Should we wait for recession?

[chalee94]

If there's a recession, I'm putting my cash into stocks.

Yep, I'd rather buy some $3 BAC stock again and ride it back to $30...

 

[skip-seglipse]

Where are these newer resorts going to be located, do you think?

I don't see many new resorts being built after Reflections. I guess it depends on how well Riviera and Reflections wind up selling. IMO, the DVC resort market is nearing the point of or has already surpassed saturation. The truth is that there is simply not an unlimited supply of people who can afford DVC, and of those who can, only a fraction of those are interested at vacationing at Disney every 1-2 years.

If anything, "new" resorts will simply be resold once contracts start expiring. I'll be 80 years old when AKL expires (if I'm even still alive), so I guess t that point it will be my kids' problem to deal with lol

Walt's vision for WDW was also that it not become completely overdeveloped, and I hope that the quest for profit above all else doesn't completly throw that vision in the trash.

 

[ELMC]

I can’t help but wonder why Disney didn’t up the incentives more, rather than take the benefits away; make it so that buying direct is a better deal without impacting ownership value.

I’m sure the short answer is “bottom line,” but I just can’t help but feel like devaluing the product vs. incentivizing a direct purchase is shortsighted and sacrifices a lot of goodwill.

Incentives cost money. Also, I don't think you will get DVC executives to concede the point that they are devaluing the product. In the article below they refer to "direct purchase benefits" and not resale restrictions.

https://www.redweek.com/resources/ask-redweek/disney-marriott-diamond-resale-restrictions
To be fair, by comparison these restrictions are relatively mild. That said, Disney is the main beneficiary of a depressed resale market as eventually resale prices could fall to the point where they fit the profit margin model for new construction.

Where are these newer resorts going to be located, do you think?

Seems like most of the best locations are already taken.

Talk to me in 2042...some of the best locations will be available for "new" DVC resorts.

 

[chalee94]

Talk to me in 2042...some of the best locations will be available for "new" DVC resorts.

Sure. But for now, I'm talking to that poster who wants to pay thousands extra to buy direct. I can see "planning ahead" but whatever happens over 20 years from now doesn't justify spending extra right now. Too much can change in 20 years.

 

[ELMC]

Sure. But for now, I'm talking to that poster who wants to pay thousands extra to buy direct. I can see "planning ahead" but whatever happens over 20 years from now doesn't justify spending extra right now. Too much can change in 20 years.

True. I was being a bit flip about BWV 2.0 etc. Disney might be on the right track in trying to create this group of new resorts but the problem is that there are already 14 resorts and many of them are premier resorts in premium locations. As long as those exist, just like you said the allure of buying direct for booking privileges at unnamed resorts with undisclosed locations is a bit of a reach. Bet they wish they thought of this before building VGF...

 

[Can_Dannn]

We are from Windsor, Ontario area and just bought 75 direct at OKW for the same reasons. We have been researching for the last 2 years and have debated everything from a Vero contract to just keep on renting.We only wanted a small contract because that is all we could pay for. If you buy direct do forget to include the points that current UY points.

HA! I grew up in Amherstburg...
Now live in Grand Rapids Michigan - small world

 

[Fred M]

How much are you hoping that prices dip in a recession? 20%? 35%? 50%?

Let's say it's 20%. But it takes 2 years to hit a recession and inflation goes up 5% during that time. Now you're saving 15%. So that $105 per point contract at AKL is now $89.25. For a 160 point contract, you're going from $16,800 to $14,280, the equivalent of 28 points or right around two years of maintenance fees at current rates. That's not a lot of savings. And I think we won't be seeing prices cut 50% during a recession.

The more DVC prices go up until a recession, the fewer casual Disney fans buy DVC and the more hardcore Disney fans and higher income Disney fans buy DVC. And people who can afford DVC or prioritize DVC will be able to ride out a recession. I'd rather sell my car and take the bus to work than sell my points.

 

[SherylLC]

With ROFR softening (lots more passing), I wonder if Disney doesn't think we are already in a recession or anticipating one as well? Prices do seem to be coming down as well.

 

[skip-seglipse]

There are several economic indicators that went south before the last recession that are moving the same direction now. The trade war with China isn't helping, as most goods are increasing in price for U.S. consumers as a result.

It's hard to believe the next recession will be as bad as the last one though, given that it was fueled by shady investment vehicles, unhealthy banks and subprime lending all conflating into one giant fireball. Hopefully financial regulations put in place after that fiasco will prevent another, similar occurrence.

 

[KAT4DISNEY]

With ROFR softening (lots more passing), I wonder if Disney doesn't think we are already in a recession or anticipating one as well? Prices do seem to be coming down as well.

I think there often has been a trend of DVC taking back fewer contracts at the end of their fiscal year. That is 9/30. And they aren't looking to accumulate and hold a bunch of points. If they have been briskly enacting ROFR and have a bunch of points to sell then they have less incentive to act on new offers.

 

[Bing Showei]

Hopefully financial regulations put in place after that fiasco will prevent another, similar occurrence.

I wouldn’t lean too heavily on regulations as a safety measure. Immediately after being implemented, the very institutions the laws were meant to police lobbied hard (and successfully) that economic development and innovations were being stifled by the aforementioned regulations, and a steady march towards deregulation has since been en vogue.

 

[mustinjourney]

I can’t help but wonder why Disney didn’t up the incentives more, rather than take the benefits away; make it so that buying direct is a better deal without impacting ownership value.

I’m sure the short answer is “bottom line,” but I just can’t help but feel like devaluing the product vs. incentivizing a direct purchase is shortsighted and sacrifices a lot of goodwill.

When economy is good, use a stick. If the economy is bad, use a carrot.

We’re in stick territory right now.

Things will change at some point. We just don’t know when.

 

[mustinjourney]

Where are these newer resorts going to be located, do you think?

Seems like most of the best locations are already taken.

There’s an expansion pad between grand Floridian and MK. There’s also a spot just outside the park near Adventureland/Frontierland.

That location would be like grand Californian. They could charge whatever they wanted for that spot.

 

[TonyaG83]

I had similar thoughts, but was apprehensive since a recession most likely means I’d be tightening my belt. I have the cash now, so I’ll buy now. I finance for 2-3 years, hoping that if a recession hits I catch the CAD on an upswing and save some small potatoes. The cash to pay off the contracts is sitting in an account just waiting to be converted, which would probably not be the case in a recession.

 

[Jason@dvcstore]

I would buy dvc now if I wanted it. You could be waiting for a LONG time if you wait for a recession to buy.

I would recommend buying in before your next trip to Walt Disney World. That way the next trip you are using your own points.

 

[MickeyMouse3!]

Still researching direct vs. resale purchases
We live in Michigan, and will probably take 1-2 trips / year (or per 18 months)
Keep going back and forth on direct over resale (purely for the member magic and the blue card - silly I know, but we would like that).

Wondering if we DO decide to do resale (plus AP), should we wait to see if there is a recession and if it would affect resale prices? Likely wouldn't affect direct prices

We also live in Michigan and travel like you described. We bought 150 points at AKL via resale a couple of years ago. We bought at $84 per point. Current resale is around $110 per point. Can't predict what future prices will be, but we are happy we bought when we did. We later purchased a 75 point contract at SSR directly from DVC. This gave us ALL of the benefits. The SSR contract doesn't give us much at the 11 month window but does give us more options at the 7 month window. Both have the same use year for easier managing. DVC is starting to restrict your options on resale. Do your research thoroughly and talk to a DVC rep and ask lots of questions. We did for both purchases and never felt pressured or stupid for asking those "silly" questions. Keep in mind that as the years go by, more points will be needed due to increases. Finally, to be honest, the benefits you get from a direct sale aren't all that significant (imo).

 

[Bearval]

The old 2011 and 2012 prices are never coming back. WDW's hotel rates have gone through the roof since then. One of the main things affecting the value of DVC is the high room rates at WDW. If they drop room rates the bottom will fall out of the market. If I could stay in a 1 bedroom at the Contemporary instead of DVC for the same price I'd switch in a minute. I can't though and that is what keeps DVC attractive to people.

The recession would also have to be long, and particularly nasty to really affect things. Even then I still don't see things sliding that far to be honest. I bought BLT at 125 a point and I'm fairly convinced I'll never see that price again in the resale market.

Recession would not have to be long and nasty for a decent price drop on resale. It is all about supply and demand. When people decide they are not gonna spend money to travel and need it elsewhere the value of a vacation time share will drop. DVC won’t exercise ROFR since then they would be stuck with paying yearly dues and no buyers in addition to less people to rent to due to less people going to WDW on vacation. They also might be restricted in what percentage of a resort they are allowed to own.

 

[RaymOOOnd]

Also -- this may be contentious but I think the recession thing has been talked up for political reasons. Sure, another one will happen eventually. But is it imminent? Ask any outlet not so fond of our current president and they'd make it seem so.

Check in again after November 2020 for more accurate economic forecasting (still flawed, for sure, but not deliberately misleading)

 

[jerseyduke]

Someday never comes

 

[Can_Dannn]

All awesome information - I feel a recession would lower resale costs, but leave direct costs unchanged. Disney does not lower their prices - ever.