First DVC Resale Contract for The Villas at Disneyland Hotel

[GoingSince1990]

Being locked in to that single resort with its brutal nightly taxes? I would only be interested at maybe around $100. And the issue is, of course, that at that price ROFR should be a no-brainer for Disney, as the points can be resold by them as unrestricted at a vastly higher price. Which is my worry about resorts with RIV and VDH style restrictions, namely resale values being so low that Disney would always ROFR, causing the private resale markets to dry up altogether; why would anyone make an offer, knowing that Disney is going to grab the points anyway?

 

[sndral]

Ok, so I ran the numbers (without TVM) based on various price points (with dues and TOT) for preferred views averaging weekday/weekend during October (middle of the point chart):

@ $230pp Studio: $396; 1BD $709; 2BD $1071

@ $193pp Studio: $378; 1BD $675; 2BD $1022

@ $160pp Studio: $361; 1BD $648; 2BD $979

@ $130pp Studio: $347; 1BD $621; 2BD $939

Are these the price per night cost based on the MFs paid on the points needed + the amount you’ll pay in transient occupancy taxes when you use the points to stay in the villa?

Being locked in to that single resort with its brutal nightly taxes? I would only be interested at maybe around $100. And the issue is, of course, that at that price ROFR should be a no-brainer for Disney, as the points can be resold by them as unrestricted at a vastly higher price. Which is my worry about resorts with RIV and VDH style restrictions, namely resale values being so low that Disney would always ROFR, causing the private resale markets to dry up altogether; why would anyone make an offer, knowing that Disney is going to grab the points anyway?

Historically DVC does not ROFR resorts in active sales (although they just did take a couple of VGF resales) - the other restricted resort, Riviera, has been in active sales for 4 1/2 years - has DVC ROFRed any resale contracts there?

 

[AstroBlasters]

Are these the price per night cost based on the MFs paid on the points needed + the amount you’ll pay in transient occupancy taxes when you use the points to stay in the villa?

Historically DVC does not ROFR resorts in active sales (although they just did take a couple of VGF resales) - the other restricted resort, Riviera, has been in active sales for 4 1/2 years - has DVC ROFRed any resale contracts there?

Yes, but not TVM.

Obviously a 5% TVM would make the delta much bigger. Add then you have to decide if it’s a straight 5% on the initial investment or if you would spend down that initial investment over time to actually use for the vacation.

If we assume 6 nights in a studio with 150 points then the most aggressive 5% TVM calculation would add an additional

up to $287 a night @ $230pp
up to $241 a night @ $193pp
up to $200 a night @ $160pp
up to $162 a night @ $130pp

 

[Sandisw]

It won't show with the way I search because I specifically look for direct contracts.

I can search for resale separately, though. Even if I find it, I may not be able to tell how much was paid without buying a copy of the deed.

EDIT: okay, I'm losing confidence I could even find the contract due to how primitive the OCRW search is. But I am increasingly confident I could tell the price, if I found it, but only because I already know how many points it is. General resale tracking will be very difficult, if not impossible.

Thanks for at least investigating for those who might be interested in it! We will just have to rely on anyone in this community posting if they decide to buy one.

 

[Sandisw]

A few thoughts:

1. Maybe it is a little high, but restrictions at VDH I don't think will necessarily have the same negative connotation that they do at say, Riviera. Practically, why would you buy VDH as home resort unless you want to stay there - especially given the high dues. These are people who will want to be there.

2. This is likely a distressed seller, and if they financed they are already taking a haircut. Or maybe DVC Resale or one of their friends bought one to gauge the market and then strip/rent in the meantime and see where gravity lands.

3. $180 seems a little high, but it fits with my view that everything on DVC Resale is too high. I don't think VDH is going to reach Riviera resale territories though, even with the restrictions.

4. I wonder if DVD is going to track this or care at all. At this point VDH is kind of baked, but it will be interesting to see how this resort with restrictions prices out compared to Riviera in the end.

5. I'm glad this conversation was allowed to happen even though it is very clearly referencing one individual contract for sale. I think that this is newsworthy and worth discussing.

I actually do think it will be around the RIV price because of the TOT….someone is really going to want to only stay and always pay that tax.

At least with RIV, you don’t have that additional cost at check in…for now, I think $140 ish is where it will settle.

 

[AstroBlasters]

For a comparison, I just calculated that a VGC contract @ $300pp is basically equivalent to VDH @ $160pp for a studio in October. If VGC is @ $250pp, then VDH needs to be @$125pp. If VGC is at $225pp, then VDH needs to be at $95pp.

This obviously depends on the point chart season. I’m using 35 years left for VGC and 49 years for VDH.

Once VGC gets a refurbishment, I don’t see any reason why the resale prices would materially drop based solely on VDH resale.

 

[Cfabar1]

For a comparison, I just calculated that a VGC contract @ $300pp is basically equivalent to VDH @ $160pp for a studio in October. If VGC is @ $250pp, then VDH needs to be @$125pp. If VGC is at $225pp, then VDH needs to be at $95pp.

This obviously depends on the point chart season. I’m using 35 years left for VGC and 49 years for VDH.

Once VGC gets a refurbishment, I don’t see any reason why the resale prices would materially drop based solely on VDH resale.

How do you mean? Can you run us through your numbers? I'm genuinely curious.

 

[Cfabar1]

Being locked in to that single resort with its brutal nightly taxes? I would only be interested at maybe around $100. And the issue is, of course, that at that price ROFR should be a no-brainer for Disney, as the points can be resold by them as unrestricted at a vastly higher price. Which is my worry about resorts with RIV and VDH style restrictions, namely resale values being so low that Disney would always ROFR, causing the private resale markets to dry up altogether; why would anyone make an offer, knowing that Disney is going to grab the points anyway?

Hmm... I doubt that will happen, at least in the short term, because Disney won't want to devote the number of dollars necessary.

The bigger question I think Disney and owners should be concerned with is will Disney continue to maintain a true world class attraction that is as popular as it is right now.

That is becoming less and less of a guarantee. The key to DVC is (like all real estate) LOCATION LOCATION LOCATION.... We bought so that we wouldn't have to deal with driving to the parks or riding a Disney bus to get to most places we'd want to visit - Monorail, walking, etc. There are some DVC resorts we won't stay at because we don't think the location compares positively enough with staying off property. Maybe I"m a snob, and our view is extreme, but that's how I feel.

I'm very concerned if WDW allows MK to become a museum and continues to not invest adequately in AK, MGM Studios, etc. that we may see our value decline simply because people would rather go to Universal, etc. That to me is an equally real threat to resale values over the long term.

 

[AstroBlasters]

How do you mean? Can you run us through your numbers? I'm genuinely curious.

VGC price per point/ 35 years + 8.04 dues * 22 points needed for a night.

VDH price per point/ 49 years + 9.06 dues * 24 points needed per night + 68 TOT tax.

Set a price for VGC to come up with a number and then plug in various prices for VDH until you make them as close as is reasonable.

 

[Cfabar1]

VGC price per point/ 35 years) + 8.04 dues * 22 points needed for a night.

VDH price per point/ 49 years + 9.06 dues * 24 points needed per night + 68 TOT tax.

Set a price for VGC to come up with a number and then plug in various prices for VDH until you make them as close as is reasonable.

Wow.... very jarring and a cautionary tale about just how greedy DVC has gotten since those days!

 

[AstroBlasters]

Wow.... very jarring and a cautionary tale about just how greedy DVC has gotten since those days!

I feel that “greed” implies some moral failure.

Disney is trying to maximize their profit AND has a fiduciary obligation to their shareholders to do so.

No guest is forced to go to Disneyland, if they want to go then they don’t have to stay at a Disney hotel, and if they want to stay at a Disney hotel they don’t have to buy into a Disney timeshare. Those are all choices of free will.

Disney didn’t get to control the TOT, that’s Anaheim. VGC got a sweetheart deal, but it’s a different city council now.

I’m not sure why the dues are 13% higher… but Disney has to spell out exactly what those go to and can’t just set them arbitrarily.

The point chart is similar to VGC, just distributed over more seasons. I picked October to neutralize any potential differential.

 

[Jwaire]

Disney didn’t get to control the TOT, that’s Anaheim. VGC got a sweetheart deal, but it’s a different city council now.

This isn't entirely true. Josh D'Amaro told Anaheim they didn't want their tax credits anymore.

https://www.cnbc.com/2018/08/29/anaheim-ends-tax-breaks-for-disney--at-disneys-request.html

 

[intamin]

This isn't entirely true. Josh D'Amaro told Anaheim they didn't want their tax credits anymore.

https://www.cnbc.com/2018/08/29/anaheim-ends-tax-breaks-for-disney--at-disneys-request.html

Yeahhh it was a nice PR move from Josh at the time and may be the reason why Disneyland forward is being mentioned as a possibility but this is definitely the effects of that.

 

[AstroBlasters]

This isn't entirely true. Josh D'Amaro told Anaheim they didn't want their tax credits anymore.

https://www.cnbc.com/2018/08/29/anaheim-ends-tax-breaks-for-disney--at-disneys-request.html

Sure, but Disney isn’t profiting from the TOT and has to work with the city to get new projects approved.

That’s why I separate it in my mind from the more controllable variables of the price per point and the point chart.

However they definitely all add up in the end when you are comparing the cost to stay at VGC vs VDH.

As long as VGC doesn’t get remodeled by the people who did the Jazz Kitchen then IMO the ppp will hold up just fine as VDH resales hit the market.

 

[DonMacGregor]

This isn't entirely true. Josh D'Amaro told Anaheim they didn't want their tax credits anymore.

https://www.cnbc.com/2018/08/29/anaheim-ends-tax-breaks-for-disney--at-disneys-request.html

And now the appeals court has denied Disney's appeal on the Measure L lawsuit filed after Disney (and Anaheim) thought they were free and clear:

California Supreme Court ends Disneyland’s fight against Anaheim wage law

So it was all for naught...

 

[AstroBlasters]

The bigger question I think Disney and owners should be concerned with is will Disney continue to maintain a true world class attraction that is as popular as it is right now.

That is becoming less and less of a guarantee. The key to DVC is (like all real estate) LOCATION LOCATION LOCATION...

I agree that this 100% the most important thing.

 

[NorCalFanatic]

I agree that this 100% the most important thing.

I’d agree as well, but….having zero interest in Florida, they could leave DLR and DCA the same for the next 5-10 years and we’d still be enjoying it 3-4 times a year. We bought VDH cause we wanted to be on property and we’re tired of paying $$$ for 2 bedroom suites multiple times a year.

At Aulani, as long as they keep the status quo we’ll be happy there a long time.

 

[New Mouse]

Disney is trying to maximize their profit AND has a fiduciary obligation to their shareholders to do so.

Everyone likes to throw this around a lot. Raising prices to where your product doesn't sell is also neglecting their fiduciary responsibility. Part of why Disney has failed recently is because of the price increases across the board.

 

[AstroBlasters]

Everyone likes to throw this around a lot. Raising prices to where your product doesn't sell is also neglecting their fiduciary responsibility. Part of why Disney has failed recently is because of the price increases across the board.

I’m not sure about WDW, but Disneyland is still very full. I think the issue is that their movies haven’t done well and that they are losing money in streaming. Parks & Experiences are fine.

 

[AstroBlasters]

I’d agree as well, but….having zero interest in Florida, they could leave DLR and DCA the same for the next 5-10 years and we’d still be enjoying it 3-4 times a year. We bought VDH cause we wanted to be on property and we’re tired of paying $$$ for 2 bedroom suites multiple times a year.

At Aulani, as long as they keep the status quo we’ll be happy there a long time.

No argument here, I was thinking more in the context of maintaining the Disneyland resort. (Late 90s/early 2000s was no bueno)