What do you think will really happen in 2042 or 2054?

[whithouston]

So, what do you think will really happen when the 50 year contracts run out in either '42 or '54? I am thinking that DVC will offer some sort of renewal or extension at that time. Just curious what you think.

Thanks!

Scott

 

[wheelcap]

I agree - they'll probably offer some kind of 'roll-over' membership, or something to that affect. Along that line of thinking . . .

I've wondered what happens to the value of our contracts as we get closer to the end date - if they don't rollover. Will the value drop out, thereby disabling our ability to sell them? I mean - if there's only, say, 7 years left to the contract, why would anybody pay for a resale membership? I'll have gotten my value out of it, but . . . just makes me wonder what'll happen?!?

 

[jarestel]

I've wondered what happens to the value of our contracts as we get closer to the end date - if they don't rollover. Will the value drop out, thereby disabling our ability to sell them? I mean - if there's only, say, 7 years left to the contract, why would anybody pay for a resale membership? I'll have gotten my value out of it, but . . . just makes me wonder what'll happen?!?

I think the minute Disney stops building DVCs, the value of the contracts will drop since they will no longer be propping them up with ROFR. Of course, who knows when that will be, but I'm sure they will reach a point where the property is "overbuilt". That, plus the low number of years left as we approach expiration will severely limit the value of any DVC contracts. It will be a good time to buy but not so good for selling.

Still, assuming WDW remains a popular destination and it costs $1000/night to stay at the Polynesian in 40 years, DVC contracts will still have some value.

 

[CaliforniaDreaming]

I think they'll offer an extension for current members. I'm sure we'll see a decline in resale prices as 2042 gets closer...

 

[mickeymarcor]

As I understand it, the reason why DVC contracts have an expiration is that the lands on which the resorts are built, are leased from a third party. So once the lease ends, so does the DVC contract. Any extension or rollover will depend on DVC's and the third party's willingnes to enter into another agreement. With the dates so far into the future, it'll a crap shoot determining what DVC will do. In the meantime, you can gloat in the fact that you stay at primo resorts while saving some serious coin.

 

[kend58]

My take is at around 25 to 30 years so 2017 to 2022 Disney will begin major renovation work and will at that time start offering existing owners the chance to extend there ownership out for an additional number of years say 25 more for some amount per point. During that cycle DVC members will likely but perhaps not if reserves are being kept high enough also face some one time fees for improvements DVD may have ways around this but the assesment model is within the contract provisions for DVC ownership. This event will cause a disruption in the resale values as owners who can barely afford there dues have to rent or sell to cover there assesments if DVD treats these new owners as equals and provides them the extension option then most people will likely take that angle and some pay up to get the extension. Some won't extend their contracts and for them the remaining useable years will become a signifigant factor in the resale value of the contracts.

Without using present value calculations DVC properties "new from DVD" points cost approximately $1.80 AKL to $2.50 BCV per point per remaing usable year plus Dues. Resale contracts seem to fall out at about or less than those prices. IMHO resale prices will have to decline when the price per remaining year at current per point price levels approaches $3 in a few years and $5 10 years from now plus dues (which will also be going up) the recovery periods will begin to be to high a percentage of the remaining useful life to make prepaying appear attractive to enough buyers.

Now having already assessed all of that for myself I am still looking for a couple of small DVC contacts because I want the Disney magic and right now the remaing useful life returns reasonable value on a discretionary luxury purchase. I just think it is only realistic to recognize that DVC owners will either have to re-ante to get extensions or face the reality that there remaining useable years on the contract cause contract resale values to decline. Exactly when and how all that will happen is the mystery. That a contract with a fixed life will eventually decrease in value is a certainity in terms of present values and a reality in terms of economics. DVC points are not sufficiently rare enough to over come the economic realities the question is how far down the road will reality hit.

 

[CarolMN]

As I understand it, the reason why DVC contracts have an expiration is that the lands on which the resorts are built, are leased from a third party. ...(snip).....

The "third party" is Disney itself (or some subsidiary wholly owned by Disney). In any event, somehow the profits from all involved (i.e., DVC, DVD & the "thrid party" ) end up on the Disney Corporation's bottom line.

FWIW, I think any extension (yes or no) will be decided based on the projected impact on Disney's bottom line.

 

[Stitch 03]

As I understand it, the reason why DVC contracts have an expiration is that the lands on which the resorts are built, are leased from a third party. So once the lease ends, so does the DVC contract. Any extension or rollover will depend on DVC's and the third party's willingnes to enter into another agreement. With the dates so far into the future, it'll a crap shoot determining what DVC will do. In the meantime, you can gloat in the fact that you stay at primo resorts while saving some serious coin.

According to the guide I spoke to last week, it is indeed a land lease. According to the lease agreement the land needs to be handed back to the lessor in the same shape in which it was acquired. This implies that the buildings will be bulldozed. However, this does not mean that a new agreement will not be struck where the villas will meet a completely different fate.

 

[tjkraz]

When SSR was brought in at 2054, I thought 12-year extensions were a possibility. But now that AKV is on the books at 2057 with other resorts likely to follow at later dates, I think extensions are less likely.

DVC is setting itself up to start re-selling all new 50-year contracts in 2042...and then 2054...and then 2057... There will be a whole new generation of Disney fans then. If sales and marketing are the biggest part of DVC's expenses, I don't see the appeal in just getting someone on the hook for 12 years when they can sell the points for 50.

If they do offer 12-year extensions, I wouldn't expect the terms to be particularly appealing. After all, Disney holds all of the cards.

Maybe they can do it both ways. Perhaps they could re-deed some OKW units for a 2054 ending date and others for a 2092 end.

I also think the decisions are likely to be made on a resort-by-resort basis. I don't think there is any guarantee that the six 2042 resorts will continue to exist beyond that date. For instance, HHI and VB could simply be sold off. It took them 10 years to sell out Vero. Do they really want to do that again? VWL and BCV are so small that they could just be rolled up with the cash rooms and cease to be part of DVC. OKW could be leveled with the land used for a new resort development.

IMO, if current members want to continue to use DVC after 2042, the most appealing scenario would be to buy an SSR or AKV contract via resale for a fraction of the "new" cost.

 

[PSC]

I'll be well into my 80's when my interest in BWV runs out (and even older when my SSR finishes). My guess is that older resorts will be leveled and re-built. Existing owners may be given some sort of an incentive to buy into the new replacement resort. If you think about it, it's not much different than opening a new resort, and it provides a way to force rehabs on what will likely be aging resorts.

 

[Margie J]

I'll be too old to worry about it. By that time I've gotten well over my cost of purchase.

They may make us a special offer to buy back in at our point levels. New owners might have another price offer.

If the properties are maintained and renovated there would be no reason to level them and rebuild. 50 years is not an old property. Changes in appliances, furniture and fixtures can (and have) be made to keep things modern.

 

[eliza61]

So, what do you think will really happen when the 50 year contracts run out in either '42 or '54? I am thinking that DVC will offer some sort of renewal or extension at that time. Just curious what you think.

Thanks!

Scott

Sweet Jesus Scott,
I think you just made me fry my brain cells, I can't figure out my kids camp schedule for next month, never mind 2042!

i think DVC will come up with some way to get us disney pod people to keep coming back, walkers, canes and all.

 

[Dean]

I think the resorts will close on 31 Jan for a complete redo or demolition. I don't see extensions,too complicated and not enough $$$ for DVC to keep it up. They'd need some 70-80% of owners to extend to make it worthwhile and I don't see enough people doing so. But the real intersting thing to me is how it will end. I have predicted a limitation of banking and borrowing and either a prorated limitation on points the last couple of years OR some type of lottery type situation. In either case, I suspect members will only have to pay for the points they have to use that last year.

 

[BWV Dreamin]

Alot has been said of the devaluation of contracts that expire in 2042. I think BWV and BCV have very desirable locations. Disney may make heavy incentives for owners to renew at expiration or near expiration. Think of what it would cost to purchase new? I think owning at these properties, even towards the end of expiration, will be an advantage to those current owners. But of course, there is the " Dean Factor"!

 

[crisi]

I think the resorts will close on 31 Jan for a complete redo or demolition. I don't see extensions,too complicated and not enough $$$ for DVC to keep it up. They'd need some 70-80% of owners to extend to make it worthwhile and I don't see enough people doing so. But the real intersting thing to me is how it will end. I have predicted a limitation of banking and borrowing and either a prorated limitation on points the last couple of years OR some type of lottery type situation. In either case, I suspect members will only have to pay for the points they have to use that last year.

I think that will depend on how many members are active. Its possible that as the contract reach end of life, they won't be worth reselling, and the owner population may have aged enough to just not bother to go. Disney may end up with a lot of points sitting around that don't have maintenance paid on them - the seniors who own them (me) or my heirs may not be interested in dues. If they don't have a lot of bookings at the end, there won't be a lot of reason to put limitations around using those points or hold a lottery for points.

We'll be old enough not to care if we go or not, and my kids may or may not wish to go.

 

[canda]

Lots of articles I read refer to 2040-2060 as being terrible times for our world. Many enviromentalist (Im not talking about the scientist, more the self important types) bring doom and disater taking place during this time.



I think i read that 2042 is the end of Social Sec.

2050 is the end of all fish life on this planet.

around that time the doomsday clock expected to reach its point. (atomic war)

No more DVC!!!!!!! That will be the worse part of it.

 

[ralphd]

As I understand it, the reason why DVC contracts have an expiration is that the lands on which the resorts are built, are leased from a third party. So once the lease ends, so does the DVC contract. Any extension or rollover will depend on DVC's and the third party's willingnes to enter into another agreement. With the dates so far into the future, it'll a crap shoot determining what DVC will do. In the meantime, you can gloat in the fact that you stay at primo resorts while saving some serious coin.

Disney owns the land.

 

[tjkraz]

Disney owns the land.

"Disney" may, but not "Disney Vacation Development." DVD leased the land from other Disney entities, built the resorts, and sold us the points.

 

[tjkraz]

Alot has been said of the devaluation of contracts that expire in 2042. I think BWV and BCV have very desirable locations. Disney may make heavy incentives for owners to renew at expiration or near expiration. Think of what it would cost to purchase new? I think owning at these properties, even towards the end of expiration, will be an advantage to those current owners. But of course, there is the " Dean Factor"!

If they have "very desirable locations", why would Disney consider "heavy incentives" to get owners to renew?

From Disney's standpoint, I just don't see the justification for selling a shorter term than 50 years. If they offer 15-year extensions, DVC incurs 3 times the costs of selling the same points as if it were a single 50-year contract. Why? Why not sell once for another 50 years and guarantee the return business indefinitely?

Even if they do decide to offer a term of less than 50 years, I wouldn't count on any major "current owner discounts." If Disney has to incur additional sales expenses due to shorter contract terms, it will be the consumer who pays the price.

I still think that for those who want to visit beyond 2042, their best option will be SSR or AKV via resale. And a long as they stay in the ROFR business, DVC could even offer SSR or AKV points to people who don't want to jump-in for another 50 years.

 

[LoveMyDisneyCats]

I'm sure they'll do something...
There's alot of members out there like myself who joined because it's a way to take affordable vacations to WDW consistantly. I would NEVER be able to go 2-4 times per year if I didn't have my DVC accomodations. And if I could afford (key word being "if") to go down just once a year or every other- I'd be staying at Pop or AS.

Disney knows that they "have" all of us disney fanatics and will want us to keep coming! Besides, once they get us there, we spend a fortune on their food, merchandise, passes, etc.! And who is it that keeps referring DVC to all of our friends or families or at the least brings them down when we travel (to spend their $$ there too!)

It might not be a great deal that they offer us, but I'm sure there'll be an offer.

At least that's what I have to hope for. I "only" be 66 in 2042. There is no chance that I will have tired of Disney then. I will never tire of WDW! (contrary to what all of those non-disney people keep telling me!) Heck, me and DH will be retired with big fat pensions (hopefully) by then so we better have some sort of vacation club to count on!!!