I mean at this point, why is anyone buying direct?

[AstroBlasters]

Your numbers are very off. Over the last 2 years, only about 1.5 million points were re-sold for the 10 WDW resorts (ex Riviera). That's less than 3% of the 55M points. Half of them were taken via ROFR, which Disney can then re-sell with the perks bundled.

Over that 2-year span, only 750k points have been re-sold privately which are excluded from the perks. Many buyers are people who already have other perk-eligible contracts and would not be interested in paying to "wash" these points. DVC makes more than $20 per point by exercising ROFR and re-selling, and they make FAR more by building and selling new.

DVC's answer to all of this is: "If you want the perks, buy 150 points from us and then you're welcome to go wild on resales." It doesn't make sense to undermine their direct sales efforts by offering a cheap upgrade path. Get 500k points to upgrade at $20 each and generate about in revenue $10M. That's about 1.5 weeks of "new" points sales.

Half of WDW resale contracts were taken via ROFR? There is absolutely no way that is true.

https://www.dvcresalemarket.com/blog/dvc-right-of-first-refusal-report-rofr-november-22/

0 buybacks in 2022 at RIV, VGF, POLY, and a low ROFR rate at BCV, BWV, and BRV.

“Year-to-date (YTD), Disney has exercised their right of first refusal (ROFR) on 1,126 Disney Vacation Club (DVC) contracts, and DVC Resale Market (DVCRM) has sold 4,230, resulting in a 26.6% buyback rate (Contracts Bought Back in 2022/Contracts Sold in 2022). The 2022 waiver rate is 73.4%.”

 

[zavandor]

Then no would do it and they miss out on billions in revenue. The whole point would be to make it low enough that they are likely to make money on most resale transactions whereas right now they are making $0.

I read all the time that most direct buyers don’t even know resale exists, so I don’t understand the “brand integrity” argument.

There used to not even be a difference between direct and resale, so they are essentially making revenue on something that makes the product operate how it was originally designed.

I concede I can be wrong. After all, Marriott for example, asks a (not very high) fee for all resale purchaser of points and then they're treated as direct points. So it might make sense for DVC as well.
But the two system are still very different. Marriott keeps a good value for resale (especially, I've seen, for some properties like those in Hawaii), but a much smaller percentage than Disney. Also DVC has and will always have the advantage of location, so they can be bolder than other timeshares.
I still think that if they allow to "wash" points, for a low amount, they would set expectations. Even if they swear on Mickey's head that it will be a once and done, people will still buy resale expecting it to happen again. Sure, they can make some quick bucks, but how much would they lose in the following years in missed sales?
And I'm not sure no one would pay the hefty price. I can easily imagine the posts calculating how many discounted AP people would have to buy to break even. Mickey math of course, but people will still pay.

 

[RoseGold]

Your numbers are very off. Over the last 2 years, only about 1.5 million points were re-sold for the 10 WDW resorts (ex Riviera). That's less than 3% of the 55M points. Half of them were taken via ROFR, which Disney can then re-sell with the perks bundled.

I'm not sure where that number comes from. Sales seems very low compared to historic numbers, and ROFR high.

And there's plenty more ways points return, through foreclosure or forfeit. DVC is old enough now that I bet plenty of people die and their estate never even claims it. If you have to bring money to the table to close, which many recent buyers would, then foreclosure may make more sense. That wasn't always true historically.

 

[AstroBlasters]

I concede I can be wrong. After all, Marriott for example, asks a (not very high) fee for all resale purchaser of points and then they're treated as direct points. So it might make sense for DVC as well.
But the two system are still very different. Marriott keeps a good value for resale (especially, I've seen, for some rpoperty like those in Hawaii), but a much smaller percentage than Disney. Also DVC has and will always have the advantage of location, so they can be bolder than other timeshares.
But I still think that if they allow to "wash" points, for a low amount, they would create expectations. Even if they swear on Mickey's head that it will be a once and done, people will still buy resale expecting it to happen again. Sure, they can make some quick bucks, but how much would they lose in the following years in missed sales?
And I'm not sure no one would pay the hefty price. I can easily imagine the posts calculating how many discounted AP people would have to buy to break even. Mickey math of course, but people will still pay.

I agree that if the parks are full and sales are at targets then there is no reason to change anything.

But, I would not be surprised if there is a time in the future where they are struggling to fill the parks, fill the current hotel capacity, and sell new points that there is a “revenue lever” pulled that monetizes a good portion of the resale points.

There is just too much potential money to be made on something that would make the points operate how they were originally designed.

 

[tjkraz]

Half of WDW resale contracts were taken via ROFR? There is absolutely no way that is true.

https://www.dvcresalemarket.com/blog/dvc-right-of-first-refusal-report-rofr-november-22/

0 buybacks in 2022 at RIV, VGF, POLY, and a low ROFR rate at BCV, BWV, and BRV.

I cannot speak to the validity of that data but it would be limited to the single broker. Numbers below are gathered from public records and encompass 13 brokers including DVRM.

Feb - April 2022: 160.6k points sold privately; 171.2k points ROFR

https://dvcnews.com/dvc-program/fin...rice-down-7-3-lowest-volume-in-over-12-months

Oct - Dec 2021: 165.9k points sold privately; 163k points ROFR

https://dvcnews.com/dvc-program/financial/news-34867/5218-2042-resorts-targeted-for-buybacks

Not published but the most recent 3 months on which I have data is Aug - October 2022: 202.8k points sold privately; 174.8k points ROFR.

EDIT: There was a formula error in a spreadsheet I was looking at. 2 year totals are approximately 1.6M points resold privately and 1.1M ROFR. Combined, about 5% of all points at WDW resorts (ex Riviera) change hands with 2.9% ultimately going to new owners as non-qualified points over a 2-year span.

 

[Brian Noble]

Why do people keep buying Worldmark or Bluegreen timeshares direct from the developer? Timeshares thrive on uninformed buyers.

That's part of it, but most of those (uninformed) buyers do not want to know about the resale market during the cool-down period. They were on vacation, having the time of their lives, and a helpful timeshare sales agent explained how they could bottle this magical feeling forever "at today's prices." It's an investment in themselves, and their family--not a financial investment, but a commitment of time and resources to vacation. And, it feels really good to have made that commitment.

People do not go out of their way to find out why something that feels really good is a bad idea.

The same thing works for people who do know about the resale market in advance, and a good sales agent can make the case. Membership Extras, unrestricted points, immediate gratification, being a "real" Member: all of these feed into the emotional side of the ledger, and that side of the ledger has value.

Heck, many folks who bought from the developer and understand the resale market end up being happy they bought. About half of the folks on TUG made their first purchase from the developer. Some of them continued to do so for one reason or another, even after understanding the market. Did they spend more than they had to? Sure. But, they still got something of value, and so it's not the end of the world.

At the end of the day, nearly every purchase anyone makes has an emotional component; most decisions are not purely utilitarian. I suspect that when someone tells themselves they are being "strictly rational" in a purchase decision---especially one that is, at its core, unnecessary---they are probably trying to fool themselves.

 

[AstroBlasters]

I cannot speak to the validity of that data but it would be limited to the single broker. Numbers below are gathered from public records and include 13 brokers including DVRM.

Feb - April 2022: 160.6k points sold privately; 171.2k points ROFR

https://dvcnews.com/dvc-program/fin...rice-down-7-3-lowest-volume-in-over-12-months

Oct - Dec 2021: 165.9k points sold privately; 163k points ROFR

https://dvcnews.com/dvc-program/financial/news-34867/5218-2042-resorts-targeted-for-buybacks

Not published but the most recent 3 months on which I have data is Aug - October 2022: 202.8k points sold privately; 174.8k points ROFR.

EDIT: There was a formula error in a spreadsheet I was looking at. 2 year totals are approximately 1.6M points resold privately and 1.1M ROFR. Combined, about 5% of all points at WDW resorts excluding Riviera.

I edited my original post to include:

“Year-to-date (YTD), Disney has exercised their right of first refusal (ROFR) on 1,126 Disney Vacation Club (DVC) contracts, and DVC Resale Market (DVCRM) has sold 4,230, resulting in a 26.6% buyback rate (Contracts Bought Back in 2022/Contracts Sold in 2022). The 2022 waiver rate is 73.4%.”

Looking at the entire active resale market, it would seem that DVCM is the largest broker: ***************************?total=,180000

I would equate that to looking at credit card spending data from JPMorgan Chase to understand current consumer spending. They are only one bank, but since they are the largest issuer of credit cards in the country the data is still statistically significant.

 

[Brian Noble]

Part of the problem is that the two of you are talking about different things. DVCRM reports number of contracts ROFRd. DVC News is reporting total points ROFR'd.

It is possible that DVC tends to ROFR larger contracts more often, but it is also possible that DVCRM is getting a biased sample of the entire population for whatever reason. (The former is believable, because there is often a price premium for smaller contracts, hence smaller contracts are taken less often all other things being equal.)

Either way, there's absolutely no reason to doubt DVCNews' numbers, because they are extracted from a public data source and anyone can confirm (or dispute) them if they so choose.

(There's also the possibility that DVCRM is slightly under-reporting the long-run ROFR number, depending on how they count: If they are counting YTD "sales agreements" vs. ROFR decisions, there's about a month's worth of ROFR decisions that haven't happened yet.)

 

[tjkraz]

I edited my original post to include:

“Year-to-date (YTD), Disney has exercised their right of first refusal (ROFR) on 1,126 Disney Vacation Club (DVC) contracts, and DVC Resale Market (DVCRM) has sold 4,230, resulting in a 26.6% buyback rate (Contracts Bought Back in 2022/Contracts Sold in 2022). The 2022 waiver rate is 73.4%.”

Looking at the entire active resale market, it would seem that DVCM is the largest broker: ***************************?total=,180000

I would equate that to looking at credit card spending data from JPMorgan Chase to understand current consumer spending. They are only one bank, but since they are the largest issuer of credit cards in the country the data is still statistically significant.

You're citing contract numbers. I'm citing point totals. DVC's ROFR tends to focus on larger contracts. They take fewer contracts, but for a higher average number of points vs private sales.

 

[kanerf]

The real question is will Gen Z do WDW or will the place become an old folks home?

 

[808blessing]

I think they cultivated a one & done mentality with the younger group. Or wait & go with your elders for a cheaper ride.

 

[hglenn]

The real question is will Gen Z do WDW or will the place become an old folks home?

Ah... this is what I keep thinking. Sorry to say, but if I were going to DW for the first time in today's environment, I think I'd be a one and done... It's just too hard of a vacation, now. It's not even close to what it was only 4-5 years ago. I have to wonder what happens to DW in general when those of us who fell in love with Disney and continue to "make the magic" are gone... Does today's Disney create a die-hard Disney fan that wants to continue to come back for the magic time after time - thus invest in DVC? I'm not sure it does....

 

[RoseGold]

The real question is will Gen Z do WDW or will the place become an old folks home?

We already know the answer to that one....

I don't talk about DVC, even with serious Disney people because anyone my age would think I'm a complete idiot for owning a timeshare. Timeshares earned their reputation, and Disney seems to be moving in that direction as well.

 

[tom1944]

You're citing contract numbers. I'm citing point totals. DVC's ROFR tends to focus on larger contracts. They take fewer contracts, but for a higher average number of points vs private sales.

What is the definition of larger contract?

Is it 150 points and above

Educated guesses are welcome

 

[Brian Noble]

It's just too hard of a vacation, now. It's not even close to what it was only 4-5 years ago.

But that's because you have five years ago to compare. Families going with their pre-school kids now for the first time do not---and I will bet it is just about as magical for them as it ever has been for first-timers in that age bracket.

It is perfectly possible to have a fine trip without doing much if any planning. You'll "accomplish" a lot less, but maybe the vacation isn't about how many rides you get on, but what the experience feels like.

 

[AstroBlasters]

Part of the problem is that the two of you are talking about different things. DVCRM reports number of contracts ROFRd. DVC News is reporting total points ROFR'd.

It is possible that DVC tends to ROFR larger contracts more often, but it is also possible that DVCRM is getting a biased sample of the entire population for whatever reason. (The former is believable, because there is often a price premium for smaller contracts, hence smaller contracts are taken less often all other things being equal.)

Either way, there's absolutely no reason to doubt DVCNews' numbers, because they are extracted from a public data source and anyone can confirm (or dispute) them if they so choose.

(There's also the possibility that DVCRM is slightly under-reporting the long-run ROFR number, depending on how they count: If they are counting YTD "sales agreements" vs. ROFR decisions, there's about a month's worth of ROFR decisions that haven't happened yet.)

Good points about how there could be a material difference between contracts vs point total.

I will say that one article is looking at YTD (through NOV) and the DVC news articles were looking at two quarters at the end of 21 and beginning of 22. That’s only 25% of the data if you are making a claim about 2 years. I also don’t think your can exclude RIV, VGF, and POLY when talking about WDW sales and there has been 0 ROFR there.

I still hypothesize that if you look at all resorts (not just WDW excluding large properties in active sales) that if the avg contract holding period of 7-10 years holds that there is at least a billion to be made in extra money (spread out over decades) monetizing resale outside of ROFR over the life of those contracts.

 

[Brian Noble]

Tim is (one of) the principal(s) at DVC News, and he's shared more than those two quarters of published data.

 

[AstroBlasters]

The real question is will Gen Z do WDW or will the place become an old folks home?

I have heard a lot of people tell me “I will never work for “the man”, I will never get married, we don’t want kids, we will never move to the suburbs”…. only to do exactly that…

 

[AstroBlasters]

Tim is (one of) the principal(s) at DVC News, and he's shared more than those two quarters of published data.

Oh, I am not meaning to question the accuracy of the data and feel that the site is an absolutely incredible resource. I am just saying that it’s not written in a way that is attempting to show a YTD perspective, just that qtr.

 

[tjkraz]

What is the definition of larger contract?

Is it 150 points and above

Educated guesses are welcome

I don't have any data at hand so I hate to even guess.

Hypothetically, if the going rate for BLT is around $150 per point, DVC is more likely to pass on a 50-point contract which sells for $165 (scarcity premium) and pounce on a 500 point contract which had to be discounted to $135 because there are few buyers looking to spend $67k.

Generally speaking, they let the little ones go and grab the big fish. And in the middle (say, 100-300 range) is an area where they would selectively pick up contracts based upon price, loaded vs stripped, etc.

It's not really that cut-and-dried, but that helps illustrates why contract numbers vs points show different trends. If you pass on ten 50-pt contracts and ROFR one for 500 points, the ROFR rate is only 9% of contracts but 50% of points.