Resale restrictions - when announced in the past?

[bighoo93]

If there is a family that is new to considering DVC, they want them to buy one of the new properties direct, not buy a resale where they (DVC) don't make any money. They don't care if the existing member loses alot of money when they try to sell. They can also scoop up low ROFR's and sell them at the direct price and make a profit on those. I'm not sure with closing and administrative costs what the cutoff is for them to make money on a ROFR, it also depends on the resort, if they will be able to sell direct. It's a lose for them if a new member buys resale, they lost a direct sale.

Do you know any of this to be true for certain? I'm asking because I have been trying to find some actual detailed data and information about DVD and have not been able to find any.

 

[JKMJ441724]

If there is a family that is new to considering DVC, they want them to buy one of the new properties direct, not buy a resale where they (DVC) don't make any money. They don't care if the existing member loses alot of money when they try to sell. They can also scoop up low ROFR's and sell them at the direct price and make a profit on those. I'm not sure with closing and administrative costs what the cutoff is for them to make money on a ROFR, it also depends on the resort, if they will be able to sell direct. It's a lose for them if a new member buys resale, they lost a direct sale.

I think I edited as you typed your answer. I finally "got it" that you were saying disney lost that customer. I was looking at it that Disney already got their profit from the FIRST owner and that any sell after that on that contract did not effect them.

 

[chalee94]

...once you've bought in, you are stuck. You would never be able to sell.

this is part of what makes timeshares complicated.

if you buy and own DVC, you are their customer and they (in my experience) treat you extremely well.

if your circumstances change and you need to sell, though, you are competing with their sales team for that buyer's dollars...and when things get adversarial between you and the mouse, the mouse typically wins. if that means you cannot pass along the same options you currently have as an owner to the new buyer, so be it.

disney was different (at least they acted differently) for a long time, but things have changed. and for me, that makes me a lot more careful in recommending DVC.

 

[bighoo93]

this is part of what makes timeshares complicated.

if you buy and own DVC, you are their customer and they (in my experience) treat you extremely well.

if your circumstances change and you need to sell, though, you are competing with their sales team for that customer's dollars...and when things get adversarial between you and the mouse, the mouse typically wins. if that means you cannot pass along the same options you currently have as an owner to the new buyer, so be it.

disney was different (at least they acted differently) for a long time, but things have changed. and for me, that makes me a lot more careful in recommending DVC.

If they decimate the resale value of your membership, that is something they are doing directly to their customer. There is no way around that. Maybe they'll do it, but they can't rationalize that they aren't doing it to their customers. If you have to sell your DVC points in the future for some unanticipated need, you are screwed, and Disney will have done it to you. That destruction of resale value happened when (or before) you were a customer.

 

[Missyrose]

If they decimate the resale value of your membership, that is something they are doing directly to their customer. There is no way around that. Maybe they'll do it, but they can't rationalize that they aren't doing it to their customers. If you have to sell your DVC points in the future for some unanticipated need, you are screwed, and Disney will have done it to you. That destruction of resale value happened when (or before) you were a customer.

You keep arguing Disney wouldn't screw their customers, but I think what PP was trying to say is that the old DVC probably wouldn't screw their customers. But DVC has become more like other timeshares and a typical timeshare companies have no problem screwing their customers. The argument "that isn't fair" won't hold much weight with DVC.

 

[bighoo93]

You keep arguing Disney wouldn't screw their customers, but I think what PP was trying to say is that the old DVC probably wouldn't screw their customers. But DVC has become more like other timeshares and a typical timeshare companies have no problem screwing their customers. The argument "that isn't fair" won't hold much weight with DVC.

Actually in that post I was just saying that Disney won't be able to pass off the notion that they aren't screwing their customer if they destroy resale value.

It is my belief that Disney won't screw their customers, but I don't know that for sure. I acknowledge that it is possible.

The reason I believe they will be different is that DVC is operated for The Walt Disney Company, which has a much more valuable brand than other timeshares have. I don't believe they will jeopardize that. DVD serves The Walt Disney Company, it is not an end to itself.

It would really be helpful to have specific financial and performance information from DVD. Speculation about what they "need" to do should be based on, among other things, their performance, how it would impact Disney's $42 billion in revenue, and whether that is worth the risk to the brand.

 

[chalee94]

Actually in that post I was just saying that Disney won't be able to pass off the notion that they aren't screwing their customer if they destroy resale value.

other timeshare companies do it. i think you are overestimating the real outcry if changes happen.

the change in 2011 wasn't a big issue in itself - there was no loss of value IMO (and i was interested in dean's comments about DVC trying to limit cruise,etc. trades due to the high cost of the program itself rather than purely to discourage resales).

but as the quote below shows, if you expect a continuing "disney difference" in the way DVC owners are treated on the way out...i think that's optimistic.

http://articles.orlandosentinel.com/2011-01-18/the-daily-disney/os-disney-vacation-club-20110118_1_disney-vacation-club-time-share-owners-time-shares

[DVC]spokeswoman Diane Hancock...added that the change aligns Disney with other time-share operators who impose similar restrictions on resales.

 

[Dean]

uh, what?

I have not heard that. I'm not actively looking to add-on but always have it in the back of my mind.

Tell me more about this rumor. I may use it to push my husband into taking the plunge.

I don't really see how disney loses when someone buys resale. The ORIGINAL points came directly from Disney somewhere down the line, no matter how often it has been sold or re-sold. Then they have someone staying at their hotel - PROBABLY going to the parks, buying food and souvenirs and drinks. I know making money on the room is important to Disney but they still have a ton of ancillary income after the sale.

Legally it's my opinion that this is not possible related to a division of resale vs retail for the current resorts. However, Disney loses a potential retail sale every time someone buys resale.

But looking at it like that, once you've bought in, you are stuck. You would never be able to sell.

This would be their ideal situation, to be able to sell and have no competition at all. Think of timeshares like new cars only worse and subtract some more and you'll still over value them.

Not sure how they would not grandfather. To not do so would be to significantly dimish the value of something someone already purchases (after the fact). Would seem they would want to avoid that situation as much as possible.

Their ideal would be to decrease your value to nothing and preserve theirs. It'll never be 100% but this would be their goal. What they want is the perception of value but no competition. Realistically they can't be overly aggressive in this area without creating a bad rep that will affect sales, it's a balance but it's about the sales only.

And for the record, there's no guarantee they grandfather in previous resale contracts. They did it once, but that doesn't mean they'll do it again.

True but even more aggressive companies almost always have done so. I could easily see them go back to the March 2011 date as a cutoff rather than having multiple dates with multiple versions. I think it's a very safe bet to assume that negative changes won't be retroactive on this subject to those currently grandfathered. What they could do would be to create a VIP system which might negatively affect all owners who don't qualify.

Do you know any of this to be true for certain? I'm asking because I have been trying to find some actual detailed data and information about DVD and have not been able to find any.

It's all true other than the issue that they can make much money on ROFR, they really can't make much for most situations.

If they decimate the resale value of your membership, that is something they are doing directly to their customer. There is no way around that. Maybe they'll do it, but they can't rationalize that they aren't doing it to their customers. If you have to sell your DVC points in the future for some unanticipated need, you are screwed, and Disney will have done it to you. That destruction of resale value happened when (or before) you were a customer.

I think this is a fundamental point. IMO the buyer did it to themselves by deciding to buy and take the risk. They either knew or should have known there were many risks including the possibility they couldn't sell or would lose a lot when they did. This is simply the nature of timeshares, many of which sell for tens of thousands and can be bought for a penny resale.

 

[Dean]

but as the quote below shows, if you expect a continuing "disney difference" in the way DVC owners are treated on the way out...i think that's optimistic.

While I know many here find it blasphemous, I simply find DVC to be just another good timeshare in a place I like to go. It wasn't ever as nice or friendly or different as many seemed to think when they drank the Kool-aide and it's not as bad as some have wanted to make out the last couple of years. It has been interested to see the true believers turn in to the jilted lover mentality.

 

[lilpooh108]

To the OP---as someone else posted they gave about 7 weeks notice last time prior to the restrictions.

HOWEVER, due to the flurry of resale activity prior to the restrictions being enforced it took us multiple offers and 1 failed contract to finally get what we want (and with insane amounts of checking listings the MINUTE it was posted). So you get some time, but it was relatively hard for us (and for my brother, who bought in at that time) to get a resale contract that we wanted, at the price that was acceptable to us.

 

[bighoo93]

other timeshare companies do it. i think you are overestimating the real outcry if changes happen.

the change in 2011 wasn't a big issue in itself - there was no loss of value IMO (and i was interested in dean's comments about DVC trying to limit cruise,etc. trades due to the high cost of the program itself rather than purely to discourage resales).

but as the quote below shows, if you expect a continuing "disney difference" in the way DVC owners are treated on the way out...i think that's optimistic.

http://articles.orlandosentinel.com/2011-01-18/the-daily-disney/os-disney-vacation-club-20110118_1_disney-vacation-club-time-share-owners-time-shares

Thanks for posting that article, it was interesting. I don't quite take that quote to mean that Disney won't be different, but I can see where you are coming from. Disney doesn't seem to be admitting that they are doing this to boost resales, but rather claiming that they are responding to the demands of those who purchased resale and think they therefore deserve more benefits than those who bought resale. This is shrewd on their part.

I agree with the analysts who say that has nothing to do with it, but it does allow Disney to make what should be a transparently self-interested move and act as though it is responding to their customers. There is quite clearly a significant sentiment among direct purchasers that they deserve to have more benefits because they paid more. Since direct purchasers, from what I have read here, greatly outnumber secondary market purchasers, taking that side is certainly not going to hurt Disney. Unless the changes crush resale value and direct purchasers realize that includes their as well. I would have more confidence in Disney/DVD management if they take the smarter approach and add value to direct purchasers, rather than take it away from secondary market purchasers. We'll just have to wait and see.

 

[bighoo93]

It's all true other than the issue that they can make much money on ROFR, they really can't make much for most situations.

Can you direct me to the data you have to support this? I think if I could find this sort of fundamental information about DVD it would settle a lot of my questions. But so far, I haven't found it and nobody has been able to show me anything significant.

It is a bit surprising that they can't turn much of a profit by reselling ROFR'd points. Lets say that instead of passing on my 250 point contract for $52 last month, I had bid $50 and they had stopped it. Then a year later, they sell those SSR points to someone who goes on their tour. Straight off the top, they take an extra $60 per point (selling for $110). But they have to pay a year of maintenance fees (~$5/point), plus some closing costs (~$5 per point). That drops them down to a mere $50/point of profit. What other direct expenses are there eating away at this? Maybe they aren't quite making 100% profit, but I'm not sure what the other direct, variable costs associated with this would be. Like I said, seeing the numbers would answer most of my questions.

 

[js]

And for the record, there's no guarantee they grandfather in previous resale contracts. They did it once, but that doesn't mean they'll do it again.

But the ones that were already grandfathered (resale purchased in 2009), would still be grandfathered, is that correct?
Thanks.

 

[disneynutz]

Can you direct me to the data you have to support this? I think if I could find this sort of fundamental information about DVD it would settle a lot of my questions. But so far, I haven't found it and nobody has been able to show me anything significant.

It is a bit surprising that they can't turn much of a profit by reselling ROFR'd points. Lets say that instead of passing on my 250 point contract for $52 last month, I had bid $50 and they had stopped it. Then a year later, they sell those SSR points to someone who goes on their tour. Straight off the top, they take an extra $60 per point (selling for $110). But they have to pay a year of maintenance fees (~$5/point), plus some closing costs (~$5 per point). That drops them down to a mere $50/point of profit. What other direct expenses are there eating away at this? Maybe they aren't quite making 100% profit, but I'm not sure what the other direct, variable costs associated with this would be. Like I said, seeing the numbers would answer most of my questions.

I think that their actions pretty much paint the picture. The money is to be made selling new resorts. Disney's Guides don't even mention to prospective buyers that other resorts are available, just like they only offer one UY. Disney has a reason for everything, we will never know what goes on behind the curtain.

If they have enough demand for a older resort they will ROFR but we don't know how many rooms they keep at each resort for cash guests and VIP's. We also don't know what their plans are for OKW and why they seem to be exercising ROFR there other than they can buy the shorter term points and magically convert them to the longer term points. We also don't know which contracts get turned over to Fidelity for sale and what that arraignment is all about.

Bill

 

[bighoo93]

I think that their actions pretty much paint the picture. The money is to be made selling new resorts. Disney's Guides don't even mention to prospective buyers that other resorts are available, just like they only offer one UY.

Bill

In September, the guide offered us any resort and any use year and any point amount. He recommended OKW, in fact.

 

[spruce]

I think it is very smart to buy resale, every timeshare I ever bought was a resale except for my dvc contracts. I didn't buy Marriott because they denied points to resale owners, I guess there are more restrictions now. I remember the South African boon for strong traders within RCI. Every system figures out a way to crush the advantages of resales, I wouldn't expect dvc to be any different as long as they continue to build and add new resorts. Usually when you sell a timeshare, you lose money but the value is in the vacations you took compared to owning a real vacation home. Timeshares are really long term values as opposed to get in and get out..... Dvc resold well for a while but eventually (now) they don't and I don't ever expect that to rebound. Now, if my direct purchase is given a premium (perks or whatever) that resales don't get, I welcome that as I've seen that before in other systems. The way I see it, I'm money ahead buying direct between $62 and $75 between 98 and 03. I'm paid off except dues and have taken many deluxe vacations that otherwise I wouldn't have afforded with many more to come until 2042. That's where the value is not reselling for whatever reason before maturity. I hope dvc does something since it gives me more value as an expected user until the end of the lease. If I have to dump it for whatever reason, I got my monies worth many times over. Gone are the days of reselling and making a profit.

 

[Dean]

Can you direct me to the data you have to support this? I think if I could find this sort of fundamental information about DVD it would settle a lot of my questions. But so far, I haven't found it and nobody has been able to show me anything significant.

It is a bit surprising that they can't turn much of a profit by reselling ROFR'd points. Lets say that instead of passing on my 250 point contract for $52 last month, I had bid $50 and they had stopped it. Then a year later, they sell those SSR points to someone who goes on their tour. Straight off the top, they take an extra $60 per point (selling for $110). But they have to pay a year of maintenance fees (~$5/point), plus some closing costs (~$5 per point). That drops them down to a mere $50/point of profit. What other direct expenses are there eating away at this? Maybe they aren't quite making 100% profit, but I'm not sure what the other direct, variable costs associated with this would be. Like I said, seeing the numbers would answer most of my questions.

You may want to look at the financial data related to the stock offerings. I doubt anyone can give you what you want because Disney doesn't release the info and other than profit and loss type statements, other timeshares don't either.

As for not being able to make much of a profit on ROFR, consider these points. First, timeshare are generally priced around double their real development costs. DVD's model is to build and sell new retail timeshares. Any ROFR they sell is in direct competition with new retail resort sales. When they're generally making $50 a point roughly on a new sale, why buy something they can't make nearly that much on. ROFR has never been about making a profit on those points but rather about controlling the market. Something that doesn't work very well when the spread is what it is now. That's not to say they don't make any money on ROFR points but not that much and it's not a focus.

If you truly want to learn about timeshares and how they work including sales I'd direct you to several methods. One, spend a lot of time on TUG, two spend a lot of time talking to management at as many different resorts as possible and look at the ARDA information. The reality is you'll be able to get a lot more info in the general areas in question from other timeshares than Disney. As an owner, it's always possible to make an appt and go talk to various VP types and the voting rep in Celebration, they are very nice and accommodating people as a rule.

But the ones that were already grandfathered (resale purchased in 2009), would still be grandfathered, is that correct?
Thanks.

Very likely but no guarantee.

In September, the guide offered us any resort and any use year and any point amount. He recommended OKW, in fact.

As a group, timeshare sales people are some of the most skilled sales type there are. By spending time chit chatting with you and picking up on body language and very subtle clues, they often know exactly the approach that will get you interested. Also remember that the guide's goal is not necessarily the same as DVD. Their goal is to get you to buy and get their cut.

If you're trying to figure out the whole story on DVC and timeshares and know exactly what to expect now and in the future, owning a timeshare likely isn't for you. Timeshares are an illusion, simply smoke and mirrors. They're never what you expect and they always changes, generally for the worse. My rule of thumb is to assume the worst and hope for the best. That comes from 18 years of timesharing experience with DVC, Marriott, Bluegreen, II, RCI and others.

From a management and user friendliness standpoint, DVC is likely the best overall but it's not perfect and it's a specialty item only reasonable for stays at DVC resorts for those that value such and can plan ahead sufficiently. Ultimately it takes simple faith to take the plunge.

 

[bighoo93]

As a group, timeshare sales people are some of the most skilled sales type there are. By spending time chit chatting with you and picking up on body language and very subtle clues, they often know exactly the approach that will get you interested. Also remember that the guide's goal is not necessarily the same as DVD. Their goal is to get you to buy and get their cut.

There is no doubt about it, our guide had me sized up perfectly within about 5 minutes. He wasn't shy about telling me so, and he was right on the money.

 

[DougEMG]

My rule of thumb is to assume the worst and hope for the best.

Excellent advice for anyone looking to purchase, direct or resale.

 

[Dean]

There is no doubt about it, our guide had me sized up perfectly within about 5 minutes. He wasn't shy about telling me so, and he was right on the money.

I'm a little unclear as to exactly what you want to know and are trying to get a handle on regarding DVC. Would you mind spelling it out for me?