VWL-2 Being Fast Tracked?

disneynutz

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One of the rumors floating around the Merry Mixer was that DVD is fast tracking the WL/DVC room conversions in phases in order to begin selling prior to the lake cabins being completed. With the PVB units not selling as fast as expected, DVD is looking for VWL-2 sales to help fund the construction completion.

What are your thoughts?
 
if this were the case, and the poly units weren't selling as fast as dvc hoped, I wonder what the price would be for the converted rooms. surely they cant be as high as the vwl-2 cabin prices.
 
Point price will be the same for both the converted rooms and the cabins, however the cabins are going to cost an astronomical number of points per night. IMHO.

However I don't think it will be as high as the Poly.
 
I've said this for a while. Eventually, DVD will price themselves out of their own market. Some say it hasn't happened yet (Poly is selling fine.). Some say it is happening now (Poly is crashing and burning.).

To me, the interesting question is "How will they correct it all?" when they finally have priced themselves out of their own market. Prices have gotten too high. Points' costs have gotten too high relative to value v. cash reservations. This is all just in my opinion, of course. If they are over and they can't or are unwilling to correct, what will their longevity be?

One of the most interesting things is that Disney has enough money and arrogance to watch it all burn to the ground and not do anything. Could they do that here? Will they do that here? Can you say "Discovery Island" and "River Country?"

There are a thousand questions to answer. Guess it's time to start seeing some of the answers.
 

I don't understand the fast track rumor? So if they complete the DVC rooms renovated from the hotel side they can begin selling points before the cabins are ready? If they do this I can see an initial " low" PPP but as those cabins start to get completed that price will start to rise. How does this help poly sales? Won't they have to disclose to current owners just what the heck is going on as far as booking rooms, what owners can do what, etc?
 
Well, I'm confused - it happens a lot :).

Once the Main Lodge Room Conversions are done.... does Disney not OWN whatever DVC interest is in them? After all, they have not sold any points yet....
As Disney OWNS these - why would they not just rent 'em out until they DO start selling VWL-2 contracts?
 
My understanding is that timeshares in Florida have to have x amount of the project completed before they can open sales. Converting rooms allows them to complete the required number sooner and they can start selling from the model. Money from sales keeps everyone employed and helps fund the rest of the project.

Me might see half of the cabins being built first than the others later. It all depends on what is less expensive.

BLT opened for sales several months prior to being totally completed.
 
But how does this scenario help with Poly sales? Maybe it doesn't help sell Poly but keeps the sales agent employed. Now I get it....:crazy:
 
In all honestly, I'm curious as to the overall point? I'm not being rude, but other than speculation, is there a negative/positive effect on current owners?

You are definitely right about enough being completed before they can start selling points, and if room conversions make that happen quicker I would see it as either trying to meet a certain date to start selling......or trying to capitalize on a market upswing. Park attendance is up, prices are up, and if another recession hits in coming years....the saying is buy low sell high right? Personally $100 per point was my max. Once they went over that I was out and headed resale, and I got BLT for SSR new price at the time. I just returned home last night and was at the Merry mixer yesterday. I heard no rumors and in fact met many clueless owners to the what they actually bought and at prices that simply shock me. But hey, the market will decide and when if they are still selling, they haven't priced themselves out of anything.
 
One of the rumors floating around the Merry Mixer was that DVD is fast tracking the WL/DVC room conversions in phases in order to begin selling prior to the lake cabins being completed. With the PVB units not selling as fast as expected, DVD is looking for VWL-2 sales to help fund the construction completion.

What are your thoughts?

That would only be the smart thing to do and shouldn't be unexpected IMO. I actually would have thought they'd be much further along on the room conversion by this time.
 
I haven't really been "keeping up" with all the scoop lately.o_O In fact, I didn't even realize they were converting WL hotel rooms - I just thought they were adding cabins.:oops: How many rooms are they converting? But anyway, I WAS curious if we know if they're keeping all of those Poly Bungalows booked full every night? I just can't wrap my head around being able to afford even 1 night in those things….
 
DVC has yet to offer any promotions on Poly points, nor really spent any serious dollars on promotions. They did a webcast but no free gifts for participating. Back when BLT was selling, they spent months publicizing tours at TOTWL with refreshments and swag for all participants.

Meanwhile prices just went up again.

Numbers suggest that Poly is selling slower than Grand Floridian before it. But so far Disney has given no signs that it is concerned with its performance. (Again, no incentives, no major attempts to drum up interest, rising prices.) Additionally, Aulani sales seem to be on an upward curve lately.

I was at WL last week and there are no signs of conversion work in guest rooms. The quiet pool is gone. Beach is walled off for work on the cabins. But that's about it.

I wouldn't rule anything out but given the way Disney has reacted to the slowish Poly sales, seems like we are a lot more concerned with the pace than Disney is.
 
That DVD would like to start selling WL converted rooms before the cabins are done doesn't need slow sales at Poly to generate such a desire. Regardless of Poly, Disney would want to do it if it could. If Poly were actually selling very well rather than the other way around, then DVD would definitely want to speed up the process at VWL to assure a selling resort was available in case Poly sold out. I doubt the rumor has any real validity as is, but if someone simply said DVD wants to get the converted units at WL done as quickly as possible so it can start selling those without any reference to PVB that would not be a surprise.

Mentioned above is the belief that Florida law requires some certain proportion of the resort to be done before DVD can sell points. That is incorrect because there is no such law. Legally, a developer could start sellng timeshare units even before it breaks ground for construction. However, there are legal requirements that result, as a practicable matter, in DVD's avoiding selling until construction is well along. Those legal requirements include: (a) you cannot sell until you have filed the detailed offering documents which need to contain accurate descriptions of what the resort is going to be when finished and what the point structure is going to be; (b) you cannot sell with an initial use year that could possibly end before the purchaser could reasonably stay at the resort; (c) buyers have a right to rescind and get any money back if the resort as finished does not comport with the offering docments or does not open on or before the promised time of opening, and, until the resort is complete and open, the develoiper is subject to either an escrow of sales proceeds or other financial guarantee requirements that would cover the rescission of the sales. Because of such restrictions, you probably won't see see sales until well under a year before at least a substantial phase of the resort is open.

Thus far, BLT is the resort that had the earliest pre-opening sales, starting about 10 months before it opened while offering a first use year that began 6 months before it opened. I doubt you will see VWL starting sales that early. AKV was a dual opening resort, first for Jambo, and then not quite a year later for Kidani. However, when Jambo was sold, DVD provided what was going to occur at Kidani, including the number and kind of rooms and the point structure for the entire resort. DVD could start selling converted WL rooms before the beach cabins but it could not do so without telling purchasers what the cabins are going to be and their point structure.
 
That DVD would like to start selling WL converted rooms before the cabins are done doesn't need slow sales at Poly to generate such a desire. Regardless of Poly, Disney would want to do it if it could. If Poly were actually selling very well rather than the other way around, then DVD would definitely want to speed up the process at VWL to assure a selling resort was available in case Poly sold out. I doubt the rumor has any real validity as is, but if someone simply said DVD wants to get the converted units at WL done as quickly as possible so it can start selling those without any reference to PVB that would not be a surprise.

Mentioned above is the belief that Florida law requires some certain proportion of the resort to be done before DVD can sell points. That is incorrect because there is no such law. Legally, a developer could start sellng timeshare units even before it breaks ground for construction. However, there are legal requirements that result, as a practicable matter, in DVD's avoiding selling until construction is well along. Those legal requirements include: (a) you cannot sell until you have filed the detailed offering documents which need to contain accurate descriptions of what the resort is going to be when finished and what the point structure is going to be; (b) you cannot sell with an initial use year that could possibly end before the purchaser could reasonably stay at the resort; (c) buyers have a right to rescind and get any money back if the resort as finished does not comport with the offering docments or does not open on or before the promised time of opening, and, until the resort is complete and open, the develoiper is subject to either an escrow of sales proceeds or other financial guarantee requirements that would cover the rescission of the sales. Because of such restrictions, you probably won't see see sales until well under a year before at least a substantial phase of the resort is open.

Thus far, BLT is the resort that had the earliest pre-opening sales, starting about 10 months before it opened while offering a first use year that began 6 months before it opened. I doubt you will see VWL starting sales that early. AKV was a dual opening resort, first for Jambo, and then not quite a year later for Kidani. However, when Jambo was sold, DVD provided what was going to occur at Kidani, including the number and kind of rooms and the point structure for the entire resort. DVD could start selling converted WL rooms before the beach cabins but it could not do so without telling purchasers what the cabins are going to be and their point structure.
Awesome response Dsruba!! Thanks!
 
I wouldn't put much faith in this rumor (at least not the reasoning). Wil (DVCNews.com) made an interesting observation comparing November 2014 and November 2015 sales that may surprise some people.

If they believed there was a demand problem, why would they have just raised the price? Doesn't follow any business logic.
 
One of the rumors floating around the Merry Mixer was that DVD is fast tracking the WL/DVC room conversions in phases in order to begin selling prior to the lake cabins being completed. With the PVB units not selling as fast as expected, DVD is looking for VWL-2 sales to help fund the construction completion.

What are your thoughts?
Doubtful since it's likely that making VWL the new kid will detract from Poly plus it's also likely that the points costs will be fairly close to the Poly which many feel is the reason for slow sales. Add to that the likelihood that VWL will be the same weird studio mix, it only gets worse not better. They have a history of timing for delays and a certain amount of sales rather than getting multiple options active and forefront at one time.
 
Somebody asked the question....who can actually afford the amount of points required to book a bungalow? I mean really? I know I have a smaller contract, but a whole years worth of points for 1 night?......and that's just the low points season! Just the dues alone it's about $700 a night, plus the buy in cost!!!! That's outrageous. That's over $18,000 up front to spend $700 for a night for the next 50 years.....with the price per night going up with the cost of dues over the years. I love being with the family in WDW, but that's just crazy.
 
Somebody asked the question....who can actually afford the amount of points required to book a bungalow? I mean really? I know I have a smaller contract, but a whole years worth of points for 1 night?......and that's just the low points season! Just the dues alone it's about $700 a night, plus the buy in cost!!!! That's outrageous. That's over $18,000 up front to spend $700 for a night for the next 50 years.....with the price per night going up with the cost of dues over the years. I love being with the family in WDW, but that's just crazy.

Apparently someone can - according to Wil Lovato's sales report on DVC News, 11 Guaranteed Week deeds for over the water bungalows have already been sold.
 
As to which DVC members can afford the bungalows, undoubtedly there are some, but it is likely a small number. We are currently 7 months out from mid-July 2016 and 11 months from mid-Nov. Between end of Jan and mid-Nov 2016, the bungalows are currently booked full for a total of 20 nights, with 12 of those in the middle of April, none after April, two in March, and six in Feb, two of which recently filled after the 60 day beakage period passed when Disney can rent them to anyone. Though Jan is mostly full, many of the days in the last half of Jan also filled after the 60 day breakage period passed.

Mentioned above is that Disney is pricing itself out of its market for DVC sales. I suspect what is going on may be different from that, and it is likely to be repeated with the new VWL beach cabins. Despite Disney's current very high prices and high points per night for new resorts -- which actually started with VGF, not Poly -- Disney knows, as proven by VGF, that it can still find large numbers of buyers to buy enough points for studios. Moreover, it knows it can sell the points applicable to both studios and larger rooms to purchasers buying only enough points to get studios. With VGF, which has only 47 studios, the result has been a significant, but legal, oversell of the studios causing availability issues even at 11 months out at times.

Now let's assume some up-and-coming MBA suit at Disney got the crazy idea that a way Disney could breath some new reservation life into its premier MK resorts was to build some rather large bungalows on the water and cabins on the beach. Someone with a brain from senior management might have said, "Are you crazy? Sure it would be nice to have such rooms to rent at high prices but they would likely not be rented all the time because only the rich can afford them, and the enormous construction and annual mainrtenance costs cannot possibly be justified. The result would be just a huge and never ending loss of money." And the MBA suit may have responded, "No, you do not understand. What I am proposing is that we build such units as part of converting Poly and WL rooms to DVC, which will mostly be studios, and add the bungalows and cabins to the DVC plans. Most DVC purchasers will not be able to afford the bungalows and cabins but they will still be able to purchase enough points to get studios and we can sell all those points applicable to the bungalows and cabins to those purchasers. We will not only recapture all our construction costs but make a large profit on the sales. Moreover, it is likely we will be able to rent many of those units during the year because most DVC members won't reserve them leaving a number to be rented at 60 days out many times during the year. And even if we cannot rent all the ones that become available at 60 days out, we still make a profit on any rentals because all the maintenance costs will be covered by the dues paid by the DVC members." And upper management may have responded, "You know, that is a great idea. Let's do it."

That conversation is just theoretical and I am sure those thoughts never actually occurred within Disney when it decided to build the very high point cost bungalows at Poly and likely-to-be very high point cost cabins.
 

















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