DVC RESALES
DVC RESALES

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Old 07-29-2013, 12:24 PM   #16
dmunsil
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Originally Posted by tjkraz View Post
That said, one way in which owners could be impacted in the long run is if the rate of defaults rises dramatically.
Correct me if I'm wrong, but doesn't foreclosed inventory belong to DVD, who then has to pay the dues on it? So if 25% of the inventory goes back to DVD and they haven't sold it to new owners yet, don't they owe 25% of the maintenance cost?

Is there some way out of it where they can foist the costs on the existing members? Perhaps by not foreclosing, just letting the past-due fees pile up?

If someone is not paying their dues, but has not yet been foreclosed on, I wonder who picks up those costs?
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Old 07-29-2013, 12:28 PM   #17
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While I agree with this (in theory), I think there are somethings that make DVC different, as mentioned by other posters.

While the DVC resale market prices have gone up, the "value" - in terms of length of contract - has gone down. So, one is paying more for a contract, but receiving less in terms of years remaining.

I have been monitoring prices for the last few years, and it just blew me away to see $90/pt for BWV. Given the rental prices for points, purchasing at these prices won't be an option for us right now because the other perks aren't worth this cost.
On the flip side, renting points (in many cases) is going to become antiquated soon. 3 Years ago, it was normal to pay $10 per point. Now, if you're very lucky, you'll pay $12, and in most cases, $14. It's gotten to a point where you're better off booking a DVC Villa then adding the discount when it comes out, which it does 90% of the time.

I'm no expert on DVC (though I have done a great deal of research), but I honestly think as big as it's been for Disney, they've gotten a bit carried away with pricing and the whole thing is going to run into a brick wall at some point.
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Old 07-29-2013, 12:39 PM   #18
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I'm no expert on DVC (though I have done a great deal of research), but I honestly think as big as it's been for Disney, they've gotten a bit carried away with pricing and the whole thing is going to run into a brick wall at some point.
I don't think so.

Disney has no real competitor.... who? Universal Studio? Their facilities and characters are kindergartenish when compared to Disney.

Disney can get away charging $100 per day for admission price. It can also charge $750 per night for its deluxe resorts. And its stock has DOUBLED in the last 2 years, from $30's to $60's.

Until there is a real competitor with similar Mickey character, these parents have no choice... they have to come to Disney sooner or later.
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Old 07-29-2013, 12:55 PM   #19
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I don't think so.

Disney has no real competitor.... who? Universal Studio? Their facilities and characters are kindergartenish when compared to Disney.

Disney can get away charging $100 per day for admission price. It can also charge $750 per night for its deluxe resorts. And its stock has DOUBLED in the last 2 years, from $30's to $60's.

Until there is a real competitor with similar Mickey character, these parents have no choice... they have to come to Disney sooner or later.
Also, they just bought Star Wars and own Marvel comics. They have so many branding opportunities in the future that they may become even more popular. I can't wait for Star Wars land
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Old 07-29-2013, 01:01 PM   #20
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I don't think so.

Disney has no real competitor.... who? Universal Studio? Their facilities and characters are kindergartenish when compared to Disney.

Disney can get away charging $100 per day for admission price. It can also charge $750 per night for its deluxe resorts. And its stock has DOUBLED in the last 2 years, from $30's to $60's.

Until there is a real competitor with similar Mickey character, these parents have no choice... they have to come to Disney sooner or later.
Yes, right now, they are getting away with charging $100 for daily admission, but let's be serious - Who buys a 1 day ticket?

Universal is very much competing with Disney. IOA may surpass both Hollywood Studios and Animal Kingdom in attendance this year. I'd call that competition.

I don't know too many people who would pay $750 a night for a hotel room. Sure, there are some that do, but most, even when staying at the most expensive resorts, are doing so with some sort of discount.

The issue DVC is going to have is that after the Polynesian, that's it. No more Deluxe Resorts to add on to. No more room near Magic Kingdom or Epcot. A standalone DVC unit at the prices they're asking today at a less desirable locale on property won't work.

WDW is going nowhere. It'll always be around. DVC however, is going to reach a limit. And that's OK. They'll have made their money and owners will have their vacations. The only thing I'd question is how well will Disney maintain the DVC properties once they stop selling?
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Old 07-29-2013, 01:02 PM   #21
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Also, they just bought Star Wars and own Marvel comics. They have so many branding opportunities in the future that they may become even more popular. I can't wait for Star Wars land
But this isn't a conversation about the Disney parks. It's about DVC. Star Wars will have very little baring on DVC. Marvel is absolutely useless in WDW as they can't build any attractions or use the characters.
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Old 07-29-2013, 01:16 PM   #22
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WDW is going nowhere. It'll always be around. DVC however, is going to reach a limit. And that's OK. They'll have made their money and owners will have their vacations. The only thing I'd question is how well will Disney maintain the DVC properties once they stop selling?
I would honestly be shocked if DVC hits their limit any time soon. You have to remember that WDW has only developed about 40% of the land that they own. There is plenty of more space for them to add more DVC resorts that aren't attached to an existing resort. Or, optionally, they can add on to an existing resort (similar to the tree houses and SSR).

Plus once they reach the capacity for building any new resorts, that'll probably be around the time that a bunch of contracts will expire (2042), Then they can do a major refurbishment at those resorts, and sell them as new.
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Old 07-29-2013, 01:24 PM   #23
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I would honestly be shocked if DVC hits their limit any time soon. You have to remember that WDW has only developed about 40% of the land that they own. There is plenty of more space for them to add more DVC resorts that aren't attached to an existing resort. Or, optionally, they can add on to an existing resort (similar to the tree houses and SSR).

Plus once they reach the capacity for building any new resorts, that'll probably be around the time that a bunch of contracts will expire (2042), Then they can do a major refurbishment at those resorts, and sell them as new.
But again, wherever they decide to build DVC from this point, it won't be in a prime locale. They got the money they did for BLT and for GFV because of location. They would never have gotten that kind of money for Saratoga.

Adding on to any Mods or Values would be pointless as people wouldn't spend the money for DVC there.

Disney needs to concentrate on adding more parks and recreation before adding any more DVC. They built GFV and will build Poly's because they were the only Deluxe Resorts without DVC and they would be obvious cash cows. I just don't see where DVC goes on WDW property after this, unless they want to sell a heck of a lot cheaper than they currently are.
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Old 07-29-2013, 01:41 PM   #24
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Who's to say they won't build an all new deluxe in the future with both CRO and DVC units? I don't think they've used all of their prime real estate yet either. All it will take is a plan and funding, why couldn't they build again after poly is done with?
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Old 07-29-2013, 01:58 PM   #25
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Who's to say they won't build an all new deluxe in the future with both CRO and DVC units? I don't think they've used all of their prime real estate yet either. All it will take is a plan and funding, why couldn't they build again after poly is done with?
I just don't see it happening. DVC, like any part of Disney, hasn't stayed on target with current inflation rates. People will still go to Disney on a non-committal basis, but at the rates at which DVC has increased, fewer and fewer people will be able to afford to buy in. Probably a very good reason the GFV is the smallest DVC yet.
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Old 07-29-2013, 02:19 PM   #26
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what makes no sense to me are these stripped contracts (no points until 2015)??? I would sooner wait to see what happens with the market than wait 2 years for points or 1 year to borrow! Even those are going for the $80's!!
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Old 07-29-2013, 02:19 PM   #27
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That said, one way in which owners could be impacted in the long run is if the rate of defaults rises dramatically. Owners of a resort must collectively pay for maintenance and upkeep on the property. But if there are fewer owners, the burden increases for those who remain.

Imagine that in 2040, 25% of OKW owners have defaulted (failed to pay loans or dues.) The remaining 75% would have to pay to maintain the resort. That could drive up their dues higher than expected. Some of the costs are variable--25% of the rooms technically no longer need to be maintained or cleaned, there are fewer check-ins for the front desk staff to handle, fewer bus passengers, etc. But the fixed costs like pool operations, security, landscaping, taxes and others still have to be paid regardless of the number of owners.

It's a problem which other timeshares are dealing with today. An undesirable resort in an undesirable location is not a good combination. Lobbying groups are even pushing for legislation to block owners from walking away from timeshares. Since most timeshares have perpetual ownership, this even impacts the heirs of a buyers--the children or siblings of a deceased TS owner are stuck paying for a property they never wanted.

Disney's ability to re-sell older contracts and even rent the rooms to non-owners at nightly rates mitigates this risk. DVC still has means to rid itself of points left behind via default.
In the case of contract defaults, doesn't Disney usually take them back into their inventory? And in that case, doesn't Disney assume responsibility for the maintenance associated with those units?
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Old 07-29-2013, 02:28 PM   #28
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IOA and universal itself has certainly hurt Disney. (Part of the reason they built Expedition Everest). They do very little to appeal to the trill ride seeker.

They have brought a new park into existence about every 10 years. Just about time for a new one....

More DVC opps, cash rooms, everything.

Also, once Cabana Bay opens at US, thats that many more ppl who are NOT staying at WDW
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Old 07-29-2013, 02:29 PM   #29
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I think one needs to consider, when looking at the price jump recently, the overall total cost of the contracts. Unlike a house where a 10% jump in retail price could mean a jump in total price by 10-30+ thousand dollars, a 10% price jump on BWV could be 10-ish dollars per point. On a 150 pt contract that is "only" 1500$.

I feel buyers are paying the new prices because to someone who can "afford" to purchase DVC, an additional 1000-3000$ is not a huge impediment. They may think "I would rather pay 9000$ but I want it for my upcoming vacation so 10500$ is a price I am willing to pay". They are looking less at the percentage and more at the overall dollar amount.
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Old 07-29-2013, 02:30 PM   #30
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what makes no sense to me are these stripped contracts (no points until 2015)??? I would sooner wait to see what happens with the market than wait 2 years for points or 1 year to borrow! Even those are going for the $80's!!
TOTALLY AGREE. I think it's practically lunacy. You are essentially giving your sellers 1/2 years free vacations on your points. You'd be better off paying a few extra dollars per point for a flush contract and then renting those to pay for part of the cost of the contract!

If your contract is 150 pts, and it's stripped till 2015, you are losing the use of a total of 300 points ($3,600 at 12/pt rental, today's rate). That is like giving your seller $3,600 extra. Even if you wouldn't rent them, you're still paying for vacations this year and next out of pocket that you woudn't have to otherwise.

The only argument you could make is that you are hedging against pt increases, but honestly, logically the net present value of the points should go down as the contracts age-- so with a super stripped contract, you are only buying 27 years of use. For a 29 year price. Just wait for another downturn if you are so patient that you don't need anything for 2 years.
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