Paranoid of off site add-ons. Valid or not?

[Mickbee]

Is there any reason to be paranoid about buying an add-on for HHI or VB. Setting aside the "buy where you stay" and the dues for each.

Does anyone have a strong opinion either way? Resale, BVTC terminating the contract, etc.

We are thinking of adding HHI points and am a bit unsure if there are any hidden disadvantages of buying off WDW property. It appears that VB and HHI are much slower sellers that their WDW cousins. Is this a valid concern? I am only thinking in terms of a resale down the road if life takes an unexpected turn. Would these properties have less of a resale appeal than on-site resorts?

Is there any business reason why BVTC could back out of a resort and remove it from the DVC program? I read the Public Offering statement about three times tonight and found parts to be vague on this subject.

Sorry if these are a silly questions but I had to ask.

 

[AnnaS]

I am anxious to see replies on this too. I had the same dilemma. I would of loved to add to HH - perhaps if we ever drive down add a night or two going down or up = I am worried about the availability there. So I, for now, am on waiting list for small add-on at my home resort.

 

[dvcdudes]

I have no idea about them being dropped but I think you can almost guarantee that the resale value would be less. Disney is having a hard time selling these resorts... I can't help but feel you would have an even harder time.
JMHO

 

[deerh]

Good question! I too am thinking of adding on at HHI, and have thought about the same thing. HOWEVER, your investment would be at at MUCH lower cost than WDW. Most add-ons at HHI or VB are 50-100 points. At HHI @3.32\pt that is $332 for 100 points, say 20 years it is $531\year for dues, (if 3%\year increase), I think I could come up with $44\month if I had too, If not, my son and daughter could help pay it. So, I see your point on not being able to sell it, but a small outlay 20 years from now would not be that bad! Also, with HHI's location, READ THE BEACH, I don't think you would have any trouble selling it. Remember, people who buy HHI, can "trade" into the DVC resorts, and by then, how many will be at WDW? OKW, BWV, WLV, BCV, EAGLE P, etc, . Yes, a Oceanfront Marriott might have a better location, but good luck staying on property at WDW with those. Also, if as Dean has indicated that DVC is the 7th most profitable part of Disney, do you not think that they will be more resorts at WDW? I for one do! So, that increases your "trading" power into WDW if you own at HHI or VB. This is JMHO, and not the opinion of anyone else. I think Doc or Dean could answer this question better than me.....
deerh

 

[Mickbee]

Thanks for the input. I am sort of glad that I'm not the only one with these thoughts.

We chose DVC because of the flexibility and the quality that Disney puts into their properties. We still believe that!

Prior to purchasing DVC, we visited a supposed great Orlando timeshare (very large, good name, so we thought). To make a long story short, we checked out within one hour of checking in! The place was substandard at best (Burn holes in the carpet, only three legs on the table, etc.). In other words; a dump! My wife and I agreed that Disney has excellent quality and it is a level of quality we expect from all resorts. So here we are, extremely happy members and are planning to enjoy DVC for the next 40+ years. At that point we will hope one of the DVC resorts has an Old Folks home so we can use our points there.

What I would hate to see down the road is Disney (BVTC or the decision makers) decide they only want to focus on the park locations. Resulting in a sale or change of control of HHI or VB. Then the HHI and VB resorts could be purchased from the nameless TS I mentioned above resulting in a deteriorating level of quality. To us, the off-site properties have a great appeal because they are part of DVC and their location. If they were removed, we would not be as interested in either property.

I had asked in a past post if Disney posts their original estimated sell out dates, expected profit margins etc. and it appears that Disney does not make these numbers available. I think they should to the members to let them make an educated decision.

Overall my concern is focused on Disney's long term plan for these resorts.

If I understand correctly (please clarify if not) Disney has listed it's unused land for sale at VB. Is the reason because the resort was not as popular as they originally thought?

Looking at this from a business stand point; If Disney feels they are not maintaining the level of margins they first expected, how likely are they to keep the properties?

I have asked my guide all of these questions. He put me at ease a bit by indicating the owners have a strong say and they wouldn't let it happen.

Please understand, I have been battling with myself to post such a question because I don't want there to be any negative message implied with this question. I personally think VB and HHI are great. They give members the opportunity to have additional variety other than WDW and remain within their collection. I think they compliment the collection, that is why we are considering purchasing a HHI add-on.

Some people may read this and say an off-site resort is not for us. That may be true, but I want to be able to make the best educated decision. Would anyone advise having an attorney review the Public Offering to ensure Disney can't walk?

If I am way off base and overly paranoid with my concerns, feel free to let me know.

Again thanks for your input and I look forward to hearing more. I also look forward to visiting all of the DVC resorts for many years to come.

 

[WebmasterDoc]

Would anyone advise having an attorney review the Public Offering to ensure Disney can't walk?

I would certainly suggest having your attorney review ANY legal contract which you don't understand or have any questions about.

DVC can't just sell VB or HH, because they are both owned (or will be soon) by the DVC members who purchased at those locations.
There are provisions in the contracts which demonstrate the conditions where the resort would be unavailable for DVC usage. The two which come to mind right now are : If the area was to be condemned and could not be rebuilt OR if the owners/members (that's us) decide to replace DVD as property managers.

I think that deerh is right on with those assumptions!!

Unless either of those events happens (and IMHO it is highly unlikely they will), the resorts, in all probability, will remain as DVC resorts until Jan 31, 2042.

Enjoy!

 

[Dean]

I would agree with the above info. It is possible but unlikely that DVC would drop VB or HH. The two resorts have a slightly lower resale value but are nice resorts. If you want to own and stay there, I wouldn't worry. If you just want into DVC, I'd consider other options including an OKW resale.

 

[Disney Adventurer]

deerh, if DVC is the 7th most profitable part of Disney, what are the first six. And are you talking return on investment or actual profit dollars?

 

[Dean]

deerh is just quoting me and I was quoting a knowledgeable guide. Don't know about the rest of the companies.

 

[sumessefui]

We just did a 100 pt. addon at HHI. I feel it will only take a few years to break even on the purchase. As HHI becomes more popular, we felt it would be good to give ourselves the 11 month window there. At age 60 I am not worried about any of the resorts lasting to 2041.

 

[CaptainMidnight]

Although the off site resorts are not the biggest sellers, I personally believe they add to the value of the onsite resorts and strongly dampen that "we'll have to go to WDW every year" aurgument. Having the beach resort in my opinion "helps" sell the WDW properties. As far as Vero Beach and the land on the opposite side fo the road, I personally would not want to stay on the other side of the road and walk under the tunnel every time I wanted access to the pool and beach. I think that expansion would not have been good for the Vero resort, and the pool and other amenities would probably not be able to handle the expansion very well. It can be moderately difficult to get into the restaraunt sometimes, the green cabin room is not overly crowded, the pool it proported to reach capacity sometimes, and it is nice the beach is not overly crowded, it is not that wide to begin with.

The option of going to a beach resort both at Vero and for many people the shorter drive at Hilton Head in my opinion adds to the appeal of DVC overall. We love to stay at the Vero resort, a wonderful place to relax. The more I have thought about it, the more I'm glad it is not over expanding. The facilities are beautiful, and the combination vacation of some days at WDW staying at the Boardwalk and then relaxing at the ocean at Vero is a wonderful winning combination for us and why we bought DVC.....

 

[Mickbee]

Excellent feedback! All I am hearing is positive feedback. I strongly agree that the beach resorts have appeal to the DVC program. I was sort of thinking "what's the catch?". Location is key. I believe Dean mentioned in an earlier post that HHI is in the top 10 vacation spots in the country.

We like the idea of combining the relaxing vacation with the fun paced one. By putting the relaxing portion first, we are able to kick off the stresses of the daily grind and recharge for the more up-beat WDW portion. I like that the HHI reosrt is not right on the beach for hurricane reasons. If I assume correctly, it is more protected by being on Broad Sound. Is there any truth in this logic? Hopefully we will never find out the hard way.

Would it be safe to assume that they have not sold out yet because when people think of Disney, they think of Mickey and the castle?

I just wish it was a shorter drive from NH!

 

[Richyams]

From someone who talks very candidly about the errors and misteps taken by Disney with the HH and VB resorts, I don't think there is much likelyhood of them being dropped from DVC.

They did sell the land at VB because of miscalculated interest. The resort is actually only a shadow of its original design. They took the HUGE step of withdrawing the contractor subsidy in the dues for those once planned units. The dues increased dramatically and the subsidy ended for those that bought originally. This was a huge move, its undertaking was forced by the dismal sales at HH and VB.

I am very confident that HH and VB will be DVC till the end. I am also very confident that there will never, ever be another off site DVC resort. I am also happy to have them as options.

If you plan regular trips to either of those areas, owning there is a great idea. HH is very difficult to get into during the prime seasons. If you plan to make regular trips there, owning there is a great idea.

 

[bjcgl]

If Disney decides to sell off HH or VB, I don't believe that the owners will have a say at all. At OKW, the governing board is made up of Disney designated people - we are not given a choice - the governing board is not made up of members at all.

 

[donald@home]

Our guide, who is based in Vero, told me that they are expecting Vero to sell out by next spring/summer. They did not tell me this as part of a "sales ptich" but as part of a personal conversation we were having about future plans with the company.

 

[Mickbee]

I had an interesting conversation with a gentleman from Disney this morning.

I asked very direct questions related to the original post. He indicated that Disney/BVTC/DVC is very pleased with HHI and VB. The project is on schedule for the anticipated selling rate (I am not clear if this was only related to HHI because I gathered this info during a HHI specific topic). They knew from the beginning that HHI and VB would sell much slower than WDW properties because of the massive number difference of people that visit Orlando compared to VB or HHI. I also asked about the projected profit margins for the HHI. He indicated they are very pleased and they have beaten their projected goals every year. Though he would not elaborate on the exact numbers (so I was pushing my luck a bit). When DVC went forward with the off site resorts they intended to see their term to the end and still do. I directed the questions to the public offering statement and asked him questions related to sections 6.3(?) and section 8. Basically I asked if BVTC or Disney could sell the property out right without a natural disaster, the property being condemned, etc. He indicated they could but highly unlikely(again stating they plan to see this through the next 40+ years). The members of DVC could also vote BVTC out as the property management. If any of these situations did transpire the property would no longer be part of DVC initially but could be reinserted after the seas calmed.

I was pleased with our conversation, taking it with a grain of salt. However, I felt he was being genuine in his statements. I am currently having the documents reviewed by my attorney but do not anticipate any problems.

We are pleased and we are looking forward to many vacations.

I hope it answers some questions for all. If not, let me know if I missed anything.

 

[plain crazy]

my wife and i bought at vero a while back, before we did we went through the same concerns outlined here. in a nutshell, we decided that:
1) the contract is slanted in dvc's favor about as much as it's legally possible to be, and offers remarkably few protections to buyers. disney could indeed find a way to abandon its participation in the property if it really wanted to, or of course be "voted out" as manager (assuming all the owners were suicidal)
2) disney's real commitment is not contractual, it's reputation based. pissing off thousands of people who either own at vero (or hh), or own at an on-site property but value being able to periodically stay at vero (or hh) is not a smart pr move. it would certainly impede future dvc sales, and would be a fairly visible black eye to disney. does that mean they'd keep managing the resort at a loss? of course not. what it means is that providing it earns any return at all, they'll probably chalk it up to experience and soldier on. at any rate that's our belief. you can ask all the guides and other insiders you like (i have a friend at imagineering), but nobody can really predict what will happen much more than a year or two out. we decided to count on disney's self-interest (or at any rate our assessment of it), and assume that unless it becomes actually painful, it will be in their interest to maintain all dvc locations, including the off-park ones.
3) the sale of the property at vero is a very clear sign that, as rich has often said, disney's plans for that location have been tremendously scaled down from the original concept. my view is, so what? or perhaps more selfishly, great. i like the idea of a more intimate resort, and the way i figure it, disney's miscalculation is our gain.
4) resale: although for now disney is stuck with their unitary pricing scheme, where all points cost the same, reality sets in in the secondary market. i would expect a continuing gap between resales at off-site versus on-site properties. but again, so what? if you buy where you want to stay (which is the first, middle and last rule of dvc), then resale is a non-issue. the only relevance is buying at the best price; if you can beat "new" points (factoring in all costs) by buying "used", great. but thinking about resale is a slippery slope; it suggests that dvc is an investment, which is absurd. and would you really buy at a home you didn't intend using as much because of a higher resale value you never expect to realize? the logical extreme of the resale value argument is to never buy at all, but to "rent" points from someone else.
************
as you can tell, our conclusion was simple; we wanted vero (my father-in-law has retired there), and we wanted as close as we could get to certainty about getting the room we want when we wanted. we convinced ourselves that disney is likely to be committed to it throughout our time horizon, and we bought.
hope some of that helps.

 

[deerh]

I am currently having the documents reviewed by my attorney but do not anticipate any problems.

Mickabee, let me know what your attorney says on these documents, as I am almost ready to purchase an add-on at HHI. I would like to know if any problems, but don't anticipate any as you have said. It is good to ask all questions, and HHI is a GOOD location as Dean and I have said. I agree with the posts so far, that DVC would not do anything to tarnish it's reputation, and I for one believe it is one of the best timeshares out there. Only 2 I would ever consider, and that is Marriott and Disney, the 2 big players. I would be worried if it was another company, unless I had inside info to the contrary. Thanks again for a great post, it is good to know and check before buying. Kind of like a car, or house, check, check, and check some more to be sure.
deerh

 

[Mickbee]

Deerh, I couldn't agree with you more. I feel if I move forward with something without fully looking into it, I will be uneasy. I will certainly pass on the finding of the attorney.

Thanks to all for the input to this post. It provided great information.

Stay tuned...

 

[Richyams]

Just wanted to disagree with any notion that sales at VB are as expected or better than expected. I do hope that the salesperson was speaking directly of HH. VB has been a MAJOR dissappointment. The dismal sales there forced Disney to sell properties designated for DVC resorts. The absolutely horrible sales experience there forced them to take the major move of ending the dues subsidy and selling the land on the other side of the road.

Any statement by a salesperson regarding sales at VB and any words like "as expected", "brisk", "on track" or anything other than horrible and molifieing is just a plain lie.