ROFR Thread Jan to March 2023 *PLEASE SEE FIRST POST FOR INSTRUCTIONS & FORMATTING TOOL*

[Brian Noble]

I just read it from another thread.

This sounds like one of those things that Everyone Knows, but is wrong. Sort of like "Disney won't sell APs because of the California lawsuit."

 

[DisneyTakeAllMyMoney]

This sounds like one of those things that Everyone Knows, but is wrong. Sort of like "Disney won't sell APs because of the California lawsuit."

Could be... but this one just seems odd. Subsidizing the dues costs them money. The logical side of me says financially they would be better off to grab every subsidized contract they can so that they could sell the points again as new and get out of throwing away money subsidizing dues... so then the fact that they never take subsidized contracts seems very odd and seems like there must be some reason they can't... because you would think they would want to if they could. But who really knows... Not selling APs seems completely different in my mind -that seems more about the fact that they don't need to since people are more than willing to fill the parks buying regular tickets at regular prices. If they offered APs, they would just be throwing away money. They will sell APs when demand softens... if that ever happens LOL

 

[Sandisw]

Could be... but this one just seems odd. Subsidizing the dues costs them money. The logical side of me says financially they would be better off to grab every subsidized contract they can so that they could sell the points again as new and get out of throwing away money subsidizing dues... so then the fact that they never take subsidized contracts seems very odd and seems like there must be some reason they can't... because you would think they would want to if they could. But who really knows... Not selling APs seems completely different in my mind -that seems more about the fact that they don't need to since people are more than willing to fill the parks buying regular tickets at regular prices. If they offered APs, they would just be throwing away money. They will sell APs when demand softens... if that ever happens LOL

Except, they have to pay for the contract if they take it. It would take a long time to make up that difference in terms of dues.

I think right now it has more to due with it not being sold out then dues.

 

[croissant de triomphe]

croissant de triomphe---$120-$14914-110-RIV-Dec-0/21, 39/22, 110/23, 110/24- sent 1/2, passed 1/23

 

[Noah_t]

croissant de triomphe---$120-$14914-110-RIV-Dec-0/21, 0/22, 39/23, 110/24- sent 1/2, passed 1/23

That Riv price is starting to become tempting.

 

[Brian Noble]

the fact that they never take subsidized contracts seems very odd

It would seem more odd if they took any Aulani contracts at all, but they don't. I think @Sandisw has a simpler explanation: they don't take subsidized Aulani because they don't take Aulani.

 

[DisneyTakeAllMyMoney]

Except, they have to pay for the contract if they take it. It would take a long time to make up that difference in terms of dues.

I think right now it has more to due with it not being sold out then dues.

Could be- but they seem to have no issues "renting" out their current share of the points pretty profitably LOL, so not sure they would end up any worse off buying back those subsidized contracts and "renting" out even more...

 

[HIRyeDVC]

Could be... but this one just seems odd. Subsidizing the dues costs them money. The logical side of me says financially they would be better off to grab every subsidized contract they can so that they could sell the points again as new and get out of throwing away money subsidizing dues... so then the fact that they never take subsidized contracts seems very odd and seems like there must be some reason they can't... because you would think they would want to if they could. But who really knows... Not selling APs seems completely different in my mind -that seems more about the fact that they don't need to since people are more than willing to fill the parks buying regular tickets at regular prices. If they offered APs, they would just be throwing away money. They will sell APs when demand softens... if that ever happens LOL

I second your suspicion and agree that if I were Disney, I would ROFR up every possible subsidized contract, no matter the profit margins or the lack there of. It would save Disney so much money in the long run.

 

[HIRyeDVC]

It would seem more odd if they took any Aulani contracts at all, but they don't. I think @Sandisw has a simpler explanation: they don't take subsidized Aulani because they don't take Aulani.

I’ve also read in another thread that an Aulani contract was ROFR’d in the past. But like you said, everything on these boards needs to be taken with a grain of salt, including some of the prices on this thread. But I largely agree that the simplest answer probably is true in this case.

 

[HIRyeDVC]

Could be- but they seem to have no issues "renting" out their current share of the points pretty profitably LOL, so not sure they would end up any worse off buying back those subsidized contracts and "renting" out even more...

Yes. Aulani might be a failure in terms of timeshare sales. But they are a smashing success as a rack rate hotel resort.

 

[DisneyTakeAllMyMoney]

I second your suspicion and agree that if I were Disney, I would ROFR up every possible subsidized contract, no matter the profit margins or the lack there of. It would save Disney so much money in the long run.

I'm in finance, so maybe this is just how I think - but even though it's an extra cash outlay, they get the triple benefit in buying subsidized contracts - 1) gets them out of throwaway cash on the subsidy 2) makes their ownership cost lower on the time they hold the points - which they can easily rent out quite profitably still (every time I calculate my ownership cost vs. their rack rates, I'm paying $0.20-$0.30 on the dollar... it's crazy. Could be a time of year thing, but there's likely plenty of room for margin for them even if they buy them back and 3) they get the chance to sell the points that they bought for $130 again at $250 or whatever the rate is when they exhaust their supply of unsold and get to selling subsidized they bought back... while more than covering their costs in the meantime by "renting" them as cash rooms... seems like a no brainer for me given how popular Aulani is on the cash side... but of course could be totally wrong. Maybe wouldn't touch the other resales, but I would clean up my subsidy mess if I could

 

[Brian Noble]

Assume that the money they have to devote to "improving the DVC margin" is limited, and they are committing all of it. Would you rather ROFR something that you can resell quickly and for which you don't have ready inventory, or would you rather take back a subsidized Aulani contract when you already have a pile of unsold Aulani points?

Even though it makes sense to buy it back, there might be more profitable ways to use that money. I also suspect that the total set of subsidized points is small enough that the cost never rises to the point of being noticed relative to other costs in the system.

 

[DisneyTakeAllMyMoney]

Assume that the money they have to devote to "improving the DVC margin" is limited, and they are committing all of it. Would you rather ROFR something that you can resell quickly and for which you don't have ready inventory, or would you rather take back a subsidized Aulani contract when you already have a pile of unsold Aulani points?

Even though it makes sense to buy it back, there might be more profitable ways to use that money. I also suspect that the total set of subsidized points is small enough that the cost never rises to the point of being noticed relative to other costs in the system.

I guess I assume things they are buying back in ROFR they really aren't sitting on very long so they don't tie up much cash... could be wrong on that too. But assume they are buying because demand is there and it's short term. So if I'm already making a ton of money on my unsold Aulani points, as long as I felt the interim demand was there to sell the rooms and continue to generate some offsetting cash... I'd probably be a fan. I prefer to have a mixed portfolio - so some cash for the quick turn buy-and-flip, some cash for the clean up my subsidy mess, stay whole/make money in the interim, and position me better long term, and some cash for the long cash drain -build resorts and sink cash in now with no short term return but future return is there... but who knows what their strategy is. Just fun to speculate what might be involved.

 

[Leeesa]

$102-$10,200-100-OKW-June- 200/23, 100/24, 100/25- sent 1/29 to ROFR,

Wish me luck!! I mean really does Disney "need" any more OKW leave mine alone! lol

 

[The_MT]

$102-$10,200-100-OKW-June- 200/23, 100/24, 100/25- sent 1/29 to ROFR,

Wish me luck!! I mean really does Disney "need" any more OKW leave mine alone! lol

nice! does your $10,200 total mean that seller is paying closing? if so that's an awesome deal with those extra points too

 

[Sandisw]

Could be- but they seem to have no issues "renting" out their current share of the points pretty profitably LOL, so not sure they would end up any worse off buying back those subsidized contracts and "renting" out even more...

They have not declared all the points to Aulani. Many of the cash rooms they are selling are from inventory not yet declared.

So, again, they don’t need more declared points which is why they don’t ROFR resorts in active sales. Plus, DVD doesn’t pay operational costs on the points that are declared in exchange for a guarantee to cover any shortfall if the estimated dues price low.

The fact they offer this every year at every resort, leads one to believe they are still making out in the end for what it costs them to subsidize Aulani

 

[Leeesa]

nice! does your $10,200 total mean that seller is paying closing? if so that's an awesome deal with those extra points too

no i am sorry i am actually paying closing costs.

 

[sleepymouse]

desithedevil---$90-$5220-50-AKV-Feb-0/22, 50/23, 50/24- sent 1/12

Definitely keep us posted on this one. I would love to know if it makes it through ROFR. May the odds be ever in your favor!

 

[Cfabar1]

I’ve thought that at least right now they aren’t exercising as much ROFR to help them conserve cash. It is interesting to me that they are full steam ahead with Poly 2 with how many resorts are currently for sale. I don’t think they’ve announced another WDW resort after Poly 2 but maybe I’m forgetting about something.

California will sell well. Aulani might never sell out. I wonder at some point if they’ll quit actively promoting it.

 

[TinkB278]

desithedevil---$90-$5220-50-AKV-Feb-0/22, 50/23, 50/24- sent 1/12

I’m sorry if this has already been asked, can you share what the list price was on this one and where you found it? I’d love a small contract but they are all listed $135-150! I want to be brave and offer $90 but after reading some rude broker responses on here I’m a bit scared lol.