Can someone explain the rumors of tiered membership?

[ziravan]

What makes you think that Disney cares about the resale value of your contract?

Do you think a resale contract would be worth more if it included the same AP and dining discounts as a direct contract? The whole point of that change was to discourage demand for resales.

Other timeshares sell for thousands direct and pennies resale - you'd have to be a Pollyanna to think Disney would have any problem with this being true of DVC.

My other timeshare is Wyndham. I paid 21k for 250 BCV points and 27k for 168 Poly points, or about 48k.

For an equivalent number of Wyndham points, 399k, across 3 contracts, I paid $1200 total and that included closing costs and transfer fees. Granted, that was just before their Ovation buyback program and them dumping points back into Access, so it would be more difficult to replicate that today (because fewer people are paying companies to dump their timeshares when they can now hand them back for free). But still.

 

[Dean]

They cannot change a contract unilaterally. If the POS is a contract, then they cannot change it during the term of the contract without both signatories adding an addendum to change the terms. If it is not a contract, then it is not binding on either party. A contract is binding. This is a basic of law. Doing so would open themselves up to a lawsuit, which they would lose.

In that sense then it's not a contract if you want to look at it that way thus we don't have a contract. We've signed up for a rollercoaster ride where we have little input and little control for the hope of savings. They certainly can make a lot of changes and where they can't unilaterally is a line of jello.

 

[keishashadow]

If they did manage to change the booking window for direct and resale owners how would they implement it if you had points under the same master contract? Say if you had 100 direct points in a February UY and 100 resale points in a February UY at the same resort. Would you only be able to book with the direct 100 points???? and then at the next window use your other 100 points??? This would become a mess for MS really quickly along with getting several angry calls and emails with having to combine reservations.

Also if they grandfathered in contracts wouldn't this cause even more headaches.

I also don't get how they would get away with changing a deeded contract after the contract has been around for 25 years at a lot of resorts. Seems that a precedent is already set.

My thoughts too on your points 1 & 2. I have a mix of direct/resale & 2 contract years. Last thing i need to do is have another hurdle when trying to keep my points straight

As for #3, the house (or mouse in this case) always wins. They're big enough to push whatever through with their influence, may get tied up in the courts via a class-action suit but wouldn't bet against them.

 

[BK2014]

I have skimmed all 6 pages of this, but if this has already been addressed, forgive me. If the point of creating a "tiered" system was based on getting people to pay more for DVC, rather than simply creating a sense of exclusivity, it seems like DVC would have some very simple options. If DVC is concerned about the number of people buying resale vs. direct, why not just exercise their right of first refusal all of the time? Then they can control how much all of the points are being sold for. Especially with the current difference between direct and resale prices. Given that the direct prices have gone up, and not down, one would have to believe that there is still plenty of demand for direct sales. Especially with resorts that are otherwise considered sold-out, they could be buying the resale contracts and selling the points at a profit.

Buying the resale contracts and re-selling the points direct would also allow those points to be sold with some new conditions/perks. Doing this would still allow DVC to create a tiered system. It just doesn't make sense to me that creating a tiered system is the best way for DVC to increase the number or cost of direct sales. Especially if a tiered system is tied to the number of points bought directly. Why would DVC care if 1,000 direct points were bought in ten contracts of 100 points each, or one contract of 1,000? Unless DVC would prefer to have a smaller number of high point contracts over having a larger number of individual owners.

 

[Dean]

I have skimmed all 6 pages of this, but if this has already been addressed, forgive me. If the point of creating a "tiered" system was based on getting people to pay more for DVC, rather than simply creating a sense of exclusivity, it seems like DVC would have some very simple options. If DVC is concerned about the number of people buying resale vs. direct, why not just exercise their right of first refusal all of the time? Then they can control how much all of the points are being sold for. Especially with the current difference between direct and resale prices. Given that the direct prices have gone up, and not down, one would have to believe that there is still plenty of demand for direct sales. Especially with resorts that are otherwise considered sold-out, they could be buying the resale contracts and selling the points at a profit.

If they could get enough volume cheaply enough, this could be part but not all, of a plan though isn't viable as the main portion. Construction costs are roughly half of the sales price of a new project with a timeshare, the rest is profit and marketing (including sales commissions). They'd still have much of the same costs so the most they'd do would be break even compared to what they do now. They'd tie up funds, which no large company likes to do unnecessarily. That's why they tend to build timeshares in phases, so that sales can fund the rest of the development. At their core they're basically a developer, not a resaler. And ultimately they'd make less profit because your suggestions is to buy up all of the resales and currently they are able to pick and chose. If they took this approach, people would play games as some do now, driving up the "price" by selling to your friend at an inflated cost.

Buying the resale contracts and re-selling the points direct would also allow those points to be sold with some new conditions/perks. Doing this would still allow DVC to create a tiered system. It just doesn't make sense to me that creating a tiered system is the best way for DVC to increase the number or cost of direct sales. Especially if a tiered system is tied to the number of points bought directly. Why would DVC care if 1,000 direct points were bought in ten contracts of 100 points each, or one contract of 1,000? Unless DVC would prefer to have a smaller number of high point contracts over having a larger number of individual owners.

That's not the case, once a point is in the club, it is in the club. The only semi exception that one can point to is OKW sales where new points are sold extended but this is still part of the OKW POS current. What they could do would be to create a new system with a new resort, making it completely unavailable to existing members. But even then you'd need a VIP system or other qualification to crossover to the new system from the old system. I doubt they'll do a VIP system but if they did, likely they'd base it on total points, not how many in each contract, everyone else does. One point to consider, one I don't recall being made, is that it's likely such a system would be based on how many points in a single master contract and one would not be able to aggregate the points from multiple master contracts to qualify.

 

[ziravan]

If they could get enough volume cheaply enough, this could be part but not all, of a plan though isn't viable as the main portion. Construction costs are roughly half of the sales price of a new project with a timeshare, the rest is profit and marketing (including sales commissions). They'd still have much of the same costs so the most they'd do would be break even compared to what they do now. They'd tie up funds, which no large company likes to do unnecessarily. That's why they tend to build timeshares in phases, so that sales can fund the rest of the development. At their core they're basically a developer, not a resaler. And ultimately they'd make less profit because your suggestions is to buy up all of the resales and currently they are able to pick and chose. If they took this approach, people would play games as some do now, driving up the "price" by selling to your friend at an inflated cost.

1. People would play games, running up prices to be paid by Disney.

2. The bottom could also fall out if the market because why devote the time and attention to trying to buy resale if your deal is always going to be ROFR'd?

Currently, resale prices reflect what people are willing to pay and the risk of ROFR is real but small. If that changed, it'd have significant impact on demand.

DVC could use ROFR more effectively to destabilize resales, but they can't do that by buying everything.

Honestly, I think they spurred resales by pricing legacy resorts so high. The resale market has never been the best place to buy newer resorts. If I wanted to buy Poly today, I'd still buy direct. Not enough price difference not to do so.

But. DVC priced themselves out of the legacy market. Some of that was intentional. Most of it. Even if you want to buy direct, it's hard to justify doing so for legacy resorts. And the resale market is a legacy resort market.

 

[Brian Noble]

Construction costs are roughly half of the sales price of a new project with a timeshare, the rest is profit and marketing (including sales commissions).

It might even be less than that. Hilton apparently is about 35%
https://seekingalpha.com/article/3986690-hilton-timeshare-spin-attractive-ipo-acquisition-target

 

[ziravan]

I think they'd have to aggregate master contracts because separating contracts by UY is their idea not their customers.

Before Wyndham moved all contracts to Jan - Dec, I had different contracts in the same account with different time lines. It's just basic accounting to manage points in different silos.

For example, though. I own 420 points, 252 APR UY BCV and 168 Jun UY Poly points.

Notwithstanding the BCV resale, I'm a previous direct buyer to the tune of almost 28k. If DVC permanently alienated owners like me by only counting half our points toward VIP, they'd be essentially dismissing their most likely VIP buyers over a basic accounting issue. (Assuming grandfather and I'm not sure that's a given for a VIP program.)

They'd likely allow linking masters so long as all the owners are the same.

 

[Dean]

I think they'd have to aggregate master contracts because separating contracts by UY is their idea not their customers.

Before Wyndham moved all contracts to Jan - Dec, I had different contracts in the same account with different time lines. It's just basic accounting to manage points in different silos.

For example, though. I own 420 points, 252 APR UY BCV and 168 Jun UY Poly points.

Notwithstanding the BCV resale, I'm a previous direct buyer to the tune of almost 28k. If DVC permanently alienated owners like me by only counting half our points (assuming grandfather) toward VIP, they'd be essentially dismissing their most likely VIP buyers over a basic accounting issue.

They'd likely allow linking masters so long as all the owners are the same.

I doubt it. I know others often do look at them as overall but not DVC. With BG I can even use points together for different UY, they all fall under one master. But given that DVC has decided to look at them as totally separate and as different owners in most ways, I doubt they'd aggregate them but they might. Even if they did for VIP purposes, I suspect this is about all. They'd have to open up transfers between masters for some of the likely benefits and this is an area I don't t think they can do differently between qualified and non qualified.

 

[Dean]

It might even be less than that. Hilton apparently is about 35%
https://seekingalpha.com/article/3986690-hilton-timeshare-spin-attractive-ipo-acquisition-target

Most of the reports I've seen over the years are between 45-55%, 55% is about the highest but I have seen but one second (or third) hand report that this is more where DVC is. Regardless, the principle is that they really can't make real extra money buying back and reselling and I know you're lending support to the thought Brian. I suspect it varies from one project to another and it also varies with the internal games that Disney could play when they "transfer" ownership from one segment to another. I would bet SSR was significantly less construction costs than VGF looked at on a per point basis even with the dilution related to the larger per villa points.

 

[ziravan]

I doubt it. I know others often do look at them as overall but not DVC. With BG I can even use points together for different UY, they all fall under one master. But given that DVC has decided to look at them as totally separate and as different owners in most ways, I doubt they'd aggregate them but they might. Even if they did for VIP purposes, I suspect this is about all. They'd have to open up transfers between masters for some of the likely benefits and this is an area I don't t think they can do differently between qualified and non qualified.

If DVC can manage multiple masters under the same login ID (and at least in my case they do), then they can figure out how to count all points in the same online account towards VIP.

How many members have multiple masters? 10%?

Why alienate 10% of your intended audience over a fixable accounting issue?

I don't see the downside to creating a "fix", but a huge downside in not doing so. All squeaky wheels on one side and none on the other.

 

[Dean]

If DVC can manage multiple masters under the same login ID (and at least in my case they do), then they can figure out how to count all points in the same online account towards VIP.

How many members have multiple masters? 10%?

Why alienate 10% of your intended audience over a fixable accounting issue?

I don't see the downside to creating a "fix", but a huge downside in not doing so. All squeaky wheels on one side and none on the other.

I didn't say they couldn't, I said they'd already made a decision to treat them separately. Reasons to keep the status quo would be this is how their current computer system is set up, another is to drive people to have the same UY, something that reduces the costs and aggravations to the system as well as the member. Since they are separate now, I doubt this will changed. But since I doubt we'll ever see a VIP system, we'll likely never know.

 

[zavandor]

During last round of restrictions for resale, they decided that the cut off date was based on closure date. A couple of days of complains and negative feedback, they decided to switch to date sent to ROFR. I've read in this thread that Disney could do things that would cause an uproar 100 or 1000 times what we had last time. I really believe it isn't going to happen and if even it will happen, they'll grandfather ALL existing owners.

 

[Wakey]

During last round of restrictions for resale, they decided that the cut off date was based on closure date. A couple of days of complains and negative feedback, they decided to switch to date sent to ROFR. I've read in this thread that Disney could do things that would cause an uproar 100 or 1000 times what we had last time. I really believe it isn't going to happen and if even it will happen, they'll grandfather ALL existing owners.

DVD have never even hinted they'd ever even try any of this stuff, and I know a few of us disagree on the legalities if they tried- I'm of the they cannot club, the declaration is clear and just because it's Disney they cannot do just what they want. However, I agree with you, they would grandfather in current owners. Don't think that would stop an onslaught of complaints and possibly lawsuits though. If they reduced the home booking priority (I don't think they can) then resale contracts would then tank in value. Every direct owner, many who have spent $25,000 plus, would see their 'asset' tank in value. This then would put off some future direct buyers, DVC has become another dodgy timeshare.

 

[ziravan]

DVC has become another dodgy timeshare.

And they didn't have to be, which makes it all the more sad.

DVC ignores more foot traffic than most timeshare ever see. They didn't need to play these games for traffic.

Honestly. The resale market and the direct market are different markets anyway. When I wanted to buy a legacy resort (BCV), I bought resale. When I wanted a new resort (Poly), I bought direct. As a rule, DVC doesn't care much about selling legacy resorts or they'd price them reasonably.

The only reason to lash out at resale like DVC has done is if they think buying a legacy resort reduces people buying direct. My guess is that buying resale and legacy go hand in hand. The people seeking information on either will soon discover both. And those buyers, once informed about resale and the ability to buy legacy probably were never going to be direct buyers at the current selling resort anyway.

And all this lashing out at resale by DVC hasn't changed that at all. If anything, it's just brought more attention to resale. As a result, resale is in boom times. Thanks, DVC!

DVC could afford to be different, to be special. It's how they started out. But management has changed and now they care more about following industry practices instead of leading them.

More than anything, that's why I think a VIP program is coming: DVC is no longer an innovative leader; they're followers. And VIP programs are what other timeshares do.

 

[Greg36]

I can see value in a VIP program if it is just adding some additional perks. I mean really some people are spending a lot of money here. Some extra perks would seem really reasonable to help people feel better about shelling out 100+K... I certainly get that DVD is about selling points. I am sure it is a huge money maker, but I have to think that people over there appreciate that one of the end goals with this is locking people into 30, 40, even 50 years of Disney vacations. That is a HUGE money maker. Park tickets, food, merchandise, special events, etc., etc.... Reading through these boards it seems like DVC membership leads to even more trips and thus more money for Disney... This makes me really question why they would want to do anything too drastic that would make resale so undesirable that people would stay clear. I think this assumes that everyone contemplating DVC could afford, or even be willing to pay, direct prices or at least be willing to buy an inferior product at a discount through resale. I think they are trying to walk a line here and help nudge some people toward direct sales, but I am guessing that they see value in having a resale option...

 

[Dean]

DVD have never even hinted they'd ever even try any of this stuff, and I know a few of us disagree on the legalities if they tried- I'm of the they cannot club, the declaration is clear and just because it's Disney they cannot do just what they want. However, I agree with you, they would grandfather in current owners. Don't think that would stop an onslaught of complaints and possibly lawsuits though. If they reduced the home booking priority (I don't think they can) then resale contracts would then tank in value. Every direct owner, many who have spent $25,000 plus, would see their 'asset' tank in value. This then would put off some future direct buyers, DVC has become another dodgy timeshare.

They've explored it internally and included it a few years ago in at one of their surveys so there have been more than hints they've considered it. It's always just been a timeshare, no more and no less.

 

[Matty B13]

When we first started looking into DVC, we thought that it was the VIP experience at Disney World, especially for large families because you could get a Villa at a Deluxe Resort. I'm sure a lot of people would be shocked after spending over $20k that they weren't a VIP at Disney World.

 

[ziravan]

I can see value in a VIP program if it is just adding some additional perks. I mean really some people are spending a lot of money here. Some extra perks would seem really reasonable to help people feel better about shelling out 100+K... I certainly get that DVD is about selling points. I am sure it is a huge money maker, but I have to think that people over there appreciate that one of the end goals with this is locking people into 30, 40, even 50 years of Disney vacations. That is a HUGE money maker. Park tickets, food, merchandise, special events, etc., etc.... Reading through these boards it seems like DVC membership leads to even more trips and thus more money for Disney... This makes me really question why they would want to do anything too drastic that would make resale so undesirable that people would stay clear. I think this assumes that everyone contemplating DVC could afford, or even be willing to pay, direct prices or at least be willing to buy an inferior product at a discount through resale. I think they are trying to walk a line here and help nudge some people toward direct sales, but I am guessing that they see value in having a resale option...

That's just it, though. You'd think they'd see the value in creating 30-50 yr customers who are committing to spending 10's of thousands of dollars with Disney.

DVC has made it clear that the only care about the next timeshare sale.

What allowed DVC to be different back when they wanted to be different was that they are part of a larger picture. Current members will spend money across their ecosystem and potential new members show up at their front door via their ecosystem. Other timeshares would kill for a fraction of DVC's traffic.

Being part of the larger Disney ecosystem allowed DVC to be an innovator when they first started. DVC pioneered timeshare points instead of declared weeks. DVC created a program that doesn't - to this day - nickel and dime you with program fees. DVC used to value all its members equally. It could afford to do so. That changed recently, though.

DVC has fallen into silo thinking. It only cares about its bottom line and no longer considers the value that it's creating for its entire ecosystem. If you're not a direct buyer, then you're useless to DVC. The fact that being a resale buyer is still fantastic for Disney does nothing to improve DVC's bottom line.

(If an owner is at the point of selling, then they probably aren't using their points as vibrantly as they used to do. Then they sell to eager new owners ready to hit Disney hard for several years. The change of ownership does indeed bring a new infusion of cash into Disney's ecosystem. It's much better for Disney's bottom line to have eager new owners than owners no longer interested in their membership.)

DVC has fallen into silo thinkiing. It's a shame considering its entire ecosystem runs both ways. Sure, it'd force them to appreciate the fact that all their members increase the company's bottom line, something they've forgotten. In addition, though, if DVC pulled itself out of its silo, their ecosystem is an ideal customer base.

If DVC were to focus on developing its ecosystem to maximize sales instead of punishing its members, the sky would be the limit. This is what annoys me about the restrictions the most. They're not just cruel treatment to loyal customers. They're also a bad and/or stupid business model. I could brainstorm a dozen ways for DVC to develop its ecosystem in ways that more than offset whatever perceived value it thinks it created by dissing Disney's (not DVC's) most loyal customers.

 

[Kellybelly78]

I think this is a bad idea.

I attended a cocktail party this afternoon on the MC, and a Club, made up of members with 1000 points or more has been considered, and looks like a sure thing to happen.

Not all families have need for so many points. Although they may have the money to purchase that many points - why buy more than you need just to be in a club??