Renting Points We Are Selling Too Low

[Dean]

I don't understand why they wouldn't sell 12 year contracts?

Even if only 20% of the resort sold out, that would be 20% less for Disney to have to worry about selling.

Many reasons. First, if they're selling new resorts, they'd be competing with themselves. If not, not enough dollars to justify having a sales force, sales area and legal department. No real money in resales. I think you're also assuming they'll simply keep the resorts running on from the end of the DVC, unlikely IMO. More likely they'll close them, bulldoze them and do something else with the land well before the 12 years has passed.

 

[Maistre Gracey]

Taking your numbers, $30 per point would be in the general range of $9000 todays dollars for a week in a 2 Br. Closing costs around $2000 and yearly fees for those points maybe another $5000 in 2040 $$. I simply think far too many people on this site over estimate the value and demand of DVC long term. As I've noted, I'll vote with my feet keeping only a smaller contract for future perks and an occasional points stay S-F.

In year 2037 a room at WL could be around $5600/week.
If you rent that room for five years you are looking at $28,000.

A studio at VWL is around 120 points. Fees over five years would be about $8,300 once adjusted for the same inflation rate.

Now we have $28,000 less $8,300, less $2000 (closing), for a balance of $17,700.
Divide that by 120 points...

That comes to $148/pt with just five years left.
Now, I'm not saying they will sell for $148/pt, but I don't think they will sell for $50 either.

MG

 

[boatboatboat]

No real money in resales

I must not understand how it really works. I would have thought selling something the 2nd time=much more profit.

I do see your point about hurting new resort sales by offering the "old" resort for sale on a 12 year contract, but on the flip side is Disney really willing to allow 200,000 75 year old consumers with bank accounts over flowing, decide since the DVC has ended to start taking the grand kids to the Walmart Wonder park in Little rock?

Course who knows, maybe by the time the original contrats are up, those owners will make up such a small part of the whole DVC side of Disney, that if they lose those people, it will be nothing more then a blip on the radar screen.

I do think SOME sort of offer will be made at a discount to keep current owners "invested" in the WDW cash flow.

 

[boatboatboat]

That comes to $148/pt with just five years left.
Now, I'm not saying they will sell for $148/pt, but I don't think they will sell for $50 either


based upon the history of renting points, I have hopes that by that time we should be able to get atleast 12 dollars for them

dare to dream.........

 

[Maistre Gracey]

That comes to $148/pt with just five years left.
Now, I'm not saying they will sell for $148/pt, but I don't think they will sell for $50 either


based upon the history of renting points, I have hopes that by that time we should be able to get atleast 12 dollars for them

Good one!

MG

 

[Dean]

In year 2037 a room at WL could be around $5600/week.
If you rent that room for five years you are looking at $28,000.

A studio at VWL is around 120 points. Fees over five years would be about $8,300 once adjusted for the same inflation rate.

Now we have $28,000 less $8,300, less $2000 (closing), for a balance of $17,700.
Divide that by 120 points...

That comes to $148/pt with just five years left.
Now, I'm not saying they will sell for $148/pt, but I don't think they will sell for $50 either.

MG

Frankly, I don't think you'll be able to give them away within the last 2-3 years or so.

No real money in resales

I must not understand how it really works. I would have thought selling something the 2nd time=much more profit.

I do see your point about hurting new resort sales by offering the "old" resort for sale on a 12 year contract, but on the flip side is Disney really willing to allow 200,000 75 year old consumers with bank accounts over flowing, decide since the DVC has ended to start taking the grand kids to the Walmart Wonder park in Little rock?

Course who knows, maybe by the time the original contrats are up, those owners will make up such a small part of the whole DVC side of Disney, that if they lose those people, it will be nothing more then a blip on the radar screen.

I do think SOME sort of offer will be made at a discount to keep current owners "invested" in the WDW cash flow.

I think what you are missing is the tremendous cost in terms of advertising, sales force, sales area and the significant infrastructure needed to support those. Even at todays dollars and looking at ROFR, I expect DVC would have sell for $20 per point more than they paid simply to break even and that's with everything in place already. They exercise ROFR to prop up the retail sales and possibly to satisfy an add on need of members, not to get points to resell for the sake of the resale itself.

 

[Maistre Gracey]

Frankly, I don't think you'll be able to give them away within the last 2-3 years or so.

Indeed only time will tell. That's why it's all just speculation...

MG

 

[boatboatboat]

I think what you are missing is the tremendous cost in terms of advertising, sales force, sales area and the significant infrastructure needed to support those.

you are correct I am "missing" it.

DVC sends me a flyer that says "Good news boat, Disney is offering you a 12 year extension for 100 dollars per point"

I call them with a credit card, and extend my contract.

I fail to see all the cost you are talking about.

 

[brownsoup]

I'm starting to sing this song:


Zager and Evans

"In The Year 2525 (Exordium & Terminus)"

Reached #1 07-12-69 on the Billboard Charts


In the year 2525
If man is still alive
If woman can survive
They may find........

In the year 3535
Ain't gonna need to tell the truth, tell no lies
Everything you think, do, or say
Is in the pill you took today

In the year 4545
Ain't gonna need your teeth, won't need your eyes
You won't find a thing to chew
Nobody's gonna look at you

In the year 5555
Your arms are hanging limp at your sides
Your legs got nothing to do
Some machine, doing that for you

In the year 6565
Ain't gonna need no husband, won't need no wife
You'll pick your son, pick your daughter too
From the bottom of a long glass tube

In the year 7510
If God's a comin' he ought to make it by then
Maybe he'll look around himself and say
``Guess it's time for the Judgement day''

In the year 8510
God's gonna shake his mighty head
He'll either say ``I'm pleased where man has been''
Or tear it down and start again

In the year 9595
I'm kinda wondering if man's gonna be alive
He's taken everything this old earth can give
And he ain't put back nothing...

Now it's been 10,000 years
Man has cried a billion tears
For what he never knew
Now man's reign is through
But through the eternal night
The twinkling of starlight
So very far away
Maybe it's only yesterday...

In the year 2525
If man is still alive
If woman can survive
They may find.......

 

[boatboatboat]

They exercise ROFR to prop up the retail sales and possibly to satisfy an add on need of members, not to get points to resell for the sake of the resale itself


I don't fully believe that. ROFR 10,000 HH points at 70 each, sell them in 3 mths at 87 a pt, with NO COST to mkt them.I bought 65 pts yesterday for 87 bucks each. What cost did disney have in selling me those other then the ROFR cost and a quick title search?



I'll take a 17 dollar mark up on a 70 dollar item anyday.........

making 20% in only 3 mths......... damn good rate of return. Disney as a corp would LOVE to make 20% on it's current ventures in only 3 mths.

 

[Dean]

I think what you are missing is the tremendous cost in terms of advertising, sales force, sales area and the significant infrastructure needed to support those.

you are correct I am "missing" it.

DVC sends me a flyer that says "Good news boat, Disney is offering you a 12 year extension for 100 dollars per point"

I call them with a credit card, and extend my contract.

I fail to see all the cost you are talking about.

Remember they will have a gazillion points to deal with and also to worry about what to do with the corresponding units they don't sell. They got to have the resort up and running at something toward capacity or close it down to be reasonable. That's one of the reasons I feel that a large percent of owners would have to participate. Plus to actually sell it for any value, they'd have to aggressively market, legal department, sales staff to follow up on leads, inquiries, show area, office space for those who come in. It's not as simple as an email or single mailing to each member, do the paperwork and collect the money.

I don't fully believe that. ROFR 10,000 HH points at 70 each, sell them in 3 mths at 87 a pt, with NO COST to mkt them.I bought 65 pts yesterday for 87 bucks each. What cost did disney have in selling me those other then the ROFR cost and a quick title search?



I'll take a 17 dollar mark up on a 70 dollar item anyday.........

making 20% in only 3 mths......... damn good rate of return. Disney as a corp would LOVE to make 20% on it's current ventures in only 3 mths.

DVC has a tremendous sales force and system in place including advertising. If they sell you HH, that's X points at SSR they didn't sell and ultimately extra days at SSR that they must run the sales, pay for the space, advertise, run a legal department, etc. How many guides do they have, we're up to what 88 the last time I looked at that thread's title. And there are many more people behind the scenes. While DVC is different to a degree, a regular timeshare usually averages about 50% of the total income related to commissions and marketing. It's definitely not found money and my guess is they struggle to even break or even lose a modest amount in the current situation. Just my informed opinion of course.

 

[boatboatboat]

If they sell you HH, that's X points at SSR they didn't sell

I must admit that hadn't even crossed my mind as a factor.

 

[offtheice]

http://business-law.freeadvice.com/trade_regulation/price_fixing.htm

Basically, if two or more agree to set a price (either high or low) for a product or service, it could be considered price fixing and that is covered by a number of state and federal laws.

The question is how many states are spending time looking at a vact club,to see if people are price fixing. My guess states have too much to worry about. It took Direct tv 10 yrs to finally attack the theft of sat services. Thats because certain people had web sites making over 2 mill a yr in selling there hot cards and so on.