Resale is not just cheaper but now a superior product

[Lisa Loberg]

As someone who is seriously considering purchasing DVC...all these new restrictions only confuse me and my "right decision " further!
Yes resale still seems to make the most sense.
How much should resort expiration date play into my decision?

 

[Ben E N]

As someone who is seriously considering purchasing DVC...all these new restrictions only confuse me and my "right decision " further!
Yes resale still seems to make the most sense.
How much should resort expiration date play into my decision?

How old are you, and how many times have you been to Disney before? Both those answers would help answer your question.

Also, how many people in the family? That would help with selecting a home resort.

 

[DougEMG]

The gondolas are going to have to be a grand slam, in order for Riviera to be a success, if they aren't I think we will see a lot of discounted points being sold, especially if they economy starts to cool off.

If the gondolas are the main draw, you might as well save money and stay at a value that is on the same gondola.

 

[CarolMN]

I think now that the direct prices have increased Disney will begin exercising their ROFR on a higher percentage of resale’s. This will drive up the resale prices. The goal being to drive up resale prices so there is a smaller delta versus buying direct. They profit from reselling the original 14 while effectively moving new buyers away from the resale market.

They won't buy enough back to make much of a difference, if any. While it may seem to some that they make a nice profit on reselling the reacquired points, it's not enough of one to tempt them to invest much of their capital. If you list all the competing options for their capital, my best guess is that the ROI for reselling reacquired points is near the bottom.

 

[Jack_Sparrow_NJ]

They won't buy enough back to make much of a difference, if any. While it may seem to some that they make a nice profit on reselling the reacquired points, it's not enough of one to tempt them to invest much of their capital. If you list all the competing options for their capital, my best guess is that the ROI for reselling reacquired points is near the bottom.

If that's the case why RFOR at all?

 

[motherof5]

As someone who is seriously considering purchasing DVC...all these new restrictions only confuse me and my "right decision " further!
Yes resale still seems to make the most sense.
How much should resort expiration date play into my decision?

Depends on how many years you think you want it for. If you want a larger committment or not is important. I also look at it that if you have a longer committment and change your mind it's easier to sell versus one that will be expired soon (like OKW non extended)

 

[KAT4DISNEY]

If that's the case why RFOR at all?

OKW has a bit of a case to ROFR 2042 contracts to resell and get the resort in align with a 2057 end date for more owners. They may want to have points for current owner add on's and they might want to have an option for those buyers who are interested but are very specific about what resort they will buy at. That's a couple reasons I can think of off the top of my head.

 

[MB_01]

They may also have the "cost" of points to make the contract "whole" for resale. They include current calendar year points on resale. If DVD has those points available, they can either add them to a resale contract, or use them to pull inventory and make cash reservations. This may impact the "cost" of the contract. The opportunity cost of available points they have. If only there was a way for DVD to make more points available to them.....

So if I call DVC today and say I want 200 pts with a Jun UY at BLT or nothing, they have to find a loaded resale contract to ROFR with full 2018 pts available? Does Disney buy contracts directly from the reseller sites to fill these requests?

 

[Frederic Civish]

Post 1/19 I haven't noticed any reductions generally in resale prices. In fact I am seeing them still go up- buyer will accept listed price only.

How are resale prices doing now? It seems like some of them, like AKV have softened a bit, perhaps 4% or so, so far. Am I right?

 

[Frederic Civish]

I was planning to probably buy Riviera, Direct. I even have about $18,000 set aside, right now, as my down payment. Now there is NO WAY that I will do that, as long as the current restrictions remain in place for Rivera. If I ever go to sell Riviera, why would someone ever be willing to pay for it, considering that they will ONLY be able to use their resale points AT Rivera, when they could buy one of the L 14 resorts at Resale, and have access to ALL of the prime DVC Locations, without restriction.

Obviously, I am not considering Riviera as a prime location - UNLESS the gondola works more consistently and better than expected. Stopping it whenever there is a rainstorm (because there is almost always also lightning) will get very frustrating, very fast. Especially during the months of June through September. And I don't think 'Reflections - A Lakeside Whatever' as a prime location, since it won't have the advantages of the Monorail resorts, and will have no better boat access than CC and BRV. So, in other words, Riviera will have no advantages and a number of Distinct Disadvantages, especially when it comes to resale. And resale problems leads to a lower price, and therefore lower value. I just can't believe that they are going to continue this policy of ONLY letting Riviera Resale contracts use their points at Riviera. Period.

 

[Greg36]

So if I call DVC today and say I want 200 pts with a Jun UY at BLT or nothing, they have to find a loaded resale contract to ROFR with full 2018 pts available? Does Disney buy contracts directly from the reseller sites to fill these requests?

They would likely put you on a waitlist and if they took a contract back in ROFR, or foreclosed on a contract, or obtained it in some other way and you were next in line on the waitlist they would likely offer it to you. The contract they took back would not have to have 2018 points on it. My understanding is they could add matching 2018 points they already had to the contract but this would cut into their profits on selling you the contract (as they would be giving them to you instead of using them for another purpose). They would have to find the 2018 points somewhere or they would not be able to sell you the contract until June 2019.

 

[Frederic Civish]

I agree, I have been wondering when Disney will pull the Grandfather plug.

I don't see them ever pulling the Grandfather plug.

Maybe I am wrong, but I feel like they generally MUST grandfather current owners, with any changes that they make, to take away benefits. If not, then they would literally be taking something away from current owners, and that would lead to all kinds of issues and legal challenges. If nothing else, legally, once you set a pattern of behaviour, or ownership, or usage or whatever, and it goes on for a while, it starts to carry some weight and validity of its own. An example is if you have the right to sue someone for something that they regularly do, but you don't sue them. Several years down the road, when you go to sue, you might find out that you can't, because, by letting them establish the pattern without fighting it, you were, in essence, giving tacit permission, which now carries some legal weight. I'm not sure if this is making sense to anyone. Anyway, by grandfathering current owners on any new changes, they don't take anything away from THOSE ESTABLISHED OWNERS, so they don't face legal consequences, but they do take rights or benefits away from NEW owners, who can be presumed to be agreeing to the new restrictions, because they buy with the restrictions in place.

 

[Frederic Civish]

I don't think that they are playing the long game and agree that they are probably looking quarter to quarter, so how are these changes going to help in the next quarter or two?

There are already a number of existing owners who are concerned with all these changes and not going to add on, so a lose of sales.
contracts.

So what is their plan and do they even have one.

Honestly, I think the very BEST strategy for Disney - to GET THE MOST MONEY (best price) from their DVC Direct sales, and TO GET THE MOST SALES VOLUME from their DVC Direct sales - would be to Build up/Push up the price of RESALES! Why? Because you know they are not going to lower the price of their own Direct Sales points. So they need to raise the price of their 'Competition.' By building up the price of Resales they minimize the difference between the cost of Resales and Direct sales, and since their Direct Sales points have more value ( - The Security of buying Direct from Disney, the Speed with which the transaction can be completed, the Perks which come with Direct sales, etc. - ) more people will then be willing to gravitate FROM purchasing Resales, TOWARDS purchasing Direct sales. If the Resale price was high, and the difference between Resales and Direct sales was only 15%, then buying Direct would make absolute sense. If the difference in price were 20%, it might still make sense to buy Direct, but it would make less sense, therefore fewer Direct sales. If the difference in price between Direct sales and Resales is 50%, then buying Direct would make absolutely no sense at all, and Resale would be the best choice.

Now, I realize Disney DOES NOT control the price of Resales. But they have some input into it, by controlling ROFR and Perks/Benefits, and similar things, including how they treat Resale owners in general. And they do have some other things that they could undoubtedly think to do, to increase Resale contract values. By doing whatever they can to increase the value (and thus the cost) of Resales, they can push up the price to help support their own high prices (by having Resales provide a floor/foundation of value), and they can help shift that balance point where high Resale costs induce people to buy Direct!

 

[Frederic Civish]

They won't buy enough back to make much of a difference, if any. While it may seem to some that they make a nice profit on reselling the reacquired points, it's not enough of one to tempt them to invest much of their capital. If you list all the competing options for their capital, my best guess is that the ROI for reselling reacquired points is near the bottom.

On the other hand, acting as the middleman, by taking contracts in ROFR and then passing them along to the ALREADY WAITING BUYERS on their waitlists, they make a pretty decent profit without much work. Banks are one of our most profitable institutions, yet they make their money on a small percentage of what they handle. Most banks (NOT Credit Cards) make their money by taking money from someone who has it to invest, either account owners, bond holders or the federal government, and passing that money on to the people to whom they make loans, while taking out around 6% to 15% out of the middle, in the form of interest, for their fee. If banks can make a ton of money doing this - being middlemen - then Disney can make a ton of money by selling ROFR contracts Directly, and taking their profits out of the middle.

 

[Jason@dvcstore]

This move is DVD's plan to kill resale.
Bill

If DVD wants to kill resale they should figure out why owners are selling. If 100% of owners kept their properties resale wouldn't need to exist. Until that happens resale will always exist.

 

[DougEMG]

Honestly, I think the very BEST strategy for Disney - to GET THE MOST MONEY (best price) from their DVC Direct sales, and TO GET THE MOST SALES VOLUME from their DVC Direct sales - would be to Build up/Push up the price of RESALES! Why? Because you know they are not going to lower the price of their own Direct Sales points. So they need to raise the price of their 'Competition.' By building up the price of Resales they minimize the difference between the cost of Resales and Direct sales, and since their Direct Sales points have more value ( - The Security of buying Direct from Disney, the Speed with which the transaction can be completed, the Perks which come with Direct sales, etc. - ) more people will then be willing to gravitate FROM purchasing Resales, TOWARDS purchasing Direct sales. If the Resale price was high, and the difference between Resales and Direct sales was only 15%, then buying Direct would make absolute sense. If the difference in price were 20%, it might still make sense to buy Direct, but it would make less sense, therefore fewer Direct sales. If the difference in price between Direct sales and Resales is 50%, then buying Direct would make absolutely no sense at all, and Resale would be the best choice.

Now, I realize Disney DOES NOT control the price of Resales. But they have some input into it, by controlling ROFR and Perks/Benefits, and similar things, including how they treat Resale owners in general. And they do have some other things that they could undoubtedly think to do, to increase Resale contract values. By doing whatever they can to increase the value (and thus the cost) of Resales, they can push up the price to help support their own high prices (by having Resales provide a floor/foundation of value), and they can help shift that balance point where high Resale costs induce people to buy Direct!

I agree. Keeping the price of resale high is the best way to encourage people to buy direct. Restricting resale and thereby lowering the price of resale will just encourage a certain number of people to buy resale and save the money. In addition for a lot of people, just the expectation that they can sell for a good price when they want/need to get out makes it easier for them to make the commitment to buy in the first place.

Destroying resale prices, just hurts Disney and their own direct buyers.

 

[SL6827]

Right now I am planning on skipping Disney next year for a couple of reasons. One, to build up some points, two, the possible crowds from Star Wars, and three, might just try something new. This is my plan, but you know how plans go. But I had also planned on buying another small contract in the near future if I seemed to really like DVC and I do like it, but no longer have a strong desire to buy a few more points because of the way DVC is uncertain now. Now I might add points, but I am gonna wait a little while first.

 

[Jason@dvcstore]

I agree. Keeping the price of resale high is the best way to encourage people to buy direct. Restricting resale and thereby lowering the price of resale will just encourage a certain number of people to buy resale and save the money. In addition for a lot of people, just the expectation that they can sell for a good price when they want/need to get out makes it easier for them to make the commitment to buy in the first place.

Destroying resale prices, just hurts Disney and their own direct buyers.

Good point. If resale prices were almost the same as buying direct you would simply have everyone buying from Disney.

 

[KAT4DISNEY]

So if I call DVC today and say I want 200 pts with a Jun UY at BLT or nothing, they have to find a loaded resale contract to ROFR with full 2018 pts available? Does Disney buy contracts directly from the reseller sites to fill these requests?

No, they do not typically go out to get a contract just because of that. If so they would not have any people on waitlists for direct points.

 

[Ben E N]

Honestly, I think the very BEST strategy for Disney - to GET THE MOST MONEY (best price) from their DVC Direct sales, and TO GET THE MOST SALES VOLUME from their DVC Direct sales - would be to Build up/Push up the price of RESALES! Why? Because you know they are not going to lower the price of their own Direct Sales points. So they need to raise the price of their 'Competition.' By building up the price of Resales they minimize the difference between the cost of Resales and Direct sales, and since their Direct Sales points have more value ( - The Security of buying Direct from Disney, the Speed with which the transaction can be completed, the Perks which come with Direct sales, etc. - ) more people will then be willing to gravitate FROM purchasing Resales, TOWARDS purchasing Direct sales. If the Resale price was high, and the difference between Resales and Direct sales was only 15%, then buying Direct would make absolute sense. If the difference in price were 20%, it might still make sense to buy Direct, but it would make less sense, therefore fewer Direct sales. If the difference in price between Direct sales and Resales is 50%, then buying Direct would make absolutely no sense at all, and Resale would be the best choice.

Now, I realize Disney DOES NOT control the price of Resales. But they have some input into it, by controlling ROFR and Perks/Benefits, and similar things, including how they treat Resale owners in general. And they do have some other things that they could undoubtedly think to do, to increase Resale contract values. By doing whatever they can to increase the value (and thus the cost) of Resales, they can push up the price to help support their own high prices (by having Resales provide a floor/foundation of value), and they can help shift that balance point where high Resale costs induce people to buy Direct!

The only way they could affect the price of resale is to either increase demand or decrease supply. Both would cost them a ton. To increase demand, they would have to build less new resorts and make less points available on their end, or make the benefits of resale almost equal to direct. Either "solution would hurt their bottom dollar. Decreasing supply would either mean that they make it so less people sell (the only way they could 'ensure' this is by doing something like giving out free APs to DVC owners, or something extreme along those lines), or by ROFRing a ton of contracts, even ones they don't want.
I'm sure they looked into all of these possibilities, analyzed how much money they would make off of them, and then decided that their current plan is the best one for them.