First Riviera ROFR

[jolynne28]

Just saw this in my fb feed.

https://www.dvcresalemarket.com/blo...c4Y6B4LvF6t5jlWn4c_aem_Lz87ZIaUHy5TQ39Ibvf9DA

 

[jolynne28]

I know it was mentioned in the ROFR thread, but as a Riviera resale owner I thought it was worthy of its own post.

 

[Tumnus]

I'm excited about this! Keep the floor of it high!

 

[airjay75]

Thanks for making this new thread! I just deleted the below post from the ROFR thread and am posting it here instead.

I don't think the RIV ROFR will have much impact on the resale market right now. I actually think the next most important milestone for RIV resale pricing is when the resort goes into sold out status, and Disney raises the price of direct to $250+ with no incentives. What this ROFR potentially signals is the spread at which Disney will look to flip RIV resale contracts into direct. So, with incentives, I'd say RIV points go for an average of $200/point direct (can get it down pretty close to $180 if you buy enough points). So, $200-$90 is $110. Let's say the sold out price of RIV is $275 - will Disney start ROFR'ing RIV resale contracts with a similar spread? That would be anything going for under $165! Or, maybe they will look for even larger spread and only start exercising ROFR for $125 and below. And, in addition to that, will existing RIV owners pay a premium for small contracts in their UY to add points rather than buying extra direct points? What about existing DVC owners who, similar to BCV/BWV lovers, decide they love RIV and just want enough points to secure a small reservation every year at RIV and don't care that they can't trade in the points at the 7-month mark?

There are a lot of variables that will affect RIV resale pricing in the future. No, I wouldn't buy RIV today with any expectation that you're going to be able to recoup a significant amount of what you paid. But, how the resale market views RIV today will not necessarily be how the resale market views RIV in the future, and this ROFR may give us a glimpse into that future.

 

[airjay75]

I'll just share one other thought that I shared on the ROFR thread. If Disney's long-term strategy with restricted resorts is to keep the resale market low (by comparison to the O14 resorts) so they can regularly buy and flip them back into direct, that will go a long ways to ameliorating the concern that some people have had about all the resale owners booking everything up at 11 months. The restricted resorts could well end up with much smaller percentages of resale owners than the O14. I have always thought there are other reasons to think this concern was overblown, but this is a potentially significant one.

 

[eticketplease]

And, in addition to that, will existing RIV owners pay a premium for small contracts in their UY to add points rather than buying extra direct points?

If Disney keeps allowing RIV to be bought as low as 25 points after being sold out RIV owners still might go the direct route with a bigger premium price tag knowing that with banking and borrowing they could use that 25 point contract for 3 nights at VDH or CFW during most seasons and be able to supplement their RIV points.

 

[hhisc16]

I wonder if anyone has bought a 25 pointer at RIV.

 

[airjay75]

If Disney keeps allowing RIV to be bought as low as 25 points after being sold out RIV owners still might go the direct route with a bigger premium price tag knowing that with banking and borrowing they could use that 25 point contract for 3 nights at VDH or CFW during most seasons and be able to supplement their RIV points.

That thought has crossed my mind too. And, Disney may well decide to do more regular direct discounted/incentivized sales on the sold out restricted resorts if they can keep easily buying cheap resale points and flipping them into direct.

 

[Sprinkles&Sprints]

I wonder if anyone has bought a 25 pointer at RIV.

I haven’t yet but plan to within this incentive cycle - a FW + 25 to get me to 150.

 

[eticketplease]

I wonder if anyone has bought a 25 pointer at RIV.

I don't think it makes sense yet since they have incentives at 100 points but I can certainly see people doing it down the line.

 

[Potigant]

$89pp still too high. Don’t see how you could go the life of the contract without stranding some points due to the restrictions. Or would II be a release valve?

 

[hhisc16]

I haven’t yet but plan to within this incentive cycle - a FW + 25 to get me to 150.

We were debating between a 25 pointer at CFW/CCV/RIV.

We chose CCV. But we loved our tower studio at RIV and may add on 25 points at RIV in the future!

 

[Sandisw]

$89pp still too high. Don’t see how you could go the life of the contract without stranding some points due to the restrictions. Or would II be a release valve?

I own 125 resale points and because I also own other points that can be used there, I dont anticipate ever losing any!

But we love RIV and for us, anyting we ever get back from selling is a bonus because our value is in using them.

Once it’s sold out, and pricing is higher, I can see it stabilizing out.

That’s the thing about any resale…you just never know what DVC will do in the future that can play a big role.

 

[RuntheMouse]

I wonder if anyone has bought a 25 pointer at RIV.

We’re considering an add on of 25.

 

[airjay75]

$89pp still too high. Don’t see how you could go the life of the contract without stranding some points due to the restrictions. Or would II be a release valve?

Interval International is a potential release valve. No idea how valuable that is. Another strategy I could see resale owners taking is booking at 11 months, modifying their plans if they can, and then, if they can't make it for some reason, just rent out the confirmed reservation. And, some may take that route to effectively trade out their points for other DVC resorts - rent out your points, then go rent points from an owner at a different resort. It's not a strategy I'd be interested in, but as more and more restricted resorts are in the DVC ecosystem, it is probably a strategy some people will try to save money over purchasing direct.

 

[stat]

$89pp still too high. Don’t see how you could go the life of the contract without stranding some points due to the restrictions. Or would II be a release valve?

Unless you skip 2 years in a row, I'd say banking, borrowing, and the "modify reservation" trick to swap in banked/borrowed points would be enough to handle most situations. Ultimately, renting out the points or a confirmed reservation should always work. Personally I'd feel uncomfortable only being able to book one resort, but objectively I think there are enough options to mitigate the risk.

 

[VGCgroupie]

I dont own RIV but this ROFR made me happy for RIV owners. I know some dont agree with my take. But I think the fact that they bought back a very low price while still in active sales is a very good thing and if I owned RIV I would be happy that they didn't let that one slip by. Hopefully it's not just a one off. Now if they would just start doing that with Aulani I know they wont do that for Aulani though. (they had one buyback but none since)

 

[disneylandtour]

Someone correct me if they have more info. I'd be very happy to learn more. But I believe that when Disney ROFRs contracts, they can only resell points under certain unit numbers into new contracts. For example, if DVD has 100 points in a RIV Unit 14a and and 100 points in Unit 11b, they cannot combine them into a new 200 point resale contract. They can only resell the points under their original unit numbers. (Generally, I think what DVD tries to do is something similar to this: have target units where they want to amass points so that the combined points in a single unit can be chopped up and resold any way DVD likes--if you buy resale with a target unit number, that is contract is more likely to be ROFRed). So 25, 50, and likely 100 point contracts, under this plan, don't help DVD that much, unless they are in a target unit. But a 400 point contract in a single unit gives DVD some possibilities in terms of how they can resell those points. DVD is probably also pivoting over to ROFR for RIV as points are pretty close to being sold out now. So beyond the low price--there have been other low price RIV resales--I think that very large number of points was attractive for DVD. That's my guess as to why this got nabbed and other contracts did not.

 

[airjay75]

Someone correct me if they have more info. I'd be very happy to learn more. But I believe that when Disney ROFRs contracts, they can only resell points under certain unit numbers into new contracts. For example, if DVD has 100 points in a RIV Unit 14a and and 100 points in Unit 11b, they cannot combine them into a new 200 point resale contract. They can only resell the points under their original unit numbers. (Generally, I think what DVD tries to do is something similar to this: have target units where they want to amass points so that the combined points in a single unit can be chopped up and resold any way DVD likes--if you buy resale with a target unit number, that is contract is more likely to be ROFRed). So 25, 50, and likely 100 point contracts, under this plan, don't help DVD that much, unless they are in a target unit. But a 400 point contract in a single unit gives DVD some possibilities in terms of how they can resell those points. DVD is probably also pivoting over to ROFR for RIV as points are pretty close to being sold out now. So beyond the low price--there have been other low price RIV resales--I think that very large number of points was attractive for DVD. That's my guess as to why this got nabbed and other contracts did not.

Your understanding matches mine. And I think the size of this contract combined with the low price is what made this very attractive to Disney.

 

[gvel]

Everyone keeps saying Disney’s ROFR and restricted resort strategy is a long-term cash cow. Personally I think they are playing with fire. The number of people willing to buy DVC direct is already tiny and the ones willing to do it at today’s prices with these restrictions is even smaller. You can only trick so many people into overpaying before the word gets around.

If Riviera and other restricted resorts keep tanking in resale value that kills one of DVC’s strongest selling points “I can sell later and only take a small hit.” If people see a 50-60% percent haircut the second they walk away from the closing table they are going to think twice before buying direct.

The reality is most owners do not keep their contracts for life. The average ownership is about eight years. Life changes. People sell. If their resale options are crippled a lot will simply never buy in. And these restrictions just make the original fourteen resorts even more desirable on the resale market while the restricted ones get treated like the timeshare version of a used Kia.

Sure Disney might squeeze some short term wins by forcing people into direct sales but the long game looks shaky. Resale buyers often turn into direct buyers later kill that entry point and you dry up part of your own pipeline. And if the business model relies on an endless stream of fresh customers willing to overpay with no viable exit that’s not a strategy it’s a ticking clock.

But what do I know I am sure Disney had a bunch of people smarter than me run full financial analyses and projections.