Direct Purchase benefits announced!

[Joan of Arc]

I wonder if DVC took into account the very profitable add on market from current owners when making this decision? Lets face it, when a new resort goes on the market these boards go crazy with owners chommping at the bit to get whats new. Many, many owners then sell of the newly acquired points very quickly for various reasons: cant handle the extra payment, didnt like the resrt they bought, really didnt need more points to begin with. Why do so many owners do this? Well, in part it has been because they know that they can always put it up for resale and get what they paid or a little less if need be. This is why you see owners breaking up their add on points into smaller amounts. I have been gulity myself of doing this and heck got more for my AKV points that I sold resale than what I paid for them, and got double developer points to boot. This mentality will completely stop with this new enhancement. So, many owners go into the feeding frenzy of what is new ad now will not even consider adding on again. I really think that if resale drops considerablly , they will loose a lot of add on purchases. Food for thought. DVC has given us all the cure for the deadly disease known as addonitis.

 

[Brian Noble]

The car analogy is a good one. Over time a cars value will go down (same as DVC). Some cars devalue quicker than others (same as DVC resorts).

Interestingly, this analogy showed up on the Daily Sales Tip over at Inside The Gate just the other day.

http://www.insidethegate.com/2011/01/chevy/

 

[LouisianaDisneyFan]

I wonder if DVC took into account the very profitable add on market from current owners when making this decision? Lets face it, when a new resort goes on the market these boards go crazy with owners chomping at the bit to get whats new. Many, many owners then sell of the newly acquired points very quickly for various reasons: cant handle the extra payment, didn't like the resort they bought, really didn't need more points to begin with. Why do so many owners do this? Well, in part it has been because they know that they can always put it up for resale and get what they paid or a little less if need be. This is why you see owners breaking up their add on points into smaller amounts. I have been guilty myself of doing this and heck got more for my AKV points that I sold resale than what I paid for them, and got double developer points to boot. This mentality will completely stop with this new enhancement. So, many owners go into the feeding frenzy of what is new ad now will not even consider adding on again. I really think that if resale drops considerably , they will loose a lot of add on purchases. Food for thought. DVC has given us all the cure for the deadly disease known as addonitis.

I have wondered the same thing.

DH and I jumped in on impulse for Aulani, even though we have never been to Hawaii. We wanted the 11-month booking window so that we could be sure our first trip was when WE wanted to travel and not just the leftovers. We probably would not keep the contract long-term. Now we're nervous... wondering what will happen to resale prices after these changes... and wondering if we should just go ahead and resell that contract before March 20. Frankly, buying on impulse was an emotional and foolish decision for us, and selling in a panic probably would be too. Fear of uncertainty (for booking) motivated us to purchase and now fear of uncertainty (for prices in resale) is tempting us to sell. That same fear of uncertainty may very well keep us from purchasing more add-ons.

 

[tjkraz]

I wonder if DVC took into account the very profitable add on market from current owners when making this decision? Lets face it, when a new resort goes on the market these boards go crazy with owners chommping at the bit to get whats new. Many, many owners then sell of the newly acquired points very quickly for various reasons: cant handle the extra payment, didnt like the resrt they bought, really didnt need more points to begin with. Why do so many owners do this? Well, in part it has been because they know that they can always put it up for resale and get what they paid or a little less if need be. This is why you see owners breaking up their add on points into smaller amounts. I have been gulity myself of doing this and heck got more for my AKV points that I sold resale than what I paid for them, and got double developer points to boot. This mentality will completely stop with this new enhancement. So, many owners go into the feeding frenzy of what is new ad now will not even consider adding on again. I really think that if resale drops considerablly , they will loose a lot of add on purchases. Food for thought. DVC has given us all the cure for the deadly disease known as addonitis.

Seems like it would be a wash for DVC, though. Instead of selling the AKV contract to you, this policy makes it more likely that DVC would have made a direct sale to the individual who ultimately bought your resale listing.

Your post actually raises and interesting point. At times individuals have taken to making direct purchases under attractive incenties, stripping the contracts and then listing them resale for a profit.

The new policy severely reduces the likelihood of this happening (IMO) due to the reduced appeal of resale contracts. In doing so, the net result is fewer contracts on the resale market. Supply and demand says that can only help resale prices.

 

[Joan of Arc]

Many, many,many owners buy on impulse or with emotion. Heck were talking about Disney and nothing brings up emotion like Disney! They are masters at it. No its not the best way to buy anything but it happens all the time. We have depended on DVC to act as they always have and they are now changing the rules on us. Wright or Wrong I just think they will loose alot of owner add ons, I know they will. They may have shot themselves in the foot with this new ENHANCEMENT.

 

[nyck]

Very good product and vacation opportunities/choices/alternatives, reputation, and moderate value retention were part of our purchase decision especially our add on contract. We also felt that Disney would treat its members right and fairly and had a strong tendency and reputation to do things right.

If resale values plummet and DVC starts scooping them up, the writing is on the wall as to what their real objective was. If their intention is to drive resale prices down to their distinct advantage, I will have little respect for the DVC/Disney organization.

And I am very sorry to say this, but you all looked at purchasing for the wrong reasons then. This is and has always been a business. People let the Disney name illusion them from what it is, a business. You can't base value retention from the past on the purchase today when it comes to a timeshare. Have you not looked at the $1 timeshares on ebay? The "Value" of any timeshare is how you USE it, not how much you can sell it for. They do not care what you can sell that property for, that isn't there concern. They care what THEY sell the property for. Once you join, they ar not going to make it easy for you to leave with any "value" being retained. That is not the nature of any timeshare business. Obviously some folks on here purchased this emotionally without realizing what they signed up for, and that is unfortunate. I don't remember any DVC guide ever telling me "If you buy this and need to sell, you can get back a good return of your investment". NO.The always say "This is investment in YOUR and your families future vacations". Which is exactly what it is.

 

[Joan of Arc]

Seems like it would be a wash for DVC, though. Instead of selling the AKV contract to you, this policy makes it more likely that DVC would have made a direct sale to the individual who ultimately bought your resale listing.

Your post actually raises and interesting point. At times individuals have taken to making direct purchases under attractive incenties, stripping the contracts and then listing them resale for a profit.

The new policy severely reduces the likelihood of this happening (IMO) due to the reduced appeal of resale contracts. In doing so, the net result is fewer contracts on the resale market. Supply and demand says that can only help resale prices.

AAAAAH but you are assuming that the person who bought my contract would go to Disney for direct sale. I am the sure sale in this scenerio and my resale buyer is an assumption which you know what they say about assuming, especially in buisness.

 

[Dizny Dad]

. . . . . . Food for thought. DVC has given us all the cure for the deadly disease known as addonitis.

So many times in our history we have used the word CURE. And as much as I agree with you, something tells me that due to the emotional factor involved, addonitis will only go dormant, waiting to rage and flair up when one least expects it! Good luck!

 

[Chuck S]

....Right or Wrong I just think they will loose alot of owner add ons, I know they will. They may have shot themselves in the foot with this new ENHANCEMENT.

But, yet it seems people say that about almost every change made by Disney/DVC (point charts, changing back to RCI from II, eliminating certain discounts, eliminating free valet...and so far, it does not seem to have hurt them.

 

[nyck]

I have wondered the same thing.

DH and I jumped in on impulse for Aulani, even though we have never been to Hawaii. We wanted the 11-month booking window so that we could be sure our first trip was when WE wanted to travel and not just the leftovers. We probably would not keep the contract long-term. Now we're nervous... wondering what will happen to resale prices after these changes... and wondering if we should just go ahead and resell that contract before March 20. Frankly, buying on impulse was an emotional and foolish decision for us, and selling in a panic probably would be too. Fear of uncertainty (for booking) motivated us to purchase and now fear of uncertainty (for prices in resale) is tempting us to sell. That same fear of uncertainty may very well keep us from purchasing more add-ons.

That does put you guys in a tough spot. I know I can go to WDW at least twice a year to use up my points on it and other stuff, but if I owed Aulani, I wouldn't know what to do with it. I will probably go to Hawaii once, but the flights are too expensive from the midwest to go often. I probably would try to sell it quick, since you could buy another DVC cheaper and use them at Aulani, especially if you weren't going to keep it

 

[Joan of Arc]

But, yet it seems people say that about almost every change made by Disney/DVC (point charts, changing back to RCI from II, eliminating certain discounts...and so far, it does not seem to have hurt them.

Agreed! However, this change has a longterm aspect financially for owners, who a lot have been thinking much more short term. You can act on emotion if there is an out, but if you take that out away from people then they have to think totally longterm with the purchase. Yes, I know alot of you will say well that is good they should have been thinking that way from the get go, The point I am making is that we did not have too befor the enhancement and now we do. LOSS of SALES for DVC

 

[Chuck S]

Agreed! However, this change has a longterm aspect financially for owners, who a lot have been thinking much more short term. You can act on emotion if there is an out, but if you take that out away from people then they have to think totally longterm with the purchase. Yes, I know alot of you will say well that is good they should have been thinking that way from the get go, The point I am making is that we did not have too befor the enhancement and now we do. LOSS of SALES for DVC

Except that scenario has proven untrue for every other major timeshare. If the strategy of limiting resale options didn't help direct sales, no major timeshare company would be using that strategy. But all the big players limit resale perks.

 

[tjkraz]

AAAAAH but you are assuming that the person who bought my contract would go to Disney for direct sale. I am the sure sale in this scenerio and my resale buyer is an assumption which you know what they say about assuming, especially in buisness.

It all balances out in the end. Even if the person who bought your contract looks for another resale, DVC eventually gains more sales down the road. Fewer resale contracts available causes resale prices to rise. The cost differential between direct and resale closes further. Add in these direct purchase benefits and the scale tips further toward direct purchase.

DVC's losing sales to people who flip their contracts on the resale market within 24 months or so isn't much of a loss.

As for people being concerned about resale value, some are...many others are not. The entire timeshare industry is a monument to lack of consumer research and planning.

 

[Joan of Arc]

Except that scenario has proven untrue for every other major timeshare. If the strategy of limiting resale options didn't help direct sales, no major timeshare company would be using that strategy. But all the big players limit resale perks.

Agreed to a point. Other timeshares are not Disney. What works for them may not work for DVC. Remember that DVC makes it easy easy easy to add on with no credit check, Just sign by the mouse ears and you are good to go. They have had a captured market by doing this with letting people have an out if needed. They will now loose that captured market. Will it be offset by fewer direct purchases? Time will tell on that one, but I doubt very strongly that other timeshares have had an owner add on market as strong as DVC. Seems to be a big gamble on their part. But hey, if it doesnt work out for them in their favor, they will change it back saying they are giving the owners what they are asking for. They always have an out.

 

[Joan of Arc]

It all balances out in the end. Even if the person who bought your contract looks for another resale, DVC eventually gains more sales down the road. Fewer resale contracts available causes resale prices to rise. The cost differential between direct and resale closes further. Add in these direct purchase benefits and the scale tips further toward direct purchase.

DVC's losing sales to people who flip their contracts on the resale market within 24 months or so isn't much of a loss.

As for people being concerned about resale value, some are...many others are not. The entire timeshare industry is a monument to lack of consumer research and planning.

It may not equal out in the end if the owner add on market comes to a screatching hault. Dont miss the point about buying with emotion. I didnt buy just to strip and sell. I bought and then wanted what was new as many other owners do. This is a huge market for Disney that they have now lost. Many owners sell their whole contract to buy a new resort and are advised to do so by these boards to gain home resort priotity. They will most likely not be able to that now. If there are fewer resales it will increase the price slightly, but I doubt enough to offset people going direct vs resale because the resale market has been put at a disadvantage now. If prices get close to one another as in your sceneiro it will be a moot point because owners will still have their out and the new enhancement did not work to
DVC favor.

 

[LIFERBABE]

I see many direct buyers selling before March 20, and when the tiers are released, no longer having enough direct points for the upper tiers. Not knowing what the tier benefits will be throws another curve in the decision making process. If the tiers are highly desireable, then you are left to purchase from DVD at $130 point.

They could pretty much eliminate purchase incentives and collect their money on the front end, if the tiers are highly beneficial which would more than compensate for the loss of the disenfranchised.

Im just sayin....

 

[Joan of Arc]

I see many direct buyers selling before March 20, and when the tiers are released, no longer having enough direct points for the upper tiers. Not knowing what the tier benefits will be throws another curve in the decision making process. If the tiers are highly desireable, then you are left to purchase from DVD at $130 point.

They could pretty much eliminate purchase incentives and collect their money on the front end, if the tiers are highly beneficial which would more than compensate for the loss of the disenfranchised.

Im just sayin....

Possible, but then again it is an assumption. The tier program is an unknown at this stage. Will it motivate the owners who get caught up in the feeding frenzy alone. I doubt it. They will no longer have their out if needed. The point I am making is that the highly lucrative add on purchases are going to come to a significant hault. No matter what DVC offers in the future if you cant sell the add on that you bought then you will not buy in with emotion and short sightedness ,you will not buy. This is a large market for DVC that is why they always offer add ons at a discount to owners first. They know that many will bit just because they want the new resort. however if you cant sell the old resort to compensate or get rid of the new one without significant loss, you will not bit. Loss of sales for DVC Any perks offered in the tiers costs DVC money out of the front end, so that is just switching one incentive for another and calling it tiers.

 

[LIFERBABE]

Possible, but then again it is an assumption. The tier program is an unknown at this stage. Will it motivate the owners who get caught up in the feeding frenzy alone. I doubt it. They will no longer have their out if needed. The point I am making is that the highly lucrative add on purchases are going to come to a significant hault. No matter what DVC offers in the future if you cant sell the add on that you bought then you will not buy in with emotion and short sightedness ,you will not buy. This is a large market for DVC that is why they always offer add ons at a discount to owners first. They know that many will bit just because they want the new resort. however if you cant sell the old resort to compensate or get rid of the new one without significant loss, you will not bit. Loss of sales for DVC Any perks offered in the tiers costs DVC money out of the front end, so that is just switching one incentive for another and calling it tiers.

There are plenty of assumptions to go around.
Many here did just that. How many people sold at a loss, to turn around and purchase BLT?
If this was true, the timeshare direct sales market would not exist at all. Westgate, Silverleaf, etc are still building and their resales sell for pennies on the dollar and often times $1. But people still purchase direct from the developer, everyday. If Westgate can survive, I have no doubt DVD will also.

 

[drusba]

I see many direct buyers selling before March 20, and when the tiers are released, no longer having enough direct points for the upper tiers. Not knowing what the tier benefits will be throws another curve in the decision making process. If the tiers are highly desireable, then you are left to purchase from DVD at $130 point.

They could pretty much eliminate purchase incentives and collect their money on the front end, if the tiers are highly beneficial which would more than compensate for the loss of the disenfranchised.

Im just sayin....

Remember we are dealing with Jim Lewis who has been the head DVD guy for about four years. Whenever he starts a sentence with "In response to repeated requests of our members and in order to enhance the membership expierence ..., " you can bet the farm that you are about to get hosed. This is someone whose "tiered benefit" program, when it is announced, is likely to be something that takes away existing benefits from those below a designated tier and which does not create any new ones for those above. That is indicated by the first step already taken which is to take away the Disney Collections from resale purchasers.

 

[Joan of Arc]

There are plenty of assumptions to go around.
Many here did just that. How many people sold at a loss, to turn around and purchase BLT?
If this was true, the timeshare direct sales market would not exist at all. Westgate, Silverleaf, etc are still building and their resales sell for pennies on the dollar and often times $1. But people still purchase direct from the developer, everyday. If Westgate can survive, I have no doubt DVD will also.

I am not talking about survival at all. I am talking about the loss of a once captured market that will be no more. This will have an impact negatively on their sales. DVC's owner add ons are significant, unlike other time shares in the industry. The other time shares did not have a market to loose compared to DVC. This will have a negative sales impact on that market. Will it be to there end, most defenitely not, they will just reverse stratagies and blame it on the owners telling them to do so.