Direct Purchase benefits announced!

[Chuck S]

Disney is taking Money from each of us by significantly decreasing the value of an investment that you made. it may or may not make financial sence to use your points as some of the non-dvc resorts, but you had a choice. People are going to pay far less for an asset that gives them less choices. To me this is the equivalent of saying since you did not buy your home off the builder directly - you are not allowed to use the sidewalks in the neighborhood. that is going to hurt your ability to sell your home later. I think people should be flooding disney with complaints, otherwise you are saying it is OK fior disney to devalue your assets to attempt to increase theirs. I am not sure this is the place to start but I will be emailing my complaints to dvcmembersatisfactionteam@disneyvacationclub.com and doing so often.

The true value in any timeshare, DVC, Marriott, Hilton...whatever, is in the personal use of the timeshare. Resale value should never be considered in a timeshare purchase. If the resale value is what tipped the scale in favor of Disney, what did you think the resale would be when the resort contract nears the end of the use lease? Eventually DVC will be worth $0, no matter whwther they made this change or not.

Any timeshare should not be looked at as a financial investment that will garner a return on that investment, other than saving you some money on your trip via lower room rates.

 

[DizGirl20]

So I am sitting here wondering... if there are less points to use on what is "excluded", won't that leave more points to use on DVC resorts and thus perhaps make it harder to get a reservation?

 

[Chuck S]

So I am sitting here wondering... if there are less points to use on what is "excluded", won't that leave more points to use on DVC resorts and thus perhaps make it harder to get a reservation?

I doubt it will have much impact at all as far as DVC availability. Buying points for regular use outside of the DVC resorts has never been a wise use of the points.

 

[childsplay]

I doubt it will have much impact at all as far as DVC availability. Buying points for regular use outside of the DVC resorts has never been a wise use of the points.

Exactly what I was thinking Chuck,
Plus, DVC rents out rooms to pay for the exchanges, thus taking them out of the pool of availble rooms for members to reserve on points.

 

[LouisianaDisneyFan]

I think a lot of folks are looking back at the apparent profits made by those who purchased DVC early on (especially at Boardwalk and BCV) who were later able to sell off some of their contracts at a higher price, and are assuming that they will be able to realize the same type of gain with their own purchases. For instance, those who purchased at BWV back in 1996 and sold during 2010 paid $65/point, enjoyed the resort for 14 years, and then sold for an average of $75/point. Those folks obviously did well on their purchase and ended up making money in the long run, thus creating the perception that DVC was an investment rather than an entertainment purchase.

The contracts they were offering for resale were attractive to potential buyers because they still had significant time left before expiration. Additionally, the overall demand for DVC properties had increased significantly from when they purchased. Disney had expanded and even added another park since their original purchase, the concept of timeshares had become much more familiar to the general public, and Disney's advertising was more aggressive. Disney built the buyers' desire and resale offered a cost-effective purchase alternative.

Buyers that acquired those contracts, however, will be in a very different situation down the road. When I purchased my resale contracts, I knew I could get full enjoyment out of them during my lifetime. Afterall, 2042 is still 31 years away... and I think I may have gotten my fill of Disney by the time I'm 81 years old! But, if I wanted to sell these contracts 14 years from now, a potential buyer would only have 17 years left. It's clear to me that any of these resale contracts I purchased do not have the potential to be resold at a profit or perhaps not even at all. They are not an investment to me, but a lifetime gift (and obligation) for our family. The story might be different for a newer resort, if you can snag one at a good price through resale, but I certainly would not count on it.

 

[tjkraz]

yep but if the prices they are selling at over at TTS are successful with no regard for ROFR, then that suggests they are priced at a reasonable market price - where supply and demand intersect - and are not being "propped up" artificially by ROFR.

i'm not saying there's not a small window of ROFR-effect. if dean is willing to offer $50 per pt and he knows that DVC might ROFR it at less than $52 per pt, he might go up to $52 per pt. (he might not if he's not in a hurry - he might just keep offering $50 until it goes through.) but if DVC is ROFRing anything under $55 or $60, dean is more likely to drop out of the market and use the cash elsewhere.

ROFR just means that if a desperate seller is willing to settle for dean's lowball, that DVC gets to decide whether dean can take advantage of the seller...or whether they do. the seller still gets taken either way. the notion that the seller is "protected" in some form by ROFR is a fantasy.

I don't have any serious quibbles with what you are saying. I was just pointing out that DVC isn't quite allowing ANY price on resorts other than BCV. They are certainly being more selective about BCV but the presence of some--any--ROFRs on other resorts means that DVC isn't simply allowing them all to filter through no matter the price.

If this change does indeed dramatically drop the bottom out of the resale market - and point values are cut in 1/2 - that just means that Disney will be able to buy more contract back to resell at retail.

If OKW is on the resale market for $80.00 right now - and after the change takes effect that value drops to $40.00 - that means Disney can buy twice as many points as they could before the change took effect.

But reality is that what you describe is NOT going to happen. In your example OKW resale isn't going to fall to $40 per point (with DVC selling at $90) simply because the buying public doesn't place a $50 per point value on the perks Disney is removing from resale owners. DVC won't have a market for OKW points at $90 per point with resales at $40, even with those perks removed.

 

[nytimez]

this:

At the risk of exposing mental shortcomings, I must say that:
a) I purchased a timeshare interest, not an investment property, and
b) I signed a document stating I was purchasing a timeshare interest and not making an investment

and this:

The true value in any timeshare, DVC, Marriott, Hilton...whatever, is in the personal use of the timeshare. Resale value should never be considered in a timeshare purchase.
...
Any timeshare should not be looked at as a financial investment that will garner a return on that investment, other than saving you some money on your trip via lower room rates.

 

[Brian Noble]

if there are less points to use on what is "excluded", won't that leave more points to use on DVC resorts and thus perhaps make it harder to get a reservation?

Not at all. The way these "Disney-internal" exchanges worked is that Members relinquish points for the hotel/cruise/tour they wanted. Disney would then use these points to book DVC inventory, and then try to rent it out for the best price they could get. The proceeds of that rental is what paid for the hotel/cruise/tour.

 

[dizfan]

Am I correct in thinking that the specified items being taken away from resales after the deadline, could be taken away from all DVC members at any time?
(Likely not in the near future)

My understanding is that the only thing guaranteed is our home resort with a 1 month home resort booking advantage. Everything else is a perk provided by the developer at their expense and are not part of the MFs.

Just trying to make sure I understand what is guaranteed and what is not.

 

[msd1962]

ok, I must totaly be missing something here. When I bought it was from re-sale and I did not look at future value of selling I looked at 8 to 9 nights of pre paid hotel room every year till 2054. This is not an investment that I expect to make money off of, except for the pre paid rooms. And why would I want to use my DVC to stay at another non DVC resort on property to me DVC's are much nicer than just a hotel room.

As for any perks remember you are buying a room for x number of nights and that has not changed.

And I am not sure why people hate SSR, we love it, park infront of the building with your room, not having to walk long hallways.

If the price drops then I will be able to buy more contracts on resale and stay more nights even cheaper or get a bigger room.

 

[chalee94]

Am I correct in thinking that the specified items being taken away from resales after the deadline, could be taken away from all DVC members at any time?

yep.

(Likely not in the near future)

yep.

My understanding is that the only thing guaranteed is our home resort with a 1 month home resort booking advantage. Everything else is a perk provided by the developer at their expense and are not part of the MFs.

well, sorta.

being able to trade out for the GF, for example, isn't so much at the developer expense. when you give up pts for the trade - DVC uses the pts to book a stay at a DVC resort, which CRO books for a cash reservation - that cash is used to pay the GF. if it's not paying for itself, the point cost for the GF is likely to go up since those rates are not fixed.

but if DVC decides that such trades are an unnecessary hassle, yes, they can stop offering that option.

 

[dizfan]

Am I correct in thinking that the specified items being taken away from resales after the deadline, could be taken away from all DVC members at any time?

yep.

(Likely not in the near future)

yep.

My understanding is that the only thing guaranteed is our home resort with a 1 month home resort booking advantage. Everything else is a perk provided by the developer at their expense and are not part of the MFs.

well, sorta.

being able to trade out for the GF, for example, isn't so much at the developer expense. when you give up pts for the trade - DVC uses the pts to book a stay at a DVC resort, which CRO books for a cash reservation - that cash is used to pay the GF. if it's not paying for itself, the point cost for the GF is likely to go up since those rates are not fixed.

but if DVC decides that such trades are an unnecessary hassle, yes, they can stop offering that option.

Thank you Charles.

With all the rumors and then this news, my head was starting to spin.
After awhile, I was beginning to think I misunderstood.

 

[disneynutz]

ok, I must totaly be missing something here. When I bought it was from re-sale and I did not look at future value of selling I looked at 8 to 9 nights of pre paid hotel room every year till 2054. This is not an investment that I expect to make money off of, except for the pre paid rooms. And why would I want to use my DVC to stay at another non DVC resort on property to me DVC's are much nicer than just a hotel room.

As for any perks remember you are buying a room for x number of nights and that has not changed.

If the price drops then I will be able to buy more contracts on resale and stay more nights even cheaper or get a bigger room.

Lets say that you decide to sell for some reason. It doesn't bother you that because of the selfish actions of Disney, you will only make $1,000 from the sale instead of $20,000? It bothers me and I am sure that it bothers others too!

Bill

 

[RescueRanger]

Lets say that you decide to sell for some reason. It doesn't bother you that because of the selfish actions of Disney, you will only make $1,000 from the sale instead of $20,000? It bothers me and I am sure that it bothers others too!

Bill

I have a question for you. If Disney doesn't make changes in order to stay profitable, how much do you think your contract will be worth if Disney sells off their DVC properties to another company like Marriott? Disney is a business. It's only responsibility should be to its shareholders. And for the record, I don't own Disney stock. Once again, this is a timeshare. The only perceived value one should have is the ability to use your points at the resort you bought. All of the rest is just perks. If you thought you were making an invesment, you didn't do your homework. Furthermore, your example of a $20000 purchase only being worth $1000 is a little overly dramatic. The perks they are taking away are not worth 95% of anyones contract.

 

[csharpwv]

Disney is not being selfish at all!
Disney is being what every company strives to be - PROFITABLE!

When an owner signs a contract - they agree to everything in that contract - or they don't sign the contract.

DVC's contract is very clear about what is being purchased. The RTU is being purchased.

There is no guarantee other than an owner's ability to use their points at their home resort for as long as their real estate interest (points) will allow them.

This decision has a clear impact on owners who do not plan to keep their contract for the life of the RTU period.

However - DVC should not make decisions based on the thoughts or feelings of those who plan to sell.
DVC should make decision based on the thoughts and feelings of those who plan to KEEP their points until the RTU expires.

DVC doesn't owe anyone anything - not even an explanation.

Each owner has the RTU at their home resort each year to the extent their interest (points) allows them.

DVC isn't in the business of providing legitimate real-estate investment opportunities that provide owners the ability to profit. DVC is in the business of fractional real estate sales/ownership and management. That's it.

DVC has to make money to continue to exist. It's a bad business model because it isn't 100% sustainable. To continue to be profitable - AND - sustainable they have to continue to build properties and sell new interests.

At the point that DVC STOPS building new resorts, maintenance fees will soar - or shoot directly through the roof. Because there has to be a revenue stream in addition to annual fees.

 

[My_3_Mi_Princesses]

Well as a prospective buyer of an small initial contract I plan on waiting until after 3/20. I am assuming the prices will drop a little ($2-$10 pp) but no where near 1/2 as was mentioned earlier there is still to much value in the product. Now I am buying a small contract to go every other year for 7 days. So I would have never had enough points to go on a cruise or something.

However I think Disney is making the same mistakes the US Auto companies made in the 90s and early 2000s. There are many reasons why they were in financial trouble and GM/Chrysler went bankrupt and Ford almost, but one of them was the horrible resale values of their cars. These companies did anything that pushed sales of new cars (discounts, fleet sales etc) disregarding what it did to current and future owners resale values of these cars. Enter Honda and Toyota that were disciplined in their sales, and next thing you know the Civic and the Camery had great resale values and in turn more customers, which then led to bigger discounts on the Big 3 vehicles dropping their resale even lower, a vicious cycle that has taken years to get out of. Now granted Disney doesn't have any real competition b/c nobody can build property on their land, so this is not really an apples to apples comparison but the lesson I think Disney needs to becareful of is that if you mess with resale values to much, you hurt your current/future customers and eventually hurt your direct sales.

 

[csharpwv]

Well as a prospective buyer of an small initial contract I plan on waiting until after 3/20. I am assuming the prices will drop a little ($2-$10 pp) but no where near 1/2 as was mentioned earlier there is still to much value in the product. Now I am buying a small contract to go every other year for 7 days. So I would have never had enough points to go on a cruise or something.

However I think Disney is making the same mistakes the US Auto companies made in the 90s and early 2000s. There are many reasons why they were in financial trouble and GM/Chrysler went bankrupt and Ford almost, but one of them was the horrible resale values of their cars. These companies did anything that pushed sales of new cars (discounts, fleet sales etc) disregarding what it did to current and future owners resale values of these cars. Enter Honda and Toyota that were disciplined in their sales, and next thing you know the Civic and the Camery had great resale values and in turn more customers, which then led to bigger discounts on the Big 3 vehicles dropping their resale even lower, a vicious cycle that has taken years to get out of. Now granted Disney doesn't have any real competition b/c nobody can build property on their land, so this is not really an apples to apples comparison but the lesson I think Disney needs to becareful of is that if you mess with resale values to much, you hurt your current/future customers and eventually hurt your direct sales.

I think that is a great analogy!

I think Disney had to do SOMETHING about resales hurting their bottom line - but I don't think this is going to have the desired effect they are hoping for.

I would like to have seen Disney buying more contracts back - and offering those to current members at reduced pricing.

But - I think your analogy is spot on!

 

[tjkraz]

...I think Disney needs to becareful of is that if you mess with resale values to much, you hurt your current/future customers and eventually hurt your direct sales.

Perhaps but in the timeshare world, this sales approach has proven to work. You can go buy Wyndham and other TS points on eBay for virtually nothing. Some owners will give them away just to get out from under the maintenance fees. But Wyndham continues to build and market directly for tens-of-thousands of dollars.

Yes this is one way in which DVC is "just another timeshare company." But overall even current members are better off when DVC is a successful timeshare company rather than one whose best days (sales-wise) are behind it.

 

[disneynutz]

Well you can tell that I don't agree. Since when do we let the interests of big corporations come before the people that made them big?

I'm not saying that they shouldn't make a fair profit but they are making cut after cut after cut while raising prices across the board and restructuring the DVC to deliberately hurt the resale value and the members that made the DVC a success.

It's like the DDP, Disney comes up with a plan to make some money, and they offer the DDP which was a good deal in the beginning. Each year they change the plan offering less and less while raising the price. They modified the restaurants and menus to increase their profit which affects all Guests, not just those on the plan.

Disney is doing the same thing to the DVC, slowly they are taking away perks and modifying the plan. I guarantee you that this won't stop, why should it. There is nothing that the members can do but sell their contracts at a larger loss then a couple of years ago.

Just because someone can legally do something doesn't always make it the right thing to do. I expect more from Disney, I guess that I am a fool.

Bill

 

[RobDoc]

... DVC has to make money to continue to exist. It's a bad business model because it isn't 100% sustainable. To continue to be profitable - AND - sustainable they have to continue to build properties and sell new interests.

At the point that DVC STOPS building new resorts, maintenance fees will soar - or shoot directly through the roof. Because there has to be a revenue stream in addition to annual fees.

You may be confusing and interchanging DVD (Disney Vacation Development) and DVC (Disney Vacation Club). The former is responsible for the development and sales of properties to be included in the DVC family. The latter is the management company who handles the day-to-day operation of the resorts and associated programs. By contract, DVC receives a fixed 12% of the operating costs for each resort (excluding property taxes) and by FL law, those costs must reflect the actual costs of running the resort. That revenue stream has nothing to do with building new resorts.

In addition, the owners of each resort have the power to replace DVC as the managing entity by a vote of those owners. Doing so would exclude those owners from DVC and thus limit those owners to their own resort and any other exchange oppportunities their "new" management company is able to negotiate agreement with. The "new" resort management would be free (and obligated) to negotiate for any services they wish including (but not limited to) transportation, security, maintenance, housekeeping, laundry, landscaping, recreation, front desk, reservations and any perks they would be interested in providing for their owners. Those owners would no longer have access to DVC Member Services or the Member website, but could set up (at their own expense) online booking. The mechanism is outlined in our documents that would allow owners to make such change.

Enjoy!