what happens to future resort availability on resale contracts?

[Sandisw]

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 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



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.



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.



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.

I’m not sure the reason Reflections was halted was to give RIV more time to sell, I am pretty sure that it was due to the revenue projections over the next few years due to lower occupancy predictions,

It’s one reason why Frozen on Broadway was nixed so quickly when things shut down, It wasn’t doing as well as they hoped and knowing that attendance would be slow to return, they decided it was better to end,

So, given that Reflections was a mixed use resort, it was better to not build now,

Of course, not building does allow the slower sales we will see with RIV for the same reasons...lower attendance in WDW.

 

[RanDIZ]

It’s obvious what Disney is doing. Slowly they are washing out the resale market. Yes, some are well into 2060’s so it will be awhile. But with resale restrictions, people will be forced to buy direct to enjoy all resorts. Unless someone wants to be locked solely into one resort, what value will the resale of a restricted resort bring. Probably not much. I hope this restriction nonsense is a complete failure! The main reason I was drawn to DVC was because of the vast variety of resorts to choose from.

 

[sethschroeder]

I’m not sure the reason Reflections was halted was to give RIV more time to sell, I am pretty sure that it was due to the revenue projections over the next few years due to lower occupancy predictions,

It sort of all adds up to the same thing though right? Reduced capacity, extended shutdown (unknown timeline to start), and likely slow travel all adds up to Riviera being slow to sell and when Reflections launched possibly still ongoing effects from this year (since it was launching in 2022).

If they felt demand would be there to sell out quickly at Riviera I suspect they would have went forward or slowed the timeline slightly.

That is my take on it coming from a sales organization and dealing with a variety of other enterprise size organizations that I have talked with over the past 10 months. As with anything I could be wildly wrong though applying my perception to the problem Disney is dealing with.

 

[Sandisw]

It sort of all adds up to the same thing though right? Reduced capacity, extended shutdown (unknown timeline to start), and likely slow travel all adds up to Riviera being slow to sell and when Reflections launched possibly still ongoing effects from this year (since it was launching in 2022).

If they felt demand would be there to sell out quickly at Riviera I suspect they would have went forward or slowed the timeline slightly.

That is my take on it coming from a sales organization and dealing with a variety of other enterprise size organizations that I have talked with over the past 10 months. As with anything I could be wildly wrong though applying my perception to the problem Disney is dealing with.

The effect is the same...but I don’t think the reason is,

 

[sethschroeder]

The effect is the same...but I don’t think the reason is,

Ya its all macro vs micro and how far in one direction you are looking at it. I guess it depends as well who was the one that "made the call". Was it DVC sales projections, DVC management, Disney Parks, or HQ.

Maybe in 15 years Pete will have someone in the know on the DVC show to talk about it hahaha

 

[Chuck S]

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)

I think that is unlikely. They will want to fully refurbish and renew the resorts, renaming them, and do some re-theming, as well. If they are going to sell it as a "new" resort, it needs to look like a "new" resort. I imagine they will sit empty for several month after the current expiration, and refreshed to look like new, technology updates, and so forth. Look at how the average home is changing into a smart home...they will want to integrate new tech, likely AFTER the contracts expire, unless they can find a way to squeeze it into our refurbishment budgets.

 

[bookwormde]

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 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



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.



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.



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.

"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."

This is what the numbers work out to (subject to any hand calculation errors form doing it quickly) with no lock off splitting (which does not typically increase guest capacity). it is a simple calculation, summation of all room sizes count times count guest capacity, (eg bwv has 145 2br times 9 guests equals 1305 guest (capacity)

"Also, I am not sure why you are adding the expiring resorts to "unused capacity"."

Because that is how the industry does it for different size accommodations), rather than the simpler room count

"What is happening to the members who have been going to Disney yearly or semi-annually for years?"

Yes there will be a percentage that are willing to pay the 2-3x more stay cash as compared to dues for deluxe rooms, but for those for whom dollars and value are a significant factor will move downscale or elsewhere if they can not buy back in at $200+ a point. this might reduce the empty rooms at the margins but the impact on deluxe occupancy would still be quite significant

"You are not creating capacity it already exists and is being filled"

Yes this is correct, but you are increasing dramatically the effective cost of the reservations, either as cash or rebuy, For those with lots of disposable income or assets they will come and stay in deluxes anyway, but from what I have seen in talking with members during visits they are solidly middle class for the most part and despite their attraction for Disney, dollars do matter

I would add that is Disney stopped boiling on site deluxes long enough before 2042 and created a lot of pent up demand that could allow the 3 resorts to sell out more quickly, but with DVC sales being such a profit center. I think it will be much more likely that they will keep on building right through 2042 which will make the situation even more challenging and even with all the mitigation factors you mention

 

[bookwormde]

I think that is unlikely. They will want to fully refurbish and renew the resorts, renaming them, and do some re-theming, as well. If they are going to sell it as a "new" resort, it needs to look like a "new" resort. I imagine they will sit empty for several month after the current expiration, and refreshed to look like new, technology updates, and so forth. Look at how the average home is changing into a smart home...they will want to integrate new tech, likely AFTER the contracts expire, unless they can find a way to squeeze it into our refurbishment budgets.

I was using the term "new" from a licensing perspective, not a branding perspective

Yes you can bet they will zero out the existing refurbishment budgets, but will still need to bring them up to whatever standard exists at the time so there may be a small lag

 

[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

for transparency I used 1.8 million points per year in sales which in in the historical average annual sales range, even if you move to the high end of 2 million it is 9 years. If you consider some point inflation if the resorts are relicensed, that could move it back up. Of course also not in this is any timeshare brand damage caused by the risks that Covid has exposed and if sales will return consistently to pre covid levels

There are lot of factors that can impact this one way or the other but I do not see it moving below the 7 year sellout range and if they continue to build resorts at even half the current pace could double the time frame.

One other consideration is if after covid they return to the same building pace of 1 new WDW DVC every 2 to 3 years, or 8 new DVC resorts how much saturation will exist approaching 2042 and unsold points overhang,

 

[Sandisw]

Just a new thought. They can declare BRV rooms and add the new points to the CCV condo association like they did the treehouses.

It would not be an extension so current owners would need to buy new points at CCV

But, given the popularity of that resort and issue with studios, it is a win win.

The rooms currently in CCV could be like OKw HH..a booking category.

 

[bookwormde]

Just a new thought. They can declare BRV rooms and add the new points to the CCV condo association like they did the treehouses.

It would not be an extension so current owners would need to buy new points at CCV

But, given the popularity of that resort and issue with studios, it is a win win.

The rooms currently in CCV could be like OKw HH..a booking category.

I had not thought of that one, probably one of the more practical options. by my calcs it would have a 26 year lifespan and as such could be offered at a reduced price point. thereby broadening the potential customers

 

[sethschroeder]

This is what the numbers work out to (subject to any hand calculation errors form doing it quickly) with no lock off splitting (which does not typically increase guest capacity). it is a simple calculation, summation of all room sizes count times count guest capacity, (eg bwv has 145 2br times 9 guests equals 1305 guest (capacity)

Its my fault but you are screwing up occupancy rate and total guest capacity. Total Capacity has very little to do with a room being filled and paid for. Look at how older couples book a Studio or 1BR. Look at how many families of 3/4/5 book at 2BR. Look at how many couples go with another couple and book a 2BR.

The hotels are selling a room not capacity. Per your example at BWV every 2BR can be split in to a Studio + 1BR which yes has the same max capacity of guests but in reality does not matter for the context of rooms being empty or not.

Yes there will be a percentage that are willing to pay the 2-3x more stay cash as compared to dues for deluxe rooms, but for those for whom dollars and value are a significant factor will move downscale or elsewhere if they can not buy back in at $200+ a point. this might reduce the empty rooms at the margins but the impact on deluxe occupancy would still be quite significant

DVC has not had an expired resort before so there will have a whole new group of buyers. Disney was adding roughly the same number of rooms to the Deluxe category as the 3 hotels just in 2022. These are two very big points on why it won't take a decade to sell out the new resorts.

Also we can even look historically when Disney has added substantial increases to total rooms and it didn't take a decade to fill.

I would add that is Disney stopped boiling on site deluxes long enough before 2042 and created a lot of pent up demand that could allow the 3 resorts to sell out more quickly, but with DVC sales being such a profit center.

I am not sure why its a requirement to not build any new DVC for a long time? Again you have pretty much every single one of these rooms filled 365 right now. There is going to be demand from that group alone. If you start out a resort before the 1st day of sales with 25% of the resorts sold to returning members that already is going to significantly cut in to sell out time again.

I guess I am not seeing anything that spells empty rooms for a decade or more. There is so many things in favor of filling the rooms that have never existed on a new hotel ever because these are not new they are existing.

 

[Sandisw]

I had not thought of that one, probably one of the more practical options. by my calcs it would have a 26 year lifespan and as such could be offered at a reduced price point. thereby broadening the potential customers

When they added the treehouses, the contract ended at the same time as SSR and no discount was offered,

Right now, if you buy BWV direct, it still expires in 2042 and people are buying it.

So, the price would be whatever CCV is selling for then.

 

[bookwormde]

With that many new resort points there might have to be some adjustments to facilitate sales

looking back, THV SSR points still had 40+ years left at that time and if remember correctly it SSR was selling for a little less than the other new resorts. I am sure DVD would maximize what they can get but especially if BCV or BVW are reliscenced for the full 50 years at that point I can not see CCV selling at similar $,

Right now direct points are selling from 4 to 10 dollars pre remaining year. this level of variance is likely unsustainable.

As the current 2042s get down to less than 10 years DVD will have to discount them significantly if they want to continue substantial sales volume, though they could also abandon sales of these resorts altogether. if these adjustments happen the precedent for longevity discounting would be established so the value of a 25 year contract would be quantifiable.

 

[Sandisw]

With that many new resort points there might have to be some adjustments to facilitate sales

looking back, THV SSR points still had 40+ years left at that time and if remember correctly it SSR was selling for a little less than the other new resorts. I am sure DVD would maximize what they can get but especially if BCV or BVW are reliscenced for the full 50 years at that point I can not see CCV selling at similar $,

Right now direct points are selling from 4 to 10 dollars pre remaining year. this level of variance is likely unsustainable.

As the current 2042s get down to less than 10 years DVD will have to discount them significantly if they want to continue substantial sales volume, though they could also abandon sales of these resorts altogether. if these adjustments happen the precedent for longevity discounting would be established so the value of a 25 year contract would be quantifiable.

My thought process was more keeping it in with the L14 which CCV is, That would mean all current owners who have trading into that resort still would.

Yes, they could would sell more points but it would keep those rom in the DVC 1.0 system while the renovate and work on places like BCV and BWV to sell.

One less resort to worry about in 2042, and giving current DVC owners one less resort that is lost.

 

[bookwormde]

To the OPs original question, based on these and other discussions, I do not think we have any certainty as to how Disney will handle it, given the challenges, and I am pretty sure Disney also does not know at this point and may not know for over a decade.

With that said, what they do with Reflections will give us one more clue

 

[sethschroeder]

DLT will launch next and will either have resale restrictions or not. If we are talking about the OP's question on if the resale restrictions will apply to future resorts as they expire.

2042 resorts being sold new will take on the same terms that resorts from 2019 to 2042 are sold under.