It was unrealistic not to expect DVC to do something about resales

[Dean]

Are you suggesting that what is made on a sale supposed to support the business model for 2 or 10 years after? Why should Disney have any expectation beyond what income is generated from an original point sale?

Each point sold, if held onto the remainder of the 50-year RTU is exactly what they should expect to earn from the sale of that real estate interest, as that would be the right of that owner. There is no obligation from any owner of a point to “help them going forward.”

By that logic, Disney should have a right to to get in on the action when a daughter inherits a contract from her mother who PAID for the points. That inheritance doensn’t benefit Disney at all. In fact it is in direct competition as a potential buyer.

Once sold, Disney should have zero expectation around getting additional income beyond the dues that support the products maintenance. The resorts operate just fine and Disney generates enough income to support the continuation of the product. How much more does Disney need to squeeze from a sale? Given how few people actually know about resale, and the rate by which Disney sells out new properties, how severe is the resale competition?

DVC has been a huge financial boon for Disney. I would argue as a stakeholder with vested interest in the success of this product, adopting your “its in the contract so it’s legal and if it’s legal it’s ethical” is more detrimental and poses a greater risk to the future health and viability of the product than any resale market ever could.

NO I'm suggesting that past sales are not enough, it's last years balance sheet and the sales this year are what's important, basically it's water under the bridge. Some have suggested that they made the money at some point and this should be enough, I'm saying it's NOT. This and future sales are what's important to them and it should be. The idea they need to prop us resales or protect them is unreasonable, IMO, esp in timeshares which are sold and not bought.

 

[Bing Showei]

NO I'm suggesting that past sales are not enough, it's last years balance sheet and the sales this year are what's important, basically it's water under the bridge. Some have suggested that they made the money at some point and this should be enough, I'm saying it's NOT. This and future sales are what's important to them and it should be. The idea they need to prop us resales or protect them is unreasonable, IMO, esp in timeshares which are sold and not bought.

So if I’m understanding your position correctly, it’s that Disney purposefully undervalued what the selling price should be to allow for sale of an unsustainable product line absent additional income generated from the repossessions and reselling of the product; that Disney is instead choosing to move said product at a lower entry cost and is banking on the reality that most timeshare owners hold onto a property for less than 10 years?

If that’s the case, the adverse affect on the resale market is not just an unintended consequence of selling direct, it’s in fact a critical part of the product’s viability; that the detriment to the members is integral to the success of the timeshare model.

Way to kill the Magic, DEAN.

 

[ziravan]

I understand that DVC has to look at maximizing “shareholder value”.

I maintain that high resale values have done just that, by giving confidence in the ongoing value of DVC as a timeshare - something that is almost unique to the timeshare world.

DVC used to be a pioneer in the timeshare world. They made point systems popular as an example, and it’s certainly not the only one. That DVC still doesn’t nickel and dime it’s members with fees is still an amazingly unique feature of the program.

DVC is a timeshare, but it has been special, unique....not because it’s “a club” but because it treated itself as something different.

“Following industry standards” used to be beneath Disney and DVC. They used to CREATE industry standards.

If DVC was running out of customers, I could understand this smack of desperation that these moves suggest.

They’re not.

Their parks are full to overflowing with new customers.

 

[keishashadow]

Resale only buyer here. Prior to owning, we would spend 8-10 days at WDW every few years, so not that often. Since owning we have averaged 27 days a year at WDW. That's a lot of park tickets, food and trinkets we've bought over that time that would never have been spent without us owning DVC. If DVC had of been like any other timeshare, I wouldn't have gone near them. DVC had a quality product. To my mind they are diminishing their brand and the value of their product for a few extra bucks. Very short term thinking.

We spend approximately the same, if not more DVC time per year @ WDW. Don’t think that is necessarily rare, especially when members start to accumulate more vacation/free time & discretionary income as they age.

There is the contingent of those who bought in thinking speculatively (to make money on their point price or to rent out points). More than few stated they had specific intent to sell within a decade or so, but I don’t think it’s quite as prevalent among Disney people; who tend to emotionally identify with the brand.

Thus far, having bought direct and being grandfathered in, will state I’m not a fan of any changes to the model as they will always be geared to benefit the house. I’m just carefully watching the embers in this fire and hoping for the best. I’m sure I’d feel quite differently if I had active plans to sell my points down the road. My perception is that my contracts (at popular resorts) haven’t diminished in actual value, yet.

Have lost count of the times I’ve heard the adage of DVC members being substantially more frugal vs CRO guests as to their spending $$$ @ WDW. Can’t say I disagree with it. IMO you visit enough, you wind up purchasing a discounted APH (oh, please, keep this perk going DVC!). Our souvenir purchases have segued into artwork and collectibles, but that’s a personal preference, not sure it’s across the board with members.

Once the kids went off to college we started to venture offsite more to enjoy other dining & entertainment options. We’ve enjoyed the disney tours over the years & still visit our fav restaurants onsite, at least once a year. However, unless friends & family are along who want to be fully immersed, we tend play things by ear and not schedule our trips around ADRs.

 

[Dean]

So if I’m understanding your position correctly, it’s that Disney purposefully undervalued what the selling price should be to allow for sale of an unsustainable product line absent additional income generated from the repossessions and reselling of the product; that Disney is instead choosing to move said product at a lower entry cost and is banking on the reality that most timeshare owners hold onto a property for less than 10 years?

If that’s the case, the adverse affect on the resale market is not just an unintended consequence of selling direct, it’s in fact a critical part of the product’s viability; that the detriment to the members is integral to the success of the timeshare model.

Way to kill the Magic, DEAN.

Timeshares are sold, not bought for the most part, even for DVC. The main way timeshares sales happen is people see the product on vacation, do the tour and buy on the spot. EVERY single resale is a potential lost resale even when the buyer says they would not have bought retail. In a sense it's no different than a large housing development that's only sold a few units and you're trying to resell, only it's a timeshare so the differences are much larger in terms of %. I think one of the critical issues is a separation of the contractual and other factors. The reality is the other options likely should never have been available to resale buyers but since the changes have happened over time, it creates more a a sense of loss. DVC has never removed options from a current owner even when they didn't have to grandfather them so every resale buyer knew or should have known going in what they had and every buyer knew what their options were to sell including that there were contractual and non contractual issues and they should have been able to separate out the 2 in their own mind. But you haven't lost anything that's contractual and in reality you haven't lost anything at all other than your perceived resale value. But yes devaluing the value and options resale is an integral part of the ongoing sales strategy for timeshares given that it's such a specialty product. And to have ongoing developer sales is integral to the qualify of our memberships as well. Still, IMO, there are lots of other things they could do to boost sales though none of them would be exclusive of this path, they could simply be additive.

I do not subscribe to the theory that the developer has a responsibility to provide more than is contractual or to support my resale value. To me this is an analytical and contractual issue and I tend to take a business and timeshare orientation rather than an emotional one.

 

[Bearval]

Each point sold, if held onto the remainder of the 50-year RTU, should be exactly what Disney should expect to earn from the sale of that real estate interest, as that would be the right of that owner. There is no obligation from any owner of a point to “help them going forward.”

By that logic, Disney should have a right to to get in on the action when a daughter inherits a contract from her mother who PAID for the points. That inheritance doensn’t benefit Disney at all. In fact it is in direct competition as a potential buyer.

DVC is not a true "RTU" since you get a deed for fractional ownership with an expiration date. This is how you can will it to another person when move on. If it were a true " Right to Use" timeshare depending on how the language is written your membership can expire when you do even if there are years left on the agreement unless you have other people listed on the document that was filed with that company when you purchased.

 

[Dean]

Each point sold, if held onto the remainder of the 50-year RTU, should be exactly what Disney should expect to earn from the sale of that real estate interest, as that would be the right of that owner. There is no obligation from any owner of a point to “help them going forward.”

By that logic, Disney should have a right to to get in on the action when a daughter inherits a contract from her mother who PAID for the points. That inheritance doensn’t benefit Disney at all. In fact it is in direct competition as a potential buyer.

DVC is not a true "RTU" since you get a deed for fractional ownership with an expiration date. This is how you can will it to another person when move on. If it were a true " Right to Use" timeshare depending on how the language is written your membership can expire when you do even if there are years left on the agreement unless you have other people listed on the document that was filed with that company when you purchased.

They don't have to allow the rights to pass but they do have to allow the contractual options to pass or take it under ROFR. There are consistencies in timeshares and generally it's gratuitous to a direct descendent to be qualified for most systems. Even then they can charge transfer fees which DVD did away with some years ago but might bring back.

 

[jade1]

DVD isn't restricting your right to sell, only the non contractual components. And in reality they didn't have to grandfather resale buyers, they could have made it retroactive in any way they so chose. And they could have announced the changes and points increase after the other restrictions went into effect.

Yep and haven't we discussed close to 20 years that they "could" limit use at just the home resort (a big reason Vero and HH are at risk for WDW).

Wonder how that would go over.

 

[Ben E N]

Yep and haven't we discussed close to 20 years that they "could" limit use at just the home resort (a big reason Vero and HH are at risk for WDW).

Wonder how that would go over.

Isn't it written into the contract of the original 14 that they are part of "the club", which is why resale restrictions hold them to those 14, but Riviera isn't in that club. I'm not positive, but I don't think they can restrict those two, even if they wanted to. Not to mention it would be a bad idea because then people couldn't trade into those resorts.

 

[Dean]

Yep and haven't we discussed close to 20 years that they "could" limit use at just the home resort (a big reason Vero and HH are at risk for WDW).

Wonder how that would go over.

Contractually I don't think they could limit directly to one's home resort for DVC the club though there may be ways they could do so indirectly. Certainly the 7 month window has gotten more difficult over the years for several reasons though the largest single factor has been SSR IMO.

 

[TexasChick123]

I was a teenager in the 90s.

I was a kid too! I couldn't exactly buy DVC when I wasn't even in high school yet...

The hoops people jump through to justify Disney chipping away at their product (not just DVC but the entire overpriced vacation experience of today) is sort of a fascinating peek into human psychology.

That's the darn truth. I was thinking something more colorful, but I am trying to stay PC here. It really is something that should be studied: blind loyalty to Disney. I suffer from it to a lesser degree because I keep going and still own my points despite the rising costs. The pixie dust has definitely been wiped out of my eyes. My DH and I were just talking about this today. We own at the 3 resorts we really love, VGF, BLT, and BWV. We don't see any need to sell any of them or add any more on. We were debating selling some off to buy at Riviera, but that won't be happening now. Done and done!

 

[BWV Dreamin]

At least I could JUSTIFY buying direct for the new resort if that’s really where you wanted to stay.

In fact, I did justify it, buying Poly direct.

I don’t think it’s justifiable anymore.

That’s the biggest change I see: DVC has made buying direct almost never a good deal.

I justified it by purchasing a fixed week and by purchasing their flagship resort. Otherwise, cant justify it now. Or ever for me.

 

[zavandor]

I am thinking the same thing about buying resale at Riviera if I like it and the price is low enough without Disney ROFR the contract. Anyone going forward buying resale with the new resorts is going to have to adhere to the saying" buy where you want to stay", and you will be fine. You won't over pay and if you as a resale buyer has to sell you will not lose your shirt like the direct buyer will. I think the really hard part on this strategy is trying to get the contract since Disney will most likely buy most of them back if they are cheap enough. Question to everyone out there, what would you pay per point for a resale at Riviera with the restrictions if the direct price was $225 per point?

I do not monitor Marriot resale, but I could buy resale at their resort near DLP for 5% they sell direct. Riviera won't go down like that immediately, but in case a big recession will hit, like 2008, I wouldn't be surprised by resale contracts going for less that $30. I would buy a small addon at that price.

 

[Ben E N]

I do not monitor Marriot resale, but I could buy resale at their resort near DLP for 5% they sell direct. Riviera won't go down like that immediately, but in case a big recession will hit, like 2008, I wouldn't be surprised by resale contracts going for less that $30. I would buy a small addon at that price.

I would guess really high MFs would help motivate someone to sell that cheap, though, so you would have to take those into consideration.

 

[Bearval]

I do not monitor Marriot resale, but I could buy resale at their resort near DLP for 5% they sell direct. Riviera won't go down like that immediately, but in case a big recession will hit, like 2008, I wouldn't be surprised by resale contracts going for less that $30. I would buy a small addon at that price.

After seeing the pictures of the rooms I am really hoping the resale prices plummet so I can justify buying at a steep discount. I already have AKV with benefits so this would be just to stay at Riveria every other year.

 

[bumbershoot]

People frequently came on these boards to say only suckers bought direct, etc.

I bought direct AND had a loan for it, and I don’t recall the word “sucker” being used.

To buy direct without knowing what you’re buying is foolish. But not just buying direct.

I paid more resale than MANY direct buyers.

Yep. Anyone buying bay lake now is paying a lot more than I did.

I think a lot of people got “spoiled” in the fact that Disney provided a great product and that most long time owners can sell their points for more than they paid for them. I am pretty sure that is a rare occurrence in other timeshare resorts.

And that’s why we paid the big bucks!

I was a teenager in the 90s.

Exactly. Not everyone was of an age or life-place to buy in back then. I was in grad school.

That inheritance doensn’t benefit Disney at all. In fact it is in direct competition as a potential buyer

Yep. The fact that I was able to dona frat transfer to me from my now-ex wasn’t something that benefited them. But they allow it.

The idea they need to prop us resales or protect them is unreasonable, IMO

So I suppose ROFR will disappear soon? What’s the point of that, other than to help resale value be higher than it would be otherwise?

Oh what am I doing giving them ideas???

 

[Dean]

So I suppose ROFR will disappear soon? What’s the point of that, other than to help resale value be higher than it would be otherwise?

Oh what am I doing giving them ideas???

You missed the point. The point of ROFR is to protect them, not you or I. Now at times it may support resale prices which is likely why they feel the need to make other changes as well.

 

[Disneylovingmomof2]

Can someone point me to a thread that lays out all of the changes? I thought I read somewhere that if you buy resale on one of the original resorts you can still use your points for any of them, is that correct (which means if you have a resale contract you can’t use at Riviera?)? But at this point if you were to buy at Rivieria and wanted to sell down the road, whoever purchased the contract as a resale can ONLY stay there and not use the points anywhere else?

 

[drusba]

Can someone point me to a thread that lays out all of the changes? I thought I read somewhere that if you buy resale on one of the original resorts you can still use your points for any of them, is that correct (which means if you have a resale contract you can’t use at Riviera?)? But at this point if you were to buy at Rivieria and wanted to sell down the road, whoever purchased the contract as a resale can ONLY stay there and not use the points anywhere else?

The changes apply to those who purchase resale on or after Jan 19, 2019: (a) buy at one of the existing 14 resorts and you can use the applicable points from that resale contract at any of those 14 resorts but not to reserve any future resort, starting with Riviera; (b) all resale purchasers of any future resort, starting with Riviera, will be limited to reserving their home resort. DVD has already created a chart so salesman can claim how purchasing from DVD rather than resale is better, and buried in the footnotes are the actual new resale restrictions https://disneyvacationclub.disney.go.com/dvc-direct-vs-resale/

All pre-Jan 19, 2019 owners (including resale) are grandfathered in and can use points from any pre-Jan 19, 2019 resale purchase to reserve at both old and future resorts.

 

[js]

I am guessing this is the first of many changes and eventually, in the not too distant future, all resales will be tied to that one home resort meaning
where you purchase your resale is the resort you will be able to stay, no trading out. In the long run, it will just be those pre 2019 (or I guess later when/if that change is made) that can trade at 7 months and eventually in 35+ years it will all disappear...maybe?