First Riviera ROFR

[havoc315]

What is the secret to getting into the 3+ resorts that haven’t been opened yet?

Don’t think Lakeside Lodge and 2 or more other resorts will be open by 2045?

 

[Brian Noble]

circles me back to direct

Mission accomplished from Disney's perspective.

 

[DVCsloth]

Mission accomplished from Disney's perspective.

Sure does make it a tempting resale purchase for some of us though. Although, I'm out of the points accumulation phase at this time.

 

[Brian Noble]

I'm not.

 

[eticketplease]

Don’t think Lakeside Lodge and 2 or more other resorts will be open by 2045?

Waiting 20 years He said "imagine in 2045." One will be finished soon and I'm sure a couple more will be built by then.

Totally missed that part lol

@stat pointed that I missed the imagine portion. Sorry about that.

 

[Brianstl]

Especially true when the older resorts starting disappearing in 16 more years.
Imagine 2045:
Direct points are good at 20+ resorts.
For all the newest resorts with longest contracts, re-sale will be 1 resort only.
“Original” resort resale points will be valid at only about 9 resorts, 3 of which having under 15 years left on contract. And all the newest resorts excluded.

I wouldn’t be surprised to see Disney eventually adopt more standardized buy back programs during periods of reduced new building. (I can imagine VDL and Lakeside Lodge carrying sales to 2030… but then a slowdown in the 2030’s awaiting massive re-building in the 2040’s).

Nobody should be purchasing for what would be 16-20 years from now when it comes to what will be available for you to book. You could no longer be interested in going to Disney, you may no longer be physically able to attend the parks, your children or grand children might not be the fans of the parks that you are and sadly any of us could be dead at that point. There are good cases to be made for deciding on direct over resale, but where you can book 20 years from now isn't one of them

 

[Carouselofplanning]

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.

Yeah but you’re also talking about when a place just opened. There’s always pent up demand for the “I gotta have the new resort” people. Talk about the emotional purchasers. Those are the ones who think least about the trade offs. I’m sure Lakeshore gets off to a nice start too.

 

[Carouselofplanning]

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.

This is so insightful. The Vegas price gouging thing is real. Disney has to be acutely aware of it. DVC in general has to remain cost effective on a per stay basis versus cash over a realistic timeframe. They currently tell you when selling you it takes 6 stays to get ahead. They can only raise point prices (and inflate new charts) so much. Nobody pays full price for a room outside of holiday weeks. Take 20% off rack rate and that’s usually what people pay. And if dues are too high people also stop buying altogether.
They have to be careful not to kill the golden goose which is to have your own customers finance your new resort construction.

 

[airjay75]

Yeah but you’re also talking about when a place just opened. There’s always pent up demand for the “I gotta have the new resort” people. Talk about the emotional purchasers. Those are the ones who think least about the trade offs. I’m sure Lakeshore gets off to a nice start too.

Ok, sure. Let's say that first year of sales was just all the emotional buyers who couldn't care less about resale restrictions. I'm still skeptical given that the Poly Island Tower hasn't posted anything like that in its first year of sales, but maybe that's because there wasn't another DVC resort in active sales. Ok, but then you have to explain @havoc315's post below where RIV and VGF went head to head and RIV did pretty darn well - even outsold VGF.

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.

So, RIV sold really well when it first opened. Then COVID shut everything down. Then, when it went head to head with VGF, it also did really well. Then, CFW and VDH come online and then the Poly Island Tower, and RIV sales still do just fine, but slow a bit such that it's going to take it until the end of 2026 to sell out.

What's the simpler explanation? It was only at the end of RIV active sales that the resale restrictions had an effect on sales because the emotional buyers had dried up and all the savvy buyers held out OR resale restrictions had no meaningful impact on RIV sales and, if COVID hadn't happened, it would already be sold out. Again, I'd love for there to be evidence of resale restrictions hurting sales, but It's hard to see. Certainly not enough evidence for Disney to think the resale restrictions were a mistake.

 

[Sandisw]

Ok, sure. Let's say that first year of sales was just all the emotional buyers who couldn't care less about resale restrictions. I'm still skeptical given that the Poly Island Tower hasn't posted anything like that in its first year of sales, but maybe that's because there wasn't another DVC resort in active sales. Ok, but then you have to explain @havoc315's post below where RIV and VGF went head to head and RIV did pretty darn well - even outsold VGF.


So, RIV sold really well when it first opened. Then COVID shut everything down. Then, when it went head to head with VGF, it also did really well. Then, CFW and VDH come online and then the Poly Island Tower, and RIV sales still do just fine, but slow a bit such that it's going to take it until the end of 2026 to sell out.

What's the simpler explanation? It was only at the end of RIV active sales that the resale restrictions had an effect on sales because the emotional buyers had dried up and all the savvy buyers held out OR resales restrictions had no meaningful impact on RIV sales and, if COVID hadn't happened, it would already be sold out. Again, I'd love for there to be evidence of resale restrictions hurting sales, but It's hard to see. Certainly not enough evidence for Disney to think the resale restrictions were a mistake.

With 6.7 million points, and even if it had averaged 100k a month in sales…which would be seen as strong, it was going to take 65 months minimum to sell it because of its size.

Add in variables for the past few years, and it’s not that far behind.

I am sure restrictions have given some pause…but overall, there have been times, as has been mentioned, when other factors outweighed them.

I can’t imagine that DVD didn’t go into this expecting to see different sales numbers with restrictions than without.

But I believe they are playing the long game and once we have LSL with them, it won’t seem like a huge deal any more.

 

[havoc315]

Nobody should be purchasing for what would be 16-20 years from now when it comes to what will be available for you to book. You could no longer be interested in going to Disney, you may no longer be physically able to attend the parks, your children or grand children might not be the fans of the parks that you are and sadly any of us could be dead at that point. There are good cases to be made for deciding on direct over resale, but where you can book 20 years from now isn't one of them

100% agree. That was my point. Which is also why you shouldn’t make a purchasing decision based on a guess of what resale value will be like in 16-20 years.

And the second point wasn’t but direct now because of availability in 16-20 years. But it was how Disney anticipates over the next 16.. 20.. 30 years… pushing more buyers to direct.

Right now, the push is, “if you want a plan that includes Riviera, Disneyland Villas, Fort Wilderness cabins, Lakeside Lodge… buy direct”
In 16-20 years, that push will be even more intense.

 

[havoc315]

Ok, sure. Let's say that first year of sales was just all the emotional buyers who couldn't care less about resale restrictions. I'm still skeptical given that the Poly Island Tower hasn't posted anything like that in its first year of sales, but maybe that's because there wasn't another DVC resort in active sales. Ok, but then you have to explain @havoc315's post below where RIV and VGF went head to head and RIV did pretty darn well - even outsold VGF.


So, RIV sold really well when it first opened. Then COVID shut everything down. Then, when it went head to head with VGF, it also did really well. Then, CFW and VDH come online and then the Poly Island Tower, and RIV sales still do just fine, but slow a bit such that it's going to take it until the end of 2026 to sell out.

What's the simpler explanation? It was only at the end of RIV active sales that the resale restrictions had an effect on sales because the emotional buyers had dried up and all the savvy buyers held out OR resale restrictions had no meaningful impact on RIV sales and, if COVID hadn't happened, it would already be sold out. Again, I'd love for there to be evidence of resale restrictions hurting sales, but It's hard to see. Certainly not enough evidence for Disney to think the resale restrictions were a mistake.

Very very few direct buyers are thinking about resale restrictions when they buy. The restrictions only possibly might affect them a tiny bit possibly if they sell, but even then, who knows.

Most of the Riviera “doomsayers” just seem upset because they prefer buying/selling re-sale, so they project that it’s terrible for direct sales also.

(I don’t doubt that re-sale restrictions hurt re-sale value relative to direct pricing. But there are so many factors that go into resale pricing, I don’t think you can project that Riviera resale values will dive below “unrestricted” resorts like SSR and AKV in a few years).

 

[Mikey15]

Nobody should be purchasing for what would be 16-20 years from now when it comes to what will be available for you to book. You could no longer be interested in going to Disney, you may no longer be physically able to attend the parks, your children or grand children might not be the fans of the parks that you are and sadly any of us could be dead at that point. There are good cases to be made for deciding on direct over resale, but where you can book 20 years from now isn't one of them

I believe the line of thinking is buying (O14) resale today already limits you to O14 and not the three newer resorts. 16-17 years from now “O14” is down to 9, or from 10 to 7 at WDW. Plus the 3 current restricted resorts (2 WDW) will grow over time.

I don’t see bringing this up as basing a today purchasing decision on 20 years out, but showing that gradually over the next 5-10-15 that the balance is going to shift. “2042” isn’t going to be the huge factor in most people’s decisions on a conscious level the way it gets brought up most of the time, but the pro/con list of direct vs resale is just going to shift in the intervening timeframe in a way that influences decisions.


Me, I’m outside looking in right now. I’d never buy Riv resale, not because I don’t want to stay at Riv, but because I don’t ~only~ want to stay at Riv. At the same time, if I do buy into DVC in the next few years I am likely to want to start off resale. This does steer me away from Riv resale and support the theory of reduced demand for Riv resale. But I’m also in what I’d consider to be a market minority to even know about these issues, much less let them weigh heavily on my decision.

 

[Patmcpsu]

Most of the Riviera “doomsayers” just seem upset because they prefer buying/selling re-sale, so they project that it’s terrible for direct sales also.

I'm upset that, as a buyer, your options are:

1. Buy direct and sell at an especially big loss because resale value is depressed by restrictions.
2. Buy direct and never sell - which sounds great on paper, but very hard to accomplish (to the point that I was hesitant to list it as an option).
3. Buy resale and be limited to your home resort.

I understand that people have bought direct at O14 resorts which now have lower resale value than RIV, but those resorts are due to other factors which weren't done for the deliberate purpose of hurting the customer.

 

[Brian Noble]

I'd love for there to be evidence of resale restrictions hurting sales

Resale restrictions don't mean anything to the direct buyer---except that the direct buyer, if selling, would see a lower salvage value.

But we know what happens to timeshare developers when their timeshares go to zero on the resale marekt. They keep selling timeshares. Why would DVC be different?

I am not arguing that it doesn't matter to any buyer, or even that sales would not be marginally better if the resort were unrestricted. But, the friction induced by lower resale value is (presumably) outweighed by people who would have bought resale but are nudged to direct by FOMO. (Yes, I'm the problem.)

 

[Carouselofplanning]

I'm upset that, as a buyer, your options are:

1. Buy direct and sell at an especially big loss because resale value is depressed by restrictions.
2. Buy direct and never sell - which sounds great on paper, but very hard to accomplish (to the point that I was hesitant to list it as an option).
3. Buy resale and be limited to your home resort.

I understand that people have bought direct at O14 resorts which now have lower resale value than RIV, but those resorts are due to other factors which weren't done for the deliberate purpose of hurting the customer.

The “hurt the customer” to make them buy direct is the evidence their direct product is overpriced and they absolutely know it. They realize people can easily pay to add luxury to their stays without having “blue card” bs. Hence, if they insist on drastic buy in inflation this is all that’s left.

 

[Dodgerburt8]

Very very few direct buyers are thinking about resale restrictions when they buy. The restrictions only possibly might affect them a tiny bit possibly if they sell, but even then, who knows.

There is no “evidence” as you like to say of what a typical direct buyer considers or even who the typical direct buyer is. What is the percentage of existing owners versus new customers? What information do they have? What did they consider in their decision? You might be right that resale restrictions haven’t hurt sales, but you might not. It’s almost entirely speculation on both sides of the argument because none of us is privy to actual data that could quantify the effect. I think there is some sales data to suggest sales might have been hurt and some sales data (like the VGF months you pointed out) that may suggest the opposite.

 

[byurick]

There is no “evidence” as you like to say of what a typical direct buyer considers or even who the typical direct buyer is. What is the percentage of existing owners versus new customers? What information do they have? What did they consider in their decision? You might be right that resale restrictions haven’t hurt sales, but you might not. It’s almost entirely speculation on both sides of the argument because none of us is privy to actual data that could quantify the effect. I think there is some sales data to suggest sales might have been hurt and some sales data (like the VGF months you pointed out) that may suggest the opposite.

When LL goes on sale in another year or two I think that will be a good indicator of whether or not they think restrictions are hurting them. I suspect it will be a restricted resort just like all the other new ones have been so far.

 

[Carouselofplanning]

There is no “evidence” as you like to say of what a typical direct buyer considers or even who the typical direct buyer is. What is the percentage of existing owners versus new customers? What information do they have? What did they consider in their decision? You might be right that resale restrictions haven’t hurt sales, but you might not. It’s almost entirely speculation on both sides of the argument because none of us is privy to actual data that could quantify the effect. I think there is some sales data to suggest sales might have been hurt and some sales data (like the VGF months you pointed out) that may suggest the opposite.

You are right the customer profiles and sales data is not public so consumer behavior observations are to an extent speculative.

However Disney implementing restrictions in an increasingly punitive way over time is direct evidence that they notice consumer behavior that is impacting direct sales to the point that they needed to take action.

 

[Carouselofplanning]

You are right the customer profiles and sales data is not public so consumer behavior observations are to an extent speculative.

However Disney implementing restrictions in an increasingly punitive way over time is direct evidence that they notice consumer behavior that is impacting direct sales to the point that they needed to take action.

And this entire dilemma was self created. There is just too much supply. I’m guessing the people who created DVC had no idea it would get so big that the company would yield its entire hotel development plan to the timeshare division.