Buying direct makes DVC better

[AmyB2006]

I don't think he was saying the only choice for direct were the new resorts but rather that new resorts could only be bought direct. In large part this is true. Initially direct is the only way, it usually take a couple of years for a new resort to have much availability resale, esp for a price that one would save much resale.

Yes, I see that I may have misunderstood. I thought he was saying you can only buy direct if it's a new resort.

ETA... And I have to add, I haven't seen anyone mention when they're talking about value, the future value that buying into DVC gives you 30 years from now!! Guaranteed Disney's prices are going to continue to go up, but the beauty is DVC doesn't. The price you bought at today is the same 30 years from now. The point values don't change. I see so many number comparisons flying around it makes my head spin.

So whether direct or resale, that is something I haven't seen discussed yet, or maybe I missed it.

Also, nd43, I get what you're saying about the direct vs resale crowd on here. I noticed it quickly as well and got the same vibe. It was a "if you bought direct then you had the wool pulled over your eyes" kind of thing. Bottom line for me, we bought DVC direct and I couldn't be happier.

 

[ELMC]

Sorry, ELMC, you asked a good question here and I missed it during my melt down over a truly poor choice of post on my part. BTW, I still apologize for that.

Bygones. Besides, you more than made up for it by suggesting that you should change your name to nd44 so nobody would recognize you. Hilarious.

I prefer to buy direct for several seasons (not just supporting DVC going forward for my family). I just found the resale process very slow, the selection was pretty poor (right now), and I lost a lot of time with my first attempt which fell to ROFR. That is why I really am not an "anti" resale guy (I tried it myself - it makes a ton of financial sense). I am also concerned about how Disney is going to handle the growing divide between resale and direct. It is just an unknown. If I am honest with myself, I also just like having all the possible options going forward even if they are not the best use of points.

I appreciate your candor. I understand why you feel this way, but I don't agree with it. I will try to respectfully state why. The resale process is slow. People do get disheartened when they lose contracts to ROFR. That is all part of Disney's plan. Back when the gap between resale and direct was much smaller, contracts passed ROFR in a matter of days, not weeks. Disney makes you wait the 30 days (plus an extra two plus weeks to get your points) as a disincentive to buy resale. Clearly it is working. Personally I wouldn't give them the satisfaction.

With regards to your comments about the unknown, I think that decisions made based out of fear are typically not sound decisions. I have five resale contracts. I'm not sure what Disney will try to do to penalize resale contracts in the future, but I can't worry about that. Right now I can use my points just the same and if that changes, I'll deal with it then. As for using points for the extra "perks", it's a total convenience move because no matter how you slice it, it is a poor financial decision. I'm not being judgmental, because it's all about the numbers. If you want to write it off as paying for convenience, that's fine, and I can respect that.

However, while I am on the wait list for BWV, my interest has shifted to VGF. I realize buying an old resort, direct, does not really advance DVC and is probably the toughest financial decision. However, we like BWV, and money aside, that counts for a lot.

In my opinion, you have got to let this go. DVD (Disney Vacation Development) does not care ONE BIT about you, your family, your finances or your future. They only care about your money. So why do you feel the need to care for them?

My problem with VGF is I do not know the data yet. It might just price us out of the market by point cost and use chart and I will have to reflect on the whole decision again. I think it has the best chance of being a "better" direct decision if Disney comes out with a reasonable incentive package given past resort performance. We also like the idea of a "new" resort in such a nice location. I will have to wait and see. If they add more perks, it will also make the direct decision easier.

My guess is that VGF will be all about buzz and status, and will have nothing to do with value. There is simply no way a resort priced at $200 a point (speculating here) can provide long term value compared to the other options. It most definitely can't provide short term value.

I am also concerned about the distance between the DVC rooms at GF and the monorail. I think that is going to greatly reduce the convenience factor.

Dean, honest question here. As we were in the middle of trying to get our purchase of DVC completed, we ended up making a summer trip plan to southern CA. Given Disney was so "on the brain", we decided, what the heck, lets spend a night at Disneyland and stay the GC again.

For the basic room, no view, it has cost us $585 per night in July. I checked the chart, and if I had points, and we could get this room w/ points, it was only around 62 pts. per night. To me, that would have been some real savings over the rate I am actually paying.

Yet, people consistently state such perks are "poor value". They might not be the same value as a villa, but is it really that poor of a value?

I guess people would say you could rent 62 points, get $620 bucks, and save $35 dollars, but that is a lot of work, without certainty (and all the various other issues w/ renting), for $35 bucks. Is that why they think it is poor value?

So on the surface what you say makes sense here. For this one night comparison, it might work out for you to use your points (assuming that there is availability for using points). But there are a couple of holes in your logic. First, you are comparing to rack rate, which although might be a reality for some, can often lead you to some pretty weak comparisons. It's like comparing to sticker price when buying a new car. Sure, there are people out there who pay sticker, but you really shouldn't. The real comparison should be what VGC owners are paying for that room (roughly 30 points). If you were to rent points from that owner that room would cost you only $360. (I understand you are looking to book on short notice and that might not be an option, but I'm talking in generalities here).

I also think you're falling into the trap of being against point rental. The market rate for points through the brokers is $11. So that is the established market value for points. Every point you own can very easily be converted into $11 cash. So when you use your points to vacation, you should be thinking of your costs in that way. I know a lot of people don't see it this way, but they're choosing to focus on hard costs rather than opportunity costs.

As far as renting points, it's very, very little work and going through a broker should afford you more protection than doing it yourself. I ask this with all due respect, but have you ever tried renting out your points before, or are you simply repeating the mantra of the anti renters who talk about all the negatives? I'm not saying this to insult you but to get you to think. Sometimes opinions can take on a life of their own, and without the facts to support them, that can be dangerous. Not like playing in the street dangerous, but financially dangerous.

 

[nd43]

Bygones. Besides, you more than made up for it by suggesting that you should change your name to nd44

Thank you!

The resale process is slow. People do get disheartened when they lose contracts to ROFR. That is all part of Disney's plan.

Understood. However, you are right, it did work. After that investment in time / effort, to be back at square one, was frustrating. To be honest, if the money was really tight, I would probably would be more patient. If you can afford direct, it is a large decentive to work the resale process (find a contract, hope to get your offer in on time, get other people to return contract, send to ROFR (wait and wait), get taken, start again). I guess Disney is clever on this one. The savings are there for the patient.

With regards to your comments about the unknown, I think that decisions made based out of fear are typically not sound decisions.

Actually I agree. To me, it was just an unknown.

In my opinion, you have got to let this go. DVD (Disney Vacation Development) does not care ONE BIT about you, your family, your finances or your future.

My benevolence toward DVC is not exactly aligned to the "company". However, the company is what makes DVC grow. I like the idea of new resorts giving me greater options into the future. It is ultimately self serving, I would like to see DVC grow to give me more resort options (where I may choose to buy more points, use my current, are none of the above). Until I read some earlier posts, I thought this was a more general feeling. I can see now that not all growth is a benefit to current owners. That was interesting.

My guess is that VGF will be all about buzz and status, and will have nothing to do with value. There is simply no way a resort priced at $200 a point (speculating here) can provide long term value compared to the other options. It most definitely can't provide short term value.

The real question on VGF for me (looking at only the financial side for a second), is what will resale be in 8-10 years? If you have the cash, where you start is not the issue, it is where does it end in terms of resale? If status and buzz keep resale prices aligned to early buy-in prices, all is good. If status and buzz only work for a small period of time and resale plummets (because of no more perceived value in owning VGF), ouch. That is my dilemna (on the financial side). In the end, if you love the home resort, you probably do not care much in 8-10 years (but again, this is just a financial view).

I am also concerned about the distance between the DVC rooms at GF and the monorail. I think that is going to greatly reduce the convenience factor.

Huge concern for me as well. From the pics, it looks like an island. That could be a lot of walking to get anywhere around the resort. It does not appear to have anything like the "sky bridge" at BLT. If there is no services (like coffee, etc.) in the building, you are walking outside even to get a morning coffee. That is on my radar as a big concern.

First, you are comparing to rack rate, which although might be a reality for some, can often lead you to some pretty weak comparisons. It's like comparing to sticker price when buying a new car. Sure, there are people out there who pay sticker, but you really shouldn't. The real comparison should be what VGC owners are paying for that room (roughly 30 points). If you were to rent points from that owner that room would cost you only $360

I am not sure if I follow this one. For background, the first thing we did is try to rent points and nothing was available at VGC and they returned our deposit for point rental. So, without a VGC options, the only way we could stay at GC was to rent a room in the regular hotel. We called, made the reservation, and this is what we had to pay. I am not sure if others could have called and got a better deal or not? So, in this case, it is exactly what our cost will be. I am not sure I understand your approach. How could I have used 30 points to get a room? I might have just missed a new approach. If I can do it, I would save the money!

I also think you're falling into the trap of being against point rental. The market rate for points through the brokers is $11.

I must admit, being "responsible" for someone else using our points is disturbing. However, I think my practical side would win out here. If problems are so rare (i.e. leaving a CC bill behind, room damage, etc.), I wish Dave's would insure the renter against any claims from Disney as part of his service. He has the leverage across more rentals to make this risk very low for him (heck, he could give owners a lower price per point if they want the coverage and make money on the deal). I think he would get more owners to sign up if he offered this coverage (just my opinion). He claims the risks are very, very low. It sounds like he is in the best position to offer the coverage to renters. After all, it just takes your rental to go bad and you get 100% of the headache. He has thousands of rentals to spread this risk.

 

[kkolbusz1]

Can I just point out that every sale was a direct purchase at one point. It just happens that for whatever reason someone may need to sell their contract & someone else will gladly take it over for them. The annual dues are taken over, everyone still gets their money & so does Disney every year.

 

[Dean]

Dean, honest question here. As we were in the middle of trying to get our purchase of DVC completed, we ended up making a summer trip plan to southern CA. Given Disney was so "on the brain", we decided, what the heck, lets spend a night at Disneyland and stay the GC again.

For the basic room, no view, it has cost us $585 per night in July. I checked the chart, and if I had points, and we could get this room w/ points, it was only around 62 pts. per night. To me, that would have been some real savings over the rate I am actually paying.

Yet, people consistently state such perks are "poor value". They might not be the same value as a villa, but is it really that poor of a value?

I guess people would say you could rent 62 points, get $620 bucks, and save $35 dollars, but that is a lot of work, without certainty (and all the various other issues w/ renting), for $35 bucks. Is that why they think it is poor value?

The issue is that buying in to use for those options is significantly different than owning points and looking to use them if you can get something you're comfortable with. Occasionally you'll find something that is a reasonable options, say a holiday or special event at a CC or a cruise that wasn't discounted. However, those are definitely the exception and are certainly not guaranteed to be a situation that continues. Personally I don't want to be in a situation where the best I can do is break even because for me it always seems to be downhill from there. Also as noted, would you pay that much on cash? If it's not worth the cash it's not worth buying points to use. It MIGHT be worth it in some cases if you have the points already and wouldn't use them otherwise. If your choice was to use 62 points or pay $585 (even if it inc tax), I'd use the points if I had them and I couldn't deduce the cash amount in some way. I think people try to come up with unusual examples to justify the routine use and IMO that's not a reasonable approach.

 

[Dean]

ETA... And I have to add, I haven't seen anyone mention when they're talking about value, the future value that buying into DVC gives you 30 years from now!! Guaranteed Disney's prices are going to continue to go up, but the beauty is DVC doesn't. The price you bought at today is the same 30 years from now. The point values don't change. I see so many number comparisons flying around it makes my head spin.

I think that's part of the issue in how some look at this compared to others. I'm not personally willing to assume that owning DVC resorts will always be better than just the fees to use toward cash for the rest of the contract. 30-50 years is a long time, Disney hasn't even be around in FL 50 years and DVC is only 21 years old. There are far too many things that could happen to make owning DVC a nightmare unto itself. It might but it might not and one needs to consider those additional risks.

 

[Dean]

Can I just point out that every sale was a direct purchase at one point. It just happens that for whatever reason someone may need to sell their contract & someone else will gladly take it over for them. The annual dues are taken over, everyone still gets their money & so does Disney every year.

DVD only gets money with the original sale and DVCMC gets their part of the maint fees no matter who pays them. That a contract was previously sold retail doesn't change that every time someone buys resale it was a potential retail sale that was lost. I know some don't think that's important but it's huge to DVD as they mostly make their money on the margin.

 

[Upon a Star]

I don't think dvc would be able to built new resorts without the resale market either. A lot of resales would end up in foreclosure and dvc would have to suck up all that inventory. So I suppose you could say thanks to the resale market also!

 

[ELMC]

I don't think dvc would be able to built new resorts without the resale market either. A lot of resales would end up in foreclosure and dvc would have to suck up all that inventory. So I suppose you could say thanks to the resale market also!

I'm sorry, but I don't see the connection at all. DVD foreclosing on a contract is good for them, not bad. It gives them more inventory that is already paid for (or at least partly) that they get to sell again. It's 100% profit. In the meantime they can turn the rooms over to CRO and get compensated for them. It's a total win for them. Other timeshare companies with a less compelling product have no trouble selling their new resorts, and have you seen the resale market for those systems? For the most part it's awful.

 

[DougEMG]

So in summary
(1) DVD needs to sell direct to stay in business. I think them staying in business is good for all owners.
(2) Buying direct is fast and can make total sense in some situations, such as new resorts, small contracts, when resale and direct are relatively close in price and maybe a few others
(3) People buy resale to save money, but it takes a lot of time and can cause a lot of stress and with ROFR you still might strike out.
(4) For every resale owner there was originally a direct owner who decided to sell before their contract expired.
(5) Booking at small resorts at 7 months is harder now than in the past because there are so many more members.

 

[Dean]

I don't think dvc would be able to built new resorts without the resale market either. A lot of resales would end up in foreclosure and dvc would have to suck up all that inventory. So I suppose you could say thanks to the resale market also!

For some timeshare resorts this is a real issue, doubtful for DVD/DVC. Foreclosures related to loan's would go back to DVD which they could resell as new points pocketing the difference already paid but competing with other new inventory. Foreclosures due to failure to pay maint fees go to the HOA and all of us members pay dues to cover those that don't pay so the foreclosure actually gives a chance for a different member to actually start paying. What I don't know is the arrangement between DVCMC & DVD to dispose of those units, basically how much does DVCMC get from that to offset dues.

 

[Upon a Star]

Agreed on a small scale. However if most of the people selling via resale didn't have that option and had to foreclose they certainly wouldn't be able to expand and keep building. I don't think there is an endless supply of people buying direct. I think it's evident with how long it took both blt and akv to sell. Although I suppose some of the resale buyers would have no choice and buy direct.

 

[Dean]

Agreed on a small scale. However if most of the people selling via resale didn't have that option and had to foreclose they certainly wouldn't be able to expand and keep building. I don't think there is an endless supply of people buying direct. I think it's evident with how long it took both blt and akv to sell. Although I suppose some of the resale buyers would have no choice and buy direct.

If there were no viable resale market some would buy direct and some wouldn't buy. It's hard to tell the market. For a system as in demand as DVC, there really is essentially an endless demand compared to supply. And that's with DVD being far too lax on the sales side. It might be hard to sell Branson in Oct but there's not a time when DVC and WDW aren't in demand. If that changes it means something big has happened and whether or not we could sell out DVC holdings might be the leasts of our worries. Things like the parks closing or a total collapse of the timeshare world. Your warning is valid for a seasonal also ran resort, and to a degree for HH/VB but not realistic for WDW or CA IMO. The jury's still out of HI.

 

[nyck]

I bought direct, getting ready to buy direct for VGF, and will always buy direct. I like to use my points for anything I want and do not think it is a waste of "points" or "money". Use your membership how YOU want, not how others tell u to use it

 

[bigvig1130]

So what if resales didn't exist, and everyone that bought direct kept the contracts until expiration. Does that mean DVC would fail because they would not be getting the infusion of retread points? I'm sure DVD figured that this could have been a scenario (albeit a low percentage chance). Or, was the business model set up hoping people would fail allowing DVC to acquire new points. This is why I have wondered why DVC makes a big deal about resale. After the original direct sale, they should not NEED to resell the same points again. Imagine if car dealerships only existed if people defaulted on car loans and the used car was sold again for original price from the dealership, or if the car could not be sold without the chance of the dealership to buy it first. I can't imagine DVC wouldn't be profitable without ROFR. I think that is what bothers me the most about the continuous resale of direct points. It's not the people who buy direct, it's the process that ultimately is the problem.

 

[Dean]

So what if resales didn't exist, and everyone that bought direct kept the contracts until expiration. Does that mean DVC would fail because they would not be getting the infusion of retread points? I'm sure DVD figured that this could have been a scenario (albeit a low percentage chance). Or, was the business model set up hoping people would fail allowing DVC to acquire new points. This is why I have wondered why DVC makes a big deal about resale. After the original direct sale, they should not NEED to resell the same points again. Imagine if car dealerships only existed if people defaulted on car loans and the used car was sold again for original price from the dealership, or if the car could not be sold without the chance of the dealership to buy it first. I can't imagine DVC wouldn't be profitable without ROFR. I think that is what bothers me the most about the continuous resale of direct points. It's not the people who buy direct, it's the process that ultimately is the problem.

I think you misunderstand the reason for ROFR. If there were no new resorts, they wouldn't need ROFR and could simply close down the sales arm. ROFR is mainly a tool to attempt to control prices and drive people to retail for NEW resorts, not to purchase sold out resorts. Limiting options with resale points has the same goal. I also suspect you're falling in to the trap of "they're a big company they can afford it" that many do in all type of areas as well. They care because they want to make as much as they can, not just be profitable. Not caring would be like you or I turning down a pay raise. The car analogy doesn't work very well because IF the dealership could make it so you couldn't sell your car except through them or not at all, they'd take it. They don't go that route because they don't have the option. Probably a better example would be whether you'd buy a car resale if the dealerships as a group refused to service it or sell any parts for it.