DVC restricting booking only to home resort?

[nd43]

See, this is where you and I disagree. I believe that this type of buyer is the super majority.

You did a great job of netting this out. I simply point this out. We now live in an age where people do web research on virtually every type of purchase. From what restaurant to eat at, what radio to buy, what tv is best, etc. I am a retail guy and people will research, in the store, items that cost less then $10 today regularly.

Why? Because the Internet has lowered the cost of doing research to almost zero. People have become conditioned to expect instant research on just about anything. They expect third party reviews on just about anything. People do not trust vendors anymore, they rely on third party resources for most of their shopping.

So, one stat will make our mutual points. What percentage of DVC buyers did any Internet research on DVC prior to purchasing? Understand, your premise would be a very, very low percentage would do research. They just ate the ice cream and signed the papers. In fact, the percentage would be much lower then people buying a $100 cell phone (which is reaching like 80% plus who research online before buying).

To be upfront, I do not know the answer but I am very confident the trend is in my favor in terms of people doing research because I see it every day in my store for far less significant purchases.

The number of users on this board and the number of people who read this board is a totally different stat.

Again, I think we sell the average DVC buyer very short. I would guess many of them would have researched DVC from their hotel room before ever getting in the van. It is how the world now works everywhere else. Can timeshares be completely immune to this global trend in buying?

I really do not know the answer, but I know the average shopper, and this would be a major departure from their current behaviors if suddenly everyone forgot they owned a smart phone and could type in "DVC reviews".

 

[DougEMG]

I kind of agree with nd43 about the current generation of young people who are used to always getting their smart phone out to research a product. When that demographic of people hit their 30-40's and start looking at buying timeshares like DVC I think the way timeshares are sold is going to have to change. Our kids are connected all the time and I think they will google the crap out of any purchase they make. They'll probably still have that emotional desire to buy while on holidays, but as they check for reviews and recommendations on which resort to buy, etc they are going to find out about the resale market.

What I wonder about with DVC and restrictions on resale purchases is that the common refrain here is that 'the value of DVC is in its use'. That is something that can not be taken away. What perks could they really add or penalties put in place that would make up for the difference in resale vrs direct. Personally I don't think there is anything they could do.

So if I was Disney what I would be worried about is how to market my product 10-15 years from now when everyone is connect all the time.

 

[Nabas]

What perks could they really add or penalties put in place that would make up for the difference in resale vrs direct. Personally I don't think there is anything they could do.

I'm not remotely suggesting they are going to do this but, for example, imagine if direct sales were given the perk of unlimited FastPass+, the way Universal offers nearly unlimited Express Pass to its onsite guests.

Providing extra FP+ for direct sale DVC members costs Disney essentially nothing yet, IMHO, a direct sale perk like this would damage resale prices while boosting direct sales.

 

[NoleFan]

I'm not remotely suggesting they are going to do this but, for example, imagine if direct sales were given the perk of unlimited FastPass+, the way Universal offers nearly unlimited Express Pass to its onsite guests.

Providing extra FP+ for direct sale DVC members costs Disney essentially nothing yet, IMHO, a direct sale perk like this would damage resale prices while boosting direct sales.

I would wager to say that DVC onsite guests is way more than those staying at Universal hotels. That probably would not be a sound decision for DVC. Probably would upset many regular park guests.

 

[geraghty]

I'm not remotely suggesting they are going to do this but, for example, imagine if direct sales were given the perk of unlimited FastPass+, the way Universal offers nearly unlimited Express Pass to its onsite guests.

Providing extra FP+ for direct sale DVC members costs Disney essentially nothing yet, IMHO, a direct sale perk like this would damage resale prices while boosting direct sales.

This would have no effect on resale buyers. They would be giving a perk to direct buyers, not taking something away. It may temporarily increase the value for direct though, increasing the gap further between direct vs resale cost. Of course, many of their talking points involve flexibility of usage, not onsite perks.

 

[Dean]

That is just flat wrong. Lets say there was no resale market for DVC, so after you purchased, it was worth $0.00 and you could not sell it. Do you think this would have ZERO impact on sales? A healthy resale market actually does benefit direct sales as long as it does not tip the balance too far away from direct sales. Do you think no one ever asks the question, "boy, what if I have to sell" while buying DVC? If you crater the resale market, it WILL affect the direct sale market. Will direct sales go to zero? Of course not, but they would decrease and I suspect Disney knows what a "healthy" resale market looks like to help optimize direct sales. If they truly did not care, they would never have placed ROFR in their base agreements. Of course they care. It is a crazy statement to say they don't.



Boy, did everyone take their condescending pill this evening or what? The concept of adding value to your product is neither an act of pure benevolence or temporary insanity, it is sound business done by virtually every successful company in the world (including Disney). When you want to start jacking your price to $200 per point, you need to start asking how you can add more value to your target customer or you might hit some problems. To say I will get there by simply cutting off resale benefits would appear to be a very poor business strategy (and most likely might make direct sales even harder if they cratered resale prices).

Let me rephrase it the way I've said it at other times. They don't care if you could ever sell but they do care how other issues affect their ability to sell themselves. Same meaning, they don't care about you, just them when it comes to one vs the other. I will tell you that there are many timeshares and other systems that sell very successfully with a spread of thousands of dollars to almost nothing, a far larger spread than DVC at it's worst. As for people asking and using resale prices to make a determination, the % is going to be so low for those who would otherwise buy retail that it can be ignored. Even if they ask, who are they going to ask, the salesperson?

Not trying to be condescending, sorry if it came across that way. However, DVC has a history of only adding perks that don't have cost, it is unrealistic to think this will change. I'm sure they'd consider it if they expected a significant return on the extra dollars but the only time they've taken that direction was for OKW early on with the free passes. Even then they fought to keep people from borrowing 2000 points and getting free passes in 1999. I'd also refer you to the free valet parking where they chose to dump it rather than pay (or have us pay) for a perk already in place. I stand by the premise that it's unreasonable and unrealistic to think DVC will add perks that directly cost them money.

I appreciate your approach and points (I really do). However, it runs on the premise that everyone else is just a naive emotion driven buyer. While such buyers absolutely exist, they cannot sustain DVC by themselves.

And yes, people saying my "downside risk" is a 50% loss does enter into the equation for many buyers. Measuring downside risk why spending $30 to $40k is not a unique, superior skill.

People on this board seem very quick to sell the average DVC buyer short.

If Disney does not care about resales because all of their customers just buy on emotion anyway, why bother having a ROFR clause? Why would your guide have a prepared response to resale questions? Why would they have changed resale benefits at all (it obviously had zero affect on their emotion driven business)? Do they just want to spite the few, superior thinkers on this board knowing it has no real affect on their business? Sounds like a lot of effort for something that has no meaning to them.

DVC actually refers people to Fidelity that need to sell yet they have no need for a resale market? Why would they bother?

That's just it, the average retail buyer with DVC does make an emotional purchase. Even here on this board we see people buying retail due to discomfort with the resale process, impatience with the waiting and fear of losing items that add cost rather than saving money, all mostly mostly emotional factors. That's not to say everyone is in that boat but the vast majority.

You asked about ROFR and here's how I look at it. Timeshares would first rather you not be able to resell so that at least a portion of those potential owners would buy retail, not all will. They look at ROFR mostly to drive people to retail, not as a vehicle to recycle the cheaper contracts, the latter is a last resort. These all represent my understanding of DVD's view on ROFR and their historical approach. I spoke to what they would prefer earlier, however, they don't have the option to keep you from selling so all they can do is make it difficult and try to control the price AND process in such a way that it doesn't hurt them too much. Another timeshare system based in FL tried to use ROFR in such a way that they acted like they had the right with properties that did not have this contractually in their documents. They also insisted on that THEY got the sales commission. They effectively made it so no one could sell and where resale companies wouldn't even list their resorts. I'm not sure where it stands now, that was a few years ago.

I'm not sure how much timeshare knowledge/experience you have but I wonder if you're making the same mistake that we've seen on other involved discussions lately, that competition and market forces play a large roll in the retail sales process, they don't play nearly as large a roll as one would think just getting involved.

 

[Dean]

I kind of agree with nd43 about the current generation of young people who are used to always getting their smart phone out to research a product. When that demographic of people hit their 30-40's and start looking at buying timeshares like DVC I think the way timeshares are sold is going to have to change. Our kids are connected all the time and I think they will google the crap out of any purchase they make. They'll probably still have that emotional desire to buy while on holidays, but as they check for reviews and recommendations on which resort to buy, etc they are going to find out about the resale market.

What I wonder about with DVC and restrictions on resale purchases is that the common refrain here is that 'the value of DVC is in its use'. That is something that can not be taken away. What perks could they really add or penalties put in place that would make up for the difference in resale vrs direct. Personally I don't think there is anything they could do.

So if I was Disney what I would be worried about is how to market my product 10-15 years from now when everyone is connect all the time.

And it's a moving target. But I think those in nd43's camp would look at that and say DVC would jump in and compete. I look at that and say there are more resale restrictions coming and more pressure with sales tours.

 

[Dean]

I'm not remotely suggesting they are going to do this but, for example, imagine if direct sales were given the perk of unlimited FastPass+, the way Universal offers nearly unlimited Express Pass to its onsite guests.

Providing extra FP+ for direct sale DVC members costs Disney essentially nothing yet, IMHO, a direct sale perk like this would damage resale prices while boosting direct sales.

For a purchase incentive (what the free passes were) or a perk to move the needle it has to be something that would make you go out and buy retail. Something where those that bought retail restricted would seriously think about selling and buying retail. One thing they could do would be to wait about 2-3 more years then give a chance of non-qualified points to be converted by a purchase of say 100 pts minimum.

 

[CarolMN]

The text in blue is copied from my BWV Component Site Public Offering Statement. These sections, along with others are why I do not believe Disney can restrict booking to only a home resort based on how the points are purchased. (I am not a lawyer).

6.4 Disney Vacation Club. Membership in the Disney Vacation Club is an appurtenance to each ownership interest, which is conveyed by virtue of the execution and delivery of a deed, in accordance with and subject to the terms of this Declaration, the Membership Agreement and the DVC Resort Agreement. Upon recording of the deed, the Club Member is automatically entitled to enjoy the services and benefits associated with membership in the Club. As an appurtenance, the Club Membership , as it is compromised from time to time may not be partitioned, hypothecated, bought sold, exchanged, rented or otherwise transferred separately from each ownership interest...............

Provided that an Owner complies with all restrictions on the transfer of an Ownership interest, if any, the transferee of such Ownership interest shall automatically become a member of the Club..........

From a legal dictionary:
appurtenance - adjunct that is attached and incidental to something that has greater importance or value. As applied to real property, an object attached to or a right to be used with land as an incidental benefit but which is necessary to the complete use and enjoyment of the property.

As best I can recall, no one has ever posted anything from a MSPOS or POS that would suggest Disney can treat owners of a resort differently with respect to how they may use their ownership interest based on how they acquired their membership. (There have been a lot of unsupported opinions posted that stated that they can, however.)

All of the options that were removed from resale purchases were never part of the ownership interest and the MSPOS clearly states that.

 

[bakerworld]

bit confused - bought into DVC because I like to vacation in WDW 2 or 3 times a year without having to book into a moderate (bus dependent) resort to afford my 'want'. Is there another reason to buy DVC?

 

[Nabas]

For a purchase incentive (what the free passes were) or a perk to move the needle it has to be something that would make you go out and buy retail. Something where those that bought retail restricted would seriously think about selling and buying retail. One thing they could do would be to wait about 2-3 more years then give a chance of non-qualified points to be converted by a purchase of say 100 pts minimum.

It's about perceived value.

Let's say starting on Monday Disney announces a new "direct sale only" perk: unlimited FastPass. There's no question in my mind it would completely change the direct sale/resale landscape.

Universal is a case study in how unrestricted Express Pass improves occupancy rates.

Regardless of whether WDW offered FastPass for sale, the perceived value of unlimited FastPass is tremendous. Just ask members of New York City's high society how much, for example, they'd be willing to hire a stranger to act as their WDW "guide" just so they can use their Guest Assistance Guard.

If Disney offered a "unlimited FastPass" perk for direct sales, it would vastly alter the direct/resale equation.

 

[DebbieB]

I think if they did an "unlimited fast pass" perk, it would have to be for a limited time. For example, new purchasers get "unlimited fast pass" for the first year of membership. Otherwise, there are going to be too many people getting it in the future for the fastpass system to work. I doubt the parks division would agree to it.

 

[Dean]

It's about perceived value.

Let's say starting on Monday Disney announces a new "direct sale only" perk: unlimited FastPass. There's no question in my mind it would completely change the direct sale/resale landscape.

Universal is a case study in how unrestricted Express Pass improves occupancy rates.

Regardless of whether WDW offered FastPass for sale, the perceived value of unlimited FastPass is tremendous. Just ask members of New York City's high society how much, for example, they'd be willing to hire a stranger to act as their WDW "guide" just so they can use their Guest Assistance Guard.

If Disney offered a "unlimited FastPass" perk for direct sales, it would vastly alter the direct/resale equation.

There's no question there's real value and perceived value. What they have to do to move the needle is to provide enough perceived value to sufficiently improve sales. It doesn't have to be real value but it does have to be big enough to get people to think it is. For those that are truly aware of the resale options and educated enough to understand where there is real value vs smoke and mirrors, the items must be bigger, maybe guaranteed. I do agree that it is a moving target due to technology and information. And it doesn't have to pull every person to retail, just enough people. And those are related to the thought that there is not enough DVD can do to push a % of buyers simply by adding perks, they have to subtract from the other side as well else it'll have no real effect.

If one simply looks at the landscape since the announced changes we have seen first a run to snap up resales, then a lowering of the resale prices and now with ROFR being more active, an increase (likely temporary) in resale prices. Then there are those that purposefully waited for the run 2 years ago and bought after prices predictably came down because they realized DVD had taken away nothing of real value and, IMO, they really can't other than in costs.

 

[CarolMN]

I think if they did an "unlimited fast pass" perk, it would have to be for a limited time. For example, new purchasers get "unlimited fast pass" for the first year of membership. Otherwise, there are going to be too many people getting it in the future for the fastpass system to work. I doubt the parks division would agree to it.

Agree.

But they could change the discount for the DVC APs/PAPs to be available only to those who have purchased retail. That could be huge, especially if they decide to continue the #399 PAP deal.

There are a number of other things they could do that wouldn't cost much - for example, the ability to make a certain number of ADRs or tours & special events before the rest of resort guests. I'm thinking CRT, V&A, BOG, and F&W events, for example.

They could offer a discount on a Dining Plan if the reservation were made entirely with retail points, offer exclusive meet & greet activities with characters (esp those not often seen) or perhaps an exclusive lounge within a park or an exclusive viewing location for fireworks.

Many possibilities for a "perks" package that would push some to buy retail.

 

[Nabas]

There are a number of other things they could do that wouldn't cost much - for example, the ability to make a certain number of ADRs or tours & special events before the rest of resort guests. I'm thinking CRT, V&A, BOG, and F&W events, for example.

They could offer a discount on a Dining Plan if the reservation were made entirely with retail points, offer exclusive meet & greet activities with characters (esp those not often seen) or perhaps an exclusive lounge within a park or an exclusive viewing location for fireworks.

Many possibilities for a "perks" package that would push some to buy retail.

I agree.

There are many "free" (for Disney) perks they could offer that would greatly help direct sales. They don't even have to offer discounts, just preferred service such as, as you suggest, the ability to book ADRs (for example) before everyone else.

With FP+ coming soon, another "free" (again, for Disney) perk would be to allow DVC direct sales to book their FP+ experiences 70 days in advance vs. 60 days for everyone else.

IMHO, there are many "free" perks Disney could add that would alter the direct vs. resales market if they thought resales were damaging their business. The fact that they don't suggests corporate Disney is comfortable with the current resale market.

The conversation frequently turns to adding restrictions but why irritate existing DVC members by taking away something they already have access to. What's the financial gain? If it's to improve direct sales, then it seems to me it would be much more effective to simply offer a new perk for direct sales only, a perk that costs Disney next to nothing.

 

[AmyB2006]

Ooooooh, I'm already drooling at the thought of unlimited fast pass. LOL See how that works?

 

[CarolMN]

Ooooooh, I'm already drooling at the thought of unlimited fast pass. LOL See how that works?

Drool away, just know that the chances of that one actually happening are zero.

 

[DebbieB]

I agree.

There are many "free" (for Disney) perks they could offer that would greatly help direct sales. They don't even have to offer discounts, just preferred service such as, as you suggest, the ability to book ADRs (for example) before everyone else.

With FP+ coming soon, another "free" (again, for Disney) perk would be to allow DVC direct sales to book their FP+ experiences 70 days in advance vs. 60 days for everyone else.

IMHO, there are many "free" perks Disney could add that would alter the direct vs. resales market if they thought resales were damaging their business. The fact that they don't suggests corporate Disney is comfortable with the current resale market.

The conversation frequently turns to adding restrictions but why irritate existing DVC members by taking away something they already have access to. What's the financial gain? If it's to improve direct sales, then it seems to me it would be much more effective to simply offer a new perk for direct sales only, a perk that costs Disney next to nothing.

It may cost Disney "next to nothing" but the issue will be getting the other divisions to agree to these types of perks that will affect the general public's experience. For example, if the general public can't get the popular fastpass times because DVC members took them with the earlier window. It may help DVC sales but it could hurt reservations & ticket sales from the general public. That's not what they had in mind when they spent millions (a billion?) on this system.

 

[Brian Noble]

Billion. With a B.

There is a possibility of one division of the company paying another for <whatever>. IIRC, the anytime FPs that DVD sometimes gives out to touring guests involve a "payment" from DVD to Parks. If Sales wants to use some of those things as tools---and can negotiate for them---they can, but it will "cost" them something.

 

[DougEMG]

I'm not remotely suggesting they are going to do this but, for example, imagine if direct sales were given the perk of unlimited FastPass+, the way Universal offers nearly unlimited Express Pass to its onsite guests.

Providing extra FP+ for direct sale DVC members costs Disney essentially nothing yet, IMHO, a direct sale perk like this would damage resale prices while boosting direct sales.

I made the exact same suggestion a while ago. A front of the line type pass is something that would interest me. It would come down to price though. If it destroyed the resale marker owning some resale points would still be a good deal for those non-park days or going to sea world!

What is interesting is that lots of DVC owners like the annual pass discount, yet that is a perk that they could have removed from resale owners, yet they didn't, how come? Is the resale market not really a big threat to them.