Resale Restriction Scenario

[DougEMG]

One of the things that concerns me about being a resale owners at the new resorts going forward is only being able to book at your home resorts. How big of an effect will this have? Well, what happened to me today is an example of what could happen to a resale Riviera owner.

Back in Jan I had booked an Aug trip (so low DVC use time) at BLT and BCV. Then booked my airfare right away. Today I got a flight change notice from Delta. They changed my direct flight to a multiple stop flight with layover windows that I considered too small. I could keep my previous flights times, but would have to leave 2 days later instead. So I took the later flight (more days in WDW is always better).

Now I needed to add 2 more nights less than 3 months out. No studios or 1 bedrooms at BLT or BCV. There of course was lots of availability at OKW, SSR and some at AKV, but I ended up booking a 1 bedroom at BRV just because I had never stayed at that resort before.

If I had of been restricted to just booking at BLT or BCV like resale owners of Riviera will be restricted to only booking at their home resort, I would have been totally shut out. This lack of flexibility could be a real killer for resale owners. Oddly enough, this also happened to my flight last year as well where my flight got cancelled and I had to make changes to my reservations.

 

[KAT4DISNEY]

That is my main thought on the resale restrictions also and why they will matter more than many think. Sure people can say that they are buying there to only stay there but things can and do come up that might require changes well after the 11 month window. But those owners won't have options to use their points if Riviera isn't available.

 

[Madame]

There’s this feeling of only if nothing else is available concerning SSR (OKW& AKV too), but I’ve taken 2/3 when it was a needs must situation. DRR resalers are going to find out the hard way that SSR really isn’t so bad when you’re in a pinch.

 

[RaymOOOnd]

Crazy. And what if people just sit on it too long, decide at 7-9 months that they want to go and have only enough points for a studio (which may be unavailable). Dis is creating a scenario where people will just blatantly lose their points without using them, if they're not entirely on the ball and free of any schedule changes or life complications. Talk about an effective disincentive

 

[Frederic Civish]

Resale restrictions on the new resorts, where people can ONLY use their DVC at their home resort, is going to put an unnecessary burden on EVERYONE who owns that resort. How? Well, first of all, there are only 28 Tower Studios. These will, of course, be booking out 'instantaneously' for almost ALL days. So, that will contribute to an atmosphere of lack of availability and options. And this sense of lack of availability will cause people to book out earlier, more often, which will create even less room availability. And if you want to travel in a popular time of the year, and you can't get what you want, because everyone else booked it at 11 months, then you will definitely have less flexibility.

Now, until they start reselling contracts, everyone at Riviera will be able to go to Riviera, OR exchange out to another resort. Since a large percentage of people (I don't know, maybe HALF of the owners?) will be exchanging out, that means that half the rooms which potentially might have been booked in the 11 month window, might not be be booked during that time. Or at least, some of the less popular rooms and views won't be booked. Especially since the original owners will know that they will 'always be able to get SSR or OKW or even AKL' But those options won't be available for the resale owners.

So there will be lots of availability while there are no resale owners, but, once they start getting resale purchasers, those owners will only be able to use Riviera and this will create a climate where it is even more difficult to get what you want. Suppose 20% of their owners are resale owners. This is probably not an unreasonable number after it has been open for 15 years. But these owners are going to need to book ONLY Riviera, and they will be doing it mostly in the 7 to 11 month window. Why? Because once Riviera reaches the 7 month window EVERYTHING THERE is likely to book up quickly. Similar to what you see at Grand Floridian or Beach Club or Boardwalk. So they will be getting reservations early, in order to make sure that they ARE able to get reservations at all. Since they will be taking a lot of the rooms available in the 7 to 11 month window, the Direct Owners at Riviera who were planning on trading out will worry that maybe they won't be able to trade out easily, so they will also be jumping harder into the 7 to 11 month window. So the 7 to 11 month window will fill up early, and people will find that there will be a lot less options, a lot less rooms available for them, for whatever their preferred vacation time is. Everyone will be grabbing whatever they can in the 7 to 11 month window, because of fear they might not have anything. This means that owners who purchased Direct will absolutely NEED to plan 10 and 11 months ahead, or they will be locked out of the desirable rooms. That is harder and less pleasant for them.

There is one more thing that the Resale Restrictions will create, that I don't think Disney has considered. That is, MORE RENTAL ACTIVITY IN RIVIERA. Look at it this way. Suppose you are a Resale Owner who was unable to book during the 7 to 11 month window, OR, your plans changed after you booked, and now it is within the 7 month window and everyone else at DVC who wants to stay at Riviera has booked up every available room. So, you have NOTHING. You CAN'T book anywhere else, and you can't book at Riviera because there is nothing left. So, maybe, you bank your points into next year, or maybe you just go ahead and contact David's and rent your points out, so you can get SOME benefit for them. So, even though renting your points out was not your first choice, it becomes your only viable choice. And if you bank those points, well then next year, you will still have the same problems you had this year, but DOUBLE, with twice as many points that you now use. So, even if you banked them, that just means that you are probably more likely to rent them out next year.

More unintended consequences. I wonder what Disney thinks of this.

 

[Madame]

More unintended consequences. I wonder what Disney thinks of this.

As long as DRR sells, they don’t care.

 

[KAT4DISNEY]

As long as DRR sells, they don’t care.

But they'll be happy to blame the evil resale buyers when owners complain and they come up with a "fix". Continued problems created by DVC sales decisions to be blamed on something else and "fixed" to the detriment of more and more direct buyers because that is where the actual price would be paid.

 

[dvcsince93]

I'm new here but not new to DVC- I have never heard anyone characterize a resale buyer as evil. As someone who bought both direct and resale, I'm not sure where I would fit in to that good vs evil characterization.

I have however seen people degrade Disney, DVC, people who buy or stay at SSR, OKW or AKV, I find that sad.

 

[Bing Showei]

Given the inherent limitations of the new restrictions and the impact that will likely have on use, anyone buying Riviera resale will likely be more informed than the average Disney timeshare buyer who bought on a whim at the park, and will be hyper-aware of those restrictions.

The laissez faire booking behavior some are describing (not the concerns DougEMG raises) during the 7-11 might be a more common usage pattern of the on-the-whim-direct buyer. And for that group it’ll be a non-issue.

If I were a Riviera resale buyer, I would; one, have a strategy of use that includes contingencies post-7-month, post-4-month, and post-1-month; two, avoiding using banked/borrowed points; and three, price this inconvenience into my valuation. Anyone going in otherwise will do so to their own detriment.

 

[KAT4DISNEY]

I'm new here but not new to DVC- I have never heard anyone characterize a resale buyer as evil. As someone who bought both direct and resale, I'm not sure where I would fit in to that good vs evil characterization.

I have however seen people degrade Disney, DVC, people who buy or stay at SSR, OKW or AKV, I find that sad.

That was a hyperbole based on DVC's comments of why the place restrictions and their continuing restrictive actions against resale buyers. Do not take it as my literal thoughts on resale.

 

[Bing Showei]

I'm new here but not new to DVC- I have never heard anyone characterize a resale buyer as evil.

You haven’t taken a tour lately. When restrictions are brought up now (in light of Riviera’s restrictions), the company line is that the restrictions were introduced to stem the abuse of the resale market and resale buyers buying in below market value and “abusing the system.” That exact term was used with me recently.

If you want to see how resale buyers are vilified as the scourge responsible for all that ails the Disney timeshare system, you need not look any further than your guide or the official facebook group.

That was a hyperbole based on DVC's comments of why the place restrictions and their continuing restrictive actions against resale buyers. Do not take it as my literal thoughts on resale.

It’s not hyperbole. This is what Disney is pedaling.

 

[KAT4DISNEY]

You haven’t taken a tour lately. When restrictions are brought up now (in light of Riviera’s restrictions), the company line is that the restrictions were introduced to stem the abuse of the resale market and resale buyers buying in below market value and “abusing the system.” That exact term was used with me recently.

If you want to see how resale buyers are vilified as the scourge responsible for all that ails the Disney timeshare system, you need not look any further than your guide or the official facebook group.

It’s not hyperbole. This is what Disney is pedaling.

Abuse of the system. Well that's a prime statement!

 

[dvcsince93]

Did they say how the system was being abused?

I am considering a direct purchase and will ask them about the resale restrictions and their rationale but I was hoping to hear what the company line was before starting.

 

[Bing Showei]

Did they say how the system was being abused?

I am considering a direct purchase and will ask them about the resale restrictions and their rationale but I was hoping to hear what the company line was before starting.

They described it as people selling their timeshare below market value and likened it to someone coming into your neighborhood where you bought a $400,000 home and buying in for $200,000, devaluing your property. The “safeguards” of ROFR seemed lost on this particular guide. They also mentioned people buying into the system cheap and renting those points out to make a profit.

Basically, there are resale timeshare cretins moving into your neighborhood.

In the same breath they pedaled how Riviera will rent really well in case you can’t use your points one year. That was rich.

The guide underscored that Disney did not want people buying in to make money, but rather to enjoy the timeshare. This is not the first time I have heard this directly from Disney.

 

[RaymOOOnd]

If they're going to stick with these changes I think the contract length being sold direct is too long. Many people (most?) don't expect to live another functional 50 years to use a contract which won't be worth much on the resale market, yet the dues are rising relentlessly with time. It's almost as if you need to make sure your kids are going to be wealthy enough to handle whatever the dues are (thanks mom and dad!)

 

[dvcsince93]

As a 25 year owner, Disney has, from the beginning, characterized DVC as a vacation plan not a real estate venture for making money. That part isn't new. It is disappointing, however, if they focus on the real estate value as how resale abuses the system.

Simply put, the idea that resale purchasers abused the system by paying less is bs, because resale points have not been identical to direct purchase points since 2011 in the system that Disney set up.

Despite all of the disclaimers that the "incidental benefits" of membership can be changed or terminated at any time, DVD sells those same benefits as valuable "Membership Magic" and a reason to buy direct. By stripping away all of those benefits from resale purchases, they are, at least on the resale side, turning the points into nothing more a real estate interest at a single resort thus, decreasing the value of that real estate interest. In such a system, its hard to see how the purchasers are abusing anything by paying less for a lesser product that Disney created.

All that being said, I will be stunned if when talking to them about a direct purchase, they even infer that resale purchasers are lesser people, much less evil or cretins. They may not like the resale market, but they are still DVC owners and WDW visitors. Then again, weirder things have happened.

 

[Frederic Civish]

As long as DRR sells, they don’t care.

By the way, I know it has only been on sale for a month, and I fully expect that month probably went pretty well for Disney. There probably was a lot of pent-up demand for Riviera, because people have been seeing it coming, and deciding to buy it, for a long time. BUT, does anyone have an actual sales figures? How was the first month's sales compared to the first month of, say, Copper Creek or Poly?

If they're going to stick with these changes I think the contract length being sold direct is too long. Many people (most?) don't expect to live another functional 50 years to use a contract which won't be worth much on the resale market, yet the dues are rising relentlessly with time. It's almost as if you need to make sure your kids are going to be wealthy enough to handle whatever the dues are (thanks mom and dad!)

Rising Membership Dues/Maintenance Fees is the great bug-a-boo of Timeshare. It ALWAYS HAPPENS and it ALWAYS RISES FASTER THAN INFLATION, mostly because the companies find they can shift more and more of their own expenses onto the backs of the Timeshare owners. Increasing maintenance fees is the single greatest reason for people to sell, unload, drop or 'give back' their timeshare. In my own experience, in one timeshare I owned, I turned it back in to the company I bought it from, after paying on it for a few years, because my financial circumstances changed (I went back to school) and I couldn't afford the maintenance fees. They were nice enough to take it back, with no penalty, other than the fact that I lost all the money I had paid into it. My own second experience with that is when I took over a timeshare contract that had been purchased by my daughter. She got divorced and couldn't afford the maintenance fees. Since that time, I have purchased some pretty good timeshare, for pennies on the dollar, literally (about 12 cents for points that originally cost more than $3 per point. So, it worked out to me paying about 4 cents on the dollar) because people couldn't afford the maintenance fees. AND, I have had Timeshare Brokers willing to GIVE ME FREE TIMESHARE, already paid for, in Orlando (a desirable destination), if I would just take over the maintenance fees. The people were that desperate to get out from under it.

Anyway, if maintenance fees keep going up at DVC at a rate which is at least double the inflation rate (and about 3 to 4 times the inflation rate this year), then it becomes quite clear that MANY MANY PEOPLE WILL NOT BE ABLE TO CONTINUE TO AFFORD THEIR DVC, and they will have to sell it. Let alone dealing with scenarios such as failing health, or passing it on to children who are less affluent, and less able to afford the membership fees.

 

[RaymOOOnd]

By the way, I know it has only been on sale for a month, and I fully expect that month probably went pretty well for Disney. There probably was a lot of pent-up demand for Riviera, because people have been seeing it coming, and deciding to buy it, for a long time. BUT, does anyone have an actual sales figures? How was the first month's sales compared to the first month of, say, Copper Creek or Poly?



Rising Membership Dues/Maintenance Fees is the great bug-a-boo of Timeshare. It ALWAYS HAPPENS and it ALWAYS RISES FASTER THAN INFLATION, mostly because the companies find they can shift more and more of their own expenses onto the backs of the Timeshare owners. Increasing maintenance fees is the single greatest reason for people to sell, unload, drop or 'give back' their timeshare. In my own experience, in one timeshare I owned, I turned it back in to the company I bought it from, after paying on it for a few years, because my financial circumstances changed (I went back to school) and I couldn't afford the maintenance fees. They were nice enough to take it back, with no penalty, other than the fact that I lost all the money I had paid into it. My own second experience with that is when I took over a timeshare contract that had been purchased by my daughter. She got divorced and couldn't afford the maintenance fees. Since that time, I have purchased some pretty good timeshare, for pennies on the dollar, literally (about 12 cents for points that originally cost more than $3 per point. So, it worked out to me paying about 4 cents on the dollar) because people couldn't afford the maintenance fees. AND, I have had Timeshare Brokers willing to GIVE ME FREE TIMESHARE, already paid for, in Orlando (a desirable destination), if I would just take over the maintenance fees. The people were that desperate to get out from under it.

Anyway, if maintenance fees keep going up at DVC at a rate which is at least double the inflation rate (and about 3 to 4 times the inflation rate this year), then it becomes quite clear that MANY MANY PEOPLE WILL NOT BE ABLE TO CONTINUE TO AFFORD THEIR DVC, and they will have to sell it. Let alone dealing with scenarios such as failing health, or passing it on to children who are less affluent, and less able to afford the membership fees.

Will have to sell it and, now, a product which might be hard to sell

 

[Jason@dvcstore]

This lack of flexibility could be a real killer for resale owners.

This will probably be the number 1 reason people end up selling Riveria. A couple of situations like this will probably cause an owner to sell.

 

[kniquy]

They described it as people selling their timeshare below market value and likened it to someone coming into your neighborhood where you bought a $400,000 home and buying in for $200,000, devaluing your property. The “safeguards” of ROFR seemed lost on this particular guide. They also mentioned people buying into the system cheap and renting those points out to make a profit.

This analogy does make sense, but if this was truly DVC's concern then why don't they put in a buy back clause in all contracts-- they buy your contract back at a certain percentage of current direct prices -- then DVC is free to resell the points at direct price.

This would completely eliminate the resale market, people could still get out of their contracts when life gets in the way. BUT -- this would mean DVC is sitting on a ton of points until they sell them for their absurdly high cost (such as the PVB contract i just bought for $14500 which direct would have cost me $23500 (heck no would I pay that!)

If they sat on points then they would not have anyone paying the maintenance fees. So essentially the resale market is what is keeping the resorts going, we "evil" resale purchasers are paying the maintenance fees.

If I had of been restricted to just booking at BLT or BCV like resale owners of Riviera will be restricted to only booking at their home resort, I would have been totally shut out.

This is a very important factor to anyone choosing to buy resale at Riviera. I hadn't even thought of this scenario and is a very likely one. I don't think anyone realizes how problematic these restriction really are. It will all come out in the wash and the only thing that could counter balance the restrictions will be a very low resale price.