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

[Sandisw]

Not sure if my guide was giving me false hope but I bought in direct almost immediately after passing ROFR and becoming a "resale member" and I was told I could get assistance booking a welcome home trip with my direct points as long as I had not yet maid a reservation for anything DVC on either membership. I ended up not needing to use the service as the trip we wanted to book was easy to do so on the site with plenty of rooms available...

If you bought direct before you had your membership even set up with your resale, it is possible that they would have given you the welcome home booking because you had not officially closed yet on that.

But typically, its only for brand new members. They wouldn't even give us one for my adult kids when I bought RIV direct with them as owners since I had already been a member.

 

[Matty B13]

I think one issue is people who purchased within the last few years with high interest loans. They are potentially behind on their dues and are underwater on their loan without the potential to make it up in their current economic circumstances. They can’t sell and will have to be foreclosed on.

If this starts happening, then DVC will have a lot of points to sell direct in the middle of a down turn. This is already happening in the auto industry.

 

[AnnaKristoff2013]

And the economy is only weakening.

This has been repeated as gospel on these boards for the past several years. (Candidly, its' probably been repeated as gospel for the last 5 years or more). Nobody knows what's going to happen. Right now unemployment is at 3.4 percent. People have jobs and with those jobs have money to spend on vacations, which is part of the reason why Disney attendance is still extremely high (albeit off the absolute revenge-travel highs of last year). Maybe the economy goes south, maybe it doesn't, but it's just as likely that DVC is at a low point right now and the resale market will rebound as it is to continue plummeting. The bottom line is that if you see a price you like right now and want to pick up more, you are not making a poor decision because its "definitely going to tank further." Man, I wish I had bought at the Covid lows when everyone thought DVC still had farther to fall.

Also, a lot of the reason why DVC prices tanked are because Disney stopped ROFR'ing. That's not due to the economy necessarily, that's due to Disney management's extremely poor choices of late (including all the debt that Disney has taken on from Disney+, Fox, etc), that have made the company cash poor.

 

[Brian Noble]

a lot of the reason why DVC prices tanked are because Disney stopped ROFR'ing.

I don’t think this is quite right. From where I sit ROFR works at the margin, but it seems to follow the market more than it sets it.

This is another thing about which most people disagree with me but so it goes.

 

[Ruttangel]

Lowest direct sales for over a year
https://www.dvcnews.com/dvc-program...-up-overall-direct-sales-down-in-january-2023

 

[MarkNC2Disney]

Yowza

 

[Stank]

This has been repeated as gospel on these boards for the past several years. (Candidly, its' probably been repeated as gospel for the last 5 years or more). Nobody knows what's going to happen. Right now unemployment is at 3.4 percent. People have jobs and with those jobs have money to spend on vacations, which is part of the reason why Disney attendance is still extremely high (albeit off the absolute revenge-travel highs of last year). Maybe the economy goes south, maybe it doesn't, but it's just as likely that DVC is at a low point right now and the resale market will rebound as it is to continue plummeting. The bottom line is that if you see a price you like right now and want to pick up more, you are not making a poor decision because its "definitely going to tank further." Man, I wish I had bought at the Covid lows when everyone thought DVC still had farther to fall.

Also, a lot of the reason why DVC prices tanked are because Disney stopped ROFR'ing. That's not due to the economy necessarily, that's due to Disney management's extremely poor choices of late (including all the debt that Disney has taken on from Disney+, Fox, etc), that have made the company cash poor.

The fact DVC prices have fallen so far so fast already shows this “we don’t know what will happen” is already happening right in front of us.

COVID was a one-time phenomenon. You had families receiving over $10k in combined stimulus checks, and the fear of YOLO. Back to reality, all that stimulus money is eaten up by the subsequent inflation. So you got $10k in a cluster of stimulus checks, but the inflation has eaten that up and then some.

Unemployment is 3.4%, or lowest since 1969, yet we have fewer full time jobs today than we did one year ago. The people getting laid off are software workers making six figures in Silicon Valley and they’re picking up replacement jobs at warehouses
making $20/hour. All jobs aren’t equal.

But hey, DVC resale prices have fallen $40-70 depending on the resort in the past year, and I’m staring at 2,700 active listings with rental options all over the place. Seems like there’s a glut of supply even with prices having fallen, so I don’t see where the demand swoops in to halt it unless prices resume declining, which will happen.

Don’t know the future, but we do know the present. Inflation is high, major corporations are laying off 7-12%, and DVC is a timeshare that costs tens of thousands of dollars. We can pretend like anything can happen, or recognize timeshares are the first to go when people are facing financial headwinds, and that’s the case explaining why DVC prices have fallen so far in price.

 

[EYL]

Lowest direct sales for over a year
https://www.dvcnews.com/dvc-program...-up-overall-direct-sales-down-in-january-2023

I think the poor incentives contributed to this. In late-2021, I bought Riviera at $175/point with the incentives. At the same point-level now, the incentives make it $203/point. Add in people's mistrust of the economy and that's a disaster for sales.

 

[flipflopmom]

I think the poor incentives contributed to this. In late-2021, I bought Riviera at $175/point with the incentives. At the same point-level now, the incentives make it $203/point. Add in people's mistrust of the economy and that's a disaster for sales.

Add to that a 150 point minimum buy in and it’s an even bigger train wreck.

 

[tom1944]

At the right price I might buy Riviera resale and a second small direct Riviera contract

It will depend on my wife’s feelings about the resort when we visit.

The plan would be staying at Riviera alternate years. We would like the option to use the direct points with our SSR contract as well as Riviera

But pricing especially compared to other resort prices will drive that decision.

 

[Noles235]

At the right price I might buy Riviera resale and a second small direct Riviera contract

It will depend on my wife’s feelings about the resort when we visit.

The plan would be staying at Riviera alternate years. We would like the option to use the direct points with our SSR contract as well as Riviera

But pricing especially compared to other resort prices will drive that decision.

Tom, what do you consider the right price for Riviera. Not enough resale transactions to get a good feel right now.

 

[tom1944]

Tom, what do you consider the right price for Riviera. Not enough resale transactions to get a good feel right now.

I am not certain yet either

After we visit and tour the resort I will have a better idea.

The limitations on resale use absolutely diminishes the value

It will have to be lower than BLT and around the price of the 2 Epcot 2042 resorts

 

[we"reofftoneverland]

Lowest direct sales for over a year
https://www.dvcnews.com/dvc-program...-up-overall-direct-sales-down-in-january-2023

Well, well, well. Take away all the reasons why large swaths of people buy direct and why people love Disney and here you are. It’s like they want to crash the plane. I just don’t get it.

 

[Cfabar1]

Well, well, well. Take away all the reasons why large swaths of people buy direct and why people love Disney and here you are. It’s like they want to crash the plane. I just don’t get it.

Part of it is the structure of the DVC vs. Parks. I also think that DVC may just be a bit of a “mature business” for right now. Maybe after the Poly tower they will take a pause. Epcot area is full til 2042… HS will have Riviera selling for years… MK will have Poly2 selling for a while, and AK doesn’t need another resort, nor does the DS area. Let a lot of people go, and save some until 2042… Do the refreshes and continue to sell some points now and then, but mostly just let people buy resale, have less staff, lower DVC costs overall, etc. At this point there aren’t many if any restrictions I can think of they can come up with.

The dirty (not so) secret is Disney was over-hotelEd, and they did all the conversions to help sell through the hotels and raise room rates. If they start building more DVC than they can sell, those will turn into cash room rates available. They don’t want more DVC than they can sell, and they aren’t too far away from that already…. I think they are quickly about to be “over DVCed as well“. Clearly the parks division doesn’t care if DVC can’t sell because of the APs, or they feel that anecdotes aside that APs don’t meaningfully drive sales of DVC units.

Keep in mind DVC is a very small percentage of park visitors on a daily basis, and my guess is they are less profitable customers over the long term as well.

 

[Brian Noble]

It's also the case that none of the "bad changes" have happened particularly recently. It's been more than a year since they last sold out-of-state APs (November '21), and G+/ILL was the month before that.

Neither of those explain why January 2023 all of a sudden is a problem. [And January is a problem; pre-pandemic, it was one of DVC's strongest months on average.]

Macro-economic headwinds seem to be a much more likely reason.

my guess is they are less profitable customers over the long term as well.

They probably generate less "per-capita" revenue (which is measured as: spending per-person and per-park-day). But they also require lower marketing costs, because they are a captive/sticky audience. You don't have to work nearly as hard to convince them to come back over and over.

Those reductions in marketing costs are one of the reasons Disney offers a long-term lodging discount via DVC.

 

[Spivey378]

I bought direct to make sure I can get a DVC slider.

 

[CarolMN]

Neither of those explain why January 2023 all of a sudden is a problem

It doesn't explain it entirely, but IMO, it is a fairly significant factor. For some time, many of us believed APs would be back in the near future - maybe right after the lawsuits were settled. Enough time has passed that we are losing hope. A year or so is about right for those of us who take annual trips to experience Genie+ and decide it's definitely not improving the park experience. In fact, it's frustrating to use.

We bought DVC because of the parks. If the parks are no longer the enjoyable experience we've come to expect, then why do we own DVC?

I'm personally not ready to sell, but I think about it - a lot more than I ever used to.

 

[Brian Noble]

That feels a little bit like a story we'd all like to be true, but I am not sure it fits. First, I suspect (but do not know) that most DVC developer points are sold to new-to-DVC families. Those folks have a very different view of what is "normal" or "expected". Second, if the park experience were the primary drag, I wouldn't expect to see a movement this sharp; I'd expect instead a more gradual (if accelerating) decline.

I could be wrong, but my recollection is that the past several months have been more or less what one would expect given the overall volume post-Covid, in light of the usual seasonal sales variations. This January result was the first one that had me doing a double-take.

Granted this is all eye-test of the sales numbers and I haven't done any actual analysis. So again: could be totally off base. But I always worry when the explanation that everyone accepts just happens to be the one that, if it were true, would give us what we want.

 

[SkampyOne]

I get that in general it's a horrible idea to buy direct, and I would never buy a new car but... Can someone check my math here? Comparing fully stacked resale with the same UY, without negotiating, buying direct is an extra $6825 with current incentives on a 175 point contract (a little less on 150 points). Let's assume in 20 years I decide I'm done and resell. If I spread that Blue Card fee over 20 years, I get $341.25/year, and attend a few Moonlight Magic events yearly and make use of the lounges every opportunity I can, is it worth it to not have to go through the stress of negotiating, ROFR, and the ability to actually have points in my account this week and start planning a Welcome Home trip without getting close to worrying about banking deadlines and closing dates? I get that if I sell earlier, it won't make sense and if I'm blessed to still be travelling in my '90s, I'd be laughing... I would just hate to "leave the lot" staring at depreciation but what's the true value of the Blue Card? (I currently have AP & Disney Visa so not including those benefits)
TIA!!!

 

[Ruttangel]

the direct sales drop is a fairly straight correlation between the date that $10 increase kicked in which was also when the decent RIV incentives ended and minor VGF incentives started… I just think $217 is too near the limit of your average sit on the fence buyer who just walks on by