Points & Perks & Price Oh My......

[Whositsgalore]

Since we are new to DVC membership I've contemplated a lot of factors lately. Points needed for stay, contract length, price to buy in, resale vs direct, perks vs no perks etc....

I can't help but wonder what DVD is thinking. Raise the direct price per point AND raise the minimum buy in for those that want perks (which can be stripped away at any time) seems crazy. For us, yeah, we would have probably bought a few points Direct even with the raise in price as long as the minimum was lower but to raise both? It seems as though now they've driven more people to resale even though there's no perks.

Ok, now that they've driven more people to resale, naturally supply and demand seems to have taken hold. Resale prices have risen...still way lower than direct even to the point the money doesn't justify buying direct for a few perks.

So i'm left wondering what's in it for Disney? I absolutely suck at civics and the like but I know they aren't doing anything without it turning a profit and buying back SSR & AKL contracts at sometimes $95 pp which is way above what they were selling for just 6 months ago seems nuts. I realize even buying back at $95 pp and selling for $151 or $171 is a hefty profit but is it that simple?

 

[_auroraborealis_]

I don't think they have driven more people to resale. Knowledgeable people have always done that work, but sales right now direct keep breaking records. A lot of people buy then come online and have never even heard of resale, and drink the kool-aid to defend their purchase in their own minds.

Disney don't really want to be selling any of the sold-out resorts in quantity. They want to use ROFR to keep value high.

 

[Whositsgalore]

I don't think they have driven more people to resale. Knowledgeable people have always done that work, but sales right now direct keep breaking records. A lot of people buy then come online and have never even heard of resale, and drink the kool-aid to defend their purchase in their own minds.

Disney don't really want to be selling any of the sold-out resorts in quantity. They want to use ROFR to keep value high.

I can appreciate that for sure. Do you think they will slow down the buy backs soon? After looking through threads that go back 2 or three years this seems to be an all time high buy back.

 

[disneynutz]

They seem to understand buyers better than we think. Every resort sells out even with the price increases and people are buying small contracts even with the minimum increase just to get some perks that they may not even use. Plus as you mentioned, those perks can change or go away without notice. There is a rumor that the head of DVD/DVC has been replaced and if so, major changes could be coming.

Bill

 

[Whositsgalore]

They seem to understand buyers better than we think. Every resort sells out even with the price increases and people are buying small contracts even with the minimum increase just to get some perks that they may not even use. Plus as you mentioned, those perks can change or go away without notice. There is a rumor that the head of DVD/DVC has been replaced and if so, major changes could be coming.

Bill

I guess time will tell if those changes will work for or against us resale buyers.

 

[_auroraborealis_]

There is incentive to Disney to keep the resale market healthy, and value high.

 

[Katie L]

I don't think they have driven more people to resale. Knowledgeable people have always done that work, but sales right now direct keep breaking records. A lot of people buy then come online and have never even heard of resale, and drink the kool-aid to defend their purchase in their own minds.

Disney don't really want to be selling any of the sold-out resorts in quantity. They want to use ROFR to keep value high.

Actually there was a pretty hefty dip in direct sales in April after all-time highs in Feb and Mar.

 

[bumbershoot]

Raise the direct price per point AND raise the minimum buy in for those that want perks (which can be stripped away at any time) seems crazy.

Well, I'm not sure they did it together purposely. And even if they did, they've always raised prices. That's not new.

 

[Dean]

Since we are new to DVC membership I've contemplated a lot of factors lately. Points needed for stay, contract length, price to buy in, resale vs direct, perks vs no perks etc....

I can't help but wonder what DVD is thinking. Raise the direct price per point AND raise the minimum buy in for those that want perks (which can be stripped away at any time) seems crazy. For us, yeah, we would have probably bought a few points Direct even with the raise in price as long as the minimum was lower but to raise both? It seems as though now they've driven more people to resale even though there's no perks.

Ok, now that they've driven more people to resale, naturally supply and demand seems to have taken hold. Resale prices have risen...still way lower than direct even to the point the money doesn't justify buying direct for a few perks.

So i'm left wondering what's in it for Disney? I absolutely suck at civics and the like but I know they aren't doing anything without it turning a profit and buying back SSR & AKL contracts at sometimes $95 pp which is way above what they were selling for just 6 months ago seems nuts. I realize even buying back at $95 pp and selling for $151 or $171 is a hefty profit but is it that simple?

It is about profit. Remember there is benefit to larger sales over smaller sales both in terms of admin/personnel costs and I'm sure they're hoping for as much or more total sales in the process. IMO DVD has often been overly optimistic when it comes to sales at least starting with VB/HH/BWV. Plus I think DVC members and potential members as a group have proven they are sheep being led to slaughter.

 

[Whositsgalore]

It is about profit. Remember there is benefit to larger sales over smaller sales both in terms of admin/personnel costs and I'm sure they're hoping for as much or more total sales in the process. IMO DVD has often been overly optimistic when it comes to sales at least starting with VB/HH/BWV. Plus I think DVC members and potential members as a group have proven they are sheep being led to slaughter.

I do feel a little like one of those sheep. While I'm VERY HAPPY with the price I just paid for a 120 point SSR contract it's hard to look at the prices paid for an identical contract (same # of points and UY) in as little as 3 or 4 months ago. Maybe it's the time of year. Maybe it's the fear of buy backs which has risen the cost. I guess there's no real way of telling. I do know that we want to add 100 - 150 more points and while there are contracts out there now we could purchase, I think we are going to roll the dice and wait until the winter. The price may go up, the price may go down only time will tell. The only thing I know for sure...for us, direct prices with no "guarantee" isn't worth the expense. Especially being APH which generally gets us a discount any way.

 

[rg35]

I'm kind of surprised Disney doesn't ROFR more resale contracts. It's double profit for them. They made money on the original direct sale, and can make additional money reselling those points again after recapturing them via ROFR from the resale market. Yes, there's some transactional and overhead costs involved, but it seems like there is still direct demand for sold out resorts and could sell more if they wanted to.

 

[Whositsgalore]

I'm kind of surprised Disney doesn't ROFR more resale contracts. It's double profit for them. They made money on the original direct sale, and can make additional money reselling those points again after recapturing them via ROFR from the resale market. Yes, there's some transactional and overhead costs involved, but it seems like there is still direct demand for sold out resorts and could sell more if they wanted to.

TRUE!!! While the rest of can't "flip" points for profit, like in say buying a house etc... DVD easily could.

 

[Ben E N]

I'm kind of surprised Disney doesn't ROFR more resale contracts. It's double profit for them. They made money on the original direct sale, and can make additional money reselling those points again after recapturing them via ROFR from the resale market. Yes, there's some transactional and overhead costs involved, but it seems like there is still direct demand for sold out resorts and could sell more if they wanted to.

It would also drive resale prices up, making the direct sales prices look more appealing. It's strange to me as well. Perhaps they put all of their cash into building new properties and just don't have enough to be able to buy and hold onto points.

 

[Dean]

I do feel a little like one of those sheep. While I'm VERY HAPPY with the price I just paid for a 120 point SSR contract it's hard to look at the prices paid for an identical contract (same # of points and UY) in as little as 3 or 4 months ago. Maybe it's the time of year. Maybe it's the fear of buy backs which has risen the cost. I guess there's no real way of telling. I do know that we want to add 100 - 150 more points and while there are contracts out there now we could purchase, I think we are going to roll the dice and wait until the winter. The price may go up, the price may go down only time will tell. The only thing I know for sure...for us, direct prices with no "guarantee" isn't worth the expense. Especially being APH which generally gets us a discount any way.

A better analogy for those familiar might be the movie Logan’s Run with Farrah Faucet. DVC has a lot of good qualities but a definite number of people seem to be willing to pay an almost unlimited cost and accept less than ideal management, to a degree every member might fit into that arena in some way or another, myself included. I’be seen people pay more than they would out of pocket just “To be a Member” for the status. I’m always amused when some issue comes up and people say things like “if they did X there would be a class action suit”, or I “I would sell”, or the most amusing “people would complain”. As a group that has never been the case though I know some have exited because of their concerns real or imagined. But until it happens enough to affect their bottom line, it’s just blowing smoke.

 

[skippytx]

TRUE!!! While the rest of can't "flip" points for profit, like in say buying a house etc... DVD easily could.

You could try though. Returns probably wouldn't be worth it, and no clue about the tax implications, but say you find a stripped out contract for a really good price. Buy it, the dues should be paid by the person using the points. Hold on to it for a few years until you have full UY points, and then sell for top dollar and hope price per point has gone up a fair bit. There are folks that do the reverse as well. Buy loaded contracts, strip out the points renting them, then sell the stripped contract.

Seems like a ton of work though for not much profit and a big gamble.

DVD I think plays a good balancing act. They want to sell you the new developments, so if they make it too easy to buy the old ones from them, they can't direct people to the new developments as easily. If you really push you'll get your sold out resort points, but they make you wait for them. The real money is in selling the new developments.