First RIV resale contract sold for?

[zavandor]

Perhaps, but what fun is waiting? I also realize I'm being a bit hyperbolic when I say zero chance. Maybe 1%.

I agree 100% with ELMC, there will be no extension for BCV and BWV. There is a very small chance for BRV:
- to avoid to have 3 resorts on sale at the same time
- to align the BRV contract duration to the CCV contracts and then resell both at the same time as one resort
but I wouldn't count on that as well.

Now, let's speak about the 1% chance it might actually happen.
OKW extension was initially offered for $15pp, later increased to $25. Forget those numbers for BCV and BWV. People are currently paying in the vicinity of $150pp for a resale contract with 22 years left. Disney would probably ask $150 or more (in today money, so add inflation) for 15 years extension with direct benefits and unrestricted points.

An extension is not going to happen and even if it happens it'll be VERY expensive.

 

[Marionnette]

I agree 100% with ELMC, there will be no extension for BCV and BWV. There is a very small chance for BRV:
- to avoid to have 3 resorts on sale at the same time
- to align the BRV contract duration to the CCV contracts and then resell both at the same time as one resort
but I wouldn't count on that as well.

Now, let's speak about the 1% chance it might actually happen.
OKW extension was initially offered for $15pp, later increased to $25. Forget those numbers for BCV and BWV. People are currently paying in the vicinity of $150pp for a resale contract with 22 years left. Disney would probably ask $150 or more (in today money, so add inflation) for 15 years extension with direct benefits and unrestricted points.

An extension is not going to happen and even if it happens it'll be VERY expensive.

I think that there will be shorter extensions (not as long as 15 years) at two resorts which will align with DVC’s refurbishment schedule for the three WDW resorts that expire in 2042. This would allow them to continue to have members at those resorts shoulder the shared operational costs during that timeframe. It also allows for staggered sales of the “new” resorts, rather than trying to sell all 3 at the same time.

 

[ELMC]

DVC sets the season points for resorts, September and October are traditionally a slower time for attendance at WDW, hence the lower point values for all resorts. It is a busy time for DVC due to lower point values. While there is the option of walking to HS, I doubt many people do it. People want to stay there because it has a lower point chart. Increase it 50% will change a lot of people’s minds. Small resorts and low point rooms seem to have the highest demand year round in DVC.

While I agree that low point rooms are in high demand, I'm not so sure I agree with your assertion that it is the low point chart driving demand at BWV and BCV. I think that the demand is high because people want to walk to Food and Wine Festival. I agree with you about the point chart being low for those times, however, because when the point charts were developed it was a very different environment. Food and Wine Festival, in fact all the festivals, special events, etc. have done a good job of smoothing attendance out over the course of the year. That's kind of my point. When the points charts were created, attendance was super low during September-November, and BWV and BCV were in low demand accordingly. Now I would argue that they are the rooms with the highest demand just about anywhere on property at any time of year, but the folks at Disney are stuck with points charts crafted based on an old attendance paradigm. I do not think that in the second go around October and November will be in the lowest point category.

There is also a lot of evidence to suggest that the days of the 10 point room are over. The minimum point requirement for a studio (excluding Tower studios- which are not real rooms) in the last four resorts built is 15, 15, 16, and 17. I would expect the new BWV and BCV to follow this pattern. It's a double inflation that a lot of our discussions on these boards have hinted at. 50% more points required at 50% higher price. It's a double whammy.

 

[suemom2kay]

There is also a lot of evidence to suggest that the days of the 10 point room are over. The minimum point requirement for a studio (excluding Tower studios- which are not real rooms) in the last four resorts built is 15, 15, 16, and 17. I would expect the new BWV and BCV to follow this pattern. It's a double inflation that a lot of our discussions on these boards have hinted at. 50% more points required at 50% higher price. It's a double whammy.

BCV is already at 15/16. No matter what they do, they have BCV, BRV, BWV, and OKW (anyone know what percentage of OKW has a 2042 expiration date?). Regardless, that's a LOT of rooms hitting the sales market at one time.

Also, as others have mentioned. The sunset years are going to make booking a nightmare. How will they compensate members that are unable to use their points. And those from other resorts attempting to book any of the 2042 resorts at the 7 month window won't be able to, creating a bottle neck at the non-2042 resorts also. It all sounds like a nightmare. So while they may choose to resell full contracts on one of the four, they are going to have to tread lightly IMHO.

 

[suemom2kay]

While I agree that low point rooms are in high demand, I'm not so sure I agree with your assertion that it is the low point chart driving demand at BWV and BCV. I think that the demand is high because people want to walk to Food and Wine Festival.

Look at the hotel side. I can book a BWI room today for September 19-21 (where I'm already staying at Poly on points) for $364/night.

I could also book a Club Level Standard View at BWI for $476/night for the whole week or a standard room at the YC for $376. Those prices are significantly less than the MK resorts. They are definitely not full if they're offering an AP discount to Epcot Resort rooms.

 

[KAT4DISNEY]

Look at the hotel side. I can book a BWI room today for September 19-21 (where I'm already staying at Poly on points) for $364/night.

I could also book a Club Level Standard View at BWI for $476/night for the whole week or a standard room at the YC for $376. Those prices are significantly less than the MK resorts. They are definitely not full if they're offering an AP discount to Epcot Resort rooms.

From what I understand the bookings at WDW are down for the fall, thus the added discounts. It kind of works this fall but it maybe didn't last fall and maybe won't next fall.

 

[DGHProp]

I don’t agree with this at all. It would cost $$$$ to reinvent BWV & BCV and then they would competing against DVD’s own new properties. In addition 10 point studios are only standard view at Boardwalk Villas. There are many more Garden/Pool, Boardwalk, and Beach Club studios which are 15/16 for most of Fall which is right in line with the other legacy resorts.

Is it a possibility that they won’t offer an extension? Sure, but definitely not ZERO percent. I think it is very likely they WILL offer an extension as that is EASY money without a lot of money needed to pour into major construction and lose out on revenue while the resort goes through this transformation. Lots of variables can and will happen before that decision is made.

Totally agree with you!

 

[suemom2kay]

From what I understand the bookings at WDW are down for the fall, thus the added discounts. It kind of works this fall but it maybe didn't last fall and maybe won't next fall.

Most likely because they withheld discounts until they realized no one was booking rooms without discounts. My real point is that BCV/BWV does not command the prices that CR, GF & Poly do. So... I can’t see them reinventing them to capitalize on a market that MAY or MAY NOT be there at a higher price point. Bookings were down due to non-discounted rooms this fall. IIRC there were no fall discounts until well into July maybe the first part of August. That may be typical of AP discounts but not general public room discounts.

 

[KAT4DISNEY]

Most likely because they withheld discounts until they realized no one was booking rooms without discounts. My real point is that BCV/BWV does not command the prices that CR, GF & Poly do. So... I can’t see them reinventing them to capitalize on a market that MAY or MAY NOT be there at a higher price point. Bookings were down due to non-discounted rooms this fall. IIRC there were no fall discounts until well into July maybe the first part of August. That may be typical of AP discounts but not general public room discounts.

GF has had the top spot for quite a long time and Poly next. BWI is pretty comparable to Poly. BCV and BWV have a typical rack rate that is also pretty close to PVB. BC/YC/CR are virtually identical and that's not really something new either. Remember that Epcot also has Swan/Dolphin right there as "competition" for the Epcot resorts. The point charts at BCV/BWV etc. are pretty much in the past if anything is done with them. DVC loves the point creep that allows them to earn even more in their initial sales.

 

[ELMC]

Most likely because they withheld discounts until they realized no one was booking rooms without discounts. My real point is that BCV/BWV does not command the prices that CR, GF & Poly do. So... I can’t see them reinventing them to capitalize on a market that MAY or MAY NOT be there at a higher price point. Bookings were down due to non-discounted rooms this fall. IIRC there were no fall discounts until well into July maybe the first part of August. That may be typical of AP discounts but not general public room discounts.

I would agree with you that the monorail resorts command a higher price than do the Epcot resorts, but comparing the two groups was never my intention. It also wasn't my intention to compare CRO bookings with DVC bookings, as they are two very different things. The thought I was sharing was that the DVC wings of BW and BC can command higher sales prices and point requirements. Going back to my statement regarding point inflation, two of the resorts I cited with higher minimums are Copper Creek and Riviera, both of which are below BWV and BCV on the pecking order. People are paying 15 points a night minimum to stay at Boulder Ridge. I feel confident saying that could easily be the floor for BWV without an issue.

 

[Jason@dvcstore]

FWIW, I do not recall Disney buying back any resort while sales were still in progress., and DRR isn't even open yet.

Correct. I haven't seen this happen in the past either.

 

[Boomatt]

Both of the listings on Fidelity are still available. 125 pointer was under offer but got put back up with a reduced price. It’ll be interesting to see how long the sit there and what the price finally gets reduced to to move them

 

[suemom2kay]

Both of the listings on Fidelity are still available. 125 pointer was under offer but got put back up with a reduced price. It’ll be interesting to see how long the sit there and what the price finally gets reduced to to move them

Very interesting indeed.

 

[anomamatt]

FWIW, I offered $100 on the 125 point contract when it was first listed. And my offer was declined.

Full disclosure that I own at Riviera (one of 5 resorts I own at), but I bought a fixed week (first week of December) to hedge against potential resale problems. That said, I would buy Riviera for $100 all day. Here is why:

Let's look at the math of staying at Riviera and let's say you are interested in a long weekend: April 2-5, 2020.

- This is 60 points in a Tower Studio.

- The cash rate for a Tower Studio is $1,995. No one pays rack rates, so let's assume you get an amazing 35% off. That ends up at $1,297.

- The DVC rental rate would be $1,020 from DVC Rental Store ($17/point).

At $100/point, you are at $2/year in upfront cost. Add $8.31 for dues. So $10.31 per point... your cost for that room in Year 1 is $618.60. (Yes, the dues will go up yearly, but so will the rack rate for the room).

You are 50% of the best potential cash rate you'll find and 40% off the current rental rate (and rental rates are currently way too low, IMO).

Even if you bought the contract to rent the points out, at $100, you will do quite well.

Of course, my big assumption is that people will want to stay at Riviera. I think that will be the case, but the resort isn't open. If the skyliner is a flop, Riviera could be in trouble. But if people do want to stay there, $100/point will be the bottom. I think $125-140 (in today's $) will be the ultimate settling price for resale.

 

[anomamatt]

And it doesn't matter if John Doe isn't willing to even pay $25/point for Riviera. I see this cited a lot for why Riviera resale is worth so little. Every DVC resort has people that are not interested at any price. If I had to hold Vero or HHI for the length of the contract, I wouldn't buy either for $1. Because hurricanes these days are catastrophic (thank global warming) and the impact of catastrophes on MFs. But anyhow, just because I won't buy them for $1 doesn't mean they are not worth what the current resale rate is.

 

[Bing Showei]

FWIW, I offered $100 on the 125 point contract when it was first listed. And my offer was declined.

Full disclosure that I own at Riviera (one of 5 resorts I own at), but I bought a fixed week (first week of December) to hedge against potential resale problems. That said, I would buy Riviera for $100 all day. Here is why:

Let's look at the math of staying at Riviera and let's say you are interested in a long weekend: April 2-5, 2020.

- This is 60 points in a Tower Studio.

- The cash rate for a Tower Studio is $1,995. No one pays rack rates, so let's assume you get an amazing 35% off. That ends up at $1,297.

- The DVC rental rate would be $1,020 from DVC Rental Store ($17/point).

At $100/point, you are at $2/year in upfront cost. Add $8.31 for dues. So $10.31 per point... your cost for that room in Year 1 is $618.60. (Yes, the dues will go up yearly, but so will the rack rate for the room).

You are 50% of the best potential cash rate you'll find and 40% off the current rental rate (and rental rates are currently way too low, IMO).

Even if you bought the contract to rent the points out, at $100, you will do quite well.

Of course, my big assumption is that people will want to stay at Riviera. I think that will be the case, but the resort isn't open. If the skyliner is a flop, Riviera could be in trouble. But if people do want to stay there, $100/point will be the bottom. I think $125-140 (in today's $) will be the ultimate settling price for resale.

Your case here is sound when you consider a tower studio, but what if you did the same calculations for a preferred view studio? As an owner, securing a tower studio will be akin to getting somewhere between an AKV value room and Club room. Getting a standard view would be akin to a standard view at BLT. A preferred view, which is projected to represent 75% of all rooms is the most likely default.

Most renters on the private market (these boards) will not approach an owner prior to the 11-month window (which would be necessary to secure a tower studio). One is normally well within their 7-11 when a post is responded to on the boards. Most requests are within that window, but not prior to 11-months. So if not exactly at 11 months, for fall frenzy - when Riviera would be most appealing, you would likely be looking at a preferred view. The economic viability of your projections change hugely then.

My concern, personally (and I know not everyone shares this perspective), is that Disney is showing a clear pattern with their policy changes that make The Walt Disney Company the only entity to financially benefit from their timeshare product. Given this gradual pattern of eroding ownership value to that end, how far are we away from rentals being targeted. It's not a stretch to see the Disney justification of "members have asked for it" to apply the same logic that gave us the Riviera restrictions. In this kind of environment, how heavily do you really want to rely on being able to rent to recoup costs or avert loss through an unexpected need to sell?

At the end of the day, this mostly doesn't matter if you're buying it to use it and have the financial fortitude to hold it through life's rough patches. The problem is what's true today may not be true tomorrow, and no one knows what the next 50 years will have in store for them; life is funny that way. So it's understandable that these restrictions will factor into the calculus. How that risk affects value will vary from potential owner to potential owner and until we have a healthy resale market to sample from, no one knows the value of these points.

You may be right. $100 may be a bargain. I just can't say that with your degree of conviction given what Disney has shown to be their new perspective on what timeshare ownership should be.

 

[anomamatt]

Your case here is sound when you consider a tower studio, but what if you did the same calculations for a preferred view studio? As an owner, securing a tower studio will be akin to getting somewhere between an AKV value room and Club room. Getting a standard view would be akin to a standard view at BLT. A preferred view, which is projected to represent 75% of all rooms is the most likely default.

The analysis holds up for any/all rooms. Here is May 2-9 (just to show it's not just one specific set of dates):

(A) Standard Studio (130 points): rack rate = $4,861 ($3160 w/ 35% off); rental rate = $2,470

Year 1 cost @ $100/point = $1,340. [46% off the lowest cash price]

(B) Preferred Studio (162 points): rack rate = $5,722.90 ($3719 w/ 35% off); rental rate = $3,078

Year 1 cost @ $100/point = $1,670. [46% off the lowest cash price]

(C) 1BR Standard view (286 points): rack rate = $7182 ($4,668 w/ 35% off); rental rate = $5434

Year 1 cost @ $100/point = $2,949. [37% off the lowest cash price]

--

If you do the analyses at a different point level:

$125/point

Standard studio = $1405
Preferred studio = $1750
Standard 1BR = $3091

There is obviously a lot "invested" for the owner, so there should be a significant discount for using your points vs a cash purchase (which is why DVC has this whole thing setup and how it makes them money). But looking at the above, I think buying @ $100 is a no-brainer and the settling point will be ~$125.

In this kind of environment, how heavily do you really want to rely on being able to rent to recoup costs or avert loss through an unexpected need to sell?

At today's prices, I would never buy DVC to exclusively rent the points. But at $100/point for Riviera, I would. At $125-150/point (where I think it will settle out), I would not buy them to rent either.

And if one is going to buy solely to rent, I'd argue they really need to ensure the purchase can be considered an irrecoverable sunk cost in their analysis and whether they want to risk doing so.

At the end of the day, this mostly doesn't matter if you're buying it to use it and have the financial fortitude to hold it through life's rough patches. The problem is what's true today may not be true tomorrow, and no one knows what the next 50 years will have in store for them; life is funny that way. So it's understandable that these restrictions will factor into the calculus. How that risk affects value will vary from potential owner to potential owner and until we have a healthy resale market to sample from, no one knows the value of these points.

I absolutely think the restrictions should and will have an impact on resale price. I just don't think it will be as dramatic as people here believe.

 

[EYL]

FWIW, I offered $100 on the 125 point contract when it was first listed. And my offer was declined.

Full disclosure that I own at Riviera (one of 5 resorts I own at), but I bought a fixed week (first week of December) to hedge against potential resale problems. That said, I would buy Riviera for $100 all day. Here is why:

Let's look at the math of staying at Riviera and let's say you are interested in a long weekend: April 2-5, 2020.

- This is 60 points in a Tower Studio.

- The cash rate for a Tower Studio is $1,995. No one pays rack rates, so let's assume you get an amazing 35% off. That ends up at $1,297.

- The DVC rental rate would be $1,020 from DVC Rental Store ($17/point).

At $100/point, you are at $2/year in upfront cost. Add $8.31 for dues. So $10.31 per point... your cost for that room in Year 1 is $618.60. (Yes, the dues will go up yearly, but so will the rack rate for the room).

You are 50% of the best potential cash rate you'll find and 40% off the current rental rate (and rental rates are currently way too low, IMO).

Even if you bought the contract to rent the points out, at $100, you will do quite well.

Of course, my big assumption is that people will want to stay at Riviera. I think that will be the case, but the resort isn't open. If the skyliner is a flop, Riviera could be in trouble. But if people do want to stay there, $100/point will be the bottom. I think $125-140 (in today's $) will be the ultimate settling price for resale.

Money-wise, your reasoning is definitely sound. But for me, I just don't know what the potential downstream effects are on availability with these resale restrictions. Once there are a substantial amount of resale purchasers (with me being one of them) and a hurricane, or life, comes in the way, there may no longer be availability at the Riviera to switch my days to. I saw posts on DIS regarding people who cancelled their reservations due to Dorian... Mostly everyone in that situation had the option to be able to plan another quick vacation. Riviera resale purchasers will most likely not have the same availability to be able to do so. You can view the $100/point as a sunken cost. But the annual dues...that's a lot to lose because of the restrictions.

For me, I'd wait 5 years after Riviera opens to see where the price settles and what effects there would be. Also, if Riviera resale prices do settle between $125 and $140, I'd probably consider buying direct at the cheaper resorts like SSR or OKW. Yes, they expire earlier. But I'd get the blue card, lower dues, can use my points anywhere from the L14 to the future 14, and less headaches.

 

[Bing Showei]

At today's prices, I would never buy DVC to exclusively rent the points. But at $100/point for Riviera, I would. At $125-150/point (where I think it will settle out), I would not buy them to rent either.

Your numbers assume one holds on for 50 years. By spreading out the cost of the initial buy-in over 50 years, it skews the risk involved in buying Riviera and relying on rent in a downturn, even at $100/point. The calculations are based on a year-one cost as $2/point plus dues. That year one cost is actually $100/point. And that's where the risk comes in on a new product that no one knows how to value. Every year you own and rent Riviera, you'll chip away at that $100/point down to $2/point after 50 years, but to dismiss that risk factor from the start (one that everyone can agree is, to some degree, greater on an unknown product when compared to what has been offered historically with Disney's timeshare), it skews what is at stake.

Yes, you can sell your holdings to offset the risk (no one thinks these points will be worth $0), but we have no data to back up what the value of these points will be to even offset the risk. There are two contracts that have been on the market now for a few weeks. No one knows what they are worth yet besides less than $160, for now.

I'll concede that concerns about Riviera resale value are probably overblown. But I have trouble accepting the "no-brainer" position for a product that we have not seen, nor do we have historical data on, to divine value upon.

 

[Hjs33]

At $100/point, you are at $2/year in upfront cost. Add $8.31 for dues. So $10.31 per point... [/QUOTE]

This is why I think Riviera should trade below $100. Using this method I could get Saratoga, Poly, and BLT for less than $10 per point and CCV and AKV for about the same price per point. But with the non-Riviera resort I get to also exchange into other resorts. So I think Riviera should be trading at a discount per point to these other resorts not at a premium.