Estimate the Best Contract price we'll see

[Instagramhusband]

Definitely, and the cheaper resale gets the less appealing direct is. If the perks aren't worth $50/pp they certainly aren't worth $100/pp. lol



I think blackout dates do have a huge effect... Especially at WDW (maybe not so much at DLR), since WDW is usually a whole week or more, you will most likely be affected by blackout dates, where I guess that just forces you to take a resort day, or spend the day(s) at Universal? lol


Funny thing about AP's are that is has me trying to do 2 trips within a year, so like once during holidays, then another in late winter/early spring, so the AP has huge value, but then only do that every other year, so instead of going "every year", its still every other year (UY), but twice within the life of the pass.

Yes, for a few years my wife had one, while I did not. I couldn't justify being away enough and dedicating my time at Disney to IN PARK activities. When you have it, you are like I have to go, when you don't have one, its easier to not feel bad about it. Last year my wife had both a Universal and WDW pass and It was real work for her to get her money's worth with both.

 

[jolynne28]

I think park tickets are too high AND (this may be upsetting to some) annual passes are too cheap. I don’t mean just Florida resident passes: all passes. A bigger differential is needed.

See I think AP prices are too high. Just 5 years ago I bought what is now the incredipass for $900. It’s now around $1500. For our family that’s $7500, so we dropped all the way down to Pixie b/c it was nearly half of what it would cost to access the parks on some weekends (sorcerer). They’ve blocked out every holiday possible, except Halloween, snd I fully expect they’ll add that one too in the future.
Now we do a lot of our park time in the summer, b/c I think there were only 2 week days of the entire school year that the kids were off and we aren’t blocked,
Disney gets a lot of our money, but I refuse to pay them 5k more a year to have better park access.

 

[atthebeachclub]

See I think AP prices are too high. Just 5 years ago I bought what is now the incredipass for $900. It’s now around $1500. For our family that’s $7500, so we dropped all the way down to Pixie b/c it was nearly half of what it would cost to access the parks on some weekends (sorcerer). They’ve blocked out every holiday possible, except Halloween, snd I fully expect they’ll add that one too in the future.
Now we do a lot of our park time in the summer, b/c I think there were only 2 week days of the entire school year that the kids were off and we aren’t blocked,
Disney gets a lot of our money, but I refuse to pay them 5k more a year to have better park access.

My statement isn’t really about what we as customers want…more about what is probably in Disney’s best interest (or so I assume). Though I don’t have the data they have access to, and presumably they have considered all potential pricing scenarios.

 

[AstroBlasters]

I can see it. I saw one $20 off that not long ago, which seemed shocking. But the taxes and dues are real issues.

The restrictions really kill its resale value unless there is plenty of availability within 7m.

Much more valuable as direct points.

 

[Genie+]

Exactly..... You are making the point I've tried to make. Disney seems to shoot themselves in the foot with some of their management decisions. I'm speaking specifically about the many restrictions. The one that is the most slap in the face is the use of Lounges. The signs will say it is for DVC members, but it is really not for DVC members. If you are a resale DVC member you are not welcome in their club.

Many of there other restrictions don't make sense as well. There is going to be a resale market one way or the other. I'd expect that if you went to one of their sales pitches for purchase of a direct contract, but asked.... what if family circumstances change in the future and I no longer can keep the membership, what options do I have to sell my contract (deed)? I'm sure they will advise you about the resale market. What I'd suspect that they won't tell you is that the resale market will be seriously discounted, so you will only recover a fraction of your original investment. Some reduction should be expected because of the declining number of years left on the deed. However, the more serious discount is due to the Disney restrictions. Seems Disney might do better to ease up on some of the restrictions, which might make the values of resale go up and reduce the discount margin between direct and resale. Especially the one that is offensive. i.e. being a DVC member, but not a special class DVC member that has access to the DVC club (lounges).

But as it is now, I'm like you. Buying direct makes no sense for me because of the steep discount you can get in the resale market.

DVD’s answer is to keep doing flash sales at sold out resorts to recapture some the resale camp.

Giving lounge access back to resale wouldn’t do much for DVD. Cost/benefit. Crowded lounges would tarnish perks for those who chose Direct. Would it even increase resale prices? Resale buyers are already mostly of the mindset perks don’t mean much dollarwise to them. It would mostly just chip at Direct’s value while adding cost for DVD.

DVD is trying to differentiate direct and resale. Direct can be a good deal on the 45-50 year contracts. Take Copper Creek, Poly and VGF1. Even for Direct buyers selling them at $130-$150pp today, the majority of them have gotten 8-12yrs of use and bought with incentives in the $160-$180 range. VGF2 direct buyers wouldn’t even lose their shirt today, after only holding for a few years if they bought with decent incentives.

Resale can’t be beat for getting in at $10 or $15k. But there are lot of differences between those contracts and active direct when it comes to long term value.

The biggest mistake I think Direct is currently making is losing buyer confidence in what access to new resorts means. RIV had to accept restrictions. DVD went and added VDH and CFW to the restricted pool but those aren’t very meaningful to WDW DVC owners. The more meaningful resorts, VGF and Poly, they added unrestricted leaving the direct camp wondering if they gave more than getting in return. Even so, RIV direct during good incentives is a good value if using over decades.

 

[Chili327]

Giving lounge access back to resale wouldn’t do much for DVD. Cost/benefit. Crowded lounges would tarnish perks for those who chose Direct. Would it even increase resale prices? Resale buyers are already mostly of the mindset perks don’t mean much dollarwise to them. It would mostly just chip at Direct’s value while adding cost for DVD.

True, access to those isn't going to make me want to buy direct... But if the difference in price was only $20-$45 for direct, it might entice me more to buy direct, especially if I was looking at VDH or RIV, etc.

 

[dontae]

True, access to those isn't going to make me want to buy direct... But if the difference in price was only $20-$45 for direct, it might entice me more to buy direct, especially if I was looking at VDH or RIV, etc.

That's the thing. Closing the price gap between direct and resale just seems to be a strategy the Disney should explore. Maybe they have, and this is the results. But, if so, it sure makes it hard to justify direct purchase, and it seems disingenuous for Disney to tell potential buyers that there is a resale market if they should decide family circumstances force them to sell. Disney is working directly against the interest of that segment of buyers. But I can understand why they would be reluctant to make full disclosure. Basically a "buyer beware" situation.

 

[Sandisw]

That's the thing. Closing the price gap between direct and resale just seems to be a strategy the Disney should explore. Maybe they have, and this is the results. But, if so, it sure makes it hard to justify direct purchase, and it seems disingenuous for Disney to tell potential buyers that there is a resale market if they should decide family circumstances force them to sell. Disney is working directly against the interest of that segment of buyers. But I can understand why they would be reluctant to make full disclosure. Basically a "buyer beware" situation.

I have never had a guide even mention resale value so I am not sure it’s a big things used in selling.

I think if a potential buyer brings it up, they might address it.

Until the restrictions rules change, resale points can’t be used at certain resorts and if those are important…like RIV is for us…the only resale we would consider is RIV.

And, had PVB tower been new with them, we would have considered more direct, but rolling it in took it off the table.

 

[atthebeachclub]

And, had PVB tower been new with them, we would have considered more direct, but rolling it in took it off the table.

Sandi, is this because it will mean a shortened expiration date compared with a brand new resort? Just wondering why you wouldn't consider more direct at PVB. Thanks!

 

[Chili327]

Sandi, is this because it will mean a shortened expiration date compared with a brand new resort? Just wondering why you wouldn't consider more direct at PVB. Thanks!

Ditto. Curious.

 

[Sandisw]

Sandi, is this because it will mean a shortened expiration date compared with a brand new resort? Just wondering why you wouldn't consider more direct at PVB. Thanks!

Because the long houses are not something I want to stay in and the number of existing points already in the system would be competing for tower rooms.

Even if only 25% of points currently owned want to move to the tower, that’s an extra one million points.

No thanks. I’d rather try my luck at 7 months since I’ll have VGF booked for that part of my split stay and it’s not a big deal if I don’t get it.

 

[Unclelude]

The field guide has a pretty cool page that goes back to 2018 resale prices!

https://www.dvcfieldguide.com/historical-resale-pricing

Assuming it's accurate... Pretty interesting general trends you can see...
... you can see a covid scare price drop and then the prices shot up... was it because Disney was ROFR - ing in the years after covid? or the helicopter money from the govt? pent up demand? ... probably some of all of those ( I think the helicopter money played a big factor ) ...

You can also see the recent price drops, no more free money, no more ROFR. Generally speaking seems like we are at (non-inflation adjusted) 2018 prices. ( I know tons of other variables, just keeping it boxed in ... plus I don't want to go off on Disney's park quality and imagineering direction - how about something innovative and *new* guys eh?? - etc.. ok, just a little griping ... hehe )

I also found interesting, prices shot up during the free money days even on resorts that had basically zero ROFR ( Vero/aulani/Hilton Head ). This is a main reason I think 'stimulus' played a big role... ( I guess it worked, got people to buy stuff ... also paved the way for inflation... ok, I'll stop now)

As you might expect the 2042s seem to have a more 'downward' trending price ...

I find coppers graph interesting - BLT too - as other threads have suggested, seems like nice deals there ( SAP+)

Riviera graph doesn't look good for higher prices ... hehe looks like a dumpster fire for sellers...

Anyway, I think the prices are going to keep going slowly down.... I don't think the Mouse is going to startup the ROFR department en masse anytime soon, and I doubt the free money machine is coming out in the near future... (ok, now I'm done...hehe)

Good Luck!
Have Fun!

 

[dontae]

Just some early morning thoughts on DVC purchase pricing. To the credit of those that sell DVC, to my knowledge they never suggest that a reason for buying is as an investment. In fact I've often heard that it should not be considered an investment. It is a way to purchase future vacations. With that, on to pricing thoughts. Don't ask me for links because this is just my thoughts. For those that might know differently I'm good with you correcting me.

Disney has 2 elements of cost/profit they are working into their sale pricing. One is capital, the other is maintenance and upkeep. They set the price of points for purchase based on what it takes to recover the building cost of the structure. I'd also guess that they also include a lease value for the land on which the resort occupies.

Then for the maintenance and upkeep they set an annual dues rate. They will adjust this rate annually because the cost of maintenance and upkeep generally increases.

So.... with the sale of a contract they will recover the capital cost, including a profit margin and establish a plan to recover maintenance and upkeep.

With that, the question is why do they care about resale value? They have already recovered their capital cost, and made a profit from the original sale. That doesn't change just because ownership of the contract might change. The original seller of the contract is out of the picture once they sell the contract. At least that would be the case with a normal real estate transaction. but again, this is not a typical real estate transaction.

They care because they want to have a continuing market for selling new contracts. Either as an add-on to an existing resort, or for a new resort. They do this by keeping their thumb on the resale market (restrictions and ROFR). This is why the cautions about this not being an investment. No one would/should buy as an investment something that the seller has the ability to keep their thumb on the value of your "investment" like the seller does in this case.

Bottom line, and back to the point I've been trying to make. They have every right to do exactly what they are doing (keeping their thumb on resale). My only question remains, though they have the right, is everything they are doing "right"?

 

[Instagramhusband]

Just some early morning thoughts on DVC purchase pricing. To the credit of those that sell DVC, to my knowledge they never suggest that a reason for buying is as an investment. In fact I've often heard that it should not be considered an investment. It is a way to purchase future vacations. With that, on to pricing thoughts. Don't ask me for links because this is just my thoughts. For those that might know differently I'm good with you correcting me.

Disney has 2 elements of cost/profit they are working into their sale pricing. One is capital, the other is maintenance and upkeep. They set the price of points for purchase based on what it takes to recover the building cost of the structure. I'd also guess that they also include a lease value for the land on which the resort occupies.

Then for the maintenance and upkeep they set an annual dues rate. They will adjust this rate annually because the cost of maintenance and upkeep generally increases.

So.... with the sale of a contract they will recover the capital cost, including a profit margin and establish a plan to recover maintenance and upkeep.

With that, the question is why do they care about resale value? They have already recovered their capital cost, and made a profit from the original sale. That doesn't change just because ownership of the contract might change. The original seller of the contract is out of the picture once they sell the contract. At least that would be the case with a normal real estate transaction. but again, this is not a typical real estate transaction.

They care because they want to have a continuing market for selling new contracts. Either as an add-on to an existing resort, or for a new resort. They do this by keeping their thumb on the resale market (restrictions and ROFR). This is why the cautions about this not being an investment. No one would/should buy as an investment something that the seller has the ability to keep their thumb on the value of your "investment" like the seller does in this case.

Bottom line, and back to the point I've been trying to make. They have every right to do exactly what they are doing (keeping their thumb on resale). My only question remains, though they have the right, is everything they are doing "right"?

Great points.
Does Disney continue to build DVC resorts at the current pace? At what cost does capital recovery become a practical impossibility with inflation biting and their fanbase not growing?

 

[Sandisw]

Just some early morning thoughts on DVC purchase pricing. To the credit of those that sell DVC, to my knowledge they never suggest that a reason for buying is as an investment. In fact I've often heard that it should not be considered an investment. It is a way to purchase future vacations. With that, on to pricing thoughts. Don't ask me for links because this is just my thoughts. For those that might know differently I'm good with you correcting me.

Disney has 2 elements of cost/profit they are working into their sale pricing. One is capital, the other is maintenance and upkeep. They set the price of points for purchase based on what it takes to recover the building cost of the structure. I'd also guess that they also include a lease value for the land on which the resort occupies.

Then for the maintenance and upkeep they set an annual dues rate. They will adjust this rate annually because the cost of maintenance and upkeep generally increases.

So.... with the sale of a contract they will recover the capital cost, including a profit margin and establish a plan to recover maintenance and upkeep.

With that, the question is why do they care about resale value? They have already recovered their capital cost, and made a profit from the original sale. That doesn't change just because ownership of the contract might change. The original seller of the contract is out of the picture once they sell the contract. At least that would be the case with a normal real estate transaction. but again, this is not a typical real estate transaction.

They care because they want to have a continuing market for selling new contracts. Either as an add-on to an existing resort, or for a new resort. They do this by keeping their thumb on the resale market (restrictions and ROFR). This is why the cautions about this not being an investment. No one would/should buy as an investment something that the seller has the ability to keep their thumb on the value of your "investment" like the seller does in this case.

Bottom line, and back to the point I've been trying to make. They have every right to do exactly what they are doing (keeping their thumb on resale). My only question remains, though they have the right, is everything they are doing "right"?

They have been working on making resale different than what you get direct for 12 years now.

So, it appears their model is to make it so direct is different and worth the difference in price.

Having been around as long as I have, over 15 years, I still do not believe that DVD makes moves with the goal of keeping resale value anywhere in particular.

What they do know is that as long as the parks exist, DVC is a product they can sell and that in itself allows it to be seen as a different timeshare product.

Because of that, its value on the resale market will always be stronger than many others out there.

The goal though is selling new resorts and most new buyers don’t even know about resale. And, guides are not going to discuss it unless the buyer brings it up.

Because I personally believe people should never use resale value as part of the decision making process, I don’t believe there is a right or wrong way for DVD to do things.

Their goal is selling direct.

 

[kboo]

Great points.
Does Disney continue to build DVC resorts at the current pace? At what cost does capital recovery become a practical impossibility with inflation biting and their fanbase not growing?

Another factor to consider (I have no data) - how many new direct DVC contracts are financed? If financed by Disney, that's another way to generate money. Put another way - many years ago, I was skiing with a friend who worked in the financial industry and he said, ski resorts are really real estate developments with a ski mountain attached as a benefit/perk. In other words, they make much more money developing the real estate, financing and selling and leasing it, and people want to buy there (as opposed to somewhere else) because of the attraction (ski area/park) there.

 

[lbwilliams]

I think park tickets are too high AND (this may be upsetting to some) annual passes are too cheap. I don’t mean just Florida resident passes: all passes. A bigger differential is needed.

California's Disneyland passes are quite high. They are at the point where I now just purchase the 3-day tickets and come out ahead for the 6-8 times I go a year (mostly on weekends and peak seasons).

 

[kboo]

So, it appears their model is to make it so direct is different and worth the difference in price.

Having been around as long as I have, over 15 years, I still do not believe that DVD makes moves with the goal of keeping resale value anywhere in particular.

@Sandisw we cross posted and I think we are saying the same thing!

Additionally/to follow up, I think DVD pumps up the direct price on resorts they're not actively selling so they don't have to deal with people coming in and saying, I want to buy VGF direct (or BLT direct) when the guides have millions of direct Poly points to sell. And then the direct price is SO high that if someone really is adamant, it is worth their while to see if they want to do some ROFR. Look at VGC - resale and direct prices were so crazy (300+) around the time VDH and the transient tax discussions were going. Now there are VGC contracts at $225+ and since I bought more VGF points last year, and recently booked VGC at 7 months, I'm kind of full and no longer interested.

 

[TheDailyMoo]

Not to mention DVC seems to employ the Kohl's method of jack up MSRP and always have a sale on a product thereby allowing them to keep inflating Direct prices but still making it "affordable"

 

[TheDailyMoo]

Besides ROFR Disney has one more trick up their sleeve to positively affect resale prices and I think they may be on their way...I'm talking about the D23 announcements that show they're at least interested in keeping up with Universal. Could they have added a new country in World Showcase? Sure. But I think they made some significant strides in announcing expansions for WDW and DL. According to Josh D'Amaro these are all "in the works". Well assuming they actually get a move on all this and not make it a BW corn dog cart type situation then I think we can see some positive increases in resale values. I still maintain prices go down in the next 6-8 months but I can clearly see resale prices (non 2042) recovering in the coming years.