Riviera Resale-Wow?

[DougEMG]

we are hoping that resale restrictions collapse the resale market. 100% of the points we own (or have ever owned actually) have been bought through disney, and wish they exercised right of first refusal on all contracts. it depresses the value of the program and perks they can offer when someone can get in with the minimum direct buy in and then load up on cheap (er) resale contracts.

I am with you, let's see the resale restrictions at RRV collapses the resale market at RRV cause then I will load up on some really cheap resale points. Sadly this will never happen as there is an inherent value in being able to use RRV points to stay at RRV as compared to booking there by cash.

 

[RivShore]

I am with you, let's see the resale restrictions at RRV collapses the resale market at RRV cause then I will load up on some really cheap resale points. Sadly this will never happen as there is an inherent value in being able to use RRV points to stay at RRV as compared to booking there by cash.

This is what people forget when they predict a crash of Riviera resale prices. The resale price is supported by the rental value and the rental value is supported by the Disney cash price. Until that breaks down, there will always be a floor on resale.

 

[RivShore]

I saw some numbers thrown out re: point charts and thought I'd give folks some resources to check the math themselves ...

BLT
281 villas with 147 being two bedroom lock-offs (see below)
428 max possible villas if all two bedroom lock-offs are split into one bedroom and deluxe studios
5,732,687 points
20,400 points per villa
13,394 points per villa (at max)

RVA
341 villas with 148 being two bedroom lock-offs (see below)
489 max possible villas if all two bedroom lock-offs are split into one bedroom and deluxe studios
6,739,966 points
19,765 points per villa -3% to BLT
13,783 points per villa (at max) +3% to BLT

you can go down the rabbit hole of comparing all the resorts if you want, the data are in the POSs to do so; happy mathing!

View attachment 532519
blt-pos-rev-12_30_13.pdf (pg. 23)

View attachment 532518
Utah-Property-Report-for-Disneys-Riviera-Resort.pdf (pg. 23)

How dare you use facts to dispute the statements from the Never Rivieras!!! (hat tip to rmoxgt)

 

[Bing Showei]

Better seven month availability at other resorts vs resale (especially as Disney continues to build out more DVC), and obviously, better seven month availability at other resorts over RIV resale as they are stuck at RIV.

It's been estimated that resale points represent less than 15% of all points in the system. Take into account the number of resale points that are bought prior to January 19, 2019, and the actual number of restricted resale points in circulation that would decrease competition against you at 7-months become insignificant.

Fast forward 30 years, will that be different? Maybe. But you know who does benefit from the resale restrictions from day 1? The Developer. Full stop.

If anything, resale restrictions will also ensure future resale owners will book at home, actually working against your ability to book there at 7-months.

Some things that materially affect your 7-month booking:

- Disney knowingly overselling studio usage against GVs, Bungalows, and Cabins.
- Disney happily financing anyone while constantly raising the buy-in cost
- Years and years of Disney's willingness to lower the member buy in and sell small contracts for those bigger dollars to more members.
- The interwebs; a more informed ownership is booking at 11-months.
- The interwebs part 2; people buying where they want to stay.
- SSR by virtue of its size (not a resale-only problem).

More breakage (from RIV resale points that can't be used to book a "last minute" reservation outside or RIV) - which may help with MF's

Every year, the share of breakage that goes back to members reaches its maximum 2.5% of cap res/operating budget. Any additional breakage will only benefit the Developer.

There would be no additional benefit to owners unless Disney decides to raise that 2.5% cap which, again, they have maxed every year. The resale restrictions would suggest owner-interest isn't high on their priorities list.

Resale restrictions are there to serve the Developer and the Developer only. Owners can choose to not care about the resale restrictions because it doesn't affect them personally, or that the pros of a new resort outweigh the cons, but it's a stretch to come up with logical reasons how the restrictions are a benefit to owners.

When the Developer opens a Yacht Club Villa, my family will be first in line to buy with or without restrictions, but I have no illusions that those restrictions will be there to serve my family's interest.

@5th gate dreamers illustrates quite vividly how Disney's resale restrictions have to appeal to base emotional justifications to make any sense. Emotions have to drive, relegating logic to the back seat, for an owner to cheerlead these restrictions.

 

[GrtDisGuy]

Quibble... Resale owners did not purchase at a discount.. they paid market value, more or less. Direct owners paid a premium.

Actually under the current system both direct and resale are purchased at market value. Direct and resale have different values and benefits. Resale buyers are not buying at a discount - they are paying market value for what a resale contract provides. Direct buyers are not paying a premium, they are paying market value for a direct contract provides.

 

[Ssplashhmtn]

the best way to think about it i guess is anyones opinion on HOA. some people want no HOA (its my house i want to do with it whatever i please), some want a weak HOA (eh, i like some rules but dont tread to much), and some like really strong HOA (i dont want any jackbutt homeowners screwing around and driving down the price of the whole neighborhood, despite the high fee and stringent rules). we just fall in line with the third option.

We agree logically (I think) that real estate needs to be protected, so I can’t follow your argument. Perhaps it’s more emotional than economic for you, which is fine. To each their own.

Just like you, I prefer a strong HOA if it keeps my real estate investment value high (your option three). And of course that‘s exactly what a strong competitive resale market does for my timeshare real estate investment. So I’m curious - Why do you prefer the high value third option of a strong HOA, but want to see a collapse of the resale market? If there weren’t a resale market, your investment is illiquid and has no market value, right?

 

[Mumof4mice]

no, its not being proud of spending more money. its "i paid $70000 for my luxury car and want others to pay the same i paid". like, if you live in a neighborhood where every house cost the same identical 200000, and then one of your neighbors list their home for sale for 110000, it would chap you some yeah?

Got it. You want DVC to be controlled like units in assisted living facilities. Private sales aren't allowed. Even if the underlying land value triples during their ownership, the residents' only option is to sell their units back to the facility operator at significant financial loss. Everyone entering the facility pays the same direct price.

Make no mistake, the rules are set up that way because sales, not MF, are where most of the profit is for the developer. If DVD could conjure the same standard of care/QC justifications, those terms would be in our POS.

I guess there are always people who would destroy their own exit strategy to avoid feeling "chapped" that someone else got a better deal. To me it's as illogical as chopping off one's own limbs because they're jealous of people who have disabled parking permits?

Although many DVC owners purchase with vague plans of retirement/grandkids. We have "beach house", not "aged care home" in mind. The option to sell our contracts at fair market value, should circumstances dictate it, is an advantage!

 

[Kickstart]

While I don't like them (especially as a brand new white card only DVC owner, at BLT), I think the resale restrictions make sense for Disney - long term.

For one, it will give Disney a much better differentiator between direct vs resale... Eventually, you will need to have direct points to use them at non-home resorts. Sure that's 20-40 years from now, but eventually the only SAPs will be direct points. The few conversations I've had with a DVC agent about buying direct have not been very convincing... all they really have is FOMO and AP discounts. In the future, when you need direct points for SAPs, I bet they won't even need to offer AP discounts or special member events as the benefit differentiator of being able to book any DVC resort over resale is huge.

In the meantime, while DVC waits for the above, it should help with seven month availability at any new resort that becomes a seasonal favorite (i.e Yacht club DVC during food and wine), as the resale points are locked out of these. It may also help with availability longer term if there's still a significant resale market in the future, which would be another selling point for buying direct.

And I think it gives DVC the option of getting a piece of the resale market (though I'm not sure if this would be desirable for Disney or not). It seems to me the resale brokers are making great money on DVC resale contracts, and I think Disney may be looking at that as a lost opportunity for them. By implementing the resale restrictions they can drive down third party resale prices... and possibly begin offering a DVC direct buy-back rate schedule. This would increase their profit margin for selling sold-out resorts.

As other have mentioned most new DVC buyers probably aren't dissuaded by the resale restrictions, and experienced/knowledgeable DVC members have decided it's worth buying into RIV even with the resale restrictions. Longer term the resale restrictions will just be accepted.

 

[Kickstart]

...
Every year, the share of breakage that goes back to members reaches its maximum 2.5% of cap res/operating budget. Any additional breakage will only benefit the Developer.

There would be no additional benefit to owners unless Disney decides to raise that 2.5% cap which, again, they have maxed every year.
...

I did not know there was a 2.5% cap... interesting. Does DVC need to disclose how much additional breakage there was and/or where they spend breakage overage?

I'm guessing this year has a lot more breakage than typical.

 

[Sandisw]

I did not know there was a 2.5% cap... interesting. Does DVC need to disclose how much additional breakage there was and/or where they spend breakage overage?

I'm guessing this year has a lot more breakage than typical.

No, they do not have to share as it is their money. We, as owners, get that specific amount and that is it.

This year, there may be more rooms because people have canceled, but breakage income only comes when DVC rooms are rented to cash guests. We went 3 full months with no resorts open, and cash guest occupancy is way down..which is why WDW hasn’t opened up all their resorts,

I am not even sure that the max 2.5% will even be reached this year. It will be interesting next month to see the projected budget and the pluses and minuses from 2020.

 

[5th gate dreamers]

@5th gate dreamers - I appreciate you sharing your view on this. While I don't quite follow your logic on how it helps keep the price up or helps member perks, I get that you want a "premium benefit" over someone who purchased at a discount.

As for the pros of resale restrictions, I can see a couple of benefits... (just thinking about this off the top of my head):

• Better seven month availability at other resorts vs resale (especially as Disney continues to build out more DVC), and obviously, better seven month availability at other resorts over RIV resale as they are stuck at RIV.
• More breakage (from RIV resale points that can't be used to book a "last minute" reservation outside or RIV) - which may help with MF's

The seven month availability advantage may also be a benefit to other direct non-RIV members, as seven month availability (and even 11 month availability) can be difficult at some resorts already. This completely blocks RIV resale points from making that situation even worse.

thanks for the civility. this is nice discussion...hard to find when people can hide behind a computer. ok, ill try to get to all of you while i have a few minutes...

 

[5th gate dreamers]

Its a timeshare though and It’s not up to DVD to worry about resale market.

Now that there are differences, at least paying direct prices does get your more...whether it’s worth the cost depends on a situation.

But, I don’t agree that those who buy resale to save money are any less than those buying direct. And, no, I would not be bothered if someone decided to sell a house near me for less than what the neighborhood might be assessed at, it’s their business and not mine.

I have a mix of direct and resale and don’t view how someone became a member better or worse.

you saying that "its your neighbors business regarding their property, not yours" is the crux of the disagreement. you are saying option 1 under my HOA scenarios and i believe in option 3. i believe my property is your businees and believe yours is mine. i understand why we differ and where you are coming from, we just disagree.

 

[5th gate dreamers]

If you want your investment to retain it's value, then you don't want Disney crushing the re-sale market. Because then you would just have another worthless timeshare that you couldn't get out of even if you paid someone to take it...

Unless you're advocating that you want Disney to hold all of the cards, essentially locking you in for the full length of your contract with no ability to get out. In which case... Bye bye perks.

yeah, i kinda am advocating that. i mean, there are some nuances to my stance, but another way in which we disagree from conception is most dvc owners swallowed the marketing and believe they own a part of disney. we dont really own, we really lease. if we owned, it wouldnt expire in 50 years. heck, i (and im pretty sure most of us) wish this was like true real estate ownership and never expired and passed down through the family forever! please dont reply (anyone) with "yeah, it actually is real estate. it is deeded property". yes, i know it is technically real estate, but its really real estate in name only. put it this way...we divvy up our paychecks between the general account, the investment accounts, and the vacation account. our dvc purchase came out of the vacation account, not the investment account.

 

[5th gate dreamers]

These are some good points with a perfect example of being Disney growing tired of people buying OKW and SSR points and trading into One BR’s at GFV etc.... they tried maneuvering the point charts around to entice non peak time booking but the fall is the hot time plus the usual peak times so people willing to go in early Dec, September, early May etc....can buy SSR and get fairly decent 7 month choices especially for one BR.

yeah, thats another reason. hilton head owners paying $70 (or whatever...obviously i dont follow the numbers on resale) a point and then staying at grand floridian, riviera, polynesian just doesnt seem just.

 

[5th gate dreamers]

WOW- Does it bother you when you fly somewhere and you find out the passengers next to you paid less for their ticket?
Or do you only fly 1st Class, so those who pay less for the same flight are actually kept in a "lower-class" cabin??
When I traveled extensively for business, I would occasionally get bumped up to 1st Class. I bet sitting next to you, being comped into 1st Class would "chap you some" if you paid the 1st Class premium price. You would probably suggest that I not get the hot towel, the mimosa, nor the better meal!

i mean, yeah. by the tone of your post, i feel like you think you are taking the moral highground, when i didnt think that was even the question here. i clearly have the moral highground. entitlement is the feeling that you have the right to something that you didnt earn, which is exactly what you are saying with the airplane analogy. we get upgraded all the time at hotels, but of course we dont deserve it and deserve lesser perks! you paid for business class while someone paid for first...of course they deserve more perks. someone paid $70000 for their car while i paid $400000, of course they deserve all the newest bells and whistles and i dont. i mean, i could go on with examples forever. i doubt you would say "how come that person gets more nights on disney property even though we both own dvc". well, they paid more for more points. more points (more money) means more nights. more money (paying more direct with disney) comes with more perks. whether someone who pays more deserves more i dont think is the argument at all right? yes, well take the upgrade at the hotel, but know full well we didnt deserve it and are grateful for the luck.

 

[RoseGold]

yeah, thats another reason. hilton head owners paying $70 (or whatever...obviously i dont follow the numbers on resale) a point and then staying at grand floridian, riviera, polynesian just doesnt seem just.

This is just bad math. Hilton Head points are some of the most expensive in the system, and they paid more than you did, in dues and maybe even in total ownership, since that seems to be your measure of worthiness. So, they are actually BETTER DVC members than you, by your analysis.

https://www.dvcresalemarket.com/blog/best-economical-dvc-resort-to-purchase-spring-2020/
It's me who stayed next door to you at VGF with cheap SSR points you are talking about. And my room was the same as yours.

 

[5th gate dreamers]

It's been estimated that resale points represent less than 15% of all points in the system. Take into account the number of resale points that are bought prior to January 19, 2019, and the actual number of restricted resale points in circulation that would decrease competition against you at 7-months become insignificant.

Fast forward 30 years, will that be different? Maybe. But you know who does benefit from the resale restrictions from day 1? The Developer. Full stop.

If anything, resale restrictions will also ensure future resale owners will book at home, actually working against your ability to book there at 7-months.

Some things that materially affect your 7-month booking:

- Disney knowingly overselling studio usage against GVs, Bungalows, and Cabins.
- Disney happily financing anyone while constantly raising the buy-in cost
- Years and years of Disney's willingness to lower the member buy in and sell small contracts for those bigger dollars to more members.
- The interwebs; a more informed ownership is booking at 11-months.
- The interwebs part 2; people buying where they want to stay.
- SSR by virtue of its size (not a resale-only problem).

Every year, the share of breakage that goes back to members reaches its maximum 2.5% of cap res/operating budget. Any additional breakage will only benefit the Developer.

There would be no additional benefit to owners unless Disney decides to raise that 2.5% cap which, again, they have maxed every year. The resale restrictions would suggest owner-interest isn't high on their priorities list.

Resale restrictions are there to serve the Developer and the Developer only. Owners can choose to not care about the resale restrictions because it doesn't affect them personally, or that the pros of a new resort outweigh the cons, but it's a stretch to come up with logical reasons how the restrictions are a benefit to owners.

When the Developer opens a Yacht Club Villa, my family will be first in line to buy with or without restrictions, but I have no illusions that those restrictions will be there to serve my family's interest.

@5th gate dreamers illustrates quite vividly how Disney's resale restrictions have to appeal to base emotional justifications to make any sense. Emotions have to drive, relegating logic to the back seat, for an owner to cheerlead these restrictions.

not at all emotional. like my reply to the airplane analogy, it is the sense of entitlement (general to humans) that leads one to believe that they deserve more for less. people feel entitled to disney for some reason. nobody ever says "the maldives are too expensive for the average family. it should be cheaper". disney is a premium luxury destination that commands premium prices because of demand. i cheerlead restrictions because i just dont believe in finding the loopholes in everything to screw over companies i love. its like people giving tips on how to "get three years of perks for only one years fee" on credit cards. this is why we cant have nice things. this is why companies are constantly closing loopholes. we love disney and want them compensated handsomely to keep the technology coming. technology isnt cheap and imagineers arent cheap. you think imagineers would do this job for free? no, they are people just like you and i with a mortgage to pay etc. to be clear, i know noone is breaking the rules. im saying i wish dvd would tighten its grip on dvc, not that anyone is doing anything against the rules.

 

[5th gate dreamers]

We agree logically (I think) that real estate needs to be protected, so I can’t follow your argument. Perhaps it’s more emotional than economic for you, which is fine. To each their own.

Just like you, I prefer a strong HOA if it keeps my real estate investment value high (your option three). And of course that‘s exactly what a strong competitive resale market does for my timeshare real estate investment. So I’m curious - Why do you prefer the high value third option of a strong HOA, but want to see a collapse of the resale market? If there weren’t a resale market, your investment is illiquid and has no market value, right?

we dont consider our dvc ownership an investment in real estate. we consider it 50 years of prepaid vacation.

 

[5th gate dreamers]

Got it. You want DVC to be controlled like units in assisted living facilities. Private sales aren't allowed. Even if the underlying land value triples during their ownership, the residents' only option is to sell their units back to the facility operator at significant financial loss. Everyone entering the facility pays the same direct price.

Make no mistake, the rules are set up that way because sales, not MF, are where most of the profit is for the developer. If DVD could conjure the same standard of care/QC justifications, those terms would be in our POS.

I guess there are always people who would destroy their own exit strategy to avoid feeling "chapped" that someone else got a better deal. To me it's as illogical as chopping off one's own limbs because they're jealous of people who have disabled parking permits?

Although many DVC owners purchase with vague plans of retirement/grandkids. We have "beach house", not "aged care home" in mind. The option to sell our contracts at fair market value, should circumstances dictate it, is an advantage!

dvc never needs to be sold. one of the selling points for us is if we ever become a non disney going family, you can rent all of your points every year and come out ahead. we werent sure of a 50 year commitment to dvc until we realized we arent really committing to anything.

 

[5th gate dreamers]

This is just bad math. Hilton Head points are some of the most expensive in the system, and they paid more than you did, in dues and maybe even in total ownership, since that seems to be your measure of worthiness. So, they are actually BETTER DVC members than you, by your analysis.

https://www.dvcresalemarket.com/blog/best-economical-dvc-resort-to-purchase-spring-2020/
It's me who stayed next door to you at VGF with cheap SSR points you are talking about. And my room was the same as yours.

i fully stated that i had no clue as to the pricing. how about this..."x resorts points that cost 2/3 of the cost of y resorts points shouldnt be able to be used at y resort". i have no clue as to what costs more or less on the resale market. its not pertinent to the point.