Future resale value on restricted resorts?

[dvc lover 1970]

The good news is that we should have an idea if it’s still on the table when they announce the rules for VDH and Poly tower!

But remember, the can get rid of those restrictions at RIV with the click of a pen whenever they want.

I do wonder if they will implement an exchange fee for resale. that is a win win for disney and resale buyers. resale buyers have option to use other resorts, disney makes more $$$. Resale still will have the membership restrictions but will not have the one resort restriction.

 

[ehh]

Except this example ignores every other variable and difference between the two resorts that impact resale demand and pricing. Where is the actual evidence that restrictions at the Riviera has actually impacted sales, either direct or resale?

It undoubtedly has had a non-zero impact (there's surely at least one truthful post on this forum of someone saying it was the reason they didn't purchase), the better question is how much--is it that one person or is it bigger?

I'm not nearly as pessimistic as many in this thread, but I fully expect it eventually to have a casually noticeable impact. Something like a 5-20% drop relative to expectation (based on the merits of RIV/future resorts themselves).

The intention of these restrictions is to deflate resale prices. RIV resale points have a different value compared to resale from other resorts due to their exclusive use. Exclusive use is/will be a dealbreaker to some people, even if they love RIV as a resort. Potential resale customers opting out is, by definition, a reduction in resale demand and assuming resales supply is unchanged, reduced demand means reduced resale prices. In turn, that impact on resale should cause a smaller but non-zero impact on direct sales velocity.

I'm not sure any of us can currently say how much it has/will reduce resales prices with hard data considering there haven't been many resales. But it's extremely unlikely to be 0% impact considering how well informed resale buyers are (on average). The good news is that, so far, it doesn't seem like resale is completely devalued and seems very loosely in the ballpark of other resorts.

As for the impact to direct sales velocity, that likely requires internal data, and I'm not sure even Disney could precisely determine the impact amidst all the economic volatility from the pandemic. They probably have a ballpark idea from surveys, though.

A likely long game for Disney is a slight deflation of resale prices so they:

1. Don't significantly hurt upfront sales velocities/prices
2. Maintain some semblance of good guest satisfaction levels overall, likely including value retention as well
3. Put themselves in a position to more easily repurchase the contracts on ROFR
4. While keeping their own longterm/sold out pricing at an optimal price point without eating into the resales margin ($200/pt sells better than $225/pt).
   • Also keep in mind the 'resale' points they sell are better points because they can be used anywhere, so they have a better product to help justify their higher price.

Considering RIV hasn't sold out yet and resales are still a trickle, they probably can't see if 3/4 are going to work for them yet and I'd be surprised if we saw any deviation from the plan for VDH.

 

[ehh]

I do wonder if they will implement an exchange fee for resale. that is a win win for disney and resale buyers. resale buyers have option to use other resorts, disney makes more $$$. Resale still will have the membership restrictions but will not have the one resort restriction.

Disney will likely say the exchange fee is just buying direct.

 

[Sandisw]

I do wonder if they will implement an exchange fee for resale. that is a win win for disney and resale buyers. resale buyers have option to use other resorts, disney makes more $$$. Resale still will have the membership restrictions but will not have the one resort restriction.

They have given themselves the right to do that and IMO, I think we will see one in which people pay an exchange fee into BVTC to use points at other resorts on a per reservation basis, while keeping restrictions in place.

But, don’t see that until there are more resorts in the system that have them.

The whole purpose is to give buyers a nudge to buy from them in the first place. I just don’t think they care about the resale market and they believe that they can still sell DVC even if the market goes the way of traditional timeshares.

We shall see what happens in the next few years. It will be interesting.

 

[sndral]

Except this example ignores every other variable and difference between the two resorts that impact resale demand and pricing. Where is the actual evidence that restrictions at the Riviera has actually impacted sales, either direct or resale?

Actual evidence? I don’t think we can find any, we know there are 2 WDW active sales resorts & we know VGF commands higher prices on the resale market - maybe that’s just because RIV is cheaper direct, who knows.
Once Riv is sold old & we have true supply, then we’ll be able to compare it to AKV & BLT, 2 resorts of similar size w/out resale restrictions & see how it fares price wise - but it’ll be 3 years or more before Riv sells out - depending on how much Poly2 cannibalizes Riv direct sales.
I listed the 7 variables that I think impact resale demand in my post #25 just above the post you quoted. IMO number 7 - the economy - will have the biggest impact & not just on Riv, but on all DVC sales direct & resale. My crystal ball is broken, but my sense is buckle up we’ve reached the summit of the economic roller coaster & are poised to head down, but I’ve been wrong before The Fed is tightening money supply via interest rate increases to tame inflation, so you’d think discretionary spending on things like DVC would go down but who knows .

 

[NVDISFamily]

Actual evidence? I don’t think we can find any, we know there are 2 WDW active sales resorts & we know VGF commands higher prices on the resale market - maybe that’s just because RIV is cheaper direct, who knows.
Once Riv is sold old & we have true supply, then we’ll be able to compare it to AKV & BLT, 2 resorts of similar size w/out resale restrictions & see how it fares price wise - but it’ll be 3 years or more before Riv sells out - depending on how much Poly2 cannibalizes Riv direct sales.
I listed the 7 variables that I think impact resale demand in my post #25 just above the post you quoted. IMO number 7 - the economy - will have the biggest impact & not just on Riv, but on all DVC sales direct & resale. My crystal ball is broken, but my sense is buckle up we’ve reached the summit of the economic roller coaster & are poised to head down, but I’ve been wrong before The Fed is tightening money supply via interest rate increases to tame inflation, so you’d think discretionary spending on things like DVC would go down but who knows .

I agree about the economy but I do have another weird thought/opinion about the whole thing. Yes the fed has been signaling that they will keep hiking rates and are sending signals that the soft landing may not be possible. But I don't put it past the powers that be to do a complete 180 on all of that and put the money printer to 11 and just YOLO like its 1999 to prevent unemployment from hitting 10%. Would not be shocked at all if the story we are told in a few months/years is that 7% inflation is great for you and your family. So I agree that there is pain on the horizon, but instead of a traditional recession we may see a consistent rise in the cost of goods at the 7 to 10 percent rate for a long time coming. There are two good ways to get out of this debt issue we are in. Be responsible and not spend as much or..... put money printer in burrrrrr mode and devalue the dollar so much that having a 40 trillion dollar debt on the balance sheet isn't too scary at all. I'm betting on this option so that's why I'm going in now to buy DVC as I think we are stuck in the inflation cycle for many years. Hello ground beef at 15 bucks a pound and DVC points at 400 a point.......

Edit - For fun... a video of the money printer in action (turn down speakers if you aren't a metal fan)

 

[DVCsloth]

As others have posted, I see Riviera resale lower because of the restrictions. Once it sells out, resale price will most likely rise quite a bit.
I don't see Disney removing the resale restrictions. I believe this is their long-term strategy and they have no intention to remove them. This can easily change since they like to shuffle their upper management quite often. Also, even if the economy doesn't improve soon, the higher costs for everything will most likely keep the prices rising along with inflation. I like the buy where you want to stay philosophy and the resale restrictions do not bother me whatsoever.

 

[Frugal Fairy Tales]

It undoubtedly has had a non-zero impact (there's surely at least one truthful post on this forum of someone saying it was the reason they didn't purchase), the better question is how much--is it that one person or is it bigger?

I'm not nearly as pessimistic as many in this thread, but I fully expect it eventually to have a casually noticeable impact. Something like a 5-20% drop relative to expectation (based on the merits of RIV/future resorts themselves).

The intention of these restrictions is to deflate resale prices. RIV resale points have a different value compared to resale from other resorts due to their exclusive use. Exclusive use is/will be a dealbreaker to some people, even if they love RIV as a resort. Potential resale customers opting out is, by definition, a reduction in resale demand and assuming resales supply is unchanged, reduced demand means reduced resale prices. In turn, that impact on resale should cause a smaller but non-zero impact on direct sales velocity.

I'm not sure any of us can currently say how much it has/will reduce resales prices with hard data considering there haven't been many resales. But it's extremely unlikely to be 0% impact considering how well informed resale buyers are (on average). The good news is that, so far, it doesn't seem like resale is completely devalued and seems very loosely in the ballpark of other resorts.

As for the impact to direct sales velocity, that likely requires internal data, and I'm not sure even Disney could precisely determine the impact amidst all the economic volatility from the pandemic. They probably have a ballpark idea from surveys, though.

A likely long game for Disney is a slight deflation of resale prices so they:

1. Don't significantly hurt upfront sales velocities/prices
2. Maintain some semblance of good guest satisfaction levels overall, likely including value retention as well
3. Put themselves in a position to more easily repurchase the contracts on ROFR
4. While keeping their own longterm/sold out pricing at an optimal price point without eating into the resales margin ($200/pt sells better than $225/pt).
   • Also keep in mind the 'resale' points they sell are better points because they can be used anywhere, so they have a better product to help justify their higher price.

Considering RIV hasn't sold out yet and resales are still a trickle, they probably can't see if 3/4 are going to work for them yet and I'd be surprised if we saw any deviation from the plan for VDH.

I can tell you I would have already purchased RIV if there were no resale restrictions. The restrictions make me hesitate. I still want RIV points but I likely will never buy them. Restrictions and the unknown future ripple effects may very well keep me from ever purchasing ANY more DVC points. So, thank you DVC, you are preventing me from spending lots of money.

 

[DVCsloth]

I can tell you I would have already purchased RIV if there were no resale restrictions. The restrictions make me hesitate. I still want RIV points but I likely will never buy them. Restrictions and the unknown future ripple effects may very well keep me from ever purchasing ANY more DVC points. So, thank you DVC, you are preventing me from spending lots of money.

I initially stayed away from Riviera because of the restrictions, then we stayed there, and it changed my mind. We plan on keeping our Riv points for at least 10 years, so they are unlikely to affect me in any way. I don't think I would buy them resale though, and as the children get older, we are more interested in being closer to Epcot and HS. We already have 2 MK resorts, so Riviera works out really well for us. I understand people's hesitation about buying Riviera, but I wouldn't let it deter me for the unknown potential resale value if we need to sell our points. This is just my opinion, not trying to influence anyone about buying or not.

 

[Frugal Fairy Tales]

I initially stayed away from Riviera because of the restrictions, then we stayed there, and it changed my mind. We plan on keeping our Riv points for at least 10 years, so they are unlikely to affect me in any way. I don't think I would buy them resale though, and as the children get older, we are more interested in being closer to Epcot and HS. We already have 2 MK resorts, so Riviera works out really well for us. I understand people's hesitation about buying Riviera, but I wouldn't let it deter me for the unknown potential resale value if we need to sell our points. This is just my opinion, not trying to influence anyone about buying or not.

I’ve stayed there. I think RIV is wonderful. Gut feeling says DO NOT BUY.

 

[NVDISFamily]

This question is usually framed as a VGF (or in the future Poly2) vs Riviera consideration and I don't think that covers all of the variables. What if VGF isn't your 1st or even 2nd choice of where you want to be in the Magic Kingdom resort area? For us, CCV was our first choice and if I had to chose a number 2, I'm not sure. It could be VGF, it it might be BLT, or poly... not sure....

My family fell in love with Riviera, despite me having some reservations given all that I had read here doing my homework. The location of the resort with reasonable transport to two parks my family is more likely to grow into, plus closer to Animal Kingdom, was a check in the pro column for Riviera. I'm sure if I would have not taken that trip I would be the proud owner of a few hundred VGF points and be happy with the purchase. Our trip and realization that CCV was a better purchase for our MK resort also played into the path we took.

Now all we need is for Disney to announce an expansion of the Skyliner to Animal Kingdom and Disney Springs at D23

 

[Sandisw]

This question is usually framed as a VGF (or in the future Poly2) vs Riviera consideration and I don't think that covers all of the variables. What if VGF isn't your 1st or even 2nd choice of where you want to be in the Magic Kingdom resort area? For us, CCV was our first choice and if I had to chose a number 2, I'm not sure. It could be VGF, it it might be BLT, or poly... not sure....

My family fell in love with Riviera, despite me having some reservations given all that I had read here doing my homework. The location of the resort with reasonable transport to two parks my family is more likely to grow into, plus closer to Animal Kingdom, was a check in the pro column for Riviera. I'm sure if I would have not taken that trip I would be the proud owner of a few hundred VGF points and be happy with the purchase. Our trip and realization that CCV was a better purchase for our MK resort also played into the path we took.

Now all we need is for Disney to announce an expansion of the Skyliner to Animal Kingdom and Disney Springs at D23

I agree and it goes along with the notion that you should buy the resort that is your top choice if you have one because it’s just way too much money to find out later you aren’t able ti use it in a way you hoped.

For RIV and any future resorts with restrictions, it still applies.

None of us know what the future holds and staying away from where you want to own for some potential loss down the road just in case? Not sure I truly get that.

Now, anyone who sees RIV and future resorts as no big deal if you are locked out of them..or if you go direct elsewhere and okay with trying at 7 months? Sure.

But I definitely don’t think someone should buy VGF if they know they will trade out most of the time simply because it doesn’t have resale restrictions.

 

[BL2020]

The downside with the restrictions on RIV for Disney is that resale owners, and there are a lot of them, will likely not try RIV because they can't using their own points and therefore be tempted to buy. If I really wanted RIV I would buy resale (as a current resale owner with access to only the original resorts) therefore I would still have 11 month access to RIV and access to others with other contracts. But Disney has cut down on their potential direct buyer pool with these restrictions.

 

[Sandisw]

The downside with the restrictions on RIV for Disney is that resale owners, and there are a lot of them, will likely not try RIV because they can't using their own points and therefore be tempted to buy. If I really wanted RIV I would buy resale (as a current resale owner with access to only the original resorts) therefore I would still have 11 month access to RIV and access to others with other contracts. But Disney has cut down on their potential direct buyer pool with these restrictions.

Except many who can’t stay there have gone and visited to see if it was worth adding some direct points to be able to stay there.

Some have done that and others, after having visited realized they didn’t need to have points for stays.

Point is that nothing prevents anyone who wants to consider the resort from checking it out.

 

[BL2020]

Except many who can’t stay there have gone and visited to see if it was worth adding some direct points to be able to stay there.

Some have done that and others, after having visited realized they didn’t need to have points for stays.

Point is that nothing prevents anyone who wants to consider the resort from checking it out.

I agree and would love to try it, but as a new owner with only having visited BCV and BWV in the past there are so many others I would like to try out ( currently have reservations with BLT, AKL, SSR, GF and BWV). Maybe someday I'll pay cash or rent for a night or two at RIV.

 

[UofMGuy423]

I think the concerning part is that CCV and AUL both were reselling for about 90% of their initial direct price 2 years after their debut. That Riviera is reselling for only 70% should be concerning for anyone who bought there.

And like I said, I feel like the list prices themselves are inflated. For example, one broker appears to have only sold one Riviera contract in the 1st QTR. One contract. And the only recent purchases on the ROFR board (few and far between) are much cheaper than list prices. There is just no demand for these contracts.

Why should I be concerned about resale right now when I have no intention of selling and it expires 50 years from now? Plenty of us bought with no intention of selling and see it as years of vacations with family and friends. I guess I see it as prepaid vacations at a discount and not an investment.

 

[Jlo85]

Why should I be concerned about resale right now when I have no intention of selling and it expires 50 years from now? Plenty of us bought with no intention of selling and see it as years of vacations with family and friends. I guess I see it as prepaid vacations at a discount and not an investment.

It’s an investment whether you want it to be or not. I may want to die in my house, but that doesn’t mean I’m ok with it losing all of its value.

 

[DVChris]

It’s an investment whether you want it to be or not. I may want to die in my house, but that doesn’t mean I’m ok with it losing all of its value.

Eventually all DVC points will go to $0.

 

[Jlo85]

Eventually all DVC points will go to $0.

Theoretically, but actually has never happened. Will depend on if Disney lets the contracts expire. In fact, DVCs have historically appreciated as they age.

 

[Sandisw]

It’s an investment whether you want it to be or not. I may want to die in my house, but that doesn’t mean I’m ok with it losing all of its value.

It definitely is not an investment for us. It’s purpose is to pay for vacation and my retirement trips, and we have gotten more than our moneys worth.

We will continue to enjoy it and if and when we sell, we personally could care less what we get for it.

RIV is our favorite place to stay and so resale value wasn’t part of our decision to buy this resort…or any of the ones we have bought over the years.

We bought for our use and if and when we ever sell, then whatever we get back..if anything…is a bonus.