Direct Purchase benefits announced!

[DeeCee735]

How many of us bought DVC as a financial investment? I'm going to guess close to 0. It's prepaid vacation accommodations...period. It's design has always been to be used at DVC resorts, the points charts alone show this to be true. DVC resort points values are way lower than any of the other options.

Now, with the new resale purchase restrictions, so much talk is going on about losing value. Its a timeshare, timeshares depreciate the minute the papers are signed, whether they are purchased at $80 a point on the resale market or $100 a point direct. They are designed to be used by the purchaser over a period of time (thereby losing value as time goes on), not bought today and resold for a profit tomorrow.

I get that losing certain options, like the cruises or the concierge collections doesn't sit well with so many people, that it was something resale purchasers had (and by the way, always will if you buy before 3/21), and future buyers no longer will. I also get that owners, like myself, who bought direct will be looking at the prospect of getting less on the resale market than they originally would have. But.....as people buying into a timeshare to use for vacationing, (as opposed to "flipping for a profit", which most of us do not do) we stand the risk of having to sell sometime in the future at lower than today's resale prices anyway, as we get closer to the expiration date.

Personally, we hope to never have to sell, as the purpose of such a buy is to hold on to it and use it to its fullest. We knew when we bought that we'd be leaving whatever years are left on our contracts to our children and that also means we knew then that by that time they'll be close to worthless on the resale market anyway. Our family will have vacationed for forty+ years on our BW contracts, and 50 years on AKV. How is this losing value when the value was originally to have a lifetime of prepaid vacation accommodations?

Also, we aren't the only timeshare company that does this with resale purchases. A close friend of mine purchased a ******** timeshare on the resale market and therefore cannot use her points for their hotels, and one or two other specific "perks" I don't remember at the moment, point is as a resale buyer she's restricted too.

God forbid we ever have to sell due to financial reasons, we already know it will be at much less than what we paid, especially as the years go by.

Just my humble opinion.

 

[drusba]

I see it as DVD at its worst in anti-member activity; this is a Jim Lewis creation and he has never considered the members' interests equal to or superior to the interests in selling DVD. Member value goes down. How else do you measure your dollar value except by what you could sell for in the market and that will go down. DVD acted intentionally against the members' interests to do that.

DVD is dealing with a perk and thus apparently can get away with it. But look how it did it. It did not add some new perk unavailable to resale purchasers. It insteads takes away a prior one avoiding any cost. It was carefully chosen. New purchasers do not have the sophistication and experience of seasoned members. Flash the Disney Collection in front of a new purchaser and it can be made to sound as the most important thing in the world -- "you need and get the cruise, you can stay in any Disney hotel, its a great deal, but you won't get any of that if you try resale." We know the Disney Collection is not a great value and not a reason to buy but the new purchaser who has no prior experience with DVC is going to believe it is critical if presented, as it will be, in an overblown and misleading fashion. No DVC salesman is going to tell potential puchasers the points needed are prohibitive.

In other words, DVD has carefully chosen a path that will allow it to increase sales by having its salesmen be misleading. It knows that will occur. It would have been more honest to just do away with the perk altogether. DVD doesn't particularly like giving the perk but as long as it can be used as a misleading sales tool it fits DVD's purpose to increase sales and diminish the resale value for all members.

Now we just wait to the next shoe to drop. What will DVD take away next such as for part of its tier benefit program. This is not a company to be trusted, assuming it ever was.

 

[DeeCee735]

I see it as DVD at its worst in anti-member activity; this is a Jim Lewis creation and he has never considered the members' interests equal to or superior to the interests in selling DVD. Member value goes down. How else do you measure your dollar value except by what you could sell for in the market and that will go down. DVD acted intentionally against the members' interests to do that.

DVD is dealing with a perk and thus apparently can get away with it. But look how it did it. It did not add some new perk unavailable to resale purchasers. It insteads takes away a prior one avoiding any cost. It was carefully chosen. New purchasers do not have the sophistication and experience of seasoned members. Flash the Disney Collection in front of a new purchaser and it can be made to sound as the most important thing in the world -- "you need and get the cruise, you can stay in any Disney hotel, its a great deal, but you won't get any of that if you try resale." We know the Disney Collection is not a great value and not a reason to buy but the new purchaser who has no prior experience with DVC is going to believe it is critical if presented, as it will be, in an overblown and misleading fashion. No DVC salesman is going to tell potential puchasers the points needed are prohibitive.

In other words, DVD has carefully chosen a path that will allow it to increase sales by having its salesmen be misleading. It knows that will occur. It would have been more honest to just do away with the perk altogether. DVD doesn't particularly like giving the perk but as long as it can be used as a misleading sales tool it fits DVD's purpose to increase sales and diminish the resale value for all members.

Now we just wait to the next shoe to drop. What will DVD take away next such as for part of its tier benefit program. This is not a company to be trusted, assuming it ever was.

Misleading salesmen or not, one needs to know and understand the product they are considering purchasing. Then, trust has little to do with it.

 

[DebbieB]

[/B]
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.

Disney is a business and if they are losing money they need to do something. I really think they are losing big time on these tradeouts. They can't rent the DVC rooms without a 40% discount and probably get next to nothing when CRO upgrades value & moderate guests for free (other than a marketing tool).

As far as the members who helped make DVC successful, they are grandfathering those people.

 

[Dean]

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.

We'll see what happens. Don't underestimate the power of the emotions in selling as well as the sense of loss some have by not getting all the options. Plus many who buy don't know about resale. However, if there is not enough affect as desired, expect additional changes added to the list which might include additional fees for resale buyers.

 

[carlbarry]

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.

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

I would suspect that people who buy resale trade out to these options MUCH less than full-price buyers. The re-sale buyer is a consumer looking for the lower price (e.g. ME LOL), and already having found a less expensive way to buy in, is unlikely to use these less-economic options.
I know when I was looking to buy resale, I did the math, and quickly became perplexed as to why anybody would, for example, use points for the cruise. I then went on DIS and confirmed my conclusion.
So for me as a resale buyer, the changes would definitely NOT affect my decision to buy resale.

 

[tidefan]

Another thing that I don't think that most have considered is that IMHO, what will really hold up resale values at some level. I think that Disney has to at some point carefully assess what DVC rooms are going for on a resale level, because I do not think that they would want anything to undercut CRO rates by such a degree that people could pick up points so cheap that CRO would be a way too expensive option. Therefore I do think that there is some "floor" to resale pricing where ROFR would probably be instituted. Now, apparantly we aren't there yet as Disney isn't currently doing too much ROFR, but I do not think that they'd let DVC undercut it's much larger CRO product.

Disney probably is trying to walk a fine line with this by keeping this in balance. IMHO, direct is way overpriced right now, though, of course, I don't know what the sales rate is. I still think with these changes, resale is the much better way to go. That's what I'd tell anyone wanting to join. However, I don't see resales getting so low that Disney would let them undercut CRO by too large a degree...

 

[Anewman]

Great thread(if you like circles)

My bottomline take is...

Most members(I understand there are exceptions) that would have "taken advantage" of these "perks" are probably not concerned or dont understand that the value trading isnt so great. That leads me to guess that they dont do much research or math, they want to cruise(or other) they cruise without much research or math.

So that leads me to believe that those that like these perks wont be buying resale to begin with. They want to buy they buy directly without much research or math.


IMO
Because of speculation and speculation only resale activity will peak in the next few weeks, then dip for a few months... by this time next year it will be about where it is now(overall economic adjustments apply).

 

[maminnie]

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.

Based on what other people have posted, other then BCV, DVC HAS stopped exercising most ROFR over the past few years at the other resorts.

 

[DVC SSR Owner]

Yes. DVD is waiting until they tank the resale market. Then they can buy contracts for $25-30 pp and resell them for $120 pp.

 

[maminnie]

I see it as DVD at its worst in anti-member activity; this is a Jim Lewis creation and he has never considered the members' interests equal to or superior to the interests in selling DVD. Member value goes down. How else do you measure your dollar value except by what you could sell for in the market and that will go down. DVD acted intentionally against the members' interests to do that.

DVD is dealing with a perk and thus apparently can get away with it. But look how it did it. It did not add some new perk unavailable to resale purchasers. It insteads takes away a prior one avoiding any cost. It was carefully chosen. New purchasers do not have the sophistication and experience of seasoned members. Flash the Disney Collection in front of a new purchaser and it can be made to sound as the most important thing in the world -- "you need and get the cruise, you can stay in any Disney hotel, its a great deal, but you won't get any of that if you try resale." We know the Disney Collection is not a great value and not a reason to buy but the new purchaser who has no prior experience with DVC is going to believe it is critical if presented, as it will be, in an overblown and misleading fashion. No DVC salesman is going to tell potential puchasers the points needed are prohibitive.

In other words, DVD has carefully chosen a path that will allow it to increase sales by having its salesmen be misleading. It knows that will occur. It would have been more honest to just do away with the perk altogether. DVD doesn't particularly like giving the perk but as long as it can be used as a misleading sales tool it fits DVD's purpose to increase sales and diminish the resale value for all members.

Now we just wait to the next shoe to drop. What will DVD take away next such as for part of its tier benefit program. This is not a company to be trusted, assuming it ever was.

As I said earlier, DVC was brillant in their release of this change.....the week the Disney Dream was introduced and christened in front of the public and the media. As I walked away on the treadmill at the gym this week mad as a hornet that DVC had done this, there was the Disney Dream with Sam Champion on the gym televisions on Good Morning America (ABC of course is owned by Disney). How masterful does it get.....

 

[Sammie]

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.

This is the very reason, I feel this is just the first of more restrictions coming.

 

[palaemon]

Yes. DVD is waiting until they tank the resale market. Then they can buy contracts for $25-30 pp and resell them for $120 pp.

Don't you think that as soon as DVC starts exercising ROFR, that we'll ALL know and so will TSS? If DVC is buying back SSR for $30/pp, then they'll list at $31/pp. DVC gets nothing to resell.

I think DVC will stick to BCV. It's small & popular.

 

[Dean]

Based on what other people have posted, other then BCV, DVC HAS stopped exercising most ROFR over the past few years at the other resorts.

At least at the price range that the TSS has been submitting. To a degree, the very nature of their system at TSS and others tends to set prices. Not that they're doing anything wrong in that regard, just that it tends to happen that way when a company is active in a given area and are trying to get the most they can both for the seller and themselves. A better but more difficult task is tracking ebay for those that don't come from the big DVC resellers. You can bet there's a level they'll buy back even for HH and VB, the question is what is it.

 

[jana]

Don't you think that as soon as DVC starts exercising ROFR, that we'll ALL know and so will TSS? If DVC is buying back SSR for $30/pp, then they'll list at $31/pp. DVC gets nothing to resell.

Actually they could set up an account ( or multiple accounts) under a made up name and buy up the lower priced real estate without anyone knowing it is Disney doing the buying. The sales would pass "ROFR" that were being done for Disney and they could exercise the ROFR on those that were "genuine" sales. People would assume because some sales were going through at that price, that was the "correct" price.
If that sounds far fetched , look at the history of how Walt originally acquired the land for WDW. Watch out for resale purchases by Mr M.T. Lott LOL

If making money ( for the shareholders) was my only motivation, it's what I'd do. If money was a little tight because I'd over stretched myself with too many big projects, I might acquire as much of my next extension project ( say BCV and or VWL, because they're the smallest and I could act with the least amount of money) as I could. Then when I repackage and resell them at 50 year memberships at 2 or 3 times the cost of what I acquired them at ( plus all the money from existing members extending their memberships) I might then go back into my next (larger) project say BWV , whose price I've manipulated lower and have a lot more cash at my disposal to get as much inventory as I could. It would quickly bring in a large amount of cash , with little exposure , which might be very helpful if sales of my big costly projects were a little slower than I had forecast.

I think I give them a little too much credit in their ability to "think outside the box"

 

[kespo]

One of the biggest pitches of sale from DVC was that you could sell your DVC if you needed to with all the same benefits. I wonder how they are using this change in their sales pitch now?
I think only new purchasers should be subject to the change for all new contracts sold after March.

 

[Chuck S]

Actually they could set up an account ( or multiple accounts) under a made up name and buy up the lower priced real estate without anyone knowing it is Disney doing the buying. The sales would pass "ROFR" that were being done for Disney and they could exercise the ROFR on those that were "genuine" sales. People would assume because some sales were going through at that price, that was the "correct" price.
If that sounds far fetched , look at the history of how Walt originally acquired the land for WDW. Watch out for resale purchases by Mr M.T. Lott LOL

If making money ( for the shareholders) was my only motivation, it's what I'd do. If money was a little tight because I'd over stretched myself with too many big projects, I might acquire as much of my next extension project ( say BCV and or VWL, because they're the smallest and I could act with the least amount of money) as I could. Then when I repackage and resell them at 50 year memberships at 2 or 3 times the cost of what I acquired them at ( plus all the money from existing members extending their memberships) I might then go back into my next (larger) project say BWV , whose price I've manipulated lower and have a lot more cash at my disposal to get as much inventory as I could. It would quickly bring in a large amount of cash , with little exposure , which might be very helpful if sales of my big costly projects were a little slower than I had forecast.

I think I give them a little too much credit in their ability to "think outside the box"

While Disney could indeed buy back under assumed names, what could it do with the product? Disney could not break up those contracts, as they would still not be DVC inventory per the name in the deed, they would have to reacquire the deed via a recorded filing of some type to break up the contract and offer them as "new" points. Now Mr. M.T Lott could technically file bankruptcy, but would likely need to file as some sort of corporation or entity, as I'd assume there is no real, breathing Mr. Lott that would risk his personal credit rating to front for a corporation.

 

[LouisianaDisneyFan]

While Disney could indeed buy back under assumed names, what could it do with the product? Disney could not break up those contracts, as they would still not be DVC inventory per the name in the deed, they would have to reacquire the deed via a recorded filing of some type to break up the contract and offer them as "new" points. Now Mr. M.T Lott could technically file bankruptcy, but would likely need to file as some sort of corporation or entity, as I'd assume there is no real, breathing Mr. Lott that would risk his personal credit rating to front for a corporation.

Not that I think the scenario is plausible... but, "Mr. Lott" could just do a gratuitous transfer of all properties to DVD, for an additional $37.00 per contract ($18.50 for the Waiver of ROFR and $18.50 to record the new deed). Small change in the grand scheme of things.

 

[Chuck S]

One of the biggest pitches of sale from DVC was that you could sell your DVC if you needed to with all the same benefits. I wonder how they are using this change in their sales pitch now?
I think only new purchasers should be subject to the change for all new contracts sold after March.

The DVC guides actually told people this? My guide never did. In fact, my original guide informed me that if I would sell I would likely do so at a loss, and that was in 1992. We are also all required to sign that we understand it is not a means of financial investment, it is a pre-paid vacation plan.

 

[Chuck S]

Not that I think the scenario is plausible... but, "Mr. Lott" could just do a gratuitous transfer of all properties to DVD, for an additional $37.00 per contract ($18.50 for the Waiver of ROFR and $18.50 to record the new deed). Small change in the grand scheme of things.

But my point was that it would still leave a publically recorded paper trail, and after the first instance, the public would be wise to the scheme.