VDH Resale: The best contract no one wants?

[Stank]

VDH resale may be the most hated among the DVC portfolio, but for that will it be more appealing? Here’s what VDH resale has going against it:

- Restrictions
- Transient tax (and can’t escape as you’re restricted to VDH-only)
- High initial dues
- No guaranteed “free” parking

Although we’re many months away from VDH resale contracts appearing, they may be the variety no one wants—and all the reason to be interested in one.

The dues may be high initially, but the rate of increase will likely be lower. Within 3-5 years, VDH dues may be in line with peers. Transient tax is somewhat exaggerated—adding a few hundred bucks to a stay a year. The trade off may result in a heavily discounted VDH resale contract price.

A lot of “mays” and “maybes,” but perhaps all these drawbacks are a boon for resale buyers….or just lipstick on a pig…

 

[GoingSince1990]

My concern would be that VDH resale is such an unattractive product and the points will be worth so much more to Disney (who can resell them as direct, unrestricted points) than to private buyers, why would Disney not eventually start doing ROFR on every single VDH contract, causing the private resale market for those points to cease to exist?

 

[nalabear]

Resale still will happen in ROFR. Disney just becomes the buyer in that case and any further buyers will know need to bid higher to obtain the product.

If Disney can flip easily, why not?

 

[RoseGold]

Nah, resale is the obvious way to buy VDH, if you are trying to stay at DL. No one cares about the restrictions. This one is going to hold value like a used Honda. I don't think this is an unattractive product at all.

VDH dues separate out taxes, and none of the WDW do. Comparing their rates of increase doesn't make sense. It's possible separating this out makes dues grow slowly.

 

[Cfabar1]

This is going to hold value just fine. VGC is in essence a restricted resort and look at the points chart. Plus, I imagine the contracts will skew towards smaller point contracts given the smaller scale of DL vs WDW. Higher dues won’t have as much of an impact.

I imagine a lot of 100 point initial contracts are going to be sold here. Enough to go a couple times a year and stay in a studio for 1-3 nights.

Nice long weekend trips etc.

 

[NorCalFanatic]

.

 

[Stank]

Nah, resale is the obvious way to buy VDH, if you are trying to stay at DL. No one cares about the restrictions. This one is going to hold value like a used Honda. I don't think this is an unattractive product at all.

VDH dues separate out taxes, and none of the WDW do. Comparing their rates of increase doesn't make sense. It's possible separating this out makes dues grow slowly.

While this is true, it becomes arguing 1+1 vs 2+0 are different while it’s the same difference (or “addition?”)

Yes, VGC direct/resale are essentially restricted points regardless—it’s inefficient to use VGC points worth 2x most WDW resorts on WDW stays. However, VDH resale can only be used at VDH thus trapping you into the transient tax. At the same time, VGC owners pay the transient tax even if they stay elsewhere, but only VDH Direct can escape the tax if staying elsewhere.

So if VDH dues are $9 and the tax is $2.73/$3, as resale you’re at $12pp dues right off the bat. If Vero dues gives you heartburn and most dog on Vero, there’s a level of cognitive dissonance to say $12 isn’t the same as $12. High dues are high dues. Yes, VDH resale gets you Disneyland….with extremely high dues.

 

[DonMacGregor]

Taxes/balconies/parking are non issues for us. I really don’t get the hoopla about balconies. We get one at DLH in the frontier tower and if we’re high enough will watch the fireworks, but other than that, it’s not a big deal. We don’t drive in, or rent a car so parking isn’t an issue, and we’re already paying taxes in Anaheim and at Aulani.

Wait until some of these folks hear the fireworks echo between those towers. As it is with only three, the sound is deafening (like window rattling and car alarm triggering loud), and I'll bet a month of Dole Whips that no one will be out on their balcony to watch fireworks in the new tower either (at least not after the first minute or so).

 

[RoseGold]

While this is true, it becomes arguing 1+1 vs 2+0 are different while it’s the same difference (or “addition?”)

This is the kind of math I'd expect at the timeshare pitch. Labels on the costs (or "dues") matter when you are trying to estimate dues escalation increases based on percentage, which is what all of the serious math has always done.

DVC has never separated out such a major component of cost from the dues. Because most of the properties are in FL, this will make the DL calculations an outlier. So, of course the dues increase won't be the same as FL. They took out 1/3 of the dues and called them something else.

Aulani's transient tax is about .60/point, and Aulani had its own struggles, so it didn't matter much in this discussion. 2.73/point is a huge, huge difference.

Disney is monkeying with the math by doing this. Of course it will make the percentage go down, and DL's dues could increase slower than other properties. Or even not increase at all, if the tax is where it is increasing. This is good for owners, I would argue, especially if you aren't using your points in California, but it is a big departure for DVC in how cost is calculated. I am interested to see the presentation and how this is presented. I can see it working very well for Disney to show how "low" the dues are.

 

[nalabear]

This is the kind of math I'd expect at the timeshare pitch. Labels on the costs (or "dues") matter when you are trying to estimate dues escalation increases based on percentage, which is what all of the serious math has always done.

DVC has never separated out such a major component of cost from the dues. Because most of the properties are in FL, this will make the DL calculations an outlier. So, of course the dues increase won't be the same as FL. They took out 1/3 of the dues and called them something else.

Aulani's transient tax is about .60/point, and Aulani had its own struggles, so it didn't matter much in this discussion. 2.73/point is a huge, huge difference.

Disney is monkeying with the math by doing this. Of course it will make the percentage go down, and DL's dues could increase slower than other properties. Or even not increase at all, if the tax is where it is increasing. This is good for owners, I would argue, especially if you aren't using your points in California, but it is a big departure for DVC in how cost is calculated. I am interested to see the presentation and how this is presented. I can see it working very well for Disney to show how "low" the dues are.

Showing how low those nearly DVC leading $9+ MFs are from the get go, right? This is move to 'hide' the costs in plain sight.

The budget shared costs of the pool and management is probably huge - only budget report comes out will we see in end of year. Regardless, VDH is a high cost product and will be very interesting to see how sustained sales occur 30+days out.

 

[HappyThoughtsTees]

VDH resale may be the most hated among the DVC portfolio, but for that will it be more appealing? Here’s what VDH resale has going against it:

- Restrictions
- Transient tax (and can’t escape as you’re restricted to VDH-only)
- High initial dues
- No guaranteed “free” parking

Although we’re many months away from VDH resale contracts appearing, they may be the variety no one wants—and all the reason to be interested in one.

The dues may be high initially, but the rate of increase will likely be lower. Within 3-5 years, VDH dues may be in line with peers. Transient tax is somewhat exaggerated—adding a few hundred bucks to a stay a year. The trade off may result in a heavily discounted VDH resale contract price.

A lot of “mays” and “maybes,” but perhaps all these drawbacks are a boon for resale buyers….or just lipstick on a pig…

I wouldn't say the transient tax is exaggerated. We are VGC owners and typically visit in June for 5 nights in a 2 bedroom Sun-Th which is 260 points. VDH points charts ups that stay to 325 points, and $885 in transient tax. Oof.

 

[sethschroeder]

Transient tax is somewhat exaggerated

Ya no it's not....

 

[NVDISFamily]

Ya no it's not....

My recent stay at VGC would have cost 2,255.31 in taxes at VDH. My desire to buy VDH has fallen off a cliff...

 

[buzlite]

Originally seeing the pricing and restrictions I was a hard no. But I remembered that as an owner I can do a small add on.
I am really considering adding on a small 25-50 point contract. Enough for 2 nights in a garden studio every other year. This seems to be the sweet spot. Use them for WDW and avoid the tax or use them at DLR and pay the transiency tax. The other option might be to just rent. TBH those Grand Villas look amazing and will be definitely on my list. (175 points at VGF current) At 104 points per night we might do 2 nights their for a big group trip. Especially since it's closer for us west coast people.
200 points per year might be the sweet spot. If they offered a points buy back deal for VDH for small contracts I would jump on that so fast you wouldn't be able to say fast pass.