Just back with OKW news! 50 years contract upgrade!

[pilferk]

Huh? Is there anything in our contract that say this? I've always felt our maintenance goes to pay for things for *our* benefit. I sure didn't expect to pay dues to turn over a pristine resort to Disney. (Though maybe that clause in the contract and I missed it.)

Specifically? No. I don't think so.

But in the way the dues and budget are set up? Has to be.

Unless you assume that, as you approach the 2042 date, your dues will go DOWN because there will not be a budget line item for provisional/planned replacement of common elements.

I mean, you're not paying to have a full "refresh" done on the resort in 2042 as the last DVC guest walks out the door...but you ARE paying to keep the resort up to standards so that the last DVC guest (assuming there was going to be a 2042 expiration) would have a facility up to usable standards as they ARE walking out the door.

For example: If projected roof replacement is slated for 2039, you'll have paid for it with your dues...but will only really get 3 years worth of "use" out of that roof with your points. If a batch of couches is due to be replaced in 2041...they will be. That kind of stuff.

 

[bnlbebes]

Adding on years doesn't interest me much, butting adding on points, particularly at GCV when it is announced seems much more useful and FUN. I'm feel pretty certain that this will not be the last time to extend our terms of ownership, and as 2042 approaches. I will leave it up to our one-and-only DS to decide if he'd like to pay for the privilege of vacationing at DVC.

 

[JimC]

Accompanying the letter is the Notice for the Special meetings of the Board and of the Members on 9/24:

The special assessment, extension fee, will be $25 per point -- no mention of a discount but that could be in the mateial they send out in late September.

Members can satisfy the special assessment by paying the fee OR by executing a deed conveying their DVC interest from 1/31/2042 to 1/31/2057

It appears that you have a one time irrevocable option.

The notice and meetings appear to be governing law formalities because the first meeting begins at 2:00 pm and the second meeting begins at 2:05 pm. Just enough time to meet the requirements of each meeting's agenda.

 

[JimC]

Huh? Is there anything in our contract that say this? I've always felt our maintenance goes to pay for things for *our* benefit. I sure didn't expect to pay dues to turn over a pristine resort to Disney. (Though maybe that clause in the contract and I missed it.)

We pay a separate fee as a reserve for refurbishment. So the funds will be there for renovations as per the schedule DVD uses.

 

[Mai Ku Tiki]

Right now the resale market seems to put very little value on post-2042 years. SSR seels for about $5/point than OKW. I doubt the difference between 2042 and 2057 OKW contracts will be much greater until we get closer to 2042.

But comparing SSR to OKW might skew things....??
If next year, Member X has 200 OKW pts to sell expiring in 2042 and Member Y has a 200 pt OKW contract for sale with an expiration of 2057...which would be purchased first? I think the average buyer would prefer the longer contract UNLESS the 2042 contract is soooo cheap, it becomes hard to pass up.So to sell the 2042 contract, Member X, would HAVE to sell much cheaper.
(Not necessarily cheaper than today's prices but cheaper than Member Y.)And of course, the closer we get to 2042, the more this occurs.

I'm basing this on 2 younger colleagues who purchased SSR (sight unseen) ONLY because of the extended yrs. They both have young families and the longevity appealed to them.

 

[salmoneous]

For example: If projected roof replacement is slated for 2039, you'll have paid for it with your dues...but will only really get 3 years worth of "use" out of that roof with your points. If a batch of couches is due to be replaced in 2041...they will be. That kind of stuff.

Remember, the management company works *for us*. They have to act *in our interests*.

If couches need to be replaced in 2041, we, the members will have a choice. Should we pay dues to turn of nice couches to Disney? Or should we live with ratty couches for a year. Unless there is some provision in the membership agreement I'm not aware of, it's up to us. If the give-it-back-to-Disney-nice crowd outnumbers the cheapskate crowd, we should pay for the couches. Otherwise, yes, dues go down at the end as the cheapskates stop wanting to spend for maintenance.

And, yes, I realize that DVC isn't run as a Democracy, and the process isn't so smooth. We wouldn't just have a vote on couches. But, in theory, we do decide how the resorts should be run.

 

[TTFN!]

Remember, the management company works *for us*. They have to act *in our interests*.

If couches need to be replaced in 2041, we, the members will have a choice. Should we pay dues to turn of nice couches to Disney? Or should we live with ratty couches for a year. Unless there is some provision in the membership agreement I'm not aware of, it's up to us. If the give-it-back-to-Disney-nice crowd outnumbers the cheapskate crowd, we should pay for the couches. Otherwise, yes, dues go down at the end as the cheapskates stop wanting to spend for maintenance.

And, yes, I realize that DVC isn't run as a Democracy, and the process isn't so smooth. We wouldn't just have a vote on couches. But, in theory, we do decide how the resorts should be run.

Actually I believe it is the Member Representative of the Board who 'represents' the Member's interests. And these Member Reps, are full time DVD/DVC employees.

We have very little 'real' power or choice.

 

[tjkraz]

But, in theory, we do decide how the resorts should be run.

Well, we can pick the entity that's in charge of managing the program, but then the day-to-day decisions are left to them. There is no mechanism in place for members to unite in 2040 and say "we've decided no more sofas."

At that late date, the most likely form of protest for dissatisfied members will be to default on dues payments. Whether DVC can, or will, seek other damages from the member remains to be seen.

 

[pilferk]

TTFN and tjkraz have already given you your answers.

No, we really don't have much in the way of choices on this one. Whatever the refurb schedule determined by Disney is will be what happens, and what we pay. Which is pretty much what members have been doing/paying since DVC's inception.

You might not like it, but....that's the way it is.

 

[chalee94]

If next year, Member X has 200 OKW pts to sell expiring in 2042 and Member Y has a 200 pt OKW contract for sale with an expiration of 2057...which would be purchased first? I think the average buyer would prefer the longer contract UNLESS the 2042 contract is soooo cheap, it becomes hard to pass up.So to sell the 2042 contract, Member X, would HAVE to sell much cheaper.
(Not necessarily cheaper than today's prices but cheaper than Member Y.)And of course, the closer we get to 2042, the more this occurs.

the other factor is that DVC will be able to ROFR those relatively cheaper OKW-42 contracts...and turn around and resell them as shiny OKW-57s.

i wonder if that might actually keep the prices of OKW-42 contracts a little higher than current prices - if only for smaller contracts as potential new members try to avoid ROFR...?

 

[salmoneous]

Actually I believe it is the Member Representative of the Board who 'represents' the Member's interests. And these Member Reps, are full time DVD/DVC employees.

We have very little 'real' power or choice.

Disney employee or not, the rep has an obligation to act in the interests of the members. That said, the 15-year extension may have just made the whole coversation moot.

 

[JimC]

Remember, the management company works *for us*. They have to act *in our interests*.

If couches need to be replaced in 2041, we, the members will have a choice. Should we pay dues to turn of nice couches to Disney? Or should we live with ratty couches for a year. Unless there is some provision in the membership agreement I'm not aware of, it's up to us. If the give-it-back-to-Disney-nice crowd outnumbers the cheapskate crowd, we should pay for the couches. Otherwise, yes, dues go down at the end as the cheapskates stop wanting to spend for maintenance.

And, yes, I realize that DVC isn't run as a Democracy, and the process isn't so smooth. We wouldn't just have a vote on couches. But, in theory, we do decide how the resorts should be run.

But it is not the maintenance dues that pay for the capital and refurbishments It is the reserves and Disney will already have that money from us. So I think we would prefer to have them keep the resorts and not delay refurbishment.

 

[mac_tlc]

Boy, a lot happens when you go on vacation for a little while. We were at OKW two weeks ago, conversing with our guide about an AKL add-on. Didn't hear about this possible "offer" from her.

As I started reading the four pages of posts I thought the add on would be a good idea, not for DW and I (82 and 81 in '42) but for our kids who at 20 & 12 still love WDW. But, the more I read, the more I thought that I'd rather take the $7,125 (285pts x $25/pt) or $4,275 (285pts x $15/pt) and add-on at AKL, which we were considering doing anyway. Don't think I can swing bith an AKL add-on and an OKW extention. Plus if I can make up my mind by Friday, I can still get DDP's.

Wonder if this announcement will have an impact on member add-on sales? Sure seems like it will for us.


mac_tlc

 

[rugrats2001]

Disney employee or not, the rep has an obligation to act in the interests of the members. That said, the 15-year extension may have just made the whole coversation moot.

Sure, the rep has an obligation to act in the interests of the members, the majority of who want the resort kept in tip-top shape until the end.

 

[rugrats2001]

the other factor is that DVC will be able to ROFR those relatively cheaper OKW-42 contracts...and turn around and resell them as shiny OKW-57s.

i wonder if that might actually keep the prices of OKW-42 contracts a little higher than current prices - if only for smaller contracts as potential new members try to avoid ROFR...?

I predict that DVC will pay EXACTLY THE SAME at ROFR for OKW 2042 & OKW 2057 .

Why would DVC pay any more at ROFR for OKW 2057 than for OKW 2042? They are exactly equal once DVC gets ownership - All are OKW 2057 to DVC, since DVC will ALREADY own the 2042 to 2057 part of all non-converted points, and all will be sold as OKW 2057.

 

[chalee94]

I predict that DVC will pay EXACTLY THE SAME at ROFR for OKW 2042 & OKW 2057 .

Why would DVC pay any more at ROFR for OKW 2057 than for OKW 2042? They are exactly equal once DVC gets ownership - All are OKW 2057 to DVC, since DVC will ALREADY own the 2042 to 2057 part of all non-converted points, and all will be sold as OKW 2057.

sounds like we agree...(?)

i think the market value of OKW-57 contracts will be high enough initially to avoid any threat of ROFR, but the OKW-42s might get a little bump (for a few years at least) since DVC will indeed consider them "exactly equal" and could begin to ROFR more aggressively.

(but i'm admittedly just guessing and have no idea how this will actually play out.)

i am curious to see how this will change add-on pricing through DVC...

 

[rugrats2001]

sounds like we agree...(?)

i think the market value of OKW-57 contracts will be high enough initially to avoid any threat of ROFR, but the OKW-42s might get a little bump (for a few years at least) since DVC will indeed consider them "exactly equal" and could begin to ROFR more aggressively.

(but i'm admittedly just guessing and have no idea how this will actually play out.)

i am curious to see how this will change add-on pricing through DVC...

This sounds about right to me!

I would guess that OKW will be the same base price as SSR & AKV, with perhaps a little better 'discount' or 'promo' thrown in to boost sales.

 

[tjkraz]

I predict that DVC will pay EXACTLY THE SAME at ROFR for OKW 2042 & OKW 2057 .

Why would DVC pay any more at ROFR for OKW 2057 than for OKW 2042?

I would answer your question by pointing out that DVC has different motivation for ROFR on the 2042 vs. 2057 contracts.

On the 2057, their goal is to keep resale prices within reach of DVC's direct pricing. Assuming that the base price will have risen to about $107 per point by the time DVC starts selling these OKW points, the net cost will be around $97 after discounts. That puts the ROFR threshold for the '57 contracts around $87 per point. Anything less and the relative bargain that can be obtained via resale will start to erode DVC's direct sales.

On the 2042 contracts, DVC's motivation will be to re-acquire contracts so that they can sell them with the additional years. While they may be more agressive in ROFR here, I can't see them going as high as $87 per point. The main reason is that very, very few people in the market for DVC points is going to make an OFFER in the upper-$80s for a 35-year contracts. People can't even get that now for OKW with prices being in the mid-$70s. No offer means no chance for ROFR.

My guess is that DVC's ROFR on the '57 contracts will be in the $85-87 neighborhood.

On the non-extended '42 contracts, I'm guessing ROFR may rise from the current level (upper-$60 / low-$70s, I believe) to the $72-75 neighborhood. At that level DVC stands to make around $25 per point when they add the extra years and sell for around $97.

That's my guess.

 

[salmoneous]

the net cost will be around $97 after discounts. That puts the ROFR threshold for the '57 contracts around $87 per point. Anything less and the relative bargain that can be obtained via resale will start to erode DVC's direct sales.

Just a thought: right now Disney seems happy to let $80/81 SSR contracts go through ROFR - so $13/14 less than the current discounted sale price. I wouldn't expect anything different from OKW.

 

[Basser]

Got our letter today. They are offering an additional 15 years for $25 a point.
that would extend our membership to the year 2057. They will be sending more information at the end of September.