Direct Purchase benefits announced!

[zanygames]

The big issue I see is that the second you sign up and buy DVC now with Disney, it is almost instantly worthless. If you had to sell your DVC for whatever reason, job loss, etc. you just lost some amazing amount of money because now you are reselling it on the resell market and the buyer can not get the benefits the original contract had. Your $130 a point that you paid seconds ago probably just dropped to $50 or less before the ink dried on the paper you just signed.

Basically the $20k I spent on DVC is going to be worth very little if I ever have to sell due to a future hardship or just because my lifestyle and vacation preferences might have changed years down the road.

 

[joelnkelly]

Once you have used your membership to recoup that $20K you spent on the membership anything you make after that is just gravy. Thats at least how I look at it. We track all the times we use our points and see the going rates for the rooms we booked, then add those up. Once we hit the amount we paid for our membership then we will have broken even. Anything after that is a bonus, plus if we sell after that then we are good to go. When we bought we realized it was going to be a lifetime commitment, we paid our contract upfront in cash (money gone, i will never see it phyiscally again, only in vacations). Yearly I will spend approx $1,600 on dues, that is the only money out of my pocket as of now.

 

[DougEMG]

When I bought I looked at now many years do I have to go Disney to reach the break even point between the DVC costs (initial costs + MF) vrs my normal hotel costs.

For me that worked out to about 9 years. So if I hold my points for more than 9 years I come out ahead. If I hold my points for less than 9 years I could lose depending on what kind of price the points are worth resale. If resale value drops to $0 (which it will not), then I have to wait the full 9 years to break even.

Everyone has that breakeven point and and if you have to sell before that breakeven point you could and probably will lose money. The change that Disney made has slighly increased the amount a person will lose if they have to sell early. A safe assumption is that there will be more changes made that will increase the amount a person will lose if they have to sell early. An ultra conservative assumption is to assume a $0 resale value (which is what I used).

 

[Tiggr88]

So what about booking windows is contractually guaranteed (if anything) and what is considered a perk?

• Is booking at your home resort at 11 months contractual?
• If I've understood what I've read in these posts, the ability to book at other resorts within DVC at any period, including today's 7 month window is a perk, correct?
• From the opposite standpoint, is the window between booking at home resort and booking at other guaranteed to be a minimum level?

For example, if they went to a tiered system and decide to offer higher point value contracts (or owners) or direct vs. resale, could they then say you can book outside your home resort at 8 months? 10 months and 25 days?

Clearly that would have an impact on the value of the home resort booking even if they technically have not changed the fact that you still have a booking window at 11 months.

I always assumed (incorrectly obviously) that the internal DVC booking window process was not changeable. Now I'm curious how changeable it is.

Thanks to everyone for their explanations.

 

[tjkraz]

So what about booking windows is contractually guaranteed (if anything) and what is considered a perk?

About the only thing that is guaranteed is a one month booking advantage at your Home resort. The four month advantage we currently have is not written into the POS, nor are the exact 7 and 11 month periods.

One thing I could see DVC doing would be sticking with the 11/7 month windows for resale buyers and going to something like 11/9 or 11/10 for direct buyers. Everyone would still have a one month advantage as stated in the POS but direct buyers would gain access to non-Home resorts sooner than resale buyers.

I have no legal expertise whatsoever but I don't see anything in the POS that would prohibit this from happening.

There were some rumblings that DVC was considering holding resale buyers to the Home resort and no other. I'm not sure that would be legal. DVC is actually a collection of individual condominium associations and there are exchange rights established between the two. I'm not quite sure that DVC could limit those exchange rights to one group of owners but not another.

 

[JWG]

The only thing we're guaranteed is our home resort. We're not guaranteed only an early home booking window and then booking anywhere. DVC can decide to only allow bookings at home resorts if they want to.

Do I think they will? No. But they could.

I've over simplified, but yes, they can also play with the booking windows and what you can do with points outside of your home resort.

This is why I've always said, buy where you want to own. Base your purchase solely on the contracted components of the timeshare, not the perks.

 

[nunzia]

Although this particular change doesn't apply to me, I can certainly see this move as a testing of the waters, so to speak, with more changes coming down the road.

 

[Sandisw]

The only thing we're guaranteed is our home resort. We're not guaranteed only an early home booking window and then booking anywhere. DVC can decide to only allow bookings at home resorts if they want to.

Do I think they will? No. But they could.

I've over simplified, but yes, they can also play with the booking windows and what you can do with points outside of your home resort.

This is why I've always said, buy where you want to own. Base your purchase solely on the contracted components of the timeshare, not the perks.

I thought that they could only restrict you from staying elsewhere if that resort was somehow pullout of the DVC group. I guess they could make everything its own group, but I didn't think they could just say "no more trading".

I agree that I don't think this would be done as that would really change things for many people who didn't necessarily buy at their first choice resort or really didn't have one to begin with so home resort didn't matter.

 

[Sammie]

If I were going to guess, I'd guess they would offer a tiered VIP program that would offer benefits like booking and/or banking advantages, maybe elimination of the Rule of Four, or possible preference in special accommodations like certain views, etc.

If they follow the rest of the industry, they'll do the tiers by number of points owned and either limit it to direct-purchased points or require a substantial direct purchase of additional points. Or both.

That kind of a system would cost them nothing and would not violate the POS as far as I can tell.

And all the standard caveats would apply:

• The benefits are just perks which DVC could change or revoke at any time
• The benefits are no big deal to most owners
• The cost savings of resale would continue to FAR outweigh the value of the VIP program.

You don't think changes in booking would be a big deal?

 

[tjkraz]

I thought that they could only restrict you from staying elsewhere if that resort was somehow pullout of the DVC group. I guess they could make everything its own group, but I didn't think they could just say "no more trading".

That's consistent with my understanding. A "condominium association" exists for each resort and there are agreements in place to share in the entire DVC program.

While it's technically possible for all owners to be held to their Home resort, in the grand scheme of things the odds of that happening are extremely slim. DVC markets the entire 11-resort program as a package. I don't see how anyone benefits from DVC creating a scenario where Aulani owners have zero access to Saratoga Springs or the Grand Californian.

 

[JimMIA]

The only thing we're guaranteed is our home resort. We're not guaranteed only an early home booking window and then booking anywhere.

My understanding is that we are guaranteed two things:

1. The ability to use our points at our home resort, subject to availability.
2. A one-month booking advantage over non-home resort owners AS LONG AS DVC permits members to book at non-home resorts. The ability to use our points at non-home resorts is NOT guaranteed, but if that's allowed, a home resort booking preference is mandated by the POS.

I personally don't think DVC will change the 11/7 system now, primarily because "if it ain't broke, don't fix it." Their current system of booking has served them well, generating pretty full resorts almost all the time.

 

[Jason@dvcstore]

The big issue I see is that the second you sign up and buy DVC now with Disney, it is almost instantly worthless. If you had to sell your DVC for whatever reason, job loss, etc. you just lost some amazing amount of money because now you are reselling it on the resell market and the buyer can not get the benefits the original contract had. Your $130 a point that you paid seconds ago probably just dropped to $50 or less before the ink dried on the paper you just signed.

Basically the $20k I spent on DVC is going to be worth very little if I ever have to sell due to a future hardship or just because my lifestyle and vacation preferences might have changed years down the road.

In my opinion the benefits they are taking away are not that big of a factor to most owners.

I am surprised someone hasn't started a post asking a poll question.

Something such as:
1) How long have you been a member?
2) How many times have you used the concierge collection option?
3) How many times have you used the adventurer collection option?
4) How many times have you used the Disney collection option?

If the survey resulted in a large number of people using those things then I would expect Disney to get all those people to add on from Disney after 3/21/11. If the survey showed a small percentage of owners using those options then I don't think would have much of an effect.

Jason

 

[Fundytrail]

Perks are an easy change that would not affect my decision to buy resale.

Other major changes to DVC ownership may not be easy changes as there is a fair bit of protection for timeshare buyers in Florida, including resale.

And I’m surprised no one has mentioned Florida’s legislative Act, Chapter 721 VACATION AND TIMESHARE PLANS.

 

[Dean]

The big issue I see is that the second you sign up and buy DVC now with Disney, it is almost instantly worthless. If you had to sell your DVC for whatever reason, job loss, etc. you just lost some amazing amount of money because now you are reselling it on the resell market and the buyer can not get the benefits the original contract had. Your $130 a point that you paid seconds ago probably just dropped to $50 or less before the ink dried on the paper you just signed.

Basically the $20k I spent on DVC is going to be worth very little if I ever have to sell due to a future hardship or just because my lifestyle and vacation preferences might have changed years down the road.

While the numbers may have adjust slightly and the ease of selling may have also, technically it's no different now than it was 3 months ago. And DVC is still far better in that regard than most any other timeshare. Though I don't see how it affects the decision on DVD's part. To me this is simply a fact of timeshares.

 

[Dean]

So what about booking windows is contractually guaranteed (if anything) and what is considered a perk?

• Is booking at your home resort at 11 months contractual?
• If I've understood what I've read in these posts, the ability to book at other resorts within DVC at any period, including today's 7 month window is a perk, correct?
• From the opposite standpoint, is the window between booking at home resort and booking at other guaranteed to be a minimum level?

For example, if they went to a tiered system and decide to offer higher point value contracts (or owners) or direct vs. resale, could they then say you can book outside your home resort at 8 months? 10 months and 25 days?

Clearly that would have an impact on the value of the home resort booking even if they technically have not changed the fact that you still have a booking window at 11 months.

I always assumed (incorrectly obviously) that the internal DVC booking window process was not changeable. Now I'm curious how changeable it is.

Thanks to everyone for their explanations.

All you're really guaranteed is a reservation opportunity at your home resort subject to rules and availability. As long as you're in the club, you also have a min of a 1 month priority over other club members who own elsewhere. However, that assumes your resort is operating and functional. If it goes belly up, you aren't even guaranteed that. You're also not guaranteed the parks with be operational.

I thought that they could only restrict you from staying elsewhere if that resort was somehow pullout of the DVC group. I guess they could make everything its own group, but I didn't think they could just say "no more trading".

I agree that I don't think this would be done as that would really change things for many people who didn't necessarily buy at their first choice resort or really didn't have one to begin with so home resort didn't matter.

That's correct, I believe it's an unlikely risk overall, however, VB and HH have a slightly higher risk than the others due to both physical location and the nature of those 2 resorts.

 

[tjkraz]

In my opinion the benefits they are taking away are not that big of a factor to most owners.

I am surprised someone hasn't started a post asking a poll question.

Something such as:
1) How long have you been a member?
2) How many times have you used the concierge collection option?
3) How many times have you used the adventurer collection option?
4) How many times have you used the Disney collection option?

If the survey resulted in a large number of people using those things then I would expect Disney to get all those people to add on from Disney after 3/21/11. If the survey showed a small percentage of owners using those options then I don't think would have much of an effect.

Jason

Results might be a bit slanted due to the nature of Internet followers, though. I suspect we (collectively) care a bit more about maximizing value than the rest of the DVC world. I'm sure we've cost DVC thousands of points' worth of sales over the years by reinforcing the idea of buying points just for DVC resort use. Owners who don't frequent websites and message boards wouldn't have been privy to that advice.

It's a pretty big carrot for DVC to dangle. Thinking back to our original purchase, I know my wife and I did appreciate the fact that DCL was a booking option even though we've never used it. In fact, I could actually see us using points for Disneyland Paris someday.

It's hard to tell how people will respond to the prospect of being completely barred from DCL, Disneyland Hotel, Paris, Tokyo, etc. for 40-50 years of ownership. Everyone has their tipping point. Some will undoubtedly be swayed to buy direct but I couldn't even begin to assign a number.

 

[gkrykewy]

At first I thought this was a non-issue, but the cruise exchanges make it one. Using points to book cruises is a big deal for people, even if it's a poor points value. Look no further than the panic last year (even among the most educated of DVC members here on the DIS) when cruise bookings were restricted.

 

[nyck]

At first I thought this was a non-issue, but the cruise exchanges make it one. Using points to book cruises is a big deal for people, even if it's a poor points value. Look no further than the panic last year (even among the most educated of DVC members here on the DIS) when cruise bookings were restricted.

People all look at using points for cruises as a waste, but that just depends on who you are. If you have already hit your "break even" point, how is it a waste of points? You are only paying for dues and I am not in this to make money anyway. I am not wanting to go through the hassle of renting my points, so if a cruise is what I want to do with my points this year so be it.I am only paying my dues, so the points values to me are what I make of it, not a dollar amount. That is the beauty of owning. If they took that away in the future that is fine too, but as long as I have that as an option I am happy. Also now that they are taking that away from resale folks I am happy so I can maybe exchange for a cruise even easier now. But I do understand that is a PERK and can be changed at anytime.

 

[Sammie]

That's correct, I believe it's an unlikely risk overall, however, VB and HH have a slightly higher risk than the others due to both physical location and the nature of those 2 resorts.

Wouldn't Aulani have the same risk,

 

[tjkraz]

Wouldn't Aulani have the same risk,

Perhaps to some degree but Disney is a lot more invested in Aulani than the others. 300 cash rooms, 3 restaurants, wedding facilities, convention facilities. Their stake in Aulani goes much deeper than a couple hundred sold-out timeshare villas.

With regard to Vero and HHI, I don't disagree with Dean (much easier to envision those two sold off rather than a theme park resort) but I also don't know why DVC would consider getting rid of them either. Aside from the management fees received, it seems like those two resorts add value to the DVC product as a whole. The resorts don't seem substantial enough for another manager to want to pursue the business.

Perhaps in another 32 years Disney will find another home for the properties but until then it seems like a case of no harm, no foul. Owners pay for operations and upkeep and they give DVC two non-park destinations to market.