ROFR Gap through EOY 2021

[KAngela]

I finally got around to updating the ROFR gap through the end of 2021. Briefly, using Pangyal's outstanding ROFR thread, I pull out the lowest contract which passed ROFR (always on an offered PPP basis) and compare it to the highest contract that was taken by Disney to see how the market is evolving at the edges. Note that this data is hardly conclusive: it only covers the subset of contracts which are put on the thread, and is hostage to all sorts of errors like the international seller impact, one-offs, and so on. So this is information about a subset, nothing more and nothing less.

There are only 4 properties with enough data to analyze: AKV, BLT, OKW, and SSR; the rest simply have too many holes. Having said that, those 4 properties all show the exact same trend, and the spotty data at the others indicates the same developments, so I'm comfortable saying we know how the ROFR market is evolving. Long story short: ROFR rose in 2021 from Q2 onwards, driving up the "lowest passed" contracts, and became more consistent.

Not by a little, either: prices are up 20% in the second half of 2021 compared to 2019, and the gap between what passes and what ROFRs closed to within a few dollars (with one exception). Resort-by-resort we can compare 2019 and 2021 and see the pre- and post-pandemic marketplace Disney is setting up (I'll note where I screened out a quarter here and there to take away anomalies):

• AKV in 2019 averaged a 94 PPP as their lowest passed contract, and their highest ROFR came in at 108. In the last half of 2021, the lowest passed contract averaged 126 PPP and the highest ROFR was 132. The average gap closed quite a bit, and in Q4 was only 2 $/P.
• BLT in 2019 averaged a 130 PPP as their lowest passed, and their highest ROFR (Q1-Q3) averaged 142 PPP. But in 2021? Lowest passed averages 150 and highest ROFR is at 151.
• OKW in 2019 averaged a 93.5 PPP as their lowest passed, and a 91.75 PPP as their highest ROFR, the closest of the four pre-pandemic. In the second half of 2021, OKW lowest passed is at 117.5 PPP and their highest ROFR averages 118.
• SSR in 2019 averaged 93.25 PPP as their lowest passed, and 100 as their highest ROFR. In Q2-Q4 of 2021, the lowest passed is at 112 PPP and the highest ROFR goes to 129, the only one of the four where we continue to see a significant gap.

We can only speculate why this would happen. Maybe tighter ROFR guidelines were rolled out so fewer contracts slipped past at the edges, or maybe this is just a quirk of the data or an artefact of supply and demand (like buyers being better about predicting Disney's minimum). These numbers, though, make it seem like ROFR is pushing pricing upwards significantly and consistently at these four resorts, and other resorts look similar.

 

[CarolMN]

Very interesting. Thanks for sharing.

I continue to be shocked at the resale prices for BWV, which show no sign of decreasing. Logically, I should probably sell my BWV contracts (bought direct in 1999 for $65pp), but I'm not done going to WDW yet.

 

[DonMacGregor]

These numbers, though, make it seem like ROFR is pushing pricing upwards significantly and consistently at these four resorts, and other resorts look similar.

This should be interesting.

 

[CarolynFH]

Very interesting. Thanks for sharing.

I continue to be shocked at the resale prices for BWV, which show no sign of decreasing. Logically, I should probably sell my BWV contracts (bought direct in 1999 for $65pp), but I'm not done going to WDW yet.

We’re in the same boat. For the first time ever, last week we discussed selling one of our two contracts (half our points), but I don’t think we’re ready to do it yet. I pointed out to DH that we’re looking forward to a tentative trip with DD and DSiL in January 2024 for Marathon Weekend, not to mention that half our points wouldn’t get us our routine January stay for just the two of us!

 

[Sandisw]

Great info!

 

[kilik64]

But ROFR has no BEARvaling on price?

 

[Epcot Forever Forever]

I still think there’s some component that Disney looks at that we aren’t privy too. And I also think a lot of it is luck and literally how many people have asked to buy a specific resort in the last couple weeks.

But at OKW they’re clearly trying to bulk up.

 

[Epcot Forever Forever]

The next step would be to take the Orange County auditors data and you could see the actual highest price that passed ROFR. Sadly I don’t think you can see the actual lowest price Disney took.

 

[rubybutt]

Very interesting. Thanks for sharing.

I continue to be shocked at the resale prices for BWV, which show no sign of decreasing. Logically, I should probably sell my BWV contracts (bought direct in 1999 for $65pp), but I'm not done going to WDW yet.

sell and buy RIV? add about 30 years for $40/point. I think we would all do that.

 

[CarolMN]

sell and buy RIV? add about 30 years for $40/point. I think we would all do that.

BWV location beats RIV for me. No contest. I'm old enough that traveling anywhere after 2042 is a very long shot, LOL.

 

[KAngela]

I still think there’s some component that Disney looks at that we aren’t privy too.

No doubt. They know all the offers at all resorts, how many people want to buy direct at those resorts, how many rooms are rented for cash, how many points are being purchased for one-time use, the maintenance plans, and on and on and on.

I suspect ROFR is driven to achieve the goal of the now for DVC, whether it's cash generation, driving up prices at certain resorts, supporting new resorts coming online, or any of a number of other things. All I'm really doing here is playing with numbers and hopefully giving some insight into what kind of offer might pass ROFR.

We got ROFR'd with the first contract we ever tried to buy, and I guess it left a mark!

 

[CarolMN]

They know all the offers at all resorts, how many people want to buy direct at those resorts, how many rooms are rented for cash, how many points are being purchased for one-time use, the maintenance plans, and on and on and on.

IMO, the factor that adds the most "mystery" to the process is unit number. All the points in a contract must come from the same unit. We have no way of knowing how many points in DVD's current inventory are from the same unit. I think some of the contracts are purchased because of the unit number. DVD probably needs points from particular units to add to their "stranded" points (less than 25 or 50 depending on the resort). Otherwise, the stranded points can't be sold.