Let's speculate about Polynesian some more!

[GoingSince1990]

I think most of this is irrelevant. DVD needs to sell direct points to pay for construction of the building and to make a profit. If the new tower is part of PVB, people who want to stay there will be able to buy resale points and get full owner privileges. Short of a deep discount such as we saw with VGF this summer, sales of direct points will suffer by some amount. I don't think DVD wants to lose those potential direct sales (although yes, I recognize there will be some PVB owners who would have added on to their PVB ownership but won't buy into a new resort, and DVD will lose those sales) to the resale market.

The new tower direct sales will be in the millions of points. How many PVB resale points are currently listed with the brokers? Maybe a few thousand? I doubt that losing much less than 1% of direct sales to resales will be considered to be much of a problem.

 

[wdw4rfam]

I’m going with 100% new association simply for wishful thinking. As a current owner at PVB, I don’t want it combined. Love my Poly, don’t have any interest whatsoever in that tower and don’t want to share my 11 month window with any more owners. It’s already getting harder to book. Throw in the whole new group of owners wanting to buy in for studios and when they can’t get them… guess where they are booking Everyone knows studios are most popular and hardest to get.

 

[Nabas]

In addition, they must be doing pretty good because owners at every resort get the full amount every single year.

By design, the amount we get back from Disney in breakage sales is limited to 2.5% of the total association budget:

Breakage Income - As stated in the Condominium Documents, Disney Vacation Club Management Corp. ("DVCMC) rents, during the Breakage Period, certain accommodations that have not been reserved by Members. The Association is entitled to receive, as breakage income, the proceeds of such rentals not to exceed 2.5 percent of the aggregate of the Condominium Operating Budget (total operating expenses less the sum of interest income and Member late fees and interest) and Capital Reserve Budget in each calendar year.​

Disney pockets a lot more than this, so the money they collect for every room above the 2.5% goes 100% into their pockets while we, the DVC members, pay for the cost of this room. Breakage is a really sweet deal for Disney, not for DVC members.

 

[Sandisw]

The new tower direct sales will be in the millions of points. How many PVB resale points are currently listed with the brokers? Maybe a few thousand? I doubt that losing much less than 1% of direct sales to resales will be considered to be much of a problem.

I mentioned earlier but it’s not just PVB resales, but all resales get access if it’s not new. That to me could be a pretty big deal.

 

[emchen]

Construction costs are paid by DVD and are recouped through sales.

I agree.

So, not sure what you mean.

Let's first suppose Poly2 is the SAME association.

Let's also suppose Poly2 has the exact same number of points as VDH and the member pricing and incentives are exactly the same when sales open.

Finally, let's suppose there is the same number of Poly1 points as there are Poly2 points (for simplicity sake let's say 3 million points each).

The only difference between VDH and Poly2 is that Poly2 comes with thousands of established owners who can book at 11 months from the get-go. We can look at the established owners as having the value of their original purchase double (they got the value of 3 million additional points that they didn't have to pay for). This is what I mean as "free-rider".

Looking from a new VDH owner's perspective, new Poly2 owners are also getting a much better deal since they are paying the same for a PVB resort with double VDH's points. That doesn't seem fair. Maybe DVD will price it higher than VDH? I doubt it.

Most importantly in this hypothetical exercise, from DVD's perspective, they are selling a 6 million point resort for half the price. If they price it double than VDH price, who will buy?

I am still convinced it will be a SEPARATE association.

 

[Sandisw]

By design, the amount we get back from Disney in breakage sales is limited to 2.5% of the total association budget:

Breakage Income - As stated in the Condominium Documents, Disney Vacation Club Management Corp. ("DVCMC) rents, during the Breakage Period, certain accommodations that have not been reserved by Members. The Association is entitled to receive, as breakage income, the proceeds of such rentals not to exceed 2.5 percent of the aggregate of the Condominium Operating Budget (total operating expenses less the sum of interest income and Member late fees and interest) and Capital Reserve Budget in each calendar year.​

Disney pockets a lot more than this, so the money they collect for every room above the 2.5% goes 100% into their pockets while we, the DVC members, pay for the cost of this room. Breakage is a really sweet deal for Disney, not for DVC members.

I get that…but my point was that since we get our full allotted amount every single year at every resort, they must be getting a pretty decent return on breakage inventory already.

I don’t think the bungalows are taking too much money from them because they don’t have to try and rent them…they get to rent every other room still there at 60 days…and remember, they sometimes will upgrade cash guests to more expensive rooms so they can now rent that lower priced room again.

 

[Sandisw]

I agree.

Let's first suppose Poly2 is the SAME association.

Let's also suppose Poly2 has the exact same number of points as VDH and the member pricing and incentives are exactly the same when sales open.

Finally, let's suppose there is the same number of Poly1 points as there are Poly2 points (for simplicity sake let's say 3 million points each).

The only difference between VDH and Poly2 is that Poly2 comes with thousands of established owners who can book at 11 months from the get-go. We can look at the established owners as having the value of their original purchase double (they got the value of 3 million additional points that they didn't have to pay for). This is what I mean as "free-rider".

Looking from a new VDH owner's perspective, new Poly2 owners are also getting a much better deal since they are paying the same for a PVB resort with double VDH's points.

Most importantly in this hypothetical exercise, from DVD's perspective, they are selling 6 million point resort for half the price. If they price it double than VDH price, who will buy?

I am still convinced it will be a SEPARATE association.

But in return the new Poly tower owners are also getting what you are referring to as free riders with the current PVB rooms.

To me, it’s no different than RIV being 6.7 million points to start vs. PVB simply being built in two phases. It’s still one resort and when you buy, you pay for your points only…how many other points exist at the resort is really irrelevant.

They are still selling 6 million points..just years apart….DVD got paid already for PVB rooms so they are not losing a thing.

So, new or same, it doesn’t matter.

 

[maui22]

I mentioned earlier but it’s not just PVB resales, but all resales get access if it’s not new. That to me could be a pretty big deal.

If it’s new, there will still tens of millions with access at 7 months.
If it’s same, wouldn’t they follow the pattern of booking window for Poly and new owners. Additionally, even though a resort is booked, DVD has worked magic to get rooms for those who buy direct so availability would not be a problem for people buying.

Regardless of the association, Disney should want the tower to be nearly impossible to book for non-owners because that signals to buyers they must own to stay there.

Not sure they would care if PVB owners switch to tower and leave studios available at 7 months.

FWIW, the best argument I have heard for new is Disney deciding they want to make all resorts restricted.

Regardless, I think they make it expire same year as PVB because it is new they will not want to sell PVB as standalone when it expires.

 

[intamin]

If it’s new, there will still tens of millions with access at 7 months.

It's not about there being tens of millions with access at 7 months, it's about excluding resale only owners from being able to book there and increasing the perceived value of buying direct which Disney has been dead set on creating a class system between direct and resale for years.

Discounts, lounges, Moonlight Magic all PALE in comparison compared to locking people out of new resorts. If the only thing I were losing was 10% off my Mickey bar and a 1 cent cup of soda I would never buy direct. The access to new resorts however DO make me care about buying direct.

 

[maui22]

I think most of this is irrelevant. DVD needs to sell direct points to pay for construction of the building and to make a profit. If the new tower is part of PVB, people who want to stay there will be able to buy resale points and get full owner privileges. Short of a deep discount such as we saw with VGF this summer, sales of direct points will suffer by some amount. I don't think DVD wants to lose those potential direct sales (although yes, I recognize there will be some PVB owners who would have added on to their PVB ownership but won't buy into a new resort, and DVD will lose those sales) to the resale market.

@Sandisw has made some pretty good points that price is what drove RIV vs VGF sales. Not sure VGF resale played much of a factor, but we will have to agree to disagree.

Having 5 resorts (RIV, CFW, tower, DLH, and Aulani) in active sales may Disney to have large discounts rotating at various resorts. Really fearing Disney is making the same mistake they made in in 2006-2007 when they approved Kidani, THV, BLT, and VGC all opening in 2009. Bad economy hit and discounts were incredible.

 

[Sandisw]

If it’s new, there will still tens of millions with access at 7 months.
If it’s same, wouldn’t they follow the pattern of booking window for Poly and new owners. Additionally, even though a resort is booked, DVD has worked magic to get rooms for those who buy direct so availability would not be a problem for people buying.

Regardless of the association, Disney should want the tower to be nearly impossible to book for non-owners because that signals to buyers they must own to stay there.

Not sure they would care if PVB owners switch to tower and leave studios available at 7 months.

FWIW, the best argument I have heard for new is Disney deciding they want to make all resorts restricted.

Regardless, I think they make it expire same year as PVB because it is new they will not want to sell PVB as standalone when it expires.

If it’s new, and has resale restrctions, then every resale contract bought since 2019 and in the future won’t have access.

The only way to stay with one’s own points is to buy direct. That’s why I said it’s not just losing direct sales to potently those who buy PVB resale, it’s losing a potential direct buyer who wants access to the tower, but is willing to gamble at 7 months…they can buy a cheap SSR contract now and stay if rolled in to PVB.

I agree that adding restrictions is pretty much the big reason as to why they would go new, and them keeping them with VDH at least means they want them….if they didn’t, they could have gotten rid of them by now and they have not.

And, yes, they have the ability to take rooms not yet declared to offer to new buyers if things are booked…but that costs them a cash reservation. It’s not needed as much when the points out there don’t dwarf the inventory.

But, new buyers who bought VGF were not able to get that same pixie dust for their welco e Ho e visit because all the rooms were declared and DVC owners had full access.

So, the question remains on which will guide people to direct over resale. Of course, for all we know, DVD has other things they find important that went in to the decision…and I do think it’s been decided by now…that none of us have even thought about.

 

[emchen]

But in return the new Poly tower owners are also getting what you are referring to as free riders with the current PVB rooms.

To me, it’s no different than RIV being 6.7 million points to start vs. PVB simply being built in two phases. It’s still one resort and when you buy, you pay for your points only…how many other points exist at the resort is really irrelevant.

They are still selling 6 million points..just years apart….DVD got paid already for PVB rooms so they are not losing a thing.

So, new or same, it doesn’t matter.

Yeah I see your point.

 

[KimMcGowan]

You know, looking at the newest pictures of the tower where they have added the doors, I don’t think there are as many single rooms as people speculated. Possibly only 12 - 15 on the lagoon facing side. And some of those look pretty small, like Duo rooms.

 

[Grumpy by Birth]

I think the pitch that you get to book those too at 7 months just like all the other resorts will be just as good to sway anyone being swayed by them.

This was my thinking too. Either way, the bungalows will be used as a selling point for direct sales.

If it's in the same association: "You can also book at the bungalows at 11 months!"

If it's a new association: "You can also book at the bungalows at 7 months!"

Either way, they'll highlight that the bungalows are also an option.

 

[zavandor]

3) The Bungalows are a bit of a problem with breakage, and by combining the resorts they can spread out that issue. They could even use the points from the new resort to restructure and lower the bungalow points per night again. (They did this once already.) VGF didn't have the bungalow problem and they did this.

They tried, but that change was rolled back along the lockoff premium.
Could they do it with points from new undeclared units? I think strictly speaking from a law perspective, I don't think they could, but I can see it getting a pass because it would be in the interest of the membership.
However, why should they voluntarily sell fewer points just to address a problem that is causing them no damage? Sure, owners would like it, but without a return for Disney I don't think it'll happen.

One question for you and the group, in the event Poly2 is the SAME association: would it be "fair" in your eyes (given members pay for the construction cost of the villas through our initial buy-in), that half the owners of Poly2 would be free-riders when it comes to the construction costs of the new tower?

Poly got a refresh around the time PVB went on sale. It's likely PVB was the reason why those money were spent. So, would PVB2 buyers be freeloaders every time they use the new lobby, a cabana in the Oasis pool or go to Trader Sam? Or when they book a studio in the longhouses?

 

[CraigInPA]

This was my thinking too. Either way, the bungalows will be used as a selling point for direct sales.

If it's in the same association: "You can also book at the bungalows at 11 months!"

If it's a new association: "You can also book at the bungalows at 7 months!"

Either way, they'll highlight that the bungalows are also an option.

Sure, they hype the bungalows and CCV's cabins when the do a sales pitch, but the vast majority of people who are DVC members will never have enough points, even through banking and borrowing, to stay there for a week. This is why you'll often see availability for cash reservations for the bungalows and cabins.

 

[skier_pete]

The only thing is if you're Disney, why would you put these restrictions in place and then not commit? If you go in halfway you really only discourage people from buying direct. The restrictions only work in the long term if you keep putting them on every new resort, otherwise, the resale market will continue to thrive.

I don't have an inside track, but there has to be SOME inkling to DVC why Riviera is/has sold so poorly. Give me a reason besides (a) people don't like the resort/location, (b) point prices per night are too high, or (c) resale restrictions turn people off.

I don't consider VDH a good second test. The resort stands on it's own, people buying there resale will want it for Disneyland. Hell, I bought it direct for Disneyland and Disneyland only.

But I do think that the Fort Wilderness cabins will tell us a lot. Does resale really turn people off? If people buy that property like crazy, it says they really don't care. Because I'm sorry, but resale restricted contracts at Fort Wilderness are going to be a VERY soft sale. Surely the vast majority of people will not want to be restricted to only cabins for the next 50 years?

 

[intamin]

I don't have an inside track, but there has to be SOME inkling to DVC why Riviera is/has sold so poorly. Give me a reason besides (a) people don't like the resort/location, (b) point prices per night are too high, or (c) resale restrictions turn people off.

I don't consider VDH a good second test. The resort stands on it's own, people buying there resale will want it for Disneyland. Hell, I bought it direct for Disneyland and Disneyland only.

But I do think that the Fort Wilderness cabins will tell us a lot. Does resale really turn people off? If people buy that property like crazy, it says they really don't care. Because I'm sorry, but resale restricted contracts at Fort Wilderness are going to be a VERY soft sale. Surely the vast majority of people will not want to be restricted to only cabins for the next 50 years?

Is it actually selling poorly? Riviera sold 50,000 points in September, VDH sold 30,000 during the same month. Add in the things you said above plus COVID and the fact that it has nearly 7 million points to sell. Even if it were selling 100k points per month (1.2m/year) it would still take almost 6 years to sell out.

The driving factor has always been price per point. It wasn't that long ago that RIV was outselling VGF.

 

[Sandisw]

I don't have an inside track, but there has to be SOME inkling to DVC why Riviera is/has sold so poorly. Give me a reason besides (a) people don't like the resort/location, (b) point prices per night are too high, or (c) resale restrictions turn people off.

I don't consider VDH a good second test. The resort stands on it's own, people buying there resale will want it for Disneyland. Hell, I bought it direct for Disneyland and Disneyland only.

But I do think that the Fort Wilderness cabins will tell us a lot. Does resale really turn people off? If people buy that property like crazy, it says they really don't care. Because I'm sorry, but resale restricted contracts at Fort Wilderness are going to be a VERY soft sale. Surely the vast majority of people will not want to be restricted to only cabins for the next 50 years?

In 2022, it was selling okay and even outperformed VGF for several months until DVD changed the incentives to make that cheaper.

Prior to Covid, it had some great sales numbers.

I think that pricing is key and that had they not made VGF less expensive we may ver well have seen it stay much slower to VGF.

Also, buyers had two great choices since 2022, both being actively promoted.

RIV is also doing well with cash guests so I don’t think DVD has been in a rush to sell it or we would have seen better incentives.

Restrictions have played some role but IMO not to the degree that they think they are a failure.

 

[Hubalorian]

I personally believe DVD could have decided between VGF or Riveria to heavily discount to reach sold out status. It is obvious they want VGF sold out by next year. The question has to be why VGF? Fewer points left to sale, possible. My hunch has to do with it being the only WDW resort in active sales without restrictions. If you take that one away, that leaves only WDW DVC resorts left in active sales with the latest round of restrictions. In my mind this indicates POLY2 playing by the same rules as every other new construction (having the latest restrictions/ separate associations). If not, I believe FW cabins and riveria sales will slow unless they are heavily discounted or POLY2 is priced at a premium to be apart of the same association.

It’s not as micro as what sales Poly2 the best but I believe it will be a macro decision. What will sell ALL active listings the best at the highest price per point possible.