Disney's Long Term DVC Strategy

[Sandisw]

Not in favor of giving non home resort direct purchasers priority booking over non home resort resale owners. You’ve created a delta between resale and direct with everything you’ve already done and sufficiently differentiated the two products. Congrats. Do you really need to do more to diminish resale? It’s like stomping on an animal once it’s already dead. Enough already! Eventually you tank the resale product so much you can’t help but realize they really clobbered their direct buyer by making sure they take an absolute bath when they need to sell.

If they decide to continue with a trust model, and put every resort in their own RTU planc they can create that type of booking situation fairly easily

You have a home resort; priority booking at other trust properties and then trading via BVTC for the rest.

But, I’m not sure whether they woood do that are not.

 

[Carouselofplanning]

If they decide to continue with a trust model, and put every resort in their own RTU planc they can create that type of booking situation fairly easily

You have a home resort; priority booking at other trust properties and then trading via BVTC for the rest.

But, I’m not sure whether they woood do that are not.

Easy and good idea are not the same thing.
Even if your points fit into the category that gets priority in the long run you are short changed in the event you sell because your’re being forced to sell a fundamentally different product than what you bought.
It’s like owning a Mercedes and when you go to sell it they tell you you’re only allowed to sell a Nissan.

 

[Brian Noble]

plenty of land available right now

The fires did destroy a fair number of structures in and around Lahaina, but I suspect (strongly) that Maui County has no appetite for tourism development in that area. Maui is not Kauai, but it's not the "tourism at all costs" Maui of forty years ago, either. There was already a pretty big tourism backlash brewing over water usage on the West Side vs. the rest of the island.

On top of that. the lockdown showed residents what a tourism-free Hawaii felt like, and while there are serious economic questions about how that could work, the "look and feel" of it was a revelation for those who live there. Development was always tricky politically on the islands. It is a lot trickier now.

 

[Sandisw]

Easy and good idea are not the same thing.
Even if your points fit into the category that gets priority in the long run you are short changed in the event you sell because your’re being forced to sell a fundamentally different product than what you bought.
It’s like owning a Mercedes and when you go to sell it they tell you you’re only allowed to sell a Nissan.

Unless DVD changes course on resale restrictions, the product is already restricted.

It’s been 7 years since they were introduced and added to VDH and CFW. So, it doesn’t seem they are going anywhere.

Trading rights are a subject of the DVC Resort Agreement and we all bought understanding what that can look like, including when that kicks in.

Home resort must have one month, but it can be as long as they want it to be, which means trading can be shortened.

Even now they can decide to make the home resort period more than 4 months at any or all the resorts.

So, if DVD decides to make non home resorts booking shorter, they can. Matter of fact the contract even mentions that it might be used to deal with demand imbalances.

The trust product, assuming they continue using it to sell, makes having different priorities for non home resort bookings easier to accomplish.

There are some people out there who could see it as a plus…even if others don’t.

All we know is that they have, since 2012, introduced aspects to the program that make resale a different product.

It seems to me that this strategy isn’t going away. So, moving forward, it’s about selling whatever product they see is a positive way forward.

I know people here belive restrictions have impacted direct sales and it’s possible they have to a small degree, but not enough from DVds perspective against current goals to have abandoned them.

 

[Carouselofplanning]

Unless DVD changes course on resale restrictions, the product is already restricted.

It’s been 7 years since they were introduced and added to VDH and CFW. So, it doesn’t seem they are going anywhere.

Trading rights are a subject of the DVC Resort Agreement and we all bought understanding what that can look like, including when that kicks in.

Home resort must have one month, but it can be as long as they want it to be, which means trading can be shortened.

Even now they can decide to make the home resort period more than 4 months at any or all the resorts.

So, if DVD decides to make non home resorts booking shorter, they can. Matter of fact the contract even mentions that it might be used to deal with demand imbalances.

The trust product, assuming they continue using it to sell, makes having different priorities for non home resort bookings easier to accomplish.

There are some people out there who could see it as a plus…even if others don’t.

All we know is that they have, since 2012, introduced aspects to the program that make resale a different product.

It seems to me that this strategy isn’t going away. So, moving forward, it’s about selling whatever product they see is a positive way forward.

I know people here belive restrictions have impacted direct sales and it’s possible they have to a small degree, but not enough from DVds perspective against current goals to have abandoned them.

Last paragraph is true but my point is if you keep adding resale restrictions…you’re not just “adding benefits” to direct. Over time it does detract. This stuff doesn’t happen in a vacuum. The steep resale discount on Riv is the canary in the coal mine here (Counterpoint: no its not I love my full price Riviera points and I’m never selling!)

 

[SugarSweetLee]

Ive never seen characters at the resorts at WDW only DLR. I didnt think they did this at WDW.

They sure do. We have seen characters walking around at OKW, BC, and RIV during trips over the last year.

 

[tx911]

They sure do. We have seen characters walking around at OKW, BC, and RIV during trips over the last year.

Yes, I've noticed this more frequently recently too.

 

[Sandisw]

Last paragraph is true but my point is if you keep adding resale restrictions…you’re not just “adding benefits” to direct. Over time it does detract. This stuff doesn’t happen in a vacuum. The steep resale discount on Riv is the canary in the coal mine here (Counterpoint: no its not I love my full price Riviera points and I’m never selling!)

Except a multi tiered booking system can be seen as a enhancement to the product…that was my point.

Having priority booking at some resorts might be a nice enhancement to the product. Or, even a multi home resort product.

The goal is selling direct points and not having owners buy resale so any differences do just that.

 

[broncofan]

Except a multi tiered booking system can be seen as a enhancement to the product…that was my point.

Having priority booking at some resorts might be a nice enhancement to the product. Or, even a multi home resort product.

The goal is selling direct points and not having owners buy resale so any differences do just that.

For me the hard part is while I don't like the resale restrictions of RIV and VDH, you can just absolutely see the obvious financial sense they make for Disney. It became financially non-viable with the size of DVC and the resale market to use ROFR to support the direct product. They tinkered but a few benefits here and there aren't enough.

Over a long time frame (2042 and beyond) you'll end up with two products, direct and resale, that aren't even remotely comparable. The massive immediate discount for Riviera proves the point - a resale contract there is nothing like owning DVC direct from Disney and that's reflected in the price.

Compare to SSR - when I bought resale I thought about adding direct points at AKV (there was some big sale going on at the time and that's where our direct points are), but there just wasn't enough reason to do that at what I think was a $60 or $70 premium per point since what you get direct AKV vs resale SSR is quite comparable for now.

 

[HyperspaceMountainPilot]

For me the hard part is while I don't like the resale restrictions of RIV and VDH, you can just absolutely see the obvious financial sense they make for Disney. It became financially non-viable with the size of DVC and the resale market to use ROFR to support the direct product. They tinkered but a few benefits here and there aren't enough.

Over a long time frame (2042 and beyond) you'll end up with two products, direct and resale, that aren't even remotely comparable. The massive immediate discount for Riviera proves the point - a resale contract there is nothing like owning DVC direct from Disney and that's reflected in the price.

Compare to SSR - when I bought resale I thought about adding direct points at AKV (there was some big sale going on at the time and that's where our direct points are), but there just wasn't enough reason to do that at what I think was a $60 or $70 premium per point since what you get direct AKV vs resale SSR is quite comparable for now.

I tend to agree with this analysis but I also think the resale product being 50% of the value of direct will hurt DVC’s direct sales over time—maybe there are enough new people to churn through over time, but I think a lot of people who joined before 2020 or so are much more comfortable financing and buying more because they assume they can always get back out and resale values will go up over time…as recently as last year people were still arguing on these boards it would continue on that way and that the past few year “dip” was simply a short term slump—but it doesn’t appear to be going back up even in a good economy and even as inflation was high in ‘22-23, I think direct buyers of new restricted resorts are likely to be underwater for at least a decade or two, if not the life of the contract (at least adjusted for inflation).

In my opinion, it will hurt Disney most with sophisticated affluent repeat buyers like many on these boards. We might keep buying enough direct to qualify for Y card benefits, but unless there’s some benefit to buying more than 350 (the current amount I have), I don’t see myself buying a restricted resort at $200/pt that I will be lucky to resell at $100/pt unless I absolutely have to stay there (so basically new BCV or front of Epcot resort are the only possibilities for me ever buying restricted). For now, if I ever need more points, they’ll be resale at BCV/VGC or maybe AUL if they dip low enough.

 

[Chili327]

Unless DVD changes course on resale restrictions, the product is already restricted.

It’s been 7 years since they were introduced and added to VDH and CFW. So, it doesn’t seem they are going anywhere.

Trading rights are a subject of the DVC Resort Agreement and we all bought understanding what that can look like, including when that kicks in.

Home resort must have one month, but it can be as long as they want it to be, which means trading can be shortened.

Even now they can decide to make the home resort period more than 4 months at any or all the resorts.

So, if DVD decides to make non home resorts booking shorter, they can. Matter of fact the contract even mentions that it might be used to deal with demand imbalances.

The trust product, assuming they continue using it to sell, makes having different priorities for non home resort bookings easier to accomplish.

There are some people out there who could see it as a plus…even if others don’t.

All we know is that they have, since 2012, introduced aspects to the program that make resale a different product.

It seems to me that this strategy isn’t going away. So, moving forward, it’s about selling whatever product they see is a positive way forward.

I know people here belive restrictions have impacted direct sales and it’s possible they have to a small degree, but not enough from DVds perspective against current goals to have abandoned them.

Last paragraph is true but my point is if you keep adding resale restrictions…you’re not just “adding benefits” to direct. Over time it does detract. This stuff doesn’t happen in a vacuum. The steep resale discount on Riv is the canary in the coal mine here (Counterpoint: no it’s not I love my full price Riviera points and I’m never selling!)

I tend to agree with this analysis but I also think the resale product being 50% of the value of direct will hurt DVC’s direct sales over time—maybe there are enough new people to churn through over time, but I think a lot of people who joined before 2020 or so are much more comfortable financing and buying more because they assume they can always get back out and resale values will go up over time…as recently as last year people were still arguing on these boards it would continue on that way and that the past few year “dip” was simply a short term slump—but it doesn’t appear to be going back up even in a good economy and even as inflation was high in ‘22-23, I think direct buyers of new restricted resorts are likely to be underwater for at least a decade or two, if not the life of the contract (at least adjusted for inflation).

In my opinion, it will hurt Disney most with sophisticated affluent repeat buyers like many on these boards. We might keep buying enough direct to qualify for Y card benefits, but unless there’s some benefit to buying more than 350 (the current amount I have), I don’t see myself buying a restricted resort at $200/pt that I will be lucky to resell at $100/pt unless I absolutely have to stay there (so basically new BCV or front of Epcot resort are the only possibilities for me ever buying restricted). For now, if I ever need more points, they’ll be resale at BCV/VGC or maybe AUL if they dip low enough.

Agree, I think it does hurt DVC overall, but as long as there are enough people that don’t do enough research they should be fine.

Devaluing resale devalues the entire product.

 

[Cyberc1978]

Brian,
You would think it is pretty easy for them to identify those owners. Join a few fb group. Watch the feed for a few weeks, and you will see some super star posters having rooms to rent everyday. They will delete their post after, so you can't see their previous posts. But pretend to be a renter, get a reservation number from them.

Have in mind we owners are allowed to rent - as far as I know we are allowed to make 20 reservations per rolling year per UY. If we decide to rent all of them its my understanding we are within the rules of the agreement.

 

[broncofan]

I tend to agree with this analysis but I also think the resale product being 50% of the value of direct will hurt DVC’s direct sales over time—maybe there are enough new people to churn through over time, but I think a lot of people who joined before 2020 or so are much more comfortable financing and buying more because they assume they can always get back out and resale values will go up over time…as recently as last year people were still arguing on these boards it would continue on that way and that the past few year “dip” was simply a short term slump—but it doesn’t appear to be going back up even in a good economy and even as inflation was high in ‘22-23, I think direct buyers of new restricted resorts are likely to be underwater for at least a decade or two, if not the life of the contract (at least adjusted for inflation).

In my opinion, it will hurt Disney most with sophisticated affluent repeat buyers like many on these boards. We might keep buying enough direct to qualify for Y card benefits, but unless there’s some benefit to buying more than 350 (the current amount I have), I don’t see myself buying a restricted resort at $200/pt that I will be lucky to resell at $100/pt unless I absolutely have to stay there (so basically new BCV or front of Epcot resort are the only possibilities for me ever buying restricted). For now, if I ever need more points, they’ll be resale at BCV/VGC or maybe AUL if they dip low enough.

I agree with all of that really, but I think the financial benefit outweighs the downside because Disney was already dealing with resale values at several resorts that were about half of the direct price.

I'm absolutely in the same boat - would never buy RIV or VDH direct because of the restrictions and the immediate loss when you drive that contract off the lot. On the other hand, if VDH drops in the resale market over time in a similar way to what has happened at RIV it could be tempting to pick some up that way. Front of Epcot resorts could be the same - it takes a little patience as you have to wait several years after they start selling for enough contracts to be on the resale block so that a real market develops - but already you're seeing VDH in the $160s. Actually makes me feel bad to look at - those are owners who barely even got started and now looking at pretty significant losses on the sale.

 

[Add-On-Itis]

Have in mind we owners are allowed to rent - as far as I know we are allowed to make 20 reservations per rolling year per UY. If we decide to rent all of them its my understanding we are within the rules of the agreement.

For sure. But there is at least one person that has multiple reservation everyday for rent. Everyone in the facebook group knows this person. I am curious how many points he's controlling, or are they flipping loaded contracts.

 

[airjay75]

In my opinion, it will hurt Disney most with sophisticated affluent repeat buyers like many on these boards.

Agree, I think it does hurt DVC overall, but as long as there are enough people that don’t do enough research they should be fine.

I'm absolutely in the same boat - would never buy RIV or VDH direct because of the restrictions and the immediate loss when you drive that contract off the lot.

Counterpoint. There are people like myself, who do lots and lots of research, make their peace with the resale restrictions because we decided we love a resort like RIV, and we must have what we want, losses be damned. And, we buy 600 direct RIV points and have no regrets . If I had to sell it all tomorrow or even give it away, I'd be fine. No, not everyone is in that boat, and I'm grateful I am.

Plenty of other timeshare developers seem to have no problem selling timeshares that are worth nothing on the resale market. DVC has been different - even now, with the resale restrictions, it is still different because of the resale and rental market. Maybe it will stay that way, maybe it won't. It does make it a more attractive product, but does it actually sell more direct points?

I'd love for the resale restrictions to hurt direct sales and put pressure on DVC to reverse course. It would make it a much more desirable product and I wouldn't have as much hesitation as I did buying the points I did. But . . . I might have ended up buying my 150 direct RIV points and bought the rest resale if that were the case too. And, thus, therein lies the conundrum.

 

[airjay75]

For sure. But there is at least one person that has multiple reservation everyday for rent. Everyone in the facebook group knows this person. I am curious how many points he's controlling, or are they flipping loaded contracts.

I've seen more than one person doing things like that on Facebook. I mean, I'm not counting everything up, but it seems like they have reservations for all sorts of times. Maybe they're trying to keep under the 20 rule, maybe not. Maybe they think if they have multiple memberships or have put their memberships in an LLC, they're shielded for scrutiny. Or, maybe, Disney isn't really doing anything other than asking people to check a box and certify every 1 minute they talk to someone on the phone that it's for "personal" use. And, the people doing these sorts of things certainly aren't saying anything other than, yes, absolutely, this is for my personal use.

 

[Add-On-Itis]

I've seen more than one person doing things like that on Facebook. I mean, I'm not counting everything up, but it seems like they have reservations for all sorts of times. Maybe they're trying to keep under the 20 rule, maybe not. Maybe they think if they have multiple memberships or have put their memberships in an LLC, they're shielded for scrutiny. Or, maybe, Disney isn't really doing anything other than asking people to check a box and certify every 1 minute they talk to someone on the phone that it's for "personal" use. And, the people doing these sorts of things certainly aren't saying anything other than, yes, absolutely, this is for my personal use.

Yes def more than 1 person. When this person don't have the room being asked, he will tag his friends asking if they have available rooms.

I guess back to the point, if disney really wanted to do something it's not that hard to find the major renters.

 

[Brian Noble]

I also think the resale product being 50% of the value of direct will hurt DVC’s direct sales over time

Nope.

How do I know that? Because the resale product at Wyndham (which is NOT restricted) is available at a discount of approximately 100%, yet Wyndham still manages to sell plenty of timeshares at price points similar to DVC.

like many on these boards.

We are not represenative of the typical DVC owner. For most people DVC is "just vacation," not something they obsessively post about at least weekly for years. (Yes, I am the Pot in this Pot/Kettle conversation.)

I'd love for the resale restrictions to hurt direct sales and put pressure on DVC to reverse course.

I am thrilled by resale restrictions, because they allowed me to put together my portfolio for my desired stays at a lower total cost than I would probably otherwise have had to have paid for it.

Devaluation of resale works both ways. It's not great for those who buy from the developer. It is very good for those who buy resale.

 

[walt34]

Devaluation of resale works both ways. It's not great for those who buy from the developer. It is very good for those who buy resale.

You bought it cheaper, but you also bought a less flexible product, as it lost some "functionality" in the resale as the restrictions came into force. Good for you, if this is the only thing you want (which appears to be the case for you). Not so good, if someone would have liked flexibility at a lower price.

 

[Brian Noble]

You bought it cheaper, but you also bought a less flexible product, as it lost some "functionality" in the resale as the restrictions came into force. Good for you, if this is the only thing you want (which appears to be the case for you). Not so good, if someone would have liked flexibility at a lower price.

I have a blended portfolio and about half of my points are unrestricted, so I still have more than enough flexibility for my needs.

The name of the game is taking affordable vacations, and this is helping me do that. Does it meet everyone's needs? No. But that's not my problem. I am only pointing out that devalued resale has an upside for those willing to be opportunistic and/or who have a set of vacation preferences that such a model can fit.

Every zero-sum transaction has two sides.