Direct Purchase benefits announced!

[TLSnell1981]

I am disappointed, but not surprised by Disney's latest move. Overall, things have steadily declined, over the last few years. Disney is losing the Magic.IMO It's what put them in a class of their own, and made Disney unique. They are no longer special, and have lost the Trust. It appears bean counters are firmly in control, and they have no vision for the future.

I have always used my points for DVC, but I am concerned with what happens next. I am very happy, I did not purchase Aulani. We have been undecided....until now. We will NOT make the purchase. Resales will not be as attractive, for buyers or sellers. I agree with the PP, Disney cannot unring the bell. Resale purchasers are considered second class citizens, and the future is quite uncertain. If it becomes difficult to use my points, we will opt to vacation elsewhere. We now visit WDW, at least twice a year. I have a feeling this will change in the very near future.

 

[DebbieB]

Yep, the cost of the Disney Collection, Adventurer Collection, Concierge Collection is not paid for by us, but by the developer.

Check your Member Benefits Guide. Things like the Disney Collection, Adventurer Collection, Concierge Collection, and AP discounts are all offered by Disney Vacation Development (DVD), the unit that builds the resorts and then sells the memberships.

They are - pure and simple - sales and marketing tools to entice people to purchase an ownership interest.

All of these special programs may be modified or terminated at any time by DVD without notice to, or the consent of any purchaser.

The cost of these programs is not passed on to members and is not included in the annual dues we pay.

I am not defending DVD but I can see how they'd want to differentiate resale versus direct and make it more enticing to purchase direct.

I don't know if this has been mentioned, I didn't read all 32 pages, but the root of the problem seems to me is that DVD is having a hard time renting the rooms through CRO when members trade out without a large discount. I just read on the resorts board that once again they are offering free upgrades from values or moderates to OKW and SSR for late Jan/early Feb. They have had to limit the number of cruises available for points, which I think was the first sign of a problem. So by doing this, they will be cutting the pool of members who have access to these tradeouts and make direct purchase more appealing. Where they could run into trouble is people who buy direct to keep the benefit and pay extra are unable to find availability for the cruise or Disney resorts.

 

[Dean]

This change sure seems like something that is the brainchild of a low-level executive who is just out of MBA school. Some of you have pointed out that this policy change has violated the community's trust. Unfortunately most business schools, graduate or otherwise, have stopped teaching about the power and profitability of consumer trust.

This is a well established and presumably successful type of approach for timeshares. DVD is a member of ARDA, which is a trade network for timeshares. Jim Lewis is on their Board and I believe he is currently the chairman if it hasn't rolled over. I suspect DVD and not DVC, pays for this membership. With most timeshares, the owners pay voluntary dues for the membership which I've always opted out of. It's touted to protect members, and I'm sure there is some secondary protection, but their main allegiance is that of the developers and resorts, hence my refusal to pay for it for them.

Unlike other timeshares, the DVC community is active and informed. No other timeshare group has so many websites and forums (disboards, ***********, dvcnews, etc.) devoted to member owners. This shows the uniqueness of DVC… that its owners help to make it something different and magical

In spite of the internet and Disney related forums, I think you're making an inaccurate assumption. I think the reverse is more true. As a rule, non DVC timeshares owners are more informed and many DVC owners are not at all. You can divide it up into groups though, those oblivious to most everything, those knowledgeable about their timeshare, those knowledgeable about their timeshare and timeshares in general. The latter is one of the reasons I believe DVC members are behind the curve, the general knowledge and owned interest are far more linked with non DVC options. DVC is unique for one reason only, the park locations. It wasn't the first and likely isn't the best at anything specific other than riding the park and emotional coat tails of Disney in general, this was true in 1994 when I bought and is even more true now, IMO.

After reading every post in this thread it's safe to say that whether you believe this change will affect you or not, everyone agrees that eliminations of "perks" will continue and that no owner, direct or resale, is safe. Yet more evidence of lost trust in DVC. In the end, loss of trust equals loss of revenue and timeshare sales are all about establishing trust.

I'd put it another way. I think everyone agrees that changes will happen going forward as they have in the past. There are those that see this as a line crossed over, a slippery slope, but reason and a knowledge of timeshares in general does not support that suggestion. It was predictable at some point as were the reallocations. Resale owners have always been second class in timeshares, it's the nature of the beast and is now just coming out in the open for DVC. One should not participate if this is a sticking point. Even in the past you'd be interested to hear some of the guides talk about resale owners. I realize they weren't technically treated differently until now but those members that are in the other group will have the ability to make an informed decision going forward and can opt out if they chose. If this affects one's trust in a timeshare, one had too much trust to start with and for no good reason. Only emotion, not facts, would support that claim.

Another theme pointed out by our members is that DVC realizes that these lost perks do have value. If that value didn't exist, DVC wouldn't have removed the perks for some instead of for all, like they did with valet service. If free valet service were such a strong selling point then DVC would have renegotiated with the provider to continue it.

I'd agree that they have perceived value though little real value, but it's good to have options in case a situation arises, which is the way I see the perks in question, really this is how I see all of them. The valet issue is an interesting one. It was free to the system, not just members, and now was going to be full price. They tried to negotiate but had no options except full price. NO, DVD would not have paid for it for the ability to tout it for sales.

Taking into account these realities, DVC's current $130/$120 price per point for direct purchases seems overpriced. Even if I don't plan to resell my points, I now have to factor this reduced resale price into the equation. (Perhaps I'm unique but I'd be surprised if every one of you didn't take that into consideration the next time you think about adding on.) As of Tuesday, direct purchases are no longer worth the same price that they were on Monday. If their current incentives plus extra bonuses are any indication, DVC thinks so too.

IMO DVC has always been over priced retail and it's just gotten more so, no doubt about that. I'd go a step further and say that everyone should have considered the lack of value from a resale standpoint possibly being zero or NOT being able to sell at all prior to the first purchase, and not wait until possible add on time. I know many did think about if they had to sell but still made far too broad assumptions in this situation.

As other DISBOARD members have said, it is now time to look at the points as though every perk or bonus is removed, and that the use is restricted to your home resort. If you look at it this way, now is a GREAT time to purchase resale. WDW isn't going away and most of us want to continue to vacation there.

Anyone informed about DVC should have looked at it this way from day 1 as it's always been 100% true. The reality is that one should at least even consider DVC WITHOUT the parks in the equation, it becomes a pretty useless and expensive option at THAT endpoint so my guess is that of those that considered that option, non of us felt it was a major risk. The same cannot be said for the change that triggered this discussion, many of us have stated this was not only possible, but likely at some point.

 

[n2mm]

So should I assume that resales will be even cheaper than they've been lately? I'm on vacation and have not read the entire thread. Not sure if the prices can drop any lower than we've seen them lately.

 

[Dean]

Could this be part of the long term strategy? It could set them up nicely for future profits from this change. Makes a lot of sense even if they end up stumbling into it.

HBC

Doubtful that it was core to the change but it could have been one consideration. To say that this change is fabricated on selling an extension to future resale members would be nuts but to consider that it could be used as part of an extension or sales program going forward would be accurate I think. And it could end up being a positive if it allows one to extend. Possibilities taken from other timeshares would be the ability to elevate resale points, and/or an extension, with a retail add on purchase. The same could be true for all current owners including retail, this is what Marriott did last summer. They came out with a new product and made all owners ante up or not participate though they did not make the differentiation on resale as large as I had suspected, they did not give credit to those that had both retail and resale ownerships and treated them all like resale.

I'd say the chance of the divide getting wider at some point is about 50%, we'll see.

I don't know if this has been mentioned, I didn't read all 32 pages, but the root of the problem seems to me is that DVD is having a hard time renting the rooms through CRO when members trade out without a large discount. I just read on the resorts board that once again they are offering free upgrades from values or moderates to OKW and SSR for late Jan/early Feb. They have had to limit the number of cruises available for points, which I think was the first sign of a problem. So by doing this, they will be cutting the pool of members who have access to these tradeouts and make direct purchase more appealing. Where they could run into trouble is people who buy direct to keep the benefit and pay extra are unable to find availability for the cruise or Disney resorts.

I'm sure that's part of it but if you look at it that way, you should be in favor of the change because the most likely alternative if that were the driver of the change would be to eliminate the perk otherwise. The conversion of those traded points to cash has always been very inefficient by the time you consider CRO's 50% commission, room discounts and the fact that about 25% (the limited info I've had) of the rooms so offered were not rented historically.

The cruise limits of around 10% per cruise has always been technically there from what I've heard in the past. The problem that caused the moratorium seems to be the perfect storm of the economy and the somewhat favorable points chart for the Dream cruises compared to historical costs, likely a tactical error on DVD's part. In the past it appears they've let it ride if the % went over a little because it was evening out pretty well overall. I also suspect DCL put the brakes on as well because while it's good business to have a lot of cruisers, having too large a participation from one group carries risk, risk they don't have to assume right now. Maybe after the hoopla dies down with the dream and the other new ship, things will return to more normal, esp since the number that can cruise on points will be less.

So should I assume that resales will be even cheaper than they've been lately? I'm on vacation and have not read the entire thread. Not sure if the prices can drop any lower than we've seen them lately.

I think that's a safe assumption, the question is how much lower. My guess is $5-10 a point for the lower priced option like HH, VB, OKW, and SSR and maybe a little more for the higher priced options. The one's at the top of the food chain are likely to be most affected like BLT, HI and GC because the owners paid a higher price and are generally trying to recoup as much as they can. The other question, and really the one people should start worrying about, is if DVD mostly abandons ROFR. If they do and once someone gets something for almost nothing, and word gets around, you'll see more and more fire sale type contracts. Esp since the total % of people looking to buy resale will be less and likely more will be trying to sell in the next few months. In the absence of that scenario, it really depends on the value that resale buyers put on the perks in question and the aggressiveness of DVD related to sales presentations (both scheduling and delivering). IMO, it will be a great thing for people looking to buy but haven't yet, esp resale.

 

[maminnie]

My husband and I are sitting here trying to decide what to do; keep or sell. Selling would mean cancelling an upcoming trip in the next months with family. Plane tickets bought, time off scheduled at work, family members excited.

We were pretty knowledgeable consumers as I hope I demonstrated in one of my previous posts. As stupid as it was, we did not think significant perks would be taken away from subgroups and that the value could subsequently be effected because of such a thing. We thought if perks of the program were lost, all would lose them and everyone would be on the same playing field.

This is very disappointing to us and as others have said I too would not consider purchasing more points or recommending DVC to family and friends. Up to this point DVC/Disney were a cut above but no more.....DVC is just another timeshare with a castle and a mouse.

 

[CWO4DVC]

So if I use my points for a cruise does that not free up a room at a DVC resort for them to put on the market? Not sure of the rack rate of a room but I am sure it is close to being a swap IF they are able to sell the room.

 

[maminnie]

What is the current price of a point for Bay Lake Tower and Animal Kingdom after all those wonderful Mickey incentives?

Anyone?

Thanks.

 

[RobDoc]

That's exactly the problem though - they have had to heavily discount from rack rate (if they have been able to rent these rooms at all) so the number of points used far exceeds the number actually needed for the room in usual practice.

There is also a cost (managed via internal accounting) when DRC is the one needing to handle the rental and management of the DVC villa. In addiiton, the cash reservation will get daily housekeeping which also needs to come out of the discounted rental rate. As some have already noted in this thread, DRC has even been upgrading some from Moderate resorts to DVC resorts at no additional charge during some of these discount programs - some have even had "free" dining while staying in a DVC villa paying moderate rack rates.

 

[Dean]

My husband and I are sitting here trying to decide what to do; keep or sell. Selling would mean cancelling an upcoming trip in the next months with family. Plane tickets bought, time off scheduled at work, family members excited.

We were pretty knowledgeable consumers as I hope I demonstrated in one of my previous posts. As stupid as it was, we did not think significant perks would be taken away from subgroups and that the value could subsequently be effected because of such a thing. We thought if perks of the program were lost, all would lose them and everyone would be on the same playing field.

This is very disappointing to us and as others have said I too would not consider purchasing more points or recommending DVC to family and friends. Up to this point DVC/Disney were a cut above but no more.....DVC is just another timeshare with a castle and a mouse.

Unless you were thinking of selling anyway, why sell now? At most, all you've lost is a modest amount of resale value and you may gain other benefits with better exchange rates and future benefits for those that qualify as retail or grandfathered owners.

 

[Dean]

So if I use my points for a cruise does that not free up a room at a DVC resort for them to put on the market? Not sure of the rack rate of a room but I am sure it is close to being a swap IF they are able to sell the room.

Look at the exchange rate of DVC to the DC where the points for a regular hotel room aren't that much different that a DVC 2 BR would be in many cases. The same issue exists with DCL. Lets look at Jan, 2012 where you can cruise for cash for around $1600 for 2 for cat 11 or around 250 DVC points and the discrepancies get larger at you go up the cabin ladder where a Cat 4 is around $3500 for 2 but 600 DVC points. The problem is that historically DVC can only get back only around $5 per point that is traded and I suspect they're lucky to get even that now. It is true that the points in and out are the same so the net result on total availability is likely nil and given that historically DVD hasn't been aggressive in getting the best rooms to rent out, more cash type exchanges probably favored availability for members for higher demand times. At some point though DVD will have to go after what they can rent out and that may mean having someone sitting there reserving the best units at 11 months out to rent through CRO.

 

[maminnie]

Unless you were thinking of selling anyway, why sell now? At most, all you've lost is a modest amount of resale value and you may gain other benefits with better exchange rates and future benefits for those that qualify as retail or grandfathered owners.

As we watch other people go through difficult times, it was always comforting to know that if we ever had to sell, our contracts would likely generate close to what we had hoped. I have closely watched the resale market to insure that this were the case. I keep my contracts healthy and as current as possible with little to no banking and borrowing.

This latest change just creates too many unknowns in the resale market and what could be taken away next to possibly devalue our membership more.

I just can't imagine those who would pay well over $100 knowing that if they had to sell, their contract would not generate near what they had paid for it. They may even have a mortgage. I just don't get it. Every direct buyer today, could be a resale seller tomorrow......

Could this possibly backfire for DVC?? As I said before it better be clearly stated in the two page Product Understanding Checklist.

I wish there was an easy answer but unfortunately the unknowns prevent this.

 

[maminnie]

For those that are far more educated on this my husbands question is, is there someplace in all these crazy documents that states the perks provided are not transferrable upon resale?

It may say they can be removed but wouldn't this be the membership as a whole and not our individual contracts?

 

[Chuck S]

Unless you were thinking of selling anyway, why sell now? At most, all you've lost is a modest amount of resale value and you may gain other benefits with better exchange rates and future benefits for those that qualify as retail or grandfathered owners.

I agree, unless you had planned to own DVC for a year or two and then sell, current owners have lost nothing. The program is exactly the same. Resale value is irrelevent unless you sell your contract.

If you use your points for trips and vacations, this resale change has zero impact. I have two DVC trips planned, and have no intention of selling. The use of the program will be the same for me after March 20, as it is now.

 

[Chuck S]

For those that are far more educated on this my husbands question is, is there someplace in all these crazy documents that states the perks provided are not transferrable upon resale?

It may say they can be removed but wouldn't this be the membership as a whole and not our individual contracts?

If perks are not part of the legally defined membership, no owner can actually "transfer" a perk to a resale buyer.

In other words, we don't own the perks and can not transfer something we don't own.

 

[maminnie]

I agree, unless you had planned to own DVC for a year or two and then sell, current owners have lost nothing. The program is exactly the same. Resale value is irrelevent unless you sell your contract.

If you use your points for trips and vacations, this resale change has zero impact. I have two DVC trips planned, and have no intention of selling. The use of the program will be the same for me after March 20, as it is now.

With all respect, you too could become tomorrows seller for reasons beyond your control. Wasn't it comforting to you too knowing that DVC was holding its value more then other timeshares especially for those of us that bought when the price per point was more reasonable. This may not be important to you because of your personal state of affairs but my guess it is important to MANY others.

As I have said, reduction in the per point resale value due to the economy, supply and demand, and perks eliminated for all members was one thing, purposely creating a subgroup with the goal to devalue members resale values is another.

 

[maminnie]

If perks are not part of the legally defined membership, no owner can actually "transfer" a perk to a resale buyer.

In other words, we don't own the perks and can not transfer something we don't own.

Got it. Thanks for the clarification.

 

[going/again]

If you're really being serious that you can't separate advertising from underlying facts then you have bigger problems than the issue at hand. Certainly there are limits on advertising related to timeshares but it is always going to be aimed at getting you interested. Look at infomercials. The idea is to get you to act on emotion but the underlying facts don't change because you do.

Wow, first you call me absurd now you suggest i have problems, as the adverts say own a piece of the magic. I suggested they put buy resale dont own so much, IT WAS A JOKE as the (booking) value of a resale is now less, I fully understand infomercials, and their intent, thanks for worrying about me though.

As a respected member of these boards as you clearly are. I have to say I'm litttle suprised you took exception to what was wrote in jest, the only concern I have over any of this is making a subset of members,

all our current points are by direct FWIW

 

[Sandisw]

As we watch other people go through difficult times, it was always comforting to know that if we ever had to sell, our contracts would likely generate close to what we had hoped. I have closely watched the resale market to insure that this were the case. I keep my contracts healthy and as current as possible with little to no banking and borrowing.

This latest change just creates too many unknowns in the resale market and what could be taken away next to possibly devalue our membership more.

I just can't imagine those who would pay well over $100 knowing that if they had to sell, their contract would not generate near what they had paid for it. They may even have a mortgage. I just don't get it. Every direct buyer today, could be a resale seller tomorrow......

Could this possibly backfire for DVC?? As I said before it better be clearly stated in the two page Product Understanding Checklist.

I wish there was an easy answer but unfortunately the unknowns prevent this.

I think you bring up why there may be differences in reactions to how this change does or does not affect their ownership.

When we bought, we bought BLT knowing that is where we wanted to stay. We were CR fans and knew that was the only place for us. We also bought with the notation that resale value would be 0, if and when we ever needed to sell.

For me, and I know it is not the same for all, if I end up with a DVC contract that only allows me to stay at BLT and offers me nothing else, I am okay with it. Our family would have continued to vacation at WDW for years to come, with or without DVC.

I think we have always been in a catch 22 with value. How often do you read threads of current members who added on via resale and got a great price? Lots of times and most of us are excited and praise them for such a great deal. But, in reality, those great deals were a devaluation of the product already and for the seller, possibly a loss of their expectation in its value.

I guess I feel that you can't have great deals for buyers and great resale value for sellers. It really does have to be one or the other. Maybe I am looking at it wrong, but I don't see this in any way changing what I bought for me and my family.

 

[Chuck S]

With all respect, you too could become tomorrows seller for reasons beyond your control. Wasn't it comforting to you too knowing that DVC was holding its value more then other timeshares especially for those of us that bought when the price per point was more reasonable. This may not be important to you because of your personal state of affairs but my guess it is important to MANY others.

As I have said, reduction in the per point resale value due to the economy, supply and demand, and perks eliminated for all members was one thing, purposely creating a subgroup with the goal to devalue members resale values is another.

But any timeshare should not be purchased retail looking forward to a resale value. No one knows what the economy will bring to them. I'm in my early 50s, do you think it would be easy for me to find employment today if I needed to do so?

Honestly, when you bought your house, did you think the resale value would be where it is today? And historically timeshares have never held resale value. That said, when I bought my first contract in 1992, 1 bought the minimum required of 230 points, thinking that if we didn't like it we could sell quickly without a huge loss, but still at a loss of 25% to 35%, given brokers fees, etc. I never gave resale value any thought when purchasing the 3 small add-on contracts directly from Disney, because I knew I would get the use value.

Now that the resale prices are lower, it should be a greater consideration for those purchasing new, but timeshares in general are on a par with new cars...they lose resale value as soon as you drive them off the lot.

Many people have given far less consideration to a timeshare purchase than they have about which car to buy, and whether to buy new or used.

And as far as the changes going in, the people buying resales after the cut-off date surely should be aware that they will be a sub-group and treated differently. Generally, if a timeshare purchaser is savvy enough to look at timeshare resales, they would likely also know that the vast majority of timeshares have such a subgroup. But they'd also know that the basic system is the same.