Jan 19, 2019 - The day the magic died

[Disney mac]

Maybe I am wrong, but I now see the renting market becoming more valuable for my points. I can see Davids/others wanting to use my pre 1/19 points at all resorts as a premium. While this may hurt the resale market, it may cause the renting market to thrive.

 

[js]

I have no desire to sell my SSR 420 points that were purchased resale in 2009 for an average of $71 a point, which are grandfathered from the beginning but trying to understand this new rule.

Is it correct if someone now sells their resale or Disney purchased contract, the person purchasing it can only use at that resort or does it mean that this starts with Riveria purchasers that now sell their contract?

Just trying to make sure I understand. Thanks so much!

 

[theSurlyMermaid]

You both are thinking logically. Disney doesn't think that way. They think a DVC member wants a contract until it expires. They think no one will ever sell. They think everyone has the money to come and pay for tickets for their stay, otherwise why would they come and why would they buy? When someone resells they think "Why in god's name are they reselling? This is Disney!"

If this is actually how they are thinking it is just so naive. Stuff happens. It happens in 5 years, 10 years, certainly in 20. Priorities change. When we bought I had no intention of reselling but 10 years later I found Disney vacations a bit tired. That doesn’t even include changes in personal circumstances or unexpected events. Does Disney honestly believe people would choose a vacation club over funding a college account or paying medical bills? Good grief.

 

[Chuck S]

I have no desire to sell my SSR 420 points that were purchased resale in 2009 for an average of $71 a point, which are grandfathered from the beginning but trying to understand this new rule.

Is it correct if someone now sells their resale or Disney purchased contract, the person purchasing it can only use at that resort or does it mean that this starts with Riveria purchasers that now sell their contract?

Just trying to make sure I understand. Thanks so much!

THe way I am reading the announcement on the DVC Member website is that if you sell your interest, whoever buys it can still use the points at any of the 14 currently existing resorts, but can not use them at Riviera or any newer resort going forward.

 

[js]

THe way I am reading the announcement on the DVC Member website is that if you sell your interest, whoever buys it can still use the points at any of the 14 currently existing resorts, but can not use them at Riviera or any newer resort going forward.

Thank you. So this new rule is to help Disney more down the road, not immediately. For those of us that have our points, this really isnt something that I think affects me now or if I am selling in the future not then either.

I own two other timeshares and didnt go into our DVC puechase blindly. I am a member of tug, asked questions and went to SSR and met with a guide but in the end, in 2009, there was no difference in my purchasing resale vs Disney other than my price per point was less than Disney. So, those purchasing Riveria hopefully do their due diligence too before buying their points. Most timeshares you end up staying where you buy so this is in line with that thinking I guess.

 

[Bing Showei]

You both are thinking logically. Disney doesn't think that way. They think a DVC member wants a contract until it expires. They think no one will ever sell. They think everyone has the money to come and pay for tickets for their stay, otherwise why would they come and why would they buy? When someone resells they think "Why in god's name are they reselling? This is Disney!"

You seem to be suggesting that TWDC/DVD is some sort of wide-eyed, "Golly gee, this is really something special we have going here" entity in the mould of Walt Disney himself.

TWDC is a giant corporate machine that serves one master only, the shareholders - and not the ones on this board who probably care too much about the product (i.e., care beyond just brand imaging/reputation). Of course TWDC thinks logically. They just don't want you to think they do. On the surface it's all magic - in it for the members, capturing the magic, lifetime of memories, [insert sales verbiage here], etc. Lift up the hood and you'll see all the number crunching machinations.

As long as it's still fun for you and your family and you're able to make great family memories from it, great! It remains on the symbiotic side of the divide. For a majority, between 5-10 years into it, it starts to creep across the line to the the parasitic side and they sell. You can be sure TWDC is aware of this metric and develops plans (e.g., Riviera) to leverage this. Sure, TWDC may want you to think you'll hold on for 50 years, but I'm sure they know and understand you probably wont. And that's ok. They don't really care. The house wins with every point sold.

 

[DougEMG]

Remember who Disney's core market is, a family, who comes down to WDW for a week at a time.

This is Disney. Their attitude is why would you want to sell a DVC Membership? No one was supposed to sell their DVC Membership. I went to a sales pitch back when they were selling OKW (I haven't been since). They were talking how great it would be to be able to vacation every year at Disney for life. Their DVC Value, Idea, Concept or whatever you want to call it was and is "Buy it, Keep it for life (until it expires) and NEVER SELL IT!" And they have ROFR to keep prices artificially inflated in case someone wants to sell. Back then I seem to recall too, that as a DVC Member you could "exchange" into a regular Disney Resort too.

Their target was/is a young couple, 20's or 30's with possibly with 2 or 3 kids. They bought, and then when the kids moved out, their kids ought their own DVC Contract. All the empty nesters, retired people, singles at any age were never thought of as serious target market for DVC. They never expected people who come for 2 or 3 nights at a time to buy. And the thing is, a lot of people bought with the idea of selling their DVC Membership at some point and Disney never expected this.

Resellers drive Disney crazy. They go against their core value. Yeah, they expected some resales but not like they see today. They don't expect Empty Nesters or Retired People to buy. They certainly don't expect people to buy with the idea of reselling some day. I certainly don't fit their "mold". I'm 61, divorced, no girlfriend. I go for longer weekends, Thursday through Sunday, Friday through Monday, Saturday through Tuesday. I probably drive them crazy now that I'm a DVC Member.

I don't know any 20-30 year olds that can afford to buy DVC at current prices. We bought when I was 50. No mortgage no debt, free cash to spend on luxury items.

 

[suebeelin]

My concern is the points from new resorts can flood the original 14 at the 7mo mark making it ridiculously difficult for us to switch resorts.

While I’m glad I bought where I don’t mind staying, I’m none too pleased by the future prospect of so many more points at the 7 mo mark...

 

[DanCio]

I don't know any 20-30 year olds that can afford to buy DVC at current prices. We bought when I was 50. No mortgage no debt, free cash to spend on luxury items.

Almost same here, very little mortgage, I'm 61. Couldn't afford DVC when I was younger. As for 20 to 30 year old millennials, that's why there is financing. Disney doesn't care how you pay, as long as you buy.

 

[DanCio]

You seem to be suggesting that TWDC/DVD is some sort of wide-eyed, "Golly gee, this is really something special we have going here" entity in the mould of Walt Disney himself.

TWDC is a giant corporate machine that serves one master only, the shareholders - and not the ones on this board who probably care too much about the product (i.e., care beyond just brand imaging/reputation). Of course TWDC thinks logically. They just don't want you to think they do. On the surface it's all magic - in it for the members, capturing the magic, lifetime of memories, [insert sales verbiage here], etc. Lift up the hood and you'll see all the number crunching machinations.

...You can be sure TWDC is aware of this metric and develops plans (e.g., Riviera) to leverage this. Sure, TWDC may want you to think you'll hold on for 50 years, but I'm sure they know and understand you probably wont. And that's ok. They don't really care. The house wins with every point sold.

When my friends went to a very early DVC presentation, for OKW, the only resort available, he asked, "What if we don't want it any longer? What if we outgrow it or our kids don't like to come here any more?" Disney said "This is Disney. You will always have a week every year to come here for a vacation, already paid for. You're not going to outgrow it. When you have kids, they are going to want their own DVC membership too."

5 owners of a contract over it's life? In their mind "Never going to happen." They expected very few people to sell their DVC Membership; but they knew some would. Someone could pass away, someone could have a job change, get divorced, whatever life changes happen could make someone not want or need their DVC membership. Those were exceptions and why they have ROFR. They never envisioned anyone selling their interest in 10 years.

Disney is not attempting to screw the reseller or resales market with all the changes. Those are incidental to their purpose which is selling everything direct in the first place.

 

[ziravan]

When my friends went to a very early DVC presentation, for OKW, the only resort available, he asked, "What if we don't want it any longer? What if we outgrow it or our kids don't like to come here any more?" Disney said "This is Disney. You will always have a week every year to come here for a vacation, already paid for. You're not going to outgrow it. When you have kids, they are going to want their own DVC membership too."

5 owners of a contract over it's life? In their mind "Never going to happen." They expected very few people to sell their DVC Membership; but they knew some would. Someone could pass away, someone could have a job change, get divorced, whatever life changes happen could make someone not want or need their DVC membership. Those were exceptions and why they have ROFR. They never envisioned anyone selling their interest in 10 years.

Disney is not attempting to screw the reseller or resales market with all the changes. Those are incidental to their purpose which is selling everything direct in the first place.

Still. It’s a real estate interest.

Selling real estate is a nature of the beast. It’s why there are titles made.

It shouldn’t matter to DVC who or how the property is resold. Just like it’s none of the developers business in a subdivision if owners resale.

That’s an essential element of real estate.

What you’re describing is a lease with no subletting rights. There may be an RTU but for the period of the RTU, I’m not a renter, I’m an owner, with all the rights that apply.

If resale were hurting direct sales, I could see the point of this. Maybe. That doesn’t seem the case to me. VGF sold out a few months after Poly went on sale. Poly sold out a few months after CCV went on sale. CCV is on track to sell out within a few months of Riviera going on sale:

It seems to me that they’re selling direct points as fast as they can make them now.

I don’t see why they care about resales. Except that resales bring in new owners eager to spend. To the extent they care about resales at all, they should be thrilled about them.

 

[Bing Showei]

They expected very few people to sell their DVC Membership; but they knew some would.

If your friends, who I'll assume were average consumers, had the good sense to ask about an exit strategy, you can be certain that a corporation prepared to dive into the timeshare industry did enough research to consider that possibility as well. Certainly they thought about it enough to provide their sales rep with lines on how to address exactly that.

Regardless they've had over a quarter century of data at this point. Do you sincerely feel like TWDC is in denial of the data? That they are continuing to operate in spite of the prevailing headwinds that is an operational reality?

I agree that TWDC is not trying to screw the resale market or the owners. I would posit they don't care what happens to us once we buy in because we've committed to 23-50 years of paying to keep the lights on. What I'm certain they care about is turning a healthy profit. And I'm ok with that too. But it doesn't mean the owners are not being screwed. We're just a casualty of corporate profit chasing.

 

[KAT4DISNEY]

My concern is the points from new resorts can flood the original 14 at the 7mo mark making it ridiculously difficult for us to switch resorts.

While I’m glad I bought where I don’t mind staying, I’m none too pleased by the future prospect of so many more points at the 7 mo mark...

There's going to be way more owners from the existing resorts who can book anywhere than there will be at the new resorts for quite some time.

There's also likely going to have to be something akin to "deposits" from one to the other. I don't know how they could just allow a free for all between the resorts when they aren't all part of the same timeshare system anymore.

 

[Deb & Bill]

My concern is the points from new resorts can flood the original 14 at the 7mo mark making it ridiculously difficult for us to switch resorts.

While I’m glad I bought where I don’t mind staying, I’m none too pleased by the future prospect of so many more points at the 7 mo mark...

Owners at new resorts tend to stay at those new resorts until they get tired of them and want to try something different. I'd say give it at least two or three years before they want to try the oldies, unless they want to go somewhere other than WDW like Hawaii or California or HHI or VB.

 

[DanCio]

Still. It’s a real estate interest.

Selling real estate is a nature of the beast. It’s why there are titles made.

It shouldn’t matter to DVC who or how the property is resold. Just like it’s none of the developers business in a subdivision if owners resale.

That’s an essential element of real estate.

What you’re describing is a lease with no subletting rights. There may be an RTU but for the period of the RTU, I’m not a renter, I’m an owner, with all the rights that apply.

If resale were hurting direct sales, I could see the point of this. Maybe. That doesn’t seem the case to me. VGF sold out a few months after Poly went on sale. Poly sold out a few months after CCV went on sale. CCV is on track to sell out within a few months of Riviera going on sale:

It seems to me that they’re selling direct points as fast as they can make them now.

I don’t see why they care about resales. Except that resales bring in new owners eager to spend. To the extent they care about resales at all, they should be thrilled about them.

I agree with everything you said. But Disney wants to control the market and know who's selling, hence ROFR. If they didn't care about resales they would let the market play itself out and people could sell at any price. ROFR keeps prices inflated at a price about 1/3 off "retail" or Direct. And they further try to control resales by limiting perks and now, with additional resorts not bein included.

Too, you and me consider it a real estate transaction. Disney considers it a Vacation for Life membership. Disney cares about resale because they are constantly selling new and OLD properties Direct. Hence a waitlist for a Legacy property. They need to keep what we consider Resale at or near direct pricing. They need ROFR because someone could sell to anyone BUT Disney.

I really don't see what all the fuss is about, but I book 3 or 4 days at a time, Sunday through Wednesday mostly and don't go Christmas/Easter/Spring Break/Summers. Like I've said elsewhere they can build 6 to 8 more resorts. Only 2 or 3 can be considered "Prime", near the Magic Kingdom. One of them would see backstage and would not be able to be on the monorail without extensive modifications to the Monorail. 1 of them could go north of Epcot. The rest would be scattered in places that are not used right now. So even if they build 8, assuming 2 are value/moderate, this would leave 14 Legacy and 8 "DVC 2" and the 8 DVC 2 don't compare to Legacy in the least.

The only ones who are going to get really screwed are the people who buy Direct at DVC 2 and go to try to resell. Anyone who buys Direct is going to want a Legacy property so they can resell it.

 

[drusba]

As has been noted the resale change does not "immediately" impact current owners except for the possible risk of lower resale value when they go to sell. Nevertheless, I personally believe that if Disney is going to have these new resale restrictions and create resorts where resale purchasers cannot reserve all resorts, then the new resorts should not even be part of the DVC system and Disney should give their new system a name that does not use "Disney Vacation Club" in the name. That is needed to avoid what is likely otherwise going to occur, in that new purchasers in Riviera are going to be misled on the concept that it is the same DVC that exists with rights to use all resorts without the salesmen putting in bold, capital letters right up front that Riviera is a new DVC that restricts severely resale rights in a way the old DVC never did.

And the long term problems for members of DVC 1 could be significant. Think fifteen years from now (which means when many here may likely still be members). By then DVC could have a total of six to seven new resorts mostly sold under its new DVC 2 system and all those new purchasers from DVD of those resorts will be able to reserve all the old resorts, while all the post-Jan 2019 purchasers of the old resorts will be able to reserve only the old resorts. That is going to make the 7 month window for the older resorts worse than it is now by an order of magnitude.

Disney may be looking short term just to do some injury to the existing resale market and protect its sales, but it is also looking long term. DVC has been around for almost 30 years and Disney expects it to be around 100 more, and now it has a long-term plan in place to assure that as time passes the old DVC will expire, allowing it to redo the old resorts as the new DVC and eventually there will only be DVC 2 resorts and the resale market will be gone almost completely. Moreover, those who have to resell under the new system will find that the price they can charge for those new resorts will be severely limited because of the restriction that allows resale owners to reserve only their home resorts, giving Disney the option to exercise ROFR at very low prices.

 

[DanCio]

If your friends, who I'll assume were average consumers, had the good sense to ask about an exit strategy, you can be certain that a corporation prepared to dive into the timeshare industry did enough research to consider that possibility as well. Certainly they thought about it enough to provide their sales rep with lines on how to address exactly that.

Regardless they've had over a quarter century of data at this point. Do you sincerely feel like TWDC is in denial of the data? That they are continuing to operate in spite of the prevailing headwinds that is an operational reality?

I agree that TWDC is not trying to screw the resale market or the owners. I would posit they don't care what happens to us once we buy in because we've committed to 23-50 years of paying to keep the lights on. What I'm certain they care about is turning a healthy profit. And I'm ok with that too. But it doesn't mean the owners are not being screwed. We're just a casualty of corporate profit chasing.

No I don't deny any of the data. They aren't trying to screw the Resale market, they are trying to control it. What I think (and what do I know), Disney is constantly trying to:

• Get people to buy Direct
• Keep people in contracts for life (or until they expire)
• Somewhat control the resale market

They do it because it costs them money. I said it elsewhere, I'm a computer programmer. I can only imagine the coding logic involved in their software to manage all this crap. If they bought all their points and are in one Use Year at 1 resort, the owner can book at 11 months out at "home" and 7 months out anywhere and buy anything and access all perks. If they bought all Direct, with multiple Use Years at the same resort, they can book X points at this time at the Home resort, Y points at 7 months out anywhere for this contract, A points at 11 months out home and B points at 7 months out anywhere, etc, etc, etc. This has to be a nightmare to write the code! As this is just the tip of the iceberg. It's costing them a small fortune to support DVC.

Anyone getting screwed is incidental. If Disney knew then what they know now they would have done some things very differently.

Remember Celebration was a Disney invention on Disney owned land. And when it was all done, they annexed it back to Osceola County because they didn't want any part of it. They couldn't control it. It's why Disney has City licenses in Orange County but has very few actual residences and residents. The people who live there are tightly controlled.

 

[DougEMG]

Maybe I am wrong, but I now see the renting market becoming more valuable for my points. I can see Davids/others wanting to use my pre 1/19 points at all resorts as a premium. While this may hurt the resale market, it may cause the renting market to thrive.

I agree with you here. My grandfathered points can be used to stay anywhere. As more people buy resale, that pool of points usable anywhere becomes smaller and smaller.

 

[DougEMG]

No I don't deny any of the data. They aren't trying to screw the Resale market, they are trying to control it. What I think (and what do I know), Disney is constantly trying to:

• Get people to buy Direct
• Keep people in contracts for life (or until they expire)
• Somewhat control the resale market

They do it because it costs them money. I said it elsewhere, I'm a computer programmer. I can only imagine the coding logic involved in their software to manage all this crap. If they bought all their points and are in one Use Year at 1 resort, the owner can book at 11 months out at "home" and 7 months out anywhere and buy anything and access all perks. If they bought all Direct, with multiple Use Years at the same resort, they can book X points at this time at the Home resort, Y points at 7 months out anywhere for this contract, A points at 11 months out home and B points at 7 months out anywhere, etc, etc, etc. This has to be a nightmare to write the code! As this is just the tip of the iceberg. It's costing them a small fortune to support DVC.

Anyone getting screwed is incidental. If Disney knew then what they know now they would have done some things very differently.

Remember Celebration was a Disney invention on Disney owned land. And when it was all done, they annexed it back to Osceola County because they didn't want any part of it. They couldn't control it. It's why Disney has City licenses in Orange County but has very few actual residences and residents. The people who live there are tightly controlled.

Is it costing DVC a small fortune to manage all those booking issues, or is that paid for by the owners?

 

[zavandor]

Is it costing DVC a small fortune to manage all those booking issues, or is that paid for by the owners?

You already know the answer