Big News

[CarolMN]

I’ll throw out a crazy theory here. Maybe, starting with Riviera, they will eliminate ROFR in their contracts. That department must be expensive. Since there will now be a HUGE restriction on resale, the resale value will be significantly lower on Riviera. This way, they can eliminate that department and save a lot of time and money. As you have stated, selling older resorts isn’t the big money maker. They want to sell the new resorts. I’m by no means saying I’ve heard this or it’s happening. I’m just throwing out a possibility, albeit a crazy one.

So far, I've never rented out my points . But if Riviera turns out to be as good as I think it will, I will be waiting for one of those low cost resale contracts, both for my own use and for renting to others!

 

[TexasChick123]

So far, I've never rented out my points . But if Riviera turns out to be as good as I think it will, I will be waiting for one of those low cost resale contracts, both for my own use and for renting to others!

I obviously don’t have access to their financials, but it would make sense considering the impending change with resales for the new resort. I was just trying to make sense of it. That would add up, but they might think they don’t need to do that, and people will still buy. I guess we’ll know in a month...

 

[DanCio]

I’ll throw out a crazy theory here. Maybe, starting with Riviera, they will eliminate ROFR in their contracts. That department must be expensive. Since there will now be a HUGE restriction on resale, the resale value will be significantly lower on Riviera. This way, they can eliminate that department and save a lot of time and money. As you have stated, selling older resorts isn’t the big money maker. They want to sell the new resorts. I’m by no means saying I’ve heard this or it’s happening. I’m just throwing out a possibility, albeit a crazy one.

I'm a computer programmer so I think what software would it take to manage this process? ROFR has to be a subjective process or there would be too much incorrect ROFR being exercised. Obviously there would be some flexible parameters based on what they are trying to buy back in a given period of time, whether it be a quarter, a year or a month. All the people in ROFR do is plug in numbers and the computer spits out Buy, Pass or Review. A Supervisor Reviews all the ones that come back with Review and signs off on the rest. There probably isn't all that large a ROFR department.

People call them up and ask them for points at a specific resort and some ask for points in a specific Use Year. That has to be a part of the software, they want or need points based on demand. If no one wants Direct points at OKW, they aren't going to be buying back OKW points just so they have them on hand in case someone wants to buy Direct at OKW at some point. Yeah, they may keep a few hundred points at each resort "just in case", but I don't think so unless its below a certain price point to keep prices artificially inflated.

A lot of people on here seem to think a fully loaded low Price per Point contract is pretty much an easy contract that will be bought by Disney. Disney isn't going to sit on Resale points. That's money Disney spent with only some guarantee of selling. They could have demand for a 200 point contract for BWV and all they can get is 160. Unless someone else wants a 160 point contract they have to sit until they get 40 more points. And what happens if they only get contracts with more than 100 points? Yeah there are exceptions and a contract at $80 pp will be bought back.

I started out buying Direct before I bought Resale and I called Disney and they didn't have any resort I was looking for, BWV, BCV, OKW and SSR. I asked the Rep how long would it take and he said up to a year. So if I had said "Put me on the list", he would have plugged it into a computer and the ROFR software would buy back contracts to fill my demand. Since they only buy back contracts at lower price points there is the wait. And this is probably the biggest variable in the Disney Resale market, is there demand?

 

[skier_pete]

I'm a computer programmer so I think what software would it take to manage this process? ROFR has to be a subjective process or there would be too much incorrect ROFR being exercised. Obviously there would be some flexible parameters based on what they are trying to buy back in a given period of time, whether it be a quarter, a year or a month. All the people in ROFR do is plug in numbers and the computer spits out Buy, Pass or Review. A Supervisor Reviews all the ones that come back with Review and signs off on the rest. There probably isn't all that large a ROFR department.

I think you have it pretty right. They don't WANT to sell the old contracts, but if a customer insists on it, they will do so. They don't really want to lose those sales to the resale market. I am sure they have data around how many points per year they sell at each resort and fractions that are in demand and they buy-back based on that. They clearly don't necessarily keep a stock of resale points - since almost everyone when asked says they said they would have to wait for something to be available. I would also bet that it is all based on quarter - they can probably only buy-back X amount of $$$ per quarter.

The exception was when they changed the "25 point minimum" rule last year (2 years ago?) and suddenly a ton of people were trying to buy direct contracts to get within the minimum. Somehow they had a bunch of points in stock for that...go figure.

So one thing I always wonder - they clearly can't change UY on points, but they can break up a contract - right? They could buy-back a 500 point contract and sell it as ten 50-point contract, right?

 

[TexasChick123]

I'm a computer programmer so I think what software would it take to manage this process? ROFR has to be a subjective process or there would be too much incorrect ROFR being exercised. Obviously there would be some flexible parameters based on what they are trying to buy back in a given period of time, whether it be a quarter, a year or a month. All the people in ROFR do is plug in numbers and the computer spits out Buy, Pass or Review. A Supervisor Reviews all the ones that come back with Review and signs off on the rest. There probably isn't all that large a ROFR department.

People call them up and ask them for points at a specific resort and some ask for points in a specific Use Year. That has to be a part of the software, they want or need points based on demand. If no one wants Direct points at OKW, they aren't going to be buying back OKW points just so they have them on hand in case someone wants to buy Direct at OKW at some point. Yeah, they may keep a few hundred points at each resort "just in case", but I don't think so unless its below a certain price point to keep prices artificially inflated.

A lot of people on here seem to think a fully loaded low Price per Point contract is pretty much an easy contract that will be bought by Disney. Disney isn't going to sit on Resale points. That's money Disney spent with only some guarantee of selling. They could have demand for a 200 point contract for BWV and all they can get is 160. Unless someone else wants a 160 point contract they have to sit until they get 40 more points. And what happens if they only get contracts with more than 100 points? Yeah there are exceptions and a contract at $80 pp will be bought back.

I started out buying Direct before I bought Resale and I called Disney and they didn't have any resort I was looking for, BWV, BCV, OKW and SSR. I asked the Rep how long would it take and he said up to a year. So if I had said "Put me on the list", he would have plugged it into a computer and the ROFR software would buy back contracts to fill my demand. Since they only buy back contracts at lower price points there is the wait. And this is probably the biggest variable in the Disney Resale market, is there demand?

My understanding is that there is an actual committee that reviews them per what the brokers tell us. If it is recommended to exercise ROFR via the committee, then there is another level of scrutiny, presumably a supervisor or another committee, who must give the final approval. There might be a handful of people who do the initial review, give a recommendation, and then just a committee that says yay or nay on exercising ROFR. On this point, I’ve never been able to ascertain whether it was a singular person who did the initial review or the whole committee. I have not heard of software ever being used to make a decision. DVC still operates in the dark ages in a lot of instances, and my understanding, though it might be incorrect, is that all of these decisions were made by people (either a single person or a committee) at every level and not computers.

 

[Jack_Sparrow_NJ]

I'm a computer programmer so I think what software would it take to manage this process? ROFR has to be a subjective process or there would be too much incorrect ROFR being exercised. Obviously there would be some flexible parameters based on what they are trying to buy back in a given period of time, whether it be a quarter, a year or a month. All the people in ROFR do is plug in numbers and the computer spits out Buy, Pass or Review. A Supervisor Reviews all the ones that come back with Review and signs off on the rest. There probably isn't all that large a ROFR department.

People call them up and ask them for points at a specific resort and some ask for points in a specific Use Year. That has to be a part of the software, they want or need points based on demand. If no one wants Direct points at OKW, they aren't going to be buying back OKW points just so they have them on hand in case someone wants to buy Direct at OKW at some point. Yeah, they may keep a few hundred points at each resort "just in case", but I don't think so unless its below a certain price point to keep prices artificially inflated.

A lot of people on here seem to think a fully loaded low Price per Point contract is pretty much an easy contract that will be bought by Disney. Disney isn't going to sit on Resale points. That's money Disney spent with only some guarantee of selling. They could have demand for a 200 point contract for BWV and all they can get is 160. Unless someone else wants a 160 point contract they have to sit until they get 40 more points. And what happens if they only get contracts with more than 100 points? Yeah there are exceptions and a contract at $80 pp will be bought back.

I started out buying Direct before I bought Resale and I called Disney and they didn't have any resort I was looking for, BWV, BCV, OKW and SSR. I asked the Rep how long would it take and he said up to a year. So if I had said "Put me on the list", he would have plugged it into a computer and the ROFR software would buy back contracts to fill my demand. Since they only buy back contracts at lower price points there is the wait. And this is probably the biggest variable in the Disney Resale market, is there demand?

It is truly an example of supply and demand. They don't want to sit on points they just want to buy them and churn them. True, there are very similar contracts where one is taken and one is not and there may be a little human intervention there but I too believe for the most part a "system" scans the incoming requests and calls the shots. The "system" could be automated or human using a defined process flow.

 

[sky2823]

Not fully fleshed out, so feel free to poke holes, but the way i have been valuing contracts has been by resale comps (not room demand) mainly due to the fact it seems hard to be profitable buying contracts to strictly rent points.

However, am I wrong to say there is a point on the curve where if you factor in overall room demand (DVC and non DVC) at the parks, a bottom not associated with contract resales will be achieved?

There will be a point where contracts would get so low you could become profitable renting the points and therefore the price will be bouyed to that equilibrium point somewhere in the neighborhood of break even.

Unless Disney hampers our ability to rent (not sure if they can or will) then this equilibrium point would be independent of Disney’s market manipulation because it would be based solely on demand for rooms on property and unless Disney wants less people staying at the park (which they won’t) prices should rise with room demand/rates....

Sorry if it has been discussed

 

[Jack_Sparrow_NJ]

Not fully fleshed out, so feel free to poke holes, but the way i have been valuing contracts has been by resale comps (not room demand) mainly due to the fact it seems hard to be profitable buying contracts to strictly rent points.

However, am I wrong to say there is a point on the curve where if you factor in overall room demand (DVC and non DVC) at the parks, a bottom not associated with contract resales will be achieved?

There will be a point where contracts would get so low you could become profitable renting the points and therefore the price will be bouyed to that equilibrium point somewhere in the neighborhood of break even.

Unless Disney hampers our ability to rent (not sure if they can or will) then this equilibrium point would be independent of Disney’s market manipulation because it would be based solely on demand for rooms on property and unless Disney wants less people staying at the park (which they won’t) prices should rise with room demand/rates....

Sorry if it has been discussed

I think Disney is trying to accomplish two things.

First they are trying to make buying resale less attractive. The reason for this is to boost their own direct sales but also it's designed to hamper individuals / businesses who purchase contracts at resale or at auctions with the sole purpose of churning those contracts.

Next, they will find a way to curtail those individuals / businesses who purchase points with the intent to only rent those points and thus become Adhoc hoteliers.

 

[charminnie]

I purchased a Bay Lake Tower resale contract in 2015. Will i be able to book at the Riviera Resort?

 

[TexasChick123]

I purchased a Bay Lake Tower resale contract in 2015. Will i be able to book at the Riviera Resort?

Yes.

 

[Dean]

So far, I've never rented out my points . But if Riviera turns out to be as good as I think it will, I will be waiting for one of those low cost resale contracts, both for my own use and for renting to others!

I think it's unlikely we'll see a fire sale situation, my guess is it'll be more of the same at least for a few years. I can't see these changes reducing contract much or at all and they may keep going up if they continue to increase retail prices.

 

[Lorilais_mommie]

It wouldn't relieve pressure on "desirable resorts" because those resorts also have a lot of resale owners. Those people would then be locked into that resort meaning less trading out by owners.

Likely all it would mean is that it would place more pressure on booking the home resort itself at 11 months. Since they would know that's it where they have to stay they would be motivated to be certain they get their dates. So you are correct, I for one do not see a restriction like that being beneficial. I'd think twice about owning some place where the resale buyers were restricted to booking it alone. With no hope for trades it would become awful when the home priority booking window opened. I guess another reason to not buy Riviera now that I think about it.

My husband and I were just talking about this..
Since most DVC owners only hold there contracts for 8-10years. Eventually the Riviera and any new resorts with the same resale restriction will be impossible to book at 7mo. anyways. Any resale owners wont be able trade out, they will have no place else to go. KAT your absolutely right the 11 booking window will be chaos! I could even see resale owners not being able to use all their points, bc there are too many owners (direct & resale) trying for the same rooms.

 

[Dean]

My husband and I were just talking about this..
Since most DVC owners only hold there contracts for 8-10years. Eventually the Riviera and any new resorts with the same resale restriction will be impossible to book at 7mo. anyways. Any resale owners wont be able trade out, they will have no place else to go. KAT your absolutely right the 11 booking window will be chaos! I could even see resale owners not being able to use all their points, bc there are too many owners (direct & resale) trying for the same rooms.

They'll still have their home resort priority which won't be that much different than the higher demand resorts now. IMO it's more about appearances than reality for high demand resorts, there are always options to get into lower demand resorts. I can see the new norm owning in both systems.

 

[TexasChick123]

They'll still have their home resort priority which won't be that much different than the higher demand resorts now. IMO it's more about appearances than reality for high demand resorts, there are always options to get into lower demand resorts. I can see the new norm owning in both systems.

If this does boost the “Legacy 14” prices via resale when it was meant to depress that market, that would be amazing! Whenever a giant corporation’s scheme backfires, it is always great. I don’t think this will happen, but I certainly hope it does.

 

[Matty B13]

It would be nice if it did backfire on them, but as DVC builds new resorts moving forward with the restrictions, and the Legacy 14 resorts get closer to some of their "End Dates", the value of the resale contracts at the original 14 will start to diminish for sure. But that is what we have all been saying about BWV, BCV, and WLV....... So who knows.

 

[KAT4DISNEY]

It would be nice if it did backfire on them, but as DVC builds new resorts moving forward with the restrictions, and the Legacy 14 resorts get closer to some of their "End Dates", the value of the resale contracts at the original 14 will start to diminish for sure. But that is what we have all been saying about BWV, BCV, and WLV....... So who knows.

That has always been a given though.

 

[Marionnette]

It would be nice if it did backfire on them, but as DVC builds new resorts moving forward with the restrictions, and the Legacy 14 resorts get closer to some of their "End Dates", the value of the resale contracts at the original 14 will start to diminish for sure. But that is what we have all been saying about BWV, BCV, and WLV....... So who knows.

That has always been a given though.

Which is why I don't view this move as having a tremendous impact on resale values in the short run. There may be a knee-jerk drop in prices at first but resale will retain its value at the DVC I resorts for a while. After the 2042 resorts expire and the Classic 14 resorts become the Original Great 8, I imagine there will be another correction in resale prices.

And in the meantime, DVC could impose further restrictions on resale contracts.

 

[DougEMG]

What's amazing is that DVC didn't start this restriction earlier with the POLY or VGF or BLT. The best resorts at the best locations are already in the classic 14.

 

[CarolMN]

What's amazing is that DVC didn't start this restriction earlier with the POLY or VGF or BLT. The best resorts at the best locations are already in the classic 14.

The wheels of bureaucracy grind very slowly.