Membership turnover rate - any info available?

[BobH]

I have never been to a annual meeting. Does anyone have any idea what the turnover rate is at the DVC resorts? Does the topic ever come up? I just wonder how many people have kept their points vs how many have sold. The Timeshare Store seems to have handled a lot of resales over the years.

 

[Beca]

Well, I am going to post a number, but I know many here will not believe it. I asked a DVC rep (not my guide, someone else) that one time, and he whispered to me that he could tell me, but I wouldn't believe it. After much prodding, he whispered to me that the average thus far has been 4yrs.

It makes me think that the disers are definitely the minority.

 

[DVC Grammy]

Well, I am going to post a number, but I know many here will not believe it. I asked a DVC rep (not my guide, someone else) that one time, and he whispered to me that he could tell me, but I wouldn't believe it. After much prodding, he whispered to me that the average thus far has been 4yrs.

It makes me think that the disers are definitely the minority.

I wonder if any of those turnovers are turnarounds: sell one DVC to buy another one. Would Disney have any way of tracking those numbers, given that they could be resales and have different use years?

 

[kend58]

I have no idea what the stats are re percentage of ownership retained at X number of years. Clearly many here on this and other boards are long time owners (and or disney fanatics). However, just based on the fact that at least three companies and (based on the three companies provided profiles) multiple licensed realtors are specialists in the DVC resale market there are a lot of contracts turning over.

I know there are threads tracking ROFR stats does DVC publish those?

Based on a thread I read at another site there have been 40 contracts which "passed" rofr in the last 4 months and where the buyer posted the resulst to one or more boards. That is an average of 10 contracts per month that pass the ROFR process. Lets assume only 10% of all the owners are on the boards posting about their activities so then 400 contracts probably is more like the actual number for the period and that would be 100 contracts per month.

DVC in it's sales materials talks about having nearly 100,000 members so 1,000 a month would be a 1% per month turnover or roughly 10 to 15 % turnover per year. That is not a rediculously high turnover rate considering Loss of Job, Change in schedule due to change in job status, paying for College, Divorce, Marriage, Child birth or Death and Long Term health issues which are likely the major drivers in peoples decisions. I think statistically any large diverse grouping (100.000 members) of people would have 10% of its members affected by one or more of those factors in any given year on average and certainly selling a luxury item (which I consider DVC memberships to be) at break-even or profit economics (which most who have posted resale stories claim they have accomplished) is any easy answer to the financial problems that come with some of lifes issues.

All of the preceeding is a long way around to saying that a 4 year average turnover seems a little hgh to me but 6 to 9 years seems statistically like the maximum number Iwould expect and therfore I don't think 4 years while lower than I would have assumed is unrealistically low.

 

[TenThousandVolts]

Good analysis: We have the running count of DVC owners on this board- which shows approx 1-2% of DVC owners are represented on the DIS if that helps (really it just shows that 1-2% have posted on that thread- assuming no-one has double posted...)

 

[Anthony1971]

I do not think 4 years may be low. From what I remeber reading most people get a 5 year itch with a mortgage of house much less a timeshare... The honeymoon period is over after two then it becomes an expense if it is not something you truly like and want to go to every year. What I am saying is the majority of people finance and being locked into paying month after month for a vacation can get tiresome. When you factor this in to the above selling for a reason 4 years is low. I assume 4 years is the average which means 50% less and 50% more. Not to imply anything (like not for nothing??) if you vacation at Disney every year it is a good deal but I see a lot posts where people ask if they can afford it or we will just make it with the payments etc. I would suppose a number of the people who purchase under these circumasatnaces will be fine as your income should grow and payments stay the same but when it becomes a Disney vacation or going out to dinner a few times a month for the 51 weeks you are not at Disney.........much less paying the price to stay on property as evrything is more expensive and those who eat out everyday on vacation offsite quickly find it is easly twice as much to the same onsite. I think the factors could go on and on... The bottome line is and more imprtant than being informed about DVC you need to be informed about your personal finances and the commitment you are making.

 

[BobH]

A time to selout of 6-9 years makes economic sense to me if the original buyer has paid cash for their points because they are probably at or near a theoretical break even point and can get all or most of their origianal money back. Four years might seem too short a time, but if it is the case it could reflect what appears to be going on in the real estate market nation wide right now - too many people getting in over their heads. DVC should not be done as an investment, but it is interesting to follow the trends to see where you stand. Besides the Timeshare Store who are the other major re-sellers?
Does anyone know? Thanks to all for answering my post.

 

[kend58]

A time to selout of 6-9 years makes economic sense to me if the original buyer has paid cash for their points because they are probably at or near a theoretical break even point and can get all or most of their origianal money back. Four years might seem too short a time, but if it is the case it could reflect what appears to be going on in the real estate market nation wide right now - too many people getting in over their heads. DVC should not be done as an investment, but it is interesting to follow the trends to see where you stand. Besides the Timeshare Store who are the other major re-sellers?
Does anyone know? Thanks to all for answering my post.

In addition to the board sponsor DVC specialists:
http://www.***********.com/ *********** - URL won't post
http://www.atimeshare.com/disney/buy-disney.html
http://www.internationalgmac.com/ho... with the board sponsor - I am still shopping

 

[Dean]

I'm sure DVC has the information but don't share it. 4 years does seem low but if reasonably accurate I'd suspect it skewed by add on purchases. If this was in the last 2-3 years it might also be skewed by SSR since a number of people seemed to buy in to get the developer points then sell for now out of pocket and thus end up with free developer points. This might be for the average length of a contract, likely a different and longer number would be the average length a person is a member. New members would also skew both numbers to look artificially low.

 

[JimC]

What general classifications of member might we consider?

1. Those who buy on impulse, later regret and cancel or sell

2. Those who buy for vacations with young children who out-grow Disney and then the contracts are sold

3. Those who sell at some point because of changed circumstances

4. Those who sell as part of a DVC or broader timeshare portfolio management (re-balancing among resorts, adding a new resort, re-balancing among programs, etc)

5. Those who inherit and sell because they do not want a membership


Are there others?

I suspect that the average turnover is affected by the proportion of members falling into the various groups. Group one would drive down average length of ownership dramatically and could represent a significant proportion of the turnover. Am I correct that this would be the experience in the timeshare industry?

If we eliminate just group one, the remaining members might be a much more stable group. Just some late night musing as I have no data to support any of this.

 

[Dean]

What general classifications of member might we consider?

1. Those who buy on impulse, later regret and cancel or sell

2. Those who buy for vacations with young children who out-grow Disney and then the contracts are sold

3. Those who sell at some point because of changed circumstances

4. Those who sell as part of a DVC or broader timeshare portfolio management (re-balancing among resorts, adding a new resort, re-balancing among programs, etc)

5. Those who inherit and sell because they do not want a membership


Are there others?

I suspect that the average turnover is affected by the proportion of members falling into the various groups. Group one would drive down average length of ownership dramatically and could represent a significant proportion of the turnover. Am I correct that this would be the experience in the timeshare industry?

If we eliminate just group one, the remaining members might be a much more stable group. Just some late night musing as I have no data to support any of this.

Jim, did you put #4 in just for me? I can't speak to the experience of timeshare in general as to the average length of ownership. I suspect ARDA has statistics on this but wouldn't know how to go about getting it though I'm sure member resorts could fairly easily. For non DVC timeshares there is a fairly large group that own but don't use. They were likely impulse buys but either don't know how to get rid of it OR they can't fathom that their timeshare is really worth only 20¢ on the dollar compared to what they paid. These would skew the numbers in reverse.

I think you pretty well covered the group that are no longer members. Depending on how DVC looks at it you could have other groups in calculations as I summarized above. Obviously one who's still an owner has been an owner for a specific time measured from whey they bought, that might have only been 2 years ago. There are obviously more new owners than long term ones. How does DVC count one who is an owner but sold part of their portfolio. What about one who sold X and bought Y. And since we know that the member cards for a resale buyer usually state the length of membership from the original retail purchase, how are those that bought resale counted? Personally I don't have much info in this area, maybe some others will have much more.

You could end up with the average length of membership which could vary depending on specifics, plus the average length one owned who is no longer a member. I'm assuming there are industry standards as to how and when to calculate this type of info, I simply don't have the knowledge personally.

 

[tjkraz]

A few random observations:

* Beca: How long ago did your Guide pass along that info? I'm wondering if this isn't a situation where he made that comment 2-3 years ago and the data itself may have been a couple years old.

If that's the case, even the earliest owners at OKW would only have 10 years or so under their belt. Average that out with people who sold on short notice and 4 years seems very realistic, IMO.

* How would recent purchasers fit into the average? Regardless of how old the data might be, if those who bought within the last year or two before the data was analyzed might be weighted equally with those who purchased when OKW first owned. You would have an awful lot of people who have only owned for a couple of years (or less) severely skewing the average, right?

* I wonder if the data is based upon owners or contract ownership. For instance, we first bought in 2003 meaning we have been members for about 4 years. If we added a second contract, would they continue to count us once or would they include the ownership duration of both contracts in the average?

* If the average ownership really is only 4 years, it seems like it would be in Disney's interest to keep members happy. The fewer contracts that hit the resale market, the easier it is to sell "new", right? So keep the perks, coming DVC. We are a very difficult group to please!!!

 

[jarestel]

I don't know about actual turn-over rates, but it does seem logical that a large percentage of current members will never see or have to deal with the contract expiration dates. 40-50 years is an awfully long time to own anything.

Circumstances change dictating a shift in priorities: people get divorced, kids need money for college, new homes are purchased, jobs are lost, folks pass away, people get tired of WDW or simply see an opportunity to sell their contracts and make a profit.

I'm sure there are dozens of other reasons but the point is most members will at some point face events or circumstances that will make a re-evaluation of priorities necessary. Maybe that comes at 4 years, maybe at 6 or 10 years.

 

[WalterS]

Well JimC captured the reason we're selling in #2. After 11 years of many great vacations we decided to sell our 1000 points in 7 contracts at various DVC resorts. Started selling in April and only have one left that isn't either closed or in contract. Use to do 4-5 vacations a year and bring relatives or friends as we have an only daughter. Too difficult now due to high school sports. No other decision factored in other than us having done all this for many years starting when our daughter was 4 and now we'd like to try other things. The fact that DVC still commands a price in which you can make a little money after closing doesn't hurt either.We loved DVC and would recommend to anyone and may even buy back in 15-20 years.