What does DVC look like in 2042?

[jtruth33]

Watched an episode of the DVC show recently (from last year) and there's a good long discussion on this topic. Pete was of the opinion they're likely to offer some type of deal to extend for existing owners versus just letting contracts expire and trying to resell everything.

Also would agree with the poster that suggested "it will depend on the economy". I could definitely see a scenario where we get closer to 2042 and hit a recession, and they use some sort of extension program to get some easy revenue. Sure BCV, BWV, BLT, Poly etc. will always be popular due to the location, but it would seem to me its a risky business proposition to have the vast majority of your timeshare operation expiring the same year.

 

[chalee94]

I was actually around for the OKW extension. DVC was looking for easy revenue then. So they offered at $25 per pt to extend from 2042 to 2057 and threw in a temporary $10 "discount" to push the extension price to $15 per pt. When OKW owners who extended their contracts went to resell them, they found the value of the extension was more like $7-8 per pt.

It was not a "deal" and most of us knew the value was not there. Not worth paying much of anything then for the promise of points you had to wait 35 years to use.

As the opening post in this thread notes, it's not the vast majority at all. OKW is completely extended - none of it will expire in 2042 (although many, many owners will hand the points back to Disney). BCV and BRV are veryy small resorts. VB and HHI will definitely be spun off if the economy isn't booming. BWV is the only resort with any size to consider.

Like I said elsewhere, you have two obvious issues: the 1) point charts are too low (especially BWV) and 2) the resale restrictions - and neither can be changed without a new ground lease.

Another issue that is more fully discussed in some of the previous links on page 1: a few OKW owners are holding out and still refuse to sign the quitclaim to waive their right to the extension - i.e. they are hoping to get the extension for free due to the contractual language relating to the ground lease. Not a lot of OKW owners are holding out, but after initially threatening to put a lien on their DVC contracts and prevent them from using their points unless they signed the quitclaim, Disney has backed off and seemingly given up.

This issue becomes important if one of the other older resorts attempts an extension when their original contract language didn't make a provision for a possible extension. For the most part, OKW owners didn't care and had signed on originally for the 2042 end date, so most of us signed the quitclaim. But BCV, BRV and BWV owners might decide to dig in en masse to see if they can get the extensions for free also. If Disney doesn't feel like they have sufficient legal grounds to deal with a handful of rogue OKW owners, I don't see them pushing an extension at another old resort with similar contractual language and taking that kind of chance.

 

[eMoneyBug]

Have to think Disney will have a plan to tell owners after 2022 that it will expire or some sort of options to extend. I can’t see them letting owners membership expire without some attempt at renewing the business

 

[jtruth33]

I see your points Chalee. Question for you though.. would you view the extension deal differently if you were, say five years away from your lease expiration vs. ~30?

I wonder if Disney gets around the issue of some owners holding out on signing a quit claim, especially at a small resort, by instead offering advance deals on new leases (instead of an extension) at the owners home club at ~5 years out. Point being, it gives Disney the 5 or so years to keep existing owners, and pull revenue forward if needed. If I'm 5 years out from 2042 and I'm a new DVC buyer, why would I buy points I can't use for 5 years? Existing owners probably would be interested though, especially if they're given a break on the eventual cost.

I'm also wondering if the distance to the parks becomes not as important of a benefit by 2042 with extensions to most resorts / operational improvement of the skyliner, making places like BWV and BCV less appealing than newer offerings.

Last thought... a fifth gate, and potential surrounding DVC options changes the game on all this completely.

 

[AvidDisReader]

The Boardwalk Villas / Boardwalk Inn is one of the most valuable pieces of property in WDW. I googled and right now there are a total of 4,888,000 points. DVC has 532 rooms, the inn has 378. So In 2042, DVC takes over all the property (no more Inn). They tear down the existing structure and rebuild, adding an additional floor giving you well over 1000 rooms. The point chart is re done, increasing the points per room significantly. I am seeing the total points north of 10 million, with the price per point north of $300 (remember this is 2043 or later when they go on sale). So Instead of doing a refurb and re brand of the existing building making 10's of million, you are doing a complete new complex and make BILLIONS. Why think small when there are big profits to be made.

 

[MrsBooch]

Vero Beach/Hilton Head are really unique property types within DVC. I wouldnt be surprised to see another similar beach resort pop up somehwere along the way in the next 20 years. I don't think they'll take these out of the Vacation Club - But i do think they might restrict them. If you buy a contract within the Beach Resort group you can only stay at the beach resorts or trade into (for more points) wdw resorts - with people who have WDW resort contracts and want a beach vacation.

 

[DL1WDW2]

Take back all the points and repackage as fixed guaranteed weeks ... ?
Thereby completely changing the Vacation Clubs future.
I would definitely buy Fixed Week at BLT .... I know : Not a 2042 Resort.

 

[jtruth33]

The Boardwalk Villas / Boardwalk Inn is one of the most valuable pieces of property in WDW. I googled and right now there are a total of 4,888,000 points. DVC has 532 rooms, the inn has 378. So In 2042, DVC takes over all the property (no more Inn). They tear down the existing structure and rebuild, adding an additional floor giving you well over 1000 rooms. The point chart is re done, increasing the points per room significantly. I am seeing the total points north of 10 million, with the price per point north of $300 (remember this is 2043 or later when they go on sale). So Instead of doing a refurb and re brand of the existing building making 10's of million, you are doing a complete new complex and make BILLIONS. Why think small when there are big profits to be made.

I like your thinking.... definitely could see that. Those resorts will be aging significantly by that point... very easy to see the case for a bigger project that can maximize profits.

 

[chalee94]

I see your points Chalee. Question for you though.. 1) would you view the extension deal differently if you were, say five years away from your lease expiration vs. ~30?

2) I wonder if Disney gets around the issue of some owners holding out on signing a quit claim, especially at a small resort, by instead offering advance deals on new leases (instead of an extension) at the owners home club at ~5 years out. Point being, it gives Disney the 5 or so years to keep existing owners, and pull revenue forward if needed. If I'm 5 years out from 2042 and I'm a new DVC buyer, why would I buy points I can't use for 5 years? Existing owners probably would be interested though, especially if they're given a break on the eventual cost.

3) I'm also wondering if the distance to the parks becomes not as important of a benefit by 2042 with extensions to most resorts / operational improvement of the skyliner, making places like BWV and BCV less appealing than newer offerings.

1) If we were 5 years away from expiration, DVC would still be charging basically full price. They only offered the $15 price point because the time value of money made points that far in the future nearly worthless. I just don't get the notion that Disney will offer a sweetheart deal when there is no justification for that idea.

2) Barring combining BRV and CCV, I think the new ground leases will be around 50 years and not in line with an "extension." But again, my bet is against there being any significant break on the cost. I expect the pre-selling will still be very very expensive, even if BRV is only selling a shorter length contract. Disney has never been one to leave money on the table - their OKW extension offer was priced at about double of the actual value (maybe more). That is historical. Had they given owners an actual good deal, the take rate would have been more like 50-75% instead of less than 20%.

3) I think the skyliner is cool. But walking from BWV and BCV still beats it every time.

 

[gisele2]

BVTC can remove a resort at anytime and once removed, it is no longer part of the club, which means no trading to other DVC resorts any more. This would be all owners...not direct vs resale...and of course, if the resort isn’t there, no one can’t trade in either.

We get the trading by virtue of being part of that. The POS only gives you the right to your home resort.

Glad I bought the 2 resorts I did.

 

[sethschroeder]

attempts an extension when their original contract language didn't make a provision for a possible extension.

I think way to many people take extension to literally. Its a marketing term and nothing more in the future.

In 2037 they start offering "extensions" to current owners first for a new 50 year contract "for future generations" and give them a 10% discount on the cost, lets say its $400/point and offer to existing members at that specific resort for $360/point. They sign a new contract that goes in to place in 2042.

If they want to level BWV they simply give those members who buy a 50 year contract at NEW BWV that opens in 2045 their points but at OKW for 3 years (since they will have a bunch of points being given up) and essentially those owners get 53 years (3 temp years at OKW and 50 at BWV).

There is zero chance they don't offer an "extension" it just will be on new terms, with new point charts, and at then current pricing models.

They also need to be ready because in 2054 when SSR expires its going to get really interesting.

 

[gisele2]

I bought one contract expiring in 2042 and one in 2060. I won't need an extension by then. I think I will want a contract with less years on it VGF? PVB?

 

[scbruno]

As the expiration time comes closer we may see DVC do something possibly again with OKW not sure about the other resorts. DVC may have offered the the original 15 year extension too early in the contracts in my opinion. We took it since we were looking to add on points at SSR and made the expirations closer in time. At the time and it was only $15 a point if I recall correctly. Even though I will be in my 80's when OKW expires in 2057 and may not be able to travel any longer I did it because my kids will more than likely be still going with their kids. It will be interesting to see if DVC offers the 15 Year extension but at current DVC market value compared to the bargain we got.

 

[we"reofftoneverland]

A ghost town lol

 

[DenLo]

Banking and borrowing will be suspended probably three years before the expiration date or with 2039. That will force people to use only their current year points leaving room for all the points with the calendar year. They might even suspend the exchange between the different resorts (the 7 month mark), so you must book at your home resort.

By 2042 the expiring resorts will not meet the standard deluxe hotel criteria especially DVC remodels and updates are cheaply done. Also the buildings will not be the current fashion for deluxe resorts. I wouldn't be surprised that they would be relabeled moderate or even raised completely and a new more profitable hotel built in their place. At OKW, those buildings were built on 1980s motel models with extra large rooms. It was ridiculous that they don't have elevators in each building at OKW and HHI and VB a deluxe resort would have them. The resorts near Epcot are very valuable and desirable locations. The hotels are smaller and a new high rise is built on the property would attract more guests. A high rise would be a smaller footprint making way for more parking or amenities. Who knows how profitable timeshares will be by then. Disney might decide not to develop these hotels as timeshares and just run the hotels or lease them to other hotel companies.

 

[bookwormde]

It is all about economics, high/mid rise cost more to build than SSR style sqft, where there are building site size or view access constraints mid or even high rise make sense. Given the assumed sites it is likely we will see a mix possibly even within a single project

At in the range of 400 million in profits per year from DVD sales unless the market collapses, Disney will continue developing new DVC resorts as they still have lots of viable sites.

Tear down redevelopment in general happen for a few specific reasons including; seriously deteriorated primary building elements, fiscal incentives to dramatically increase density, grossly antiquated configuration that no longer meets needs or standards. Lack of available new developement space is also an add on factor.

While there will certainly be significant upgrades in 2042 none of the resorts appear to meet the standards for full redevelopment, with BWV being the closest of an of the WDW DVCs (Poly would be significantly closer to the standard on the cash side).

 

[Bruggok]

As much as demolishing Beach/Yacht club to build a high rise could maximize DVD's revenue, WDW won't want Epcot visitors to see the top of a tall building visible from the World Showcase. If DVD adheres to such height limit, it may be more inclined to build outwards or shove more rooms into existing space instead. Also a lot of people love the laid back New England resort styling of those two. Personally if I wanted a high rise beachfront condo, I'd buy a unit and get a property manager to rent out the other 50 weeks.

 

[jtruth33]

The latest DVC show was really good on this topic. After hearing their predictions, I tend to believe some resorts will offer extensions closer to the expiration date, with other more profitable properties allowed to expire so they can shut them down and renovate. Use the money earned from extensions to help pay for renovations at other resorts with prime real estate (Epcot resorts?) to maximize capacity, and profits once renovations are complete, and Disney can charge top dollar for them.

 

[Deb & Bill]

Will people even go to theme parks in 2042? They may just stay home and use simulation software instead.

 

[David Crowell]

If 2042 contracts at BWV expire and Disney attempts to refresh/rebrand/rebuild/resell that resort to a new generation, could white card owners at other resorts subject to the 2019 restrictions loose access to booking the "new" BWV? Could they bring back the creepy clown, change the name to The Oldschool Boardwalk and claim it is no longer one of the original 14 resorts?