Did Disney cut its own throat with new resale rule?

[PacoDF]

I think the only effect that it might have on the resale market, is that you might get more people to purchase directly. When we originally bout in (I think around 2004) I signed up for the sales presentation and briefly looked at the resale market. But the price differences wasn't enough for me to go that route, mostly out of convenience. We financed with Disney (paid it off quickly) had fully loaded contract with previous years points, not have to go through ROFR and such. It was a convenience and I opted to spend a bit extra for that.

Remember the customer here. It is Disney fans and they have shown over and over again, they will pay extra for something without blinking an eye. Look at the tour, parties, extra magic, etc etc etc.

I agree with you. Disney should see some better sales in their tours. And maybe that leads to more resale offerings some time later, and maybe a larger offer can push down the resale prices a bit. But I don't see a major drop in resale prices.

 

[gonzalj1]

Wondering if Disney is cutting its OWN throat with this new resale rule--by basically giving their customers a product that now has limited value on the resale market? Basically, when you now pay $168/PP (or whatever it is now), you are basically 'stuck' with this product since there is now NO WAY you will get even close to that if you need to re-sell. They are now offering a product that loses a lot of its benefits once it is re-sold--which therefore limits the dollar value should you need to sell.

If someone bought for $168/PP and needs to sell due to an emergency, they are going to take a HUGE hit on resale. No one in their right mind would pay more than say $130/PP, when they can buy that property direct and get all the benefits (quick closing, no stripped points, membership extras, etc). So, anyone selling one of the newer properties (Poly, GF, etc) is going to have to price their re-sale so low that they will lose thousands.

While they think this new rule will help them, I really think it will hurt new purchases-- since they are trying to sell a product with a very limited resale market.

Perhaps the opposite - If the issue is reduced resale value then perhaps they did themselves a huge favor. If the resale market becomes depressed and the word gets out that the perks are not available to resale purchasers then Disney may have a huge market of resale ROFR purchases they will get for less and resell for more.

Let's also keep in mind that all those perks that people are valuing so highly are not part of your membership. Disney can take them away from everyone at anytime. You only bought the right to reserve a room at your home resort at 11 months if one is available. No more, no less.

 

[miTnosnhoJ]

Grand Floridian is re-selling for $150 per point. DVC's direct price is $180.

$150 is the asking price for VGF that a lot of sellers start with. However, if you follow the ROFR thread, most transactions come in at $140-ish or lower.

 

[crisi]

A more sensible approach would be for the buyer to still purchase the bulk of their points resale, combined with 25-50 pts direct in order to secure the perks. That would have minimal impact on resale demand / pricing.

Next step will be to tier benefits based on the number of direct points you own. Own less than 150 points direct - no AP benefit.

Magic Bands make it really easy to code it all into what you wear on your wrist.

ETA: I don't really care, we've very seldom taken advantage of member benefits. I have better things to do with my park time than visit a DVC lounge and get free soda. We don't tend to use dining discounts. We have used the TIW, but it isn't the value it used to be.

 

[gdrj]

Wondering if Disney is cutting its OWN throat with this new resale rule--by basically giving their customers a product that now has limited value on the resale market? Basically, when you now pay $168/PP (or whatever it is now), you are basically 'stuck' with this product since there is now NO WAY you will get even close to that if you need to re-sell. They are now offering a product that loses a lot of its benefits once it is re-sold--which therefore limits the dollar value should you need to sell.

If someone bought for $168/PP and needs to sell due to an emergency, they are going to take a HUGE hit on resale. No one in their right mind would pay more than say $130/PP, when they can buy that property direct and get all the benefits (quick closing, no stripped points, membership extras, etc). So, anyone selling one of the newer properties (Poly, GF, etc) is going to have to price their re-sale so low that they will lose thousands.

While they think this new rule will help them, I really think it will hurt new purchases-- since they are trying to sell a product with a very limited resale market.

I have no idea what impact there will or won't be. I'm not sure anyone does right now. In a year or two the norm will be the new rules (no member extras) and it will be seen as quite normal. I have 2 direct contracts, for my 2nd contract I looked at resale but for a number of factors went direct.

IMO the buyers who have a gripe are those who just fall on the wrong side of not having the benefits. While unfortunate the money savings on purchase more than make up for lost benefits. DVC has been talking about making changes for years about the resale market (at least when I have spoken to them). As many people here say about DVC purchases do your homework, and also that benefits can and do change.

For those who are concerned about resale, if you are buying a timeshare, resale should never be part of the equation IMO.

 

[ldo]

Exit strategy/resale should always be part of the equation, IMHO. I predict that in 1 year, resale prices will be equal or higher than last weeks' prices. The changes will be absorbed and people will still want to buy DVC for $85PP vs. $130 or $150+ PP. They will realize that they still get to stay in the same DVC as the guy next door who bought direct. They'll lament about not getting AP for a discount and not being able to go to a couple DVC events, then get over it when they see the thousands that they can save. Tune in 4/6/2107 to see what happens. This is still a solid product with high demand.

 

[PBB]

I spoke with Member Services this afternoon. I called and asked for the information on selling our points. We have been members since 98 and we bought a resale at OKW. He made the mistake and asked why. I told him that I believe Disney has a conflict of interest and is no longer acting in the best interest of the members. The recent letter clearly stated that new sales were more important to DVC than the retention of the members equity............

 

[disneynutz]

I spoke with Member Services this afternoon. I called and asked for the information on selling our points. We have been members since 98 and we bought a resale at OKW. He made the mistake and asked why. I told him that I believe Disney has a conflict of interest and is no longer acting in the best interest of the members. The recent letter clearly stated that new sales were more important to DVC than the retention of the members equity............

And they love for you to sell, the person you sell to gets no benefits, do you really think they care?

Bill

 

[gr8tdame]

Exit strategy/resale should always be part of the equation, IMHO. I predict that in 1 year, resale prices will be equal or higher than last weeks' prices. The changes will be absorbed and people will still want to buy DVC for $85PP vs. $130 or $150+ PP. They will realize that they still get to stay in the same DVC as the guy next door who bought direct. They'll lament about not getting AP for a discount and not being able to go to a couple DVC events, then get over it when they see the thousands that they can save. Tune in 4/6/2107 to see what happens. This is still a solid product with high demand.

Where do you get your $85 per point figure. I have 2 contracts that are at ROFR and the AKV was $97 pp and BWV @ 102 pp . I had a contract the didn't pass ROFR that Disney took for BCV @115 pp.

 

[Lisa F]

DVC has always artificially propped up prices by their ROFR. No one REALLY knows what the resale market would look like if Disney didn't have their hand in it, buying back points before it gets too low. It's been going on for so long now that people take for granted that when if they resell their points, instead of getting $0.10 on the dollar like many timeshare resales (especially in Orlando, which is lousy with them) they will be getting $0.70-$2 on the dollar, depending on when you bought in. My BWV points purchased with magical beginnings at $55 a point could be sold for... I dunno but the poster above is trying to purchase for $102 a point. That is extraordinary!

All that said, I don't think most people are buying into DVC for the perks. JMHO, the biggest reason to buy into DVC is deluxe accommodations at a discount. Period. That's what we bought direct 17 years ago and that's what most people are buying now. People who are buying a resale are usually the more savvy buyers who have looked at the numbers a little harder and value the savings over anything else, including convenience, including (necessarily) getting exactly what you want and perhaps buying something that is "close enough" and what they are basically buying is a prepaid discounted room at Disney's top notch resorts. You think someone who goes to disney frequently and is wants to do so regardless is going to cut off their nose to spite their face over losing 10% off of the less popular restaurants in exchange for a huge discount on rooms? As some of the numbers demonstrate above, if you want to spend an extra $8000 or more on points to retain those discounts... not a great financial move.

I don't think it will matter to most people who buy. Get the disney visa instead for the same discounts. as far as the ticket discounts go, that is never guaranteed and if THAT is the deal killer for someone buying into DVC, I think that is a bad thing to hang your hat on. JMHO. Most of the member "perks" can be recreated by other means... you want to go to a special party? they are available, put a price tag on it. It is FAR less than the difference between buying resale and buying direct.

I know people would like to believe that Disney is hurting itself but believe me, when it comes to making money, they know what they are doing. Perks are not there in the first place to be nice... they are there to make money.

 

[Dean]

Wondering if Disney is cutting its OWN throat with this new resale rule--by basically giving their customers a product that now has limited value on the resale market? Basically, when you now pay $168/PP (or whatever it is now), you are basically 'stuck' with this product since there is now NO WAY you will get even close to that if you need to re-sell. They are now offering a product that loses a lot of its benefits once it is re-sold--which therefore limits the dollar value should you need to sell.

If someone bought for $168/PP and needs to sell due to an emergency, they are going to take a HUGE hit on resale. No one in their right mind would pay more than say $130/PP, when they can buy that property direct and get all the benefits (quick closing, no stripped points, membership extras, etc). So, anyone selling one of the newer properties (Poly, GF, etc) is going to have to price their re-sale so low that they will lose thousands.

While they think this new rule will help them, I really think it will hurt new purchases-- since they are trying to sell a product with a very limited resale market.

I doubt it hurts them and it likely will help some. Ultimately I don't think it'll make much difference. Timeshares are sold not sought out normally. Worst case scenario is they have to be more aggressive in some areas of the sales process. Timeshares worth zero on the open market are sold all the time. DVC potential members have proven they'll buy no matter what, I doubt that'll change. I'm sure there will be some that balk temporarily but it won't make a difference. They don't care about resale options only the ability to sell retail. If they could make it so you effectively couldn't sell, they would.

 

[boxer]

Where do you get your $85 per point figure. I have 2 contracts that are at ROFR and the AKV was $97 pp and BWV @ 102 pp . I had a contract the didn't pass ROFR that Disney took for BCV @115 pp.

$85/PP is not out of line for most resorts.....I got my BWV 4 months for $70/PP, of course it was stripped of 2016 points, but I get my full allotment of points in 2017. I thought this was a steal. I know in the $80 dollar range you can get VWL, SSR, OKW, AKL, and possibly a couple others if the points/deal is right.

 

[boxer]

Exit strategy/resale should always be part of the equation, IMHO. I predict that in 1 year, resale prices will be equal or higher than last weeks' prices. The changes will be absorbed and people will still want to buy DVC for $85PP vs. $130 or $150+ PP. They will realize that they still get to stay in the same DVC as the guy next door who bought direct. They'll lament about not getting AP for a discount and not being able to go to a couple DVC events, then get over it when they see the thousands that they can save. Tune in 4/6/2107 to see what happens. This is still a solid product with high demand.

This is what I'm talking about....surprised more people on here don't think like that? You are buying something direct, that may (or may not) have limited or reduced values on the open market, should you need to sell. This to me is a concern, in the event that you need to sell your interest.

 

[Supplanter]

I believe your assumption is that someone buys today and sells today. That is rare and honestly generally occurs when someone hasn't thought it out. Already, you can't get what you paid back out of it if you sell in the first couple of years. But the same theory holds with buying a new car. If you buy it new off the lot today and try to sell it next month you will lose a fortune.

I bought my first contract in SSR, the worse investment ever according to many here. What I paid for it directly from DVC I could now make a health sum of money. Same thing when I bought from BLT, I paid a lot less than I can sell it for now on the resale market. But that isn't why I bought it and I don't plan on selling them.

I think the issue is largely that with a car you still have the exact same object to sell. What Disney has done is materially changed and diminished the value of what you have available to sell. If they want to separate the "vacation" from the "club" it needs to be sold that way.

 

[CarolMN]

Respectfully, it is sold that way. Our purchase agreement, POS & MSPOS and even the Quality Assurance Checklist all made it very clear what was included in the purchase. What they changed is the population to which they are offering selected discounts.

Of course, that is still very disappointing. But it is not a material change to the product purchased - at least in the legal sense. We've never had the right to discounts and so never had the right to re-sell or gift them to someone else.

 

[crisi]

My exit strategy for a timeshare - don't buy it if you can't afford to lose money on it. When people bought in 2007 and 2008 and then needed to sell in the recession, they lost money. Some people lost money they couldn't afford to lose. If you manage to hold onto it long enough to save money - congrats - you've won the game. If you sell it for more than you paid, you also won the bonus round. But there isn't any guarantee you won't walk away thousands poorer than if you'd never bought.

People like to think Disney is different, but they are a business. Their primary reason for existing isn't to make magic, its to make money. Remember that and you'll be disappointed in their actions less often.

 

[Sammie]

Just as one should never buy DVC based on the continuance of perks, one should never buy any timeshare thinking you will make money when you sell. We have had ours long enough that I truly do not care if we make anything if we decided to sell it. I figure we have ours until the end.

 

[ldo]

I really don't understand all the "diminished value" talk as the key and really only component is the accommodation, which is still the same. The booking window is the same (not so with other resale TS). The AP discount is nice, but as I posted, it is worthless to some who go at peak times now unless you buy the more expensive pass, which essentially negates the discount.
The "Club" is just a fiction--a great marketing ploy--there's no special handshake or secret meetings that anyone is missing out on. When I stay @ DVC on an RCI trade, I feel just as good as staying on my DVC points--actually better b/c I have gotten a better "deal" using my RCI trade than it would cost in DVC points. Maybe that's how people should look at it. They're in a different level of the "club"--the smart one. Would you rather have (let's say) $5K more in your kids college fund or get to go to a "special" DVC party every once in a while (we've been to 3--I'd skip all of them if you gave me $50) and get $100 off some AP that now have blackout dates (and maybe more in the future)? I'd pick resale and $5K, or $10K in the bank. For some, if it matters that much, then buy direct, as many do.
Agree with others that DVC handled poorly and advance notice would have been decent--why not say anything not closed by May 1--it's no skin off their back. For those caught in the middle, ask yourself why you were buying? For the vast majority who crunched the numbers, that value is still there. I would be mad too, but then happy that I still got such a good discount. Enjoy your DVC and don't let this set you back.

 

[robinb]

The AP discount is nice, but as I posted, it is worthless to some who go at peak times now unless you buy the more expensive pass, which essentially negates the discount.

There are is a way around that depending on your situation. You can upgrade a pass to a Gold AP once you are out of the black out period. For instance, I used a 7-day PH after Christmas and through New year's day and upgraded it to a Gold Passport on January 2, 2016. Of course, if your trip ends in the blackout dates, that won't work.

 

[PBB]

And they love for you to sell, the person you sell to gets no benefits, do you really think they care?

Bill

This is exactly why it is time to move on.........They don't care! Why would I want to continue to do business with a company who is only focused on the next sucker?