What is the Future for DVC? Thoughts?

JimMIA · Apr 26, 2016

ronparise said:
Without such a distinction what possible reason would a buyer have for choosing to buy from Disney

Easy F-I-N-A-N-C-I-N-G!

A lot of people cite pixie dust, and feeling like part of a "club," but I think the real reason in many cases is a different type of "Magic" -- financing.

JimMIA · Apr 26, 2016

paxsarah said:
Not as often with the Epcot resorts, but I am looking forward to my RCI exchange into BWV next month. Epcot-area exchanges do still exist.

Yep, and I've seen BLT and AKV as well. But I think the vast majority of DVC's deposits are for SSR.

IF -- and I think it's a big if -- DVC does their deposits straight-up by depositing whatever the member puts into RCI, it stands to reason that most of the deposits would come from the bigger resorts. SSR, OKW, AKV, and BLT are the largest resorts with the largest populations of owners who might make RCI deposits.

But I'm not at all convinced that DVC deposits straight-up!

SueDonJ · Apr 26, 2016

Fletch said:
I can comment since I no longer work for them, Aulani sales are ok but sellout isn't until like another 7 years so if I had to guess, if given a choice, they would have not did that location. Jim Lewis told me they were looking at a 2nd Hawaii location but that's why he is gone. That would be a bad idea. They would love another CA location near Disney but that's hard to come by. Land is FREE in Orlando and that's there comfort zone so I don't see that model changing in the next decade. When I was there, we were pushing him for the Caribbean but not sure Disney can have the control they want out of the US.

Hey Fletch - good luck in whatever you're doing now!

ronparise · Apr 26, 2016

JimMIA said:
Easy F-I-N-A-N-C-I-N-G!

A lot of people cite pixie dust, and feeling like part of a "club," but I think the real reason in many cases is a different type of "Magic" -- financing.

Not terribly difficult to get a loan for a dollar, Heck Id loan you that

but I agree, Ive purchase timeshares that I never would have owned except for the assumable loan

twinmommy19 · Apr 26, 2016

paxsarah said:
Not as often with the Epcot resorts, but I am looking forward to my RCI exchange into BWV next month. Epcot-area exchanges do still exist.

I agree. We originally looked into Wyndham and bought resale points because we knew Disney would be a repeat vacation destination with our then-preschool (now elementary) kids. But as it turns out, we've only stayed at WBC twice. We've exchanged into DVC three times (including next month) and Manhattan Club for next year, and used our points within the Wyndham system several times for Myrtle Beach, Williamsburg, and several other locations on the east coast. Our Disney trips are spacing out much more than when our kids were littler, because while we can still get accommodations at a value, the rest of the experience is costing more and more $$. Now that the kids are growing, they're starting to appreciate the experiences we can get at a wide range of locations.

You guys are missing my point. There is an extremely large market of people who buy DVC specifically because they consider it a huge commodity to be able to walk (or take the monorail) from their hotel into a Disney theme park. The existence of this large market (and the willingness of that population to pay a premium for it) is the reason why DVC will never sell for a dollar like Wyndham points do. Not only does DVC have a 100% monopoly over the timeshare market, but the Starwood Swan and Dolphin resorts are literally the only non-Disney lodging options that offer this access.

So again, I am not saying that there isn't a market of people out there who would prefer to own at one of the MANY gorgeous, spacious Orlando resorts over a DVC ownership. What I'm saying is that I don't think Wyndham Bonnet Creek offers enough relative to the 8+ Orlando resorts run by MVCI, HGVC, and Starwood alone to justify a high price sticker on Wyndham points in order to obtain access to it. That comparative point applies to most Wyndham properties - which is the main reason why Wyndham points deeds don't have much resale value.

vacationhopeful · Apr 26, 2016

twinmommy19 said:
...<snip>... What I'm saying is that I don't think Wyndham Bonnet Creek offers enough relative to the 8+ Orlando resorts run by MVCI, HGVC, and Starwood alone to justify a high price sticker on Wyndham points in order to obtain access to it. That comparative point applies to most Wyndham properties - which is the main reason why Wyndham points deeds don't have much resale value.

Wyndham never has had the level of finish as your stated list of resorts. And for years, the cost of using Wyndham was hundred of dollars LOWER in MFs and other costs than your list (MVCI, HGVC, and Starwood).

Not now. Wyndham's USAGE costs has CLIMB too high. The cost to buy into Wyndham is almost FREE on the secondary market ... it is the ONGOING costs that owners are fleeing from. And also the VALUE gotten for the dollars spent. And there are complex RULES to use the Wyndham timeshare product.

JimMIA · Apr 26, 2016

twinmommy19 said:
So again, I am not saying that there isn't a market of people out there who would prefer to own at one of the MANY gorgeous, spacious Orlando resorts over a DVC ownership. What I'm saying is that I don't think Wyndham Bonnet Creek offers enough relative to the 8+ Orlando resorts run by MVCI, HGVC, and Starwood alone to justify a high price sticker on Wyndham points in order to obtain access to it. That comparative point applies to most Wyndham properties - which is the main reason why Wyndham points deeds don't have much resale value.

I agree with you to a point, but I really doubt if very many people buy Wyndham (or Marriott, or Hilton, or Starwood, or Bluegreen, or...) to vacation at WDW.

People buy timeshares for different reasons. There's no question that DVC is great for WDW, but it is extremely limited once you leave WDW. People buy the larger systems to vacation elsewhere. We were owners of DVC when we bought Wyndham; we bought Wyndham because we couldn't go anywhere we wanted to go, other than WDW, with DVC.

We found that Wyndham had great offerings in dozens of destinations where DVC has nothing. Our stays last summer at Sedona and Flagstaff were way better than any of the zero DVC resorts in AZ. We're going to Smuggler's Notch in a few weeks, and it's much nicer than any DVC's in New England. And in October, Old Town Alexandria -- again, much better than the DVC offerings in the DC area. Wyndham gives us more than 100 resort choices in 60 destinations in the US. DVC has 13 resorts -- 9 of which are in ONE place and the other 4 are in places we don't want to go.

You like to walk and monorail to theme parks; we like to do other things. There's no right or wrong here -- just different strokes for different folks.

paxsarah · Apr 26, 2016

twinmommy19 said:
You guys are missing my point. There is an extremely large market of people who buy DVC specifically because they consider it a huge commodity to be able to walk (or take the monorail) from their hotel into a Disney theme park. The existence of this large market (and the willingness of that population to pay a premium for it) is the reason why DVC will never sell for a dollar like Wyndham points do. Not only does DVC have a 100% monopoly over the timeshare market, but the Starwood Swan and Dolphin resorts are literally the only non-Disney lodging options that offer this access.

So again, I am not saying that there isn't a market of people out there who would prefer to own at one of the MANY gorgeous, spacious Orlando resorts over a DVC ownership. What I'm saying is that I don't think Wyndham Bonnet Creek offers enough relative to the 8+ Orlando resorts run by MVCI, HGVC, and Starwood alone to justify a high price sticker on Wyndham points in order to obtain access to it. That comparative point applies to most Wyndham properties - which is the main reason why Wyndham points deeds don't have much resale value.

I wasn't disagreeing with you (except on the statement that Epcot resorts aren't being deposited into RCI any longer, because they are, albeit sparingly). DVC offers something very exclusive that a certain population is willing to pay a premium for. On the flip side, what they offer is also very limited. What Wyndham (or many other systems) offer is less "special" but more flexible and with arguably broader appeal.

I also think that another reason that DVC points keep their value is that Disney has ROFR and does exercise it. I'm sure there would be more fluctuation if they didn't, though I don't think DVC would ever drop to a dollar, regardless.

twinmommy19 · Apr 26, 2016

I think some you have misinterpreted what I'm trying to say.

To not "pick on Wyndham" - let's instead compare DVC ownership to a fixed week 9 deed for the Wyndham in New Orleans. I'm sure that one retained it's value (like DVC will) because it's a niche market where demand will always (absent another destructive flood) exceed supply and maintenance fees will unlikely ever come close to the crazy prices that folks are willing to pay for a Mardi Gras rental.

In comparison, Disney has a monopoly on a very specific niche market that isn't seasonal (week 9 in New Orleans is only one out of 52), and happens to be large enough to allow DVC ownerships to retain their resale value and also allow Disney to continue selling new deeds. Outside of the Disney area, DVC hasn't made much of an attempt to compete with other TS systems in other regions. They don't need to.

Simple economics.

Wyndham points system on the other hand, competes directly with every other system in the TS industry along with the ownerships people buy non-franchise to trade II and RCI. On a relative basis, the value one gets from owning a Wyndham vs. ownership in these other (non-DVC) TS resales doesn't command a purchase price premium in the resale market (with all the Wyndham perks stripped out as Ron pointed out).

JimMIA · Apr 26, 2016

twinmommy19 said:
I think some you have misinterpreted what I'm trying to say.

To not "pick on Wyndham" - let's instead compare DVC ownership to a fixed week 9 deed for the Wyndham in New Orleans. I'm sure that one retained it's value (like DVC will) because it's a niche market where demand will always (absent another destructive flood) exceed supply and maintenance fees will unlikely ever come close to the crazy prices that folks are willing to pay for a Mardi Gras rental.

:hysterical: You know Ron owns ALL of that week at BOTH of the NOLA Wyndhams...right?

Wyndham points system on the other hand, competes directly with every other system in the TS industry along with the ownerships people buy non-franchise to trade II and RCI.

Of course. And they compete quite successfully, although there are certainly other systems that offer nicer accommodations. Wyndham's differentiation factor is number and variety of locations. They are an "anti-niche" option.

On a relative basis, the value one gets from owning a Wyndham vs. ownership in these other (non-DVC) TS resales doesn't command a purchase price premium in the resale market (with all the Wyndham perks stripped out as Ron pointed out).

I don't know what kind of assumptions you're making there, and frankly I don't know enough about other systems to evaluate that comparison.

But I know two things about my own personal experiences with DVC and Wyndham:

When I sold my 310 point OKW contract after six years, I netted less than 70% of my purchase price. I bought resale, and I paid cash. If I had purchased direct, I would have lost more than 50%.
I purchased 500K Wyndham points at Great Smokys for just under $2000 total, including all closing and transfer fees. When I exit, I will lose no more than $2000 -- and in the meantime, I have enjoyed the rough equivalent of 600-700 DVC points at an equivalent MF rate of well below $4 per DVC point.

Also...you know DVC just "stripped" most of the DVC perks from their resale owners too...right? I'm just waiting for them to take two more pages from the Wyndham book:

a tiered VIP program that bases the perks you get on how many direct points you own
a Wyndham-style different ownership model (like Wyndham's CWA) which gives you additional perks even large direct owners don't get.

bnoble · Apr 26, 2016

I also think that another reason that DVC points keep their value is that Disney has ROFR and does exercise it

Except that we know ROFR follows the market rather than making it. Prices dipped considerably during the recession, and demand was so low that Disney stopped exercising ROFR during that period. Presumably they were acquiring enough through foreclosure to satisfy any sales needs they had.

JimMIA · Apr 26, 2016

bnoble said:
Except that we know ROFR follows the market rather than making it. Prices dipped considerably during the recession, and demand was so low that Disney stopped exercising ROFR during that period. Presumably they were acquiring enough through foreclosure to satisfy any sales needs they had.

OR...they were taking such a bath with foreclosures and the general business downturn that they didn't have the cash to exercise ROFR. Or a combination of factors.

All we really know is that they not only stopped ROFR, they also virtually stopped financing for a period, and then re-instituted financing with greatly increased interest rates and much tighter down payment and credit standards.

I think it's likely that DVD took a real beating with their easy and cheap financing of SSR for people who couldn't really afford it.

twinmommy19 · Apr 26, 2016

HTML:

JimMIA said:
:hysterical: You know Ron owns ALL of that week at BOTH of the NOLA Wyndhams...right?

Of course. And they compete quite successfully, although there are certainly other systems that offer nicer accommodations. Wyndham's differentiation factor is number and variety of locations. They are an "anti-niche" option. I don't know what kind of assumptions you're making there, and frankly I don't know enough about other systems to evaluate that comparison.

But I know two things about my own personal experiences with DVC and Wyndham:

When I sold my 310 point OKW contract after six years, I netted less than 70% of my purchase price. I bought resale, and I paid cash. If I had purchased direct, I would have lost more than 50%.

I purchased 500K Wyndham points at Great Smokys for just under $2000 total, including all closing and transfer fees. When I exit, I will lose no more than $2000 -- and in the meantime, I have enjoyed the rough equivalent of 600-700 DVC points at an equivalent MF rate of well below $4 per DVC point.

Also...you know DVC just "stripped" most of the DVC perks from their resale owners too...right? I'm just waiting for them to take two more pages from the Wyndham book:

a tiered VIP program that bases the perks you get on how many direct points you own

a Wyndham-style different ownership model (like Wyndham's CWA) which gives you additional perks even large direct owners don't get.

The point is that there is only so far the price for DVC resale a will ever drop so long as the demand and price point for their rentals remains significantly above maintenance fees. That's all. Enough folks want the Disney access the same way enough folks want stay in New Orleans for Mardi Gras relative to the number of properties there. And enough folks want to stay mountainside at a top ski resort. Geography is one of the safer bets in time sharing. Every else can change...

SMHarman · Apr 26, 2016

At current point prices, and with the new restrictions, I can't see why I woukd ever but DVC over renting from a David or similar.

twinmommy19 · Apr 27, 2016

SMHarman said:
At current point prices, and with the new restrictions, I can't see why I woukd ever but DVC over renting from a David or similar.

I thought pretty much all of the restrictions were based on whether you own ANY DVC points purchased directly from the developer? If that's the case - prices will probably dip a bit resale and folks who want to own DVC will just buy the minimum size contract required directly from DVC.

I agree with you though. I'm not going to go to Disney enough times in our lifetime to make ownership worth it for us. Renting is more cost effective for us (or staying non-DVC via II/RCI trade) Was hoping to trade in via RCI but now they aren't depositing much at the DVC resorts where I'd want to stay over Marriott Lakeshore or some of the other options.

JimMIA · Apr 27, 2016

twinmommy19 said:
I thought pretty much all of the restrictions were based on whether you own ANY DVC points purchased directly from the developer? If that's the case - prices will probably dip a bit resale and folks who want to own DVC will just buy the minimum size contract required directly from DVC.

Yes, that is the case...for now. But that could easily change, especially if enough people buy small contracts direct just to get member benefits. The Mouse is neither blind nor stupid.

It would be a simple matter for DVD to adjust the requirements for an AP discount, for example. "Ok, starting today you have to own 100 developer points to get any AP discount, and if you want to buy the Gold AP, you have to own the normal minimum initial purchase of 150-160."

Easy minor tweak, and there is nothing anyone could do about it but whine.

JimMIA · Apr 27, 2016

twinmommy19 said:
HTML:

The point is that there is only so far the price for DVC resale a will ever drop so long as the demand and price point for their rentals remains significantly above maintenance fees. That's all.

Eventually, I think DVC resale prices will drop to near zero as resorts approach the expiration of their RTU life and annual maintenance fees rise to a too-high level. But that's a few years off at the earliest.

Clearly DVC will retain value better than most timeshares -- at least for the WDW resorts, and probably also for VGC, for the convenient location reason you cited earlier. I'm not sure the rental option is really that big a deal, because DVC could radically change that picture pretty easily. They can't eliminate renting, IMHO, but they can certainly make it more difficult and much less cost-effective.

elleny76 · Apr 27, 2016

"People who buy DVC specifically because they consider it a huge commodity to be able to walk (or take the monorail) from their hotel into a Disney theme park. " .[/QUOTE]

BINGO! You are right. We own in Wyndham, HGVC, Starwood and DVC. Nothing is better than stay at SSR :cheer:

Who wants to drive in vacation? we dont :shrug:

We are walking distance to DS, boat, bus..etc we love SSR.:whoopie:

stanleyu · Apr 28, 2016

As for resale prices dropping drastically: one can only hope! since we ALREADY own DVC we will get all the special offers based on our current ownings. And if prices do drop significantly I'll be buying more.

SMHarman · Apr 28, 2016

stanleyu said:
As for resale prices dropping drastically: one can only hope! since we ALREADY own DVC we will get all the special offers based on our current ownings. And if prices do drop significantly I'll be buying more.

I'll message you when I want to go see the mouse.

moonlightgraham · Apr 28, 2016

I've owned DVC and Wyndham for years and bought both resale. I'll give Wyndham the advantage for number of locations but everything else DVC is head and shoulders better. From attention to detail, caliber of employees to service they win hands down. And you don't have to beg off a sales meeting to get a damn parking pass at every visit!

Good example, last year we spent a week at Aulani then a week at Kona Hawaiian Resort. Should have done it in reverse. After Aulani I could sense the family's disappointment. Now KHR is a nice property but it's no Aulani and I too felt some disappointment in the difference in everything I mentioned above. Bottom line: our DVC trips are special. Our Wyndham trips not so much.

I use my DVC points for DVC lodging, the perks have little value to me. Like Stanleyu if resale prices drop I'll just get more points.

Sent from my iPhone using Tapatalk

twinmommy19 · Apr 29, 2016

stanleyu said:
As for resale prices dropping drastically: one can only hope! since we ALREADY own DVC we will get all the special offers based on our current ownings. And if prices do drop significantly I'll be buying more.

Nah you don't want that to happen. If it does, it means DVC has become the next Harborside (off the charts maintenance fees). The only way the price of DVC ever falls to anywhere near a dollar is in that scenario. Or obviously, since they are RTU, when the term of remaining only has a few years left (but that would be the case for any property).

stanleyu · Apr 29, 2016

SMHarman said:
I'll message you when I want to go see the mouse.

good luck with that!

lprstn · May 2, 2016

I have to say, after visiting their Hawaii resort - I prefer the DisneyWorld resource by 10! Crowded and not the same feel you get at the Disneyworld location. I would forego visiting their other resorts if you want what you get at the main resort. Disney should save their money and invest in something else besides other properties.

twinmommy19 · May 5, 2016

The points I made were never intended to imply there aren't plenty of folks out there who prefer Wyndham ownership over DVC.

Wyndham points will continue to be worth nothing so long as plenty of non-franchise RCI lock-off properties can also be purchased for next to nothing with very low maintenance fees (say under $800) that can be deposited for +70 or more TPUs. It would be hard to justify spending thousands to own Wyndham instead which is why Wyndham also goes for next to nothing. Nothing great to differentiate from non-franchise.

What is the Future for DVC? Thoughts?

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