home News forums Reviews Trade links

Go Back   The DVC Boards at MouseOwners.com - the place to talk DVC and Walt Disney World > VACATION CLUB RESOURCES > Latest DVC News and Rumors
 Register FAQ Calendar Search Today's Posts Mark Forums Read

 Notices

Reply
 
Thread Tools Display Modes

Old 02-16-2019, 12:09 PM   #91
Crafty
Grand Villa
 
Crafty's Avatar
 
Join Date: Oct 2013
Location: South Carolina
Posts: 2,000
Default

I think that demographics will play a major role. The Boomers, being older, are not as worried about 2042. They see themselves as largely done with the parks by then. As Boomers, ourselves, we went with longer contracts to leave them to our daughter. The recent situation with maintenance fees has caused us to question that decision. Will she be able to comfortably pay them if wages remain stagnant, etc.

Younger families will look more to the future than Boomers. They will probably be deterred by the 2042 resorts because of the reduced years remaining.

However, for that age group, birth rates are declining. Millennials are waiting longer to start families and in some cases declining to have kids altogether. Student loans and job insecurity are also causing delays in home ownership and long term financial commitments. This generation will present problems for Disney.
Crafty is offline   Reply With Quote
Old 02-16-2019, 12:31 PM   #92
Pooh128
Studio
 
Pooh128's Avatar
 
Join Date: Sep 2018
Location: NJ
Posts: 76
Default

Quote:
Originally Posted by FCivish3 View Post
In essence, ROFR is really just another buyer competing in the market. And they are a buyer at a disadvantage, since they cannot ever offer a price. Especially not a low price. So, they have to wait for others to set the market price, and other buyers will know that if they set the market price too low, then they will lose it to the buyer named ROFR. The result will be that just having ROFR grabbing cheap contracts will tend to be pushing prices back up. Just as it is doing now.

There is a reason why Disney wasn't nearly so active in the ROFR market in the past and that is because they realized that buying a lot of contracts back would tend to push up the resales prices, which they didn't want for multiple reasons. But once they raised their own Direct prices enough that they could start to make a little profit by 'spinning' the ROFR contracts, they moved into the ROFR market much more aggressively.

I think that Disney continues to sell ROFRed contracts from 'closed resorts' mostly just to be able to prove to Direct Buyers, buying their current sales property (CC) that, "See, it IS worth what we are charging. Because, just look at the prices for all those other OLD resorts. They are also high."
Your hypothetical set Poly’s price at $25 PP, that would never clear ROFR when DVC can sell those points for $220.
Pooh128 is offline   Reply With Quote
Old 02-16-2019, 12:37 PM   #93
FCivish3
One Bedroom
 
Join Date: Apr 2018
Location: Lost in Disney
Posts: 328
Default

Quote:
Originally Posted by Pooh128 View Post
Your hypothetical set Poly’s price at $25 PP, that would never clear ROFR when DVC can sell those points for $220.
This is true. And buyers in the market will realize it is true. So they won't make an offer of $25. What will they offer? $50, $75, $100? Oh, wait, we are already there.

The point of this is, that since a DVC Contract is a Real Estate Interest, it has Real value as REAL Estate. (Where do you think the name 'Real Estate' comes from?) Now, unlike most homes, etc., this real estate has an expiration date. But it is still worth SOMETHING and has some intrinsic value. Therefore, Disney would not be able to drive the price down, below market value, no matter what they do.
__________________
-=- Fred

Poly, AKL, BLT

FCivish3 is offline   Reply With Quote
Old 02-16-2019, 01:40 PM   #94
FCivish3
One Bedroom
 
Join Date: Apr 2018
Location: Lost in Disney
Posts: 328
Default What is the value of Beach Club and when will it drop?

Quote:
Originally Posted by tomandrobin View Post
Once more people start looking at the "true" value of the contracts, the quicker it will start. I keep trying to teach and preach value over cost per point. The time is coming.....5 years maybe?
What is the True Value of a contract? Let's look at some numbers.

* To rent a night at a Beach Club Standard Studio costs about $500 per night. (More, actually, but I am trying to be fair.)

* To use points to stay at a Beach Club Standard Studio costs about 25 points per night. (Less, actually, but I am trying to be fair.)

That means that each point at Beach Club is worth $20. (More, actually, but I am trying to be fair.) Now, subtract from that $20 the 'approximate' Membership Dues of $7. And that makes each point at Beach Club actually worth about $13.

Now, assume that Beach Club is selling for about $130 per point (I know a lot of contracts out there for Beach Club are costing a bit more, but there are still some in that range.) That means that, if you purchased Beach Club when there are 10 years left on the contract, you would pretty much break even. (It is true there are purchasing fees, etc., to get a contract. However, there are also room taxes, parking fees, etc., if you rent a room with cash, so, again, DVC points come out ahead and are worth even more than we are saying.)

So, what this means, is that, if you take the emotional element out of it, Beach Club prices (and Boardwalk, and Boulder Ridge and HHI and Vero Beach) wouldn't really start dropping until we get down to close to 10 years remaining. And then the price would start dropping at a bit more than 10 percent per year.

Do I really believe this is how it will happen? No, I don't. But it might. Especially when you consider that Room Rates at DW have been going up considerably faster than inflation for many years. The more it goes up, the quicker you get your money back if you have points. But if this is what it is truly worth, and if each point is worth $13 per year (in value towards a room rental) then Beach Club, with 23 years left on the contract, would be worth $299 per point, right now. Which is more than double its actual price. HOWEVER, I do think that as we get closer and closer to the end, and the numbers become clearer and more manageable for everyone, then the price really will start to be much more reflective of the actual dollar value/dollar per point purchasing power.
__________________
-=- Fred

Poly, AKL, BLT


Last edited by FCivish3; 02-16-2019 at 01:55 PM.
FCivish3 is offline   Reply With Quote
Old 02-16-2019, 01:42 PM   #95
Goofygrl
Add-on Aficionado
 
Goofygrl's Avatar
 
Join Date: Jun 2009
Posts: 12,388
Default

Quote:
Originally Posted by FCivish3 View Post
This is true. And buyers in the market will realize it is true. So they won't make an offer of $25. What will they offer? $50, $75, $100? Oh, wait, we are already there.

The point of this is, that since a DVC Contract is a Real Estate Interest, it has Real value as REAL Estate. (Where do you think the name 'Real Estate' comes from?) Now, unlike most homes, etc., this real estate has an expiration date. But it is still worth SOMETHING and has some intrinsic value. Therefore, Disney would not be able to drive the price down, below market value, no matter what they do.
Sellers won't sell for $25/pt. Free market really isn't that stupid. Buyers would try and buy at that if they could. And they'll pay more because it's worth more than $25/pt.
__________________
Three Little Circles
Goofygrl is offline   Reply With Quote
Old 02-21-2019, 10:50 PM   #96
MattinColorado
Studio
 
Join Date: Mar 2012
Posts: 84
Default

Quote:
Originally Posted by Crafty View Post
I think that demographics will play a major role. The Boomers, being older, are not as worried about 2042. They see themselves as largely done with the parks by then. As Boomers, ourselves, we went with longer contracts to leave them to our daughter. The recent situation with maintenance fees has caused us to question that decision. Will she be able to comfortably pay them if wages remain stagnant, etc.

Younger families will look more to the future than Boomers. They will probably be deterred by the 2042 resorts because of the reduced years remaining.

However, for that age group, birth rates are declining. Millennials are waiting longer to start families and in some cases declining to have kids altogether. Student loans and job insecurity are also causing delays in home ownership and long term financial commitments. This generation will present problems for Disney.
You couldn't be more right. The aging Boomer population is driving a lot of these types of policies
__________________
84 June - Off Site
90 July - The Swan
93 July - The Dolphin
06 October - Coronado Springs
07 September - Saratoga Springs studio
07 November - Springs One bedroom
08 September - Saratoga Spring Grand Vila Split Trip
08 September - Port Orleans French Quarter Split Trip
09 January - OKW grand vila
10 February - Saratoga Springs Tree Houses
11 March - Polynesian Long Houses
14 October - BLT Grand vila
16 March - Magic 7 day Cruise
17 March - VRBO House
18 October - AKL Grand Vila
19 October - BLT Grand Vila
MattinColorado is offline   Reply With Quote
Old 02-21-2019, 11:13 PM   #97
tink711
Add-on Aficionado
 
tink711's Avatar
 
Join Date: Sep 2013
Location: North Carolina
Posts: 6,583
Default

Quote:
Originally Posted by MinnieMomofOne View Post
Not to be paranoid or anything but I’d rather not come up with ideas that could be used against us.
__________________

Always dreaming of my next visit ...





tink711 is offline   Reply With Quote
Reply

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump


All times are GMT -4. The time now is 11:18 PM.

© MouseOwners. "MouseOwners" is a registered servicemark. This is an unofficial fan site and is not affiliated in any way with The Walt Disney Company, the Disney Vacation Club, Disney Vacation Development, or any of their affiliates or subsidiaries. All Disney images © The Walt Disney Company.
Powered by Forum Software