First Riviera ROFR

[havoc315]

I think RIV sales compared to Poly Tower since it opened is pretty good evidence of resale restrictions depressing demand for RIV.

Not really. Poly has more demand than every WDW DVC other than Grand Floridian. So clearly there is a lot more at play than resale restrictions.
Certainly, resale restrictions could play a role, but it's more likely the fact that the Poly tower is "new" as opposed to Riviera which has been on the market for 6 years, and it's just the Poly.
With more generous incentives kicking in for Riviera, I wouldn't be the least bit surprised if it outsells Poly in the next monthly report.

 

[Patmcpsu]

There is no way that resale restrictions don't hurt. They only bring disadvantages with zero tradeoff. The only question is how much they hurt.

And every resort with resale restrictions has a convenient excuse for why its sales have lagged:

1. Riviera: Covid
2. Villas at Disneyland: Transient Tax
3. Cabins at Fort Wilderness: Doomed concept

What will the excuse for Lakeshore Lodge be?

 

[tidefan]

1. Cabins at Fort Wilderness: Doomed concept

I would actually say that the problem at CFW isn't restrictions (I think that if people buy there, that's definitely where they want to be), it's the combination of the high dues and the uncertainty that the Trust model brings with it.

 

[havoc315]

Very good points. And I would argue that those factors along with points charts is what, by and large, determines 7-month availability at a given resort. BCV/BWV are very much resorts where having home resort priority matters because getting in at 7-months is not easy. I think VGF is also a resort where, maybe to a slightly lesser extent than BCV/BWV, home priority also matters. Compare that to BRV and AKL, resorts where home resort priority matters a lot less and, accordingly are priced much lower on the resale market (of course, there are other factors - namely, length of contract and dues).

Right now, RIV resale doesn't have much going for it other than length of contract. Dues aren't bad, but they aren't really better than the alternatives. And, home resort priority doesn't matter too much outside of a few room categories - location is not quite as desirable as BCV/BWV and the points charts are a lot higher than those two resorts. But, these mix of factors (aside from location) could all change in the future.

Imagine a future buyer who owns their direct points at Poly/VGF/LSL/CFW/AKL and says, you know, I want to stay at an Epcot area resort once in awhile. BCV/BWV have very little life on their contract and when they relaunch, the points charts are probably going be worse than RIV. And, let's say 7-month bookings at RIV gets increasingly more difficult. Might they say to themselves, you know, why not pick up a cheap, small RIV resale contract I can use every few years, maybe in combination with my direct points.

Of course, that might not happen too - all sorts of variables are going to affect the price of all of our contracts on the resale market. Bottom line - none of really know how resale is going to look in the future. But, it is fun to imagine future scenarios about how things will evolve.

This. There are so many factors at play, most of which are unknown. It is impossible to predict resale value 15-20 years from now.
It's *possible* that resale restrictions will hurt the resale value compared to O14 resorts.
It's also possible that location, competition, etc, could boost the resale value of Riviera (a period of time where it is the only realistic Epcot area resort).

The lesson is that DVC is not an investment. It is a leisure purchase. It can be resold, but that shouldn't be the basis of your purchase. Future resale value is truly unknown, so which resort might be worth $6 more per point in 20 years, really shouldn't be the basis of purchase behavior today.

 

[jennypenny]

There is no way that resale restrictions don't hurt. They only bring disadvantages with zero tradeoff. The only question is how much they hurt.

And every resort with resale restrictions has a convenient excuse for why its sales have lagged:

1. Riviera: Covid
2. Villas at Disneyland: Transient Tax
3. Cabins at Fort Wilderness: Doomed concept

What will the excuse for Lakeshore Lodge be?

But those excuses aren't wrong per se, they just don't capture the whole picture. I'd say they're the biggest reason for slow sales of new purchases. (Do most new members -- assuming they are aware of the restrictions -- even know that resale restrictions are a new thing? Are they still considered 'new' since they started 6 years ago?)

Add-ons are probably hurt by the restrictions because existing members are somewhat more informed.

 

[airjay75]

There is no way that resale restrictions don't hurt. They only bring disadvantages with zero tradeoff. The only question is how much they hurt.

And every resort with resale restrictions has a convenient excuse for why its sales have lagged:

1. Riviera: Covid
2. Villas at Disneyland: Transient Tax
3. Cabins at Fort Wilderness: Doomed concept

What will the excuse for Lakeshore Lodge be?

I wanted to believe this was true with respect to RIV - I mean, I'd love for DVD to think, oh boy, we really screwed this up with the whole resale restrictions thing. But, then I look at RIV selling 140,000 points in February 2020 with an average of almost 111,000 points per month in that first year of opening before COVID shut it all down and I just can't see it. If resale restrictions were going to have an effect, it should have been most pronounced during this time because RIV was the only resort with them. I guess it's possible they would have sold even more RIV points during that first year without the resale restrictions.

 

[Brian Noble]

There is no way that resale restrictions don't hurt. They only bring disadvantages with zero tradeoff. The only question is how much they hurt.

There is one very important thing you are missing. They also help, because it is impossible to buy the "whole system" via resale. If you want access to everything, there is now only one way to do it---and that's only going to become more true over time.

I can guarantee you that Disney did not make this change without believing it would help them sell timeshares, and they did not keep it because they think it only has disadvantages.

 

[Patmcpsu]

There is one very important thing you are missing. They also help, because it is impossible to buy the "whole system" via resale. If you want access to everything, there is now only one way to do it---and that's only going to become more true over time.

I can guarantee you that Disney did not make this change without believing it would help them sell timeshares, and they did not keep it because they think it only has disadvantages.

I was referring to the buyer's perspective.

 

[Brianstl]

While it is fun to argue about how much resale prices will rise or fall at RIV compared to other resorts, I think it misses a big point. That point is that resale prices are going to fall at all resorts and maybe pretty dramatically. What makes resale attractive is the savings versus a cash stay at a regular Disney deluxe resort over time. For the current prices to remain sustainable it requires the cash rates at Disney deluxe resorts to be able to keep increasing at the incredible rate they have in the post pandemic world. If you look at what is happening hotel occupancy rates and prices over the last six months around the world, those kind of increases in cash rates are proving to be unsustainable. If you think Disney won't be impacted by the kind of problems we are seeing develop in places like Vegas, I think you are being overly optimistic.

I am not saying we are headed into a recession or anything like that. I just think we are seeing a growing backlash to the dramatic increases in the cost of vacations far outpacing even the sky high inflation rates. Now that people don't feel the need for revenge travel, they are becoming ever increasingly price sensitive when it comes to vacation spending.

 

[eticketplease]

I would actually say that the problem at CFW isn't restrictions (I think that if people buy there, that's definitely where they want to be), it's the combination of the high dues and the uncertainty that the Trust model brings with it.

All though not talked about much but there is only one accomodation type. If there were 2 bedroom cabins it might have more appeal for some as well.

 

[Brian Noble]

What makes resale attractive is the savings versus a cash stay at a regular Disney deluxe resort over time. For the current prices to remain sustainable it requires the cash rates at Disney deluxe resorts to be able to keep increasing at the incredible rate they have in the post pandemic world. If you look at what is happening hotel occupancy rates and prices over the last six months around the world, those kind of increases in cash rates are proving to be unsustainable.

With apologies to Maelström: this is not the first time this has happened, and it will not be the last.

During the Great Recession, Disney offered some stunning discounts, and resale values cratered, for that reason plus a bunch of others. They recovered. Going back even further, the 9/11 travel slump shuttered entire resorts.

The "value" of owning DVC (as measured by a comparison to prevailing rates) will always ebb and flow. Historically, it has flowed more than it has ebbed. I don't see a fundamental reason why that will change, and if it does the resale value of DVC is probably not going to be in my top ten concerns, because there will be much bigger problems to worry about.

 

[havoc315]

There is no way that resale restrictions don't hurt. They only bring disadvantages with zero tradeoff. The only question is how much they hurt.

And every resort with resale restrictions has a convenient excuse for why its sales have lagged:

1. Riviera: Covid
2. Villas at Disneyland: Transient Tax
3. Cabins at Fort Wilderness: Doomed concept

What will the excuse for Lakeshore Lodge be?

Help or hurt who? They absolutely help Disney sell more DVC direct, that's why they put it in place. Disney believes they are selling more points at higher price than if they didn't have resale restrictions.

The idea that Riviera sales have "lagged" is a bit of a false perception. Disney very much controls the pace of sales by adjusting incentives. Riviera was indeed hurt for a while due to Covid. But Riviera is also a massive resort in terms of points, with over 6 million points to sell. I suspect the plan was always to keep it in active sales for several years.

Evidence: https://dvcnews.com/dvc-program/fin...nd-floridian-in-dvc-direct-sales-in-july-2022

There were several months where Riviera was beating Grand Floridian when both were in active sales. Then Disney improved the incentives at Grand Floridian, and the balance switched. Grand Floridian also had a lot few points to sell -- Big Pine Key was under 2 million points.
So in the summer of 2022, when Riviera was priced about $15 less than Grand Floridian, Riviera was actually out-selling Grand Floridian.

By September, after the initial rush for Grand Floridian Big Pine Key wore off, Riviera sales were also double Grand Floridian:

https://dvcnews.com/dvc-program/fin...2022-grand-floridian-continues-downward-trend

That suggests the free market does not think Grand Floridian direct is worth $15 more than Riviera direct.

In winter 2022, Disney scaled back Riviera incentives, and made Grand Floridian cheaper than Riviera, by about $3 per point. At $3 cheaper than Riviera, Grand Floridian again started to *slightly* outsell Riviera.

So this suggests the free market does not think Riviera direct is worth $3 more than Grand Floridian direct.

Add it up?
1 -- Sales of Riviera have not "lagged" -- In fact, there were many months in head to head competition, where it was out-selling Grand Floridian.
2 -- The free market direct value of Riviera might be worth slightly less than the free market direct value of Grand Floridian. But that's true of all resorts, Grand Floridian is the flagship. We

In the end, there is no evidence that resale restrictions have hurt the direct sales of Riviera. In all likelihood, the restrictions have helped the direct sales, which is why Disney has them in place.

 

[airjay75]

Help or hurt who? They absolutely help Disney sell more DVC direct, that's why they put it in place. Disney believes they are selling more points at higher price than if they didn't have resale restrictions.

The idea that Riviera sales have "lagged" is a bit of a false perception. Disney very much controls the pace of sales by adjusting incentives. Riviera was indeed hurt for a while due to Covid. But Riviera is also a massive resort in terms of points, with over 6 million points to sell. I suspect the plan was always to keep it in active sales for several years.

Evidence: https://dvcnews.com/dvc-program/fin...nd-floridian-in-dvc-direct-sales-in-july-2022

There were several months where Riviera was beating Grand Floridian when both were in active sales. Then Disney improved the incentives at Grand Floridian, and the balance switched. Grand Floridian also had a lot few points to sell -- Big Pine Key was under 2 million points.
So in the summer of 2022, when Riviera was priced about $15 less than Grand Floridian, Riviera was actually out-selling Grand Floridian.

By September, after the initial rush for Grand Floridian Big Pine Key wore off, Riviera sales were also double Grand Floridian:

https://dvcnews.com/dvc-program/fin...2022-grand-floridian-continues-downward-trend

That suggests the free market does not think Grand Floridian direct is worth $15 more than Riviera direct.

In winter 2022, Disney scaled back Riviera incentives, and made Grand Floridian cheaper than Riviera, by about $3 per point. At $3 cheaper than Riviera, Grand Floridian again started to *slightly* outsell Riviera.

So this suggests the free market does not think Riviera direct is worth $3 more than Grand Floridian direct.

Add it up?
1 -- Sales of Riviera have not "lagged" -- In fact, there were many months in head to head competition, where it was out-selling Grand Floridian.
2 -- The free market direct value of Riviera might be worth slightly less than the free market direct value of Grand Floridian. But that's true of all resorts, Grand Floridian is the flagship. We

In the end, there is no evidence that resale restrictions have hurt the direct sales of Riviera. In all likelihood, the restrictions have helped the direct sales, which is why Disney has them in place.

Thank you for sharing that - I'm bookmarking your post. It should be required reading for anyone who thinks resale restrictions hurt direct sales - I don't fault anyone for thinking that because if you're newer to DVC and all you know about is the current head-to-head matchup between Poly and RIV, you might, at first glance, want to blame the resale restrictions - that's what I thought a few months ago. But once you look at all the history of RIV sales, very difficult to continue holding that view. Maybe someone who is familiar with all of this still has a plausible theory for why the resale restrictions hurt direct sales - I'd love to hear it.

 

[havoc315]

Thank you for sharing that - I'm bookmarking your post. It should be required reading for anyone who thinks resale restrictions hurt direct sales - I don't fault anyone for thinking that because if you're newer to DVC and all you know about is the current head-to-head matchup between Poly and RIV, you might, at first glance, want to blame the resale restrictions - that's what I thought a few months ago. But once you look at all the history of RIV sales, very difficult to continue holding that view. Maybe someone who is familiar with all of this still has a plausible theory for why the resale restrictions hurt direct sales - I'd love to hear it.

Starting recently, Disney boosted incentives for Riviera. My guess -- they want to sell it out, before Lakeside Lodge opens. Poly still has a long way to go, but Riviera can get over the finish line with a nudge.
With the recent boost in incentives, I suspect you'll see a noticeable increase in Riviera sales in the next monthly report.
For 200+ points, Riviera is now $14 per point cheaper than Poly.
I wouldn't be surprised if Riviera outsells Poly over the next few months.