Direct Purchase benefits announced!

[chalee94]

i'm curious about tjkraz's take as well but i'll take a shot.

Where do those extra buyers come from?

i think they come from folks like this. they don't know much about DVC but they heard that buying resale will cost them <something>. they feel safer dealing with disney directly. they can't tell you exactly what they might be giving up and haven't done a lot of research...and probably would have gone resale had they looked into it a bit more...but with a specific difference to hang their decision on (regardless of details), they'll buy direct.

And if they come from people who would have bought resale, does that mean there are less resale buyers? If less resale buyers, what happens to the sellers?

less demand pushes prices down. that's basic econ. resale pricing should soften a little more...

 

[tecdavidt]

In my opinion, I think this is a bad business move on Disney's part. If they are that concerned about resale, go after it, don't agree to the resale contract. Disney has the choice to say no, they should tell people who have to sell, we will buy it back. Simple. They have not done that lately and now they just now have decided, wow, we have a problem and it is hurting the new sales. This tells me Disney wasn't paying attention to the DVC market, only to new sales. DVC is a business that includes new and "used" sales. Disney should have keep in touch with the "used" portion of the business.

My husband was one who had no problem telling our guide that the using the points for Cruising,other types of vacations, or staying at non DVC resorts while on property was a waste of the points. The bang of the point came from using the points at the DVC resorts only. The guide just didn't agree, it didn't take long to point out points needed for a one time cruise vacation equaled how many WDW DVC resort vacations. Then the guide tried to defend DVC, it didn't work on us. The new change will not affect how we use our points.

I have to agree, what is next? Tweaking the booking windows?

One area I have always wondered about: just how can a business survive on new sales only? Will they continue to build DVC resorts at WDW? We vacation in Florida, we have no desire to buy into the new Hawaii resort, we have no desire to purchase in CA. We made a point to our guide we prefer Boardwalk. We really would like Boardwalk points. Her response, you can't buy those points anymore. (Well, we learned later we could have but also learned using our SS points at BW was no problem) We ended up with our SS points. We later bought enough BLT points so we could stay there with a 11 month out booking window. Last year we finally added 160 through the timeshare store. Buying through the second market was fantastic and a good choice for us.

Kathy

 

[toocherie]

A testing of the waters.........

No matter how anyone paints this picture, the changes have devalued our contracts, whether one owns all direct, all resales, or a combination of these points. What loss occurs from these changes remains to be seen.

Agreed! And if you go to the Disney Vacation Club website it really makes it sound like it is part of ownership, it is not listed as one of the "perks". I am guessing they will need to rewrite the language on their site to reflect this.

And raise your hand if you have been to a glitzy DVC marketing event where they promoted all of the "options" you have as a DVC member to use your points. I don't recall there being an asterisk'd statement at the end where after they had touted the benefits of being a member they added: "oh and just kidding--we can take all this away anytime we want." (Oh, I'm sure it was in some marketing materials or email somewhere--but it certainly wasn't in the verbal presentation.)

Didn't miss the point; I was just carrying on with another thought - now that perks have been taken away the first time, it is so easy to nibble away at them in the future.

And so it begins, one nail at a time.

Yup--fraid so. I remember just a couple of months ago saying on here--"it's coming folks" and several people had the attitude "I'll believe it when I see it--until then it's just rumor." Expect many more changes down the road.

Oh Sammie, I totally agree with what you are saying about what Disney was feeding the potential buyer. I am in no way saying that Disney is without fault for giving "misleading" statements. However, when a person gets their contracts and reads through the POS, the buyer then has the blame on themselves if they don't know any better.

Yes, I'm quite certain that Disney's lawyers have done what they can to give them the ultimate flexibility to change things up. That doesn't make it right. And as someone else mentioned, that doesn't mean that someone can't bring an action over the marketing done by DVD as being misleading.

 

[cseca]

i understand your point - that is the nature of timeshares, that the developer finds ways to suck the value out until you should only expect to be able to sell for a pittance. if you've done your homework on timeshares, it should not come as a surprise.

but with disney's historical attempts to differentiate themselves from other timeshares, you have to admit it's a bit of a drag to have disney get down in the mud with the other hucksters.

all things being equal, why wouldn't you want to have a contract that has more value on the resale market rather than less? you bought a contract with certain perks knowing that they could be taken...but it's still kind of a let down when disney actually takes this sort of adversarial approach.

exactly!

But why would you be trying to get "anywhere close to the money back that we purchased for." I don't get that - you didn't buy it to resell, you bought it to use. My expectation would never be that I could use the product for a number of years and get all my money back from it as well.

I know that has happened to some of the earliest owners, but that is not a reasonable assumption. It's not an investment, it's a vacation. When the time comes (if it ever does) that you need to sell, you take what you can get and be done with it, enjoying the value you did get from it, both in taking vacations and by reselling. It is NOT an investment.

Yes, Disney is a business... but if tomorrow they say all current owners regardless direct or resale can only book at your home resort at 11mo out and no other perks, zero.

but all new owners who wants to pay $200/pt direct can book at all the resorts + collection + concierge + adventure, etc.

Wouldn't all current owners be upset?


Yes they CAN change their rules as close to the basics as possible but that doesn't mean we as owners have to be happy about it.

When we bought our points, we bought with the understanding of what differentiated DVC than other timeshares (decent resales, disney service, disney theming).
If they keep shedding their differences then ... I feel duped... yes, it's all my fault for feeling that way, but I can feel it can't I?

 

[toocherie]

:yes they can change their rules as close to the basics as possible but that doesn't mean we as owners have to be happy about it.

exactly!

 

[vicki_c]

When we bought our points, we bought with the understanding of what differentiated DVC than other timeshares (decent resales, disney service, disney theming).

Well I didn't buy a Disney timeshare for these reasons at all, just because I wanted to be able to stay at WDW in Florida. But of course, I would be upset if we could never book outside our home resorts, because we have really enjoyed that. So there's not NOTHING that would upset me. But this change does not because I don't plan on reselling (and if I did - I wouldn't expect to get an amazing amount of value out of it) and we don't plan on using our points outside DVC.

 

[sanibel93]

We bought with the idea of only staying at DVC at WDW, don't see this effecting us. We own another timeshare with a fixed week and see DVC as a prepaid vacation when we want to go. I know they could change other things in the future, but as long as we get the 11 month booking advantage at our home resort I will be happy. Might even buy more points resale.

 

[jsivigny]

Well...this just de-valued everyones Timeshare values to prop up Disney profits.

This should not be taken lightly. This is classic "incrementalism".

What is Next...

All of our agreements state that we are only guarenteed our Home Resort. How happy would we all be if the next thing is all Resales are only good for use at the home resort. The would further de-value our investments.

I don't like this one bit. Changing the rules after the fact with such VERY short notice is not good.

Do we have any recourse?

 

[crisi]

No it's not. I fully intend to keep my contract. IN fact, I had my contract divided into 2 equal smaller contracts so that I could give 1 to each of my daughters should I decide I am unable to enjoy it any longer. I know I have read many other posts from people doing the same. I would say that people like you are most likely in the minority. Not the other way around.

I don't intend to keep my contract. But after ten years of ownership, even if my resale value was $0, I'd still have gotten the value for my money. When we did our analysis on purchase, we assumed that our resale value was zero, and we determined that we'd have to own somewhere between eight and twelve years for it to be worthwhile. If we sold before then, their was a chance we'd loose money.

As to this specific change - too many people were buying cheap points to cruise. As the floor for ROFR has all but disappeared, that actually became a not bad deal. This both takes some pressure off using points to cruise, and gives the sales people a carrot. A LOT of people who post here looking for purchase advice think cruising/ABD/Disney collection is an attractive option for their points. We might "set them straight" - but few buyers find us before they sign the contract. And from the usage patterns, I'm guessing most people either don't do the math, or find that using points where they want to is worth the premium.

 

[Sandisw]

I don't intend to keep my contract. But after ten years of ownership, even if my resale value was $0, I'd still have gotten the value for my money. When we did our analysis on purchase, we assumed that our resale value was zero, and we determined that we'd have to own somewhere between eight and twelve years for it to be worthwhile. If we sold before then, their was a chance we'd loose money.

As to this specific change - too many people were buying cheap points to cruise. As the floor for ROFR has all but disappeared, that actually became a not bad deal. This both takes some pressure off using points to cruise, and gives the sales people a carrot. A LOT of people who post here looking for purchase advice think cruising/ABD/Disney collection is an attractive option for their points. We might "set them straight" - but few buyers find us before they sign the contract. And from the usage patterns, I'm guessing most people either don't do the math, or find that using points where they want to is worth the premium.

We did the exact same analysis when we were deciding to buy. We used a 10 year period to see where we were.

We also bought so that we could enjoy our WDW vacations in bigger rooms for, what we believe, is a great price.

I understand everyone's concern about how this devalues DVC, as a whole, but for me, I just don't feel that my DVC ownership is worth anything less today than it was yesterday.

And, to be honest, if I was to add on points in the future, I would still consider buying via resale, even given the restrictions.

 

[Brian Noble]

Ultimately, the value of a contract *has* to go down---if for no other reason than the system is RTU. This could move it ahead, but only by so much.

Where do those extra buyers come from?

Timeshare isn't like oil, or wheat, or another commodity good. It is a luxury good. (Yes, as hard as it is for some DISers to believe, Disney trips are not in the same category as food, clothing, and shelter.) Demand for timeshares doesn't "naturally" exist---developers, like Disney, manufacture demand, through a carefully orchestrated marketing and sales process. The whole pitch about "not like other timeshares"? A key part of that sales process---and one they still use, despite the fact that practically every other timeshare is now also point based, with flexible booking, etc.

Most people who go on a tour, and hence most people who buy DVC, never seriously planned to do so before they went on vacation. They saw the DVC TV channel, or maybe saw the kiosks in the parks, and decided to take a tour. They might have even heard of DVC, and thought it worth looking into, but did no serious research before they left home. The tour then capitalized on that "magic vacation" feeling, offering the chance to bottle it and keep it forever. Demand is created through that process.

The DVC tour is a lot more subtle than a "regular" pitch, but it works in fundamentally the same way---build a rapport, demonstrate the value proposition ("luxury lodging for moderate cost"), appeal to the prospect's sense of "wanting to belong" to something special, etc. Disney doesn't systematically use the "take away"---this is where the front-end sales lead sets the tour prospect up in a position where he thinks buying will be out of reach, only to have "a special deal" cut for him by a "manager"---the "manager" isn't, and this is the real sales price. But a few Guides do use smaller versions of it by insinuating that maybe the prospect isn't in a position to buy...especially if the prospect is only marginally qualified (and, probably shouldn't be buying.)

Most of the well-informed prospects who have a clear understanding about resale will go that way even with these changes, because financially they are immaterial. Those people are not going to be swayed, and will still be there for the resale seller. These changes are designed to deflect the objections of a tour guest who has heard of resale, understands it is probably cheaper, but doesn't really know the dollars-and-cents figures well---and, such a guest is unlikely to find resale unless they do serious research during their rescission period, because (again) they didn't have firm plans to buy in the first place. Most people don't do this, in part because they don't really want to know any reasons why they should rescind---because that would mean giving up this special thing that they are really proud to have purchased.

So, I don't think this will be a serious drag on the resale market, because folks who are seriously examining resale will see these changes for what they are---smoke and mirrors at the margins of value. But, let's assume for a minute I'm wrong. If I am, then there will be fewer buyers for the available sellers. That will lead to a lower equilibrium price, at which point some sellers will decide not to sell after all, and/or some buyers will decide that this new lower price makes DVC an attractive option at last. Eventually, sellers will find buyers. The only question is: at what price.

 

[Sammie]

They need to get over and change their website:

Disney Vacation Club – Much More Than a Timeshare
Disney Vacation Club offers much more than old-fashioned timeshares—from the flexibilty of Membership and the variety of accommodations, to the hundreds of destinations you can visit.

And no where on the website does it say you must buy direct to receive any of these benefits. I guess they will change it before March.

 

[XGrumpy1]

Thanks for making me aware of what DVC was doing today.

I had just decided to add on and was in the process of purchasing points. I called my reseller and backed out.

No matter what I think this will not help increase resale prices. I never intend to use points for anything other than Disney World, so for me it makes sense to wait 6 months or so for a purchase and see what happens to resale prices.

If I get a lower price then, good for me. If not, I doubt I will pay anymore than I would have paid today.

I bet the phones at all the resellers were ringing off the hook all day. People like me backing out, other people trying to buy!

 

[Sandisw]

They need to get over and change their website:



And no where on the website does it say you must by direct to receive any of these benefits. I guess they will change it before March.

I'm not sure that I agree that Disney needs to be the one to tell new buyers that resale points are restricted, unless a buyer specifically asks about them. What they are advertising and selling via their website, still carries all the benefits they are touting so there really is no need to change it.

It is the contracts for sale through a resale broker that will now be different so I think it is going to be up to them to share that information with potential buyers. I am sure that the TSS will have to change the answer on their FAQ's that addresses this.

 

[Sammie]

I'm not sure that I agree that Disney needs to be the one to tell new buyers that resale points are restricted, unless a buyer specifically asks about them. What they are advertising and selling via their website, still carries all the benefits they are touting so there really is no need to change it.

It is the contracts for sale through a resale broker that will now be different so I think it is going to be up to them to share that information with potential buyers. I am sure that the TSS will have to change the answer on their FAQ's that addresses this.

I mean mainly that they advertise to be "different" from other timeshares. Don't think that is accurate anymore.

 

[LouisianaDisneyFan]

And raise your hand if you have been to a glitzy DVC marketing event where they promoted all of the "options" you have as a DVC member to use your points. I don't recall there being an asterisk'd statement at the end.

I would say this explains perfectly why Disney instructs Guides to never conduct business via email (i.e. written statements). When receiving emails with specific questions, Guides are instructed to write back asking for a good time to call. They'll tell you it is to keep the personal touch, but I think we all know it's to keep the paper trail of broken promises and misleading statements at an absolute minimum....

 

[quinnc19]

Does anyone think it possible that Disney may make future changes (to booking windows, etc.) and use March 20th as the dividing line retroactively?

 

[LouisianaDisneyFan]

Does anyone think it possible that Disney may make future changes (to booking windows, etc.)

Yes, whenever they feel it is in the best interest of their bottom line.

and use March 20th as the dividing line retroactively?

No.

 

[Brian Noble]

Is it possible? Sure. Is it likely? I don't think so. At least, not in the near term.

For all its faults, DVC isn't particularly quick to react to changes. My guess is that this new differentiator will be measured eight ways from Sunday to see if it is meeting its sales objectives before any further actions are taken.

 

[ShellyLynn3630]

Is the resale market for dvc really having that great of an effect on disney that would make them warrent these changes on resale points.