How can disney sell taken contracts

[ScubaCat]

I believe when you buy direct, you get the current use year's points right away followed by the full points when it flips to the next use year (inside of the current calendar year). Hence, that's how they give you "double points" the first year.

In other words, suppose I bought 100 points direct with a September use year. I'd get 100 now and another 100 on September 1.

 

[MouseOfCards]

I believe when you buy direct, you get the current use year's points right away followed by the full points when it flips to the next use year (inside of the current calendar year). Hence, that's how they give you "double points" the first year.

In other words, suppose I bought 100 points direct with a September use year. I'd get 100 now and another 100 on September 1.

Sounds great! Is this offer always available? Or is it only available at certain times?

And is the offer available for 25 point add-ons?

 

[ScubaCat]

That's how direct purchases always work. They're not selling something you can use "eventually". A new direct purchaser can book a stay usually 48-72 hours after closing.

This is why stripped contracts seem less likely to be taken via ROFR -- they don't have the current use year points to be immediately flipped.

 

[Supplanter]

That's how direct purchases always work. They're not selling something you can use "eventually". A new direct purchaser can book a stay usually 48-72 hours after closing.

This is why stripped contracts seem less likely to be taken via ROFR -- they don't have the current use year points to be immediately flipped.

I just went through the limited data we have here on the site and it looks like it's a mix of low prices, loaded deals and maybe some other background data that makes a contract appealing to them. What doesn't make sense is when they pass on super cheap loaded deals. I can't figure out why that is.

 

[KAT4DISNEY]

Just thinking, I suppose if disney takes a contract they couldn't necessarily just immediately flip it since they offer current double points the first year. They'd have to either pick up a contract with existing year points or hold it for a time period to ensure those points were available to give.

Disney doesn't sell contracts with double points. They sell contracts with current points. The guides love to tell you it's double but in actuality is selling the product with points for the current UY. Now the next UY might be starting soon but it's still current. At this time only with resale can you get the most possible if you find a contract with points already banked, all current and all going forward. DVC can and has included developer points for promotions which are actually "extra" one time points.

 

[Supplanter]

Does anyone know what percentage of Aulani DVC has been sold?

Is this always the case or is it a limit-time special?

That's always the case with direct purchases from what I understand. If you were to buy at aulani for example, they're currently selling October use year so you'd immediately get your points and then in October you'd get another set. It's a nice incentive to go direct over a stripped down contract and something to factor in any calculation.

Someone suggested looking at the direct cost including potentially just renting out the first set or two of points, its an interesting idea.

 

[KAT4DISNEY]

That's how direct purchases always work. They're not selling something you can use "eventually". A new direct purchaser can book a stay usually 48-72 hours after closing.

This is why stripped contracts seem less likely to be taken via ROFR -- they don't have the current use year points to be immediately flipped.

6-8 years ago they seemed to almost exclusively take stripped contracts. One just never knows what the ROFR Monkey is going to do.

 

[malba2366]

I just went through the limited data we have here on the site and it looks like it's a mix of low prices, loaded deals and maybe some other background data that makes a contract appealing to them. What doesn't make sense is when they pass on super cheap loaded deals. I can't figure out why that is.

The more I read about this the more I believe that they are looking at potential revenues to Disney. I would bet money that the buyers of these cheap per point loaded large contracts that sail through ROFR are people that go to disney often and consistently spend tons of money in the parks.

The whole process looks random and haphazard to people looking in with limited information, but I can not imagine that is how it actually works.

 

[wdrl]

Just thinking, I suppose if disney takes a contract they couldn't necessarily just immediately flip it since they offer current double points the first year. They'd have to either pick up a contract with existing year points or hold it for a time period to ensure those points were available to give.

Technically, Disney has never offered "double points." At best, Disney will sell a deed at the very end of the Use Year, which permits the buyer to receive points for the current Use Year, then the buyer receives another allotment of points when the next Use Year starts a few days later.

As you say, Disney's ability to repackage and sell points is limited if it reacquires a stripped or partially stripped deed. If Disney reacquires a 100-point September Use Year deed that has no points left in its 2015 UY but a full complement of points in its 2016 UY, it can't sell those points until September 1, 2016.

 

[wdrl]

This is why stripped contracts seem less likely to be taken via ROFR -- they don't have the current use year points to be immediately flipped.

There is a scenario where a stripped deed could still benefit Disney in selling points. Disney is required to retain 2% of the resort's total real estate interest, but it doesn't mean that it has to have 2% of the points in each Use Year.

Let's say that a resort has 1,000,000 points and Disney owns 20,000 points, exactly 2% of the resort's total. Even if all of the points were for the current Use Years, Disney could not sell any of the points because it would drop below the mandated 2% threshold. If Disney ROFRs a stripped 500-point deed, it now has 20,500 points, slightly more than 2% of the resort's total points. Disney could now sell 500 of its previously held points.

 

[ScubaCat]

Someone suggested looking at the direct cost including potentially just renting out the first set or two of points, its an interesting idea.

A lot of times DVD offers the option of a discount (I think it was $10 or $12 a point last time I checked; I don't remember the exact amount) in lieu of the current use year's points, which is comparable to renting them out yourself.

 

[KAT4DISNEY]

A lot of times DVD offers the option of a discount (I think it was $10 or $12 a point last time I checked; I don't remember the exact amount) in lieu of the current use year's points, which is comparable to renting them out yourself.

I haven't heard of that happening for years and years. Where are you hearing that?

 

[MouseOfCards]

There is a scenario where a stripped deed could still benefit Disney in selling points. Disney is required to retain 2% of the resort's total real estate interest, but it doesn't mean that it has to have 2% of the points in each Use Year.

Let's say that a resort has 1,000,000 points and Disney owns 20,000 points, exactly 2% of the resort's total. Even if all of the points were for the current Use Years, Disney could not sell any of the points because it would drop below the mandated 2% threshold. If Disney ROFRs a stripped 500-point deed, it now has 20,500 points, slightly more than 2% of the resort's total points. Disney could now sell 500 of its previously held points.

If Disney ROFRs a stripped 500-point deed, and now sells deeds with 500 current use year points, wouldn't they be losing some money from having to add the current use year points?

 

[MouseOfCards]

Technically, Disney has never offered "double points." At best, Disney will sell a deed at the very end of the Use Year, which permits the buyer to receive points for the current Use Year, then the buyer receives another allotment of points when the next Use Year starts a few days later.

As you say, Disney's ability to repackage and sell points is limited if it reacquires a stripped or partially stripped deed. If Disney reacquires a 100-point September Use Year deed that has no points left in its 2015 UY but a full complement of points in its 2016 UY, it can't sell those points until September 1, 2016.

But they can always add the 2015 UY points from their own allotment, and sell the new contract before September 1, 2016, correct?

 

[MouseOfCards]

That's how direct purchases always work. They're not selling something you can use "eventually". A new direct purchaser can book a stay usually 48-72 hours after closing.

This is why stripped contracts seem less likely to be taken via ROFR -- they don't have the current use year points to be immediately flipped.

So if we were to now purchase a 25-point add on June UY from Disney, it would for certain include 25 points from 2015 that we could immediately bank into 2016 UY?

 

[MouseOfCards]

2 more questions for those of you still awake:

1. Is there any information on which Use Year(s) are the ones taken by Disney the most?
2. Is Disney able to jump ahead and just offer/buy resale contracts without waiting for ROFR?

 

[ScubaCat]

So if we were to now purchase a 25-point add on June UY from Disney, it would for certain include 25 points from 2015 that we could immediately bank into 2016 UY?

Yes. Typically you have to bank 4 months prior to the use year, but they will almost always make an exception for the first year on a new purchase. (That exception is even mentioned in the POS)

2 more questions for those of you still awake:

1. Is there any information on which Use Year(s) are the ones taken by Disney the most?
2. Is Disney able to jump ahead and just offer/buy resale contracts without waiting for ROFR?

1. Check the ROFR thread in this forum.

2. I would imagine that they could, but it's their explicit policy not to.

 

[supersnoop]

If Disney ROFRs a stripped 500-point deed, and now sells deeds with 500 current use year points, wouldn't they be losing some money from having to add the current use year points?

Not specifically "losing" money, but delaying it a bit, adding carrying costs. But since they're typically buying at $90 or less, and selling at $160 or more, I'm going to assume they can afford it.

 

[supersnoop]

1. Is there any information on which Use Year(s) are the ones taken by Disney the most?

Don't try to understand how they choose which contracts to take back. It will depend entirely on what their immediate customers are after. I describe the process as a drunk monkey throwing darts. That's should demonstrate our ability to deconstruct their process.

 

[Supplanter]

So if we were to now purchase a 25-point add on June UY from Disney, it would for certain include 25 points from 2015 that we could immediately bank into 2016 UY?

Ask them but yes it should. That's always been their policy