- Joined
- Nov 15, 2008
- Messages
- 46,430
Perhaps, they're definitely still pressuring buyers to go direct instead of resale, but they have to know that if the resale value tanks too far than the sales might further slow. Conversely, letting the price drop and not picking up Riviera contracts could simply be a matter of them not wanting inventory on the books when it's not selling at the pace they want, which could be overriding their preference to keep the value up. All I'm saying is that I don't believe they don't care about the resale price, though I would agree it's not their primary concern at the moment, I doubt it's not a factor in their overall strategy.
Supply and demand are market forces and will dominate the pricing of the resorts, no argument there, but Disney absolute has mechanisms in place to influence it. They can (and are) using restrictions and incentives for direct members to weaken the demand for resale, making it less appealing. They could also use RoFR to prop up the resale price while pushing demand down to really kill that market, and they aren't. That's what I'm surprised by, like I wrote earlier in this post I suspect they're more worried about being stuck with inventory that's not moving well, and that's why they're letting the average price drop, but I am sure they're tracking it and weighing it against all the factors.
It's not the determining factor at the moment because Disney hasn't engaged it as such, but that doesn't mean they don't care about the resale value, that's all I'm saying. I'm sure there's a big picture and a bunch of spreadsheets and analytics that factor it in alongside a number of other things. If Riviera inventory was moving better I'd bet you'd see them using RoFR to push the prices up, but since it's not, maybe they're not ready to pull that lever, but the idea that they don't care about it doesn't make sense. This is the current compromise they've chosen, that's all.
Oh totally agree, the strategy is definitely resort dependent. Right now the strategy for Riviera seems to be to get rid of the inventory for it and try to get as much as they can for it now. As @Sandisw pointed out, they kept up with the restrictions so they must feel like this strategy is broadly working for them. Time will tell.
To add, DVD has been on a quest to differentiate resale from direct since 2012…13 years…the restrictions in 2019 were just the most impactful.
The majority of direct buyers have no clue about resale and many aren’t even thinking about that.
They have the power to reverse them at any time. So sales must be within acceptable levels for them to not made changes.