DVC restricting booking only to home resort?

[DougEMG]

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.

If Disney ever stops meeting their sales targets, then I agree with you that they will definitely start looking at placing more restrictions on resales. You've got lots of experience with other timeshare systems, what restrictions do you think they could legally put in place and do you think they would be effective?

For myself, I bought resale because I'm frugal anything that made resales even cheaper to buy would probably make me want to buy more points. Am I the typical resale buyer, probably!

 

[Dean]

If Disney ever stops meeting their sales targets, then I agree with you that they will definitely start looking at placing more restrictions on resales. You've got lots of experience with other timeshare systems, what restrictions do you think they could legally put in place and do you think they would be effective?

For myself, I bought resale because I'm frugal anything that made resales even cheaper to buy would probably make me want to buy more points. Am I the typical resale buyer, probably!

Has Disney really been hitting their sales targets consistently?

Take away BVTC, otherwise it's mostly financial basically pay to play, minimum stay, costs for cancelation, etc.. Then it's options related to buying additional retail points such as an extension or conversion to qualified based on either a cash payment of retail purchase. OTOH, the things that they can simply add that have no real cost AND would make people sit up and take notice are relatively limited when you also realize the facts of dealing with other divisions within the company overall. Add to that the fact that DVC management has never shown the willingness to play hardball to get members real benefits that have true value. I was hopeful that the PAP discount was a start of change in that area but it's not looking like that's the case. The bottom line to me is that I don't see DVD/DVCMC as having the gumption to jump into this and make a real difference (this may be good for most members) but I do see them doing what they've done already, playing with the options hoping little things move the needle.

 

[dianeschlicht]

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.

I agree, and the AP discount thing might be enough to do it alone. I for one, would NOT want to give up that perk! It also might keep people from buying one small 25 point contract just for the discount too. (Yes, we have heard of people doing that).

 

[crisi]

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.
.

I know everyone's children on this board are exceptional, but I had the opportunity to go to college recently - in my 40s. And I have to say that the current generation in my experience isn't researching squat on their cell phones - it breaks into texting and angry birds. At work I manage college interns - and I don't think the accessibility of information is doing a whole lot. People who want to research will.

 

[Nabas]

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.

It's a numbers game. DVC members are perhaps 5% of WDW's total daily guests. (Anyone have a better estimate?) Direct sales might be 80% of DVC members. (Purely a wild guess.) So maybe 4% of WDW's theme park guests are direct sale DVC members and would be eligible for a new perk.

Separately, I've calculated that about one-in-three DHS guests will be able to receive a TSM FP+. It's a similar number for Soarin'. (I pick these because they likely will be the most difficult FP+ to get.)

If Disney decides it needed to boost direct sales, it could offer some sort of FP+ related perk that might not even be noticeable to other guests, simply because of the numbers involved.

I again emphasize that I don't have any information that it will happen, only that the FP+ system could support it if it does happen.

Returning to the point of this thread, it's been suggested Disney could add a restriction for resales. Instead, I suggest it makes more sense to add a new perk for direct sales, if Disney ever felt resales were hurting the direct sales market.

In my opinion, the resales market is sufficiently small that DVD management does not see the need to make any changes at this time. Sales guides might like more restrictions on resales but that's because resale impact their commission and they'll use scare tactics if needed to make the sale. However, from a corporate perspective, I don't think Disney is particularly worried about the current state of the resale market.

 

[Nabas]

Has Disney really been hitting their sales targets consistently?

IMHO, WDW flooded it's DVC market with the three relatively recent DVC additions of SSR, BLT, and AKV. That's a lot of points they created and it looks like it going to take 8 years to sell out AKV. I can't believe they originally expected it to take that long so I do think they might have expected better sales. Conversely, they did OK despite a major recession and near collapse of the real estate market so, overall, hopefully they take that into consideration.

It seems that Disney has, for now, learned its lesson with very large DVC resorts. The next two appear to be much more modestly sized.

AKV sales started picking up recently with the "free tickets" perk. Hopefully, they'll be sold out within a year. Demand should be high at the smaller VGF. Therefore, I don't see the need for Disney to add any further restrictions to resales at this time.

 

[Nabas]

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.

I agree, I don't think DVD management views resales as a threat. DVD's bread-and-butter business is (IMHO) the impulse buyer on vacation at WDW. Resales annoy sales reps more than Disney management.

Disney has the tools necessary to implement all sorts of perks to manipulate the resale market. The fact that Disney doesn't suggests to me that Disney likes things pretty much the way they are.

Right now profit margins for new construction are greater than exercising ROFR. Disney's going to continue to focus on building until guests stop buying. For DVD management, resales are small potatoes.

 

[Dean]

IMHO, WDW flooded it's DVC market with the three relatively recent DVC additions of SSR, BLT, and AKV. That's a lot of points they created and it looks like it going to take 8 years to sell out AKV. I can't believe they originally expected it to take that long so I do think they might have expected better sales. Conversely, they did OK despite a major recession and near collapse of the real estate market so, overall, hopefully they take that into consideration.

It seems that Disney has, for now, learned its lesson with very large DVC resorts. The next two appear to be much more modestly sized.

AKV sales started picking up recently with the "free tickets" perk. Hopefully, they'll be sold out within a year. Demand should be high at the smaller VGF. Therefore, I don't see the need for Disney to add any further restrictions to resales at this time.

IMO DVD has a history of being overly optimistic on sales, in part that's what cost us at least 3 outside resorts in the 90's because they were overly optimistic with VB and HH sales expectations while being under aggressive with sales. I'm not sure that GF & Poly represent a philosophical change, we still have the FW project planned and on the table though not an OKW or SSR. IMO the resorts, sizes and timing was not the main issue, but rather their sales approach. Last I heard HI wasn't meeting sales expectations either. I think they drink their own Kool-aid at times. Now that I think about it, OKW & BCV might be the only resorts thus far that have truly met sales expectations internally. VWL didn't, I'm not sure about BWV. OKW just because it was new and they didn't know what to expect.

I agree, I don't think DVD management views resales as a threat. DVD's bread-and-butter business is (IMHO) the impulse buyer on vacation at WDW. Resales annoy sales reps more than Disney management.

Disney has the tools necessary to implement all sorts of perks to manipulate the resale market. The fact that Disney doesn't suggests to me that Disney likes things pretty much the way they are.

Right now profit margins for new construction are greater than exercising ROFR. Disney's going to continue to focus on building until guests stop buying. For DVD management, resales are small potatoes.

Then why exercise ROFR to the degree they have lately (it's not just to resell those points) and why make the change to limit resale buyers. Clearly they see it as a threat, how much is the issue and whether they have the stomach to make necessary changes to affect it. Personally I don't think they do but I think it's fear and not intent that's the main thing holding them back.

Disney as an overall entity clearly has plenty of ammunition to move the needle on this issue, DVD does not and those divisions function independently in most ways. DVD would have to negotiate with the other components and get perks that are of real value (or perceived value) that cost them little or nothing. If they have to pay another entity either ongoing or a significant amount, it's not gong to happen. If it did, it'd be a sales incentive and not a perk for the general membership.

 

[Nabas]

IMO DVD has a history of being overly optimistic on sales, in part that's what cost us at least 3 outside resorts in the 90's because they were overly optimistic with VB and HH sales expectations while being under aggressive with sales. I'm not sure that GF & Poly represent a philosophical change, we still have the FW project planned and on the table though not an OKW or SSR. IMO the resorts, sizes and timing was not the main issue, but rather their sales approach. Last I heard HI wasn't meeting sales expectations either. I think they drink their own Kool-aid at times. Now that I think about it, OKW & BCV might be the only resorts thus far that have truly met sales expectations internally. VWL didn't, I'm not sure about BWV. OKW just because it was new and they didn't know what to expect.

Then why exercise ROFR to the degree they have lately (it's not just to resell those points) and why make the change to limit resale buyers. Clearly they see it as a threat, how much is the issue and whether they have the stomach to make necessary changes to affect it. Personally I don't think they do but I think it's fear and not intent that's the main thing holding them back.

Disney as an overall entity clearly has plenty of ammunition to move the needle on this issue, DVD does not and those divisions function independently in most ways. DVD would have to negotiate with the other components and get perks that are of real value (or perceived value) that cost them little or nothing. If they have to pay another entity either ongoing or a significant amount, it's not gong to happen. If it did, it'd be a sales incentive and not a perk for the general membership.

Thanks, I enjoyed reading your post. There is one thing I'd like get your opinion on.

Has Disney really been that aggressive on ROFR lately?

73 resales were ROFR'ed in March, reflected in the April OCC data. In prior months, Disney averaged about 20 per month. Does March represent a change in philosophy or simply an aberration caused by a spike in demand created by free WDW tickets at BWV and price increases everywhere except BLT?

Using BCV as an example, let's assume 250 people are on the BCV waiting list. BCV direct sale contracts seem to be averaging about 75 points. 250 X 75 = 18,750. We are more than half way through May yet Disney has ROFR'ed only 1 BCV contract, while waiving ROFR on 12 more. The numbers are similar at other resorts: 3 contracts ROFR'ed for the first half of May at BWV, 1 at VWL, 1 at AKV, 3 at SSR, 2 at BLT. The month is not over but is ROFR activity already starting to slow down?

By comparison, direct sales at AKV were over 130,000 points. Therefore, the waitlists at resorts such as BCV represent only a fraction of WDW's direct sale business and, it seems, Disney is in no rush to get points for those on the waitlist, particularly for those small 25 or 50 add-on requests.

In 2008, Disney ROFR'ed over 40% of all resales, about 60 DVC resales per month. The March 2013 spike represents a nearly typical month in 2008. Taken together, is ROFR activity really that bad?

 

[DougEMG]

I think they drink their own Kool-aid at times.

Good one

 

[Dean]

Thanks, I enjoyed reading your post. There is one thing I'd like get your opinion on.

Has Disney really been that aggressive on ROFR lately?

73 resales were ROFR'ed in March, reflected in the April OCC data. In prior months, Disney averaged about 20 per month. Does March represent a change in philosophy or simply an aberration caused by a spike in demand created by free WDW tickets at BWV and price increases everywhere except BLT?

Using BCV as an example, let's assume 250 people are on the BCV waiting list. BCV direct sale contracts seem to be averaging about 75 points. 250 X 75 = 18,750. We are more than half way through May yet Disney has ROFR'ed only 1 BCV contract, while waiving ROFR on 12 more. The numbers are similar at other resorts: 3 contracts ROFR'ed for the first half of May at BWV, 1 at VWL, 1 at AKV, 3 at SSR, 2 at BLT. The month is not over but is ROFR activity already starting to slow down?

By comparison, direct sales at AKV were over 130,000 points. Therefore, the waitlists at resorts such as BCV represent only a fraction of WDW's direct sale business and, it seems, Disney is in no rush to get points for those on the waitlist, particularly for those small 25 or 50 add-on requests.

In 2008, Disney ROFR'ed over 40% of all resales, about 60 DVC resales per month. The March 2013 spike represents a nearly typical month in 2008. Taken together, is ROFR activity really that bad?

It's all good. One of the good things about having little real information, other than historical data and experience, is it's difficult to be wrong in such a situation but equally difficult to be completely right either.

From a ROFR standpoint it's all relative. They've certainly been far more aggressive than for a while and likely than they've ever been in some aspects. They managed to drive prices up some $20 a point for some options in a short period, I think there were other factors as you mention. This has always been the main goal of ROFR anyway, to keep resale prices high enough so that those looking to buy and knew about resale, were comfortable buying retail. The resale restrictions simply add fuel to that fire though more smoke and mirrors than real restrictions at this point and likely ever. I think many here get wrapped up in the numbers and though important, the psychology of DVC and timeshares is the largest factor, IMO. And to answer the other question that has been around lately, yes I think those are enough for DVD to take notice and pay attention to resales. From DVD's standpoint, their best scenario is the member doesn't sell and the potential buyer goes retail.

 

[Sammie]

IMHO, WDW flooded it's DVC market with the three relatively recent DVC additions of SSR, BLT, and AKV. That's a lot of points they created and it looks like it going to take 8 years to sell out AKV. I can't believe they originally expected it to take that long so I do think they might have expected better sales. Conversely, they did OK despite a major recession and near collapse of the real estate market so, overall, hopefully they take that into consideration.

It seems that Disney has, for now, learned its lesson with very large DVC resorts. The next two appear to be much more modestly sized.

AKV sales started picking up recently with the "free tickets" perk. Hopefully, they'll be sold out within a year. Demand should be high at the smaller VGF. Therefore, I don't see the need for Disney to add any further restrictions to resales at this time.

Only because there was no room to make them any larger.