June 2022 Direct sales

[DonMacGregor]

Every buyer who goes resale is a lost direct sale and that is their goal.

I think 13 years ago, it didn’t matter when you had a very small spread in price. BLT was selling for $92/point and resale was in the $50/ to $80s.

Now, it’s bigger. But I get it.. I get why they are doing what they are doing.

It certifiably worked for me!!

I don’t think that’s necessarily true. If that were the case, GM would stop building Chevys and only build Cadillacs. We all know some Chevy buyers might move to the higher cost product, but many will go buy a Ford.

There is a stigma to timeshares that Disney enjoys avoiding for the most part, and invariably, whether it’s a news article or YouTube video or some other medium, the two comments made are that “unlike other timeshares, you’re not stuck forever” (contract end dates) and “unlike other timeshares, you can get out through a robust resale market”. Disney knows that too.

Also, Disney is happy to collect dues from us all, it all spends the same, and the real goal of DVC is to get you to spend money in the parks, on food, on merch, etc. Blue Card, White Card, everyone’s money is green.

Do I think Disney’s absolute preference is for as many people as humanly possible to buy all their points directly from Disney? Absolutely. But I don’t think the transfer of points they’ve already sold from one owner to another is in their worst interest, especially if the new owner is fresh spending meat.

Obviously their preference is to make every buyer a direct buyer, and they’ll never admit otherwise, but if they really hated it that much, a completely random ROFR process, dragging their feet for a few days setting up contracts, and no access to a few perks that none of us are guaranteed anyway would pale in comparison to what they would try to do.

Just my opinion.

 

[Sandisw]

I don’t think that’s necessarily true. If that were the case, GM would stop building Chevys and only build Cadillacs. We all know some Chevy buyers might move to the higher cost product, but many will go buy a Ford.

There is a stigma to timeshares that Disney enjoys avoiding for the most part, and invariably, whether it’s a news article or YouTube video or some other medium, the two comments made are that “unlike other timeshares, you’re not stuck forever” (contract end dates) and “unlike other timeshares, you can get out through a robust resale market”. Disney knows that too.

Also, Disney is happy to collect dues from us all, it all spends the same, and the real goal of DVC is to get you to spend money in the parks, on food, on merch, etc. Blue Card, White Card, everyone’s money is green.

Do I think Disney’s absolute preference is for as many people as humanly possible to buy all their points directly from Disney? Absolutely. But I don’t think the transfer of points they’ve already sold from one owner to another is in their worst interest, especially if the new owner is fresh spending meat.

Obviously their preference is to make every buyer a direct buyer, and they’ll never admit otherwise, but if they really hated it that much, a completely random ROFR process, dragging their feet for a few days setting up contracts, and no access to a few perks that none of us are guaranteed would pale in comparison to what they would try to do.

I don’t think they are upset that there is a resale market and will take whatever benefit it comes with

But I just don’t think it’s a priority for them when making decisions for their product.

It’s clear they decided in 2011 to start making differences between the two..first with no trades to cruises, etc. and all the way to restrictions.

So, I do think they see the resale as their competitor and do what they do for that reason…to get as many people as possible to buy from them to enhance the use of the same product.

 

[RKS03]

There’s definitely a balance. Having a viable resale market definitely convinces some to buy direct. For me personally I sold 175 unrestricted points (including only 25 direct) to buy 300 direct just this year. I never would have bought the new points unless I could have sold the old ones for a reasonable price. So I don’t think someone can conclude every resale point bought is a direct loss to Disney. That said I get why they are trying to differentiate direct from resale but they can’t push it too far. Hopefully they do it by offering perks for direct and not making resale worse.

 

[DonMacGregor]

I look at it like the rental market. You can currently rent DVC points for less than a comparable cash stay, most of the time. That’s cash money that Disney is losing 100%, just like a direct DVC sale. If Disney was determined to turn all of those renters into cash guests (which we would assume they’d like to), they could further restrict the rental of points as new resorts are built and new POS’s are generated.

Like resale DVC purchases, Disney would obviously rather every guest be a cash guest, but they know they’re getting spending dollars from those guests in the parks, resorts, DS, etc. THAT is the cash cow. Getting you inside the bubble.

Not a perfect example, but you get the idea.

 

[Sandisw]

I look at it like the rental market. You can currently rent DVC points for less than a comparable cash stay, most of the time. That’s cash money that Disney is losing 100%, just like a direct DVC sale. If Disney was determined to turn all of those renters into cash guests (which we would assume they’d like to), they could further restrict the rental of points as new resorts are built and new POS’s are generated.

Like resale DVC purchases, Disney would obviously rather every guest be a cash guest, but they know they’re getting spending dollars from those guests in the parks, resorts, DS, etc. THAT is the cash cow. Getting you inside the bubble.

Not a perfect example, but you get the idea.

And when Disney puts out discounts they do compete to a degree because people have choices. But Disney also has so many other rooms to offset the loss for DVC rentals so they don’t need to work that hard

But resale contracts are the same product they want to sell so it makes logical sense to me to make their product something different than the resale product.

In the end, it’s still about sales for DVD and if they believe restrictions will lead people their way, they will stick around.

And, indirectly they do play a role in resale by jumping in with ROFR, once they see a good deal having been made between two other people.

I am just not convinced that DVD has the same priority for DVC to retain a high resale value as some buyers do, especially those who frequent boards like this.

Plus, they know that as long as the parks exist, a DVC timeshare will have value..something not applicable to other timeshare.

Obviously they were not too concerned with sales because they did not extend the extra incentives and ended them July 13th.

 

[RoseGold]

t. But I do think strictly resale owners may have some moments of second guessing their decision years down the line.

If they do, they can always sell and buy into whatever the new FOMO resort is. Even I would have bought points at Star Wars hotel if they have DVC a little, and I don’t even like Star Wars.

 

[Nursemanit]

If they do, they can always sell and buy into whatever the new FOMO resort is. Even I would have bought points at Star Wars hotel if they have DVC a little, and I don’t even like Star Wars.

This, and I already know there will be peer-to-peer DVC reservation swap sites hooking up resale RR owners with other non-RR resale owners so they can stay at other resorts. People will work around the restriction.

 

[Roughians_satchel]

Is there someway DVD can have both restrictions and one association with regards to Poly1/Poly2? I was thinking along the lines of OKW when they offered the 15 year extension. That extension basically applies to all the points in the association - but is only activated for those who bought the extension or are buying resale now directly from DVC. Could DVD come in and alter the current association (like they did with OKW), so that people who buy directly get 11 month access to both existing Poly DVC and the new Tower, they get maybe a longer contract but it's all with restrictions. As for original Poly owners, they could offer them this "extension" for a small fee/point that would give them 11 months to the new tower, the longer contract but they'd now have restricted Poly points on the resale market.

 

[Sandisw]

Is there someway DVD can have both restrictions and one association with regards to Poly1/Poly2? I was thinking along the lines of OKW when they offered the 15 year extension. That extension basically applies to all the points in the association - but is only activated for those who bought the extension or are buying resale now directly from DVC. Could DVD come in and alter the current association (like they did with OKW), so that people who buy directly get 11 month access to both existing Poly DVC and the new Tower, they get maybe a longer contract but it's all with restrictions. As for original Poly owners, they could offer them this "extension" for a small fee/point that would give them 11 months to the new tower, the longer contract but they'd now have restricted Poly points on the resale market.

No, they can’t because the POS is what guides it. With OKW, it’s different.

DVD extended the ground lease to 2057. By default, all contracts have been extended. Owners either paid for an extension or were asked to sign the quit claim deed, basically agreeing to give it to DVD in 2042.

Some owners did neither. When an original owner goes to sell, they are required to sign the quit claim deed, which is what keeps that contract a 2042 contract for the new buyer.

What no one knows is what is going to happen in 2042 for those owners who bought initially, and never paid, never signed, and still own,

If they are the same association, they can’t have different rules for the point usage or for the sale,

The only way to apply restrictions is to make it a new association, unless they asked all current PVB owners to vote to amend the POS to change the terms that added the resale restrctions to all contracts.

I do not see that happening, and doubt you would ever get PvB owners to agree to it anyway,

 

[Brian Noble]

they could further restrict the rental of points as new resorts are built and new POS’s are generated.

There are other ways to add friction to the rental process at existing resorts, and other timeshare developers have already implemented some of them. You don't necessarily need to end it, you just need to make it hard enough/expensive enough that it isn't a common pathway that rank-and-file customers turn to. Charging to put non-owners as lead guests (or changing from one non-owner to another), restricting the number of times you can send a guest without also traveling at the same time at certain resorts during certain time periods, etc. Typically, these changes don't negatively effect the vast majority of owners, but do add some pain to the frequent renters.

"But Disney would never do that!"

Maybe. Maybe not. Lots of people thought they'd never distinguish between resale and retail points.

 

[BeachClub2014]

Charging to put non-owners as lead guests (or changing from one non-owner to another), restricting the number of times you can send a guest without also traveling at the same time at certain resorts during certain time periods, etc.

I could easily see this happening as it has a direct cost to MS. Every time one of us calls to change the lead guests, it costs MS $$.

 

[Madame]

There are other ways to add friction to the rental process at existing resorts, and other timeshare developers have already implemented some of them. You don't necessarily need to end it, you just need to make it hard enough/expensive enough that it isn't a common pathway that rank-and-file customers turn to. Charging to put non-owners as lead guests (or changing from one non-owner to another), restricting the number of times you can send a guest without also traveling at the same time at certain resorts during certain time periods, etc. Typically, these changes don't negatively effect the vast majority of owners, but do add some pain to the frequent renters.

"But Disney would never do that!"

Maybe. Maybe not. Lots of people thought they'd never distinguish between resale and retail points.

Would those rules restrict Disney’s use of their own points as well?

 

[wnielsen1]

I could easily see this happening as it has a direct cost to MS. Every time one of us calls to change the lead guests, it costs MS $$.

It costs MS nothing. It costs the owners like you and me.

 

[BeachClub2014]

It costs MS nothing. It costs the owners like you and me.

Then they should definitely start charging a fee.

 

[Brian Noble]

Would those rules restrict Disney’s use of their own points as well?

I suppose it depends on how they are written. Disney is explicitly in a different category of owner in the POS, so I would not assume they have to. Of course, this is all very hypothetical.

The developer who uses seasonal/resort restrictions (Wyndham) abides by those restrictions via its Extra Holidays rental arm and also seems to avoid depositing those resorts/seasons to RCI, but I am not sure they have to do either of those things.

 

[Sandisw]

Would those rules restrict Disney’s use of their own points as well?

I don't think it would because there are certain areas of the POS that mention don't apply to DVD. Rentals are allowed via the POS and the only thing they can define differently is renting for 'commercial purposes'. It is why I don't think they care to micromanage this aspect of the contracts.

 

[Brian Noble]

Here's a concrete example of the resort/seasonal restriction:

https://clubwyndham.wyndhamdestinat...rces/reservations/owner-priority-reservations

It can be quite targeted. For example, the Austin resort is restricted only during the week of South by Southwest.

 

[Madame]

Here's a concrete example of the resort/seasonal restriction:

https://clubwyndham.wyndhamdestinat...rces/reservations/owner-priority-reservations

It can be quite targeted. For example, the Austin resort is restricted only during the week of South by Southwest.

That makes sense since the resorts are in different locations with regional/local pressures on demand (festivals etc.). DVC resort demand (other than HHI, AUL and VB) all follow the same demand patterns. I wouldn’t mind restrictions targeting rentals as we rarely rent out points, but I guess it would be more along the lines of limits on non-member lead guests and the like.

 

[DonMacGregor]

There are other ways to add friction to the rental process at existing resorts, and other timeshare developers have already implemented some of them. You don't necessarily need to end it, you just need to make it hard enough/expensive enough that it isn't a common pathway that rank-and-file customers turn to. Charging to put non-owners as lead guests (or changing from one non-owner to another), restricting the number of times you can send a guest without also traveling at the same time at certain resorts during certain time periods, etc. Typically, these changes don't negatively effect the vast majority of owners, but do add some pain to the frequent renters.

"But Disney would never do that!"

Maybe. Maybe not. Lots of people thought they'd never distinguish between resale and retail points.

Exactly. There are plenty of things they could be doing to make renting points a far more difficult process, to push those renters to cash rooms, but they’re not.

 

[Brian Noble]

Yet.

The good news is that there is a relatively easy exit path for most landlords. Strip the contracts (via transfer if you have to) and sell them.

For that matter it looks to me like that’s what the smart money has been doing all along.