what happens to future resort availability on resale contracts?

[sethschroeder]

Or, they will allow owners to buy an extension but it will be with the be with new points chart kicking in and a restriction on resale as well.

I am 100% in this category of thinking. There is 0 reason to wait until 2042 to start selling anything. As we get closer to 2042 those contracts on the resale market will tank. Disney is going to be able to buy BCV resale as an example for $10-$20 per point the last couple years from existing members. You buy BCV at the new pricing and get existing points thrown in as an example.

Heck they can even market the extra time as the discount and not give an actual discount during that lead up time.

Disney is most interested in ongoing profits not past performance. extensions would not allow for changes to total points

It 100% can. The "extension" can simply be a new 50 year contract with all the new Terms.

very unlikely that they will do this with the majority of 2042 resorts since the glut of points would leave a very large number of rooms empty since it world take 10+ years to sell those points

Who is thinking it would take over 10 years to sell out? They will have sold roughly 50% of OKW out to 2057 maybe more (think about the ROFR flip of an expiring 2042 contract in 2035 and selling it out to 2057 for Disney), will possibly sell off VB/HH, and will be left with BCV/BWV/VWL as the only resorts to sell.

They have roughly 950 total rooms across those 3 resorts and another 375 at a 50% sold out OKW.

SSR - 1250 Rooms
Reflections - 900 Rooms (on hold)
AKV - 650 Rooms

Its not like Disney has not sold that many points before. Also great thing about Disney cash is they can always discount rooms to fill them during that initial period.

 

[Sandisw]

Disney is most interested in ongoing profits not past performance. extensions would not allow for changes to total points

I should have been clearer. Give owners a chance to extend into new contracts that will kick in once the cute things contract ends at a substantial discount,

It was probably a poor choice to use the word extension.

 

[bookwormde]

I should have been clearer. Give owners a chance to extend into new contracts that will kick in once the cute things contract ends at a substantial discount,

It was probably a poor choice to use the word extension.

OK yes an option to buy the new contract for the timeshare that replaces the existing timeshare would allow for pretty much any change that still aligns with state code (except OKW)

This still leaves DVD selling the same number of 50 year points at 2042, even if they do have significant potential market from prior owners. not sure how many owners would who have been members for lots of years who purchased during their prime earning years at much lower prices would be ready to commit that level of cash. At 10 years to sell these points that would figure about 1/3 would rebuy and the rest would come from new or add on purchases

This also assumes that Disney is not building any new resorts form 2 years before and 8 years after 2042

This still makes it economically impractical for Disney to close and restart all the 2042 resorts if they want to maximize yearly profits.

Running the numbers say that a maximum of 1 2042s could be fully converted and the rest would need to have their endpoints moved out 8-12 years buy selling short term extension. It is important to remember that Disney is already committed to reselling all the OKW contracts that were not exerted beginning in 2042

By then Disney will already have to adapted their sales strategies to deal with a resale market for contract that have only a few years left and are selling for a small fraction of a new contract.

 

[Chuck S]

I am 100% in this category of thinking. There is 0 reason to wait until 2042 to start selling anything. As we get closer to 2042 those contracts on the resale market will tank. Disney is going to be able to buy BCV resale as an example for $10-$20 per point the last couple years from existing members. You buy BCV at the new pricing and get existing points thrown in as an example.

Heck they can even market the extra time as the discount and not give an actual discount during that lead up time.

Actually, extending the contract on the ground lease so they can actually sell extensions to the current owners and new owners may not be the wisest course of action for Disney. The can't legally sell an extension, unless the ground lease is extended by "the club."

There are still legal questions over the way this was done at OKW...for instance, since "the club" extended the ground lease, there is an argument that all contracts were automatically extended by that action, and the current owners (like at OKW) that don't want to extend would be asked to sign documents deeding the property back to DVD. If you don't sign the new document, some people are waiting to see what happens. Technically, "the Club" extended the contract and technically the owners at that resort are "the club." Sooo...DVD/Disney is now stuck with a resort where a lot of members opted out of the extension, and they have to continue operating it for 15 years, locked into the original point allocations for the resort.


What is far more likely is that the current ground leases will be allowed to full expire. the current "club" legally dissolved, then the property re-leased to DVD/DVC, a whole new point system installed, buildings fully refurbished and modernized, and then resold as a new resort, with a new name. For instance, BCV, could be renamed Sandy Bay Villas, Boardwalk renamed Luna Park, and so forth.

 

[sethschroeder]

Actually, extending the contract on the ground lease so they can actually sell extensions to the current owners and new owners may not be the wisest course of action for Disney. The can't legally sell and extension, unless the ground lease is extended by "the club."

There are still legal questions over the way this was done at OKW...for instance, since "the club" extended the ground lease, there is an argument that all contracts were automatically extended by that action, and the current owners (like at OKW) that don't want to extend would be asked to sign documents deeding the property back to DVD. If you don't sign the new document, some people are waiting to see what happens. Technically, "the Club" extended the contract and technically the owners at that resort are "the club." Sooo...DVD/Disney is now stuck with a resort where a lot of members opted out of the extension, and they have to continue operating it for 15 years, locked into the original point allocations for the resort.

To clarify its not actually an extension just marketed as such. I expect it to be new from ground up on the contractual side.

In 2035 DVC signs off on a new 50 year contract when the previous leaser holder vacates (aka DVC 1.0 ends). If you are a new owner in a sense you will be buying two separate contracts really no different than doing split points today.

Again I could be wrong but I think that is how it will work. It will not be an actual extension in the OKW sense.

 

[bookwormde]

Just as a refernce point there are 18 million non extended 2042 points, and this does new include any point increases that might occur if the resorts are completely restarted

 

[sethschroeder]

Just as a refernce point there are 18 million non extended 2042 points, and this does new include any point increases that might occur if the resorts are completely restarted

What is the breakdown by resort?

Also what is your current % of OKW that is flipped since that will continue to decrease over time.

 

[bookwormde]

Actually, extending the contract on the ground lease so they can actually sell extensions to the current owners and new owners may not be the wisest course of action for Disney. The can't legally sell and extension, unless the ground lease is extended by "the club."

There are still legal questions over the way this was done at OKW...for instance, since "the club" extended the ground lease, there is an argument that all contracts were automatically extended by that action, and the current owners (like at OKW) that don't want to extend would be asked to sign documents deeding the property back to DVD. If you don't sign the new document, some people are waiting to see what happens. Technically, "the Club" extended the contract and technically the owners at that resort are "the club." Sooo...DVD/Disney is now stuck with a resort where a lot of members opted out of the extension, and they have to continue operating it for 15 years, locked into the original point allocations for the resort.


What is far more likely is that the current ground leases will be allowed to full expire. the current "club" legally dissolved, then the property re-leased to DVD/DVC, a whole new point system installed, buildings fully refurbished and modernized, and then resold as a new resort, with a new name. For instance, BCV, could be renamed Sandy Bay Villas, Boardwalk renamed Luna Park, and so forth.

If they do extensions in combination with new shorter contracts at a resort, I would expect that after there experience at OKW it will be some type of non deeded structure (either timeshare or prepurchased vacation)

How do you think they will handle 18 million points on the market all at once?

 

[bookwormde]

What is the breakdown by resort?

Also what is your current % of OKW that is flipped since that will continue to decrease over time.

Beach Club Villas

3,027,124

Boardwalk Villas

4,888,837

Boulder Ridge Villas at Wilderness Lodge

1,961,969

Hilton Head Island

1,368,962

Vero Beach

1,616,438

Old Key West

7,674,852

The last numbers I have seen for OKW were in the 30% extended range

 

[sethschroeder]

Beach Club Villas

3,027,124

Boardwalk Villas

4,888,837

Boulder Ridge Villas at Wilderness Lodge

1,961,969

Hilton Head Island

1,368,962

Vero Beach

1,616,438

Old Key West

7,674,852

The last numbers I have seen for OKW were in the 30% extended range

So as pointed out and many have called out on other threads:

• HH and VB are likely being sold off or removed from DVC (they also do not compete with WDW DVC at all)
• OKW is likely going to be 50% sold out to 2057 so 3.8m left
• That leaves 9.7m + 3.8m = 13.5m total points
• BLT + AKV = 13.1m total points and sold out in 7 years (BLT launched during an economic downturn and AKV was what took the full 7 years)

Another thing will be that every owner of those points will now have lost their contract. When DVC normally launches a resort they are only selling net new points when these resorts expire they can sell in to owners who just lost their contract.

 

[bookwormde]

So as pointed out and many have called out on other threads:

• HH and VB are likely being sold off or removed from DVC (they also do not compete with WDW DVC at all)
• OKW is likely going to be 50% sold out to 2057 so 3.8m left
• That leaves 9.7m + 3.8m = 13.5m total points
• BLT + AKV = 13.1m total points and sold out in 7 years (BLT launched during an economic downturn and AKV was what took the full 7 years)

Another thing will be that every owner of those points will now have lost their contract. When DVC normally launches a resort they are only selling net new points when these resorts expire they can sell in to owners who just lost their contract.

Not in anyway sure that both Hh and VB will be sold off since they would generate close to 500 ,million in sales and would like not sell for more than 20% of that

Even if Disney is not building new DVCs and you cut out VB and HH 7 to 8 years means that the resorts would be very empty for many years. Beyond the financial consideration large resorts sitting empty would likely not look good

 

[sethschroeder]

Even if Disney is not building new DVCs and you cut out VB and HH 7 to 8 years means that the resorts would be very empty for many years. Beyond the financial consideration large resorts sitting empty would likely not look good

I am not sure why you are thinking they will be very empty for many years?

Again VB/HH are a different story and who knows for sure what will happen there.

Its why I pointed out rooms:
WDW today has 28,318 rooms as of December 2020
WDW expiring in 2042 would account for 950 at BCV/BWV/BRV and 380 at OKW (50% sold to 2057)
That means Disney would have an "excess" of 4.6% of room capacity in 20 years time
In 2022 Disney had planned on adding 3.1% capacity just at Reflections

Disney typically runs at like 95% occupancy typically from my understanding which they really can't run higher than (100% occupancy is not really plausible based on what others have said just like 0% unemployment). So I am not understanding your thought of these rooms being empty.

Lets also think that new DVC resorts will possibly have a spike in sales out of the gate and you have how many members that will want to rebuy in to the new resorts which is not a current sales process that ever happens.

 

[bookwormde]

I am not sure why you are thinking they will be very empty for many years?

Again VB/HH are a different story and who knows for sure what will happen there.

Its why I pointed out rooms:
WDW today has 28,318 rooms as of December 2020
WDW expiring in 2042 would account for 950 at BCV/BWV/BRV and 380 at OKW (50% sold to 2057)
That means Disney would have an "excess" of 4.6% of room capacity in 20 years time
In 2022 Disney had planned on adding 3.1% capacity just at Reflections

Disney typically runs at like 95% occupancy typically from my understanding which they really can't run higher than (100% occupancy is not really plausible based on what others have said just like 0% unemployment). So I am not understanding your thought of these rooms being empty.

Lets also think that new DVC resorts will possibly have a spike in sales out of the gate and you have how many members that will want to rebuy in to the new resorts which is not a current sales process that ever happens.

You really have to look at DVC as part of the Deluxe subset where average occupancy is much lower as is room count, There is also a price point issue, especially with 2br, GV and specials. 1200 and above is a night is a very narrow market,

We have seen repeatedly what happens when there are lots of unsold DVC rooms at new DVC resorts and how that cannibalizes the regular cash deluxe reservations.

There is a reason why Disney has not built a new stand alone deluxe resort for decades and any new deluxe rooms since AKL

 

[i<3riviera]

͏

 

[sethschroeder]

There is a reason why Disney has not built a new stand alone deluxe resort for decades and any new deluxe rooms since AKL

Except they can discount the DVC rooms if they wanted to draw in an upsell from moderates. Again pointing out BLT/AKV was built all within a 3 year timespan with even more rooms added in the Deluxe category.

They haven't built new Deluxe Rooms because their goal is to convert Deluxe stays to DVC and if not charge more for a singular stay. Also did we forget between Rivera and Reflections Disney was set to completely add not convert 1200 rooms in the Deluxe category (900 were Reflections new hotel development, 300 RIV from Moderate knock down) over a 3 year period 2019 -> 2022.

You really have to look at DVC as part of the Deluxe subset where average occupancy is much lower as is room count, There is also a price point issue, especially with 2br, GV and specials. 1200 and above is a night is a very narrow market,

Okay so lets look at that:

• Deluxe Cash/DVC has 10,039 Rooms
• Reflections was going to be 900 Room or a 9% increase in room capacity
• Expiring 2042 is 13% in room capacity (not even an addition simply rooms no longer tied to points)
• 0 Special Rooms, 7 Grand Villas, 122 Dedicated 2 Bedrooms (BCV, BWV, BRV)
• OKW 27 GV, 274 Dedicated 2 Bedrooms (Disney is not under the requirement to take these rooms and could use their points to book the Studios/1BRs just like a member)

So there basically 1% of rooms at $1200+ night when you consider out of all 3 resorts expiring only BWV actually has Grand Villas and BRV/BCV have dedicated 2 Bedrooms (at this point).

unsold DVC rooms at new DVC resorts

Also these are not new resorts. They are expired resorts being resold. What % of members rebuy? We will have to wait and see.

 

[Sandisw]

You really have to look at DVC as part of the Deluxe subset where average occupancy is much lower as is room count, There is also a price point issue, especially with 2br, GV and specials. 1200 and above is a night is a very narrow market,

We have seen repeatedly what happens when there are lots of unsold DVC rooms at new DVC resorts and how that cannibalizes the regular cash deluxe reservations.

There is a reason why Disney has not built a new stand alone deluxe resort for decades and any new deluxe rooms since AKL

But to add, current resale points not restricted...pre 2019..and all direct points bought from now until 2042 will continue to have access to those resorts if they become new, while new points are sold at each of them.

So, it’s not like no one in DVC will be eligible for staying there. In 20 years, that could be a lot of points eligible to trade into those new resorts. It means they could take one offline at a time.

 

[bookwormde]

Yes they can discount DVC rooms but that is what cannibalizes Deluxe rooms and lower the average room rate on them

The real upsell is selling DVC to moderate cash customers

The room capacities of cash deluxe is about 25,000 and the best information we have is that Disney runs in the low to mid 80s for room occupancy so abut 3800 average unused occupancy capacity. Capacity of the 3 2042 only resorts is 5300 so that would raise the unused average capacity to 9100 or up to abut 27%.

While not totally applicable to Disney there are industry models that say to refill to the prior occupancy it would take an additional discounting of 20 to 25%. Hey I would be up for 40 to 60% discounts on cash Deluxes

As to RIV or any other new DVC resort since it is new, guests expect it to be well below full occupancy so perception is different.

I agree reflections would have greatly stressed the system in best times which is likely a driving force for the extended delay or even reconfiguration or canceling. I still would ot be surprised if they reduced or eliminated the cash rooms

 

[StitchesGr8Fan]

When a 50 year term expired on an existing resort, it becomes a new resort if they sell it again. (The OKW extension was a flop by all accounts so I doubt they will do that again. So yes, resale buyers will start losing access to resorts as the old become new again.

 

[bookwormde]

When a 50 year term expired on an existing resort, it becomes a new resort if they sell it again. (The OKW extension was a flop by all accounts so I doubt they will do that again. So yes, resale buyers will start losing access to resorts as the old become new again.

Yes if they let it fully expire so that there are no longer any public members they can close the current timeshare license, and apply for a new one I think they also could apply for the new license ahead of time and start selling the renewed resort within the same lead times that are allowed for new resorts (typically about 9 months)

 

[sethschroeder]

Yes they can discount DVC rooms but that is what cannibalizes Deluxe rooms and lower the average room rate on them

And its a short term solution to try and draw people in to purchasing DVC as part of the process. Its not something they will be doing for a decade as already outlined.

The room capacities of cash deluxe is about 25,000 and the best information we have is that Disney runs in the low to mid 80s for room occupancy so abut 3800 average unused occupancy capacity. Capacity of the 3 2042 only resorts is 5300 so that would raise the unused average capacity to 9100 or up to abut 27%.

The capacity of the 3 resorts is 950 (BRV 136+BWV 532+BCV 282) rooms not 5300 so I have no clue where you got your counts from? You possibly could say slightly more because there are 268 of those rooms which are lock-offs meaning max of 1218 rooms.

Also, I am not sure why you are adding the expiring resorts to "unused capacity". What is happening to the members who have been going to Disney yearly or semi-annually for years? You have the capacity filled, there is a hurdle to get them paying more than MFs but there is a built in group to market to (even specific discounts just for expired DVC members to try and get them to buy back in while on site).

1. Some expired members will switch to cash
2. Some expired members will purchase a new contract
3. Some expired members will stop going to Disney completely
4. Some existing members will buy in to the relaunched resorts
5. New people will buy new resorts (no different that today with a spike in purchases at the relaunch)

1-3 never existed as a target market before

While not totally applicable to Disney there are industry models that say to refill to the prior occupancy it would take an additional discounting of 20 to 25%. Hey I would be up for 40 to 60% discounts on cash Deluxes

Again numbers seem to be off and not sure why the rooms would automictically be "empty". A family who just bought BCV resale in 2032 is now just going to stop going? Heck I could see the rebuy being fairly strong because what about all the kids who were left a contract by their late parent, there is an emotional pull to rebuy so they can pass it on as well.

Also they have added a larger % of rooms historically to the Deluxe category with AKL/AKV as an example. They were planning on Reflections as well and I doubt they expected to take more than 4-5 years to sell out the 900 rooms. Plus no guarantee they don't take 1 or 2 resorts out of commission to do a larger rebuild/refresh for 1-2 years.

As to RIV or any other new DVC resort since it is new, guests expect it to be well below full occupancy so perception is different.

How many people had stayed at Riviera over a year ago? 0
How many people will have stayed at BWV/BCV/BRV? Countless

You are not creating capacity it already exists and is being filled. You are going to lose some members but not all of them.

I agree reflections would have greatly stressed the system in best times which is likely a driving force for the extended delay or even reconfiguration or canceling. I still would ot be surprised if they reduced or eliminated the cash rooms

The big reason Reflections was delayed was so that Riviera could have an extended time to sell out. Its similar to how pretty much every sales organization out there back in April reset targets and continued to monitor trends. They were easily able to pause the resort and because they have aspects already done likely can hit a 2 year construction timeline when it comes down to it. That is if they don't flip more rooms from cash to DVC at places like VGF that I know some are predicting.