Is Disney Trying to Cut Down on the Resale Market, or Keep it Strong?

[Dean]

Could you clarify this? Not sure what you mean about legal option. Thanks

Sorry, on vacation and didn't get notification. As I understand it, Westgate tried to somewhat successfully insist on ROFR when they did not have the right listed in the paperwork and did not develop the property but simply acquired the management and ? unsold units. In order for ROFR to be applicable there has to be a contractual basis.

 

[thelionqueen]

I think whatever DVC does has a lot less effect on the resales market than some people think. The market price is driven strictly by supply and demand. The only effect Disney has that mildly effects the market price is exercising their ROFR. Some may be willing to pay a little more per point to ensure a given contract gets through ROFR. Other timeshares have lots of competition. There are literally dozens of systems and resorts out there all competing for the same clients. Massive supply with limited demand, hence their value is poor. I own a massive number of HGVC points. I could stay in a 2 BR during high season for over a month but I still bought DVC. Why? Because I want the Disney experience for my family. Disneys only competition is Disney! Disney is massively popular. There is limited supply and high demand that is why the prices are high. I didn't buy a timeshare, I bought a Disney experience. The demand will always be there. If Disney could somehow drive down the price of resale points to $20/point, how many of you would be lining up to buy a massive number of points? I don't have to stay in a value studio anymore because now I can afford enough points for a 3 BR villa for a month! Demand for resales would skyrocket and price would go right back up.

As someone noted earlier, the only thing that effects prices is an economic downturn, but that effects direct sales too.

Ironically I believe this move to 75 points direct will actually hurt their direct sales. I, probably like a lot of other resale buyers, would have gladly purchased 25 points direct to get perks. I highly doubt I will ever purchase 75 points direct to get those perks. The $5-6K extra it would cost me is highly unlikely to be worth any perk I can get. It may convince a few people that have limited knowledge of the resale market to purchase direct instead but I believe that they will lose a significant amount of extra small contract business from the resale buyers.

Well they certainly increased 25 point purchases for the 3 weeks before the change took affect. I wonder how much they made additionally that they wouldn't have otherwise. I'm pretty sure it's significant

 

[Mosescan]

Well they certainly increased 25 point purchases for the 3 weeks before the change took affect. I wonder how much they made additionally that they wouldn't have otherwise. I'm pretty sure it's significant

Yes, I can imagine there was a bit of panicked buying. But now I bet the resale buyers getting ad ons has almost completely dried up.

 

[Dean]

Well they certainly increased 25 point purchases for the 3 weeks before the change took affect. I wonder how much they made additionally that they wouldn't have otherwise. I'm pretty sure it's significant

I suspect it'll increase profits long term.

 

[Ben E N]

I suspect it'll increase profits long term.

I would imagine so as well. Considering they are in charge of making money, and have significantly more data at their disposal, they have figured out how to make the most money off of people. The move to 75 points will not only get more people to commit to 75, but will also push more people to just buy 150 direct than before, when they would just buy 125 resale and 25 direct.

 

[kboo]

Ironically I believe this move to 75 points direct will actually hurt their direct sales. I, probably like a lot of other resale buyers, would have gladly purchased 25 points direct to get perks. I highly doubt I will ever purchase 75 points direct to get those perks. The $5-6K extra it would cost me is highly unlikely to be worth any perk I can get. It may convince a few people that have limited knowledge of the resale market to purchase direct instead but I believe that they will lose a significant amount of extra small contract business from the resale buyers.

I agree with your post except for this point of 75 points - I think smaller contracts are just not worth DVD's while. The transaction costs and administrative costs and time for small contracts is not worth it if there are buyers willing to pay $20,000 or more. I originally typed $15,000 - that's 75 points at $200 per point. I think this was carefully calculated that DVD wants to focus on selling new resorts and is only going to motivate to sell points at other resorts if they're going to make $15,000 as opposed to $5,000.

I would imagine so as well. Considering they are in charge of making money, and have significantly more data at their disposal, they have figured out how to make the most money off of people. The move to 75 points will not only get more people to commit to 75, but will also push more people to just buy 150 direct than before, when they would just buy 125 resale and 25 direct.

Exactly.

If the premium $ for small contracts (<100) continues, then some resale buyers who want the small addons because they need the points, as opposed to wanting the perks, are more likely to go to DVD for their purchase if it doesn't cost drastically more, because they can get points in their account immediately as soon as points are available. Resale prices will settle, and buyers of big contracts (150+ points) will buy resale or direct based on their knowledge of the market. For most, resale will still be the better option, and I don't see DVD exercising ROFR so much unless it's a ridiculously low price. While looking around on the OCC site the other day, I saw someone who bought 300+ points direct at VGF last fall! So... there are still buyers who don't know about resale and buy on impulse and... they can spend 10s of thousands of dollars more than we did.

 

[Ben E N]

For most, resale will still be the better option, and I don't see DVD exercising ROFR so much unless it's a ridiculously low price.

This is where I think Disney likes the resale market, to a certain degree, and wants it to stay high. The closer the spread between resale and direct, the more some people will say "eh, it's not worth the hassle" and just go direct for all of their points. If there is an $80 spread between direct and resale, then it will convince a lot more people to hybrid the two, and even more people to go all resale.

 

[MJB62676]

I know my wife keeps asking me why I would go to the hassle of buying Aulani resale when we can buy it the way we want it (two 100 point contracts) going direct. We shall see.

 

[Mosescan]

I know my wife keeps asking me why I would go to the hassle of buying Aulani resale when we can buy it the way we want it (two 100 point contracts) going direct. We shall see.

It you can have it the way you want it resale too and for half the cost. You just have to be patient!

 

[ziravan]

I know my wife keeps asking me why I would go to the hassle of buying Aulani resale when we can buy it the way we want it (two 100 point contracts) going direct. We shall see.

If you want two 100 point contracts, then buy one of each. Save some money buying one resale and get perks buying one direct.

Best of both worlds.

Prob save about $8 grand in the process.

 

[Dean]

I know my wife keeps asking me why I would go to the hassle of buying Aulani resale when we can buy it the way we want it (two 100 point contracts) going direct. We shall see.

Why would you want it at 100*2? The usual reasons people look at that option for the same resort are for an exit strategy or a legacy and IMO neither are worth the extra cost. If one plans to sell later, just buy less and make do, very easy to do the math to hit the sweet spot for that situation. Plus one should never buy to sell later unless they can turn an immediate profit. From a legacy standpoint even at resale it really doesn't make sense. You never know what changes 10-20 years or more is going to bring, what the situations are going to be, whether they will want it or want to go. For the price difference, even going resale at two contracts of 100 pts each at the same resort is not a reasonable cost. So roughly for an extra $2000 one could go resale if they could find two contracts that match up. Or for an extra $15K one could go all retail. I'd actually go out and find a subsidized contract even if more if possible.

If you want two 100 point contracts, then buy one of each. Save some money buying one resale and get perks buying one direct.

Best of both worlds.

Prob save about $8 grand in the process.

For that end I'd do 125-175 resale THEN 75-100 retail second if going retail made sense at all. I know it says 100 minimum but I bet they'll sell 75. IMO it will not make sense for many that it did at 25 pts. At 25 pts it was reasonable just for insurance against future changes if one could incorporate the retail purchase into the overall plan, that's not true at 75-100 pts. You have to get real and specific benefits like a bunch of pass discounts to make it worthwhile.