Direct Buy vs. Resale - Is this just the first step?

[JimMIA]

I also think this change further emphasizes the wisdom of researching OTHER OPTIONS for non-DVC vacations.

There are numerous other very good timeshare programs with far more scope, and in some cases better accommodations. And many of those can be purchased for almost nothing on eBay.

There are also numerous rental options, just paying cash (especially for cruises), etc, so prospective buyers would do well to look at the whole picture rather than relying on the slick promises of a timeshare salesman.

 

[Granny]

Seems like a negligible change to me.

This seems to be the popular sentiment and I agree. However, I do think it provides insight for those who were speculating about a tiered point system.

Clearly, Disney intends to reduce benefits/perks for resales rather than increase any perks for direct sales. Many were hopeful for additional incentives to make direct sales more desirable but it looks like Disney will go the way of making resales less desirable.

As you pointed out Jim, these are all perks anyway and not obligations. As Doc often says, "stay tuned"!

 

[ssawka]

I think DVD will continue to monitor the program as well. If it causes a drastic dip in resale prices (I don't think it will), DVD may need to reevaluate. One of the selling points of DVC over other programs is the the liquidity of the points. If people see DVC as something they will be "stuck with" during times of trouble, they may be less likely to buy (resale or direct). That is unless DVD is willing to exercise ROFR more often.

Personally, I don't think it changes things much. If you still want to stay at one of the "collection" destinations, you still have the option of renting out points and paying cash. You'll probably get a better rate and not have to pay the $95 booking fee!

 

[BirdsOfPreyDave]

I know Disney gets contracts back through foreclosures and ROFR, but do they also purchase contracts? Or is resale your only option for selling?

This change doesn't affect us, as we don't use our points anywhere other than DVC resorts. I'm also very relieved to see they did a grandfathering of existing resale contracts. Had this not been the case, I didn't know what we'd do with our add-on contract if we couldn't use it how we wanted to.

I wondered if DVC would "take a trade-in" so to say on a new direct-purchase contract.

 

[BirdsOfPreyDave]

I just had another thought... the DIS is going to need an entirely new type of trade board. "Book me a cruise with your Disney-purchased points, and I'll book you a DVC room with my re-sale points."

 

[LouisianaDisneyFan]

Ah, two threads with some different posters.

*Subscribing here too* =)

 

[JWG]

Wonder if ROFR reviews will slllllllloooooooooooooooowwwwwwwwwwwwwww down for the next two months.

 

[chalee94]

I think DVD will continue to monitor the program as well. If it causes a drastic dip in resale prices (I don't think it will), DVD may need to reevaluate.

the big issue is this: DVC wants to be able to say to folks on tour: here is why you should buy direct and not resale - so if this change causes more direct purchases, it is a win for DVC. this is all that matters.

ROFR has never been about propping up prices - that's just timeshare salesperson talk (which is to say, not true). DVC will step in and ROFR only to the extent that there is demand from direct purchasers to get rid of the inventory they acquire (and they have the cash to pay for the ROFRs). as long as there is direct demand, it doesn't matter if resale prices have a drastic dip - that just makes it cheaper for DVC to scoop up inventory to satisfy the demand from direct purchasers.

as you suggest, logically this will bite a timeshare developer eventually as sophisticated buyers will not purchase directly for $20,000 if they understand the resale value is $1. but IMO, it will be difficult for DVC to avoid the temptation to take the short term money if they are making enough money in selling to the less sophisticated.

 

[eliza61]

So, am I reading this correctly? Beginning soon, if you brought your points through a resale and not through disney direct you could be locked out of some locations?

 

[cseca]

So, am I reading this correctly? Beginning soon, if you brought your points through a resale and not through disney direct you could be locked out of some locations?

You won't be locked out of the core DVC resorts, but other resorts outside DVC... yes.

 

[LouisianaDisneyFan]

So, am I reading this correctly? Beginning soon, if you brought your points through a resale and not through disney direct you could be locked out of some locations?

Only if you closed on your resale purchase after March 20, 2011. Those contracts that close on or before March 20, 2011, will have the same booking ability as direct purchases.

 

[Donna M]

So, am I reading this correctly? Beginning soon, if you brought your points through a resale and not through disney direct you could be locked out of some locations?

Actually, if you buy any new points after March 20, then the new points will have the restrictions, not resale points already owned prior to March 20; they will be grandfathered in.

 

[CrazyDuck]

Seems like a negligible change to me.

As long as you dont EVER want to try and sell your points...

I have a feeling this is going to kill resale values... So the question is... Buy now for the "collection" elegibility or wait a year and scoop up some dirt cheap contracts?

 

[Brian Noble]

This may penalize the very same people who made Disney huge sums of money, people with huge contracts who may want to downsize in the future may have a challenge selling those points.

"Loyalty" in the commerce world is not about rewarding people who gave you money in the past. It's about rewarding people who might choose give you money in the future. Someone *selling* a contract is not only not giving money to Disney, they are supplying alternative inventory to someone who might otherwise give money to Disney. In short, they are the last people Disney could possibly want to "reward".

Note that a large point owner does have to pay (largish) MFs. But, those aren't by choice; the owner is legally obligated to do so. So, those too don't count as "loyalty" worth rewarding.

But that might not be true of first time buyers. How many DVC owners were on the Disboards before buying? When we bought our 500 points, we knew nothing about resale.

Right---but, as a first time buyer with no knowledge of resale, it's probably the case that you didn't do much research before buying. Otherwise, you'd've known about it. Maybe after taking the tour, but probably not before. You might have done that research---and it might have been long enough ago that resale wasn't such a well-known option, or wasn't necessarily economically viable. But, that was then and this is now. Right now, if someone is considering a resale purchase when they visit the sales floor, it means that they *definitely* did *some* research before going on the tour. As an aside, that is probably not the case for most of the people on the tour---I'd bet a mickeybar that most tour guests never considered DVC before they decided to tour, beyond maybe seeing it on Resort TV.

If it causes a drastic dip in resale prices (I don't think it will), DVD may need to reevaluate.

A dip in resale prices, by itself, would not be cause for alarm. Disney doesn't care about that. What they care about is the total flow of tour guests, and the rate of conversion of those guests. The resale price may impact tour flow and conversion rate, but this smoke-and-mirrors change is meant to counteract that, and convert some on the fence between resale and retail. And, in some cases, it will work. So, if the total flow doesn't go down, or the conversion rate goes up enough to compensate, it won't matter what the resale price is. Disney wins.

I have a feeling this is going to kill resale values.

For reasons mentioned above, I disagree. Most serious resale purchasers are resale purchasers *because* they understand the system well. This won't change their minds, because these options are almost universally poor uses of points vs. using in DVC or renting reservations.

 

[keishashadow]

As long as you dont EVER want to try and sell your points...

I have a feeling this is going to kill resale values... So the question is... Buy now for the "collection" elegibility or wait a year and scoop up some dirt cheap contracts?

i don't think so as I've never considered using my points in this fashion as the trade/value to points didn't seem equitable. Easier to rent/transfer points for cash & then travel outside of WDW or book DCL. If that option is closed, then I will be up the creek or spending far more time @ WDW proper.

i have no idea the % of members who do enjoy this perc anyway, not sure if they would publicize the figures.

certainly don't think it devalues my membership (partial resale) as imo the option to trade in/out, etc. is nothing more than a sales tool type feature based upon my travel habits. Im sure the guides will increasingly point out this option though after the stated deadline.

 

[ChiSoxKeith]

Correct me if I'm wrong, but the general consesus around these boards is that the Disney Cruise Line is not a good value (when you figure in the value of the rental points versus just paying cash), and I've looked and the ABD and the points are usually sky high........ditto with using your points to stay at say the Grand Floridian.

So if future resale purchasers can't use them for that, who cares?

Yes it gives the Direct Salespeople something to sell "see, if you buy direct you can use them on the cruise" but that's not a good value for your points.

If this drives the resale market down (and it might in the short term, but I don't see it for the long term), I'll be looking to pick up some points then.

 

[DVC SSR Owner]

It is all about options. Will I ever stay at wdl? Probably not. Will I cruise? Maybe at least once! Will I ever stay at wdw at a moderate if everything Dvc is booked? You never know! But, I would like the flexibility to use my points how I see fit! Glad they grandfathered in my 200 ssr points cause we are not buying any more points anyway. We don't need um and I am not paying for em or their dues.

 

[LauraLea]

Correct me if I'm wrong, but the general consesus around these boards is that the Disney Cruise Line is not a good value (when you figure in the value of the rental points versus just paying cash), and I've looked and the ABD and the points are usually sky high........ditto with using your points to stay at say the Grand Floridian.

So if future resale purchasers can't use them for that, who cares?

Yes it gives the Direct Salespeople something to sell "see, if you buy direct you can use them on the cruise" but that's not a good value for your points.

If this drives the resale market down (and it might in the short term, but I don't see it for the long term), I'll be looking to pick up some points then.

Unless.....the point charts change to much lower usage.

I seriously doubt that will happen.........Laura

 

[Shooby doo]

Just to add my thoughts,from across the pond,these changes do not affect me -at the moment- & TBH the perks that have been taken away were astronomical points wise!Will the changes affect the market,I think so: Firstly I believe that it will affect the Resale market,it's all about perception,the product is now sub-standard,whether you would use the perks or not, so the Resale price has to be affected. Great for those thinking of buying in or adding on as I'm sure the prices will drop. Which leads me on to the second point,your ownership has been devalued,fine if you see out your contract but should your circumstances change then expect to get alot less for your product. I also believe that it will affect the Direct market,especially bigger contracts,you will think twice about that big family contract,knowing that you could be left with surplus once the "chicks" have flown the nest.
Only time will which way it will go but I can tell you that it would seriously make my reconsider paying $130/point,with no escape plan!
SD

 

[manning]

It's negligible to me as long as I have my points. But should I ever decide I need to sell...not something I plan to do...it definitely devalues my resale.

Exactly.