The new resale rule: The Empire Strikes Back

[tjkraz]

I do not think anyone could care less about resale value, but you should never buy a timeshare IMHO based on resale value. You should know going in it may have no resale value at some point. Again the value of a timeshare is in its long term use.

That's pretty much it in 3 sentences.

Using the logic of some folks here, when one purchases their DVC contract, we only get what's in writing. Fully agree...but that's not what is MARKETED. We can read a contract...that's not the point. Disney sets certain expectations and promotes them in their literature.

Resale value has never been marketed. If a DVC Guide made any comments regarding resale value, obviously it was based upon his/her own impression of the current or future market.

No benefits are changing for current members so whatever aspects of program usage you feel were marketed to you at the time of purchase are true today.

So, here is the question...what would be reaction if Disney exercised the full content of the Contract and forced ALL DVC members to only book at their Home Resorts. That's all that's in our Contracts. To all the defenders of this new policy, that would be a welcome "enhancement". Right? It's in the contract, so it's all we should expect.

Obviously every member would react differently but it's a possibility that I was aware of at the time of purchase. It's also part of the reason that I own points at 3 separate resorts.

In the grand scheme of things I think it's a pretty remote possibility. DVC certainly benefits from the ability to market the package of resorts rather than just one. And they cannot sell the rights to use 11+ resorts if they hold owners to a single location.

Would I be disappointed if it happened? Yes.

Would it change my perceptions of the DVC program as a whole? Yes.

Would it negatively impact any future purchases on my part? Probably.

Do I think it will happen? Not really.

 

[Lynne M]

Using the logic of some folks here, when one purchases their DVC contract, we only get what's in writing. Fully agree...but that's not what is MARKETED. We can read a contract...that's not the point. Disney sets certain expectations and promotes them in their literature.

Yes, but what's marketed doesn't really matter. Especially when the literature that comes with the contract states that the contract supersedes everything else......advertising, salespeople's comments, etc.

I'm also not sure what expectations are set in the marketing that contradict what's in the contract. The marketing materials don't say that the current offerings for members can never change. I'd bet that the phrase 'subject to change' is in there someplace. And they certainly don't say a blessed thing about resale value.

It's important to distinguish advertising that's truly misleading, from an assumption or inference that that buyer made on their own. To be misleading, you have to have a statement that's untrue. If the shiny DVC brochure says "you'll be able to book DVC cruises at any time for the life of your contract, and the point cost will never change"....well, that would definitely be misleading. Instead, the book says "you can book DVC cruises with your membership", and the buyer assumes that a) the point values will be reasonable, b) they'll always stay the same, and c) DCL will make cabins available to DVC members on every cruise for the next 40 years. None of which DVC promises, and none of which is true.

So, here is the question...what would be reaction if Disney exercised the full content of the Contract and forced ALL DVC members to only book at their Home Resorts. That's all that's in our Contracts. To all the defenders of this new policy, that would be a welcome "enhancement". Right? It's in the contract, so it's all we should expect.

Would members be happy? Of course not. I wouldn't be. But I wouldn't have a right to complain, or sue, or feel personally betrayed by my guide, because I signed a contract that says that can happen.

When I first started considering DVC, I was both clueless and cynical about timeshares. Which I why I read the contract so carefully, and did so much research. I never assumed there'd be ANY resale value. I didn't think people got much of anything for selling their timeshares.

I read the contract, figured out what I was getting at bare-bones minimum, which was the right to stay at VWL subject to availability for the next 40 years. Yeah, there are currently a lot of other ways to use the points, and some nice little discounts and perks. But the question I asked myself before I signed was, "is this thing still a good deal for me if all I can do with it is stay at VWL every year till I'm 80?" The answer was yes. I wouldn't have signed if the answer was no.

 

[LIFERBABE]

All the "ifs" should have been answered prior to purchasing.
It s not that I don't care or lead a charmed life, it's that I fully understood what I was purchasing behind the marketing.
My 1 regret is that I did not purchase more BCV back in 2003 but I limited my exposure because of what you are actually purchasing at BCV. SAB is not part of Bcv and there are no Grand Villas to absorb large amounts of points if we were ever restricted to our home resorts. So I purchased enough for at least a week in a 2 bedroom and moved on to other resorts. I also took into consideration the suspension of banking and borrowing and loss of affiliation with Disney.
I only own what we can use and would want to use if DVD ever exercised all their options.

 

[Brian Noble]

To all the defenders of this new policy, that would be a welcome "enhancement". Right?

I think it is worth remembering that most (if not all) of the "defenders" do not think that the March 21st rules are "welcome enhancements." Rather, we understand that such "enhancements" are within DVC's rights. Many probably do not like them, but accept them.

Likewise, home-resort-only would be within DVC's rights. And, some people might even like it---the people who own at, say, BCV but can't book more than seven months prior to check in for one reason or another. Other people would not like it. But, DVC would be within their rights to do it if they so chose.

 

[johde]

I've read through most of both threads and my opinion is still

Do I like the change? No
Do I think it hurts members more than helps? Yes
And the only one that really matters;
Was Disney is their right to do it? Yes

I've been a member for going on 10 years now, and there's been alot of changes in that time. I expect there will be lots of changes in the future.

 

[crisi]

Honestly, it wouldn't bother me in the least. I've never used points anywhere but my hone resort since 1992.

We have, but haven't found a place that we all like as much as we like "home."

Home for us is BWVs. Last time we stayed at BCV - I figured my kids were a great SAB age. My husband is especially fond of the easy Epcot access - still had that. My kids were homesick for BWV. We had to pool hop back

I like VWL, as does my husband. We stayed there and its too far from Epcot. The kids wanted to be back "home."

So, my children appear to be creatures of habit even more so than their parents. We just had the "where should we stay next time" discussion - and its BWVs.

The one Disney initiated change I can think of that would make me rethink ownership (and I rethink ownership all the time - but those are our life changes, not Disney's changes) would be no more banking/borrowing. We are every other yearers. I have no desire to go to Disney more often than that. I suspect we'd sell - even if its $2 on eBay. Would I be sad - yep. But the reality is it could happen.

 

[bicker]

There has been nothing in years to indicate that resale values would be effected by anything but supply and demand and the economy.

That's no excuse. Past performance is no guarantee of future results.

Everyone can just continue to defend DVC/Disney and their practices, but this decision by Disney has likely hurt a vast number of owners should they wish to sell after the 20th.

No one has said it wouldn't hurt a number of owners. Again, all I've been criticizing is the practice of trying to cast Disney as evil for doing what they had every right to do, and given that it was the best move at this time for their owners, a fiduciary obligation to do.

Why can't people just say, "I am sad," instead of saying, "They are bad." What's with this incessant need to always blame someone else when things don't go one's own way?

 

[disneygal922'sboy]

Why can't people just say, "I am sad," instead of saying, "They are bad." What's with this incessant need to always blame someone else when things don't go one's own way?

I appreciate what you said...

What can we REALLY do about this situation? Nothing...
Is it unfortunate? OF COURSE!
Am I stoked about it? Not at all!
Are they wrong for doing it? Highly debatable...but not really.

As pointed out before, Disney is first and foremost a business...and their obligation is those who have a fiscal interest in the company. DVC members, as much as we may feel we have a fiscal interest due to the large amount we have spent for membership, are not Disney's first priority. Disney's obligation is to drive profitability for their shareholders.....that's it.
How do they do that? Drive revenue. How do they do that? Push the resale market back in their favor.

Ultimately, as it has been stated, this is not something that I am stoked about, but it's not something I never expected. I'm a new DVC owner....bought at BLT in 2009. I knew exactly what I was getting because I took the time to actually read the contract. I truly do feel bad for those who did not expect something like this to happen. Being blindsided can really push us to anger and start playing the blame game, but we have to remember that it is what it is.

I purchased at BLT to stay at BLT, and I have already made back a good chunk of my initial purchase. I feel that I am absolutely getting what I paid for.

 

[ElizabethB]

Well, as someone who has considered DVC from time to time, but never taken the bait, I can say I am much less likely to do so now. The ability to limit downside from the investment -- and get out of it -- has been materially damaged by the latest announcement, IMO.

Frankly, I see this as a way for Disney to limit its exposure on the right of first refusal. Even when we were considering DVC, I wondered how Disney could buy up every contract that went on the resale market in order to keep artificially propping up the price of points.

Well -- they just limited their ROFR exposure significantly. Now that they have created a two-tier owner system with resale contracts worth much, much less than they used to be worth, they do not need to spend nearly as many dollars as they did before to buy up resale contracts and keep stabilizing the price of DVC points. They may even stop exercising the ROFR since a resale points contract is a very different animal, now, from a contract purchased directly from DVC. It's two entirely different products (apples and oranges, really) -- so, if the price of a resale contract falls (as many timeshares have) to something like $1 per point (or less!), Disney may not even care anymore. So, no need to spend precious resources buying resale contracts.

I'm glad we decided not to buy and cannot imagine that we would ever consider a purchase after this latest action, which may end up being only the tip of the iceberg in terms of the contractual rights DVC has at its disposal for use in benefiting itself at the expense of its members.

 

[bicker]

More likely, what Disney's done is biased the population of owners in such a way that benefits Disney. I don't think there is any surprise on Disney's part about the fact that some people will consider this a reason not to buy in, but remember: Disney's getting other benefits from this change. They balance the two against each other and it seems clear that they feel that those benefits far outweigh the down-sides.

This is important: Not every customer is worth the same, and I'd rather sell 95 widgets at $100 each then 100 widgest at $70 each. Wouldn't you?

 

[crisi]

And given that, DVC was never for you and you are wise not to have taken the bait.

Buy DVC for what Disney is contractually obligated to provide. You can do some risk analysis on the rest and determine if you think the risk is small enough (or the issue unimportant enough) to move forward.

Those of us "defending" Disney in this also tend to be the most vocal about "DVC is NOT for everyone." And have been since long before any of the changes in the past few years were even rumors.

 

[canoe86]

Well, as someone who has considered DVC from time to time, but never taken the bait, I can say I am much less likely to do so now. The ability to limit downside from the investment -- and get out of it -- has been materially damaged by the latest announcement, IMO.

Frankly, I see this as a way for Disney to limit its exposure on the right of first refusal. Even when we were considering DVC, I wondered how Disney could buy up every contract that went on the resale market in order to keep artificially propping up the price of points.

Well -- they just limited their ROFR exposure significantly. Now that they have created a two-tier owner system with resale contracts worth much, much less than they used to be worth, they do not need to spend nearly as many dollars as they did before to buy up resale contracts and keep stabilizing the price of DVC points. They may even stop exercising the ROFR since a resale points contract is a very different animal, now, from a contract purchased directly from DVC. It's two entirely different products (apples and oranges, really) -- so, if the price of a resale contract falls (as many timeshares have) to something like $1 per point (or less!), Disney may not even care anymore. So, no need to spend precious resources buying resale contracts.

I'm glad we decided not to buy and cannot imagine that we would ever consider a purchase after this latest action, which may end up being only the tip of the iceberg in terms of the contractual rights DVC has at its disposal for use in benefiting itself at the expense of its members.

Not quite sure about your post and TRULY not being argumentative, just curious.

Why would DVC fall soooooooo low? Future resale of course will lose value with time, the points do have an expiration.

But even with these new rules, the points on resale still get a DVC room which most certainly has value.

Right?

 

[Sandisw]

Couldn't agree more...

Using the logic of some folks here, when one purchases their DVC contract, we only get what's in writing. Fully agree...but that's not what is MARKETED. We can read a contract...that's not the point. Disney sets certain expectations and promotes them in their literature.

So, here is the question...what would be reaction if Disney exercised the full content of the Contract and forced ALL DVC members to only book at their Home Resorts. That's all that's in our Contracts. To all the defenders of this new policy, that would be a welcome "enhancement". Right? It's in the contract, so it's all we should expect.

Well, to be honest, that is the reason I spent $5000 more to buy BLT over SSR. I knew that I wanted to stay there and that DVC could, at any time, remove my home resort from the group and I would be allowed to only stay there.

Sure, I might be sad that the option was gone but I would in no way feel mad or upset about it. I would still love my DVC and in no way would that move even change its value for me. Again, I bought to stay at BLT and as long as I can stay at BLT I will be thrilled.

 

[Sandisw]

There has been nothing in years to indicate that resale values would be effected by anything but supply and demand and the economy. If there had my timeshare interests would have been on the market.

Everyone can just continue to defend DVC/Disney and their practices, but this decision by Disney has likely hurt a vast number of owners should they wish to sell after the 20th.

Some of the members who post in support of Disney have owned their timeshares for years and years and have certainly gotten their moneys worth, may be in the position not to worry about resale, etc. etc. That is not the case for many of our fellow members. Once again we all roll over and play dead to the mouse.....

I hope those that could care less about resale values continue to have a "happily ever after" life.

I guess I just don't understand these comments and criticisms. I respect that some are upset about what Disney did because they went in to it thinking that they could get some or all of their money back. Personally, I chose not to do that so I have no reason to be upset or mad at Disney.

 

[Dean]

I don't see the big deal if you ask me do most people buy DVC points in order to go to Disney or to go elsewhere? Nothing in this announcement to me would indicate that the value of your points will take a nosedive simply because the people buying your points will only be limited to vacations at Disney DVC locations ,and world passport destinations

In many ways, neither do I. It seems those that see this as a big deal fall into one or more of the following categories.

1. Bought for the wrong reasons.
2. Didn't understand what they were buying.
3. Have an inherent problem with different customers/owners being treated differently.
4. See this as a sign that DVD isn't the company they thought they were (see #2).

I can see them all. Timeshares are often impulse buys and many people don't take the time to understand what they are buying. I don't agree that any are ultimately legit reasons to relate to the decision in question here but I can see how some would.

There has been nothing in years to indicate that resale values would be effected by anything but supply and demand and the economy. If there had my timeshare interests would have been on the market.

Everyone can just continue to defend DVC/Disney and their practices, but this decision by Disney has likely hurt a vast number of owners should they wish to sell after the 20th.

Some of the members who post in support of Disney have owned their timeshares for years and years and have certainly gotten their moneys worth, may be in the position not to worry about resale, etc. etc. That is not the case for many of our fellow members. Once again we all roll over and play dead to the mouse.....

I hope those that could care less about resale values continue to have a "happily ever after" life.

I don't agree. I think that changes in the ROFR policy, new resorts with a longer RTU and direct specials have affected prices which have been up and down starting with 9/11 which too was an emotional affect more than a true supply/demand issue.

IMO, it doesn't matter how long you've owned, what you paid or how much "value" one stands to lose. It is irrelevant to the underlying questions of whether DVC has the right to make the move, whether it was one that could have been anticipated as a risk and whether it's appropriate for them to do so. Again I say that DVD/DVC is not responsible for your or my resale value. ASAMOF, I've predicted changes along these lines several times over the years going back likely to 1999 or 2000 if my memory serves me correctly. IMO, it was inevitable and should have been put into place up front or early on. This has NOTHING to do with caring, or not caring, about resale value. I actually have a fairly large BWV contract I had planned to sell at some point. This is simply about realizing what the risks are and taking personal responsibility for my own actions rather than trying to put blame on other people or companies.

If you feel strongly about the issue, file legal action against them.

 

[Dean]

Using the logic of some folks here, when one purchases their DVC contract, we only get what's in writing. Fully agree...but that's not what is MARKETED. We can read a contract...that's not the point. Disney sets certain expectations and promotes them in their literature.

So, here is the question...what would be reaction if Disney exercised the full content of the Contract and forced ALL DVC members to only book at their Home Resorts. That's all that's in our Contracts. To all the defenders of this new policy, that would be a welcome "enhancement". Right? It's in the contract, so it's all we should expect.

What's marketed is the options available at the time with no legal promise that they will continue. As for home resort only, it is a risk but only if the resort pulls out of the club for some reason. Actually the parks themselves could close which would be far worse. Both are risks that are small. If either did happen I'm sure many wouldn't be happy but that's a different matter than assigning blame which would depend on specifics. Lets make it more real. Lets say that VB or HH was either sold off (management contract) or was destroyed by mother nature and it was decided not to rebuild. In either case one would immediately cease to be a member of the club and in the latter, might end up with nothing at all but max would likely get a few pennies on the dollar insurance coverages after expenses. In the former, main fees might go up or down but realities would certainly change dramatically.

Resale value has never been marketed. If a DVC Guide made any comments regarding resale value, obviously it was based upon his/her own impression of the current or future market.

And they could easily be in violation of the state law if they suggested one could profit in any way.

 

[Cmbar]

I guess I just don't understand these comments and criticisms. I respect that some are upset about what Disney did because they went in to it thinking that they could get some or all of their money back. Personally, I chose not to do that so I have no reason to be upset or mad at Disney.

I don't think it is all about "getting their money back". Please remember that for some they actually need to resell their points. For some it may be the un-disney like feel to it. It's about DVC being separated into two tiers of members. Some that are allowed certain benefits and some that are not.

Personally the only thing valuable outside of the 7 onsite DVC resorts is the Disney collection (DCL included)in my opinion. I wish they had gotten rid of RCI which is really useless . I am like most people here in that this does not affect me. It doesn't mean I don't feel for the others who this will impact and those that purchase in the future. For me, something doesn't have to impact me for me to have empathy for those that it does impact.

I feel that DVC is less value for ME because once again they have made changes that in my OPINION continue to denegrate the product. It doesn't matter whether they are in their right to. They can change everything but your points once you purchase them. They are totally in their right to not let you use a single point outside of your use year and force you to vacation in that year in the month or lose your points.

So I guess I don't understand the comments of "they can so it is ok that they do". They are within their right to do a lot of things that they didn't market. I know we aren't allowed to speak of the other changes on this thread, but there were changes that affected all members and this is just one more that says to me "we really don't care about our members".

I know some will say it is better they make a profit and the bottom line is the all important thing, but to me those things don't have a bit to do with our original purchase.

But almost all of the defenders say the same thing about this change: You bought to use at your home resort and you went into it with full buyer awareness. This doesn't affect you and you never believed what Disney was selling and such. Some say they don't care about resale, it shouldn't affect the value of our product because as a PP said, it is sentimental and priceless because of the emotional value it brings you

So whether the DVD system has a positive bottom line should not affect you anyways. Only thing that affects all of us directly is if they keep the resort we purchased open. What do I care if Disney sells more resorts if I am not guaranteed to be able to visit them anyways. I would be perfectly happy if they shut down DVD and just kept open the management company and we paid our dues (no matter how high, because they can do that to) and we have our 7 resorts at WDW. I don't care about HH or VB or Aulani or the California DVC. Doesn't affect me, wouldn't care to visit there, so I hope they get rid of them and such. But of course this is just my opinion. Most members wouldn't be happy without the "club" part of DVC. And quite honestly that is what most of us, (possibly not OKW owners) were marketed. I was NEVER told that I only have the rights to stay at BLT. Never. And I resent that once they have a boom in building and a downturn in the economy AND the Disboards spread the word that there is a resale market, that they start changing things to cut off the resale market. It just feels like a switch and bait and unfortunately this along with the other recent changes has caused me to recommend to others to not purchase DVC. Because we all have one thing in common. None of us knows what product will be left in the years that come.

Again just an opinion and I can't imagine having an opinion on something without actually having a feeling about it! And I wouldn't feel sad if Disney hadn't been Bad!

 

[disneymember2000]

I agree with those that said if this really bothers you, then you probably bought for the wrong reasons or did not research well. DVC is still the best buy on the timeshare market. After only 7 years, we have more than gotten our money's worth. If we could not sell for anything, ever, it would have been a good buy. I am for growth of the Disney Brand as it will enhance our experience for many more years to come.

 

[gkrykewy]

Well, as someone who has considered DVC from time to time, but never taken the bait, I can say I am much less likely to do so now. The ability to limit downside from the investment -- and get out of it -- has been materially damaged by the latest announcement, IMO.

Frankly, I see this as a way for Disney to limit its exposure on the right of first refusal. Even when we were considering DVC, I wondered how Disney could buy up every contract that went on the resale market in order to keep artificially propping up the price of points.

Well -- they just limited their ROFR exposure significantly. Now that they have created a two-tier owner system with resale contracts worth much, much less than they used to be worth, they do not need to spend nearly as many dollars as they did before to buy up resale contracts and keep stabilizing the price of DVC points. They may even stop exercising the ROFR since a resale points contract is a very different animal, now, from a contract purchased directly from DVC. It's two entirely different products (apples and oranges, really) -- so, if the price of a resale contract falls (as many timeshares have) to something like $1 per point (or less!), Disney may not even care anymore. So, no need to spend precious resources buying resale contracts.

I'm glad we decided not to buy and cannot imagine that we would ever consider a purchase after this latest action, which may end up being only the tip of the iceberg in terms of the contractual rights DVC has at its disposal for use in benefiting itself at the expense of its members.

Disney hasn't meaningfully exercised ROFR for years. The resale prices are essentially market prices.

 

[tjkraz]

So whether the DVD system has a positive bottom line should not affect you anyways. Only thing that affects all of us directly is if they keep the resort we purchased open. What do I care if Disney sells more resorts if I am not guaranteed to be able to visit them anyways. I would be perfectly happy if they shut down DVD and just kept open the management company and we paid our dues (no matter how high, because they can do that to) and we have our 7 resorts at WDW. I don't care about HH or VB or Aulani or the California DVC. Doesn't affect me, wouldn't care to visit there, so I hope they get rid of them and such. But of course this is just my opinion. Most members wouldn't be happy without the "club" part of DVC. And quite honestly that is what most of us, (possibly not OKW owners) were marketed. I was NEVER told that I only have the rights to stay at BLT. Never. And I resent that once they have a boom in building and a downturn in the economy AND the Disboards spread the word that there is a resale market, that they start changing things to cut off the resale market. It just feels like a switch and bait and unfortunately this along with the other recent changes has caused me to recommend to others to not purchase DVC. Because we all have one thing in common. None of us knows what product will be left in the years that come.

Problem is you aren't thinking big picture. If Disney Vacation Development isn't selling new points, they have no incentive to support the current program. The first thing to happen is member perks would disappear. Why bother giving $100 Annual Pass discounts to people who are already committed to visiting the parks? Dining discounts, spa discounts, free Internet...it would all go away.

And if the program doesn't have any future growth potential, I'm sure Disney would look at getting out of the timeshare management business. The next logical step would be to sell DVC to the highest bidder. DVC the management company, that is. There wouldn't be any property changing hands but owners could suddenly find themselves part of Wyndham or Bluegreen--competing with hundreds-of-thousands of other owners for the limited Disney availability at 7 months.

DVC points would become Wyndham points or some other. (Former) DVC owners would find themselves subject to VIP programs, housekeeping credits, reservation credits, trading fees and all of the other supposedly distasteful aspects of other timeshares. Other developers would have zero interest in ROFR. Resale values would fall completely off the map. Why bother buying Bay Lake Tower Wyndham points when you can get access to the WDW resorts by paying $100 for Wyndham Branson, MO on eBay.

Whether we realize it or not, we all WANT DVD to do well. New destinations, larger guest rooms, extra bathrooms, expanded occupancy levels, more attractive locations, new resort pools, new resort restaurants...all of those moves are primarily designed to sell more points. But fortunately even the class of '91 can benefit from those additions.

If the program suffers, ultimately we all suffer. And it's not too hard to envision scenarios like the above where resale values are much, much lower.

As for DVC expansion, destinations like Aulani, BLT and the Grand Californian may not appeal to YOU but they certainly help the system as a whole. Resale prices are all about supply and demand. The demand side of that equation can can only increase when they add new destinations. Building in locations like Hawaii, Washington DC or Lake Tahoe generates new interest in the program. People who once dismissed DVC due to the lack of at monorail resort or non-Disney destinations will suddenly see DVC as a better match. Ultimately that can only HELP resale prices.

I'm not thrilled with the decision but I have yet to come across an alternative which doesn't carry its own set of consequences.

DVC all but ceased ROFR activity in the last 1-2 years. That move had a MUCH more damaging impact on resale prices than this ever will. I find it increasingly ironic that we have 40+ pages of discussion on this policy change yet nobody batted the proverbial eye over the end to ROFR.