2042 Impact on NON-2042 resorts - what % decrease in resale value?

[JPKnapp]

What % decrease in value would you expect a resale contract at BLT would have in 2043 since only 9 resorts are available for booking? And, do you agree we will see a decrease in value starting in 2032?

A key component of holding value for a DVC contract is the ability to use resold points at other resorts. More options = More value. Clearly, Disney is trying to make this a direct-only benefit. So, as resorts get sold/overhauled in 2042, a new wave of direct resorts will open; and those "new" direct resorts can only be booked with "direct" points.



How much impact do you think it'll have as we inch toward and past 2042?

 

[Wakey]

It’s a long time until 2042. Who knows what could happen by then. There will be a lot of new resale buyers by then, who will be seriously stymied from staying in non home resort anyway. This is because once all the 2042 are gone (resold as new resorts) then those who bought after the latest restrictions will only have 7 resorts available in WDW. Problem for them then is they will be competing with the resold 2042 owners and all the new ones from Riv onwards to book that remaining 7 WDW resorts. Even if they all have the same booking window, the imbalance they will face will make it much more difficult than now to book the resort they want from their dwindling choice.
So definitely resale prices will be hit as this new reality hits home if things stay as they are now.

 

[Yinn]

What % decrease in value would you expect a resale contract at BLT would have in 2043 since only 9 resorts are available for booking? And, do you agree we will see a decrease in value starting in 2032?

A key component of holding value for a DVC contract is the ability to use resold points at other resorts. More options = More value. Clearly, Disney is trying to make this a direct-only benefit. So, as resorts get sold/overhauled in 2042, a new wave of direct resorts will open; and those "new" direct resorts can only be booked with "direct" points.

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How much impact do you think it'll have as we inch toward and past 2042?

On BLT? Minimal amount. Most who buy BLT do so because it's hard to grab the room of their choice; or because it's close to MGK, or because it's a monorail resort, or because of it's low dues. The expiration of 2042 resorts wouldn't change any of those one bit.

The contracts that will be hurt will be from the people who bought a lot of sleep around points without any intention of ever starting at their home resort. But I personally think the majority of the resorts will retain their value and will not fall off a cliff. Why? First, those sleep around points have to go somewhere. If they like their homes, not a big deal. If they don't; they'll funnel into the remaining resorts. Which will make availability a little more scarce, which makes a home resort at those locations desirable - which helps support pricing.

Further, all of future resale DVC will be even more restricted than the current 14, future 9 all the way down to Copper Creek where it'll finally be equal to all of the rest of resales. Every new resale starting with Riviera will be restricted to 1. So until it's just Copper Creek remaining out of the original 14 any resale option at SSR, AKL, OKW, BLT, VGC, AUL, VGF, PVB is still more options than a non-direct resale purchase at RIV or future DVC resorts (disclaimer: for now)

Lastly, just look at the rental and cash market. None of those people have the option to go elsewhere; yet there is still high demand. So as long as there is desire to stay in those resorts, and an avenue for cash flow (rental revenue) then those resorts will continue to be pretty steady.

 

[Sandisw]

On BLT? Minimal amount. Most who buy BLT do so because it's hard to grab the room of their choice; or because it's close to MGK, or because it's a monorail resort, or because of it's low dues. The expiration of 2042 resorts wouldn't change any of those one bit.

The contracts that will be hurt will be from the people who bought a lot of sleep around points without any intention of ever starting at their home resort. But I personally think the majority of the resorts will retain their value and will not fall off a cliff. Why? First, those sleep around points have to go somewhere. If they like their homes, not a big deal. If they don't; they'll funnel into the remaining resorts. Which will make availability a little more scarce, which makes a home resort at those locations desirable - which helps support pricing.

Further, all of future resale DVC will be even more restricted than the current 14, future 9 all the way down to Copper Creek where it'll finally be equal to all of the rest of resales. Every new resale starting with Riviera will be restricted to 1. So until it's just Copper Creek remaining out of the original 14 any resale option at SSR, AKL, OKW, BLT, VGC, AUL, VGF, PVB is still more options than a non-direct resale purchase at RIV or future DVC resorts (disclaimer: for now)

Lastly, just look at the rental and cash market. None of those people have the option to go elsewhere; yet there is still high demand. So as long as there is desire to stay in those resorts, and an avenue for cash flow (rental revenue) then those resorts will continue to be pretty steady.

Cash and rental buyers have the flexibility to go anywhere they want as they choose where to stay.

I do think that as we get closer to 2042, contracts will take some sort of hit because some of the resorts that many trade in to will no longer be there,

BRV, BWV, and BCV are popular. When they are gone, what is left that competes? BLT, VGF and Poly and CCV.

Poly will be out for anyone looking for 1 or 2 bedrooms, CCV is hard to get into now, and VGF has much higher point charts.

So, it will get to a point where resale buyers at those resorts won’t find trading easy..it may push more buyers to direct...decrease in resale buyers may mean sellers have to lower prices.

Having said that, we also don’t know what new types of rules Disney will put in place that could impact resale value.

Yes, owners of SSR who bought to sleep around will have a much harder time for sure.

 

[jarestel]

Every time Disney raises the prices on current or sold out resorts and every time the regular Disney hotels increase in price, it actually bolsters the resale market and even allows resale prices to float up a bit. As long as there is a significant enough differential between direct/rack and resale, people will always be interested in aftermarket purchases even when the years remaining have waned. Some folks don't need a 50 year contract when a 10 year contract will do just fine.

To your point about staying at any of the DVC resorts, some adjustment in expectations will need to occur for resale purchasers as 2042 approaches, but I don't think it's as big a deal to most members as some would think.

That's not to say that resale prices will retain maximum value to the bitter end, but as long as people think there's enough of a savings to justify DVC I expect there will be some value for the remaining resorts into 2042 and beyond.

 

[skippytx]

I bought BLT to stay at BLT. I don't think it will affect BLT much at all.

I can see some softening of say SSR or OKW as they become less attractive as "sleep around points", but the monorail resorts will be fine. If WDW keeps up with the hotel room pricing, DVC contracts will always look good to regular visitors.

22 years is a long time from now, I might not even be a DVC owner at that point as I'll be thinking about retirement in the mid 2040's.

 

[DebbieB]

Add Riviera 2070
Reflections 2072?
Others? I doubt DVC will stop building

 

[DaveNan]

Add Riviera 2070
Reflections 2072?
Others? I doubt DVC will stop building

I think they will have measured building for the next 15 - 20 years. But they need to have a plan for how to handle the 2042 issue. My guess is about 7-10 years in advance, you may see them starting to buy up all contracts in ROFR on the expiring resorts at bargain prices and selling packages where you get the time to 2042 as a "bonus" on a 2092 expiring resort. "Buy now in 2035 at the new BCV, your contract is from 2042 to 2092, and we give you new next 7 years at the current BCV as an incentive" or maybe for just $30 extra....

 

[_auroraborealis_]

But they need to have a plan for how to handle the 2042 issue.

A plan? Ha. They will do it all by the seat of their pants. The executives who will be making the decisions are mid-level right now at best, if they're even working for Disney.

 

[cedricandsophie]

Doesn’t anyone think disney will offer the chance to extend time for a small amount per point? We already extended our OKW points to 2057 for $15 a point about 10 years ago. Not everyone did at that time but we bought some additional OKW points last year, already extended to 2057. We own several other resorts and were not given that chance For them yet. We are already in our 70s so the kids will inherit and they can decide what to do.

 

[ColinBlair]

While the value of the points to a buyer after 2042 may be going down, the value to pre-Riviera owners of SSR and AKV would be going up and that might create an interesting dynamic on point prices. My guess is that the rental value of unrestricted SSR and AKV points after 2042 may exceed the resale value of those contracts.

 

[sethschroeder]

If room rates go up 500% in the next 20 years it will vastly offset any price "decrease".

 

[_auroraborealis_]

Doesn’t anyone think disney will offer the chance to extend time for a small amount per point? We already extended our OKW points to 2057 for $15 a point about 10 years ago. Not everyone did at that time but we bought some additional OKW points last year, already extended to 2057. We own several other resorts and were not given that chance For them yet. We are already in our 70s so the kids will inherit and they can decide what to do.

The OKW extension was a dumpster fire. You will not see a similar offer elsewhere.

 

[Jenniebee]

I don't know, but you have arguably the top two most popular DVC resorts on WDW property both expiring in 2042, I find it hard to beleive that Disney will just let these go. My theory is I think they will resell them with new point charts starting at about 2-3 years prior. I do not even think they need to alter them much from whatever their current state will be at the time. ??

 

[Cyberc1978]

While the value of the points to a buyer after 2042 may be going down, the value to pre-Riviera owners of SSR and AKV would be going up and that might create an interesting dynamic on point prices. My guess is that the rental value of unrestricted SSR and AKV points after 2042 may exceed the resale value of those contracts.

Thing is that you don’t have any such thing as unrestricted points when you sell them. When you sell they all become restricted.

If you rent your points then you can book anything you want at the 7 month mark but that wouldn’t IMO give you more $$ it will just give you the option to rent whereas those that can only book classic resort will be“stuck” with those.

 

[CraigInPA]

I see no downward price adjustment coming to BLT in 2042. 22 years from now, I expect BLT to be the new BCV, where people who have bought there expect to stay there, and don't really place a value on the ability to switch to other resorts.

I expect SSR, which people have been buying as "sleep around points" to feel the greatest pain post 2042.

 

[Sandisw]

I see no downward price adjustment coming to BLT in 2042. 22 years from now, I expect BLT to be the new BCV, where people who have bought there expect to stay there, and don't really place a value on the ability to switch to other resorts.

I expect SSR, which people have been buying as "sleep around points" to feel the greatest pain post 2042.

I agree with you regarding SSR points. I think anyone trying to sell those after 2042, with BCV, BRV, BWV out of the mix of trades for new buyers, they really will go down in value. I still think all the resorts will suffer some decline, but definitely, SSR, OKW, and AKV, will take the largest hit.

It is why I don't think I will be selling any of my contracts unless I can no longer afford MF's. Renting out the points will make a lot more sense. Plus, one of my contracts is BWV...which means, come 2042, those MF's will be gone!

 

[ColinBlair]

Thing is that you don’t have any such thing as unrestricted points when you sell them. When you sell they all become restricted.

If you rent your points then you can book anything you want at the 7 month mark but that wouldn’t IMO give you more $$ it will just give you the option to rent whereas those that can only book classic resort will be“stuck” with those.

First section: pretty much my point. The points are worth more unsold which creates an interesting dynamic. I am not saying it will keep the price up, I am saying it makes the sale unlikely in the first place.

Second section: There are currently two levels of rental points: 11 month premium points and everything else. Going forward, there will also be unrestricted points, original DVC restricted points, and single resort restricted points. With the 2042 points removed from the pool, I think that will create a new premium pool of 7 month unrestricted points on the rental market which would be mostly composed of SSR and AKV points. Not as high a premium as the 11 month, but a premium over the restricted points.

To be clear, I am not saying that the per year rental price would be higher than the purchase price, I am saying that the profit you make renting out your points for the last decade of SSR and AKV may be enough that it doesn't make sense to sell.

 

[disney_kings]

Doesn’t anyone think disney will offer the chance to extend time for a small amount per point?

That would be my guess although I'm not sure I would bank on it being a "small amount per point".

 

[Sandisw]

That would be my guess although I'm not sure I would bank on it being a "small amount per point".

The problem is that to extend, I believe they would have to keep the point charts the same,vs, ending the land lease and just starting fresh, increasing the points they can sell for those resorts with the new 50 year date.

Given how it went at OKW, as already mentioned, I simply can not see them doing that, I do not think Disney will have any problem filling those rooms with cash guests as the renovate one and then the other.