What Happens When Contracts Expire?

The end date for Saratoga Springs is 2054. Technically all of old Key West will be in the club until 2057
2054 - that's only 36 years away :rotfl2:
I'll be happy if I can still use DVC then. I will be happy if I can do anything in 2054 (I'll only be 96 then):darth:
 
It is generally believed that the land (and improvements) revert to the property owner (Disney), who will in turn re-lease them to Disney Vacation Development (DVD). DVD will then re-develop the properties and sell them as new timeshares with 50 year expiration dates.
I am under the same impression. It's good so our committment is only for a set time frame and we enjoy while we have it
 
2054 - that's only 36 years away :rotfl2:
I'll be happy if I can still use DVC then. I will be happy if I can do anything in 2054 (I'll only be 96 then):darth:
Not to pick on you but to make the point, this is a pet peeve of mine. DVC is still a financial consideration both in terms of an asset AND a liability. If one wants to consider it thrown away at a point closer than the end of the RTU, they should also look at both a return on investment of a shorter timeframe AND an exit/transition strategy. Hopefully at 12 years out (2054) SSR will still have some real value and there will be a liquid market to sell it.
 
Not to pick on you but to make the point, this is a pet peeve of mine. DVC is still a financial consideration both in terms of an asset AND a liability. If one wants to consider it thrown away at a point closer than the end of the RTU, they should also look at both a return on investment of a shorter timeframe AND an exit/transition strategy. Hopefully at 12 years out (2054) SSR will still have some real value and there will be a liquid market to sell it.
OK Dean; I’m not feeling picked on. I’m comfy with our status. We’re 7 years in, and have gone every year, breaking even based on my math. Our primary goal is escaping January in the mid-atlantic. Secondary goal is to take grandkids, and that’s planned for 2020. Beyond tbat, we have the option to resell, or deed to the kids. I would, however, be happy to still be going in 2054!
 


Just curious. Does anyone know how much owners had to pay to extend their contract. We own at BWV and am holding out for an extension. Especially with the new Star Wars land opening.
 
Just curious. Does anyone know how much owners had to pay to extend their contract. We own at BWV and am holding out for an extension. Especially with the new Star Wars land opening.

I believe $25/point with a discounted offer that eventually settled at $15.

But any extension is unlikely to be handled in the same manner and most certainly wouldn't be for those prices.
 
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BWV won't be offered an extension. They will want a new points chart.
I doubt they'll pick and choose for the WDW 2042 resorts. If they offer an extension it'll likely be all or none. Both sides of the equation make sense from DVD's standpoint, taking them back vs offering an extension. The one that would have made sense to do differently is OKW and it's already extended. For an extension the issue is going to be how to get enough participation to make it workable and I sincerely doubt they'll want to fool with a 25 yr or less extension as a core sales option. Plus they have to do it quite differently than they did with OKW both because that didn't work and because they risk an issue with those owners who either extended or didn't back when. Now I certainly could see them selling off VB & HHI, I'm very skeptical they'll extend those.
 
BWV won't be offered an extension. They will want a new points chart.
In general, Disney will do what they believe will make them the most money. It is their responsibility to the shareholders. If conditions stay (WDW draw and general financial conditions) as they have basically been for 25 years, I believe they will "upgrade them" and resell. Current owners may get "rofr" of rebuying ("extending") at near new market prices, especially for BWV and BCV. Those properties have only increased in popularity since opening, and with DHS and Epcot adding more attractions and lands that should continue. It does no make sense to substantially discount them to current owners, if new owners are there willing to pay full price. A modest discount of 10-20% to cover marketing, sales, and short term DVD ownership of a lot of properties may make sense, but I would not expect more than that.
 
The end date for Saratoga Springs is 2054. Technically all of old Key West will be in the club until 2057
Not quite. The number of units that are dedicated by the remaining points will still be in the club. Disney can rent the remaining units as regular rooms. It's the reverse process as when a resort is added. DVC can only use points on the number of rooms that have been allocated by number of points sold.
 
I got one over on Disney! I plan on being dead before AKV expires so I effectively have lifetime ownership! With any luck I'll shaft them on the last years dues as well...
 
Not quite. The number of units that are dedicated by the remaining points will still be in the club. Disney can rent the remaining units as regular rooms. It's the reverse process as when a resort is added. DVC can only use points on the number of rooms that have been allocated by number of points sold.
As I said, ALL of the resort will be in the club until 2057 but Disney will own a large portion of it. They may rent it or sell again but either they or a new owner will have to compete with the legacy owners for reservations. But they can't carve out a portion of the resort unless they obtain a full ownership of a given "unit" or get a vote of the owners there to do so to modify the POS accordingly.
 
And there's this whole DVC2 hoo hoo with Riviera and Reflections to take into account as well. If they hold with this approach, it almost certainly means nothing gets extended in 2042, and OKW becomes even more of a burden because it is de facto extended and stays DVC1 until 2057.
 
There is no word from Disney on what will happen when the resorts hit their expiration dates. There are a lot of guesses...but nobody really knows.

Perhaps the Disney higher-ups may have an idea, but no info has ever been released.
 
And there's this whole DVC2 hoo hoo with Riviera and Reflections to take into account as well. If they hold with this approach, it almost certainly means nothing gets extended in 2042, and OKW becomes even more of a burden because it is de facto extended and stays DVC1 until 2057.

At least for the non-OKW resorts, it seems likely that DVD would want to let the DVC1 RTUs die (rather than "extend"). They can offer existing owners the "exclusive opportunity" to "extend" their ownership "at a discounted price," but effectively they'd be buying a new RTU with T&Cs closer to DVC2's restrictions. OKW complicates that model for one resort, but I don't think that changes how they'd handle the others.

There is no word from Disney on what will happen when the resorts hit their expiration dates. There are a lot of guesses...but nobody really knows.

Perhaps the Disney higher-ups may have an idea, but no info has ever been released.

As Disney, why wouldn't you keep your options open until closer to expiry? They probably have an idea but no sense indicating the direction until they see how things fall into place.
 
As Disney, why wouldn't you keep your options open until closer to expiry? They probably have an idea but no sense indicating the direction until they see how things fall into place.

Or until they know what executives will be in charge at the time. Any long-term plans are irrelevant in the face of executive turnover.
 
I can see SSR getting extended like OKW was, but the land near the two Epcot DVC resorts is way too valuable now, and will be insanely valuable in another 20 years. I'm of the opinion there is ZERO chance they extend those 2 resorts at all, much less anything resembling what they did at OKW. They would make so much more money taking control, refurbishing and reselling all new contracts. Not sure about the other resorts like AKL, or the monorail 3. I'll be 80 years old when BLT expires, I doubt I'll care really if I'm still around.
 
DVC Beyond 2042

The DVC resorts expiring in 2042 are HHI, Vero Beach, Beach Club, Boardwalk Villas, and Boulder Ridge. Old Key West is NOT expiring, it has already been extended to 2057, but a large number of people will be giving up their rights to use it, after 2042. Only those who paid for the extension will still have it.

Disney will most likely sell off HHI and Vero Beach. The are not that popular, they are not that profitable, they are worth less per point than other resorts, and there is no real reason to keep them, since their original purpose was to help Disney broaden and expand DVC, but they failed in that, for the most part. ALSO, Disney has undergone a change in philosophy, from making DVC into an amazing timeshare that would serve all 'Vacation Club' owners, into a much more focused, money making pipeline funneling people directly into Disney World. Perhaps the main reason Disney is likely to sell them off, is because they drag down the value of DVC points. This makes it harder for Disney to sell the more expensive points at other resorts. So HHI and VB probably don't need to be a part of the future of post 2042 DVC.

BCV, BWV and Boulder Ridge have a total of about 1000 units between them. A bit more units than are in the resorts of OKW and AK (both of which have a little over 700 units, counting a room of any size as a unit), but significantly less than SSR, with 1300 units. Disney will probably take all three of those resorts and immediately start renting the units out, while reselling them as quickly as possible, as new DVC units. They might remodel some, but DVC Membership Dues should have maintained them in excellent shape, and they pretty much will be ready to turn around and be rented or sold almost immediately. Why would Disney tear them down and go to the additional expense of building new units when the currently existing ones will be doing just fine? I know that we, as American's expect that buildings will be new, but that is just because of the 'brief' age of our country. I was recently in Europe where many fine hotels in numerous citis have been in use for over 250 years, as hotels, and are still doing just fine. I don't see why Disney would need to tear down buildings that are only 50 or 60 years old.

It is not clear how much of OKW is owned by people who have extended, and what percentage is going to expire, but there will probably be a not insignificant portion of it that will be looking for new owners after 2042. On the other hand, Disney has been exercising ROFR on Old Key West at the rate of about 80 contracts per year. Clearly, if they keep this up for 10 years, then through their ROFR they will end up converting most of the 'expiring contracts' into 'non-expiring contracts,' since most of them will have been extended by the time we reach 2042. 80 per year for 10 years is 800 units, which is more than the total number of units at OKW. Still, however many unextended units remain, those units will be added to the sales inventory, BUT, they will be short term sales of 15 years or so. I DO believe that Disney will try to sell them, just in order to avoid paying the Maintenance Fees, but they won't be able to sell those points for full price. And if they think current 'Resales' with discounted prices is adversely affecting their more expensive Direct sales, then I see OKW at 15 years as being an even bigger problem. There are certainly many people, who would jump on an OKW contract giving them 15 years for $70 per point, rather than a more expensive 50 year contract somewhere else at $200 per point (equivalent, adjusted for inflation). So, unless they 'convert' most of the expiring contracts into extended contracts by then, it could be a problem for them. My guess is that they are doing just fine, by picking up OKW with ROFR at the rate they are, and so this probably won't be a problem.

So that still leaves the question of what they will do with BCV, Boardwalk and Boulder Ridge in 2042. I think it is likely that Beach Club will just be converted into a 'Villa Hotel.' It is a very desirable location and they will almost certainly NEED the hotel rooms by then. And they will put the Boardwalk and Boulder Ridge units on the DVC market, while also using many of them as hotel rooms in the intermediate timeframe. If they are not trying to sell BCV as DVC, then their other resorts will give them a total of around 700 'new DVC units' to sell. This is quite manageable. And with proper planning and preparation, and by not building any more DVC units or new hotels in the last 4 years before 2042, I really don't see Disney having any problems. DVC will be 'refreshed' and will continue to go on as it has before.

A perhaps bigger problem for them will be what to do with Saratoga Springs and its 1300+ units when it expires in 2054 (I did list this wrong, but it is now correct), and then OKW with its 700+ units only 3 years later.

If they clearly make a decision that they will be putting the DVC properties back on the market, as DVC properties, then I could see them starting to take ROFR on even more contracts, and selling them at Full Price or Full Price +, (even with a very short period of time remaining) with the stipulation that once the resort returns to Disney, they will put it back out as a DVC resort, and give whoever has ‘bought in,’ in those last few years, an automatic extension to the end of the New DVC contract. In other words, they would be picking up old units on the market, towards the end of the contracts and then ‘Preselling’ the ‘new’ DVC units by selling interest in the expiring contracts, at a high price.
 
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