inflation has been just short of 40% itself.

Your comment isn't really grounded in reality.

Reminder this means though you lost to inflation. $30k today is worth more than $30k in 13 years.

 

[Genie+]

You would be a pretty good favorite.

Maybe +150 area where you bet $1 to win an extra $1.50

You took a step further though and outlined even 50% which in reality wouldn't be on the board.



You can already get 50% of the money back. Plus you could strip the contract and transfer points as well.

RIV would have to be selling under $100/point to not get half your money back.

I think you need to look at what prices are, what typical changes occur over time, see how resale tracks to direct pricing, calculate inflation in, ect.

In the last 13 years inflation has been just short of 40% itself.

Your comment isn't really grounded in reality.

Reminder this means though you lost to inflation. $30k today is worth more than $30k in 13 years.

Timing is everything. If a person plans on selling their contract x number of years down the road, no they cannot rely on getting the full amount back. That is not based in reality. There’s been 3 times in the last 22 years where they would’ve been hit pretty hard. There have been people under water trying to sell. There’s no way to know how the 2030s or 2040s will play out, especially when trying to predict in certain time frame. A recent post was on this very premise, they were planning on getting x amount of money back in 5-7 years and doing the math based on that.

 

[WB1971]

As long as the 7-8% increase doesn’t become the new normal.

$8.50 dues Compounded at the 5, 10, 25 and 40 year marks:

4% - $10.34, 12.58, 22.66, 40.81
8% - $12.49, 18.35, 58.21, 184.66

Oh my goodness that last one is crazy!!!
$185 dues on a 200 point contract would be $37,000 a YEAR. That is not a typo, lol.

There have been some consistently large increases since I bought in 6 years ago. Concerning in the long term with the compounding effects of these big increases early in my ownership.

 

[Cfabar1]

One of the issues is that resort availability has gotten so bad. If you want to stay at these properties, better book up early or be a DVC owner. Hopefully that will change, but with the amount of conversions, etc. it seems disney recognizes they'd prefer ADR higher and move the rest into DVC.