Resale restrictions as resort deeds expire?!?

[KPeterso]

I could see Disney extending 1-3 of the resorts for 5-10 years. They have multiple resorts expiring in 2042 (BWV, BCV, BRV, partial OKW, HH, and Vero). I would imagine they would not want to resell and remodel all of those at the same time. So extend one for 5 years and another 10 years, and then work on renovating and reselling the resorts in that sort of timelime. And it brings it closer to when SSR will expire and it could then be the next one in the line. Just kind of how I think it might make sense to work.

 

[jarestel]

DVD/DVC has virtually zero financial benefit in extending the 2042 resorts. The cost and profit was realized when the resorts initially sold out. There's no real money for them in simply continuing to manage the resorts for another 'X' number of years and they haven't shown themselves to be especially interested in selling small dollar contracts. I think some of us have read way more into the failed OKW extensions than is actually there, key word being "failed".

DVD will probably have an interest in redeveloping and reselling at least some of the resorts because they will make way more money going this route than by offering extensions. Redeveloping existing resorts will be a much quicker process than building from scratch. Whatever DVD decides to do, it will be to maximize profit for themselves and certainly not to cut us long time members a great deal.

 

[rg35]

OKW failed because it was poorly executed, not necessarily because the idea of an extension itself was a bad idea.
They offered an extension way too early. They offered the extension in 2007 - a point when owners still had 35 years left on these leases...some portion of these OKW owners wouldn't have even be expecting to still be alive in 2042.

 

[jerseyduke]

DVD/DVC has virtually zero financial benefit in extending the 2042 resorts. The cost and profit was realized when the resorts initially sold out. There's no real money for them in simply continuing to manage the resorts for another 'X' number of years and they haven't shown themselves to be especially interested in selling small dollar contracts. I think some of us have read way more into the failed OKW extensions than is actually there, key word being "failed".

Very true, there is very little financial benefit to DVD extending one or two of the 2042 resorts.

Question is, is there financial loss to Disney as a whole?

If the 2042 results were all built and sold for 50 years, this would be a non issue.

DVC is many things, and one of the the big ones is, its a lodging system designed to operate at 95%+ occupancy. That is so many people that were on property in 2042 that will not be in 2043. If disney thinks it can rent all of those rooms out for cash, problem solved. If not, they are going to look for a way to fill those rooms.

I can see them shutting down 1 2042 property at a time to redo and resell.

 

[Dean]

OKW failed because it was poorly executed, not necessarily because the idea of an extension itself was a bad idea.
They offered an extension way too early. They offered the extension in 2007 - a point when owners still had 35 years left on these leases...some portion of these OKW owners wouldn't have even be expecting to still be alive in 2042.

And they did it heavy handedly and generally poorly.

 

[jarestel]

DVC is many things, and one of the the big ones is, its a lodging system designed to operate at 95%+ occupancy. That is so many people that were on property in 2042 that will not be in 2043. If disney thinks it can rent all of those rooms out for cash, problem solved. If not, they are going to look for a way to fill those rooms.

I agree in principle with you, but in reality I just don't see anywhere near 95% of current members deciding to extend. In my case, and I don't think I'm alone in this, I'll be in my late 80's so what use would an extension be to me? With all the grumbling about cost of annual dues, the grousing about ticket price increases, complaints about de-Disneyfication of the resorts, hysteria regarding resale policies, and given the age of a number of members in 2042, I suspect extensions won't be a slam dunk for a large portion of the current membership.

 

[chalee94]

OKW failed because it was poorly executed, not necessarily because the idea of an extension itself was a bad idea.
They offered an extension way too early. They offered the extension in 2007 - a point when owners still had 35 years left on these leases...some portion of these OKW owners wouldn't have even be expecting to still be alive in 2042.

If they offered OKW at $15 (later $25) for points that would not be available to use for 35 years, you have to understand that the price would be much higher (similarly unreasonable for most of us) if offered later.

The idea of an extension was also a bad idea, though, as it was not clearly provided for in the original contracts. Some OKW owners have refused the extension with the plan of getting a free extension. (This has been discussed several times.)

An extension for the 2042 resorts would also not allow repricing the point charts. And also not allow some of the new restrictions that DVC has been imposing.

I would not count on any extensions for the 2042 resorts and any incentives for prior owners wishing to repurchase at the renewed resort will only be nominal.

 

[jerseyduke]

I agree in principle with you, but in reality I just don't see anywhere near 95% of current members deciding to extend. In my case, and I don't think I'm alone in this, I'll be in my late 80's so what use would an extension be to me? With all the grumbling about cost of annual dues, the grousing about ticket price increases, complaints about de-Disneyfication of the resorts, hysteria regarding resale policies, and given the age of a number of members in 2042, I suspect extensions won't be a slam dunk for a large portion of the current membership.

Agreed. Can't see anywhere near 95% extending. Age alone. At best I can see a 'new contract" offered at old key west - might mitigate the 2057 situation - but even that is a slim chance.

Just a lot of rooms that are no longer 'guaranteed' to be occupied - and that makes it interesting. Maybe they will be able to fill them with cash ressies, who knows.

And with all the complains, and I agree with some of them, park attendance is up and up, and they are adding more rooms, over 1000 this year between CSR tower and Riviera resort. Then another 900 with reflections.

 

[ScubaCat]

I 100% agree with the general consensus that they won't extend them "as is". If they do want to keep operating them as they're built, they'll issue a new POS, condo declaration, deeds, etc. starting 2/1/2042 or sometime thereafter. They'd definitely want to rework the terms with all the new restrictions they can dream up in the next 21.5 years. And it'll cost a LOT more than $25/point!

 

[RamblinWreck]

I wonder what their plan WILL be, though?

They have 5 resorts that will all end in 2042. There's no way they want to immediately flip them all and start trying to sell out 5 resorts at the exact same time, right?

 

[_auroraborealis_]

The legal issues of the OKW extension won't go away, either. It basically has to be a new inception. When you extend the land lease, you extend everyone. You also don't have the ability to realign the points charts.

They don't have to outright flip them, either. They can move units into cash.

 

[CraigInPA]

In 2042, I think you'll see DVC sell of HHI and VB.

OKW has some portion extended to 2057, and DVC has been aggressively ROFR'ing the 2042's and converting them to 2057's. I think, by the time 2042 rolls around, the number of 2042's left will be an acceptably small number, and DVC will turn the extra inventory over for cash bookings.

BCV can easily be rented for cash bookings due to demand at BC/YC. This is an effective way for DVC to "hold" the resort until it gets around to renovating it.

BRV will likely go to immediate renovation, and then sale as a new resort. The demand there is high.

BWV is a long term renovation project. They'll probably close most of it for a while until they get around to it.