Jan 19, 2019 - The day the magic died

To meet demand? Sure they could, through ROFR. They just don’t think the profit margins are worth their time.
Not at $110/point to buy and turn back around at $150. But drive the price down to $50/point and resell “new” at $160 and the economics of reselling start to look very different.

That probably won’t happen with the L14 contracts but might be the goal of the new contracts going forward. How much is a Riviera resale worth versus say a Poly resale that can be used at 14 resorts?

Wyndham recently discovered that taking back points for free and reselling then as “access” points at full value is a great deal for them. By and large it gave owners an “out” to dump off their timeshares and Wyndham another stream of revenue.

The profit margin for resell is more trouble for DVC than its worth. Now. But if they bend the value curve on resell enough, that could change.
 
I just don't see how it isn't worth their while to exercise ROFR and resell. It is free money. Most spreads are 50+dollars. They could buy up every contract. It is a bit of a mystery to me. The only thing I can come up with is that very few people would actually buy resale at their direct prices. Otherwise, why wouldn't they flip them all. Free money is free money. Essentially the market is telling Disney the actual worth of contracts, and Disney is able to convince a few hundred people a year that the market is wrong and that they should buy direct. Why does Disney keep people willing to pay inflated prices on artificial waiting lists? That's the real conundrum.

The big irony for me is that if Disney "kills off" the resale market through regulation (sorry, but I can't help thinking about big government again), they hobble the vacation club all together. They can't capture the value they are "losing," unless they get rid of their business partners, the members. They have to go back to being straight hotel owners to get all the value. And then, a lot of value goes to travel agencies and there is no one to pay for property upkeep, no one to give them money upfront for free financing. They are not happy with that model either apparently. I can't for the life of me figure out their new post January 19th angle, but I am under no illusions that they know what they are doing. The only thing I do know is that previous management created a timeshare that works, and that new management should be more deferential.
 
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That probably won’t happen with the L14 contracts but might be the goal of the new contracts going forward. How much is a Riviera resale worth versus say a Poly resale that can be used at 14 resorts?
This is where I've landed. Which is why I'm not too worried about my "investment".

But I would also argue that if the value is in the ability to stay at all of the different resorts, then why is there a difference in resort prices at all? If the real value was in the ability to trade in/out, then all properties would trade at SSR rates. But they obviously are not.

The only two reasons prices vary among resorts are (1) expiration dates, and (2) home booking priority. Most of the difference in value (at this point) comes from #2. And because of this, I don't believe that placing limits on future resellers will really change the value of my contracts on the resale market that much, even after this silly rule. Like ziravan said, the L14 are fine.

Resale for the new resorts, who knows... I could see several scenarios. But that doesn't really hurt me right now, or in the foreseeable future. In 20 years? Maybe it hurts me. But I was always going to be in trouble then, with much shorter terms on my contracts compared to all the new resorts anyway.
 
Not at $110/point to buy and turn back around at $150. But drive the price down to $50/point and resell “new” at $160 and the economics of reselling start to look very different.

That probably won’t happen with the L14 contracts but might be the goal of the new contracts going forward. How much is a Riviera resale worth versus say a Poly resale that can be used at 14 resorts?

Wyndham recently discovered that taking back points for free and reselling then as “access” points at full value is a great deal for them. By and large it gave owners an “out” to dump off their timeshares and Wyndham another stream of revenue.

The profit margin for resell is more trouble for DVC than its worth. Now. But if they bend the value curve on resell enough, that could change.
Sure. PP specifically said “sold out resorts.”
 


I personally think the impact of these changes on resale pricing on the original 14 will be minimal. People will still be able to stay at a great portfolio of on-site resorts at a sizable discount to the cash rates. And sure, they won't be able to stay at Riviera or Reflections. But will that drive that many people to go pay 50%-100% more? I just don't see it.

Resale pricing has stayed strong for DVC based basically on four things:
1)Rising direct prices
2)Rising onsite cash rates
3)Strong rental market
4)Exploding demand for Disney World vacations

I don't see any of those factors changing anytime in the next 5-10 years. The only thing I can see derailing the pricing is a 2008 type recession...which I don't see happening on that type of scale. And let's face it, if resale prices dropped even 15%-20% I think many of us would be grabbing more points. I've owned BLT & BWV since 2009 with 250 total points. If I could get 100 more at anywhere near the levels I bought then I'd be calling the Timeshare Store right now instead of typing this reply. There's always going to be strong demand I think at certain levels that only outside economic factors will be able to push us below.
 
Sure. PP specifically said “sold out resorts.”
Sorry, I started that line of thought going one way and ended up somewhere else. They would make changes to the L14 if they could but they basically made membership in the club an appertenance of ownership.

They are correcting that error now.

And then they plan to drive resales to ground. At that point, it seems the plan will be to corner the market.

That said, ROFR and restrictions aren’t enough to completely eliminate the market.

DVC can’t ROFR everything or the price goes sky high. There has to still be some level of what’s too high to make a reasonable resale margin. And there’ll almost certainly be space between that price and the value of the contract without recycling the benefits of buying direct.

ROFR to corner the market will only stay as low as Disney is willing to keep it by not ROFRing contracts priced higher; otherwise they’d all be priced higher. That’s the same as now - how many people pad their offers in an attempt to stay out of ROFR?

It’ll be interesting to see what their ultimate goals are with Riviera resale pricing.
 
Well in fairness, Terri did say “ I truly believe that there’s never been a better time to be part of this magical community "

I take that as "now", not after Jan 19.



Everything everyone was guaranteed when they bought is exactly the same. Whether resale or not.

Going forward the rules are spelled out. Yes many people are uninformed but that is no one's fault but their own. The rules are there. In the age of the internet if people can't take the time to do a couple google searches for a 50k purchase then I'm sorry, but that is their own fault.

Not entirely correct. You’re grandfathered in. If you sold your points tomorrow it would be January 12. This policy isn’t effective until the 19th. So your points would be able to be used at the Riviera as long as you are in ROFR by the 19th. It just if your hypothetical buyer ever wanted to sell then that contract will have the limits).

Will be interesting to see at what price point DVC tends to exercise ROFR going forward.

The real people getting screwed are direct buyers of Riviera and future properties... At least we have SOME options. They won't have ANY.

That probably won’t happen with the L14 contracts but might be the goal of the new contracts going forward. How much is a Riviera resale worth versus say a Poly resale that can be used at 14 resorts?

The only thing I do know is that previous management created a timeshare that works, and that new management should be more deferential.

I don't believe that placing limits on future resellers will really change the value of my contracts on the resale market that much, even after this silly rule. Like ziravan said, the L14 are fine.

I personally think the impact of these changes on resale pricing on the original 14 will be minimal.

They would make changes to the L14 if they could but they basically made membership in the club an appertenance of ownership.

It’ll be interesting to see what their ultimate goals are with Riviera resale pricing.
 


Well in fairness, Terri did say “ I truly believe that there’s never been a better time to be part of this magical community "

I take that as "now", not after Jan 19.

Maybe she meant "now", meaning in December before the new resale restrictions. At least owners at the time she said that are all grandfathered. Maybe she was trying to say us something.

Edit: sorry, just realized you said the same.
 
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The big irony for me is that if Disney "kills off" the resale market through regulation (sorry, but I can't help thinking about big government again), they hobble the vacation club all together.

I don't think that is necessarily true. Look at how many timeshares are literally worth nothing resale, yet their companies are selling to new owners all the time.
Remember, Disney Vacation Development's main focus is building and selling, not reselling. THere are filing fees and title fees to to pay on any resale they pickup, plus any strictions on closing that the seller may put on it, like...closing after a date that allows them one more Disney trip.
 
I don't think it's that hard of a sale. I knew about resale, it was 2009, and we still bought direct. I wasn't alone.

Obviously you were not alone. Heck I knew about resale, even made the call in myself, when I bought direct 14 years ago. I bought direct for two reasons - longer contract and the other person buying with me was not onboard with resale (Insert annoyed face here - :laughing:).

Still I am sure the sales force would agree that it was definitely a hard sale, in general terms, when the buyer knew about resale during those times where there was no difference between them (well besides saving thousands and thousands of dollars.:drinking1) and when there was some just miniscule differences. Just because you and I and others bought knowing does not mean it wasn't very difficult with many prospective buyers who knew about resale.

I have always been very perplexed that they didn't do something more extreme years earlier, for their own sales.
 
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Obviously you were not alone. Heck I knew about resale, even made the call in myself, when I bought direct 14 years ago. I bought direct for two reasons - longer contract and the other person buying with me was not onboard with resale (Insert annoyed face here - :laughing:).

Still I am sure the sales force would agree that it was definitely a hard sale, in general terms, when the buyer knew about resale during those times where there was no difference between them (well besides saving thousands and thousands of dollars.:drinking1) and when there was some just miniscule differences. Just because you and I and others bought knowing does not mean it wasn't very difficult with many prospective buyers who knew about resale.

I have always been very perplexed that they didn't do something more extreme years earlier, for their own sales.
They didn’t do anything more extreme before because they didn’t have to do so. Just like they don’t now.

DVC worried about resales affecting direct sales is them worried about ghosts behind their backs.

DVC has a model staged to perform fantastically whether resale is high or not. Allowing resales to remain high makes them special, different than “just another timeshare”.

It doesn’t hurt their sales.

Or.

To the extent that it does, there are other fish in the sea. Plenty of them.

One of the main arguments that DVC doesn’t really care what we think is that there are plenty of other people lining up to take our place. That’s true enough. But that works both ways.

The parks are jammed full...... of potential DVC customers.

DVC ignores more potential foot traffic than most timeshares ever hope to see. THIS is why I think the excuse that this is just a business decision or maximizing shareholder value is just that, an excuse.

If DVC spent half the time it’s currently spending devaluing it’s product on expanding its outreach to the market at its fingertips, they could sell more points at $200/point than they could manufacture.

A few very low cost examples:

1. There’s a check box when reservations are made to identify who’s not a member. These are people who’ve done enough preliminary research about DVC to rent points. They’ve already educated themselves about the product, talk about a prime potential customer! At check in, offer them dinner at a nice Disney location and make a mild pitch but more importantly, a direct ask.

2. Just put a huge banner up at the entrance to Epcot saying, “Welcome home DVC members, your private lounge is in the Imagination Pavilion! (Ask how you can become a member at any DVC station)”

3. Two extra FPs per day for members and their guests staying in rooms on their points. Must be their points and a member must be on the reservation and present at check in. That one right there would spike the value of DVC through the roof. Cost? Maybe the opportunity cost of what they could be sold for elsewhere but selling them this way makes them worth tens of thousands of dollars, so there’s that.

4. Add an extra Moonlight Magic event at each park and spread out a third of the space at each event for non-DVC members considering a purchase. That doesn’t take anything away from current members but how powerful would the following offer in the hands of a guide be? “You said you’re coming down in February, let me invite you and your family to a special DVC event to show you what makes DVC so special.” —— If a guide couldn’t close that sale afterwards, they weren’t trying hard enough.

No. Until DVC makes a much better effort capturing its current foot traffic, I’m unconvinced that trying to kill resale is the best business model they could adopt.

They need to stop looking over their shoulders and actually reach out to the audience of the most crowded parks in their history. There are dozens of ways to do that without being aggressive.
 
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They need to stop looking over their shoulders and reach out to the audience of the most crowded parks in their history.

::yes::

DVC is a timeshare animal unto itself. It seems like Disney has allowed themselves to be convinced that they are "just a timeshare like all others". Oh my - just throw in a set of free AP's or pay parks for some FP's for a couple of years with each minimum sized add on and see how resale is scorned by the average buyer. Or at least a dozen other things I can think of that almost certainly cost less than the routes they have taken.
 
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If DVC spent half the time it’s currently spending devaluing it’s product on expanding its outreach to the market at its fingertips, they could sell more points at $200/point than they could manufacture.

I don't know, considering that you can't walk around any park or Disney Springs with seeing several DVC kiosks, I think they've reached the limit of their outreach for their target audience. But when you think about those of us early purchasers who received free park passes (1/2 the capacity of the room), if they're having trouble selling points at new resorts they could reintroduce that sort of program. They could even limit it to purchases and stays at the newest resort. But I doubt they're having trouble selling though, if they were they wouldn't keep building.
 
They didn’t do anything more extreme before because they didn’t have to do so. Just like they don’t now.

DVC worried about resales affecting direct sales is them worried about ghosts behind their backs.

DVC has a model staged to perform fantastically whether resale is high or not. Allowing resales to remain high makes them special, different than “just another timeshare”.

It doesn’t hurt their sales.

Or.

To the extent that it does, there are other fish in the sea. Plenty of them.

One of the main arguments that DVC doesn’t really care what we think is that there are plenty of other people lining up to take our place. That’s true enough. But that works both ways.

The parks are jammed full...... of potential DVC customers.

DVC ignores more potential foot traffic than most timeshares ever hope to see. THIS is why I think the excuse that this is just a business decision or maximizing shareholder value is just that, an excuse.

If DVC spent half the time it’s currently spending devaluing it’s product on expanding its outreach to the market at its fingertips, they could sell more points at $200/point than they could manufacture.

A few very low cost examples:

1. There’s a check box when reservations are made to identify who’s not a member. These are people who’ve done enough preliminary research about DVC to rent points. They’ve already educated themselves about the product, talk about a prime potential customer! At check in, offer them dinner at a nice Disney location and make a mild pitch but more importantly, a direct ask.

2. Just put a huge banner up at the entrance to Epcot saying, “Welcome home DVC members, your private lounge is in the Imagination Pavilion! (Ask how you can become a member at any DVC station)”

3. Two extra FPs per day for members and their guests staying in rooms on their points. Must be their points and a member must be on the reservation and present at check in. That one right there would spike the value of DVC through the roof. Cost? Maybe the opportunity cost of what they could be sold for elsewhere but selling them this way makes them worth tens of thousands of dollars, so there’s that.

4. Add an extra Moonlight Magic event at each park and spread out a third of the space at each event for non-DVC members considering a purchase. That doesn’t take anything away from current members but how powerful would the following offer in the hands of a guide be? “You said you’re coming down in February, let me invite you and your family to a special DVC event to show you what makes DVC so special.” —— If a guide couldn’t close that sale afterwards, they weren’t trying hard enough.

No. Until DVC makes a much better effort capturing its current foot traffic, I’m unconvinced that trying to kill resale is the best business model they could adopt.

They need to stop looking over their shoulders and actually reach out to the audience of the most crowded parks in their history. There are dozens of ways to do that without being aggressive.

::yes::

DVC is a timeshare animal unto itself. It seems like Disney has allowed themselves to be convinced that they are "just a timeshare like all others". Oh my - just throw in a set of free AP's or pay parks for some FP's for a couple of years with each minimum sized add on and see how resale is scorned by the average buyer. Or at least a dozen other things I can think of that almost certainly cost less than the routes they have taken.

Somewhat preaching to the converted. I agree with much of your post zirvan.

I said in my original post - where the highlighted part came from - that there were much more inventive ways of differentiating between direct versus resale. Or if I didn't make that clear there are/have been at least a half a dozen ones running around in my head. Of course there are way more productive and less aggressive ways. And I agree it is not that difficult to think of them. I don't like their decision, think it lacks vision, but remain firm that it had to be a hard sale (note only talking about the specific crowd) without anything different to offer, when people tour and talk for hours knowing about resale or finding out soon afterwards - sometimes after contract. And that something was needed.

My last post was about countering that highlighted specific crowd comment only (But see where using the word extreme took it somewhere else). Merely countering that those who bought knowing resale do not equal it wasn't a hard sell for the agents in general, with many others that knew.


I have always thought there are better ways.

---------

Totally agree Kathy, just can't be bother to reformat your quote placement on my phone.
 
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I wish we had the percentage of total sales that were direct add-ons.

That is the piece of the pie that I am most curious about. It must have been a very small part, especially lately with the price increase, for them to merely throw it away.
 
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I don't know, considering that you can't walk around any park or Disney Springs with seeing several DVC kiosks, I think they've reached the limit of their outreach for their target audience. But when you think about those of us early purchasers who received free park passes (1/2 the capacity of the room), if they're having trouble selling points at new resorts they could reintroduce that sort of program. They could even limit it to purchases and stays at the newest resort. But I doubt they're having trouble selling though, if they were they wouldn't keep building.
The kiosks are ubiquitous everywhere on property, but what do they do? Normally I see them empty. We use them for stickers and pin trading.

DVC needs to rethink how to entice the crowds to use those kiosks.

1 FP for that day for watching a 5 minute video about DVC (and allowing us to mail you information.)

Shoot, just set up a video replaying on a 1 hour loop 60 - 1 minute member testimonials that guests can listen to while they’re waiting for the rain to pass...

Or SOMETHING!!
 
DVC is selling between 115-150 thousand points per month right now.

Not counting Aulani, they only have so many points between resorts.

They can only sell the points they have.

For CCV, they’re on track to sell out as Riviera comes online.

How many more points do they need to sell per month? They are in-line with their capacity now - and they’re not going to want to be limited to just having Aulani for sale.

I just can’t see the need to go after resales. I don’t see how they’re hurting DVC’s business model at all. That said, I can surely see how resale values help to make DVC a unique product and how that should be seen as something very positive for their business model.
 
They need to stop looking over their shoulders and actually reach out to the audience of the most crowded parks in their history. There are dozens of ways to do that without being aggressive.

Everyone here complaining about the changes DVC has made references them as becoming a "just another sleezy time share company". When we bought DVC it was on a cruise. We knew very little. We had seen the kiosks and done a little research but still knew very little. When they offered a sales meeting on the cruise we attended. Not once were we ever pressured to attend. They posted the info for people to seek out. Even at the kiosks in the park. The info was there. We were never pressured to go anyway. The second we said not interested they backed off but were still friendly. That's what sold us on going to the meeting. We knew we weren't going to be pressured. Even after the meeting. We never got a single phone call to our room or anything. They only replied when we reached out to them. I've never attended a 'regular' time share sale. I know very well there is no such thing as a free lunch.

1) Point 1 - people self identifying if there members or not. So they can be given a sales pitch at check in?? No thanks. I think many would agree. When you give a free dinner in an isolated group there is no such thing as a mild pitch. That's a pressure cooker.

4) Extra moonlight magic for non members to attend - If I wasn't a member I'd 'consider a purchase' every time we went. This is no different then normal time share sales pitches. Give a free event, crank the heat in the room, and sell, sell, sell. Besides these events are extremely expensive to run and attendance is limited. Now a third of that space is lost to potential buyers vs existing members. I can't see people being to happy with that. There were already several complaints on the board last year with people missing out only to hear that many bloggers, travel agents, and staff members attended calling it nothing more than a sales pitch vs perk for existing members.

As much as people complain about DVC and outrageous costs they still sell like crazy. Why? Disney sells itself. I can't speak for everyone's experience but I've never seen DVC forced down the throats of park goers. There is info everywhere and when people are ready they seek it out.

People can talk about DVC devaluing their product all they want. The only fact that I know is that when we bought in 2011 we paid 99$ pt at blt direct. Direct prices now have close to doubled in less than 8 years. I'm pretty sure they know what they are doing.
 
3. Two extra FPs per day for members and their guests staying in rooms on their points. Must be their points and a member must be on the reservation and present at check in. That one right there would spike the value of DVC through the roof. Cost? Maybe the opportunity cost of what they could be sold for elsewhere but selling them this way makes them worth tens of thousands of dollars, so there’s that.

For this one I had to some quick searches. I found a thread here from 2005 that said of the 5 resorts (at that time) there were a max of 2596 rooms. Let’s say an average of 3 guests per room. That’s 7788 people. If everyone got 2 fast passes that’s 15 576 fast passes everyday. That’s for 5 resorts. Now I get not every room will be filled, etc, etc but but over 14 resorts were potentially looking at an excess of 50 000 fast passes per day. 2 per day may seem like a minuscule number but in the grand scheme it’s not.
 

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