November 2022 Direct sales.

[SLThomas318]

I just feel like this is the "new Disney".... charging more and giving less. We joined in 2018 and it seemed like they had a good thing going. We were comfortable joining because it wasn't a typical time-share model and the strong resale/rental market felt like a little bit of a safety net. The DVC annual pass (blanking on the name) was a great deal and we quickly started adding on points because we were having these magical trips. Even knowing about the resale market, we bought our points direct. We did smaller point contracts and it was easy to call up and have points loaded right away. Was the resale market really killing all of Disney sales?

 

[havoc315]

Two comments on this:

1) Resorts don't resell at nearly that pace. Over the last 22 months, 0.74% of SSR points changed hands via resale. For BLT it's 0.71%. For AKV it's 0.93% (Three resorts chosen at random.)

2) Anecdotally, many owners book their home resort at 11 months anyway. And surely people who buy a restricted resale do it because they have great affection for the resort. I don't think it's realistic to suggest that someone who buys a restricted resale would act completely different if not for the restrictions.

EDIT: One more point to add to my list...

Yes, your hypothetical VGF direct buyer could find some lesser amount of RIV availability due to the restrictions. But the offset is the RIV resale owner is unable to use his/her points to book OTHER destinations, thus increasing that pool of availability. If your RIV resale owner cannot use his/her points to book BCV, BLT, Poly and others, 7 month availability in those locations will increase for owners who can access.

And all those BCV/BLT, Poly, GFV re-sale owners can't exchange INTO Riviera.
Which should actually keep RIviera more available at the 7 month mark.

 

[EYL]

Let’s say you bought today direct from Disney at VGF.

Currently, the number of resale owners at RIV is small, meaning you have a decent chance of being able to book at 7 months at RIV.

However, over time, the number of resale owners at RIV will only increase. Those resale owners will ONLY be able to book at RIV. They won’t (for example) to be able to book at VGF, VB, SSR, AKV, etc.

The only reason the 7- month booking window works is because some owners use their points for something else, most commonly a stay at a different DVC resort.

But if a large percentage of RIV owners can ONLY use their points at RIV, then that’s going to make it more difficult for you and I, as non-RIV owners, to book RIV at 7 months.

Even if we bought directly from Disney, we are hurt by the resale restrictions at RIV.

I agree. Another problem is that the restrictions are much more visible on the resale value of RIV today and people tend to overlook the restrictions on O14 resales.

Value-wise... Right now, RIV is reselling at about $140/point (based on the sponsor's article). With 20 years left, some 2042 resorts are worth more - BCV is about $159/point (it sold for $80-$85 when it first opened). But I'm not sure if BLT (for example) will be worth the equivalent when it has 20 years remaining, because there will be fewer original DVC resorts to trade into. Imagine owning BLT in 2040 with multiple resorts expiring in 2 years. If the prices do drop, will it cause more people to sell and compound upon the issue? (Not as drastic, but think the stock market going down and there's a sell-off.) Not sure, but the value of DVC, as a whole, might be hurt by the resale restrictions.

Availability-wise... In 2042, there will be more O14 resale owners and 5 fewer resorts to trade into. Availability in the then-O9 resorts at 7 months will suffer also. This will make it much harder for all owners, resale or direct, to book anything other than your home resort at 7 months. If availability suffers, will it cause more people to sell and compound upon the issue?

I bought in to, hopefully, own until expiration. But with these potential issues, it's hard not to look at resale value and have an exit strategy. My ownership strategy might change as well. Meaning, is it more worth it for me to hold onto RIV until it expires? Or maybe sell it half way through for a decent amount and trade it in for the new BCV or BWV? Other timeshares are being offered for free with closing costs, and in some cases 3 years worth of dues, to be paid by the "seller". It seems as long as DVC retains some value, Disney will be happy.

 

[tom1944]

This snippet of the chart shows that in November, RIV was selling at a 35% discount to direct prices, which is performing better than some resorts, or not as good as others. Point being, there is little evidence to suggest that the restrictions are dragging down resale prices.

Riviera Resort

$140

$217

$77

35%

Do you think they dragged down direct pricing?

 

[BeachClub2014]

Do you think they dragged down direct pricing?

Do I think that restrictions on future resales have hurt direct sales? No, I don't. I'm sure that there are some folks who would have bought, it otherwise. My overall point is that the resale restrictions on Riviera resale points have seemingly had negligible effects on either direct sales or resale prices. I am not a huge fan of the restrictions, but they are here and likely to stay.

 

[havoc315]

Do you think they dragged down direct pricing?

Considering they just made Riviera MORE expensive than Grand Floridian in direct pricing, clearly no.

 

[havoc315]

Do I think that restrictions on future resales have hurt direct sales? No, I don't. I'm sure that there are some folks who would have bought, it otherwise. My overall point is that the resale restrictions on Riviera resale points have seemingly had negligible effects on either direct sales or resale prices. I am not a huge fan of the restrictions, but they are here and likely to stay.

For good reason, a lot of people don't like the restrictions. Re-sale buyers are overrepresented on this board compared to the overall DVC population. So especially on this board, there are people who really hate the restrictions.
Seems some of those people are therefore looking for evidence that those re-sale restrictions are really bad for sales, essentially (probably subconsciously) trying to discourage people from buying Riviera in the hopes that it will force Disney to get rid of the restrictions.

But the actual evidence shows that re-sale restrictions are not significantly impacting sales or pricing. They are almost certainly here to stay.
But a couple of caveats -- They may or may not be included in Poly2, depending on how they choose to do the associations. They also may or may not be included in VDH, depending on whether there is anything in California timeshare law that would prevent it.

 

[Nabas]

And all those BCV/BLT, Poly, GFV re-sale owners can't exchange INTO Riviera.
Which should actually keep RIviera more available at the 7 month mark.

Yes, and since those resale buyers cannot stay at RIV, it makes it harder for me to book other resorts.

A resale buyer says to themselves, “I really wanted to give RIV a try but since I can’t book RIV at 7 months, I might as well go for BLT.” So if I wanted to stay at BLT, it means I’m less likely to get it at 7 months because someone who would have rather stayed at RIV, is going to grab BLT (their second choice) instead. Now I’m grabbing MY second choice at 7 months (BRV?), blocking someone who really wanted BRV as their first choice.

The way all members benefit is if we all have an equal chance at our first choices at 7 months.

 

[havoc315]

Yes, and since those resale buyers cannot stay at RIV, it makes it harder for me to book other resorts.

“I really wanted to give RIV a try but since I can’t book RIV at 7 months, I might as well go for BLT.” So if I wanted to stay at BLT, it means I’m less likely to get it at 7 months because someone who would have rather stayed at RIV, is going to grab BLT (their second choice) instead. Now I’m grabbing MY second choice at 7 months (BRV?), blocking someone who really wanted BRV as their first choice.

The way all members benefit is if we all have an equal chance at our first choices at 7 months.

But those who can't stay at Riviera can split between 14 other resorts. While none of them can come into Riviera.

And what you're talking about will affect all owners equally. Ok, if gets harder to book BLT at 7 months for a OKW re-sale owner. Also becomes harder to book BLT for a SSR re-sale owner. Also becomes harder to book CCV for a BCV re-sale owner.

 

[tjkraz]

A resale buyer says to themselves, “I really wanted to give RIV a try but since I can’t book RIV at 7 months, I might as well go for BLT.” So if I wanted to stay at BLT, it means I’m less likely to get it at 7 months because someone who would have rather stayed at RIV, is going to grab BLT (their second choice) instead. Now I’m grabbing MY second choice at 7 months (BRV?), blocking someone who really wanted BRV as their first choice.

And without the restrictions, the RIV resale buyer chooses to stay at BLT or BRV. Regardless of the system, there are gives-and-takes. A balance will be struck.

 

[BeachClub2014]

And without the restrictions, the RIV resale buyer chooses to stay at BLT or BRV. Regardless of the system, there are gives-and-takes. A balance will be struck.

Agree.

I am fascinated to see what DVC availability looks like after the 2042 resorts start falling off the radar and the options for using the post-restriction resale points become fewer and fewer.

 

[tom1944]

Agree.

I am fascinated to see what DVC availability looks like after the 2042 resorts start falling off the radar and the options for using the post-restriction resale points become fewer and fewer.

I wonder also but I will be turning 85 so I doubt I will be an owner then

 

[BeachClub2014]

I wonder also but I will be turning 85 so I doubt I will be Ian owner then

I hear that. I will be 76, so likely won't care too much, anyways.

 

[DonMacGregor]

And without the restrictions, the RIV resale buyer chooses to stay at BLT or BRV. Regardless of the system, there are gives-and-takes. A balance will be struck.

I'd be more curious about Aulani direct points that can be used at new resorts. I often wonder what percentage of Aulani points are actually used to book there versus SAP in any one year. Those numbers are growing (albeit slowly), so there has to be some increasing effect.

 

[Sandisw]

The typical Timeshare does not go to a value of $0 because the original company intentionally takes steps to decrease its value.

In this case, we are seeing DVD intentionally take steps to decrease the value of its product once on the resale market.

I understand why they do this for Membership Extras which come out of the DVD budget. Why should DVD pay for something for an owner who did not buy from them?

But being able to exchange between DVC resorts benefits everyone.

Let’s say in 20 years, 20% of RIV owners bought on the resale market. This means that for someone buying direct today at VGF, it’s going to be that much harder to exchange into RIV. Long term, people who bought direct from Disney are going to be hurt by this.

Except, if they continue adding new resorts with it and more and more resale owners are not allowed to trade, it will absorb some of that.

For example, when the 2042 resorts end, if they come back restricted, there will be a lot of rooms opening up to direct buyers so it could end up not as difficult as one thinks.

 

[Cfabar1]

To be fair, many time shares don’t go to $0. Hyatt properties don’t, and their system, despite some key differences, reminds me the most of DVC To the other players. Hyatt has very limited restrictions, and their owners, overall seem happy. They are less happy now that Marriott Vacation Club has taken them over.

Marriott/Vistana also seem to not go to $0. However, many others do.

 

[Sandisw]

But isn’t all of that because the restriction lowers the value?

I was not aware Poly direct was so much more expensive so I have to rethink my concern about the current cost.

Long term I still would have concerns that the restrictions would be an issue

What does the lack of ROFR indicate? Disney does not want them back?

DVD does not use ROFR when a resort is in active sales. So, until RIV is sold out, the lower prices get through.

Before VGF went back on sale in March, people were paying in the 190s for it, Now, you can get it in the 160s because of the direct price having gone lower and because people know it won’t get taken.

 

[Cfabar1]

Does anyone know DVD’s rationale for not exercising ROFR when in active sales?

 

[DonMacGregor]

DVD does not use ROFR when a resort is in active sales. So, until RIV is sold out, the lower prices get through.

Before VGF went back on sale in March, people were paying in the 190s for it, Now, you can get it in the 160s because of the direct price having gone lower and because people know it won’t get taken.

While the common thought is that Disney doesn’t want to be adding inventory back in while they are actively trying to unload it (which I’m not entirely sure I buy because it does mean leaving money on the table), I also think they are banking on simple economics limiting the number of points showing up on the resale market. Realistically, how many contracts are going to be resold at a 30 or 40% loss within the first 24 to 36 months? Sure, some folks will experience hardships and be forced to sell, or be faced with other motivations, but between being upside down on financed points, and a strong desire not to lose that much cash on something you literally just bought (and may have only used once or twice), you have to think most think long and hard before risking significant loss with no ROFR in place.

As an aside, there are significantly fewer RR contracts on the resale market than any other resort of equal size, adjusting for percentage of declared units.

 

[Nursemanit]

Why buy VGF when you can wait for new-build Poly.

it’s the iPhone +1 sales problem - you only get 6-8 months of sales before everyone waits for the new version.

Where as in the Epcot area you know you have nothing coming for at least 7 years. So it’s RR or overpay for 19 years of BWV