Disney resale restrictions, would this take the cake?

[ScubaCat]

IMO Disney can change the terms and conditions to fit their needs as they see fit. We have authorized the board (Disney) to vote on our behalf. If it ever went to court who would bring the case against them, who would spend the money for a couple of hundred thousand members? You would never get the "membership" as a whole to take action against Disney, most don't care. The few of us on the internet who do care can either sell our contracts if things get too intolerable or stick it out and hang on for the ride.

Bill

But a resale buyer is an equivalent member of the association, which is part of the ownership interest. How would you discern them from direct purchasers?

They could certainly change the terms, but it would affect all owners the same.

 

[Tinkerdreams]

I had heard there are further changes coming. The only change I see that they could do is change the time for booking. Currently everyone books at the 11 or 7 month mark. Future resale buyers could be limited to book lets say at 10/6.

 

[supersnoop]

I had heard there are further changes coming. The only change I see that they could do is change the time for booking. Currently everyone books at the 11 or 7 month mark. Future resale buyers could be limited to book lets say at 10/6.

We've been over this multiple times. There's no legal way to differentiate the booking periods based on where you purchased.

 

[Supplanter]

I had heard there are further changes coming. The only change I see that they could do is change the time for booking. Currently everyone books at the 11 or 7 month mark. Future resale buyers could be limited to book lets say at 10/6.

There's lots of things they could do, but messing with the ability to book a room isn't one of them. That's the one thing you are guaranteed by buying points, direct or resale.

 

[Dean]

I had heard there are further changes coming. The only change I see that they could do is change the time for booking. Currently everyone books at the 11 or 7 month mark. Future resale buyers could be limited to book lets say at 10/6.

I agree with the others, the only way to differentiate would be through a VIP program and even then, they'd likely have to grandfather current members into the program at their qualified level.

 

[malba2366]

Even if they could (very unlikely), I doubt they ever would. Even if only 10% of all contracts are resales this would take enough rooms out of the 7 month availability to significantly decrease the ability of people to book outside their home resort. By doing this they would destroy two of the big benefits of their program they advertise...the ability to reasonably book at another resort than the one you own, and the strong resale value of DVC contracts.

DVC is not out to shut down resales, however it has probably gotten to a point where resales are starting to hurt their business. They need resale values to stay relatively high otherwise no one in their right mind would buy direct.

 

[Dean]

Even if they could (very unlikely), I doubt they ever would. Even if only 10% of all contracts are resales this would take enough rooms out of the 7 month availability to significantly decrease the ability of people to book outside their home resort. By doing this they would destroy two of the big benefits of their program they advertise...the ability to reasonably book at another resort than the one you own, and the strong resale value of DVC contracts.

DVC is not out to shut down resales, however it has probably gotten to a point where resales are starting to hurt their business. They need resale values to stay relatively high otherwise no one in their right mind would buy direct.

I've made this point before but I'll make it again. They would prefer buyers not to be able to resell and could care less about the value but they do want to encourage retail buyers. One way is to have prices similar such that no one would fool with resale and that's not going to happen except for the newest resorts. Otherwise it's about the perception of benefit retail and the uncertainty and perception of negatives for resale. On both sides the perception is much larger than the reality.

 

[msjprincess]

I can't see how they could restrict resale to home resort only without it seriously affecting those who buy direct as well, the current changes won't affect any direct buyers where restrict where resale members can use their points would.

MTE

That wouldn't persuade me to buy direct. I'd be worried about less availability at 7 months for other resorts.

 

[LionKingCPA]

Im not sure im right here.. .im more talking it out for discussion.

But as i understand, the benefits taken away, both in 2011 and a couple weeks ago, were never guaranteed for anyone, resale or retail. The cost savings benefits they took away in april specifically had small print that these were not guaranteed for any amount of time. Disney just chose to take it away from a select class of owners rather than everyone.

That being said, i thought booking windows were guaranteed under the current terms and bylaws of the assciation as well as the contracts. Im not sure what else is guanteed - But i thought that was one benefit that was pretty ironclad.

Like i said, im talking out loud here without any real proof so please poke holes in my theory if you can.

 

[ScubaCat]

DVC is not out to shut down resales, however it has probably gotten to a point where resales are starting to hurt their business. They need resale values to stay relatively high otherwise no one in their right mind would buy direct.

Resales are definitely important; they're much better off with a viable owner holding the units both from collecting maintenance fees and ancillary spending. Nevertheless, while that last part is somewhat debatable, it's clearly hurting their direct sales. How couldn't it be? Other than the expiration date, there's no true depreciation of the asset. If anything, it appreciates in that on-property deluxe hotel prices have gone up far quicker than DVC dues. Thus, there has to be some way to differentiate direct vs. resale. I'm surprised it took this long, to tell you the truth.

Im not sure im right here.. .im more talking it out for discussion.

But as i understand, the benefits taken away, both in 2011 and a couple weeks ago, were never guaranteed for anyone, resale or retail. The cost savings benefits they took away in april specifically had small print that these were not guaranteed for any amount of time. Disney just chose to take it away from a select class of owners rather than everyone.

That being said, i thought booking windows were guaranteed under the current terms and bylaws of the assciation as well as the contracts. Im not sure what else is guanteed - But i thought that was one benefit that was pretty ironclad.

Like i said, im talking out loud here without any real proof so please poke holes in my theory if you can.

That's exactly how I read it. There are probably ways around it, and the association can be amended at any time, but still, I find it difficult to understand how they could discern a direct vs. resale buyer from an ownership standpoint. Incidental benefits can basically be whatever, whenever, however they want, so changing those isn't difficult. Many businesses offer different discounts and perks to different customers depending on their level of loyalty, spend, etc. That's completely different from changing the terms of a deeded ownership interest, however.

Another poster mentioned a "VIP" program. That's probably how it would need to be done. I don't have experience with any other timeshares, but from what I've ascertained from this board, that's how the others all do it.

 

[ckb_nc]

Part of what has made DVC so popular is the resale market potential. The fact that I can recoup some of my investment potentially in the future (key word being potentially) make it attractive. I bought resale last year - the inability to not book a cruise was not big for myself or my family. I could resell today and actually come a little ahead on my investment. That is an extreme rarity in the time share space.

Disney wants us to buy direct - the question Disney has to ask themselves is this - what do we do to get you to buy direct over resale? Shutting down the resale market all together (ROFR every thing) is likely cost prohibitive and frankly Disney does not to own all that inventory. The resale market helps keep the market liquid; without resale SSR never gets built. However, when the resale market becomes larger than the Direct market, Disney steps in to try and manipulate the market. Abstractly, Disney is a market maker for their property - and as such has complete control. But it must manage that market well. I believe they over priced Poly at the time and contend that is still true. Reality is they are trying to determine what is the set of incentives where the informed buyer (not the emotional one) will choose direct and its premium over resale. The irony is that Disney has incentives (park hopper tickets for length of stay for X years, extra points, or some sort of extra park based benefit) that it could tie to the buyer and not the time share but has yet to exercise these.

End of the day, the value of the DVC is market based - how much do we think it is worth based upon current and projected future worth. The resale market is actually important to Disney as it gives them a neutral measure of the DVC property worth

 

[Supplanter]

We have decided that DVC is just not for us. We love Hilton Head and I am sure we will love Vero Beach this October as well. We may even try to rent points out in the future if we find a good deal. But we will also do regular resort stays.

But with the new restrictions placed on resale buyers, my one burning question in my mind would be, will Disney ever restrict resale buyers to staying at only their home resort? I think this could be a possibility in the future. Anyone agree?

No it's not possible. Their entire advertising campaign (in the parks, online, etc...) focuses on the ability to stay at any of the dvc locations. They can't remove that part of the club.

I do wonder what will happen before and in 2042 though when a good chunk of the properties will have deeds expire. Will Disney just resell them?

 

[Dean]

Part of what has made DVC so popular is the resale market potential. The fact that I can recoup some of my investment potentially in the future (key word being potentially) make it attractive. I bought resale last year - the inability to not book a cruise was not big for myself or my family. I could resell today and actually come a little ahead on my investment. That is an extreme rarity in the time share space.

Disney wants us to buy direct - the question Disney has to ask themselves is this - what do we do to get you to buy direct over resale? Shutting down the resale market all together (ROFR every thing) is likely cost prohibitive and frankly Disney does not to own all that inventory. The resale market helps keep the market liquid; without resale SSR never gets built. However, when the resale market becomes larger than the Direct market, Disney steps in to try and manipulate the market. Abstractly, Disney is a market maker for their property - and as such has complete control. But it must manage that market well. I believe they over priced Poly at the time and contend that is still true. Reality is they are trying to determine what is the set of incentives where the informed buyer (not the emotional one) will choose direct and its premium over resale. The irony is that Disney has incentives (park hopper tickets for length of stay for X years, extra points, or some sort of extra park based benefit) that it could tie to the buyer and not the time share but has yet to exercise these.

End of the day, the value of the DVC is market based - how much do we think it is worth based upon current and projected future worth. The resale market is actually important to Disney as it gives them a neutral measure of the DVC property worth

I don't think it's made much if any difference for those buying. I'm sure there were some who wouldn't have bought but very few and most likely those were resale buyers anyway, something DVD would prefer to avoid. Even if only a small % of resale buyers went retail, it's more than would have otherwise. And the sales that were missed due to resale would dwarf the number of points for those who bought resale then later retail. Plus many of those are smaller packages which are inherently more costly on a per member basis for all of us and tends to push up dues on a PP basis.

 

[ckb_nc]

Clearly Disney has complete control. Due to ROFR, they know who is buying direct versus resale. They has some levers left including:

• Changing the resort windows 11/7 to 11/6 or even 11/5 which really locks the owner in on the home resort even more. Net effect is it probably drives prices down for SSR/OKW. To me, this is the simplest to implement on a good forward basis but really hurts the attractiveness of the biggest resorts.
• Provide more limitations on reslae (11/7 for direct - 11/5 for resale) - again this would hurt the larger resorts.
• Even more perks for direct

Disney is trying find that inflection point where direct premium for the truly educated buyer over resale is worth paying. Seems like this latest round might do it for some not for others. I also believe DVC has been strangle a blessing and a curse for Disney. Been great source of revenue but the admin of this is where they have been struggling. DVC resales is about the only way to get something from Disney via a third party at a "discount" off the Disney price, which Disney never wants. But it is real estate and governed by laws outside of Disney,

 

[supersnoop]

• Provide more limitations on reslae (11/7 for direct - 11/5 for resale) - again this would hurt the larger resorts.

We have repeated refuted the ability to segregate the home resort booking timeframe between direct and resale owners.

 

[ckb_nc]

We have repeated refuted the ability to segregate the home resort booking timeframe between direct and resale owners.

At the time of closing, the contract will specify the seller and buyer. Clearly a resale between two parties is different between Disney (DVD) and the buyer. DVD can determine a resale versus direct by the real estate purchase. Not hard frankly.

DVD can create classes and does.

 

[supersnoop]

At the time of closing, the contract will specify the seller and buyer. Clearly a resale between two parties is different between Disney (DVD) and the buyer. DVD can determine a resale versus direct by the real estate purchase. Not hard frankly.

DVD can create classes and does.

It's the legal documents forming the condo owners association, trading association, and Florida timeshare law that prevent them from making a distinction when it comes to the booking timeframes.

 

[ckb_nc]

It's the legal documents forming the condo owners association, trading association, and Florida timeshare law that prevent them from making a distinction when it comes to the booking timeframes.

Agree - which makes changing the windows a rather large undertaking. So date, Disney has been nibbling on the edges on non-contractual changes to create direct sale value. It will be interesting to see if the latest changes materially change the resale market. The resale market much more to date reflects the general perception of the economy and value of Disney.

Need to go find post 9/11 DVC valuations (although the inventory is vastly different)