Projecting future resale values

[havoc315]

This is definitely happening, and it is NOT just 2042 resorts. The 2042 resorts are if anything exceeding reality due to their prime locations.

Location is why monorail resorts have much better value than SSR or AKV, for example.

In the end though, the 2042 date is a certainty. No matter how great the location may be, it's not worth paying more for DVC than one would pay for a cash room, for example. (No, we aren't in that situation yet. But that represents an absolute ceiling).

What is Disney’s goal? Riviera resale is starting to show where reality is for that product.

Premature to judge Riviera. It's actually exceeding most other resorts in resale as a percentage of direct price. And resale is always cheaper when a resort has no ROFR.
For January 2023, Riviera resale prices were higher than AKV and BWV.
It will be several years until we can judge how Riviera truly performs on the re-sale market, after it sells out and starts to get ROFRed.

It is considerably less valuable on resale.

It's 38% cheaper than non-incentivized direct. BLT is 40% less than non-incentivized direct. Poly is 38% less than non-incentivized direct.
So it's actually about the exact same as the other 206x resorts. Grand Floridian is the only outlier (at 25% less than direct). Meanwhile, the truly less valuable resale resorts are OKW (50% less) and BWV (45% less).

The Galactic Starcruiser is not working well for them at all. A Star Wars themed hotel with the equivalent of the Polynesian luau might have worked - but the product they are creating is too niche and too expensive to support long term. I suspect that building will be rebranded or the experience will undergo significant changes in a few years. DVC may be a part of that repurposement as well.

Like all things, it's supply and demand. They overestimated the demand at the price point. Some re-adjustment, it will likely do fine. I expect them to increasingly "package it" with as part of a weeklong trip. (Instead of $5000 for 2 nights for a family on the starcruiser, it will be $8000 for a 5 nights at the Grand Floridian + 2 nights on the Starcruiser).

 

[havoc315]

That could be. But so far they are struggling to just sell through their existing inventory. It is possible they will have five resorts actively selling soon - to say nothing of the other resorts…

Every contract they take bake they have to be confident they will sell. I’m skeptical they are able to do that - and I think that is why in part ROFR has stopped and they have started SSR and BLT incentives.

Not totally true. Using ROFR also can be used to increase the number of cash rooms available for booking. So they have to be confident that they can either sell the contract direct, or keep it at a high occupancy rate via regular cash booking.

 

[havoc315]

Another issue is that resale sellers are holding onto fantastical notions of what these timeshares are worth… How many of them are truly even serious about selling their properties? That is part of the equation…

That's partially just lag time. Re-sale sellers are looking at prices from a year ago. "These BCV contracts sold for $160 per point just last year! No way I'm dropping my price to $130 per point!"

A correction takes time for reality to set in.

$70 pp savings, sure, resale makes a ton of sense and why buy direct?
$20 pp savings, much less clear which way is best - do i want membership extras, post 2042 resort availability, all of this becomes a much more tangible discussion….

Some sellers are living in la la land so much it isn’t even worth making an offer… That’s why there are so many current listings available for sale…

 

[Nabas]

Same goes for BLT(2060) and CCV(2068). You don’t buy CCV if you like BLT because of the few extra years.

If I remember correctly, BLT sold very well when it first was offered. My theory is that it was the first Monorail DVC, and lots of buyers were excited by that.

Now, we’re approaching the 5th round of direct sales on the Monorail. The novelty is wearing off.

And the Poly/VGF point charts are just nasty.

 

[havoc315]

I think part of the issue DVC is finding themselves in right now (and why I think they may slow down on the Poly2 pace) is that the experience that they are having with VGF2 doesn't seem to be matching what happened when they did their last expansion at Copper Creek.

But the bigger question is why is it doing less well than CCV... It's probably a combination of reasons:

1 -- Mere conversion to resort studios doesn't sell as well as combinations of room types that included the new cabins.
2 -- Though they are both mostly just room conversions, CCV was more perceived as "new" given a new 50 year contract, new association, the new cabins, etc. While VGF doesn't have the same "new" feeling.
3 -- The market has simply changed. Lower demand than 5 years ago, and possibly saturation.
4 -- Pricing has hit a ceiling.
5-- CCV didn't really have to compete with CCV resale. There wasn't yet a huge market of CCV resale. But there already is a huge market of VGF resale.

I think, but I may be mistaken, that Copper Creek sold out in about 2 years. I don't see that happening with VGF2. Also, because there were so many existing points at VGF1, with it in the SAME association, they are directly competing for the first time with resale points as CCV points, even though in proximity, were not the same as BRV points. However, the VGF points are the same. Why would someone NOT buy in resale at $40-50 less per point?

 

[havoc315]

If I remember correctly, BLT sold very well when it first was offered. My theory is that it was the first Monorail DVC, and lots of buyers were excited by that.

Now, we’re approaching the 5th round of direct sales on the Monorail. The novelty is wearing off.

And the Poly/VGF point charts are just nasty.

Yes. BLT was the very first monorail DVC. It was a big deal. It also reflected a turning point in the DVC model.

Up to and somewhat including BLT, DVC was kept slightly different/inferior to WDW deluxe resorts. I think Disney didn't want DVC competing with the pure deluxe resorts. If someone wanted a large deluxe room on the monorail, then they had to book a cash room.
DVC was built secondary locations -- SSR, OKW, BRV, AKV. Where they competed with deluxe resorts, the studios were typically smaller than the deluxe hotel rooms -- BCV, BWV. At Beach Club, the villas were even stuck in a less desirable corner of the property.
BLT was the first truly top deluxe location, right on the monorail -- But they still kept the rooms smaller than the cash hotel side.
As they moved forward beyond BLT, they no longer constrained the quality of DVC.

So BLT was a turning point, and there was huge demand.

Now, it's not just the novelty wearing off. Given these are 50-year contracts, you get to a point where most people who want DVC already own DVC. It's not that easy to keep finding new buyers. Even with younger families --- Some of those multi-generation WDW family now include grandparents who already own DVC and will pass it on to their kids.

Today, on any given day, maybe 5-10% of the guests in the park are already DVC owners. In 2003, that was maybe 3%? In 1998, that was maybe 1%?

 

[RivShore]

5-- CCV didn't really have to compete with CCV resale. There wasn't yet a huge market of CCV resale. But there already is a huge market of VGF resale.

Question - not sure if I have seen data on how big the resale market really is. Do we know what the average monthly point sales are for resale? Direct averaged somewhere around 170k points per month in 2022, how much does resale do?

 

[havoc315]

Question - not sure if I have seen data on how big the resale market really is. Do we know what the average monthly point sales are for resale? Direct averaged somewhere around 170k points per month in 2022, how much does resale do?

I haven't seen any precise numbers. Through ROFR reports, even just looking at listings, you can get a very vague sense.