September Direct Sales

[kneely58]

https://dvcnews.com/dvc-program-men...s-continue-on-a-robust-pace-in-september-2023

 

[LittleBitGoofy]

VGF is about to be sold out! That's crazy how fast it went with the right pricing this summer. I imagine the next incentives won't be any better than current just because they don't need it to be.

 

[intamin]

It's surprising that RIV outsold VDH by over 18,000 points in September. VDH sales really fell off a cliff after the first few months. I expected a drop off but not that significant. Hopefully some better incentives for RIV are around the corner because I'm definitely in the market :X

 

[BrianLo]

Historically, VGC was hard for them to sell.

The early sales for VDH were all pent up existing demand from DVC owners. I don't think its slow sales are a criticism, just a reality that Disneyland DVC market is going to be more niche. All things being equal I do foresee RIV selling out earlier than VDH.

RIV is also going to keep churning along a bit faster than it gets credit for. We're heading to 60% sold out territory and it's going to go back to functionally being the only WDW resort on sale for a year again.

I mean, functionally as it is VGF is sort of sold out. They're clearly pivoting away from it given the dwindling points pool.

 

[Disfamwa]

Historically, VGC was hard for them to sell.

The early sales for VDH were all pent up existing demand from DVC owners. I don't think its slow sales are a criticism, just a reality that Disneyland DVC market is going to be more niche. All things being equal I do foresee RIV selling out earlier than VDH.

RIV is also going to keep churning along a bit faster than it gets credit for. We're heading to 60% sold out territory and it's going to go back to functionally being the only WDW resort on sale for a year again.

I mean, functionally as it is VGF is sort of sold out. They're clearly pivoting away from it given the dwindling points pool.

I don’t know how much it’s impacting sales, but VDH is very studio heavy and their studios only sleep 4. The other studio heavy resorts like VGF and poly sleep 5 per studio. If you have you have a family of 5 or more, it will be very hard to even book a room and very expensive between the high point chart, high buy in price, and high MF (almost $ 12 dollars per point if you count the transient tax).

 

[garalex]

why no information on AUL direct sales?

 

[ehh]

why no information on AUL direct sales?

The county recorder requires payment for access to data. Fairly significant payment, if I remember correctly.

 

[DanCali]

RIV is also going to keep churning along a bit faster than it gets credit for. We're heading to 60% sold out territory and it's going to go back to functionally being the only WDW resort on sale for a year again.

At current sales levels, RIV won't sell out for another 4 years. And if sales double because it's the cheapest and/or only WDW resort, it will still take 2 years to sell out. But even with the new fall incentives starting Sep 12 (and recognizing those deeds wouldn't get recorded till after Sep 22) it didn't crack the 50K points mark. On the other hand VGF was off the charts even with the price hike after Sep 12. It seems that resale restrictions impact direct sales too - not sure how much this was foreseen by those who came up with the idea...

 

[intamin]

At current sales levels, RIV won't sell out for another 4 years. And if sales double because it's the cheapest and/or only WDW resort, it will still take 2 years to sell out. But even with the new fall incentives starting Sep 12 (and recognizing those deeds wouldn't get recorded till after Sep 22) it didn't crack the 50K points mark. On the other hand VGF was off the charts even with the price hike after Sep 12. It seems that resale restrictions impact direct sales too - not sure how much this was foreseen by those who came up with the idea...

I’m not sure if it has as much to do with resale restrictions as it is people just wanting to own at what WDW markets as the flagship resort on the monorail loop next to MK. I do think that resale restrictions at least play a small part of that; however, there’s too many other factors here to say definitively like preference of rooms, theming, park, restaurants etc.

 

[Royal Consort]

It seems that resale restrictions impact direct sales too - not sure how much this was foreseen by those who came up with the idea...

As much as many would like this to be true, it appears demonstrably false. Riviera outsold VGF for months that they needed to discount VGF to move stock. It's not restrictions that limit direct sales, it's price. If Riviera has a similar promotion I expect it to move stock too.

 

[LittleBitGoofy]

I'm just one person, but I'm dissuaded from buying direct that has resale restrictions and definitely from buying resales that have those "one resort only" restrictions. VGF is probably our last opportunity and that window is quickly closing (aside from sold-out pricing or random fire sales, of course).

 

[mamaofsix]

The speed of VGF nearly selling out makes me think the new Poly Tower will be the same association as their original villas. It appears that grandfathering it in was a great sales tactic. Especially for those who want to add onto their existing contract. Makes perfect business sense.

I know there's already an entire thread devoted to this debate, but the direct sales stats speak for themselves.

 

[DanCali]

As much as many would like this to be true, it appears demonstrably false. Riviera outsold VGF for months that they needed to discount VGF to move stock. It's not restrictions that limit direct sales, it's price. If Riviera has a similar promotion I expect it to move stock too.

Riviera did have a similar promotion for 3+ months (it was just ~$5 more than VGF for the entire summer). And in September, it was actually a lot cheaper for half the month. It hasn't outsold VGF in any month of 2023 and it wasn't even close.

I do agree that "It's not the restrictions that limit direct sales, it's the price" but I'd take that in a different direction. When Riviera was outselling VFG the resale price of Riviera were probably around mid-$140s(?). More recently they are in the mid-$120s. Sure, there are buyers who don't know or care about that and will buy Riviera direct. But, at the margin, you also have many potential buyers (like the one quoted below, or myself) who are keenly aware of resale prices and are not interested in losing 30%+ on "Day 10". If Riviera resale prices continue to trend down, as I suspect they will, this part of the equation will only exacerbate, and it's won't be just for Riviera... Assuming it is restricted, how many people currently considering buying Poly2 direct would have second thoughts if the resale price of Riviera ended up settling at $100 or below in 2-3 years? DVD will have to provide stronger incentives specifically targeting those types of buyers to move their product.

I'm just one person, but I'm dissuaded from buying direct that has resale restrictions

 

[DanCali]

I'm just one person, but I'm dissuaded from buying direct that has resale restrictions and definitely from buying resales that have those "one resort only" restrictions. VGF is probably our last opportunity and that window is quickly closing (aside from sold-out pricing or random fire sales, of course).

I have purchased direct at other timeshare systems even with resale restrictions knowing that the resale value is substantially lower. But the types of incentives that got me to do it were a combination of "Elite" owner levels and resale purchases "requalification". This would be equivalent to DVC having owner tiers providing various additional perks based on the number of direct points owned (e.g., early checkin, late checkout, meaningful bonus value when electing to use at hotels or cruises, extended banking windows, etc). And also, some form of "point washing" where if I were to buy direct, they will also change the treatment of a bunch of my resale points to being treated as direct (also allowing faster qualification for those higher "Elite" levels). These are incentives only the developer can offer and it compensates a buyer who might never otherwise buy direct for the loss of value caused by the developer's imposed resale restrictions.

Personally, I would actually consider a "one resort only" resale purchase. But not at anywhere near current resale prices...

 

[BeachClub2014]

Riviera did have a similar promotion for 3+ months (it was just ~$5 more than VGF for the entire summer). And in September, it was actually a lot cheaper for half the month. It hasn't outsold VGF in any month of 2023 and it wasn't even close.

I do agree that "It's no the restrictions that limit direct sales, it's the price" but I'd take that in a different direction. When Riviera was outselling VFG the resale price of Riviera were probably around mid-$140s(?). More recently they are in the mid-$120s. Sure, there are buyers who don't know or care about that and will buy Riviera direct. But, at the margin, you also have many potential buyers (like the one quoted below, or myself) who are keenly aware of resale prices and are not interested in losing 30%+ on "Day 10". If Riviera resale prices continue to trend down, as I suspect they will, this part of the equation will only exacerbate, and it's won't be just for Riviera... Assuming it is restricted, how many people currently considering buying Poly2 direct would have second thoughts if the resale price of Riviera ended up settling at $100 or below in 2-3 years? DVD will have to provide stronger incentives specifically targeting those types of buyers to move their product.

This is the core issue with the whole discussion/debate on resale restrictions. If we assume that Poly Tower is a new association with restrictions, and the new CFW also has restrictions, it signals that DVD remains committed to that strategy. What sometimes gets lost in the discussion is that ALL points on ANY resale contract post-2019 are restricted. We haven't really seen that impact yet, as 2042 is so far down the road, and only Riviera has restrictions at WDW. That landscape could soon shift with three active resorts having use restrictions. We all assume that DVD implemented the use restriction paradigm to incentivize people to buy directly from them. If true, it would seem that they (DVD) would understand that not everyone would go that route and some folks will still buy resale for a variety of reasons.

 

[mamaofsix]

Riviera did have a similar promotion for 3+ months (it was just ~$5 more than VGF for the entire summer). And in September, it was actually a lot cheaper for half the month. It hasn't outsold VGF in any month of 2023 and it wasn't even close.

I do agree that "It's no the restrictions that limit direct sales, it's the price" but I'd take that in a different direction. When Riviera was outselling VFG the resale price of Riviera were probably around mid-$140s(?). More recently they are in the mid-$120s. Sure, there are buyers who don't know or care about that and will buy Riviera direct. But, at the margin, you also have many potential buyers (like the one quoted below, or myself) who are keenly aware of resale prices and are not interested in losing 30%+ on "Day 10". If Riviera resale prices continue to trend down, as I suspect they will, this part of the equation will only exacerbate, and it's won't be just for Riviera... Assuming it is restricted, how many people currently considering buying Poly2 direct would have second thoughts if the resale price of Riviera ended up settling at $100 or below in 2-3 years? DVD will have to provide stronger incentives specifically targeting those types of buyers to move their product.

Agree.

I think another factor is that people simply prefer VGF over Riv. We toured both. Riviera was cheaper at the time. We liked the villas, restaurants, transportation options and location of VGF better. So we bought there. A $10 difference in price per point made no difference to us. We weren't going to choose whichever resort was cheapest. We chose the one we liked best.

 

[BeachClub2014]

Agree.

I think another factor is that people simply prefer VGF over Riv. We toured both. Riviera was cheaper at the time. We liked the villas, restaurants, transportation options and location of VGF better. So we bought there. A $10 difference in price per point made no difference to us. We weren't going to choose whichever resort was cheapest. We chose the one we liked best.

I agree, except many prefer Riviera (or other resorts) over VGF. I know that we do. That's why we bought some Riviera points to add to our portfolio. We wouldn't buy VGF at just about any price. I'm not too fond of the place and will never stay there. We own OKW, BCV, and RIV because we love the resorts and want to stay there.

 

[DanCali]

This is the core issue with the whole discussion/debate on resale restrictions. If we assume that Poly Tower is a new association with restrictions, and the new CFW also has restrictions, it signals that DVD remains committed to that strategy. What sometimes gets lost in the discussion is that ALL points on ANY resale contract post-2019 are restricted. We haven't really seen that impact yet, as 2042 is so far down the road, and only Riviera has restrictions at WDW. That landscape could soon shift with three active resorts having use restrictions. We all assume that DVD implemented the use restriction paradigm to incentivize people to buy directly from them. If true, it would seem that they (DVD) would understand that not everyone would go that route and some folks will still buy resale for a variety of reasons.

The post-2019 resale restrictions restricted resales as a group. Having a block of 14 resorts to trade into is a lot more valuable than a block of 1. And even a block of 7 is more valuable than a block of 1, especially with Hawaii included.

As a corporation, DVD can play the long game and look beyond the expiration of the penultimate O14 resort (PVB in 2066), at which point every resale is a one-resort option. But those restricted resales may be so cheap, that it's still make a direct purchase very unattractive to potential buyers like my yet-to-be-born grandkids. On top of that, my own personal expiration and horizon will likely come a lot sooner than 2066, so I couldn't care less about their long term vision for the product. I'll likely be owning in the O14 world for my own foreseeable horizon, unless direct purchase incentives change dramatically to compensate for the newest resale restrictions which, over time, will adversely impact the value of what they now sell me.

 

[BeachClub2014]

The post-2019 resale restrictions restricted resales as a group. Having a block of 14 resorts to trade into is a lot more valuable than a block of 1. And even a block of 7 is more valuable than a block of 1, especially with Hawaii included.

As a corporation, DVD can play the long game and look beyond the expiration of the penultimate O14 resort (PVB in 2066), at which point every resale is a one-resort option. But those restricted resales may be so cheap, that it's still make a direct purchase very unattractive to potential buyers like my yet-to-be-born grandkids. On top of that, my own personal expiration and horizon will likely come a lot sooner than 2066, so I couldn't care less about their long term vision for the product. I'll likely be owning in the O14 world for my own foreseeable horizon, unless direct purchase incentives change dramatically to compensate for the newest resale restrictions which, over time, will adversely impact the value of what they now sell me.

I get that having 14 resorts to trade into has more current value for many people than just one. My point is/that DVD surely knows this as well and still made the move. That signals their willingness to lose some direct sales to people who refuse to buy a resort that has resale use restrictions for just that resort.

This assumes that enough yet-to-be-born-grandkids are aware of the resale market to make a meaningful dent in the pool of people buying DVC directly. A common theme here on the DIS is how uneducated the "average" buyer of DVC is. If that is true, what percentage of buyers even know that a resale market exists or factor that into their decision?

We own some of the O14 because we love OKW and BCV, and we added directly purchased RIV points to the portfolio mainly because of the price and the 2070 expiration. I'll be long-dead by then, but my kids are lining up to see who gets them!

 

[DanCali]

This assumes that enough yet-to-be-born-grandkids are aware of the resale market to make a meaningful dent in the pool of people buying DVC directly. A common theme here on the DIS is how uneducated the "average" buyer of DVC is. If that is true, what percentage of buyers even know that a resale market exists or factor that into their decision?

Those "uneducated buyers" are the ones that can be most helpful to the developer. They may first buy 100 points thinking they can book standard view studios at 9 months out, then they will buy 150 more points because they realize they need more space, and then they will buy 250 points at a different resort because they are generally happy with what they have.

But when some of them inevitably try to sell, they can also cause the most damage to the developer because they can be posting all over social media things like that they didn't know the resorts they bought were restricted and worth pennies on the dollar on the resale market, that their loans are underwater and they can't sell, and that they believe they were totally duped when they first bought in.

It took me many years to buy into DVC for a variety of reasons. But even when I wasn't an owner, I'd generally hear about the organization having a relatively great reputation in the timeshare world. But it wasn't because of these types of new restrictions, which resemble what other developers have been doing for a while.