The future with new resorts and restrictions

[maui22]

Timeshare sales are based on people having a wonderful time on vacation and wanting that to occur for many years. Happens all over the world. Many (perhaps most) do not do their research.

The thing about restrictions is in 17 years we begin seeing the unrestricted resorts losing options.

If restricted resale prices drop, Disney could use ROFR and have so called fire sales. It’s worked for several sold out resorts. Seems to make ROFR more attractive option. Additional benefit is they would not have to build as many resorts.

I am still in the camp who thinks they delayed the rumored Epcot (YC or front of Epcot) because they want to get closer to 2042. MK was avoided for fear of losing hotel revenue. BRV was only option. Suddenly a MK explosion happened (will be 20-25 years) BLT, CCV, VGF, PVB, CFW, LSL.

All these resale buyers (restricted or not) who were not grandfathered in, will have FOMO on the Epcot and DHS resort explosion 2030s or at worse 2042. Likely a new Epcot DVC, BCV, BWV, and maybe they bring back the architect plans that were found for a DHS/BB area resort with easy access to both DHS and BB.

 

[Girlstar30]

Timeshare sales are based on people having a wonderful time on vacation and wanting that to occur for many years. Happens all over the world. Many (perhaps most) do not do their research.

The thing about restrictions is in 17 years we begin seeing the unrestricted resorts losing options.

If restricted resale prices drop, Disney could use ROFR and have so called fire sales. It’s worked for several sold out resorts. Seems to make ROFR more attractive option. Additional benefit is they would not have to build as many resorts.

I am still in the camp who thinks they delayed the rumored Epcot (YC or front of Epcot) because they want to get closer to 2042. MK was avoided for fear of losing hotel revenue. BRV was only option. Suddenly a MK explosion happened (will be 20-25 years) BLT, CCV, VGF, PVB, CFW, LSL.

All these resale buyers (restricted or not) who were not grandfathered in, will have FOMO on the Epcot and DHS resort explosion 2030s or at worse 2042. Likely a new Epcot DVC, BCV, BWV, and maybe they bring back the architect plans that were found for a DHS/BB area resort with easy access to both DHS and BB.

Great observations!

 

[muppets3d]

ROFR'ing sold out resorts at current sales pricing and then doing a "fire sale" is a great way to keep the lights on at DVC I bet.

Every time they do a fire sale they sell quite well from what I hear.

Last time I talked to my guide, he said they had just ran out of OKW and Vero points. He said a lot of people buy Vero direct (relatively speaking of course) because it's the cheapest direct points most of the time.

 

[tjkraz]

ROFR'ing sold out resorts at current sales pricing and then doing a "fire sale" is a great way to keep the lights on at DVC I bet.

Not really. It's much more profitable to build a new resort and sell--discounting at times--rather than to spend tens-of-thousands to ROFR each contract and try to flip it for a modest profit.

Every time they do a fire sale they sell quite well from what I hear.

The term "fire sale" gets thrown around a lot. Not really sure how many incentives actually meet a reasonable definition.

Last time I talked to my guide, he said they had just ran out of OKW and Vero points. He said a lot of people buy Vero direct (relatively speaking of course) because it's the cheapest direct points most of the time.

They sold about 4000 Vero points all of last year. Not really "a lot" across 2 million total points sold.

OKW did well with a nice incentive over the summer. About 150k points across 4 months. DVC has more of a vested interest in re-selling OKW than others because of the contract extension. The more extended contracts they flip, the fewer points they're left holding on February 1, 2042. But they're rarely haphazard with their ROFR.

 

[Brian Noble]

If the 2040s and 2050s roll around and Disney tries to restrict every resort, it could seriously damage the perception / value of the product.

I don't think it will. None of the other developers have trouble selling timeshares at similar prices to DVCs, with much lower resale values. I don't see any reason why DVC is fundamentally different.

ROFR'ing sold out resorts at current sales pricing and then doing a "fire sale" is a great way to keep the lights on at DVC I bet.

As Tim points out, this is not true. I did a quick back-of-the-envelope analysis on this but the short version: prices have to drop a lot farther before ROFR is competitive with stick-built.

Here's the long version:

Post in thread 'Future of Riveria'

Feb 22, 2023

I think ultimately they would like to buy back all resale points and resell them directly.

Only at the right price.

The general rule of thumb in the timeshare industry is that the "cost of inventory" is at most somewhere between 1/4 and 1/3 of the total cost of the product you are selling. (The biggest cost component? Marketing at 40-50%.) That's cost not sales price. So even if they weren't making a dime of profit on any sale, it's better to build a shiny new resort than to ROFR a resale at anything more than about 1/3 of the direct price. Because there is...

• Brian Noble

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[CarolynFH]

maybe they bring back the architect plans that were found for a DHS/BB area resort with easy access to both DHS and BB.

I had to pull up the map for this one! I wasn’t aware of such plans. They were for the land between World Dr. and W. Buena Vista, sort of across the road from CSR? I hate to see wooded areas and wetlands be destroyed, but I have to admit that would be a great location. Especially with a Skyliner extension from DHS to AK.

 

[maui22]

I had to pull up the map for this one! I wasn’t aware of such plans. They were for the land between World Dr. and W. Buena Vista, sort of across the road from CSR? I hate to see wooded areas and wetlands be destroyed, but I have to admit that would be a great location. Especially with a Skyliner extension from DHS to AK.

If I remember right, it was going to be a large resort (SSR of OKW size) but the location would have been made it very popular.

 

[maui22]

I had to pull up the map for this one! I wasn’t aware of such plans. They were for the land between World Dr. and W. Buena Vista, sort of across the road from CSR? I hate to see wooded areas and wetlands be destroyed, but I have to admit that would be a great location. Especially with a Skyliner extension from DHS to AK.

I found the old dvcnews article on this if anyone is interested. It was going to be even larger than I remembered.
https://dvcnews.com/index.php/resor...alifornia-themed-resort-for-walt-disney-world

 

[CarolynFH]

I found the old dvcnews article on this if anyone is interested. It was going to be even larger than I remembered.
https://dvcnews.com/index.php/resor...alifornia-themed-resort-for-walt-disney-world

Very interesting! Thanks for looking it up! I can see why they didn’t build it, if it was supposed to be 1200 units. That would have been challenging to sell, to say the least, despite the awesome location.

 

[tjkraz]

I found the old dvcnews article on this if anyone is interested. It was going to be even larger than I remembered.
https://dvcnews.com/index.php/resor...alifornia-themed-resort-for-walt-disney-world

 

[tjkraz]

Very interesting! Thanks for looking it up! I can see why they didn’t build it, if it was supposed to be 1200 units. That would have been challenging to sell, to say the least, despite the awesome location.

Yeah, 50% larger than SSR.

SSR started at 12 buildings and later expanded to 18 plus the treehouses. Disney seemingly believed that people would buy any resort, without giving much consideration to a specific home. AKV and Aulani followed a similar pattern. Problem was those large resorts took so long to sell-out that they faced fierce competition from resale. If SSR was $120 direct, you could get the exact same product (same length, no restrictions, etc.) for around $80-90 resale.

The next wave of resorts were built deliberately small so DVC could sell-out in 2-3 years before resale built up enough inventory to be a threat. VGC, BLT, VGF, Poly, Copper Creek were all around 300 rooms max.

Now that they've gone the way of resale restrictions, they could revisit larger resorts without the resale concern. Though a resort with 1200 units still better have some good appeal.