New Restrictions Announced on Resales: Effective Jan 19

[DebbieB]

Based on everything that has been shared by insiders, on other discussion boards, it seems that Disney's Riviera Resort may be the most lavish resort at Walt Disney World. Gran Destino, Riviera, and Reflections mark the beginning of a hospitality and thematic shift for Parks and Resorts.

I agree - the artwork does not look moderate. The points charts will tell the tale. I would call OKW and SSR the DVC moderates, low points per night.

 

[kboo]

This will be our first contract. We toured DVC on our November trip and made an offer on an AKV resale contract later that month. Disney took that contract in December. We found another yesterday and we were going to try again until this news broke.

I'm sorry. I would say if you still think it's a decent value to still go for it. If you get to ROFR before 1/19, you would be able to use your points at Riviera etc. If you don't, you can't, but ... you're in no different position from anyone who currently owns points and is using them before Riviera opens. And if you really want to stay at Riviera or the later resorts, you could rent your AKV points and use the $ to rent at Riviera. It's really the Riviera direct buyers who bought without enough information who are going to get screwed, especially if they find after purchasing that they can't or don't want to pay their mortgage or maintenance.

Edited: that said, since we already own grandfathered points, more points are going to wait until I see how this all shakes out.

 

[WilsonFlyer]

I wonder about booking the rooms. If you own resale at Riviera (for instance) and are locked in there, you're going to be on at 8am whenever possible to grab whatever is available. That could make it more competitive for direct buyers to secure home resort rooms... unless there's a direct-purchase booking advantage as well, which will further devalue resale to the point of near-worthlessness. And... there's going to be a bunch of Riviera reservations-for-rent someday, too, due to the need to lock something in ASAP every time. It'll be interesting to see how this plays out and what the exact terms of the trading disclosure are.

Did the OKW owners have this problem when it was just OKW? Just sayin'.

 

[WilsonFlyer]

Really the only thing that's giving me pause now is the thought of the contract being completely worthless and not being able to at least give it away if we needed to get out from under the maintenance fees. If I knew that I would be able to get out when I needed to, even by just giving it away, I would go ahead and jump in. Does anyone think it's even remotely possible, barring another great depression, that a DVC membership could become completely unwanted?

Unless they can somehow remove owners' ability to rent reservations, I simply can't see this happening. That particular panic seems premature to me. As long as we can rent reservations for essentially less than Disney can sell CRO for and still maybe even make money, the value should stay where it is or at worst, increase proportionally to CRO costs.

 

[Jerry5788]

Unless they can somehow remove owners' ability to rent reservations, I simply can't see this happening. That particular panic seems premature to me. As long as we can rent reservations for essentially less than Disney can sell CRO for and still maybe even make money, the value should stay where it is or at worst, increase proportionally to CRO costs.

I agree but think the real value impact is closer to 2042.

14 resorts - gcv, vb, hhi, aul and 10 wdw resorts. If the 10 - 3 often gave availability at 7 months (akv,Ssr, okw). Come 2042 the 7 other premium dvc resorts become only 4 (gfv, Blt, CCV, poly). I would then consider buying direct from Disney st bcv dvc2 or whatever they do New there

 

[Madame]

Did the OKW owners have this problem when it was just OKW? Just sayin'.

Wasn't there a lottery system for Christmas stays?

 

[WilsonFlyer]

I agree but think the real value impact is closer to 2042.

14 resorts - gcv, vb, hhi, aul and 10 wdw resorts. If the 10 - 3 often gave availability at 7 months (akv,Ssr, okw). Come 2042 the 7 other premium dvc resorts become only 4 (gfv, Blt, CCV, poly). I would then consider buying direct from Disney st bcv dvc2 or whatever they do New there

I think we've all always known there would an impact as we neared EOL on these contracts. That's only logical. The real question, I believe, has always been at what point does EOL begin to have an impact. That's the great unknown, and the impact of this on that seems negligible to me at this point, unless somebody can prove that wrong.

 

[Marionnette]

Did the OKW owners have this problem when it was just OKW? Just sayin'.

OKW owners didn't have to compete with direct and grandfathered owners at 16+ resorts in order to make a reservation at 7 months or less when the resort was new. Limiting Riviera resale owners to only using their points at Riviera could make it almost impossible to use their points inside the 7-month window when any DVC II owner and a large number of DVC I owners can book. It will also make it difficult for other members to book DVC II resorts as more and more contracts at those new resorts are sold at resale.

 

[jsand99]

I saw a post in another thread saying that after January 19th, no resale contracts on the original 14 will have the 11-7 month home resort priority and can only book in the 0-7 month window. Can they really take away home resort priority from future resale owners?

 

[Deb & Bill]

Did the OKW owners have this problem when it was just OKW? Just sayin'.

We bought in 1997 when there was only OKW, BWV, HHI and VB. We had no need for HHI or VB; we bought to go to WDW and stay at OKW. And with the choice we had, we chose OKW over BWV. We still have only stayed at BWV maybe four nights in 21 years. We just don't care for it. I think a lot of the original OKW owners still like OKW the best. But that's just my opinion. We still spend most of our stays at OKW.

 

[Deb & Bill]

Wasn't there a lottery system for Christmas stays?

Yep, the first two years of our ownership (we bought in 1997), if you wanted to go for the Christmas holiday, you had to enter into the lottery. You didn't know if you got it until a few months/weeks before.

 

[Deb & Bill]

I saw a post in another thread saying that after January 19th, no resale contracts on the original 14 will have the 11-7 month home resort priority and can only book in the 0-7 month window. Can they really take away home resort priority from future resale owners?

No. All they can do is shorted the home resort priority booking period.

 

[thebigman65]

The advantages haven't changed from what they were in the past. You're paying for future vacations now and will save money (over time) vs. paying as you go. Owning is still cheaper than renting, but you have to be in it for the long haul in order to reach the break even point.

There's no way to tell how this will affect resale prices. On one hand, all of the 14 original resorts will still have the ability to book at each of the others. And in a sense, that's no different than the day that I bought my most recent contract. The inability to book at the newer resorts may not have a huge impact on the resale value of a BCV contract to someone who wants to swim in SAB. BLT ownership will still appeal to people who want to walk to the MK from their hotel. OTOH, when the 2042 resort contracts expire, almost half of the legacy resort will disappear. Owners who buy resale at the remaining resorts after 01/19/19 will see their options significantly reduced. That's going to seriously impact their resale value, especially if (when?) DVC repackages those 2042 resorts as all new versions of their former selfs, complete with the "you can't book here if you bought resale" clause.

Yes this.....however, there are only 6 out of 14 resorts that expire in 2042 (BRV,VB,OKW1,HH,BWV,BCV) so that would still leave 8 resorts that would not potentially move to the new DVC 2 platform until their expiration dates which is quite a bit after 2042. It does however, take away some of the most desirable resorts that are close to the parks, etc. My point being is that the value of resale point on the original 14 (DVC 1) should remain very stable and are still a good buy IMHO. I also would imagine that owners of the 6/2042 resorts will probably get some sort of offer to "buy in" at a special rate and therefore become not only DVC 2 members, but perhaps retain the DVC 1 privileges as well. There are all kinds of ways this can go, but in short, I think DVC resale still has value....not as an investment, but as a pre-paid vacation.....which is all it ever should be considered as......

 

[kboo]

Yes this.....however, there are only 6 out of 14 resorts that expire in 2042 (BRV,VB,OKW1,HH,BWV,BCV) so that would still leave 8 resorts that would not potentially move to the new DVC 2 platform until their expiration dates which is quite a bit after 2042. It does however, take away some of the most desirable resorts that are close to the parks, etc. My point being is that the value of resale point on the original 14 (DVC 1) should remain very stable and are still a good buy IMHO. I also would imagine that owners of the 6/2042 resorts will probably get some sort of offer to "buy in" at a special rate and therefore become not only DVC 2 members, but perhaps retain the DVC 1 privileges as well. There are all kinds of ways this can go, but in short, I think DVC resale still has value....not as an investment, but as a pre-paid vacation.....which is all it ever should be considered as......

Exactly - and (after sleeping on this) this has the initial effect of depressing Riviera resales while they are still selling Riviera (and arguably Reflections) direct. They've left the ability to rent points untouched, so it creates an incentive for grandfathered owners to delay resale and consider renting instead. Which is sort of genius ... renting gets bodies in the parks, and does a little DVC selling for free, and no one is debating whether the price difference between resale (which will be lower, for sure, just how much lower remains to be seen) and direct is worth it or not.

Ooooh. And how low will distressed Riviera contracts be? Low enough for Disney to ROFR them all? or will Disney "rent" the points from the distressed owners rather than foreclosing? There are many ways to disincentivize resales.

 

[kboo]

I wonder why they didn't start this with BLT, or VGF, or POLY. Any of those resorts would of been a better draw to start a new DVCII, rather than with the Riveria. Change in leadership and bonus requirements?

I haven't been an owner that long, but with Poly and CCV we saw resale contracts popping up while they were still selling direct. Those resale contracts were potentially competing with direct sales, and put $ pressure and administrative cost on the ROFR process. And - as we've always said, Disney can't ROFR them all... but they sure can take back a lot more contracts at $100 per point than $150 pp. So artificially depressing Riviera resale prices helps them.

 

[DeeCee735]

We bought direct at BWV to stay at BWV until the end of the contract or the end of our lives, whichever comes first . We bought direct at AKV because we love it and every stay we’ve had there and will continue to have til the end as well. God willing we never have to sell. But....if we do, we’ll take what we can get and not look back. 19 years and counting, still love it, and now have it with our kids and grandkids. To us, and currently, no matter what, DVC still rocks!!!

 

[ScubaCat]

Ooooh. And how low will distressed Riviera contracts be? Low enough for Disney to ROFR them all? or will Disney "rent" the points from the distressed owners rather than foreclosing? There are many ways to disincentivize resales

I have a hunch that eventually - when they feel it's to their advantage - there will be an option to "convert" these severely limited "DVC 2" resale contracts to direct. For a very modest fee, of course. That's actually fairly common in the timeshare industry.

 

[zavandor]

One thing any resale owner of the Riviera is going to have to be careful of is making sure they book their trip before the 7 month window opens. With other owners able to book into the Riviera, but resale owners note allowed to book out, there could be horrible availability problems for those resale owners.

This new DVC II club sounds like it will be set up to only allow resale owners to book at their home resort and never anything else.

The new exchange system hasn't been announced yet, so at the moment no one knows how it will work, but it's fun to speculate anyway.

The Legacy14 resorts are set up in a way that it was difficult to impossible to differenciate direct from resale on what really mattered: booking. They could have set up a priority list, giving them earlier access to the 7 months booking window (it's in the POS), but while it would have limited resort hopping, it would have not eliminated it. Too much effort for little result.

So they are introducing DVC2. Riviera, Reflection and all other resorts will not be part of any "Vacation Club". Reservations will not be first come first serve between them and with the Lecagy14. They will create an exchange system (let's call it DVCX), similar to RCI, but valid only between DVC resorts. Since this is a new system, DVD will be able to decide what are the rules to access it and they have decided that you must purchase direct in order to access DVCX.

DVCMC had the choice to join DVCX or not at those new rules. And of course they joined.

DVCX must somehow balance the exchange, every point booked by a legacy owner at Riviera must be balanced by a owner booking from Riviera into a legacy resort.
Let's make an hyperbole and think what happens if everyone decides to sell their contracts at the legacy resorts: no one would be able to book Riviera, how can they legally justify that Riviera owners can still book at the legacy resorts? They are not in the same Vacation Club and our POS certainly doesn't allow external users to book our resorts. It's an exchange system so points need to balance out.
It's like RCI users being able to book DVC weeks: those weeks must be deposited into RCI first.

This means also two more things:

• DVCX must be kickstarted with points by DVC. In order to allow the first owner to book through DVCX, points must already be in the system, otherwise they would book a room in another system without the certainty someone would book back.
• The amount of points deposited in the system initially cannot be low. If they deposit 1000 legacy points and someone books a Grand Villa using Riviera points, a second owner wouldn't be able to book anything until someone from the legacy resorts books back something in Riviera.
  I bet they want to make DVCX booking system to appear as seamless as possible, ideally like it is now, they do not want to sell $200 points that will be worth $50 on the resale market to have owners locked out the legacy resorts. This means a lot of points need to be in the exchange system as a buffer

Disney owns 2-4% at each reasort, but they cannot deposit those as they must be used for maintenance. They could buy back a lot of contracts and keep those points just to feed DVCX, but it's a lot of money. How can Disney create points out of thin air to have extra availability at the legacy resorts? Increasing the lockoff premium! there could be a million of extra points created at WDW resorts by the lockoff premium. All of those could be deposited in DVCX as soon as a 2BR is locked off in a studio + 1BR.
We will be feeding with the points we'll loose to book studios and 1BR the exchange system that will shut out resale owners from booking all resorts. Genius. Evil genius.

Disclaimer: I have no insight into the new system and I'm just wildly guessing. However I think it makes sense.

 

[Madame]

That's actually fairly common in the timeshare industry.

One word I never thought Disney would want associated with an aspect if their business, and yet just like DCL and its “industry standards” nonsense, here we are.

 

[ScubaCat]

One word I never thought Disney would want associated with an aspect if their business, and yet just like DCL and its “industry standards” nonsense, here we are.

It's amazing what Disney is once you pull back the facade. DW and I were evacuated from the peoplemover a couple of years ago from that last tunnel before the end, and the stairwell clearly hadn't been touched since 1971. Ceiling tiles hanging loose and missing, the railing had paint chipping and rust, fluorescent light flickering, etc. Quite the culture shock right in MK. I always think of DVC in the same manner. It's a cash cow for a huge corporation with a pretty facade. It's reasonably well kept and we enjoy it (for the most part), but it's like that for their benefit overall.