Disney Direct Tricks?

[Dean]

Resales make up less than 15% of the market, hardly a number that threatens Disney market dominance.

Frankly, many of those buying resale would never pay Disney's direct prices so the number of direct sales lost to the resale market is even lower.

In order to justify Disney's direct prices, they need a small but robust resale market. It's difficult to justify charging $150/point if "restricted" resales are selling for $20/point.

Disney needs a strong resale market and as long as it remains small, would be foolish to place unnecessary restrictions on resales.

I think I disagree on every point. 15% is a large % in this situation. It's likely most who buy would buy retail if that were the only option they knew about or the only one that was viable. Disney doesn't have to justify the prices with resale. Those companies who's timeshares can be had for pennies or less, still sell at inflated prices and do so successfully. Disney doesn't need resale, only the appearance that one can sell later if they want and even then it's not something they'll talk about in a fair overall way. At today's prices very few would buy initially (full size contract) retail if they were truly informed and understood the risks and realities. The few exceptions would include those set on VGF or VGC for most of their stays. The rest are either ill informed at the time of the purchase, ignoring other costs and risks and/or making assumptions based on availability and factors that could easily change or be taken away. Just so there's no misunderstanding, I AM making a blanket statement that those who buy largely to cruise, exchange or buy a full size contract they could buy for literally half they are paying ARE making a poor choice whether they are aware of the options or not. They have the right to do so.

 

[BenDiscipio]

Resales make up less than 15% of the market, hardly a number that threatens Disney market dominance.

Frankly, many of those buying resale would never pay Disney's direct prices so the number of direct sales lost to the resale market is even lower.

In order to justify Disney's direct prices, they need a small but robust resale market. It's difficult to justify charging $150/point if "restricted" resales are selling for $20/point.

Disney needs a strong resale market and as long as it remains small, would be foolish to place unnecessary restrictions on resales.

First of all, any restrictions they make are not going to affect the resale market that much. They are still a Disney resort timeshare and are already priced attractively. Even if they restricted the Poly to only direct buyers, I can't see that hurting resale prices more than a couple of bucks.

And as to the assertion that most of those 15% of owners who bought resale...would not pay direct prices, that's a bunch of hogwash. Most of the resale buyers I see on here are Disney fanatics....and many of them were, at one point or another, on the fence on whether to buy direct or resale...

 

[MsTessP]

Put me down as one Disney fanatic who would not be an owner if not for resale.

 

[Nabas]

Put me down as one Disney fanatic who would not be an owner if not for resale.

Me too!

Been going to WDW as an adult for over 30 years (I think that makes me a fanatic!) but definitely would not be a DVC owner if not for resales.

 

[jasonv1]

Admittedly I'm new to timeshare ownership. I guess once you accept the concept of paying yearly MF's and sign a contract that allows changes after the fact you must also accept the you've given up a lot of control.

It's nice to dream of extra perks when buying direct but it's much easier just to reduce them for people who bought/buy resale. So what if those resale points never get bought, someone is paying the MF's, which is what matters. Even better they don't pay MF's and DVC forecloses and gets the points back on the cheap.

I'm know I'll enjoy myself regardless, which is why I bought even with the restrictions that exist today. No access to Poly would be disappointing, but I'll understand why if it does happen.

Then why go there at all? They've already started this ball rolling, if they didn't see it as important, they never would have initiated the current restrictions. EVERY resale is a potential lost retail sale and every lost retail sale is lost margin.
You would be the exception but Disney doesn't care if they lose a resale buyer, only that they lose ENOUGH retail buyers that the change clearly hurts them more than it helps them.

Not exactly accurate. What they'd have to do would be to create a new and separate timeshare system. They could then allow access to some and not others if they so chose depending on the rules in place for the new system. I think you're assuming that the current restrictions at the time of purchase are locked and that is NOT the case. Disney could have made the changes they did 3 years ago retroactive to ALL resale buyers and they can add additional restrictions to those unqualified points as they see fit assuming those restrictions are not in violation of the POS and related documents. Essentially they can't differentiate on usage at club resorts (current or future) but they can remove EVERYTHING else if they want. Unlikely. This is one of the beauties of a timeshare system from Disney's standpoint. In all likelihood someone will use the room whether it's you, me or someone else. At that point Disney as a whole will get some money and DVC loses nothing. And no matter how you use your points or when, they will generate income to Disney at some point and in some way. There's no way for an owner to truly hurt Disney in their points usage patterns (or not using them) or in selling for some reason.

I think those days are long gone except for some very specific and limited options. At one point resale was roughly 20% of retail but those days are gone even when we're currently at a recent high point. As I said before, there really aren't enough perks they can/will add that would be enough to affect this balance. They only way to push people to retail is to take away from resale. Perks are generally little or no cost items. They could introduce a VIP system, they could tie extensions to retail purchases but as far as just throwing on gifts to entice people to buy resale, don't expect much and what you do get will be mostly window dressing.

 

[jasonv1]

Admittedly I'm new to timeshare ownership. I guess once you accept the concept of paying yearly MF's and sign a contract that allows changes after the fact you must also accept the you've given up a lot of control.

It's nice to dream of extra perks when buying direct but it's much easier just to reduce them for people who bought/buy resale. So what if those resale points never get bought, someone is paying the MF's, which is what matters. Even better they don't pay MF's and DVC forecloses and gets the points back on the cheap.

I'm know I'll enjoy myself regardless, which is why I bought even with the restrictions that exist today. No access to Poly would be disappointing, but I'll understand why if it does happen.

Then why go there at all? They've already started this ball rolling, if they didn't see it as important, they never would have initiated the current restrictions. EVERY resale is a potential lost retail sale and every lost retail sale is lost margin.
You would be the exception but Disney doesn't care if they lose a resale buyer, only that they lose ENOUGH retail buyers that the change clearly hurts them more than it helps them.

Not exactly accurate. What they'd have to do would be to create a new and separate timeshare system. They could then allow access to some and not others if they so chose depending on the rules in place for the new system. I think you're assuming that the current restrictions at the time of purchase are locked and that is NOT the case. Disney could have made the changes they did 3 years ago retroactive to ALL resale buyers and they can add additional restrictions to those unqualified points as they see fit assuming those restrictions are not in violation of the POS and related documents. Essentially they can't differentiate on usage at club resorts (current or future) but they can remove EVERYTHING else if they want. Unlikely. This is one of the beauties of a timeshare system from Disney's standpoint. In all likelihood someone will use the room whether it's you, me or someone else. At that point Disney as a whole will get some money and DVC loses nothing. And no matter how you use your points or when, they will generate income to Disney at some point and in some way. There's no way for an owner to truly hurt Disney in their points usage patterns (or not using them) or in selling for some reason.

I think those days are long gone except for some very specific and limited options. At one point resale was roughly 20% of retail but those days are gone even when we're currently at a recent high point. As I said before, there really aren't enough perks they can/will add that would be enough to affect this balance. They only way to push people to retail is to take away from resale. Perks are generally little or no cost items. They could introduce a VIP system, they could tie extensions to retail purchases but as far as just throwing on gifts to entice people to buy resale, don't expect much and what you do get will be mostly window dressing.

 

[Dean]

Admittedly I'm new to timeshare ownership. I guess once you accept the concept of paying yearly MF's and sign a contract that allows changes after the fact you must also accept the you've given up a lot of control.

It's nice to dream of extra perks when buying direct but it's much easier just to reduce them for people who bought/buy resale. So what if those resale points never get bought, someone is paying the MF's, which is what matters. Even better they don't pay MF's and DVC forecloses and gets the points back on the cheap.

I'm know I'll enjoy myself regardless, which is why I bought even with the restrictions that exist today. No access to Poly would be disappointing, but I'll understand why if it does happen.

That's a nice early step in truly understanding the practicality of a timeshare. With those revelations you're ahead of a large number of people who've been here on DIS for years. Personally I doubt that the Poly will be unaccessible for ANY reason or that DVC has the willingness to make such radical changes that it truly turn the tide to retail at any cost. However, they've already made the biggest step by instituting any differentiation at all. DVC still has high end resorts and is a good system, learn the system well and be proactive because you truly are in competition with your fellow members. For the record, were I buying today it would be resale because the numbers don't support otherwise unless you go small or want something like VGF for most trips. The only retail option I'd consider would be a good fixed week at VGF.

 

[Dean]

Admittedly I'm new to timeshare ownership. I guess once you accept the concept of paying yearly MF's and sign a contract that allows changes after the fact you must also accept the you've given up a lot of control.

It's nice to dream of extra perks when buying direct but it's much easier just to reduce them for people who bought/buy resale. So what if those resale points never get bought, someone is paying the MF's, which is what matters. Even better they don't pay MF's and DVC forecloses and gets the points back on the cheap.

I'm know I'll enjoy myself regardless, which is why I bought even with the restrictions that exist today. No access to Poly would be disappointing, but I'll understand why if it does happen.

Just to add, many of the other major players have gone this route already removing perks and benefits from resale and adding them to retail buyers. In all the cases I'm aware of, the company has tied this to a VIP system to some degree or the other. Changes have generally been incremental over time. What this has done is to devalue resale often dramatically. For those that are mostly points based, essentially to or near zero. For Marriott, still based in weeks for the most part resale, the affect has not been as dramatic compared to before the change and is still more a factor of the value of the underlying resort and weeks than anything else. One of the problems for DVC in this situation is that comparatively they're still more to buy and more maint fees for somewhat similar items than the competition, on average around 25-30% higher maint fees with a more variable purchase difference than can be dramatic. Thus for those looking for one system to do both, non DVC timeshares are essentially always the better choice. IF one is going to make a mistake, I'd always rather they underbuy than overbuy. Since I feel one needs to truly learn what they're buying, this would eliminate a rash and completely poor choice from the equation.

The only area I can think of where DVC can realistically add value without negative affects otherwise is for those that own already, they could tie "free" extensions to new purchases. Otherwise I go on the premise that perks are generally little or not cost items to DVD and thus are unlikely to make a difference. You'll see lists of things people would like to have when this type of discussion comes up like free passes but they generally are not realistic items.

 

[CarolMN]

...(snip)......The only area I can think of where DVC can realistically add value without negative affects otherwise is for those that own already, they could tie "free" extensions to new purchases. .....

And even that isn't really a good choice.. Once an extended contract is sold, a resale contract has the longer expiration, too.

 

[Dean]

And even that isn't really a good choice.. Once an extended contract is sold, a resale contract has the longer expiration, too.

Ignoring the overall extension discussion, I'm confident they could structure this option as a win for them. Take the OKW extension since it's the only one that's actually come to fruition. Had they offered it at the same terms OR a new retail purchase (no other discounts) of say a min of 100 points. I assume you're referring to the fact that the current DVC resorts have the extension tied to the land lease and that is an issue but it's one I'm sure they can get around if they put their minds to it. My interpretation on the OKW extension is that the issue in this regard was that they do not have the legal right to enforce a special assessment. However, that no one challenged them on this fairly obvious limitation suggests they could take that route again and add the option I suggested.

 

[Nabas]

I think I disagree on every point. 15% is a large % in this situation. It's likely most who buy would buy retail if that were the only option they knew about or the only one that was viable. Disney doesn't have to justify the prices with resale. Those companies who's timeshares can be had for pennies or less, still sell at inflated prices and do so successfully. Disney doesn't need resale, only the appearance that one can sell later if they want and even then it's not something they'll talk about in a fair overall way. At today's prices very few would buy initially (full size contract) retail if they were truly informed and understood the risks and realities. The few exceptions would include those set on VGF or VGC for most of their stays. The rest are either ill informed at the time of the purchase, ignoring other costs and risks and/or making assumptions based on availability and factors that could easily change or be taken away. Just so there's no misunderstanding, I AM making a blanket statement that those who buy largely to cruise, exchange or buy a full size contract they could buy for literally half they are paying ARE making a poor choice whether they are aware of the options or not. They have the right to do so.

An 85% share is overwhelming dominance of any market.

Disney cannot stop DVC owners from selling and; therefore, cannot stop this market from existing. Disneys primary influence on the resale market is price. By changing direct prices or incentives, adding DVC inventory, altering terms of use, or exercising ROFR, Disney can influence resale price.

Let's examine 4 categories of DVC buyers and see how each is affected by the resale market.

1. Direct buyers who are unaware of the resale market.

By its very nature, the resale market has no effect on these buyers. They purchase directly from Disney, possibly as an impulse buy while on vacation, and remain blissfully unaware of the resale market at least until their 10-day window expires.

2 . Direct buyers who are aware of the resale market but prefer buying direct.

A DVC purchase is not just about money. For many, it's the entire package.

These buyers want the low-pressure, no haggle, easy financing, quick transaction of a direct sale. Above all, they value the ease and security that buying directly from Disney offers.

These buyers like the convenience of being able to use points for cruises or other Disney exchanges without having to deal with renting their points.

These buyers want the premium DVC experience and are willing to pay for it.

3. Resale buyers who would never buy direct.

For these, the primary focus is cost savings. As long as existing DVC members provide inventory by reselling their points, there always will be buyers willing to purchase those points, with supply and demand determining price.

4. Those considering both direct and resale.

This is the category that Disney is potentially losing sales to. For these, price differential is the primary determining factor. If, for example, resale prices were only 10% less than direct, than most would buy direct. If resale price were significantly less, then most would buy resale.

For this category of buyer, a weak resale market only hurts direct sales. Lower resale prices only encourages those considering both direct and resale to go the resale route.​

Disney wants resale prices to be as high as possible. Adding unnecessary restrictions not tied to cost savings undercuts the DVC market by cheapening the product.

Disney should carefully evaluate all DVC benefits to determine which could be restricted to direct-sales buyers without undercutting resale prices.

Disney wants to provide its guides with as many selling points as possible while simultaneously preserving high resale prices.

 

[Dean]

An 85% share is overwhelming dominance of any market.

I wouldn't agree in timeshares but regardless, it's still lost opportunity.

Disney cannot stop DVC owners from selling and; therefore, cannot stop this market from existing. Disney’s primary influence on the resale market is price. By changing direct prices or incentives, adding DVC inventory, altering terms of use, or exercising ROFR, Disney can influence price.

Let's examine 4 categories of DVC buyers and see how each is affected by the resale market.

1. Direct buyers who are unaware of the resale market.

By its very nature, the resale market has no effect on these buyers. They purchase directly from Disney, possibly as an impulse buy while on vacation, and remain blissfully unaware of the resale market at least until their 10-day window expires.

2 . Direct buyers who are aware of the resale market but prefer buying direct.

A DVC purchase is not just about money. For many, it's the entire package.

These buyers want the low-pressure, no haggle, easy financing, quick transaction of a direct sale. Above all, they value the ease and security that buying directly from Disney offers.

These buyers like the convenience of being able to use points for cruises or other Disney exchanges without having to deal with renting their points.

These buyers want the premium DVC experience and are willing to pay for it.

3. Resale buyers who would never buy direct.

For these, the primary focus is cost savings. As long as existing DVC members provide inventory by reselling their points, there always will be buyers willing to purchase those points, with supply and demand determining price.

4. Those considering both direct and resale.

This is the category that Disney is potentially losing sales to. For these, price differential is the primary determining factor. If, for example, resale prices were only 10% less than direct, than most would buy direct. If resale price were significantly less, then most would buy resale.

For this category of buyer, a weak resale market only hurts direct sales. Lower resale prices only encourages those considering both direct and resale to go the resale route.​

Disney wants resale prices to be as high as possible. Adding unnecessary restrictions not tied to cost savings undercuts the DVC market by cheapening the product.

Disney should carefully evaluate all DVC benefits to determine which could be restricted to direct-sales buyers without undercutting resale prices.

Disney wants to provide its guides with as many selling points as possible while simultaneously preserving high resale prices.

I would agree that DVD cannot completely stop sales but they can affect options and choice such that it doesn't make sense to buy resale. Marriott has a variable transfer fee on their newer Trust points system which starts at $2120 and goes up in $250 increments depending on contract size. I don't know if they're still doing it but at one time Westgate was demanding the sales commission as part of the ROFR process effectively eliminating company based resales to the point that no resale company would sell them. Specific to your grouping.

1. I agree, this is the largest number of buyers by far.
2. I somewhat agree however, I would suggest that this group of buyers are often making assumptions that the retail purchase gives them protections that it does not. I would also suggest they are the group most likely to swing from retail to resale or vice versa depending on specifics or more accurately, perceived issues, along with those in group 4. I'd also suggest that for many of them, they are making assumptions that the retail purchase offers protections and real benefits that it does not as well as making assumptions about the resale process that are often either not accurate or exaggerated at best.
3. For this group I'd suggest that for every single person who says this is the case, likely about 90% of them are fooling themselves. I'm sure there are those that would be as you suggest but FAR more than think they would be but that if retail were their only viable option, they'd eventually come around and buy retail.
4. For this group I'd partly agree. It really comes down to what they're looking at and why they're considering both. It also goes back to their assumptions as to what the parameters on both sides are. As a rule they almost always assume close to best case scenario. Certainly for those that realize the items currently lost resale are not of reasonable value, they are likely only buying for access to the current resorts themselves and hoping that DVD will not make changes that dramatically alter those things later (I'd be in this group buying today). IF DVD makes real changes, it could turn all of this on it's ear.

So to me both 3 & 4 affect retail sales by a portion going to resale that would otherwise go retail. Disney would love to have resale not be a viable option and this is the direction that a differentiation between qualified and on qualified points should lead us to, else why even start. The other direction they can do this is with a VIP system, something they've talked about but haven't yet pursued. They really don't care what the resale price is other than as it affects their sales. Since it's been proven that ROFR doesn't work in this situation, the other way to do this is to make resale less viable regardless of price (see above). What they don't want is enough resales going forward at a higher price. What they really want is for the resales to be so nonviable that it forces the price very low because no one wants to go that route. It's almost impossible to do that from a perk standpoint and it is impossible to do it by simply adding perks for retail buyers.

Whether they'll get serious enough to force this direction remains to be seen, so far they haven't been. IMO they've actually done buyers a favor by pushing down prices without removing core benefits. However, there are many things they can do if they chose and many of them are on the negative side. Here's a partial list to give the idea.

• Increase fees to smaller points owners.
• Banking/borrowing fees
• Instituting cancelation or multiple reservation fees.
• giving a reservation priority to retail buyers (A VIP system would be the only way with the current system)
• Going back to a transfer fee and increasing it enough to make people think.
• Giving the option of using qualified points to pay for other things not currently available like tickets or dues.

You keep going back to the idea that DVD wants to preserve high resale prices and not only is it simply not true, there really isn't hardly anything they can do that will give that effect and still drive things to retail. One thing they could do would be to create a minimum purchase price (retail or resale) that would make any points qualified but for this to work they'd still have to create a large enough differential between the 2 in terms of usage, benefits and options to justify the cost differential.

BTW, I think for everything I've mentioned above, someone is already doing in this arena including those where resales are essentially free and they're still selling retail with hefty profits. Thanks for the discussion.

 

[dmunsil]

You keep going back to the idea that DVD wants to preserve high resale prices and not only is it simply not true, there really isn't hardly anything they can do that will give that effect and still drive things to retail.

DVC apparently does feel that it's important to have a deeded ownership, which implies that there are going to be resales. If they didn't want people to be able to resell their membership, there are innumerable ways to do it. They chose to make their membership be a deeded one, as do most timeshare developers.

Here's an interesting article in the form of a "discussion" between two lawyers about whether a timeshare should be sold in the form of a title or a right-to-use license. And they point out that most developers feel that having a title is important to making the sale. People have more trust in a titled purchase. And one downside of having a deeded property is that people can sell it. With a license, the developer can just make it nontransferable. Presto: no resales.

http://www.americanbar.org/publicat...publications_magazine_2000_00ma_ma01dady.html

Now as to whether Disney cares whether the resale market is high or low, I think they actually do care if the price is too low. OTOH, it's pretty clear Wyndham doesn't care. And Hilton does care, and Marriott seems to care at least a little bit.

I had a discussion about this with someone who used to work in the titling office at DVC, and I asked what the purpose of ROFR was: primarily to keep the resale price up, or primarily to get points to resell. She said it was entirely to keep the price up. She said it was believed around the office that they had to keep the price of the property high, because it was important to people's perception of the value of DVC. Now, it could be that they've changed their opinion since she left; she said she had no idea how they were currently making their decisions about what to exercise ROFR on. Maybe they primarily see it as a way of getting cheap points back. But they get plenty of points back via foreclosure, so it wouldn't seem like ROFR is primarily a way to get points.

I know you think they don't need to keep the resale price up. And I'm not saying you're wrong. I agree that most people don't know about resale and will never look into it. The effect on direct sales if resale prices went to near-zero would probably be fairly minimal. But contrarily, I don't think it would reduce the number of deeds sold that much. And if the price goes low enough, some number of people who might have sold their ownership will instead just refuse to pay their dues until Disney forecloses, or call Disney and get a deed in lieu of foreclosure and walk away, and Disney will eat that contract instead of having it pass to another dues-paying person.

Nonetheless, I think Disney has shown through their actions that they do want to put a floor on the price to some extent. Perhaps they do worry that low resale prices will negatively affect sales, or perhaps they worry about damage to the brand. All it takes is a few little old ladies on 60 Minutes saying things like, "When I bought this I thought it would be a nice vacation, and I could always sell it if I didn't want it any more. Well, the fees just kept going up and up, and finally I said I'd sell it. Disney told me I was on my own. People are giving their ownerships away to get away from the maintenance fees. Disney cheated me!"

Turn this around: suppose Disney tried to keep resale prices up as high as they could. They could do what Marriott does and have their own resale broker that they promote. They could tell their sales staff that if someone is going to walk away because of price, they can salvage a small commission by referring them to the Disney-owned resale broker.

In any event, if the resale price is high, basically it's no problem competing with resale. Who would buy resale to save a few dollars? Only the most fervent bargain hunters. And if they can actually drive the resale price of the sold-out resorts up above $130, then it becomes easy to raise direct prices. Or it becomes a sales convincer: they can just show people the TSS web site and say, "Look - resale prices are above the price these people paid. How many other timeshares can say that?"

Ultimately there is nothing that will validate a high direct price better than resale prices being high as well.

 

[GiantsNiners11]

Tricks? I think that's a bit strong. I'm a resale junkie, but people gotta earn a living.

 

[DougEMG]

If they ever offered extra FP+ tickets to on site guests based on the resort they were staying at, they could if they wanted exclude resale buyers from that perk.

When I originally looked at DVC I decided the value wasn't there for me at direct prices so did not buy. It was only a few years later that I found out about resale and determined that resale price did work out, and so bought some points. Of course during the years prior to not owning resale I still went to Disney and just stayed in a hotel. So you could say the hotel side of their business lost my business once I bought resale. On the plus side I go for a lot more days than before and spend more annually now owning DVC then prior to owning DVC, so overall Disney is getting more money from me than previously.

 

[Nabas]

If they ever offered extra FP+ tickets to on site guests based on the resort they were staying at, they could if they wanted exclude resale buyers from that perk.

When I originally looked at DVC I decided the value wasn't there for me at direct prices so did not buy. It was only a few years later that I found out about resale and determined that resale price did work out, and so bought some points. Of course during the years prior to not owning resale I still went to Disney and just stayed in a hotel. So you could say the hotel side of their business lost my business once I bought resale. On the plus side I go for a lot more days than before and spend more annually now owning DVC then prior to owning DVC, so overall Disney is getting more money from me than previously.

Since FP+ is essentially free for Disney, I think extra FP+ selections is an excellent perk for Disney to offer to distinguish between direct and resale buyers. Could be a strong selling point for guides to use to close the deal.

Like you, I'd been number crunching DVC for years. Direct or resale, I never could get it to work for me; the break-even point was too long for my tastes.

However, after years of Cash Room price increases and the resale price drop in 2011/2012, I finally was comfortable with DVC financially and was able to negotiate even lower prices in a buyer's market.

I haven't bought as many points as you but I do have enough for my needs.

 

[Deb & Bill]

If they ever offered extra FP+ tickets to on site guests based on the resort they were staying at, they could if they wanted exclude resale buyers from that perk.....

So what would happen if you booked your DVC stay using both direct and resale points from the same resort at eleven months out? Like I transferred two Dec resale OKW points to my Sept direct OKW contract to book my stay for the spring?

 

[Dean]

DVC apparently does feel that it's important to have a deeded ownership, which implies that there are going to be resales. If they didn't want people to be able to resell their membership, there are innumerable ways to do it. They chose to make their membership be a deeded one, as do most timeshare developers.

I think you're equating option with intent. Their intent is to sell as many points as possible and make as much profit as possible, the questions is how to reach that goal. That one has the right/option to sell,doesn't mean it was DVD's intent for anyone to actually do so. All timeshares in the US have to be deeded in some way. DVD chose to do so directly and others have done so in a trust format. If I read you correctly you're saying DVD purposefully chose this option for some purpose, my view which you may have seen me post previously, is that it was a mistake on their part to do so. They created additional difficulties and work for themselves while depriving the system of benefits and leverage they could have avoided. I'm not aware of a single timeshare within the US that one doesn't have the right to sell, the question is price and limitations. I don't think there's a way to make them non transferable deed or no deed.

Now as to whether Disney cares whether the resale market is high or low, I think they actually do care if the price is too low. OTOH, it's pretty clear Wyndham doesn't care. And Hilton does care, and Marriott seems to care at least a little bit.

Again, it's not price they care about but sales. I suspect you're referring to ROFR, if so, don't equate that with caring about price but rather the ability to pick up cheaper options. That's how Marriott approaches it. Bluegreen and Wyndham simply can't keep up because the increased obligations would overwhelm them from a cost and fee standpoint.

I had a discussion about this with someone who used to work in the titling office at DVC, and I asked what the purpose of ROFR was: primarily to keep the resale price up, or primarily to get points to resell. She said it was entirely to keep the price up. She said it was believed around the office that they had to keep the price of the property high, because it was important to people's perception of the value of DVC. Now, it could be that they've changed their opinion since she left; she said she had no idea how they were currently making their decisions about what to exercise ROFR on. Maybe they primarily see it as a way of getting cheap points back. But they get plenty of points back via foreclosure, so it wouldn't seem like ROFR is primarily a way to get points.

They certainly haven't bought contracts sufficiently to suggest they actually care about resale prices and this is their only support option. The reality is they would prefer resale prices to be very high but for other reasons such that people who looked at both would still think it worth buying retail. Thus it's the retail purchase they're interested in, not the price itself and that was my point all along.

I know you think they don't need to keep the resale price up. And I'm not saying you're wrong. I agree that most people don't know about resale and will never look into it. The effect on direct sales if resale prices went to near-zero would probably be fairly minimal. But contrarily, I don't think it would reduce the number of deeds sold that much. And if the price goes low enough, some number of people who might have sold their ownership will instead just refuse to pay their dues until Disney forecloses, or call Disney and get a deed in lieu of foreclosure and walk away, and Disney will eat that contract instead of having it pass to another dues-paying person.

My view again is that it's the effect of pushing people to retail they are interested in, that there are other ways to affect the number and variability of resales than just price and that there really isn't anything they can do that will prop up prices enough to fulfill their goals. IMO they've proven they can't prop up prices enough to do what they want so they either have to look the other way and accept the inherent losses or take action which many are not going to like. In the absence of either, we have what we have now where buying retail for most options is a costly option comparatively with no real benefit for almost all situations.

Nonetheless, I think Disney has shown through their actions that they do want to put a floor on the price to some extent. Perhaps they do worry that low resale prices will negatively affect sales, or perhaps they worry about damage to the brand. All it takes is a few little old ladies on 60 Minutes saying things like, "When I bought this I thought it would be a nice vacation, and I could always sell it if I didn't want it any more. Well, the fees just kept going up and up, and finally I said I'd sell it. Disney told me I was on my own. People are giving their ownerships away to get away from the maintenance fees. Disney cheated me!"

I'm of the opinion that Disney doesn't care nearly as much what people think or even say as many here on DIS seem to feel they do. We've seen lots of threat's here over the years, esp starting with the first reallocation in recent times, valet parking issue and a few reservation/remodeling issues over the last few years.

Turn this around: suppose Disney tried to keep resale prices up as high as they could. They could do what Marriott does and have their own resale broker that they promote. They could tell their sales staff that if someone is going to walk away because of price, they can salvage a small commission by referring them to the Disney-owned resale broker.

They have and failed. Marriott used to have their own internal resale sales department which they've closed because it wasn't viable. They've also had trade in options and when they did, they've tried to collect a commission as if they'd sold the item being traded in. Bluegreen has their own resale arm as well which they will often use to lure those in that aren't going to buy retail but have perceived interest. Disney could go that route as well but they've chosen not to most likely because it competes with their more lucrative retail sales.

In any event, if the resale price is high, basically it's no problem competing with resale. Who would buy resale to save a few dollars? Only the most fervent bargain hunters. And if they can actually drive the resale price of the sold-out resorts up above $130, then it becomes easy to raise direct prices. Or it becomes a sales convincer: they can just show people the TSS web site and say, "Look - resale prices are above the price these people paid. How many other timeshares can say that?"

Ultimately there is nothing that will validate a high direct price better than resale prices being high as well.

No argument, the question is whether there is a method they can do that successfully pushing most to retail, the truth is there isn't by propping sales prices and they've proven it. I'd also suggest getting there by a robust resale activity is counterproductive to their goals you've laid out.

 

[Dean]

So what would happen if you booked your DVC stay using both direct and resale points from the same resort at eleven months out? Like I transferred two Dec resale OKW points to my Sept direct OKW contract to book my stay for the spring?

I think you're assuming they would still be able to be combined.

 

[DougEMG]

One strategy that Disney could take is to make smaller high demand resorts with high prices and with a limited supply of points. Then one could plan to sell out the entire resort before resale contracts for that resort hit the market. Which seems like what they are doing with VGF and the up coming Poly DVC.

To me it seems like if Disney was at all concerned with resale and were willing to do something about it then the introduction of the VGF would have been the time to do something.