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.

 

[Brianstl]

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.

I didn't intend to leave the impression that they would never recover. They almost certainly would. I just think people too often expect the situation that exist today to go unchanged. That just isn't what happens and no one should expect the price they think they should be able to sell for to be the price that the market will pay a year or two years from now. There will be ebbs and flows. If you can't handle the price you will get if you have to sell during one of those ebbs, you shouldn't be buying DVC. There just seems to be a lot have people that expect the resale sale price to always hold up and history has shown that isn't the case. Yes it will eventually bounce back, but that does you no good if you are in a position where you have to or want to sell in one of those ebb cycles. Way too many people look at their DVC contracts like a financial investment of some sort that has a guaranteed painless exit plan. There are going to be situations where it isn't pain free.

 

[RivShore]

Way too many people look at their DVC contracts like a financial investment of some sort that has a guaranteed painless exit plan.

Way too many people on here. As many of us have said above, the far majority of DVC owners have no clue about resale value, they just want to have fun!

 

[Genie+]

In 2016 DVC removed membership perks from resale. In 2019 DVC added resort restrictions to resale when sales opened at RIV. Neither of these impact a Direct buyer using their contract. They get the perks and are not blocked from trading into any resorts.

DVC set out to differentiate direct from resale. The very first move was back in 2011, removing new resale’s ability to trade points into the Disney Collection. It was a smart move using something few people cared about. Gently it acclimated the DVC community to the idea that certain things do not legally need to be included with resale. The big punch came 5 years later, when membership extras were taken from new resale. Even then, it was done gently because they allowed as little as 25pts direct to qualify for perks. Slowly they raised that minimum direct purchase, and 3 years later when RIV was the first restricted resort that minimum was 100pts. In 2021 it was raised to 150pts.

We don’t exactly how Covid affected the originally intended order of rolling out new restricted resorts. RIV went on sale in 2019 and that year VDH and Reflections were announced (presumably matching a RIV type contract). Post March 2020 things got shuffled around. VGF2 ended up coming next, though most likely that was not to come until those first 3 fully restricted resorts were in play.

DVD set out to differentiate resale from direct. Buying resale in 2025 is different from buying direct. 10 years ago it would’ve virtually been the same product. I’d say that is helping them sell more Direct points. If you want the whole kit and kaboodle, direct is the only way.

My guess is they will continue on this path. Resale is buying the deluxe room. Direct is buying the full Club experience. Unrestricted points. Blue Card. Welcome Home weeks. Moonlight Magic. Access to MMB.

I can’t fault DVC for making these changes. We are only 3 years into owning DVC. If we had gotten in under a 2015-type market, very likely we would’ve been content resale only buyers. Under today’s market it is very likely we’d at some point at least buy the minimum direct to qualify for Membership Extras and have some unrestricted points. It’s also making me consider adding-on with more direct instead of automatically defaulting to resale because I do like the idea of ‘future-proofing’ my points. So at least I’m still entertaining Direct while looking at resale.

To be fair though, one of many things that drew us to VGF2 was it joining the OG association that did not have fully restricted resale. Our plan is to keep using it, so in that way zero difference from RIV. But if we ever decided to sell, I liked the odds that an OG tradable monorail resort might hold a better salvage value resale. This aspect alone wouldn’t keep me from buying LSL Direct. It was just one of many things that sold us on VGF2.

 

[VGCgroupie]

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.

Agree 100%

 

[Brian Noble]

I'll also mention that there are two sides to the resale value coin. For example, I will not be sad to see RIV prices drop futher. But that's because I'm more likely to be a buyer than a seller. And, if I buy inexpensively, future values matter a lot less.