Most Economical DVC Resort to Purchase - Fall 2017

[GoofGoof]

So what's everyone's opinion of the possibility of Disney offering contract extensions on the resorts that expire in 2042? I know they did this for OKW, but that was an extension with years left on the original contract. I'm curious about when the contracts get down to the 15 though 5 years remaining range. I know Disney can just convert them to cash rooms, but those yearly maintenance dues (guaranteed) do help with the cost of running the resort.

Slim to none.

The OKW extension was by and large a dismal failure for a slew of reasons. They screwed up on that one in a few ways and I don't see them repeating the mistake. I could see them reselling at the end but not extending.

This is a great question. I agree that it's unlikely that Disney will offer another extension the way they did the OKW one.

If they just allow the contracts to expire in 2042 they could in theory just resell all of he points with a new 50 year contract. The question is will they just stop building new DVC resorts and focus on selling the old points or will there be a mix. Another question is will they sink a bunch of money into overhauls and new amentities for the resorts? They will also have most of OKW, BWV, BCV and WLV all expiring at once at WDW (plus the 2 offsite). I think it's probably over 25 million points to sell. That could take over a decade just to finish and then SSR comes up with all those contracts expiring. In theory Disney could probably just stop building new DVC resorts for many years starting in 2042 and still sell about the same number of points every year. I do wonder if they will stagger the sales or try to sell all of them at once. Lots of questions but we have 25 years to wait to find out.

 

[correcaminos]

I don't know how much the direct prices will go up in the next 10 years but I doubt that Disney won't raise the prices as much as they can get away with. To the question @Ralphlaw posted, I doubt the resale points will sell for $300 any time soon, but it's not out of the realm of possibility that they could get near $200 in a decade. That of course assumes people still want to visit WDW and the economy stays good. There are lots of things that could derail the market but it's possible.

Direct prices over $200 are probably right around the corner and almost certainly in the next decade. Another factor could be how much of a discount resale points sell for vs direct purchase. If Disney continues to remove benefits from resale buyers the market could definitely drop and the spread between direct and resale could expand.

I agree that Disney will keep raising the prices. As they do that though, people do seem to turn to resale more and then get a 25 point add on just to get full benefits. I see that now even.

As you said a lot of things could derail. A turn down in economy and we'll likely see drops in resale again. Last time that happened we had a 1yo and couldn't justify the add on darn it. If it drops again we'll buy if it goes low as well.

It'll be interesting to see what direct prices will do. Some are as low as $115, and some 'really hard to get even on a wait list sold out' are as high as $185 with new resorts hanging out about $10 less. Older $20-40 less. That also will make it hard to watch and see what each will do. I do know $200 will be there but I think we'll have to have a strong economy to handle it. I say that only because there is a mental block when you change from $100s to $200. Even $195 feels a better deal than $200. I'm a little surprised there wasn't an increase with CCVC but we'll see what happens with the Riviera resort. I do agree that in the next 10 years some will hit it, but I wouldn't be surprised if the older resorts hang out with lower costs like now.

 

[Ralphlaw]

What eventually ends up in the equation is the cost of staying in a normal room, especially at the deluxe resorts (which is where DVC members would probably otherwise stay). I think most of us have seen discounts and deals and felt left out, wondering if we'd be better off not owning at all. Plus, Disney seems to hide the true cost of a normal room with various add ons, deals, park hoppers, dining plans, etc . . . Yet you can still figure it out if you dig.

If the rack rate of a normal deluxe room is $500 per night, then owning at DVC probably looks pretty good. If it's $700 per night, our points are worth more. If it's $300 per night, our points are worth less. Right now, a standard hotel room at the Boardwalk is going for about $500 per night, depending on when you plan to visit. It would therefore cost about 4 nights to equal the $2,000 in maintenance fees that I pay every year. If I can stay for 9 nights with my 300 points, that means I'm basically knocking off about $2,500 of my purchase price per year after my maintenance fees are paid (5 nights times $500 = $2,500).

However, if I miss out on various packages and discounts that total $1,000, then perhaps I'm only knocking off $1,500 from my purchase price.

The economist in me thinks that a 20% increase in the rack rate would result in a 20% increase in my point value. Thus an increase to $600 per night on average for a normal hotel room at Boardwalk would cause a resale increase from $118 per point to about $144 per point. With the economy good, travel being cheap and easy, Disney sticking serious money into the parks, parks still being over-crowded, and travel being more popular than ever, I easily foresee plenty of rises in deluxe room rates for the short and long term futures.

Anyhow, crunching the numbers is good, but there are so many variables that comparisons are a challenge. I basically made money when I sold Baylake, and could make big money if I sold Boardwalk right now. To me, that's a gift, and totally unexpected in any number crunches that I could possibly have done back when I originally bought in.