The new resale rule: The Empire Strikes Back

[tjkraz]

Yeah, well, my disappointment in their growth rate starts with announcing SSR - that increased the supply beyond my own comfort level. Of course they've scaled back with the recession, but they built under the assumption that the economy would not do this - the same sort of assumption that some of us made with "resale values won't plummet." IMHO, they should have scaled back sooner.

They looked at the revenue immediately generated - timeshare sales has a fantastic ROI for them - and I don't think they bothered to look beyond the three year plan for "what happens 12 years out if gas is $10 a gallon?" What happens when the resale market with ordinary turnover gets X large? Stock options for executives are way to short term for my taste.

I'm not sure how they could have justified scaling back prior to the economy going south. We could probably wag a finger at DVC over the plethora of sales kiosks in the parks and resorts. But beyond that the product pretty much sold itself.

If you recall, there was even a period in late 2008 / early 2009 where DVC went almost a year with no inventory readily available to sell. Saratoga Springs had sold out the original 18 buildings and AKV Jambo was also gone. All they had were pre-sales of AKV Kidani and BLT which were both nearly a year away from opening. I would imagine it's pretty difficult to get someone to commit to a $20k purchase, only to reveal that they can't use the points for a year.

Granted hindsight is 20/20 but with construction lead times of 2.5 - 3 years, everyone was working from reasonable approximations of what sales would look like for perhaps a decade into the future.

It just wouldn't have made sense to create a business plan which recent sales trends showed was likely to leave them with no active inventory to sell, on the assumption that some economic crisis would erupt during that specific timeframe.

 

[Dean]

Am I missing something here? I would think the DVC re-sale market is what keeps DVC alive. What if people just simply dropped out and stopped paying their maintenance, etc.? Is there really enough direct, new contract demand to keep the system printing money for Disney? Maybe there is given the new direction Disney is taking on re-sale vs. direct. We'll see after March 20th.

That doesn't hurt DVD (sales) but might hurt DVCMC (management) and the members temporarily. They'd just take the account over and those points couldn't be used in the interim.

I thought the only thing that was contractually guaranteed was a one month booking advantage. If so, what would stop them from doing this? Couldn't they change the booking window to 11 month at your home resort, 10 months for other DVC for direct buyers, 7 months for other DVC for resale buyers? Is it that it would only apply to new purchases in the original question and not all direct buyers? Or do I not understand the current process correctly?

It is my opinion they could not legally make different rules for different members for reservations either at a home resort or within the current club. I do not think they could legally segregate resale and retail for club and home resort reservations.

How true -Remember the big Valet Parking change ,when I purchased this was a perk -By the time I had my first stay ,they had done away that perk-
Although many members voiced their " feelings" wrote emails and complained -it didn't matter

Nor should it have mattered. The only realistic decision given the specifics of the valet parking options was to do away with it.

I HAVE read every post about this topic just like you. I still find it hard to believe that people don't care about this.

This isn't about me or obeying me, it is about all members. I have been a member for a number of years and did research the purchase extensively. Resale values have held steady with ups and downs associated with the economy and supply and demand not DVC rule changes.

It may be a good decision for Disney and that's great for them......but it was at the expense of its members. A company is only as good as the customers that support them. Without them, they are nothing.

IMO, it's irrelevant whether members care or not or if they are affected in a negative way. It is a reasonable change given the realities in timesharing and it was predictable.

Your blanket defense of Disney in this matter is troubling. Your distorting the truth in their defense. Although you bring up what is in the contract as binding and the whole truth "which I agree it is legally" the substance of what you left out is whats important. Many people go down to Disney and take the tour and hear all about this wonderful DVC membership. "I will qualify that the phone guides do the same". When the Sales "liars" are done and they get your money will you deny what exactly they told you comes with this membership? On first contact with my "direct" guide some of the first things he touted are the banking and borrowing along with the ability to stay at ANY DVC resort. I dont know of ANY member who on day one while thinking about purchasing was provided a "contract" in its entirety to read... "Hell, im well within my process and I have yet to see one".

I remember from my law classes and according to local laws anyway that a verbal contract does have some weight and if this was to be changed in that manner I would be the first to seek out an attorney and file a class action lawsuit against Disney. The way Disney is selling these is borderline deceptive if that is the case. I know I have NEVER received a disclaimer from a guide I talked to.

If you willing to just roll over and play dead while Disney does what they want without a fight after you have dished out so much money is saddening. They made this change, if you dont at least make your opinion known to them they will consider doing anything they want in the future to devalue your investment. scenarios like this have happened throughout history where a leader starts small all of a sudden all freedoms are taken away.

Every buyer signs that verbal representations are not binding and every resale buyer assumes the same responsibilities as the original buyer. While the perks available at the time may be touted, they are not guaranteed and that too is covered in the POS.

 

[Dean]

Please remember that you as a direct buyer may too become a resale seller someday......life has many unknowns. I hope that life continues to treat you well.

True but irrelevant in this discussion. DVC still will have the best resale option overall compared to other timeshares.

All our points are direct, still think this is wrong, they are making a subclass of members and that can't be right.

It's a reality of life everywhere you turn. IMO, one who can't stomach the process shouldn't participate. It's a little like politics, you have to hold your nose in some situations.

 

[Eric Julie and Hailey]

Well, I guess I got what I wanted: This is certainly a spirited discussion about the change.

I suppose DVC can do it - otherwise they wouldn't be doing it. It just feels wrong to me. The message I get from this move by DVC is "we will step on you when and if we can." Good business? Possibly.

I agree with the other posts that talk about this likely being the first of many such moves. However, if they keep doing this sort of thing -- some of us will get LOUD!

And, yes, I bought to use my points. And, yes, I will continue to do so. I just didn't want to let this decision go by quietly!

There will be a peaceful demonstration on Main Street in the MK just prior to the afternoon parade tomorrow.... Or, that may just be guests waiting for the parade. You decide!

 

[DVC92]

Are resale buyers after 3/20 being charged maintenance fees for member services that are necessary to make reservations for the perks they will not have access to? Also, don't the maintenance fees pay for the printing of our yearly vacation planners which include numerous pages relating to these benefits? If this is in fact the case, I think it only fair that the resale buyers have a reduced yearly maintenance fee.

 

[Sammie]

Are resale buyers after 3/20 being charged maintenance fees for member services that are necessary to make reservations for the perks they will not have access to? Also, don't the maintenance fees pay for the printing of our yearly vacation planners which include numerous pages relating to these benefits? If this is in fact the case, I think it only fair that the resale buyers have a reduced yearly maintenance fee.

Good luck with that. We all pay dues on things we do not use.

 

[bicker]

All our points are direct, still think this is wrong, they are making a subclass of members and that can't be right.

Of course it can be. Service providers do something even more remarkable all the time, these days: They offer the same level of service to brand-new customers for a lot less money than they charge old customers, who don't upgrade to a higher level of service.

This sort of disconnect happens a lot, with people mistaking their own personal antipathy for what someone else is doing with "wrongness". All they have to say is, "I don't like it," and move on. Personal disappointment is worthy enough to share with others; there is no need to try to make it sound like something more important than it is.

 

[RobDoc]

Are resale buyers after 3/20 being charged maintenance fees for member services that are necessary to make reservations for the perks they will not have access to? Also, don't the maintenance fees pay for the printing of our yearly vacation planners which include numerous pages relating to these benefits? If this is in fact the case, I think it only fair that the resale buyers have a reduced yearly maintenance fee.

Members using the Disney Collection, Concierge Collection and Adventurer Collection programs must pay a $95 transaction fee for that benefit. Resale purchasers after March 20 won't have that burden like other members. IMO an argument could be made that the $95 is a "user" fee bearing the cost of those programs.

 

[Dean]

Are resale buyers after 3/20 being charged maintenance fees for member services that are necessary to make reservations for the perks they will not have access to? Also, don't the maintenance fees pay for the printing of our yearly vacation planners which include numerous pages relating to these benefits? If this is in fact the case, I think it only fair that the resale buyers have a reduced yearly maintenance fee.

The fees don't pay for those perks, DVD does. However, to take your idea a little further, some members cost the system inherently more than others. Some call a lot, some use the amenities on site a lot and some barely at all, small point members are more costly by % than large point members (on average), some use the free internet, some don't, etc. So the idea that everyone only pay for what they get is simply wrong. A timeshare must balance spreading the costs to all members vs pay to play based on the inherent cost, % of guests that use a given option, expectations of members and guests and the feasibility of doing pay to play for a given option. Valet parking is a perfect example. It was previously free and now it was going to be full price, benefit a small segment of the membership, is not an expectation of reasonable people and is simple/easy to do pay to play. In addition it would have had to be paid by only members at the applicable resorts instead of the entire membership.

 

[Havana]

Are resale buyers after 3/20 being charged maintenance fees for member services that are necessary to make reservations for the perks they will not have access to? Also, don't the maintenance fees pay for the printing of our yearly vacation planners which include numerous pages relating to these benefits? If this is in fact the case, I think it only fair that the resale buyers have a reduced yearly maintenance fee.

It was my first reaction to think that way also.
But we have to remember: Maintenance fees are the annual costs members pay to provide the usual services at the resort. Things like; landscaping, housekeeping, grounds maintenance, lifeguards, etc. fall into this category.

 

[going/again]

yet again relate it to buying a used car. Many dealerships now will pre certify a used car and provide additional warranties. If you buy from a used car lot or an independent seller, the price maybe less but so are the benefits

You think its ok I dont, if they make a change that affects direct owners.

A lot on here may feel differant, say like many have said own resort only, I would say great, you may not like that its all in each of our own opinion

 

[Dean]

You think its ok I dont, if they make a change that affects direct owners.

A lot on here may feel differant, say like many have said own resort only, I would say great, you may not like that its all in each of our own opinion

As long as they keep their contractual obligations I'll be comfortable. That doesn't mean I'll be happy with everything that could happen. For example, if DVCMC sold the management contract to all or even my owned resorts and Disney closed the resorts, I wouldn't have much reason to own. Even then those issues are known risks that anyone should have considered before buying and should realize they are currently real risks though unlikely scenarios. Sure I'd prefer more for less but one must be realistic and know what's off limits and what's not. That some put blind faith in thinking "Disney was different" whatever that means (we'd all have a different defintion), was an error in judgement on the part of the buyer.

 

[Chuck S]

Are resale buyers after 3/20 being charged maintenance fees for member services that are necessary to make reservations for the perks they will not have access to? Also, don't the maintenance fees pay for the printing of our yearly vacation planners which include numerous pages relating to these benefits? If this is in fact the case, I think it only fair that the resale buyers have a reduced yearly maintenance fee.

Actually, when you make a trade outside the DVC resort system there is a $95 surcharge. They have never really explained the actual function of that fee, but suffice it to say the official line will be that the $95 pays for the extra reservation paperwork.

As far as the vacation planners, it is likely far cheaper to pay for a standard planner that goes to all guests, rather than trying to print multiple type of planners. In fact, I'd just as soon see no planners mailed out at all, the info is all available on the member website. I browse through the planner when it arrives, then never use it again.

 

[DVC92]

The fees don't pay for those perks, DVD does. However, to take your idea a little further, some members cost the system inherently more than others. Some call a lot, some use the amenities on site a lot and some barely at all, small point members are more costly by % than large point members (on average), some use the free internet, some don't, etc. So the idea that everyone only pay for what they get is simply wrong. A timeshare must balance spreading the costs to all members vs pay to play based on the inherent cost, % of guests that use a given option, expectations of members and guests and the feasibility of doing pay to play for a given option. Valet parking is a perfect example. It was previously free and now it was going to be full price, benefit a small segment of the membership, is not an expectation of reasonable people and is simple/easy to do pay to play. In addition it would have had to be paid by only members at the applicable resorts instead of the entire membership.

As to the $95 transaction fee, does the money go to DVD or DVC?

Further, simply because a member doesn't use a particular perk, the right to use it exists. New resale buyers don't have that option.

 

[disneynutz]

As to the $95 transaction fee, does the money go to DVD or DVC?

Further, simply because a member doesn't use a particular perk, the right to use it exists. New resale buyers don't have that option.

I don't know if members really know what money goes where and many Disney employees don't even know.

Disney deliberately doesn't provide detailed information and if you ask specific question face to face with Disney Management, they don't answer the question and state that they will get back to you which they never do. I am still waiting for answers from questions that I had at the member meeting in 2009.

I was told by our Guide that the Paddock Pool rebuild is being paid 100% by Disney. I was told by a Disney DVD Manager that the money is coming from the SSR Capital fund that Members pay for.

Bill

 

[bicker]

If you believe that they're doing something illegal, there are measures you can take to force them to prove that they're not doing anything illegal, but you do have to be willing to "put your money where your mouth is", so-to-speak.

 

[Dean]

As to the $95 transaction fee, does the money go to DVD or DVC?

Further, simply because a member doesn't use a particular perk, the right to use it exists. New resale buyers don't have that option.

Pays for the exchange system is my understanding

 

[huey duey & luey]

You think its ok I dont, if they make a change that affects direct owners.

A lot on here may feel differant, say like many have said own resort only, I would say great, you may not like that its all in each of our own opinion

don't necessarily think it is right, just that it's not unusual.
Like any company out there Disney is going to try to do something to attract buyers. They aren't going to compete with prices, so they will add/reduce perks or offer specials. Done all the time,just not sure why everyone is so surprised

 

[bicker]

don't necessarily think it is right, just that it's not unusual.
Like any company out there Disney is going to try to do something to attract buyers. They aren't going to compete with prices, so they will add/reduce perks or offer specials. Done all the time,just not sure why everyone is so surprised

You are 100% correct, of course, about what you're saying about Disney. With regard to why some people are "surprised" (i.e., trying to assign fault, instead of just expressing disappointment), I think what's going on is that it is easier for people to slough off the negative feelings associated with disappointment if they can channel those negative feelings into anger and indignation, even if there is no legitimacy to the blame they assign.

 

[jsivigny]

You are 100% correct, of course, about what you're saying about Disney. With regard to why some people are "surprised" (i.e., trying to assign fault, instead of just expressing disappointment), I think what's going on is that it is easier for people to slough off the negative feelings associated with disappointment if they can channel those negative feelings into anger and indignation, even if there is no legitimacy to the blame they assign.

Good post...but I think it's legitimate for people to be ticked off to see a de-valuation in their fiscal net worth. Pick whatever word you choose...disappointment, anger, surprise. Pretty normal reaction, especially in the context of the "what will come next" discussion. Classic incrementalism. Disney can't get what they want up front, so they do a little at a time. I don't blame Disney (I am an unabashed Capitalist) for maximixing profits (I own Disney stock), but given the branding they sell, I am surprised, since Disney generally tries not to anger their customers...it's just bad business to anger/disappoint/surprise customers, especially long term ones that bought into DVC.

I also think this is bad business because I don't think Disney will achieve their goals of increasing up front sales/maintaining current and future price points. Time will tell, but a sinking tide lowers all boats. By reducing their perceived value for their product in the Aftermarket, they've just gone down the road of US Car manufacturers. Who wants to buy a car that drops 30%+ in value right off the lot, when you can buy a Honda that keeps much more of its resale value over the course of it's useful life. Instead of going negative, they could have added perk(s) to Direct sales instead of negatively targeting Resale perks. Would have been a less bitter pill to swallow and better business...But hey, Disney makes good money(yeah!!!, stock just went over $40/share) and their Marketing group is top notch. I'm sure the focus groups they used all gave them top grades on this idea