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

[FindingFigment]

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

Instant depreciation! That's why I like to buy pre-owned vehicles. When it comes time to sell, I take a smaller loss.

 

[ssawka]

Instant depreciation! That's why I like to buy pre-owned vehicles. When it comes time to sell, I take a smaller loss.

That's a good point! If this devalues resales further, and Disney continues to raise the price of direct sales, they are actually going to widen the gap between resales and direct purchases, making the price of resales even more attractive (assuming the purchaser is not all that interested in trading).

 

[chalee94]

That's a good point! If this devalues resales further, and Disney continues to raise the price of direct sales, they are actually going to widen the gap between resales and direct purchases, making the price of resales even more attractive (assuming the purchaser is not all that interested in trading).

yep - and whether you buy direct or resale, everybody will be selling at resale prices down the road.

 

[DougEMG]

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?

If resale values bcome "dirt cheap", I'll certainly look at picking up more points via resale.

 

[DougEMG]

"
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.

Agree.

Disney wins if more people buy direct.

People who want to stay onsite and buy resale (assuming resale prices go down) win.

This leaves direct purchasers that need to sell as the real losers.

 

[franandaj]

You know I subscribed to the "trading out for a cruise is not workable, better to rent points and pay cash" theory for quite some time until I did the math. I'm not sure what cruises people are looking at, but the ones I want (outside stateroom with verandah) start at over $3000, but only take less than 300 points per person.

Points seem to be renting out at around $10-12, so I won't break even if I rent the number of points I would use for the cruise even at $12. I had just done this math about two weeks ago, and we definitely are planning a Disney cruise in the next five years. We also don't plan on selling our points, we're going to use them until we die.

That being said I'm in ROFR for a VWL contract and as soon as I heard about the "New Rule" I checked and just today a BCV contract came up in my UY. It's twice as big as I want, but better than paying full price from Disney, so I just started that one too.

Now I'm done!

 

[keishashadow]

That's a good point! If this devalues resales further, and Disney continues to raise the price of direct sales, they are actually going to widen the gap between resales and direct purchases, making the price of resales even more attractive (assuming the purchaser is not all that interested in trading).

interesting thought, unless DVC decides to repeatedly tweak the 'status' of resale contracts to make them even less attractive.

OT perhaps but Im surprised that the 7 month window hasn't been reduced at the more popular resorts (addressing issues from 'home resort' owners who complain of difficulty obtaining a reservation @ their 'home' unless they plan far ahead).

 

[DVC SSR Owner]

Ok, maybe I am a skeptic, but....what if this is part of the master plan. DVD has had to pick up a lot of contracts due to forclosures. Wouldn't they rather let the resale market prices plummet so that the contracts would get unloaded and they would now have new people picking up those dues! Just a thought!

 

[Sandisw]

Where do they go from here? It depends on whether or not this is enough "smoke and mirrors" to deflect the "but resale is so much less expensive" objection on the sales floor.

I think, quite possibly, it will be. Only time will tell though.

As to the effect on resale points. Honestly? I don't think it has any effect at all. The use of DVC points for Disney-internal reservations (DCL, D.Coll., and ABD) is almost *never* cost effective. Most resale purchasers are well-educated about the product (by definition, they know enough to know to look for a resale deed), know what it is good for, and know what it is not good for. They will see this as a non-event.

At the end of the day, my opinion is that DVC is doing future resale purchasers a favor by eliminating use options that are poor values.

Unless, at some point, they negotiate for the point costs for these options to go down.

If, for argument's sake, cruising on points became more attractive, then it could push someone to Disney over resale.

I am not saying that this will happen or even could happen, but if it did, it would turn something that is seen as a negative and turn it in to a positive.

 

[Brian Noble]

Possibly, but that "discount" has to come from somewhere---someone has to pay the difference between the monetized points (after CRO gets paid on their end of the deal) and the cruise fare. Presumably, that would be DVD, so they'd need to drive a *lot* of extra sales with it.

This problem---that real perks cost real money---is why most other timeshare developers use relatively meaningless window dressing to differentiate resale vs. developer purchases.

 

[Mickey'sApprentice]

Could DVC actually improve the trade options and points charts for those of us grandfathered in and for those buying through DVC?

I doubt it, but what do y'all think?

 

[chalee94]

I doubt it, but what do y'all think?

i think you are right to doubt it.

 

[nuts]

at least they grand fathered

 

[hakepb]

Could DVC actually improve the trade options and points charts for those of us grandfathered in and for those buying through DVC?

I doubt it, but what do y'all think?

This change would have to result in a significant drop in using points for those exchange options
Which is doubtful. I.e. A large number of people buying large resale contracts, cruising and selling those contracts before having to pay dues..

 

[BEASLYBOO]

Ok, maybe I am a skeptic, but....what if this is part of the master plan. DVD has had to pick up a lot of contracts due to forclosures. Wouldn't they rather let the resale market prices plummet so that the contracts would get unloaded and they would now have new people picking up those dues! Just a thought!

I personally didn't buy with the intent to re-sell at a later date, however I didn't buy large amounts of points. I have been through 2 sales tours and DVC never pitched me the idea that you could sell/downsize your points at a later date.

The sales pitch however does embellish the Concierge Collection, the Passport collection, RCI, the Cruises ....etc. but it isn't until you see, use and understand the point structure (and lately they change every year) that it becomes clear that these other options aren't the best use of ones points.

Losing these perks may mean very little to some( like me) so the resale market is still a good option but to those who don't understand how it works it may push them to buy directly from DVC, which is what they want.

It will be interesting to see how the resale market is affected, it may plummet but with ROFR maybe there will be a lot more foreclosures rather than resales.

 

[Snurk71]

That's a good point! If this devalues resales further, and Disney continues to raise the price of direct sales, they are actually going to widen the gap between resales and direct purchases, making the price of resales even more attractive (assuming the purchaser is not all that interested in trading).

Maybe Disney wants to devalue the resale market to where there is a huge price difference, with a plan to more aggressively exercise ROFR at the reduced resale price point and sell to the market at Disney's direct, inflated price for an even larger return?

That would be a good financial move to drive down the resale market if you're planning on doing the buying.

 

[nuts]

With 2042 coming ever so closer I wonder if this was a consideration. Market value will naturally degrade as we approach expirations.

 

[Jason@dvcstore]

With 2042 coming ever so closer I wonder if this was a consideration. Market value will naturally degrade as we approach expirations.

Most likely, however, keep in mind that the contracts have always had an end date and Disney has continued to raise the price. With this logic one might thing buying from Boardwalk or Beach Club from Disney at this point would be lower than the $65 per point that they sold it for originally.

From 1994 until 2005 the resale prices actually rose even though the contracts had less and less time on them. Then there was the Disney Vacation Club boom (the number of owners multiplied) and the number of sellers rose causing the resale prices to lower.

Only time will tell what will happen with this new change.

Jason

 

[nickspace]

With fewer perks on resale DVC I think the prices will go down a little.

 

[goofy2008]

So is the resale price going to go up from now until March??