Will SSR be the last DVC resort built?

[DrBond007]

Just remember that it's in our best interest that DVD / DVC continue to build new resorts.

New resorts = ongoing new point sales

Ongoing new point sales = ROFR on resale contracts

Without ROFR, the "value" of points (as determined by resale prices) would certainly fluctuate. Some properties would feel it more than others. But it would certainly cause many to walk away from DVC out of concern that Disney could begin to neglect the program and its owners

This isn't gonna happen today, tomorrow, next week or next year. But someday...

Sorry, but this rational makes no sense to me what so ever. If I understand my economic classes correctly, if you stop building resorts and therefore cap supply, that high demand will drive price per points up and thus DVC would have the option of raising the ROFR so those values go up. They could decide to recapture more of the resale market if they choose and could resell those points at DVC prices instead of them being sold at resale prices. Seems like that would increase the value of our points. It seems to me that the more they build and the more supply that exists, the less value our points have for trading purposes, cruises, conscierge, etc. It also increases the demand for peak times and highly sought after resorts, making reservations harder to aquire at your desired resort (increasing the importance of home resort). I don't get how all the sudden people will be throwing their arms up and giving up points because Disney is going to neglect them, that logic escapes me. Seems like less supply, high demand, high price, right?

 

[Dean]

Sorry, but this rational makes no sense to me what so ever. If I understand my economic classes correctly, if you stop building resorts and therefore cap supply, that high demand will drive price per points up and thus DVC would have the option of raising the ROFR so those values go up. They could decide to recapture more of the resale market if they choose and could resell those points at DVC prices instead of them being sold at resale prices. Seems like that would increase the value of our points. It seems to me that the more they build and the more supply that exists, the less value our points have for trading purposes, cruises, conscierge, etc. It also increases the demand for peak times and highly sought after resorts, making reservations harder to aquire at your desired resort (increasing the importance of home resort). I don't get how all the sudden people will be throwing their arms up and giving up points because Disney is going to neglect them, that logic escapes me. Seems like less supply, high demand, high price, right?

I suspect what he's saying is that the price per point is artificially high. And to a certain extent it absolutely is. Without ROFR what would happen is just like most other timeshares. Some will hold out for higher prices and some will sell cheaply, far below the standard. This happens with rentals currently. And those that are willing to wait and pursue will find the $40 pp resale or maybe even less. I've seen agreements for this low already but when the ROFR was in the $60 pp range. Plus as the length of ownership decreases, that will erode the value both the true value and he perceived value by those wanting to buy.

 

[rocketriter]

I also suspect that DVC will make contract extensions available when the number of years remaining starts to eat into the value of contracts, although I'm not prepared to guess how they'll structure it. It's in their interest to manage the sale of all those contracts with only 8 or 10 years left on them so they don't become "generic drugs" on the market.

 

[spiceycat]

hey if the economy is good and I believe it will be - WDW (not DVC) will simply buy them up and put them up to rent - let see

a 2-bedroom BWV for around $3,500 per night - a 3-bedroom for what $10,000 a night.....

please kept in mind what WDW gets NOW on its resort rooms - these are so much better....

if the economy is not so good - then I would expect WDW to extend our contracts - but only until SSR is expired too.

then I firmly believe WDW will take them back. Otherwise why lease them for just 50 years.....

 

[Granny]

I'm having trouble buying that a DVC member will spend more than a cash guest at the same hotel type. I'm sure Disney has a ton of this type of demographic info but it doesn't seem that a DVC member will spend more than someone at GF or YC for example. What DVC does give is a steady stream of business to even out the down times.

Dean, I know that this will not be the case for everyone. I guess I was using our own example and assuming that many others might fall into the same category.

Think of it this way. Let's say that our average Disney vacation used to cost $4,000 a year, including room costs. Now we have the room costs "paid for" before we go and tend to spend the extra budget doing things we never used to do. More bike & boat rentals, more shopping and souvenirs, and in the future...more golf. Much of this is incremental to what we would have spent.

One other thing.

Without DVC there is NO WAY we would be going to WDW every year. Probably every other year, maybe even less frequently. So there is no doubt in my mind that I am spending much more money with Disney, even if you cut out the room charges, than I would have without DVC.

We often have seen on this board that DVC doesn't save people money, it actually increases their vacation costs because they are going more often and for longer periods. Poll after poll shows that people don't cook much in their villas except for breakfast, so Disney captures a lot of the food dollars too.

Yes, but a cash guest is almost 100% certain to spend time at Disney parks. A DVC owner - particularly one who's been going to WDW for a few decades - can easily spend a week at a DVC resort and not give a penny to Disney. IMHO this is what's going to happen as ownership durations hit 20-30 years, so cash guests are going to be even more important.

IMHO - YMMV

I understand the point you're making.

And I can see that the park hours/vacation day might go down for DVC guests compared to cash resort guests. But my guess is that the typical DVC guest spends more total hours per year in the parks than a typical cash guest.

Let me put it this way. If I had enough points to only go for one week each year with DVC, I would probably spend just as much time in the parks as a cash guest with the same trip frequency and duration.

On the other hand, I have enough points to stay for almost two weeks. I really don't think I would be spending two weeks if I had to use cash reservations. In the two weeks that I stay, I easily spend as much time in the parks as I used to with a one week cash stay.

Just throwing out some thoughts.

YMMV.

 

[dianeschlicht]

I have to agree with Granny. While we aren't spending as much on accommodations after 8 years of owning DVC, we are probably spending more on special meals in the resprts and parks, because it is one of the things we like to do at WDW. We also bring a lot of guests with who have never been before, and those usually turn into repeating customers too.

 

[childsplay]

I said this back before SSR opened, that if they came out with a different ending date, then SSR would not be last one and I still believe that to be true...I just can't see them building only one with a different ending date.

 

[pumpkinboy]

I am not sure how long the Starwood management contract is for the Swan and Dolphin, but those lots would make for readily available and prime real estate for another DVC resort. If it's 10 more years off, well we are talking laong term. But they are on Disney land and owned by Disney, just managed by another company.

Of course so are the Disney Village hotels.

Then again, I suspect that it is to Disney's advantage to have every major hotel chain right nearby so that companies with preferred deals with particular chains can put their employees up there, and attend a conference at one of Disney's conference centers.

 

[Dean]

Dean, I know that this will not be the case for everyone. I guess I was using our own example and assuming that many others might fall into the same category.

Think of it this way. Let's say that our average Disney vacation used to cost $4,000 a year, including room costs. Now we have the room costs "paid for" before we go and tend to spend the extra budget doing things we never used to do. More bike & boat rentals, more shopping and souvenirs, and in the future...more golf. Much of this is incremental to what we would have spent.

One really can't include the up front costs or even the maint fees as part of the amount paid per year. In Disney's eye's that's money that's past and whether you go or not, they already have it. What is at issue is what do you spend on park passes, restaurants, gifts and the like at DISNEY venue's and I can't see how the average is more per day. But as I said earlier, if you go when other's don't, it gives a base to keep things moving.

 

[sjdisneywedding]

I'm having trouble buying that a DVC member will spend more than a cash guest at the same hotel type. I'm sure Disney has a ton of this type of demographic info but it doesn't seem that a DVC member will spend more than someone at GF or YC for example. What DVC does give is a steady stream of business to even out the down times.

I am not sure it really matters if the dvc'er spends more per day or per vacation(although i believe they do). The major benefit to disney is that the dvc'er is guarenteed to come back over and over and over again. Each and every time spending more money, whereas Disney has zero guarentee the cash guest will ever return.