Wilderness Lodge DVC additions - Copper Creek Villas & Cabins

[LAKid53]

This is an interesting point. Disney will probably need to stretch out new WDW DVCs until the original resort contracts begin to expire. Assuming a roughly 3 year selling cycle per project, after this WL project wraps up sales in 2020 they would really only need about 7 or 8 more projects to get to 2042. Off the top of my head here's 7 possible DVC projects that have either been rumored in the past or just make sense to me:

1. Conversion of BWI rooms to DVC (maybe the whole resort)
2. Conversion of additional BC rooms to DVC
3. Conversion of some YC rooms to DVC
4. Conversion of several "islands" of CBR into a DVC tower
5. BLT2 on the site of the other garden wing
6. EPCOT DVC in the parking lot
7. River Country DVC project

There are probably others we haven't even heard of yet. If each of these projects took roughly 3 years to sell it would stretch all the way until 2042. This also doesn't include any additional off property DVC projects. The other factor is that WDW is actually experiencing some growth recently. The last earnings release had hotel occupancy at 89% which is pretty healthy for recent history. They could also potentially add a 5th gate by 2042 resulting in additional attendance. It may be time soon that WDW considers expanding its hotel offerings (non-DVC rooms). It's very likely that if they do they will build a new resort as a mix of DVC and hotel rooms. Why try to jam it in later. If they actually go forward with either the River Country project or the EPCOT parking lot project I could see those being a mix use project with some studio hotel rooms, some cash room family suites (those are popular these days) and some DVC.

Another possibility is that with something like 5 to 10 years to go on the original contracts Disney might offer extensions to existing owners. With the money from selling the extensions they could do some major refurbs on the existing resort and pocket the rest of the cash. When the contracts for any of those people who didn't extend expire the points can be resold creating a glut of DVC points to sell. With all of that available inventory they won't need to build anything new for a decade or more. In other words they could potentially start this reselling process in 2032 instead of 2042 meaning they really might only need 4 additional new projects after WL.

As one of those owners whose contract for most of my points ends in the original 2042 date, not the now 50 years from purchase, I would like to see an extension offer.

 

[GoofGoof]

I disagree. I think they've got plenty of room. Purchased around 27,000 acres. 1/3 set aside for conservation. Have probably used less than half of the remaining 18,000 or so acres for parks/resorts. So I think if they've got 8,000 to 10,000 acres left that can be developed, they've got space.

But I'd rather see them use some of that acreage for a 5th gate. Like an awesome Star Wars Land.

I assume when he said "running out of places" he didn't mean literally running out of physical land, just running out of deluxe resorts to add DVC to. There is nothing to stop them from building new resorts.

 

[GoofGoof]

As one of those owners whose contract for most of my points ends in the original 2042 date, not the now 50 years from purchase, I would like to see an extension offer.

I wouldn't be surprised to see it happen. I don't think they will take the path they took with OKW and just offer something like a 15 year extension. I think it will be more substantial and possibly as long as 50 additional years. The question is what will the price be? If they try to get $165 a point it's gonna be a tough sell. If they offer existing owners a chance to extend for half that...maybe a little easier to sell.

 

[LAKid53]

I wouldn't be surprised to see it happen. I don't think they will take the path they took with OKW and just offer something like a 15 year extension. I think it will be more substantial and possibly as long as 50 additional years. The question is what will the price be? If they try to get $165 a point it's gonna be a tough sell. If they offer existing owners a chance to extend for half that...maybe a little easier to sell.

I agree. It would be a tough sell if the extension offer is $30-$40 more per point than the original purchase. WLV was going at $130/point when I bought - and I got a $5/point discount from that price. Can you imagine offering extensions to the first purchasers in OKW at $165 a point?

 

[doctornick]

I always thought that a Northeast DVC location might do well since there are a large number of WDW regulars in the area, but it's tough with the cold winters. DVC really needs to have a 365 days a year appeal so it makes NE beach areas less appealing. If they went with a more urban setting I think DC or it's suburbs might work. With lots of history and the Smithsonian museums it could hold year round appeal.

And wasn't it a DVC resort that Disney was planning to open in the National Harbor area? I know they were going to put a hotel there, but backed out, and I think it was DVC. So, they were probably thinking along the same lines as you.

I wonder about the possibility of DVC resorts at the international Disney parks. In particular, Paris would make a lot of sense, I think. They are supposedly overbuild with hotel rooms there, so converting some to DVC would have a similar calculus to what is going on at WDW. And it would have the appeal of "go see Paris too" during a stay.

 

[GoofGoof]

And wasn't it a DVC resort that Disney was planning to open in the National Harbor area? I know they were going to put a hotel there, but backed out, and I think it was DVC. So, they were probably thinking along the same lines as you.

I wonder about the possibility of DVC resorts at the international Disney parks. In particular, Paris would make a lot of sense, I think. They are supposedly overbuild with hotel rooms there, so converting some to DVC would have a similar calculus to what is going on at WDW. And it would have the appeal of "go see Paris too" during a stay.

I think they had plans both in DC and at the beach near DLR. Both seemed like pretty good ideas to me. Neither happened...yet. They actually sold the land in CA. Not sure if they still own land in the DC area.

 

[LAKid53]

I assume when he said "running out of places" he didn't mean literally running out of physical land, just running out of deluxe resorts to add DVC to. There is nothing to stop them from building new resorts.

If they continue to turn existing deluxes into DVC rooms via refurbishment, you will end up with deluxe resorts that have very few cash rooms. Is that what corporate really wants?

 

[LAKid53]

I think they had plans both in DC and at the beach near DLR. Both seemed like pretty good ideas to me. Neither happened...yet. They actually sold the land in CA. Not sure if they still own land in the DC area.

Isn't the Grand Californian a DVC resort? it's included in the list of properties on the DVC member site. Or are just a % of the rooms DVC. I guess I can find out for myself in two weeks....

 

[GoofGoof]

Isn't the Grand Californian a DVC resort? it's included in the list of properties on the DVC member site. Or are just a % of the rooms DVC. I guess I can find out for myself in two weeks....

There are 50 rooms in the Grand CA that are DVC out of about 950 total rooms.
Edit: 50 2 bedroom equivalent DVC rooms so more like 100 total rooms.

If they continue to turn existing deluxes into DVC rooms via refurbishment, you will end up with deluxe resorts that have very few cash rooms. Is that what corporate really wants?

That certainly seems to be the trend. There aren't many deluxe resorts left to convert rooms at.

 

[doctornick]

Isn't the Grand Californian a DVC resort? it's included in the list of properties on the DVC member site. Or are just a % of the rooms DVC. I guess I can find out for myself in two weeks....

Just a small percentage of the rooms are DVC. It's very few overall.

There's been ongoing rumors of Disney building a new tower at the Disneyland Hotel for DVC. They "need" a "Tomorrow Tower" to go along with the other towers that reflect the original lands at Disneyland (there are Fantasy, Frontier and Adventure towers).

 

[GoofGoof]

I agree. It would be a tough sell if the extension offer is $30-$40 more per point than the original purchase. WLV was going at $130/point when I bought - and I got a $5/point discount from that price. Can you imagine offering extensions to the first purchasers in OKW at $165 a point?

For OKW they offered a 15 year extension for $15 a point that went up to $25 a point before the offer expired. Sales were supposedly not great with less than half of the owners extending. IMHO the biggest issue is that the contracts still didn't expire for over 30 years. People didn't want to have to put out cash today for something they wouldn't use for over 30 years. If they offer it much closer to the contract expiry it will be much more appealing to owners who will be potentially facing losing their timeshare.

 

[Rodan75]

so my question is does Disney continue to build/repurpose at wdw or will they venture off site and build elsewhere, because you re exactly right..they have to (in their eyes) keep selling DVC to maintain profit but they re running out of places at wdw

I think they have to figure out a way to split the Timeshare component from the Membership component and sell those and start promoting the heck out if international travel and the cruise lines. I don't know if Aulani worked well enough to do timeshares at other vacation destinations.

This is where everything else @ParentsOf4 comes into play regarding long term attraction growth.

 

[ford91exploder]

If they continue to turn existing deluxes into DVC rooms via refurbishment, you will end up with deluxe resorts that have very few cash rooms. Is that what corporate really wants?

Corporate loves the cash infusion makes the bonus checks fat, The problem comes down the road for the next management team. I half expect the next management team to buy BACK many of the DVC contracts and recomvert rooms to cash. because DVC at it's current levels is a long term drain on revenues. This is spoken as a DVC member with 800 points mind you.

What I can see is a couple resorts being DVC only and the rest you need to trade points into cash

 

[GoofGoof]

Corporate loves the cash infusion makes the bonus checks fat, The problem comes down the road for the next management team. I half expect the next management team to buy BACK many of the DVC contracts and recomvert rooms to cash. because DVC at it's current levels is a long term drain on revenues. This is spoken as a DVC member with 800 points mind you.

What I can see is a couple resorts being DVC only and the rest you need to trade points into cash

They could decide at some point not to continue to build new DVC but I can't see any scenario where they will buy back all of the DVC points for a resort. Leaving out the potential lawsuits they could face and bad blood created with customers, it would still cost them way more than just building new hotels (they have plenty of land). Take BLT as an example. 5.7 million points at a rumored new construction cost of $200M. That works out to about $35 a point. So unless they buy back BLT points for under $35 it's cheaper to just build a new tower next to the existing one. Plus could you imagine the outrage from owners who paid between $90 and $165 a point when they are told that they are just going to get $35 back? Resale right now is north of $100. There would be a riot. If they offered $100 per point (which woukd still frustrate a lot of owners), that would cost Disney $570M to buy back all of the points plus the administrative and legal costs. That's almost 3 times the cost of just building a new hotel.

 

[ford91exploder]

They could decide at some point not to continue to build new DVC but I can't see any scenario where they will buy back all of the DVC points for a resort. Leaving out the potential lawsuits they could face and bad blood created with customers, it would still cost them way more than just building new hotels (they have plenty of land). Take BLT as an example. 5.7 million points at a rumored new construction cost of $200M. That works out to about $35 a point. So unless they buy back BLT points for under $35 it's cheaper to just build a new tower next to the existing one. Plus could you imagine the outrage from owners who paid between $90 and $165 a point when they are told that they are just going to get $35 back? Resale right now is north of $100. There would be a riot. If they offered $100 per point (which woukd still frustrate a lot of owners), that would cost Disney $570M to buy back all of the points plus the administrative and legal costs. That's almost 3 times the cost of just building a new hotel.

Its not something that could be done overnight and especially not at BLT or the monorail resorts but Disney could buy back the interest at places like WL and/or transfer the points to somewhere like OKW and SSR making those resorts exclusively DVC along with making BLT exclusively DVC and converting Poly back to cash.

I don't think there would be a problem if Disney buys back contracts at FMV and since Disney has financed so many it may be possible to refund the downpayment and forgive the rest of the loan in many cases.

DVC right now is hurting the margins at deluxe and moderates and they have to stop building.

 

[GoofGoof]

Its not something that could be done overnight and especially not at BLT or the monorail resorts but Disney could buy back the interest at places like WL and/or transfer the points to somewhere like OKW and SSR making those resorts exclusively DVC along with making BLT exclusively DVC and converting Poly back to cash.

I don't think there would be a problem if Disney buys back contracts at FMV and since Disney has financed so many it may be possible to refund the downpayment and forgive the rest of the loan in many cases.

DVC right now is hurting the margins at deluxe and moderates and they have to stop building.

I think it would be hard to do. If I bought at WL and then DVC tells me they are transferring my points to OKW or SSR I'd be furious. Even a transfer "up" from a less popular resort to a more popular one might not go over big for some people. I also think they might have a hard time getting everyone to agree on what FMV is, especially if FMV is significantly below what people bought in at. I could see them making a bigger push to buy back points through ROFR for a specific resort and/or possibly offering a deal to retire units early if it was close to the contract's expiry (within 10 years of expiry).

DVC isn't really hurting the margins at deluxe resorts. It's hurting demand to some extent, but it's also reducing supply. Prices aren't dropping as a result of DVC canabalizing the deluxe resorts. Some DVC owners would be staying at deluxe resorts if DVC didn't exist, but there are also a bunch of people who own DVC who would stay in values/moderates or off property if they didn't own DVC. There is some lost opportunity for selling cash rooms, but there is also quite a bit of profit from selling the points. It's more of a timing thing.

 

[ford91exploder]

I think it would be hard to do. If I bought at WL and then DVC tells me they are transferring my points to OKW or SSR I'd be furious. Even a transfer "up" from a less popular resort to a more popular one might not go over big for some people. I also think they might have a hard time getting everyone to agree on what FMV is, especially if FMV is significantly below what people bought in at. I could see them making a bigger push to buy back points through ROFR for a specific resort and/or possibly offering a deal to retire units early if it was close to the contract's expiry (within 10 years of expiry).

DVC isn't really hurting the margins at deluxe resorts. It's hurting demand to some extent, but it's also reducing supply. Prices aren't dropping as a result of DVC canabalizing the deluxe resorts. Some DVC owners would be staying at deluxe resorts if DVC didn't exist, but there are also a bunch of people who own DVC who would stay in values/moderates or off property if they didn't own DVC. There is some lost opportunity for selling cash rooms, but there is also quite a bit of profit from selling the points. It's more of a timing thing.

There is no way you could make everyone happy here, You could define FMV as price paid for the points or current point price -20%

 

[GoofGoof]

There is no way you could make everyone happy here, You could define FMV as price paid for the points or current point price -20%

And I could say "I've got a contract that says my points last until 2060...see you in court"

The point is that the best DVC could do is offer a buyout and hope some percent of owners take them up on it. They could then sell those repurchased points to WDW to be used as cash rooms. Any existing owner that wants to keep their points is going to get to keep them.

 

[LAKid53]

I think it would be hard to do. If I bought at WL and then DVC tells me they are transferring my points to OKW or SSR I'd be furious. Even a transfer "up" from a less popular resort to a more popular one might not go over big for some people. I also think they might have a hard time getting everyone to agree on what FMV is, especially if FMV is significantly below what people bought in at. I could see them making a bigger push to buy back points through ROFR for a specific resort and/or possibly offering a deal to retire units early if it was close to the contract's expiry (within 10 years of expiry).

DVC isn't really hurting the margins at deluxe resorts. It's hurting demand to some extent, but it's also reducing supply. Prices aren't dropping as a result of DVC canabalizing the deluxe resorts. Some DVC owners would be staying at deluxe resorts if DVC didn't exist, but there are also a bunch of people who own DVC who would stay in values/moderates or off property if they didn't own DVC. There is some lost opportunity for selling cash rooms, but there is also quite a bit of profit from selling the points. It's more of a timing thing.

Since I own in WL, I would not be a happy camper if Disney decided to transfer my points to OKW or SSR. When I bought, I was given the opportunity to purchase in SSR and declined, because I wanted WL. "Transfer my points and breach that contract? Where's my lawyer!"

 

[Unplugged]

They won't ever "transfer" points as it is legally a real estate purchase. That would be like a subdivision developer telling you 10 years after your bought your house that they're going to swap you to a house 1 block down so they can turn your house into a rental. It simply doesn't work like that.