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Thread: Older resorts receive price bump

  1. #1
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    Default Older resorts receive price bump

    As Disney Vacation Club launches sales for Copper Creek Villas & Cabins, most of the older resorts see their prices climb higher.



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    The popular Disney's Beach Club Villas is up to $165 per point with only 25 years left on the contract.

    It will be interesting to see how Disney prices its older DVC resorts as we get closer to January 31, 2042. Beach Club Villas, along with Boardwalk Villas, Boulder Ridge, Vero Beach, and Hilton Head, expires on that date.

    Right now, it doesn't look like having an expiration date less than 25 years away is martially impacting demand for those resorts. Perhaps younger DVC members who will only be in their 50s when those resorts expire are hesitant to buy these "2042" resorts. But I think there are still many buyers, including some of the younger owners, who view DVC as a viable commodity if they can get about 10-15 years worth of use out of their ownership.

    But at some point in the near future, maybe in the next 5 years or so, more and more buyers will begin to shy away from these 2042 resorts.

    When that happens, what does Disney do with its prices for those resorts? Surely, it will have to begin scaling back its price for BCV and the other 2042 resorts. Disney won't be able to price BCV at $165 when there are only 3-4 years left on the life of the deed. We are so use to seeing Disney raise its prices, its hard to imagine that we might see the day that Disney announces yet another price cut on its older resorts.






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    Quote Originally Posted by wdrl View Post
    When that happens, what does Disney do with its prices for those resorts? Surely, it will have to begin scaling back its price for BCV and the other 2042 resorts. Disney won't be able to price BCV at $165 when there are only 3-4 years left on the life of the deed. We are so use to seeing Disney raise its prices, its hard to imagine that we might see the day that Disney announces yet another price cut on its older resorts.
    I suspect demand will rule. You've seen the small trickle of points reacquired at most resorts, so they really don't have to sell these older properties. They could end ROFR entirely and use other recaptured points for cash reservations or one-time-use points.

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    Quote Originally Posted by TimK View Post
    I suspect demand will rule. You've seen the small trickle of points reacquired at most resorts, so they really don't have to sell these older properties. They could end ROFR entirely and use other recaptured points for cash reservations or one-time-use points.
    I definitely see Disney no longer exercising ROFR on the 2042 resorts. But I think Disney will still be reacquiring a lot of points from the 2042 resorts due to increased foreclosure activity.

    I suspect foreclosures will increase significantly as we approach 2042. Currently, if an owner wants to get out from under their DVC maintenance fees, they can sell their deed on the resale market. And for some owners, they might actually sell it for more than they bought it originally. But as we approach 2042, the resale market will probably crater for the 2042 resorts. BCV owners might have to give away their deed just to get rid of them. When that happens, owners might decide its just easier to not pay the annual dues and let Disney take back the deeds.






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    Quote Originally Posted by wdrl View Post
    I suspect foreclosures will increase significantly as we approach 2042. Currently, if an owner wants to get out from under their DVC maintenance fees, they can sell their deed on the resale market. And for some owners, they might actually sell it for more than they bought it originally. But as we approach 2042, the resale market will probably crater for the 2042 resorts. BCV owners might have to give away their deed just to get rid of them. When that happens, owners might decide its just easier to not pay the annual dues and let Disney take back the deeds.
    As long as the rental market remains brisk, DVC will stave off the worst of the market crater. In fact, I could see people capitalizing on continued demand for Disney accommodations. If 2037 rolls around and people are virtually giving away contracts, some enterprising individuals will pick them up to use for 5-6 years of rentals.

    As for direct pricing, DVC isn't going to be able--or willing--to sell someone a contract with under 10 years remaining. So any discussion of a direct price becomes moot.

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    I agree that DVD would have a hard time selling points with very limited years remaining, but as Tim points out, Disney may be happy to use the rooms for cash.

    Prices will dictate supply/demand. Prices that Disney charges for the rooms. There will be plenty who would be happy to buy and rent, but only if they know they can make a nice enough profit below what Disney charges for rooms.

    If BCV is $30/pt in 2032 that's $3/pt plus MFs for the annual cost. MFs will keep rising, but if there's still a healthy rental market people will be happy to make money.
    Additionally, if someone thinks they will be going to Disney for 5 times in those last 10 years, it may be a nice discount off what Disney charges to buy the points and use them.

    Time will tell at what people believe the risk/reward is worth buying points with fewer years left.

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    I would think at some point DVC would start noticing that many deeds are being used only for rental. At what point will DVC decide which ones are a commercial business? IRS definitely should be interested as well.
    --Denise

    Scheduled upcoming Disney trips:

    03/27/17 - 04/05/17 - Boulder Ridge Villas at Disney's Wilderness Lodge - 37th Anniversary
    11/30/17 - 12/14/17 - Bay Lake Tower at the Contemporary Resort

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    Here's some thoughts I had:

    They raised the prices for the 2042 resorts and the discussion of course is their worth as they wind down their years, etc. etc. I love reading all of the conjecture. Here's some more:

    What if they are planning at some point to offer extensions like OKW a few years ago? I forget how many years were left on OKW when they offered the 15 year extension but wasn't it around 20-25 years left? I can't remember. Anyway, if they do that, then the price increase makes more sense (I think?). I hope they do offer the extensions, as I would definitely do it. I own in BCV and VWL.

    Also, the extension possibility could be good for previous VWL owners, now Boulder Ridge people. It would bring the years closer to their new offering Copper Ridge. (Although, they may not want to do it quite yet, bc they want to lure as many buyers as possible to Copper Creek.)

    Another factor for this increase could be the membership perks part. I have friends who wanted DVC but didn't want the $165/pt cost (at the time) so they bought the minimum pt total from Disney Direct for the resort they wanted, (50pts). Then, they bought resale for the rest of their wanted points and did it based on the resorts with the best maximum years, like AKV, or BLT. Their thought was that it was the best of both worlds, the perks and the cheaper price. With Disney raising the price of everything means that folks are paying more for the minimum pt allowance, just to get the perks each year.

    A final thought on why they are raising the prices is the overall yearly rise in the cash price at these resorts. It goes up every year...and they may have done the math and said, you know, we can raise these point values to this amount and it's still going to be overall cheaper for someone who wants to stay at Disney through the years to be DVC, than for them to pay the average rise in cash prices year to year...And this is even with the limited years left on the contract.

    You know, it's hard to figure any of this out and know for sure. BUT, I am glad I bought when I did and wish I could've bought in sooner...but I was a younger man then and couldn't afford it.

    Have a great day everyone!

    -highpoint7

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    Quote Originally Posted by Highpoint7 View Post
    Here's some thoughts I had:

    They raised the prices for the 2042 resorts and the discussion of course is their worth as they wind down their years, etc. etc. I love reading all of the conjecture. Here's some more:
    What if they are planning at some point to offer extensions like OKW a few years ago? I forget how many years were left on OKW when they offered the 15 year extension but wasn't it around 20-25 years left? I can't remember. Anyway, if they do that, then the price increase makes more sense (I think?). I hope they do offer the extensions, as I would definitely do it. I own in BCV and VWL.

    wdrl is telling me that the extensions for OKW were in 2008 when it was 16 years old. BCV is not that old yet, but we will find out in a couple of years.

    However, I am not sure that the OKW extension offer was a success. And if it doesn't make a lot of money for DVC and Disney, I can't see them making an offer to extend the expiration date. Although what they will do with so many 40 - 50 year old hotels coming back on the hotel market and those resorts need remodeling must be giving someone nightmares.

    Also, the extension possibility could be good for previous VWL owners, now Boulder Ridge people. It would bring the years closer to their new offering Copper Ridge. (Although, they may not want to do it quite yet, bc they want to lure as many buyers as possible to Copper Creek.)

    I really don't think DVC will want BRV to compete directly with Copper Creek until it is near the sell out date.

    Another factor for this increase could be the membership perks part. I have friends who wanted DVC but didn't want the $165/pt cost (at the time) so they bought the minimum pt total from Disney Direct for the resort they wanted, (50pts). Then, they bought resale for the rest of their wanted points and did it based on the resorts with the best maximum years, like AKV, or BLT. Their thought was that it was the best of both worlds, the perks and the cheaper price. With Disney raising the price of everything means that folks are paying more for the minimum pt allowance, just to get the perks each year.

    A final thought on why they are raising the prices is the overall yearly rise in the cash price at these resorts. It goes up every year...and they may have done the math and said, you know, we can raise these point values to this amount and it's still going to be overall cheaper for someone who wants to stay at Disney through the years to be DVC, than for them to pay the average rise in cash prices year to year...And this is even with the limited years left on the contract.

    I really think that DVC when considering price increases, they only consider whether the market will bear the new price. Will enough people buy it? Will there be too many costly defaults on loans or annual dues? If we have to take the default back, when we resale the points will it offset the lost and still give us a good profit? How much will DVC/Disney profit from the increased selling price? And will it look good on an annual report?

    You know, it's hard to figure any of this out and know for sure. BUT, I am glad I bought when I did and wish I could've bought in sooner...but I was a younger man then and couldn't afford it.

    Have a great day everyone!

    -highpoint7
    You are right is all conjecture, but interesting to those of us that care about all these details.
    --Denise

    Scheduled upcoming Disney trips:

    03/27/17 - 04/05/17 - Boulder Ridge Villas at Disney's Wilderness Lodge - 37th Anniversary
    11/30/17 - 12/14/17 - Bay Lake Tower at the Contemporary Resort

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    Quote Originally Posted by denlo View Post
    You are right is all conjecture, but interesting to those of us that care about all these details.

    Denlo, couldn't agree more on your points back to me. On the point about extension of BCV and VWL folks. With Boulder Ridge, that was the other thing I was thinking, no direct competition w/ CC. Concerning OKW extension success or failure, my memory serves me as well that it wasn't as successful as they thought it would be. The selling price started at $15/pt but then they rose it to $25/pt for the extension. However, (and this i'm hoping to be the case), OKW isn't BCV. When they offered that extension of OKW, my gut feeling was that they were trying to get the 'nostalgia' buyers who had bought into that first DVC resort when this whole thing started. It just didn't take off like they thought it would. OTOH, the popularity of BCV's, the continued expansion of yearlong events at Epcot that draw folks year round, it just makes me wonder if that is just different and could be a big success if they offered it to owners. Everyone that I know who owns there would do it. But, in 25 years, who knows what that place will look like. Their last reimagining of the rooms I love and they look brand new to me. I don't know. I hope they will do the extension. Well, whatever they decide to do with it in 2042, or before, I'm sure they will include or open it up to previous owners first because it is a ready made base of people to reinvest in it. It seems to me a win-win for home resort owners no matter what they do. -highpoint7

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