Direct Purchase benefits announced!

[maminnie]

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.

For those of us who have been members for a while, why in the world would any of us think that the resale value could quickly drop and even possibly to 0?????? Historically there is nothing to support this. Unless of course our buddies at Disney did something to negatively impact us all which it appears they may have done.

So basically anyone looking to buy direct from Disney should automatically assume that there $120-$130 purchase could plummet immediately if they too happen to become a seller.

In this economy, people better think long and hard......DVC could very well become just another potentially worthless timeshare down the road. This has not been the case over the past 10 plus years.

 

[going/again]

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.

Also from values you will find.

 

[Dean]

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.

Unless one plans to sell, no uncertainties, but I realize sometimes life happens. MOST timeshare that are sold (timeshare are rarely bought) are worth near nothing when you walk out the door. I realize that has not been quite the case for DVC and it still isn't nor do I expect it to be until late in the contracts but it could happen and every buyer back to 1991 knew or should have known that possibility ahead of time. We've had people on DIS in the past argue (erroneously IMO) that DVC would have a real sale value even the last couple of years. I don't see any way it could "backfire" but it may or may not produce the intended result. We really don't know how much they're expecting out of this change or whether they're just posturing for the future. Personally I doubt it'll have a large affect on either side at the current minimal level of differentiation but it will have some. There is NO reason for them to spell this out further, it's already covered in the POS and I believe the Product understanding checklist as well. They will not have to hit people in the face with any statements related to this issue. What they will do is inform potential buyers about the differentiation between resale and retail and include the wording that if one sells, certain benefits do not transfer. They will likely also require this wording on resale contracts coming in for ROFR.

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?

No and it's not needed. The wording is something to the effect that certain benefits may be offered from time to time but are not guaranteed and can change or be removed at any time at DVD/DVC's discretion. The truth is you don't have any legal case to argue until you get to the level of management and use of the DVC resorts themselves and then it would depend on specifics. They could say that left handed people got certain benefits but right handed people didn't and other than as discrimination laws might apply, there's nothing you could do but complain or vote with your fee.

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 how does that translate to the legalities or even the reasonableness of this change? The answer is, it doesn't in any way. It's really no different than going to a car dealership and buying a car only to have a huge rebate go into effect a few days later than they didn't tell you about.

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

I wish I had worded it differently, I didn't intend for it to come across personally as it did. I was just having trouble understanding how anyone could equate the advertising as a legal commitment (I still do) because the 2 are different and almost unrelated. I do sincerely apologize for any personal references.

 

[Chuck S]

For those of us who have been members for a while, why in the world would any of us think that the resale value could quickly drop and even possibly to 0?????? Historically there is nothing to support this. Unless of course our buddies at Disney did something to negatively impact us all which it appears they may have done.

So basically anyone looking to buy direct from Disney should automatically assume that there $120-$130 purchase could plummet immediately if they too happen to become a seller.

In this economy, people better think long and hard......DVC could very well become just another potentially worthless timeshare down the road. This has not been the case over the past 10 plus years.

It WILL be worth $0 anyway down the road, the contracts will expire. When the value will actually drop to next to nothing, no one can predict. All this change may do is hasten that drop slightly...but it would happen eventually anyway. It is just the way deeded RTU leases work. Even many property deeded "forever" timeshares are worth next to nothing on the resale market.

 

[going/again]

I wish I had worded it differently, I didn't intend for it to come across personally as it did. I was just having trouble understanding how anyone could equate the advertising as a legal commitment (I still do) because the 2 are different and almost unrelated. I do sincerely apologize for any personal references.

I'm not sure how you came to the conclusion, that I thought the advertising was a legal commitment, as you still do from,

Own piece of the magic.
buy resale not so much,

although it was wrote in jest, it really is that simple

no need for you to have apologised.

 

[RobDoc]

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?

In addition to Chuck's explanation, here is another comment in this same thread from DVC Mike - http://www.disboards.com/showpost.php?p=39652227&postcount=477 .

Also, from the 7/95 POS Summary Section II - 9, d. Restrictions upon Rental or Resale:

THE SALE, LEASE OR TRANSFER OF OWNERSHIP INTERESTS IS RESTRICTED AND CONTROLLED.

THE PURCHASE OF AN OWNERSHIP INTEREST SHOULD BE BASED UPON ITS VALUE AS A VACATION EXPERIENCE OR FOR SPENDING LEISURE TIME, AND NOT CONSIDERED FOR PURPOSES OF ACQUIRING AN APPRECIATING INVESTMENT OR ITH AN EXPECTATION THAT THE OWNERSHIP INTEREST MAY BE RNTED OR RESOLD.

Ownership Interests are offered for personal use and enjoyment only and should be purchased by any propspective Purchaser for resale or as an investment opportunity or with any expectation of acheiving rental income, capital appreciation, or any other financial return or valuable benefit, including any tax benefit. Ownership Interests should also not be purchased with any expectation that any Vacation Home located at DVC Resorts can be rented, or if it is rented, that any particular rental rate can be obtained for such rental.

7/95 POS Summary Section II - 10. Exchange Program Opportunities
a. Interval External Exchange Program
(Describes the arrangement as of that date with Interval International including it's commencement on July 1, 1995 and that the contract is a 5 year agreement. It also includes a suggestion as follows:

... There can be no assurance, however, that an DVCMC will be successful in entering into another agreement of short or long duration with Interval or another provider. Under such circumstances, Club Members may contact Interval or anoterh providerof exchange services directly to establish individual exchange privileges. There can be no assuarnce, however, that and individual Club Member will be able to satisfy the terms and conditions then required by Interval or another provider of exchange services to participate individually in the Interval or other Exchange program)

Under the description of the BVTC, Section III Membership
3.1 Membership in the Club, Since the availability of the DVC Reservation Component is part of the servcies offered through the Club, membership in the Club is necessary for a purchaser to access and use the DVC Reservation Component. Membership in the Club us an appurtenance to all Ownership Interests at DVC Resorts, in accordance with the terms of the DVC Resort Documents, and is conveying an Ownership Interest. There is no Club contract separate and distinct from the purchaser's contract with the Developer, and a purchaser of an Ownership Interest automatically becomes a Club Member at the time that the purchaser acquires the Ownership Interest.

Since there is also language in these same documents that allows DVD to change and modify the terms of the contract it would seem that excluding resale purchasers from some of the provisions can be accomplished and thus changing and modifying the terms of the contract can also occur for purchases made directly through Disney.

My original POS from 5/93 described RCi as the exhange provider, but otherwise the other provisions were similar. I'm sure subsequent documents are also substantially the same with modifications to reflect changes to the programs during that time. My early POS documents do not describe specific perks like valet parking, dining discounts, admission discounts, etc. . As for making a clear statment in the Product Understanding Checklist, I doubt that will be done (or needed) since any change in the body of the document will be the responsibility of the purchaser to note and understand. The resale limitation can easily be added under the appropriate section regarding resale.

 

[Sandisw]

For those of us who have been members for a while, why in the world would any of us think that the resale value could quickly drop and even possibly to 0?????? Historically there is nothing to support this. Unless of course our buddies at Disney did something to negatively impact us all which it appears they may have done.

So basically anyone looking to buy direct from Disney should automatically assume that there $120-$130 purchase could plummet immediately if they too happen to become a seller.

In this economy, people better think long and hard......DVC could very well become just another potentially worthless timeshare down the road. This has not been the case over the past 10 plus years.

Because timeshares, in and of themselves, have always been worth very little on the resale market.

Yes, I know that Disney was the exception to the rule and I guess we considered that information as a bonus. I owned another timeshare about 30 years ago and within the first year, we couldn't give it away. Maybe that is why I went in to DVC with my eyes wide open that didn't require me to get resale value out of the product.

And, I do think that anyone buying today, whether it is resale or direct, should go in with the expectation that you are buying something whose value is its use and not something that you can sell with any sort of guarantee money back. Anyone who buys with that intention, IMO, needs to do more research in timeshares and their purpose. Counting on a return of some of the money is not a wise decision, least IMO.

I bought just in 2009 at BLT and paid around $96/ppt. Is it nice to see that I could sell it tomorrow and probably get money for it? Sure. But, if all of sudden, I had to sell, and could get nothing, then that is fine too as I never expected to get anything from it.

I am not trying to sound heartless to those who were expected DVC to stay a cut above the rest in terms of value, but if someone really needs to get cash back out of their purchase, then it may be time to get out.

 

[Dean]

I'm not sure how you came to the conclusion, that I thought the advertising was a legal commitment, as you still do from,

Own piece of the magic.
buy resale not so much,

although it was wrote in jest, it really is that simple

no need for you to have apologised.

In context your post was a counterpoint to Chuck who was saying you were not buying "a piece of the magic" and seemed to be equating the emotion of advertising as a restriction related to this change or at least as a way of saying it wasn't appropriate. The truth is there is no real definition for "the magic" as it applies to DVC because it's different for everyone, just like one can chose whether to be offended or not. If you were being funny, that's fine. One cannot say things that are Technically inaccurate on advertising and that's why I referenced infomercials because they are all about emotion and hype while usually being technically accurate. Still, it was not my intent to come across personal and thus the apology for that still stands.

 

[maminnie]

Because timeshares, in and of themselves, have always been worth very little on the resale market.

Yes, I know that Disney was the exception to the rule and I guess we considered that information as a bonus. I owned another timeshare about 30 years ago and within the first year, we couldn't give it away. Maybe that is why I went in to DVC with my eyes wide open that didn't require me to get resale value out of the product.And, I do think that anyone buying today, whether it is resale or direct, should go in with the expectation that you are buying something whose value is its use and not something that you can sell with any sort of guarantee money back. Anyone who buys with that intention, IMO, needs to do more research in timeshares and their purpose. Counting on a return of some of the money is not a wise decision, least IMO.

I bought just in 2009 at BLT and paid around $96/ppt. Is it nice to see that I could sell it tomorrow and probably get money for it? Sure. But, if all of sudden, I had to sell, and could get nothing, then that is fine too as I never expected to get anything from it.

I am not trying to sound heartless to those who were expected DVC to stay a cut above the rest in terms of value, but if someone really needs to get cash back out of their purchase, then it may be time to get out.

Are you 100% sure that is not part of why you bought Disney after your negative experience with another timeshare organization????

 

[Deb & Bill]

DVD/DVC might eliminate a lot of their problems if they reduced the availability of non-DVC Disney stays including the hotels, DCL and ABD and regained a relationship with II for direct sales (or RCI if they chose). Resales would only have access to RCI. Or earlier resales would have access to RCI and new resales would have access to no trades. That would stress the point of buy where you really want to stay. Those who wanted to stay only at Disney wouldn't have any problems - other than getting the stay they wanted.

 

[Sandisw]

Are you 100% sure that is not part of why you bought Disney after your negative experience with another timeshare organization????

Yes. I bought my DVC to use it. When I ran all the numbers, I used a resale value of $0 and tried to figure out at what point, my investment of money into to DVC was a wash against what I was paying for my stays at the CR.

At rack rate, its 5 years to get back my initial cost so as long as I own for longer than that, DVC is saving me money on my future trips. For my family, that was the one and only reason for buying.

As I said, it is certainly great to know that I could sell BLT tomorrow and recoup some of my money, but it is not something that I expect or need to happen. And, the only way that my DVC contract will truly be "worthless" is if WDW, the parks, cease to exist. Hopefully, that won't happen for at least another few years.

 

[CarolAnnC]

Like I said before, DVC is a timeshare with an expiration date that will yield a zero dollar value eventually.

That being said, I bought DVC with full knowlege that I was simply prepaying much nicer vacation accommodations, and I was not making an "investment".

If resale value were to drop today, it would not bother me. We don't intend to sell at this point, and if circumstances ever require drastic action on our part I would either rent points out or sell my DVC knowing full well I had obtained my perceived value from my ownership via countless vacations. And I am saying this as a member of the 1,000+ DVC Point Club.

 

[jana]

Bangerang, great post

And as for economics here in the US, ethics doesn't make money or keep a company alive. Profit making business tatics is what makes money right now, and unfortunatly at the expense of others.

Possibly the most depressing thing I've read in a while. Probably the main reason for the decline of the American manufacturing industry and the whole banking/real estate debacle is this enabling and appologist mantra of "greed is good" . I beg to differ. Ethics, long term investment in the emotional well being of one's core customers and remaining true to your companies brand ( by that I don't mean keeping the same logo, I mean to the core values that made your brand a success) are what will keep a company successful in the long term. Too much of the American corporate entity has bought into this belief of make a quick buck and move on to the next scheme before the (mug) punters work out who did it.

Some people still don't get an asset doesn't have to be purchased as an investment in order to have a residual value. From an oil painting that has it's letter of providence/authentication destroyed to an antique tin toy truck whose original packaging gets thrown away as trash, loses $ value , but it still performs it's "function" . Put on top of an already fragile resale market this will have an affect on the residual value of every members asset. You may not plan or need to sell it now, but that may necessary in the future. For yourself that may not bother you, but your kids who inherit, may desperately need to realize that value at some time and their inheritance has been diminished.

Anyone tried to guess the total loss of value to the membership? I'd guess $8-10 per point , but I'll do it on just $1 per point and each of you can decide what that means with your numbers.

Average membership is about 200 points. so $200 for each $1 drop
160,000 member families X $200 = $32,000,000 THIRTY TWO MILLION DOLLARS PER $1 drop
IMHO this is somewhere between $200-300,000,000 TWO -THREE HUNDRED MILLION DOLLARS. I think that sort of number may tempt a lawyer to take a tilt at the windmill that is Disney. But is there due cause, other timeshare companies have done similar, been sued and not lost. I think Disney's unique ROFR might turn out to be an Achiles heel. DVD has a monopoly on resales, members have to offer them to Disney first. If Disney, reduces the value of something it holds a legal monopoly to buy, exercises that ROFR then repackages ( at no cost) in order to resell at an "inflated" price , I think they might have a problem. It seems a mighty big risk to take , is the reward worth it?

Will this action have the required effect?
The majority of people who buy DVC do so to use it solely at DVC resorts, it's a nice comfort blankie to have the other uses, but mostly the "value" is in DVC usage. If resales are a challenge at $70 per point, how much more of a challenge will they be at $50-60 ?? I don't see this helping direct sales, as the world becomes more and more internet driven ,the "knowledge" is going to get out. Some direct buyers may become nervous because of the drop in residual value, some will decide the increasingly lower resale price makes that a better option.

Comes back to It seems a mighty big risk to take , is the reward worth it? Some have speculated that this might be a direct tactic to lower the resale price in order to buy, repackage and resell. The counter was there isn't enough money in it. Not sure I agree, but I'll concede reselling 2042 memberships ( $90-100) certainly limits the profitability, however were DVD to repackage them as 2060-2065 and resell them at $ 130+ I would say financially that's tempting. The cost of building+land purchase must exceed $50 per point. So I'd come back to , if we ( as a society) really believe

And as for economics here in the US, ethics doesn't make money or keep a company alive. Profit making business tatics is what makes money right now, and unfortunatly at the expense of others.

Then that would be a perfectly acceptable business tactic and congratulations to the board at DVC for making the shareholders happy + money at our ( and our children's ) expense. It seems a lot of DVD's recent decisions have been based on the "make a quick buck" , this certainly would create a lot of revenue quickly. No need to build out another resort, just sell BCV,VWL +BWV extensions and points purchased cheap as 2042 resales repackaged as 50 year memberships. Actually that could tie in nicely if the alleged plans of an extension at VWL were to realize. DVD could sell repacked 2042 points as 2060-65 for the full price $130+ and no one would know the difference.

 

[DVC Mike]

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.

Most, if not all, of the perks are not part of the "ownership interest" we purchased, thus they are not transferrable.

The latest Member Benefits Guide states:

None of the benefits described in this Guide are a feature or component of the DVC Resort real estate interest, or of any rights or privileges which are appurtenant to that real estate interest.

IF YOU SELL YOUR OWNERSHIP INTEREST, INCIDENTAL BENEFITS DO NOT AUTOMATICALLY TRANSFER TO YOUR BUYER.

DO NOT PURCHASE YOUR OWNERSHIP INTEREST IN RELIANCE ON YOUR ABILITY TO TRANSFER THESE BENEFITS IF YOU SELL YOUR OWNERSHIP INTEREST.

BEGINNING MARCH 21, 2011, MEMBERS WHO PURCHASE OWNERSHIP INTERESTS IN ANY DVC RESORT FROM A PERSON OR ENTITY OTHER THAN DIRECTLY FROM DVD SHALL NOT BE ABLE TO USE THE VACATION POINTS ASSOCIATED WITH THAT OWNERSHIP INTEREST FOR RESERVATIONS OR STAYS THROUGH THE INCIDENTAL BENEFITS KNOWN AS THE ADVENTURER COLLECTION, CONCIERGE COLLECTION OR DISNEY COLLECTION.

 

[Jason@dvcstore]

If resales are a challenge at $70 per point, how much more of a challenge will they be at $50-60 ?? I don't see this helping direct sales, as the world becomes more and more internet driven ,the "knowledge" is going to get out.

This is a very good point and going to be interesting how it will play out.

Jason

 

[JWG]

F YOU SELL YOUR OWNERSHIP INTEREST, INCIDENTAL BENEFITS DO NOT AUTOMATICALLY TRANSFER TO YOUR BUYER.

DO NOT PURCHASE YOUR OWNERSHIP INTEREST IN RELIANCE ON YOUR ABILITY TO TRANSFER THESE BENEFITS IF YOU SELL YOUR OWNERSHIP INTEREST.

BEGINNING MARCH 21, 2011, MEMBERS WHO PURCHASE OWNERSHIP INTERESTS IN ANY DVC RESORT FROM A PERSON OR ENTITY OTHER THAN DIRECTLY FROM DVD SHALL NOT BE ABLE TO USE THE VACATION POINTS ASSOCIATED WITH THAT OWNERSHIP INTEREST FOR RESERVATIONS OR STAYS THROUGH THE INCIDENTAL BENEFITS KNOWN AS THE ADVENTURER COLLECTION, CONCIERGE COLLECTION OR DISNEY COLLECTION.

Does the new information discuss transfers of deeds at no cost? So, adding additional owners or changing ownership from parents to kids, etc? Not a "resale". I would assume a no cost transfer, same as generally being exempt from ROFR, would also be excluded from these resale rules.

 

[palaemon]

This is a very good point and going to be interesting how it will play out.

Jason

I agree. As long as DVC doesn't decide to make further changes AND make them retroactive for resales that happen after 3/21, I'll be happy with it. Or at least give those members a chance to "upgrade" to full member $xx/pp.

 

[LouisianaDisneyFan]

Does the new information discuss transfers of deeds at no cost? So, adding additional owners or changing ownership from parents to kids, etc? Not a "resale". I would assume a no cost transfer, same as generally being exempt from ROFR, would also be excluded from these resale rules.

The new publication doesn't seem to specifically address gratuitous transfers, but as I have mentioned several times before in this thread, I have contacted Member Administration about this topic twice now and have received the same response. Gratuitous transfers are not a resale of your ownership interest and will continue to receive all benefits attributed to the original purchaser.

Now... I've seen discussion about adding folks to a deed, claiming it was gratuitous, to get around this rule. If folks start adding a true buyer onto their deed and claiming it's gratuitous, then Disney may very well start taking a longer look at those Waiver of ROFR requests for gratuitous transfers. It will delay the process for those families who are truly passing the ownership on to their kids or other loved ones. Taking this course of action to get around the new policies would also be FRAUD, because those person(s) added to the deed must sign a statement testifying that this is a gratuitous transfer. Additionally, FRAUD would be perpetrated on Orange County, because the taxes paid on the transfer would not reflect the true transaction that occurred. All in all, it would be a pretty rotten thing to do.

 

[maminnie]

Bangerang, great post

Possibly the most depressing thing I've read in a while. Probably the main reason for the decline of the American manufacturing industry and the whole banking/real estate debacle is this enabling and appologist mantra of "greed is good" . I beg to differ. Ethics, long term investment in the emotional well being of one's core customers and remaining true to your companies brand ( by that I don't mean keeping the same logo, I mean to the core values that made your brand a success) are what will keep a company successful in the long term. Too much of the American corporate entity has bought into this belief of make a quick buck and move on to the next scheme before the (mug) punters work out who did it.

Some people still don't get an asset doesn't have to be purchased as an investment in order to have a residual value. From an oil painting that has it's letter of providence/authentication destroyed to an antique tin toy truck whose original packaging gets thrown away as trash, loses $ value , but it still performs it's "function" . Put on top of an already fragile resale market this will have an affect on the residual value of every members asset. You may not plan or need to sell it now, but that may necessary in the future. For yourself that may not bother you, but your kids who inherit, may desperately need to realize that value at some time and their inheritance has been diminished.

Anyone tried to guess the total loss of value to the membership? I'd guess $8-10 per point , but I'll do it on just $1 per point and each of you can decide what that means with your numbers.

Average membership is about 200 points. so $200 for each $1 drop
160,000 member families X $200 = $32,000,000 THIRTY TWO MILLION DOLLARS PER $1 drop
IMHO this is somewhere between $200-300,000,000 TWO -THREE HUNDRED MILLION DOLLARS. I think that sort of number may tempt a lawyer to take a tilt at the windmill that is Disney. But is there due cause, other timeshare companies have done similar, been sued and not lost. I think Disney's unique ROFR might turn out to be an Achiles heel. DVD has a monopoly on resales, members have to offer them to Disney first. If Disney, reduces the value of something it holds a legal monopoly to buy, exercises that ROFR then repackages ( at no cost) in order to resell at an "inflated" price , I think they might have a problem. It seems a mighty big risk to take , is the reward worth it?

Will this action have the required effect?
The majority of people who buy DVC do so to use it solely at DVC resorts, it's a nice comfort blankie to have the other uses, but mostly the "value" is in DVC usage. If resales are a challenge at $70 per point, how much more of a challenge will they be at $50-60 ?? I don't see this helping direct sales, as the world becomes more and more internet driven ,the "knowledge" is going to get out. Some direct buyers may become nervous because of the drop in residual value, some will decide the increasingly lower resale price makes that a better option.

Comes back to It seems a mighty big risk to take , is the reward worth it? Some have speculated that this might be a direct tactic to lower the resale price in order to buy, repackage and resell. The counter was there isn't enough money in it. Not sure I agree, but I'll concede reselling 2042 memberships ( $90-100) certainly limits the profitability, however were DVD to repackage them as 2060-2065 and resell them at $ 130+ I would say financially that's tempting. The cost of building+land purchase must exceed $50 per point. So I'd come back to , if we ( as a society) really believe

Then that would be a perfectly acceptable business tactic and congratulations to the board at DVC for making the shareholders happy + money at our ( and our children's ) expense. It seems a lot of DVD's recent decisions have been based on the "make a quick buck" , this certainly would create a lot of revenue quickly. No need to build out another resort, just sell BCV,VWL +BWV extensions and points purchased cheap as 2042 resales repackaged as 50 year memberships. Actually that could tie in nicely if the alleged plans of an extension at VWL were to realize. DVD could sell repacked 2042 points as 2060-65 for the full price $130+ and no one would know the difference.

I was one of the people that mentioned earlier DVC buying low and reselling these resorts. Your post is very well put. I think you may have hit it right on the head. Very sad but hey as long as that mouse is happy and smiling......who cares about the members who helped make DVC successful.

 

[Chuck S]

[/B]

......who cares about the members who helped make DVC successful.

Again, this has no effect on current memberships. Unless they decide to sell it is a total non-issue.

And then look at the percentage of current members that actually trade points into the Disney Collection, Adv. By Disney, and cruiseline...maybe what, 10% to 15%? So this change only actually would have any effect on 10% to 15% of prospective resale purchasers.

We don't have any idea what resale price will do, they may actually remain pretty stable.

If Disney's goal was to simply buy the resales up cheap, and repackage them, they could do that VERY easily without making this change. They could simply totally stop exercising ROFR for a year. Without that artificial price support, resale prices would drop very quickly, and Disney could swoop in and exercise ROFR very cheaply. Remember, nothing says Disney HAS to exercise their repurchase rights, and their wouldbe nothing illegal in doing that.

Until we actually see any results, even short term, everything is speculation.