The Economy and DVC

[tgropp]

I would be surprised if the price goes down, unless no body would go to Disney anymore and there was a surplus of rooms for Disney to sell. The place always seems busy and there wll always be a market at the current price for people to purchase DVC. Especially if they have a family of 5 or more.

 

[eliza61]

For me, it's not so much of a the mortgage. I did finance my dvc and paid it off early but now it's more basic. The simple fact is Disney is expensive. With this poor economy and every thing hitting me hard in the purse ( I almost had heart failure at my heating oil bill, in fact I'm thinking it would be cheaper to have open heart surgery), I some times find it hard to justify dropping 2-3K on a vacation (to anywhere). Now with 2 kids rapidly approaching college at the same time Dh & I are hoping we won't have to survive on romaine noodles for the next 4 years.

 

[rsinj]

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[crisi]

Well, if we look at the period post 9/11, Disney just held tight. Announced Eagle Pines and backed off. Continued to exercise ROFR, sold the inventory they had at BCV and announced SSR - which could be done in stages as the economy recovered and had a lot of the infrastructure in place. Prices didn't go down for DVC, but Disney had some nice packages available through CRO.

Which is what Disney tends to do. They know their business is cyclic, so they plan for a few years of plenty followed by a few of famine. With a weak dollar, you can expect more marketing to an international clientele, for whom a U.S. vacation gets more affordable every day.

There is still plenty of money out in the economy - Disney will remember, like they do every time - that vacations are a luxury purchase - and compete more aggressively for the dollars of the people that still have them.

And Disney can always shut down floors or buildings of resorts to manage expenses, they can turn more attractions into "seasonal" again.

 

[Fitswimmer]

The biggest change for me has been that it now takes two jobs to do what one did two years ago. I paid for my points up front, so the only outlay now is dues and my second job covers them until the tax refund comes in and I can pay off the balance.

If I did not own DVC, I probably would not be going to WDW at all. With my lodging paid upfront, it's easier for me to afford to go.

 

[dianeschlicht]

The biggest change for me has been that it now takes two jobs to do what one did two years ago. I paid for my points up front, so the only outlay now is dues and my second job covers them until the tax refund comes in and I can pay off the balance.

If I did not own DVC, I probably would not be going to WDW at all. With my lodging paid upfront, it's easier for me to afford to go.

And that is why those of use who are long term DVC members will likely hang on. It's the newer member, younger members, and yet to become members whom we are really talking about.

 

[mopee3]

Interesting thread, lots of negative stuff, but sounds like for those who can hang in there, the availability both long and short, will be much easier to obtain.

 

[Inkmahm]

You know that's not a fair comparison...you'd find a similar scenario with many global businesses/corporations when compared with Microsoft. You know Microsoft has very little overhead when compared to other global corporations - few hard assets.

A more fair comparison might be comparing financials of Disney and Time Warner. Time Warner "only" has $1.8 Billion in cash, has about 30% more revenue than Disney but is carrying more than twice as much debt, and profit over the past year is basically the same at $4.7 Billion.

CASH on the books is a bad way to evaluate the deep pockets of ANY company. I work for an international public company and we try very hard to have very little cash on our balance sheet on any outside reporting date (quarter end, year end). If we guess wrong on cashflow and end up with extra cash, we hear about it from our parent as we screw up their reporting.

 

[BWV Dreamin]

Which is what Disney tends to do. They know their business is cyclic, so they plan for a few years of plenty followed by a few of famine. With a weak dollar, you can expect more marketing to an international clientele, for whom a U.S. vacation gets more affordable every day.

In fact, this has already begun. Just this past weekend, Disney aired its "Most Affordable" time to visit WDW commercials during the playoffs.

 

[rsinj]

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[keishashadow]

And that is why those of use who are long term DVC members will likely hang on. It's the newer member, younger members, and yet to become members whom we are really talking about.

oh to have bought in when i 1st wanted to still feel better knowing we paid cash for 1st two resorts even if we do have to finance the next one

would be interesting to know the % of buyers over the last few years who didn't buy the full pkg from DVC and went the resale/cash route with subsequent addons.

glad to hear that ROFR process, etc. doesn't affect our dues

as for the stock, we'll hold onto our shares (still a rec. buy/hold); think it'll weather the storm. As long as people have disposable income, they'll spend it somewhere and Disney is popular.

 

[DVC Mike]

I would think that the possibility of a recession might make people re-think a vacation at Walt Disney World, perhaps forcing Disney to stop halting their price hikes and opening up more discounts.

The only positive spin, although a selfish one, I can put on the economy going south is that the parks might not be as crowded when I'm down there.

 

[minnierealtor]

Due to financial woes, we had to reschedule a Feb. vacation to add more days to our April trip. DVC allows us to pre-pay for lodging on vacation but the cost of transportation from NH plus the cost of food and tickets adds up quickly. We have found that we can save at least $500.00 if we just add a few days to a trip instead of multiple trips like we did before. I'm in real estate so we have to keep a bigger surplus in savings to weather the storm.

 

[tvwalsh]

The world markets are down anywhere from four to eight percent overnight.(1/21) Think about your portfolio going down 4-8% or $4,000-$8,000 for every $100,000 you have invested. This is what is going to happen to us all tomorrow morning!

Recession? I don't think so. I'm thinking depression. Still planning on adding on?

 

[BWV Dreamin]

And that is why those of use who are long term DVC members will likely hang on. It's the newer member, younger members, and yet to become members whom we are really talking about.

As a newer member, our decision to purchase came solely after we had just paid off our home mortgage! While we are taking family on some trips, the majority of trips will just be with myself and my husband. We carefully factored in airfare, ticket prices, food costs as well as in depth analysis of appropriate points purchased. In today's environment, I just don't know how a young family does it. In any other circumstances, it would be too much for us to afford.

 

[a Really Bad Egg]

I think I remember a thread back in April '07 about the number of resales increasing rather quickly and there may be a DVC bubble.

Seems like the consensus from the responders back then was that could never happen with DVC. (No one took talk of a housing bubble very seriously either.)

However, if you bought DVC, you did it for a reason other than investment. If you are still looking to buy, depressed prices would be another good reason to buy.

As far as the stock market and 'depression', don't panic...get a shopping list together and get ready to buy. Look at the charts over a long period of time...and it goes up. That's how the rich get richer.

 

[SSRFred]

The world markets are down anywhere from four to eight percent overnight.(1/21) Think about your portfolio going down 4-8% or $4,000-$8,000 for every $100,000 you have invested. This is what is going to happen to us all tomorrow morning!

Recession? I don't think so. I'm thinking depression. Still planning on adding on?

The market still returns 10% or so over time and that includes these speed bumps. Stocks financed my most recent DVC purchase as will my add on in 2010 . For now, those gold chains in my closet might have to finance my yearly dues .

 

[nuts]

The market still returns 10% or so over time and that includes these speed bumps. Stocks financed my most recent DVC purchase as will my add on in 2010 . For now, those gold chains in my closet might have to finance my yearly dues .

Exactly! Remember the dot.com bubble burst? Remember 9/11 market hit? Even with those I still average 10.5% return. People who panic on the shortterm lose out.

 

[Mickey'sApprentice]

I think Disney should find ways to market both WDW and DVC more aggressively in the Southern U.S.

The economy is expected to stay a bit stronger in the South and many can go to Disney without airfare. (Its a toss up for us with a 9 hour drive.) However, the cost of living/income is still lower in the South, which makes the cost of Disney out of reach to many.

I would also LOVE to see DVC come out with points charts that included park tickets and/or air fare.

 

[TheRustyScupper]

. . . Makes you wonder how many subprime loans DVC is holding . . .

1) To Disney, this isn't a major issue.
2) In some cases, it can be a plus.
. . . they can easily repossess the points
. . . they can resell the points at a higher rate
. . . they still might be able to get partial payment from those owing