The Decline and Fall of WDW?

[alvernon90]

I've been lurking about here reading up on DVC because I am considering buying. (I've also rented some points from someone here on the boards to give BCV a try later this year.) I've read many pros and cons of buying, but I haven't seen anyone address this question:

What happens if WDW falls apart over the next 40 or 50 years?

There is no doubt that WDW is about as terrific a vacation destination as currently exists, but then again they used to say that about Coney Island and Atlantic City. These things go in cycles, and new competition could always turn WDW into a shadow of its former self. After all, just look at how far downhill Disneyland has gone in recent years.

Not to mention the risk to the Walt Disney Company itself. The corporation is ripe for a takeover just as it was in the pre-Eisner days. While the DVC contracts are binding, there is nothing promising that Disney will continue to maintain or even operate the parks, resorts, and attractions at WDW.

In short, it seems there is a very real risk that WDW will not be such a terrific destination in 2023, yet DVC owners will still be holding points that are good for decades more.

Did anyone factor this into their purchase decision? If so, what was your conclusion? Do you think the risk of a WDW decline is low? That Orlando will always be a good vacation spot even if WDW isn't? That you can sell and get out if a decline becomes apparent?

Thanks in advance for your thoughts.

 

[Granny]

Originally posted by alvernon90
Did anyone factor this into their purchase decision? If so, what was your conclusion? Do you think the risk of a WDW decline is low? That Orlando will always be a good vacation spot even if WDW isn't? That you can sell and get out if a decline becomes apparent?

Welcome to the DIS Boards and thanks for coming out of the "lurking" mode to post a question!

I think your question is valid for anyone considering a DVC purchase. I'll give you my thinking on the matter, and I'm sure you'll get many opinions.

Yes, I factored a potential WDW decline into my purchase decision. I thought it was highly unlikely as the parks continue to be a good profit source for Disney. And they continue to invest with two major new attractions this year and at least two or three new major ones scheduled for the next couple of years.

I think a bigger risk than Disney declining is the decline of the airline industry. If they don't pull themselves out of their terrible messes, then it will continue to affect WDW traffic, which affects Disney's ability to reinvest in the parks. WDW is heavily dependent on airline travel...much moreso than other theme parks. So the airline industry needs to right itself...and I think somehow they will, though we may end up with only two or three national carriers.

We decided that the risk was minimal for WDW to decline. And also, you hit the nail on the head in that we think that Orlando will continue to be a great destination no matter what happens to WDW. So that buffers any fears we might have.

 

[timC]

Of course there are no guarantees. You're right. WDW could fall apart in 40 or 50 years... I know I will!

Honestly, many things could happen long-term, but no-body can forecast what will happen to WDW, Orlando, vacation behavior etc, beyond a few years.

It's more important that you forecast YOUR future. How committed are YOU and your family to WDW in it's current form. What do you see yourself doing with all those point, 5, 10, 20 years from now. These are things you have at least some control/influence over.

 

[crisi]

For us, the most useful part of the contract is the next ten years - while our kids are fairly young. Once our children hit college age - we don't plan on spending much time in the parks, and plan on spending more time playing golf - Disney has some very nice courses, but their are plenty of lovely courses all around Orlando even if Disney doesn't keep theirs up.

Since the contract will have "paid for itself" before the kids outgrow it, our risk isn't 40 years, but 10 -- and that is a reasonable amount of time to believe Disney will continue to hold it together in a reasonable (if not perfect) fashion.

 

[KNWVIKING]

Why save for retirement,I could die anytime.

I think Disney has a pretty good history of not being some fly-by-night outfit that is going out of business right after they get my money.

 

[JimC]

Yes, the things you say are a possibility. However, in my view, they are unlikely. Disney is one of a small number of truly great companies and I believe they will overcome their challenges. They have weathered difficult times -- double dealing and financial strains in their early days, the death of their founder, then their founder's borther a few years later, corporate raiders, bad economic times and the like. They have challenges now and will have challenges in the future.

My assessment was not the risk of Disney performance over the next 40 years (we bought last year) but the risk over the 8 - 10 years that we calculated as a breakeven period. There we believe the risk to be minimal. After that it really does not matter financially.

There is risk in everything we do in life. The same assessment could be made for buying a house. Will the schools remain in good shape? Will the community thrive? Will the large employers remain? Will taxes rise to untenable levels? Will there be an environmental disaster?

My view is if you enjoy WDW vacations, go regularly and are willing to spend for moderate or better hotels, then you are a candidate for DVC.

Good luck.

 

[bcvillastwo]

First, I agree completely with overall discussion up to this point in the posts. Second, eveyone's circumstances are different, we all come at the decision about DVC from different angles, and as others have pointed out in a round about way--the affairs of life a risky.

Return on investment is definitely a factor that we should each look at, we would be fools if we didn't. Part of that decision should involve looking at the issue of whether WDW is apt to continue as one of the premier vacation spots in the world. But part of that decision is examining past experience and from where I sit, it's very likely that WDW will continue to be a prime vacation spot. Is it guaranteed? No, but neither is our next breath.

It took us over 3 years before we decided to make the plunge and it was only after we had the cash on hand that we did it. Would I do it again, absolutely without hesistation. We love Disney, it's been a well run organization and it's overall organizational culture give it a very strong change of sustaining continued growth (in my opinion). I would never have become a DVC member if I didn't want to go back at least once a year. We've been going three times since joining.

Good luck on your decision--remember nothing in life is guaranteed except death.

 

[ear_poppin]

...and taxes....... unfortunately!!



Denise

 

[ralphd]

Originally posted by KNWVIKING
Why save for retirement,I could die anytime.

I think Disney has a pretty good history of not being some fly-by-night outfit that is going out of business right after they get my money.

Well said!

ralphd

 

[erikthewise]

Yes, WDW could conceivably fall into decay over the next 40-50 years, though I think it's unlikely, considering that Disney has invested on the order of $10B in it. Should the possibility concern you? Yes, but in the end I don't think it should play much of a role in your decision. If a DVC membership isn't going to pay off for you in the next 10-20 years, financially and/or emotionally, you probably shouldn't do it. 40-50 years is too long a time frame to consider for this type of purchase.

And what about timeshares that don't expire? They face the certainty that the resort will crumble to dust during the ownership period!

 

[Mai Ku Tiki]

Aloha!

Instead of really worrying about the future, we looked to the past....our past...and Disney's past.

Stayed at Poly for first time in 1972. Folks paid $35 per night! Since then, prices have climbed yearly and WDW has grown from only the MK to all we know and love today!

I've been back almost every year since '72. That is over 30 YEARS!!! We've paid the price to stay on-site (at Poly and CBR, mostly) almost every trip (albeit trying to get AP rates or other deals).

The hotel prices continue to go up and WDW continues to grow even more wonderful. We WILL keep going back for more ! Some things may change; some visits may not be quite as magical. But being at WDW is what makes our hearts sing.

DVC allows us to stay in larger, more comfortable accomodations for a trip we know we'll make annually no matter what.

Will WDW ever go bust??? Who knows? But as long as it stands... WE'LL BE bACK!!!

~aloharose~

praying to the tiki gods for a DVC/POLY

 

[Zurg]

Yeah it could fall apart.

I don't think it will.

WDW is big asset in the Corp holding and letting it run down isn't going to ad value. Disneyland is still a great destination.

I think even if it should like they say above the value is in the next few years not the out years. (see finance 101 - time value of money net present value etc...)