First Riviera ROFR

[Brian Noble]

You might be right that resale restrictions haven’t hurt sales, but you might not.

Disney did not create restricted resorts because they thought they would be harder to sell. Disney also has the data on tour flow and conversion rates both before and after this model was introduced.

 

[Carouselofplanning]

Disney did not create restricted resorts because they thought they would be harder to sell. Disney also has the data on tour flow and conversion rates both before and after this model was introduced.

That doesn’t mean the data is all good.
Cabins isn’t working out so far and Island Tower ended up not being its own association or trust. And sales of Riviera have slowed.

 

[havoc315]

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.

The biggest and most conclusive data: Disney is continuing the restrictions moving forward. If they were hurting sales, Disney would stop doing it. When New Coke tanked, Coca Cola went back to the original.

If the restrictions were hurting direct sales, then Disney wouldn’t be putting them into new resorts.

 

[havoc315]

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.

I understand being upset by the change. But remember, most timeshares become nearly worthless at resale. And I think you underestimate the number of people that never sell, just pass the contracts on to their kids. (That’s still my plan, keep my contracts for another 10-20 years, and then hand them down).

 

[Tumnus]

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.

Why would number 2 be "very hard to accomplish"? Buy direct and never sell to me is the default option.

 

[Patmcpsu]

Why would number 2 be "very hard to accomplish"? Buy direct and never sell to me is the default option.

If you're buying direct, the remaining contract length is usually 45-50 years. If the average ownership length of a DVC contract is 7-8 years (I keep hearing that number referenced, but never properly cited), that means a contract changes hands an average of 4-6 times over the course of its life. I'm aware there are cases where contracts change hands zero times, but that's the outlier.

 

[Brian Noble]

If the average ownership length of a DVC contract is 7-8 years (I keep hearing that number referenced, but never properly cited)

That's because it is wrong. That was a "study" done of deeds acquired by resale, and it was done years ago. It does not measure the length over which deeds not sold were held, and over time you'd only expect the average length to get longer.

Edited to add: If someone were to come to me to suggest they only wanted to own DVC for 7-8 years, I would tell them to rent.

 

[Brian Noble]

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 think there is a third option, which I will call Option 1.5:

Buy direct, hold it long enough to have gotten what I consider good value based on the vacations I have taken, and dispose of it when I am done. Maybe I get a few dollars back then, maybe I don't, but if I do it is found money.

It is true today that if you buy RIV today and sell it tomorrow, it will cost you significantly more than if you buy and sell PVB. Is that true if you buy today but sell 20 or 25 years from now? Maybe. My bet is "You'd still lose more, but the gap has narrowed." But that's just a bet, and I am not a betting man.

Either way, I do not care what my DVC deed is worth in 20 years, and I hope to use it for vacations until at least that point, more or less. If I do, I will have considered it a good value, even if I have to give it away. If I end up having health issues that prevent me from traveling between now and then, I may lose a little more. On the other hand, I won't be spending money on other travel expenses, so it doesn't matter.

For me, timeshares are a consumable toy, not an asset.

 

[Carouselofplanning]

I understand being upset by the change. But remember, most timeshares become nearly worthless at resale. And I think you underestimate the number of people that never sell, just pass the contracts on to their kids. (That’s still my plan, keep my contracts for another 10-20 years, and then hand them down).

The gripe is that DVC was never supposed to be most timeshares. It was supposed to be different. More guest friendly. That’s clearly no longer the strategy. The current leadership is fully in the “this is just a plain ole timeshare” boat now. Because of the addiction to financing all hotel construction through it.

 

[Carouselofplanning]

I think there is a third option, which I will call Option 1.5:

Buy direct, hold it long enough to have gotten what I consider good value based on the vacations I have taken, and dispose of it when I am done. Maybe I get a few dollars back then, maybe I don't, but if I do it is found money.

It is true today that if you buy RIV today and sell it tomorrow, it will cost you significantly more than if you buy and sell PVB. Is that true if you buy today but sell 20 or 25 years from now? Maybe. My bet is "You'd still lose more, but the gap has narrowed." But that's just a bet, and I am not a betting man.

Either way, I do not care what my DVC deed is worth in 20 years, and I hope to use it for vacations until at least that point, more or less. If I do, I will have considered it a good value, even if I have to give it away. If I end up having health issues that prevent me from traveling between now and then, I may lose a little more. On the other hand, I won't be spending money on other travel expenses, so it doesn't matter.

For me, timeshares are a consumable toy, not an asset.

Whether what they did is working or not or somewhere in between, your ultimate point is good advice. Whatever one complains about regarding the evolution of DVC, practically speaking, today, it’s best to evaluate it as something worth nothing when you are done with it. If it still makes sense then do it. If not, don’t. If you get money back when you are done that’s a bonus. I wish it were different and there are many reasons why it should be but it’s not.

 

[Tumnus]

If you're buying direct, the remaining contract length is usually 45-50 years. If the average ownership length of a DVC contract is 7-8 years (I keep hearing that number referenced, but never properly cited), that means a contract changes hands an average of 4-6 times over the course of its life. I'm aware there are cases where contracts change hands zero times, but that's the outlier.

As others said, that is a statistic for those who sell, not those who buy. We don't know what percentage of members sell, we also don't know if that old stat was ever accurate as it was put out by people motivated to get others to sell, the resale brokers.

If you assume 7.5 years average for those who sell and 40 years average for those who don't, if only 25% of members sell (which I would say is probably high), then the average length of holding is about 32 years. "What percentage of members sell" is the big unknown variable, but it's definitely not 100% (which would need to be true for the 7 to 8 years to be right) and it's not 0%. Most likely the majority of buyers do not sell.

 

[Carouselofplanning]

As others said, that is a statistic for those who sell, not those who buy. We don't know what percentage of members sell, we also don't know if that old stat was ever accurate as it was put out by people motivated to get others to sell, the resale brokers.

If you assume 7.5 years average for those who sell and 40 years average for those who don't, if only 25% of members sell (which I would say is probably high), then the average length of holding is about 32 years. "What percentage of members sell" is the big unknown variable, but it's definitely not 100% (which would need to be true for the 7 to 8 years to be right) and it's not 0%. Most likely the majority of buyers do not sell.

They still changed the rules for a reason. People are reselling enough that it impacted their direct sales.

 

[airjay75]

I wonder how many direct sales Disney lost pre-RIV from people who took a tour, got the pricing, went home and did some research and realized they could basically get the same thing for cheaper on the resale market and all they’d lose is a handful of blue card benefits they didn’t care about too much.

Disney may well have looked at that and thought, well, we could choose the carrot or the stick to get rid of this problem. We could either boost direct benefits which will cost money (the carrot) OR we could impose resale restrictions which will cost us nothing (the stick). And, if the stick works, it will have the added benefit of depressing the resale market and we can actually make more money down the road recycling points.

 

[Brianstl]

They still changed the rules for a reason. People are reselling enough that it impacted their direct sales.

I don’t think they determined it was hurting their direct sales badly. I think the long term intention is to drive down resale prices so when Disney decides to exercise ROFR they can generate a greater profit. If you think resale is hurting your direct sales in any impactful way, you don’t institute a policy that makes resale cheaper at your newest resorts and more attractive to buyers hunting for bargains.

Too many people think this DVC forum reflects a significant portion of the way DVC’s potential customers base actually thinks. It actually is a very tiny subset of what they view as possible direct customers. It makes it less attractive to the tiny part of the market that buys resale (where being able to book a different resort matters) and to commercial renters for the flexibility to rent different resorts at 7 months offers a chance for better profit margins.

 

[Dafoo17]

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

Can you expand on this?

I'm new looking into DVC, and where I can book in 20 years was the exact reason I was looking at direct haha. I'm wondering if I'm being naive about something.

Like do you have any worry about future FOMO? Will the 2042 resorts going away concentrate attendance into the remaining O8? You're confident there'll never be a new resort you "have" to stay in?

Genuinely curious if I'm either overthinking these risks OR underthinking what 7 month availability looks like with current DVC.

 

[Carouselofplanning]

I don’t think they determined it was hurting their direct sales badly. I think the long term intention is to drive down resale prices so when Disney decides to exercise ROFR they can generate a greater profit. If you think resale is hurting your direct sales in any impactful way, you don’t institute a policy that makes resale cheaper at your newest resorts and more attractive to buyers hunting for bargains.

Too many people think this DVC forum reflects a significant portion of the way DVC’s potential customers base actually thinks. It actually is a very tiny subset of what they view as possible direct customers. It makes it less attractive to the tiny part of the market that buys resale (where being able to book a different resort matters) and to commercial renters for the flexibility to rent different resorts at 7 months offers a chance for better profit margins.

So to summarize this interpretation of resale restrictions: Intentional market manipulation by the DVC board solely to benefit DVD?

Check please, thank you.

 

[Brian Noble]

You can make the decision of what (and whether) to buy for whatever reason you want, or even just because.

 

[Sandisw]

If you're buying direct, the remaining contract length is usually 45-50 years. If the average ownership length of a DVC contract is 7-8 years (I keep hearing that number referenced, but never properly cited), that means a contract changes hands an average of 4-6 times over the course of its life. I'm aware there are cases where contracts change hands zero times, but that's the outlier.

Just to clarify…the info regarding ownership around 7 to 10 years…it is only based on owners who have sold and not those the didn’t.

So, it’s not that the average owner sells that soon…but rather of the small group of owners who have sold, the ownership within that group is that 7 to 10 years.

Most owners hold on much longer than that.

 

[Sandisw]

So to summarize this interpretation of resale restrictions: Intentional market manipulation by the DVC board solely to benefit DVD?

Check please, thank you.

DVC board didn’t decide anything. DVD did when they decided how to build and sell the resorts with restrictions.

DVD decided in 2012 to start making the two products different.

Resale restrictions just happen to be the one change with the biggest impact for owners.

We are now over 6 years since they decided to make them part of the product…and they seem very content with sales of all the products if you base it on sales incentives.

I definitely was surprised they did role PVB tower into PVB…but they obviously decided it made sense

However, the sales numbers for it, outside the first few months, have been good but not amazing.

What does seem to be a push is having more resorts on sale to give choices vs shorter overlap times.

It took about 1.5 years for them to offer better incentives for CFW and those sales have struggled from the start.

For me, incentives are what I use to try and tease out DVDs thinking.

So far, it seems that they are comfortable with direct sales based on incentives offered.