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View Full Version : Are Disney resale rules devaluing their Club?


hauntedcity
11-23-2011, 09:57 AM
I purchased resale points earlier this year, fully understanding the new policies that prevent me from using my points towards any of their "collections." That was a very valid trade-off for getting a great deal.

I've been doing some thinking lately (a dangerous pastime, I know). It seems that Disney's intention was that the new resale policy would push buyers to purchasing direct, thus keeping the prices higher. However, by devaluing the resale points, it looks like that's actually driving the resale prices lower. Rather than encouraging direct sales, it could push buyers to go for bargains which just keep getting better, because resellers feel they have to lower prices to compete with Disney direct.

Any anyway, isn't it weird how points had all these privileges (points for cruises, Collections, WDW hotels, etc.)... they were part of the value of the points ... and suddenly, because ownership transferred, they are suddenly less valuable.

I'm honestly not upset about my purchase via resale. This isn't a "complaint" post. We're not planning to use our points for anything other than DVC resorts, so I have no regrets at all. It's just when I look closer at the situation, it just doesn't seem all that smart for Disney.
:confused3

Oh, well. I'm looking forward to staying at AKLV in January! 13.1 miles, here we come!!!

Doug

Brian Noble
11-23-2011, 10:17 AM
It seems that Disney's intention was that the new resale policy would push buyers to purchasing direct, thus keeping the prices higher. However, by devaluing the resale points, it looks like that's actually driving the resale prices lower.
Doubtful. Most resale purchasers are pretty rational when they evaluate a purchase, because they are better informed than the average purchaser. And, in dollars-and-cents terms, the restrictions are doing resale buyers a favor---the "forbidden" point uses are almost always worse deals than just renting out your points for the low end of the market range and using the proceeds to book the vacation you desire. So, to the average (rational) resale buyer, these restrictions are meaningless.

Point prices are dropping due to an inevitable process that is built in to the fundamental economics of timeshares. Essentially, timeshares have little or no organic demand. Very few people wake up and think, "Today, I'm going to obligate myself to pay for the operation and maintenance of a portion of a luxury vacation condo for decades to come." Instead, it is all manufactured by sales tours that promise to bottle the "magic at today's prices". And, those tours are very effective; sales remain fairly brisk even in the face of a relatively poor overall economy.

But, as the system grows, the number of people looking to sell for whatever reason also grows---they get tired of DVC, the kids they bought it for have outgrown Disney, their financial circumstances change, who knows. Unless the set of people interested in buying resale *also* grows just as fast, prices must drop. Inevitably, the secondary market fades, and eventually collapses. It has happened to every other timeshare developer, it is happening to Disney as well. The DVC secondary market has ridden the wave longer than most, because they have a unique product and a strong brand name. But, eventually, the pool of ready and willing resale buyers runs dry.

Rather than encouraging direct sales, it could push buyers to go for bargains which just keep getting better, because resellers feel they have to lower prices to compete with Disney direct.
Other timeshare developers have even more serious resale restrictions, and it has not hurt their direct sales one bit. Instead, it's been an effective marketing tool. That's because---again---there is little organic demand, and most purchasers are not particularly well-informed. The few who do have some vague sense of a resale market can be shown all the shiny baubles that they don't get resale, and as often as not that helps seal the deal.

Kidanifan08
11-23-2011, 10:19 AM
Hello, fellow Hoosier!

I think that Disney's lack of ROFR is a bigger reason why resale prices are drifting lower. Without ROFR, there is no minimum value for the various resorts, so it's a buyers market.

Additionally, there seems to be a glut of resales available in this dismal economy. For the seller in distress, they just want to get out from under this unnecessary expense as quickly as possible. They are probably willing to accept lower selling prices so as not to lose out to another seller.

I agree that the restrictions are not that important, but perhaps it is DVC's effort to make resales appear less valuable to try to get a few of the people looking at resale to think twice. Their other option is to buy the all of the contracts back, and in this economy, even Disney does not want those points to try to re-sell. Disney is still going to sell a lot of points direct because many people who are considering buying DVC don't even know about the resale market.

Enjoy AKV in January -- that's our favorite resort!

Brian Noble
11-23-2011, 10:50 AM
I think that Disney's lack of ROFR is a bigger reason why resale prices are drifting lower. Without ROFR, there is no minimum value for the various resorts, so it's a buyers market.
This is one of the great myths of ROFR. Prices are only set by willing buyers and sellers---those prices are not entirely influenced by ROFR because (a) Disney has never been consistent about what they did and didn't exercise even when they used it, so things always snuck through, and (b) not everyone carefully follows what the exercise prices are, and set prices without knowing the market. Unless Disney is willing to exercise everything below $X, their impact on the market is small---and even Mickey Mouse has a limit to how much cheese he can devote to reacquisitions.

What's more, if you go back and look at the data, I think you'll see that prices started dropping quickly almost a full year before Disney essentially abandoned ROFR, and there hasn't been a "knee in the curve" since then.

Additionally, there seems to be a glut of resales available in this dismal economy.
It's been three years since the economy tanked, and we've been digging out slowly but surely ever since. Luxury goods have made a comeback. Disney's own RevPAR (a measure of hotel booking strength) has climbed substantially, and total profits from the Resorts side of the business have improved. There's a limit to how much you can blame "the economy" for the deeds on the resale market. Instead, the simpler explanation is that the number of Members has grown, but the rate at which people want to sell remains roughly constant. So, the number of contracts available for sale has increased, but the supply of willing resale buyers has not kept up. In that environment, there will *always* be distressed sales, so there will *always* be sellers willing to lowball.

Sure, the fact that some folks are still under water has something to do with it, but it doesn't explain it all. Disney can't escape the same economic and market forces that face every other developer forever.

GrnMtnMan
11-23-2011, 11:37 AM
Inevitably, the secondary market fades, and eventually collapses. It has happened to every other timeshare developer, it is happening to Disney as well. The DVC secondary market has ridden the wave longer than most, because they have a unique product and a strong brand name.
I somewhat disagree.

If there's an active rental market where owners can rent for more than their maintenance dues, then I think the timeshare will maintain some non-negligible value (but still just a fraction of the original purchase price).

To have a strong rental market, resorts have to have some competitive advantage, meaning other nearby vacation rentals can't offer the same thing. Like be the only timeshare walking distance to a major theme park (think BLT, BWV, or BCVs). Or offer access to the neighboring mega-resorts attractions (like Harborside at Atlantis). And you'd also need the competing hotel accommodations to be in the same 'class' as the timeshare accommodations.

Yes, I own a timeshare at Harborside at Atlantis, so I might be rationalizing here. But I think my theory is still sound: if the rental market allows for owners to charge above maintenance fees, then the timeshare will maintain some value.

But I whole-heartedly agree on timeshare resorts that offer nothing but basic shelter, gussied up to look like a resort, will eventually hit a resale price of zero.

awilliams4
11-23-2011, 11:42 AM
I anticipate the difference will become larger and larger in regards to direct and resale. I believe there will be a point where it doesn't matter much how much resales are going for because they will not have near the value or flexibility that direct points will have. Disney will take steps in doing this...as a business, I don't believe they have much choice.

If DVD does nothing about resales, it is only a matter of time where DVD will not be able to compete with resales and DVD will no longer be a profitable venture. Then we will all lose.

While it may not be popular, DVD is and will continue to ensure their long term viability and DVC Members (direct I guess) will also have a vested interest in DVD making these changes.

I would expect resale contracts to become less and less attractive in the coming years. For those that bought resales after March, I would be concerned that the changes in the future will become much more painful. I believe it will start with some of the new RFID things, then maybe the $100 off APs, then eventually they will start messing with the 11/7 month thing and in 15 years when Vero is selling for $2 a point, they will make it to where you can only stay at your home resort.

While it might make some unhappy, doing nothing about resales will be a death blow to DVD and therefore the DVC program itself.

Brian Noble
11-23-2011, 11:56 AM
If there's an active rental market where owners can rent for more than their maintenance dues, then I think the timeshare will maintain some non-negligible value (but still just a fraction of the original purchase price).
I agree with you. However, there is more friction to owning that to renting---the owner carries all risk going forward---and so the pool of potential owners is lower than the pool of potential renters. Indeed, by my accounting resale prices have already crossed the "cheaper to own than rent" threshold---and are still dropping. And, I include opportunity cost in that accounting. If you ignore it (as most do) owning comes out even more favorably.

Edited: sorry awilliams, I mis-understood your point. I agree with you; it is likely that DVC will continue to put up window dressing that attempts to devalue resale contracts. However, if they follow the lead of most other systems, it will be only that---window dressing, not anything that is truly substantive.

hauntedcity
11-23-2011, 12:43 PM
Does DVD give any suggestions on what to do if an owner has to sell due to any number of circumstances (financial, personal, or otherwise)? I agree that someone should not purchase DVC with the thought of reselling or it holding value, but with the new policy, DVC is lowering the value if you need to sell. This isn't directed at potential resale buyers; rather, it's telling potential direct buyers that their purchase loses value as soon as they try selling it. I think I'm still just having trouble seeing how the new policy helps Disney in the long run.

Right now, we're so focused on how it affects buyers of resale. How does it make existing owners feel that their existing, pre-March ownership has been devalued and made much less attractive to resale buyers?

Doug

(Thanks for all the great thoughts on this topic! Good stuff!)

DenLo
11-23-2011, 12:44 PM
There is no evidence that the resale prices are dropping solely because of the new resale policy. We've been tracking resale point prices for awhile and since 2008 the prices have been steadily dropping.

I think the economy is a big factor. We know that there have been a lot of contracts that the DVC have required due to bankruptcy, or people just returning it back to DVC. There's a thread by wdrl that tracks that information. Also because of the economy some can no longer afford the expense to get to WDW or the cost of going to the parks. Some people are just changing their vacations because the kids are getting older and they have too many commitments at home. The age of the resorts could be a factor, younger couples want more modern amenities and larger kitchens. There are more timeshares available that are starting to compete with the DVC and offer a nice product for a better price. And lastly the resale limitation is probably have an affect on prices, mainly because sellers are more scared and are selling quicker for lower prices and buyers are taking advantage of them.

I just can't agree that the resale limitations is the sole cause of prices dropping.

Brian Noble
11-23-2011, 12:54 PM
Doug: I believe they are sent to Fidelity.

As for how it helps Disney---it's pretty simple. Anyone who *really* understands the resale market pretty much won't buy directly from Mickey for nearly any reason. Those tour guests are just lost. Anyone else on the tour either has no idea the resale market exists, or has heard about it, but doesn't really know the ins and outs. For the former, it's a non-issue. For the latter, the Guide waves the Disney Collection in front of them, and hints that resale members "aren't really *full* members", and pretty soon the prospect of the resale market recedes into the rear-view mirror. This hinges on a couple of important facts about the average timeshare purchase. First, it is usually made without prior due diligence. Second, it's as much an aspirational purchase as a rational one, and so the threat of "missing something" holds a lot of sway.

As to the downside---your contract drops even farther in value as soon as the ink is dry---you'd think that would have an impact on sales, but nearly every other developer went this way years ago, and have only increased the differentiation between developer and secondary purchases. Either they are all stupid, or the sales recovered by dispelling the specter of resale outweigh the sales lost by folks realizing that selling is even harder, should they have to. My money is on: "They aren't stupid," again because timeshare purchases are emotional, and few think about disposition when they are "bottling tomorrow's vacation magic at today's prices."

GrnMtnMan
11-23-2011, 01:53 PM
they will start messing with the 11/7 month thing

This would have more of an impact on direct buyers than resale: resale buyers are generally more informed about what they are purchasing and how they intend to use it...especially people who have purchased since the rule change. DVC is contractually obligated to provide a one month preference period for booking a home resort...this is not something DVD can play with as a resale owner has the same legal rights to the use of his/her points at the home resort as a direct buyer does.

And since resale buyers are generally more informed, they're going to be on the phone the moment their booking window opens, thus filling inventory much quicker than it's filled now....even if its just to reserve a prime week to put on the rental market. So direct buyers who were sold all this flexibility will be trying to book with what's left over.

Which is to say I don't think they'll play with this window on a direct versus resale basis.

Annabell
11-23-2011, 02:51 PM
IMO.... I do think that the resale restrictions has caused DVC to decrease in value. As a potential new buyer, even if I am going to buy from Disney direct, I will consider what my contract would be worth say few years down the road... just in case I need to sell for whatever reason.
So at the time I need to sell my DVC contract it becomes a resale contract with the restrictions in place for the new buyer. This would definitely cause a decrease in value for my DVC contract.
So what I am trying to say is that the DVC does not hold it's value anymore once you want to sell it ! This is a big consideration for me when deciding not to buy DVC.
If Disney is going to implement more restrictions for the resale contracts in future, they are just killing themselves because who is going to buy something knowing that the resale market would make it worthless ! Not me !

Greysword
11-23-2011, 04:09 PM
Anyone who *really* understands the resale market pretty much won't buy directly from Mickey for nearly any reason. Those tour guests are just lost. Anyone else on the tour either has no idea the resale market exists, or has heard about it, but doesn't really know the ins and outs.A few reasons an informed consumer may decide to buy direct from Disney, despite the higher prices include:

1) New Resort: The newest resort is valuable to the buyer, and either points have not yet hit the resale market or are maintaining their value for a period of time. Bay Lake Tower is a good example of this, as the MK location was highly sought after by current members, some members delaying purchase until such a resort was built, and new members that enjoy this area over others. In addition, BLT resale points have held their value relative to direct purchase well, until DVD increased their prices exponentially over the past year and a half.

2) Expiration Year: The new resort has a significantly longer number of years before Disney can reclaim the deed than the previous resorts. Although SSR is currently influencing this variable, since it has about the same expiration date as AKV, expiration is a factor to consider.

3) Financing: Although the general consensus by the financially conscientious on here is to never finance a luxury, many of us did and will finance our DVC purchase. Buying through DVD permits decent financing terms with less work than using an outside lender to purchase resale.

As a side note, the ability to use points within the Disney Collection holds some value, and is not just a gimmick or a bauble that is never fully appreciated. The greatest example for this would be at Disneyland. DVC members on the West coast (and in neighboring States) find it easier, at times, to satisfy their Disney park craving with a quick weekend trip to DLR. Many times, rooms at VGC are not available due to the very small size and popularity of the resort, especially on short notice (short for DVC owners, that is ;)). As such, using points at the DLR hotels is an excellent avenue, especially if it is past the banking date and a trip to Florida is not possible.

Thus, an informed DVC customer may choose to buy direct from Disney at a higher price point than resale under many viable circumstances. What percentage of the population fall into this category, I'm not sure.


As to the downside---your contract drops even farther in value as soon as the ink is dry---you'd think that would have an impact on sales, but nearly every other developer went this way years ago, and have only increased the differentiation between developer and secondary purchases. Either they are all stupid, or the sales recovered by dispelling the specter of resale outweigh the sales lost by folks realizing that selling is even harder, should they have to. My money is on: "They aren't stupid," again because timeshare purchases are emotional, and few think about disposition when they are "bottling tomorrow's vacation magic at today's prices."

As a potential new buyer, even if I am going to buy from Disney direct, I will consider what my contract would be worth say few years down the road... just in case I need to sell for whatever reason.

So what I am trying to say is that the DVC does not hold it's value anymore once you want to sell it ! This is a big consideration for me when deciding not to buy DVC.
If Disney is going to implement more restrictions for the resale contracts in future, they are just killing themselves because who is going to buy something knowing that the resale market would make it worthless ! Not me !These are valid points around the same concern, the final value of the timeshare should the member wish to sell. Luckily, one of the mantras repeated on here (as noted by Brian, above) is that DVC is not an investment, rather a prepaid lodging. As such, some direct customers understand the timeshare's value decreases immediately, and will likely reach $0 (as anyone even remotely observing the timeshare industry has witnessed). For any informed buyer, resale should be a factor, but not a major one.

Thus, the value of the timeshare must be reached through usage, before selling, to make the purchase viable. Once the value is reached (or if outside circumstance force a premature sale), the informed member should be willing to let the points go for $1, if that is the selling price, simply to become free of the annual dues.

Brian Noble
11-23-2011, 04:57 PM
There may be a few people who truly understand the resale market that later buy direct, but I bet that percentage is vanishingly small.

New resorts? Today's new resort is tomorrow's resale bargain. Already BLT prices are down into the $80s, and they are likely to only go lower. And, in the first few years, there is often a window between declared and sold inventory, making that resort bookable at 7 months. There are exceptions for particular view categories (THV and AKV-Concierge) but those are relatively rare.

Expiration year? AKV is down to the 60s. You can get a couple extra years at BLT, and a couple more at AUL, but few people make these sorts of decisions based on something that happens 55+ years from today. Even fewer will pay $60/pt for those few extra years far off into the future.

Financing? Resale buyers are savvy purchasers. Chances are good they would not consider financing, and even if they did they would use lower-cost avenues of borrowing (home equity/refinance).

As for the Disney Collection: last I checked, it was still true that it is more "efficient" to rent your points and use the proceeds to book the DLR/PP room you wanted. It's not as convenient, but again---the resale buyer is probably not someone much swayed by convenience. If they were, they would not be resale buyers.

I'm not saying that these have *no* value---they do. But in the mindset of the "resale buyer"---someone looking to maximize bang-for-buck---they are almost certainly trumped by the 30-50% savings you get going resale. I'll bet you many mickeybars that the sales conversion rate on folks touring who have also bought resale since, say, 2009 is incredibly low. From where I sit, the exclusion of "March '11" resale Members from the Member Cruise is pretty compelling evidence, even if circumstantial.

Thus, the value of the timeshare must be reached through usage, before selling, to make the purchase viable.
Exactly so.

Greysword
11-23-2011, 06:00 PM
Great points all around, Brian. I would like to add to my previous comments for clarity; I was focusing on new potential members, who are weighing both options equally. I agree that it is more probable that members via resale are significantly less likely to purchase direct, but it does happen (like the string of caveats? :rolleyes1) for many reasons.

There may be a few people who truly understand the resale market that later buy direct, but I bet that percentage is vanishingly small. To be honest, this is the most surprising aspect to me, since information is extremely easy to access and the expense is high. This is especially astonishing given the prevalent "doom and gloom" news on timeshare values in general society.

A cursory Google search for timeshares will lead a person to the TUG boards (that's where I ended up first). A DVC search would point straight to here, DVC News, MousePlanet, Allears, or other boards frequented by knowledgeable people. I would even bet the questions we get from new visitors on the other board are generated from a random visit.

Our family bought direct on all of our points, and I'm glad we did. We are getting the full value from our purchase, and if we need to sell for $1 someday, that would be fine as it would be to discharge the annual dues instead of obtain a pot of cash. That said, I would prefer to sell for at least enough to cover closing costs :thumbsup2

JimMIA
11-23-2011, 06:04 PM
3) Financing: Although the general consensus by the financially conscientious on here is to never finance a luxury, many of us did and will finance our DVC purchase.I'm pretty conscientious financially, but I'm just not smart enough to determine whether an individual family -- who I don't know, and whose finances I don't know -- should finance or not. So I'm not going there.

I DO get a sick little tingling feeling in my tummy when I read the "Can I finance DVC with bad credit, bankruptcy, low credit score..." threads. But their question is CAN I, not SHOULD I, so I don't get involved in those discussions either.

However...IF someone is financing, they certainly should add the cost of financing (whether they're financing direct or resale) to their cost of purchase to determine their actual cost. And add the financing cost for the FULL term of the loan -- don't pull one of those "Oh but we're going to pay it off early" (wink, wink) dodges...even if you DO pay it off early.

To me, for someone to purchase direct because they HAVE to finance is "compounding the felony." They're paying double the purchase price in many cases because they're buying something they have to finance.Buying through DVD permits decent financing terms with less work than using an outside lender to purchase resale.Whether 11%-15% are "decent financing terms" is open to question.

JimMIA
11-23-2011, 06:09 PM
A cursory Google search for timeshares will lead a person to the TUG boards (that's where I ended up first). A DVC search would point straight to here, DVC News, MousePlanet, Allears, or other boards frequented by knowledgeable people. You're absolutely right...but.

And the but is...MOST people who get interested in DVC never take the Google step. They make a decision to purchase a timeshare (50 year to lifetime financial committment) with less research than they put into their sandwich order at Subway.

Brian Noble
11-23-2011, 07:07 PM
To be honest, this is the most surprising aspect to me, since information is extremely easy to access and the expense is high. This is especially astonishing given the prevalent "doom and gloom" news on timeshare values in general society.
I know. I'm surprised by it as well. But, the major players all keep selling full-freight timeshares at a large clip---AND their owners are still generally happy when surveyed---despite the obvious facts at hand.

Partly, it's that these purchases are impulse buys, driven by emotion. Partly it's because the sales force knows how to play their audience. Partly, it's because a lot of folks don't want to be told they made a bad decision, so they either never look, or they ignore what they find. In short: people are complicated.

Our family bought direct on all of our points, and I'm glad we did. We are getting the full value from our purchase
That is all that matters. The value of a timeshare is in its use, nothing more!

Dean
11-23-2011, 08:01 PM
Does DVD give any suggestions on what to do if an owner has to sell due to any number of circumstances (financial, personal, or otherwise)? I agree that someone should not purchase DVC with the thought of reselling or it holding value, but with the new policy, DVC is lowering the value if you need to sell. This isn't directed at potential resale buyers; rather, it's telling potential direct buyers that their purchase loses value as soon as they try selling it. I think I'm still just having trouble seeing how the new policy helps Disney in the long run.

Right now, we're so focused on how it affects buyers of resale. How does it make existing owners feel that their existing, pre-March ownership has been devalued and made much less attractive to resale buyers?

Doug

(Thanks for all the great thoughts on this topic! Good stuff!)No because it's not their problem and not their responsibility. DVD's job is very simple, sell as many retail points as they can for as large a profit as possible. Every resale they prevent supports that goal even if that member doesn't end up buying retail. They are in direct competition if you need to sell.

ROFR really has little to do with resale value and likely has not affected resale values at all in a number of years. ROFR actually works against buyers currently because it drives a number of people away from resale who either don't want to chance spinning their wheels for a deal that might fall through or for those that have lost a deal previously and simply give up and buy retail. In reality the price difference has little to do with resale vs retail. MOST retail buyers either don't know about resale, don't care or are sold at the sales tour. DVC is a little unique in that they don't actively pursue new potential customers and don't use reasonable pressure sales tactics as well or as frequently as other good companies do. I feel they will have to change these techniques, esp for HI and there is evidence they have adjust somewhat already.

eventually they will start messing with the 11/7 month thing and in 15 years when Vero is selling for $2 a point, they will make it to where you can only stay at your home resort.I am torn in my thoughts on this subject. On one hand at least 2 timeshare companies that are FL based have gone to some type of VIP or other reservation priority system after the fact which suggests it's legally possible. On the other, I don't see a way within the POS and FL statues to allow a differentiation for CURRENT resorts. It'd be easy to do for new resorts if they so chose. The other piece of info is this would fall under reservation rules which by the Multi Site POS, DVCMC has complete control over with no input necessary even from the voting rep.


To be honest, this is the most surprising aspect to me, since information is extremely easy to access and the expense is high. This is especially astonishing given the prevalent "doom and gloom" news on timeshare values in general society.One would think but I've seen people spend 100 times the cost for retail knowing the resale prices even when there was NO difference between the 2 in any way and when financing was not an issue. Major factors include the emotional attachment, gullibility of the buyer and effectiveness of the sales process. Even now with DVC we see people posting about buying direct because of the March change even though there is not a single exchange option lost resale that is of any monetary benefit at all, EVER to anyone. It's all emotion and smoke and mirrors along the lines of have a larger withholding in order to get back money at tax time, only infinitely worse from a financial standpoint.

Our family bought direct on all of our points, and I'm glad we did. We are getting the full value from our purchase, and if we need to sell for $1 someday, that would be fine as it would be to discharge the annual dues instead of obtain a pot of cash.No doubt that the benefit of timeshares is in the usage. However, throwing significant money away on the purchase price would be foolish. The reality is that we have all made choices that could have been better. My goal is to make as few bad choices as possible and as many good ones as I can. Along the way I'd like to help others to know the info that helps them do the same where I have the knowledge to provide the info. What they do with it is up to them.

disneynutz
11-23-2011, 08:30 PM
Do we have any numbers on how many members are buying direct verses resale?

The March restrictions and then subsequent DCL Member Cruise restrictions tells me that Disney is starting their attack to hurt the resale market.

They need to keep selling to stay in business and selling new makes them the most money. If new isn't available to sell, then I see them doing what ever is necessary to drive resales their way.

You don't take money from the Mouse!

:earsboy: Bill

Dean
11-23-2011, 08:51 PM
Do we have any numbers on how many members are buying direct verses resale?

The March restrictions and then subsequent DCL Member Cruise restrictions tells me that Disney is starting their attack to hurt the resale market.

They need to keep selling to stay in business and selling new makes them the most money. If new isn't available to sell, then I see them doing what ever is necessary to drive resales their way.

You don't take money from the Mouse!

:earsboy: BillI'm not aware of hard numbers that are available to outsiders. DVD obviously has that info. I'm not sure it matters what the hard numbers are, only the amount of retail points sold and the inherent profit therein. They don't have to stamp out the resale market, they just need to shift it a modest amount. Likely the most egregious example I can think of is Westgate. Westgate put in ROFR clauses in the resorts they sold but they tried (somewhat successfully) to enforce ROFR for those resorts and deeds that did not have the restriction prior. The other thing they did is they insisted on the sales commission for every ROFR unit. The end effect is they essentially killed the resale market and caused brokers to decline to get involved. My understanding is that ROFR for Westgate technically started in 2005. I'm not sure how this has gone lately though.

VTNuke
11-24-2011, 12:13 AM
I would say it has devalued the program over all. It's not about DVC making money, which is actually a good thing for us members by the way, it's about the value of what we own. There are a few ways that value can be determined:

1) The value of using it. The program is most valuable when it is being used. By that measure, the changes have not hurt the value.

2) How much is someone willing to pay to rent out your points. This has not necessarily been hurt by the changes. It may actually make it go up a bit if more people are paying to rent your points because they can't afford to buy into the program direct from Disney, but want to use the points. I'm stuck on #1, so this really doesn't hurt me.

3) What someone else will pay for your points at resale. This is the area that has gotten hurt by the changes. This is where DVC was a little short sighted. The overall value of DVC is not as much if people aren't willing to pay as much to buy your points from you.

Dean
11-24-2011, 08:09 AM
3) What someone else will pay for your points at resale. This is the area that has gotten hurt by the changes. This is where DVC was a little short sighted. The overall value of DVC is not as much if people aren't willing to pay as much to buy your points from you.DVC doesn't care about your resale value, nor should they. They likely do care about your perceived value but since almost no one buys with the idea of selling later, the value most look at is the savings over what they would pay out of pocket along with the upgrade in accommodations. Actually if they can drive the resale value to near zero, it'll make many not sell at all and just keep it making for less total resales, or they'll let it go back and DVD will get it back and can sell it as new points. This process is extremely simple. From DVD's standpoint it's about making the most retail sales no matter how they do it and no matter how it works after the fact for those members, while staying out of the thoughts of Tallahassee (SC, HI, CA). From DVCMS's standpoint, it's about having the larger % of members possible who pay dues. I know that this will rub many the wrong way who assumed that Disney was different, this was a partnership, etc, their mistake. Timeshare sales are like used cars, buyer beware and like new cars where the value drops precipitously upon purchase, only timeshare are far more extreme in both areas than cars are.

Judique
11-27-2011, 09:25 AM
I know that this will rub many the wrong way who assumed that Disney was different, this was a partnership, etc, their mistake. Timeshare sales are like used cars, buyer beware and like new cars where the value drops precipitously upon purchase, only timeshare are far more extreme in both areas than cars are.

Love this analogy, Dean!