Direct Purchase benefits announced!

[LouisianaDisneyFan]

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.

If there was really a diabolical plan to scoop up all the contracts and repackage them, then I would assume DVD would be savvy enough to hold the contracts in the fictitious names until they were ready to begin construction on any expansion... at which point it would be pretty obvious to the general public that something was up... with or without a paper trail. They don't need the points in the name of DVD until they are ready to sell points.

 

[shortypots]

Subscribing. However, my viewpoint is unless Disney offers a resale option of their own, this will kill the resale price for those who choose to sell. We own Marriott as well, and they do penalize resale purchasers now (can't buy into the pts program), however, they offer a Direct resale program for owners. May take years to sell your unit, but you get like 20% more than the resale market even after the commission you pay. This wouldn't be so bad, especially for sold out resorts like VWL, BC, etc. However, would take a very long time for those selling AKV, BLT, SSR, and Aulani.

 

[TisBit]

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.

Thanks, I was thinking the same thing. I don't remember seeing or ever hearing anything from DVC about being able to resell "with all the same benefits", etc. They do promote their ROFR and how they have held more price stability than other timeshares....which does still hold true.

 

[XGrumpy1]

I have a friend who has Wyndham.

I thought "how can you buy a time share that sells for $1 on eBay"? I am smart cause I bought DVC.

Now I have a largish OKW contract I could not sell till after my Dec ressie with no points till 13 -- good luck with that.

His guide found him a way to add points, combine them, get a newer resort with lower maintenance fees and lower his monthly payment with more points and benefits. Upgrades from a 1 bedroom to a 2 bedroom for the same points, sure, no problem.

My guide? She sent me a Christmas ornament one year.

 

[Tiggr88]

Is it possible that DVC wants to start selling the sold-out resorts at a more reasonable price compared to the resale market and needed a justification (excuse) for two different price points? In other words, you can buy BWV at either the current new price (approx. $100 - $120 today?) or you can buy BWV at $70. The difference is that the higher cost comes with more perks?

The biggest problem with this is that the items being discussed are still all considered perks even for the new contracts, subject to being removed in the future. However, is it possible that they may actually view this as the first step and may eventually contractually create differences and therefore give themselves a binding difference between the types and then sell at different prices?

If so, they may be able to unload inventory they don't want and possibly start ROFR more since they will be able to sell at a more reasonable price?

Otherwise, other than the few people that buy with the intent of using the perks they just took away from resales, I'm not sure I understand what is in it for Disney? Do they really think there will be increased sales for new purchases due to this?

There have been many pages filled with the impact to the current and future owners, but I haven't yet really been able to figure out what is in it for Disney. I'm not sure the answer to customers who ask "why are your prices so much higher than resale" going to drive enough of a difference in sales. Especially since they won't volunteer the information, and as soon as someone asks about the resale price, they'll already be educated enough to know that the extra perks probably aren't worth the $$. I'm just not sure there are enough people who would think the perks are worth the price value if they knew. I know there will be some, and there are even those that have said do in this discussion. I just don't know if it is enough to change the sales numbers. Am I wrong?

 

[carlbarry]

Is it possible that DVC wants to start selling the sold-out resorts at a more reasonable price compared to the resale market and
There have been many pages filled with the impact to the current and future owners, but I haven't yet really been able to figure out what is in it for Disney. I'm not sure the answer to customers who ask "why are your prices so much higher than resale" going to drive enough of a difference in sales. Especially since they won't volunteer the information, and as soon as someone asks about the resale price, they'll already be educated enough to know that the extra perks probably aren't worth the $$. I'm just not sure there are enough people who would think the perks are worth the price value if they knew. I know there will be some, and there are even those that have said do in this discussion. I just don't know if it is enough to change the sales numbers. Am I wrong?

I own Wyndham, bought on ebay. When a Wyndham sales person tries to sell me at their inflated prices, and I tell them that I bought on ebay for 5% of what they're offering, they rattle off a litany of "bonuses" that only direct purchasers get. Now DVC can do the same thing: "Only if you buy directly through DVC do you get all the benefits of DVC ownership. You'll be able to take great cruises, stay at great hotels . . . do you know what that will cost people who buy re-sale, and don't get all the benefits of DVC ownership?"

 

[Tiggr88]

I own Wyndham, bought on ebay. When a Wyndham sales person tries to sell me at their inflated prices, and I tell them that I bought on ebay for 5% of what they're offering, they rattle off a litany of "bonuses" that only direct purchasers get. Now DVC can do the same thing: "Only if you buy directly through DVC do you get all the benefits of DVC ownership. You'll be able to take great cruises, stay at great hotels . . . do you know what that will cost people who buy re-sale, and don't get all the benefits of DVC ownership?"

I understand, but:

1. Most people who know enough about resale prices would probably realize the price difference isn't worth the difference in perks.
2. They are still just perks an can be taken away from the new owner as well.
3. I only see this as a value to Disney if the differences in type of ownership get bigger and are contractual, not subject to the "new direct" owner being at risk for being put in the other class anyway

I then wonder if they would get in the sales business at the lower price point themselves. I wonder if this would constitute a "tiered" system from DVC's perspective at that point?

 

[JimMIA]

I have a friend who has Wyndham.

I thought "how can you buy a time share that sells for $1 on eBay"? I am smart cause I bought DVC.

I'm smart because I bought both DVC, and Wyndham (on eBay, for a little more than $1...but not much).

DVC is great for DVC, so I'm happy with it although I know I'll take a big loss when I sell. With Wyndham, I invested very little, so I'll lose very little when I sell it.

His guide found him a way to add points, combine them, get a newer resort with lower maintenance fees and lower his monthly payment with more points and benefits. Upgrades from a 1 bedroom to a 2 bedroom for the same points, sure, no problem.

That's "Weasel Speak" for

"I got you to give up your resale points for the honor of paying MAJOR bucks buying direct, in return for which we'll give you lower maintenance fees (until we increase them -- which we will as soon as this resort is no longer in active sales) and an occasional upgrade. HA! For what you paid, we can well afford the upgrade and I make a great commission!"

Your friend paid tens of thousands of dollars to get the temporarily lower maintenance fees and a few perks. Check back with him in a few years and see if he still thinks he made a good decision to convert his initially wise purchase to a direct sale.

 

[chalee94]

*Most people who know enough about resale prices would probably realize the price difference isn't worth the difference in perks.

it's not about looking at the point charts for cruises and nights at the GF, it's about shiny pictures of the disney dream cruise ship and GF in the sales offices. the analytical types will still mostly end up with a resale or nothing...but not everyone is that analytical.

*They are still just perks an can be taken away from the new owner as well.

lots of folks are nervous about having to do a lot of research into stuff about "stripped" resale contracts and "ROFR." they trust disney and will look for excuses to go ahead and buy direct. why would they worry about perks being taken away when there's all that pixie dust around?

*I only see this as a value to Disney if the differences in type of ownership get bigger and are contractual, not subject to the "new direct" owner being at risk for being put in the other class anyway

lots of people buy timeshares because of high pressure, borderline fraudulent presentations with little time to do any analysis...not because they've done months of research online to calculate whether it fits their wallet and lifestyle...or have calculated what they might be able to sell it for down the road.

jim lewis wants DVC to become more like other timeshares. hopefully not too much like other timeshares...

 

[Dean]

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.

I think they could if they wanted, simple accounting to get it back to Disney's technical control, but I don't see them making it that complicated. Their main goal isn't to buy back but to direct sales to retail. I'm not sure it would have to leave a paper trail but it might.

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.

I doubt anyone would have asked it this exact way before the rumors started about a possible change. However, even if it were asked and answered in that way, the legal documentation doesn't support the statement and clearly lists that many things, including perks, are at their sole discretion.

Subscribing. However, my viewpoint is unless Disney offers a resale option of their own, this will kill the resale price for those who choose to sell. We own Marriott as well, and they do penalize resale purchasers now (can't buy into the pts program), however, they offer a Direct resale program for owners. May take years to sell your unit, but you get like 20% more than the resale market even after the commission you pay. This wouldn't be so bad, especially for sold out resorts like VWL, BC, etc. However, would take a very long time for those selling AKV, BLT, SSR, and Aulani.

Last I heard they had closed down taking any new resales and were just clearing what they already had on the books.

I have a friend who has Wyndham.

I thought "how can you buy a time share that sells for $1 on eBay"? I am smart cause I bought DVC.

Now I have a largish OKW contract I could not sell till after my Dec ressie with no points till 13 -- good luck with that.

His guide found him a way to add points, combine them, get a newer resort with lower maintenance fees and lower his monthly payment with more points and benefits. Upgrades from a 1 bedroom to a 2 bedroom for the same points, sure, no problem.

My guide? She sent me a Christmas ornament one year.

Assuming your friend bought retail, you're still better off financially. However, if your friend bought for the $1, he's way ahead if he uses the program appropriately. Bluegreen is my best value of what I own (DVC, top Marriott's, BG, MX resort). I just got a 4 BR, 2525 sq ft Presidential unit through their short term rental program for $79 a night for Bike Week.

I understand, but:

1. Most people who know enough about resale prices would probably realize the price difference isn't worth the difference in perks.
2. They are still just perks an can be taken away from the new owner as well.
3. I only see this as a value to Disney if the differences in type of ownership get bigger and are contractual, not subject to the "new direct" owner being at risk for being put in the other class anyway

I then wonder if they would get in the sales business at the lower price point themselves. I wonder if this would constitute a "tiered" system from DVC's perspective at that point?

There are lots of possibilities but the idea that DVC buyers overall are educated enough before buying to make such informed decisions is not one of them. Some are but most aren't. The same is true for other timeshares as well. I do wonder how much the instant online options have affected this situation with those going online during the sale process.

 

[BeccaG]

Subscribing, and pondering (since I haven't had the chance to read it all). Is this just a step in distinguishing direct v. resale purchases? Do you think they will make further changes (i.e. a priority booking window for direct buyers or holders over a certain amount of points)?

 

[Tiggr88]

*Most people who know enough about resale prices would probably realize the price difference isn't worth the difference in perks.

it's not about looking at the point charts for cruises and nights at the GF, it's about shiny pictures of the disney magic and GF in the sales offices. the analytical types will still mostly end up with a resale or nothing...but not everyone is that analytical.

*They are still just perks an can be taken away from the new owner as well.

lots of folks are nervous about having to do a lot of research into stuff about "stripped" resale contracts and "ROFR." they trust disney and will look for excuses to go ahead and buy direct. why would they worry about perks being taken away when there's all that pixie dust around?

*I only see this as a value to Disney if the differences in type of ownership get bigger and are contractual, not subject to the "new direct" owner being at risk for being put in the other class anyway

lots of people buy timeshares because of high pressure, borderline fraudulent presentations with little time to do any analysis...not because they've done months of research online to calculate whether it fits their wallet and lifestyle...or have calculated what they might be able to sell it for down the road.

jim lewis wants DVC to become more like other timeshares. hopefully not too much like other timeshares...

There are lots of possibilities but the idea that DVC buyers overall are educated enough before buying to make such informed decisions is not one of them. Some are but most aren't. The same is true for other timeshares as well. I do wonder how much the instant online options have affected this situation with those going online during the sale process.

So basically Disney expects to make money because people will not understand what they are buying and will pay for the "perks" that are not guaranteed and without truly understanding the cost. I understand, I just find it hard to believe that it will make that much of a difference in the overall sales numbers.

What do you think about Disney someday getting into a two tiered pricing schedule where they would not only sell the direct at the direct prices (with all of the "perks), but also sell the "un-perked" at a price more resembling the resale market?

If they really have too much inventory that requires losing money on CRO, I can't see how they can ever get rid of the excess inventory unless they lower the price. Especially if they think it will not get better or may even get worse over the next couple of years.

 

[Dean]

So basically Disney expects to make money because people will not understand what they are buying and will pay for the "perks" that are not guaranteed and without truly understanding the cost. I understand, I just find it hard to believe that it will make that much of a difference in the overall sales numbers.

What do you think about Disney someday getting into a two tiered pricing schedule where they would not only sell the direct at the direct prices (with all of the "perks), but also sell the "un-perked" at a price more resembling the resale market?

If they really have too much inventory that requires losing money on CRO, I can't see how they can ever get rid of the excess inventory unless they lower the price. Especially if they think it will not get better or may even get worse over the next couple of years.

What you state is the very essence of timeshare sales now including DVC even before this change was announced. I too doubt it'll make a big difference but if it doesn't, look for further changes UNTIL a big difference is reached. I suspect such a two tiered system was possible but I don't see it happening. More likely would be a tiered VIP system.

They've always had too much inventory compared to the rental options, even back when it was just OKW, BWV, HH & VB. There aren't a boatload of people out there wanting to pay even a discounted rack rate for these types of rooms, some, but not nearly as many as you might think. However, the historical figure of 25% offered but not rented DVC rooms, which I got from a VP a few years ago and have had substantiated a couple of times by those at a similar level, might be down right now. More importantly though is that CRO takes such a heavy cut, apparently 50%, that it's like salmon swimming upstream. In addition, everything that goes the cash direction competes with other units being rented also. Developer owned inventory (declared and undeclared), Breakage inventory and cash type exchanges all end up in one basket, CRO. DVD has added RCI as a possible outlet for cash units but I doubt they're getting much action there.

It does make you think that maybe they should simply stop cash type exchanges for everyone and simply streamline the system. My guess on the reason they don't is that they use it to entice sales and now they can add one line to the sales pitch, "you only get these options if you buy retail". This issue isn't unique to DVC, every similar system I am aware of where timeshares are converted to cash options faces these inefficiencies, I don't think any do better than DVC and most seem to do worse. However, the one difference that DVC presents is that DVC points have a more liquid cash value than any other systems I am aware of thus giving members more and/or options than members in other groups seem to have.

 

[TisBit]

So basically Disney expects to make money because people will not understand what they are buying and will pay for the "perks" that are not guaranteed and without truly understanding the cost. I understand, I just find it hard to believe that it will make that much of a difference in the overall sales numbers.

What do you think about Disney someday getting into a two tiered pricing schedule where they would not only sell the direct at the direct prices (with all of the "perks), but also sell the "un-perked" at a price more resembling the resale market?

If they really have too much inventory that requires losing money on CRO, I can't see how they can ever get rid of the excess inventory unless they lower the price. Especially if they think it will not get better or may even get worse over the next couple of years.

As much as many people hate to admit it, most of our peers (and even some of us) do not always make the most financially sound decisions. Yes, there are some people that analyze the numbers and come to conclusions on what the costs should be and decide what they should buy. Some people over analyze and will spin themselves in circles on the numbers......finances are funny that way and many people just don't try to understand them. It is like when someone asks if they should buy DVC....you will get 100 different opinions ranging from if you can buy without fianancing, to finance it if you would travel anyway, to don't buy regardless......

You throw in this new layer of complexity and you will most certainly see many more people on a tour decide going through DVC direct might be the way to go. Yes, there will still be some that have done a lot of research and know they don't need those extras and will argue with the guides, but the walk ins off the street will just not want to take the chance of missing out on the opportunity of traveling somewhere else later.

 

[chalee94]

Subscribing, and pondering (since I haven't had the chance to read it all). Is this just a step in distinguishing direct v. resale purchases? Do you think they will make further changes (i.e. a priority booking window for direct buyers or holders over a certain amount of points)?

no idea on what changes will come, but i would bet on more changes in the next couple of years.

What do you think about Disney someday getting into a two tiered pricing schedule where they would not only sell the direct at the direct prices (with all of the "perks), but also sell the "un-perked" at a price more resembling the resale market?

nope. disney can add the perk for virtually nothing. i don't see them selling discounted "resale" type contracts.

 

[Brian Noble]

His guide found him a way to add points, combine them, get a newer resort with lower maintenance fees and lower his monthly payment with more points and benefits. Upgrades from a 1 bedroom to a 2 bedroom for the same points, sure, no problem.

What Jim said. Your friend got taken, robbed, swindled, what-have-you vs. just adding on via resale. It takes a *lot* of years at marginally lower MFs to make up for the 20x-100x markup in price to buy retail---with no guarantee that those MFs will stay low. What's more, if you are patient, you can find a resale deed at a resort with lower MFs. I own at such a resort, and am quite pleased with it.

 

[JimMIA]

Subscribing, and pondering (since I haven't had the chance to read it all). Is this just a step in distinguishing direct v. resale purchases? Do you think they will make further changes (i.e. a priority booking window for direct buyers or holders over a certain amount of points)?

If I were going to guess, I'd guess they would offer a tiered VIP program that would offer benefits like booking and/or banking advantages, maybe elimination of the Rule of Four, or possible preference in special accommodations like certain views, etc.

If they follow the rest of the industry, they'll do the tiers by number of points owned and either limit it to direct-purchased points or require a substantial direct purchase of additional points. Or both.

That kind of a system would cost them nothing and would not violate the POS as far as I can tell.

And all the standard caveats would apply:

• The benefits are just perks which DVC could change or revoke at any time
• The benefits are no big deal to most owners
• The cost savings of resale would continue to FAR outweigh the value of the VIP program.

 

[jana]

chuckS said

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.

The question about a "paper trail" is , So what?
If the assertion is that a corporation should only be concerned over the money it makes for it's shareholders , so what if there is a paper trail? There is nothing wrong in doing that, is there?

If there is nothing wrong ( and I think there is) with manipulating the price of a commodity that you have a monopoly in ( and DVD does have a monopoly on purchasing back DVC through it's ROFR) what does it matter if there is a paper trail?

When they are ready to resell to the general public, simply transfer the accumulated points into DVD who can then break them up as needed. If, as I proposed DVD absorbed as much of BCV+VWL as it could lay it's hands on, repackaged them as 2060-65 and resold them at say $130+ per point , but stayed out of the remaining resale market, would the BWV or HHI or Vero or DSSR resales increase in price? Still no perks, still much shorter end date. I seriously doubt they would. Then at some stage, 2,3,4 years later , when people had forgotten about the tactic, make up another set of shell companies to acquire BWV and go through the process again. IMHO there is no way the resale sellers at that time could work out what was going on (raise their prices) until after the event.

Now I will accept this is a long shot and not very likely, however the question I have is if the above scenario is unacceptable,questionable, immoral or illegal , just what is the difference between what I proposed and what is being done (lowering the value of resales) , Disney exercising it's ROFR on any points, then Disney reselling them with the perks ? It's just a question of magnitude, but it is basically, legally and morally, the same. My reading is that resales purchased from Disney would have the same perks as "first time sales" so I think my point is valid.

Any lawyers out there with views on insider trading, manipulating a "free market" in which you have a unilateral monopoly , fiduciary duty etc etc. I'd love an opinion on the legality of it , even if I'm certain of the morality ( or lack) of it.

I think that ROFR may be a real game changer in trying to use precedents set by other TS companies doing similar things in the past.

 

[Chuck S]

The point of there being a paper trail is that the State Atty General and Timeshare board, as well as members can look at it. Disney would have a hard time proving that transferring ownership from Mr. Lott to DVC without adequate cause (like reposession for non-Payment), would probably send up a red flagand at least get the State involved at some level. And it would cost additional $$ via filing fees.

As to whether or not the State would view it as legal market manipulation, or a violation of some sort of responsibility...that is debatable...but Disney would not need to take such a risk at all by simply not execising ROFR and letting the prices drop naturally down to next to nothing, then buying back whatever they want by ROFR.

 

[zalansky]

Seeing as I bought all 3 of our contracts direct from Disney, I am all for direct purchase benefits. However, I don't think any of these changes will effect resales or their values. I do know some people use them for cruises but I can't see it being a big draw? We would never use them on a cruise...

Anyway just wanted to chime in