DVC Exercising ROFR

For those not in the FB group, here's what Jerry said:

I just wanted to reach out to the community and let everyone know that we had some DVC packages bought back today under Right of First Refusal (ROFR). During Covid Disney had been dormant on ROFR and waived on all listings sold from March 30th until today. So far today we have had 6 packages bought back. Below are the prices and locations of what Disney is buying:

Saratoga Springs - 200 points @ $91 per point.

Saratoga Springs - 385 points @ $92 per point.

Saratoga Springs - 200 points @ $97 per point.

Old Key West - 220 points @ $81 per point.

Grand Floridian - 200 points @ $139 per point.

Old Key West - 270 points @ $89 per point.

I would expect more buybacks to come, but just wanted reach out and let you know the news.
 
This is interesting. We are waiting on ROFR for a loaded SSR contract right in those price points :/
 


Or..... they are trying to stick their finger in the dam that is about to break on resale pricing.

We won't know till this winter though when all those MF's come due.

Could also be they just want some more points to cover the limited direct sales to avoid any sort of waitlist? It would line up with just SSR/OKW being pulled back really.

Would also be interested in the terms of the contract, loaded/stripped, MFs who pays, ect.
 
I'm a little surprised at the SSR 200 $97 PP buyback specifically. That seems like a pretty common price on the "good" end of the spectrum over the last year or so for SSR, not a covid-influenced low price.
 
I think the lack of ROFR while the sales office was closed was almost entirely due to no direct sales happening. Now that direct sales are happening again Disney has to ROFR contracts to resell them.
 


I'm a little surprised at the SSR 200 $97 PP buyback specifically. That seems like a pretty common price on the "good" end of the spectrum over the last year or so for SSR, not a covid-influenced low price.
Yeah I have a 175 point contract at $99 a point that is pretty loaded. I’m hoping they do not take it. But if they do no big deal I’ll find another one.
 
I think the lack of ROFR while the sales office was closed was almost entirely due to no direct sales happening. Now that direct sales are happening again Disney has to ROFR contracts to resell them.

I think they also get inventory from foreclosures...is it possible that they aren’t allowed to foreclose due to eviction bans? I doubt that applies to timeshares but would pretty funny if it did
 
I know direct is out of SSR points and they have a waitlist, so maybe they see this as easy sales?

The weird thing about the “waitlist”...is if they have a waitlist of people willing to buy at like $165/point, they should be buying back basically everything that allows them a solid margin, until the waitlist is exhausted
 
It will be interesting to see how this goes, whether its an outlier or if they will go back to their regular routine. I’ll be very surprised if they do much ROFR, but these contracts getting taken surprises me a lot!
 
The weird thing about the “waitlist”...is if they have a waitlist of people willing to buy at like $165/point, they should be buying back basically everything that allows them a solid margin, until the waitlist is exhausted

Depends some of the waitlist is on purpose to try and get people to buy RIV or CCV instead. Yes they will clear it out at some point but they don't need to rush and cause the bottom price to start to increase and make less money.
 
My friend was the seller on 1 of the OKW contracts that was taken in ROFR today. She gets her money either way, but now it will be from Disney. Definitely interesting that they started ROFR back up.
 
is if they have a waitlist of people willing to buy at like $165/point, they should be buying back basically everything that allows them a solid margin, until the waitlist is exhausted
You might be surprised at what "solid margin" means. Standard practice in the timeshare industry is that cost of construction (including land, prep, etc.) is about 20-30% of the total cost of sales. So, unless those resales are down in the low 40s or so, DVD is better off building a shiny new resort and selling that for $165, because the cost basis is lower.

Depends some of the waitlist is on purpose to try and get people to buy RIV or CCV instead.
Exactly so, for the same reason.
 
You might be surprised at what "solid margin" means. Standard practice in the timeshare industry is that cost of construction (including land, prep, etc.) is about 20-30% of the total cost of sales. So, unless those resales are down in the low 40s or so, DVD is better off building a shiny new resort and selling that for $165, because the cost basis is lower.


Exactly so, for the same reason.

Disagree to some extent, building the new resort will result in a greater margin, but it takes 2 years to build + 3 years to sell. If I can buy back points at $100 and sell them a month later for $165, I can do that 20 times before I finish selling out that shiny new building. Plus, I take on no risk because someone has already told me that are looking to buy at $165. So while my gross margin may be less, I can recycle my capital over and over and over again generating significantly more profits with no risk.

I think their only risk is the potential for cannibalism. For example, they could be selling boughtback units at SSR to potential Riv buyers. They'd be better off selling Riv, so they could get it off their books.
 

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