New DVC Rules for 2013?

[JJSWDW]

Fortunately I own at the coolest DVC resort ever (VWL) so if I could only ever stay there I would not lose sleep, especially if I could buy resale points for $25 each because DVD restricted them and killed their resale value. It's all in your point of view, I don't think they'd do it but who knows. I am firmly in the Buy Where You Want to Stay camp so you can avoid these problems, while its nice to switch up resorts the people who will be really upset are those who bought one place ( to buy direct or cheap resale) but intended to always stay somewhere else. BTW, VWL is my coolest resort which I know is arguable . But you should feel that your home resort(s) is the coolest ever or don't buy there.

Have fun.

 

[hakepb]

I don;t see how they legally could for existing resorts.

My opinion is they couldn't make it different for qualified vs non qualified. What they could do would be a VIP program that gave a VIP priority for a wait list or an advanced reservation window. Then the VIP qualifications would come into play. They certainly can change the window but they'd have to change it for all. Not only do I see this as an easy challenge, I see it as an easy one to win. I don't see DVC sticking their neck out in this way.

Could DVC open up the old 13 month lottery (that still contractually exists) to direct purchasers only?

 

[Peepster]

Sounds to me like a "scare" tactic from a salesperson. Buy from Disney or else!

By the way, I agree with the VWL assessment! It's the only place I want to stay anyway! (Well, maybe a little OKW...and no offense to other owners!)

A.Peep

 

[drusba]

It seems that rumors like these may start because some sales rep is acting out of line and making up a parade of horribles to sell points. Dean is correct that DVD would have serious legal problems with trying to create a rule that says resale purchasers can reserve only at their home resort. The same applies if DVD attempted to create a VIP class of resort owners who would be able to reserve before other owners at a resort. It also cannot use the lottery system that it had for Christmas back in the 1990s to leave out resale purchasers since that is under the "special seasons' exception which depends on having oversized demand in a season and cannot be used to discriminate between members..

As a practical matter, these are also things that DVD has no incentive to do. It did away with the lottery system because it was too much of a hassle in both time and cost for MS to run it. My guess is we will never see that again unless the Olympics come to Orlando. The 11 month window for owners works fine for owners and you don't need VIP priorities. In fact the 11/7 system works fine in DVD's mind and it has no incentive to go a system where there is only a one month difference, even though it is allowed to, including because it would accomplish nothing. Limiting resale purchasers to their home resort would, as noted by others above, impact on the ability of others to reserve at a popular resort, and even if DVD were legally allowed to do it, that would be a change that it would have to spell out clearly to new purchasers before they buy because it restricts their possible ability to get rooms at 7 months out.

The problem that exists is that DVD, under the tutelage of Jim Lewis, who apparently woke up every morning thinking of ways to take things away from members, screwed owners and resale purchasers once by taking away much of the Disney collections from resale purchasers and many just assume it is going to happen again. It may but you have to note the significant difference in that change and all the ones for which concern is being expressed in this thread. That was a change DVD could easily make because the Disney collections were merely a perk that could be changed or eliminated at any time. The right as an owner to reserve at home resort on equal basis and with the same priority period with other owners in the same resort, the right to reserve at other resorts on the same basis as all non-owners of a resort, and the special season limitations, are all things set out in the official documents as things to which you are entitled which can be modified only in limited circumstances none of which would allow any of the resale purchaser only restrictions mentioned in any of these repeated "rumors" members keep hearing.

 

[Tlrhodes]

ortunately I own at the coolest DVC resort ever (VWL) so if I could only ever stay there I would not lose sleep, especially if I could buy resale points for $25 each because DVD restricted them and killed their resale value. It's all in your point of view, I don't think they'd do it but who knows. I am firmly in the Buy Where You Want to Stay camp so you can avoid these problems, while its nice to switch up resorts the people who will be really upset are those who bought one place ( to buy direct or cheap resale) but intended to always stay somewhere else. BTW, VWL is my coolest resort which I know is arguable . But you should feel that your home resort(s) is the coolest ever or don't buy there.

Exactly my situation and thought process as well! If I am restricted to staying at VWL for the rest of my term...it won't phase me a bit. Its fun to try other resorts once in awhile, but I will never, ever be disappointed with staying at the Lodge.

 

[DisneyDiana]

Exactly my situation and thought process as well! If I am restricted to staying at VWL for the rest of my term...it won't phase me a bit. Its fun to try other resorts once in awhile, but I will never, ever be disappointed with staying at the Lodge.

Agreed. The horrors of being restricted to VWL....

 

[Dean]

Could DVC open up the old 13 month lottery (that still contractually exists) to direct purchasers only?

I don't believe the lottery or special season preference lists could be used in this way. 98% of the time when people post that a given issue would cause a problem or result in legal action, I discount it as not being something that could reasonably happen. In this case not only do I think a legal challenge would happen if they tried these issues, I don't think there's anyway DVC/DVD could win such a challenge.

 

[Deb & Bill]

Sounds to me like a "scare" tactic from a salesperson. Buy from Disney or else!

By the way, I agree with the VWL assessment! It's the only place I want to stay anyway! (Well, maybe a little OKW...and no offense to other owners!)

A.Peep

VWL and OKW? I could be happy. (see my signature)

 

[Tink2312]

This reminds me of the excellent advice I received from members on here before I bought in of "buy where you want to stay". I did and now, although I would miss trying the other resorts and shaking things up a bit, BLT is and I imagine always will be my favourite resort by a country mile!

 

[Minniesgal]

It seems to me there is no shortage of direct buyers or DVC would not have the confidence to up direct prices by almost 30%. I can't see they need to attempt to devalue resale when they are currently struggling to fill wait list demand for direct points. I too this this is just an unscrupulous guide who is trying to scare people into buying

 

[SCFIREMAN]

What if you look at it this way. DVD can devalue the resale market by putting restrictions on resale buyers therefore driving down the value. They maintain the ROFR for all sales. They buy up the resale contracts that are out there for less and resell them at direct pricing as new contracts to the people on the wait lists. Sounds like a win for Disney to me.

 

[ITGirl50]

I heard one of the new rules is that you will be allowed to talk about fight club(as long as you're staying at a home resort on points).

 

[Missyrose]

What if you look at it this way. DVD can devalue the resale market by putting restrictions on resale buyers therefore driving down the value. They maintain the ROFR for all sales. They buy up the resale contracts that are out there for less and resell them at direct pricing as new contracts to the people on the wait lists. Sounds like a win for Disney to me.

You do realize that Disney isn't a bottomless pit of money. They couldn't even come close to the plan you've proposed.

 

[Dean]

What if you look at it this way. DVD can devalue the resale market by putting restrictions on resale buyers therefore driving down the value. They maintain the ROFR for all sales. They buy up the resale contracts that are out there for less and resell them at direct pricing as new contracts to the people on the wait lists. Sounds like a win for Disney to me.

Roughly half of the cost of most timeshares is hard costs like development. They'd have to devalue the resales to the point they could buy them back for 40% or under to make any money compared to active new sales and even then it'd have to be for in demand options, likely 30% or less for resorts where they have a more difficult time moving.

 

[SCFIREMAN]

You do realize that Disney isn't a bottomless pit of money. They couldn't even come close to the plan you've proposed.

They would not be able to buy all the contracts that are out there you are right. They already do buy up contracts though when they go to the resale market through ROFR. The allotment of points is a set number so they can't just make more. Therefore they have to buy up contracts to be able to keep filling demand for sold out resorts.

Roughly half of the cost of most timeshares is hard costs like development. They'd have to devalue the resales to the point they could buy them back for 40% or under to make any money compared to active new sales and even then it'd have to be for in demand options, likely 30% or less for resorts where they have a more difficult time moving.

DVC has a wait list of people that want to buy points from them for many of their resorts. They can't fill those lists unless they have points to sell because there is a defined number of points available. Lets say that I bought a contract 7 years ago for AKV for $110 a point. Now I decide to sell it. The current resale rate on that property is around $70 per point. I find a buyer and it goes to ROFR but Disney buys it back. I use the money I get to pay off my loan because it doesn't go away just because I sold it. Now Disney flips those points to a new buyer for $140 a point. Their Developement costs were paid by me already the new money they just made is profit.

 

[Dean]

DVC has a wait list of people that want to buy points from them for many of their resorts. They can't fill those lists unless they have points to sell because there is a defined number of points available. Lets say that I bought a contract 7 years ago for AKV for $110 a point. Now I decide to sell it. The current resale rate on that property is around $70 per point. I find a buyer and it goes to ROFR but Disney buys it back. I use the money I get to pay off my loan because it doesn't go away just because I sold it. Now Disney flips those points to a new buyer for $140 a point. Their Developement costs were paid by me already the new money they just made is profit.

I understand how all that works and that's why I qualified that there are higher demand options. For AKV I don't believe they have any wait lists and for every option, there is a certain amount of competition with current active sales. Plus there are other costs. As a rule timeshares don't want to fool with resales more than they have to. It as much a mindset as a math equation. Plus without the new resorts, the demand and pricing for the others decreases as well.

 

[tjkraz]

DVC has a wait list of people that want to buy points from them for many of their resorts. They can't fill those lists unless they have points to sell because there is a defined number of points available. Lets say that I bought a contract 7 years ago for AKV for $110 a point. Now I decide to sell it. The current resale rate on that property is around $70 per point. I find a buyer and it goes to ROFR but Disney buys it back. I use the money I get to pay off my loan because it doesn't go away just because I sold it. Now Disney flips those points to a new buyer for $140 a point. Their Developement costs were paid by me already the new money they just made is profit.

Bay Lake Tower cost $140 million to develop and represents 5.6 million points. That works out to $25 per point for design, construction, furnishings, etc.

If DVD can build a new resort for $25 pp and sell for $165 pp, why would they ever invest heavily in a ROFR at $70, sell for $140 model?

 

[SCFIREMAN]

I understand how all that works and that's why I qualified that there are higher demand options. For AKV I don't believe they have any wait lists and for every option, there is a certain amount of competition with current active sales. Plus there are other costs. As a rule timeshares don't want to fool with resales more than they have to. It as much a mindset as a math equation. Plus without the new resorts, the demand and pricing for the others decreases as well.

But if they have a wait list for a resort and no points to sell then the only supply source is the resale market. If you change the rules for the resale market and make it less appealing the price will go down. Disney is going to sell those points as a new contract with all the benefits and none of the restrictions put on someone who bought on the open market. They are not going to buy VWL points for $60 p/p and sell them for $60. They are going to charge $130.

 

[SCFIREMAN]

Bay Lake Tower cost $140 million to develop and represents 5.6 million points. That works out to $25 per point for design, construction, furnishings, etc.

If DVD can build a new resort for $25 pp and sell for $165 pp, why would they ever invest heavily in a ROFR at $70, sell for $140 model?

The only reason I could see them investing in ROFR is because they sold out the resort and need the points back to resell them. If they are sold out then they have no choice but to buy up the points from the resale market and put them back in circulation.

 

[tjkraz]

The only reason I could see them investing in ROFR is because they sold out the resort and need the points back to resell them. If they are sold out then they have no choice but to buy up the points from the resale market and put them back in circulation.

And the only reason there is noteworthy demand for older resorts right now is because word of the price increases leaked out a few weeks early. In the months and years leading up to that February news, ROFR was used very modestly at older resorts and demand was equally low. And demand is unlikely to grow moving forward with prices higher still.

Functionally DVC might be able to manipulate the marketplace and put themselves in a favorable position to re-sell older resorts. But the margins will never be as great as they are on newer developments.

As long as Walt Disney World has land suitable for construction, building new will always be a more profitable approach than re-buying the old.