Wanting Riviera but not its resale restrictions

[HIRyeDVC]

What should be a major concern for DVC management is the percent of direct points at RIV compared to total sold. For May it was 44% and for June 48%, so customers are preferring the shorter terms of existing resorts to RIV. Listen, RIV looks beautiful, has the Skyliner to 2 parks and should be selling at 100,000 points per month, but is not. So, the resale restrictions are playing a roll. My feeling is DVC has become stubborn and does not want to admit they made a mistake. What will really be interesting is when GFV2 goes on sale, only offering studios, if it will outsell RIV. Now that will be a real eyeopener.

I think the biggest problem for Riviera is that it’s to expensive (points chart and dues) for the average family so the slower sales rate makes sense. Disney is now catering to a different socio-economic demographic who are far less people than your usual middle-class family that might have purchased DVC in the past. Sure resale restrictions are definitely playing a part. Heck, it also drove me away earlier this year and pushed me to buy Copper Creek direct instead. I think Disney consciously made this decision to cater more to the wealthy and I don’t think they’re going to look back. I agree that VGF2 will out sell Riviera which will not look good for Disney. Heck, DLT that doesn’t come out until 2023 will probably out sell Riviera. I think there will be some sweeter incentives for the Riviera in a year or two. Or maybe Disney will jack up direct pricing for VGF2 and DLT to make Rivera look more enticing. So excited to see what will happen!

 

[Paul Stupin]

I think the biggest problem for Riviera is that it’s to expensive (points chart and dues) for the average family so the slower sales rate makes sense. Disney is now catering to a different socio-economic demographic who are far less people than your usual middle-class family that might have purchased DVC in the past. Sure resale restrictions are definitely playing a part. Heck, it also drove me away earlier this year and pushed me to buy Copper Creek direct instead. I think Disney consciously made this decision to cater more to the wealthy and I don’t think they’re going to look back. I agree that VGF2 will out sell Riviera which will not look good for Disney. Heck, DLT that doesn’t come out until 2023 will probably out sell Riviera. I think there will be some sweeter incentives for the Riviera in a year or two. Or maybe Disney will jack up direct pricing for VGF2 and DLT to make Rivera look more enticing. So excited to see what will happen!

I think VGF2 and Riviera will be similarly priced. They’re going to want to sell the former as much as the latter. The value/studio crowd for whom VGF2 is being built won’t buy in if it’s too expensive.

 

[AvidDisReader]

I think VGF2 and Riviera will be similarly priced. They’re going to want to sell the former as much as the latter. The value/studio crowd for whom VGF2 is being built won’t buy in if it’s too expensive.

Now I am saying this is fact, but from my reading VGF2 is going to be part of the original VGF. If this means that the contract expiration date is the same as VGF or 2063 if my math is correct, people are buying these "new" points with 41 year expiration date (not 50 years). So what will be the price of these new contracts base on a 41 year contract. Just food for thought.

 

[havoc315]

I like Riviera, and if I loved it, I’d consider buying direct, but I don’t think you can minimize the significance of the resale restrictions.

1. No one really knows where the Riviera resale price will settle in a few years

Nobody knows the resale value of any location in a few years. But we can look at current, and resale value of Riviera is holding up quite well. It's not going to drop from $140 to $14 in a few years.

2. I agree about the eroding value of BCV and BWV, but there are those who argue otherwise. If you know that you’re buying 12 years of vacations in 2030 at either resort, and crunch the numbers, I bet they will still be a good value. That said, personally, I wouldn’t own there.

It's very easy to crunch numbers once you have a limited number of years left. It's cost vs rental. If you're not saving money versus renting points, the price point would not be rational. And we are already getting there --- So it's pretty easy to see how the re-sale prices will rapidly drop on these properties.

3. When VGF2 goes on sale later this year, it will probably be priced within the same range, or the same as, Riviera, probably with zero resale restrictions. That sounds like a better value.

We will see. I wouldn't rule out the resale restrictions, an unknown right now. I suspect it will be priced higher, but again, we will see.

4. Not everyone books studios. My wife and I stay in one bedrooms, which are easier to book at seven months

But lots of people do stay mostly/entirely in studios. So there is a huge market for whom the 7-month availability has very little relevance. So the way you would use your direct points is irrelevant to your ability to re-sell it. You can re-sell to someone who primarily books studios.

5. Future resorts. Hmm. What future resorts? There’s VGF2, which will be a good option. I love VGF and it’s one of our home resorts. Not counting the Disneyland Tower 3000 miles away,

Why wouldn't you count Disneyland Tower??? I'm using my points at Aulani next year. When I'm at WDW, Riviera is the only resort I want to stay at. But I do want to use my points at other far away resorts (which is why I buy direct).
There will be MULTIPLE new properties over the next 20 years. Not just the Tower and then nothing new. Disney builds a new property every 3-5 years. There are already rumors about another monorail property. Reflections property will eventually be used.

15 years from now, there will likely be 4-5 resorts where you can't use O14 re-sale points.

6. I think calling Riviera an Epcot area resort isn’t exactly true. I love the entire Crescent Lake vibe, and the boardwalk, and all the fun activity. There’s none of that at the Riviera. And though I haven’t timed it, I’d bet it’s about a half hour in travel time from one’s room at the Riviera to the Epcot Gate. It’s a fun journey on the skyline, but it’s still a journey.

It's faster to get from Riviera to Epcot than to get from Epcot from Swan/Dolphin. It's faster to get to DHS from Riviera than to get there from BC/YC.
So, if you want the ability to get to both Epcot and DHS is under 20 minutes on Disney transportation, Riviera may be the only DVC option with long term viability.

 

[brazzledazzler]

We will see. I wouldn't rule out the resale restrictions, an unknown right now. I suspect it will be priced higher, but again, we will see.

I agree with all the points you made! And I’m glad someone else is highlighting the ambiguity of future resale restrictions at VGF2. Personally, I just assume there will be resale restrictions on all new DVC properties (even extensions) moving forward. It’s a new era and I imagine they are already planning for how to manage changes to come in 2042. I also think there is a major push to make direct sell better and eventually end the SAP mentality.

 

[Paul Stupin]

Now I am saying this is fact, but from my reading VGF2 is going to be part of the original VGF. If this means that the contract expiration date is the same as VGF or 2063 if my math is correct, people are buying these "new" points with 41 year expiration date (not 50 years). So what will be the price of these new contracts base on a 41 year contract. Just food for thought.

They'll be priced similar to Riviera

 

[Paul Stupin]

I agree with all the points you made! And I’m glad someone else is highlighting the ambiguity of future resale restrictions at VGF2. Personally, I just assume there will be resale restrictions on all new DVC properties (even extensions) moving forward. It’s a new era and I imagine they are already planning for how to manage changes to come in 2042. I also think there is a major push to make direct sell better and eventually end the SAP mentality.

They've said that VGF2 will be part of the VGF condo association, which means there will not be resale restrictions.

 

[havoc315]

I agree with all the points you made! And I’m glad someone else is highlighting the ambiguity of future resale restrictions at VGF2. Personally, I just assume there will be resale restrictions on all new DVC properties (even extensions) moving forward. It’s a new era and I imagine they are already planning for how to manage changes to come in 2042. I also think there is a major push to make direct sell better and eventually end the SAP mentality.

I suspect all "new" DVCs will have resale restrictions. VGF2 might be different, depends on the legal maneuvering in light of the fact that it is adding to an existing association.

 

[havoc315]

They've said that VGF2 will be part of the VGF condo association, which means there will not be resale restrictions.

"They've said" is pretty meaningless until we see something more concrete. We know they are always adjusting plans.
Even if kept in the same condo association, it doesn't guarantee there wouldn't be re-sale restrictions. Such restrictions are contract based, not association based. Just like they can change price, they can change other things. The extent to which they can change re-sale restrictions, isn't that clear. Unquestionably -- they CAN make the change, but it's a question of HOW. Just like they were able to offer OKW owners an extension of their contracts using quit claims. There are definitely things that can be done to make changes. Whether easy or hard, whether Disney would make those changes, that's less clear.

 

[brazzledazzler]

I suspect all "new" DVCs will have resale restrictions. VGF2 might be different, depends on the legal maneuvering in light of the fact that it is adding to an existing association.

I’m sure a Florida real estate lawyer familiar with timeshare property interests could shed light on the possibility of resale restrictions of new property under the same condo association. I just assume there is a larger plan at play for the future of DVC, and resale restrictions are part of it.

 

[brazzledazzler]

"They've said" is pretty meaningless until we see something more concrete. We know they are always adjusting plans.
Even if kept in the same condo association, it doesn't guarantee there wouldn't be re-sale restrictions. Such restrictions are contract based, not association based. Just like they can change price, they can change other things. The extent to which they can change re-sale restrictions, isn't that clear. Unquestionably -- they CAN make the change, but it's a question of HOW. Just like they were able to offer OKW owners an extension of their contracts using quit claims. There are definitely things that can be done to make changes. Whether easy or hard, whether Disney would make those changes, that's less clear.

Exactly!

For me, I don’t understand why Disney would roll out resale restrictions on RIV, then backtrack that on future DVC construction. I think that restrictions are the new norm, thus, going forward, buy where you want to stay.

 

[Paul Stupin]

Nobody knows the resale value of any location in a few years. But we can look at current, and resale value of Riviera is holding up quite well. It's not going to drop from $140 to $14 in a few years.



It's very easy to crunch numbers once you have a limited number of years left. It's cost vs rental. If you're not saving money versus renting points, the price point would not be rational. And we are already getting there --- So it's pretty easy to see how the re-sale prices will rapidly drop on these properties.



We will see. I wouldn't rule out the resale restrictions, an unknown right now. I suspect it will be priced higher, but again, we will see.



But lots of people do stay mostly/entirely in studios. So there is a huge market for whom the 7-month availability has very little relevance. So the way you would use your direct points is irrelevant to your ability to re-sell it. You can re-sell to someone who primarily books studios.



Why wouldn't you count Disneyland Tower??? I'm using my points at Aulani next year. When I'm at WDW, Riviera is the only resort I want to stay at. But I do want to use my points at other far away resorts (which is why I buy direct).
There will be MULTIPLE new properties over the next 20 years. Not just the Tower and then nothing new. Disney builds a new property every 3-5 years. There are already rumors about another monorail property. Reflections property will eventually be used.

15 years from now, there will likely be 4-5 resorts where you can't use O14 re-sale points.



It's faster to get from Riviera to Epcot than to get from Epcot from Swan/Dolphin. It's faster to get to DHS from Riviera than to get there from BC/YC.
So, if you want the ability to get to both Epcot and DHS is under 20 minutes on Disney transportation, Riviera may be the only DVC option with long term viability.

I think we'll just disagree on this one!

1. Riviera is just too new to come to a conclusion that the resale value is holding up.

2. Your argument re seven month availability seems to be based exclusively on studios. Yes, a lot of folks book them, but a lot of folks book one, two, three bedrooms, cabins, bungalows, and grand villas. Many folks who stay primarily in studios will bank or borrow to splurge on a one bedroom. And, yes, I guess you can resell your direct contract to someone who only wants to use it to book studios at Riviera, but thats certainly limiting your pool of available buyers, right? And a limited pool of buyers means a lower resale price. The fun of a dvc contract for any resort, except Riviera, is trying out all the resorts, which buyers can still do, depending upon the time of year. Sure, studios are challenging at 7 months, but they're not impossible.

3. Agree re Disneyland Tower. I was just assuming that most people who buy want to stay primarily in Orlando, but everyone will want the Disneyland Tower as well. That's pretty much the only new resort, two to three years down the line, you'll be able to book. And I think Disney might very well revive Reflections, or something like it, in two or three years. So, in 5-7 years, resale Riviera buyers will have two other options. Maybe three? Buyers of other contracts will have 14.

4. Good points re travel time to Epcot and DHS. Though I actually do love the Riviera, I still don't love its location. However convenient the skyline is (and it is convenient!) that patch of land by Caribbean Beach, for me, just isn't Crescent Lake.

As I said, Riviera is a good resale buy for existing owners looking to add on, or folks who only want to stay there and nowhere else.

 

[Brian Noble]

What should be a major concern for DVC management is the percent of direct points at RIV compared to total sold.

There are a LOT of things that are different about this past May and June compared to other years, not just the fact that the primary on-property resort happens to be RIV with resale restrictions.

For example, it is entirely possible that sales of "sold out" resorts are being driven by people who (a) are adding on or (b) were already actively in the market and (c) are not visiting WDW in person as part of the sales process. As we've seen in other segments, the upper, say, 20% of the socio-economic ladder has a lot of extra cash to burn coming out of the pandemic, and a fierce desire for travel. On the other hand, it is very likely that the tour flow volume for on-property DVC sales is down significantly over May/June '19, between park capacity restrictions and the fact that several WDW resorts that would normally be full remain closed. And, that tour flow is what generates the bulk of sales for whatever resort happens to be on the lips of the DVC Guides at the moment.

More broadly: If I'm in management for any travel business, I am not using Q2/Q3 of 2021 as indicative of anything in particular going forward, either as a basis of concern or celebration, for a variety of reasons.

Aulani [...] the property itself and the location are spectacular.

The property sure is, but the location is arguable, IMO. Oahu is probably the first island most tourists visit, but it's probably not the island the come back to the most frequently. Then, take Aulani's relative isolation vs. Waikiki, the North Shore, etc. etc. and it's certainly not my first choice of locations on what is not my first choice of islands. The Ko Olina lagoons still aren't fully built out IIRC, and the Marriott has been there for how long now?

This pattern of sub-standard location has been repeated over and over by Disney's non-park resorts. Vero is too far north to really be a prime year-round destination. HHI is on the wrong side of the road vs. the ocean.

 

[HIRyeDVC]

As the title of this thread says, I’m wanting Riviera but I’m REALLY hating my resale restrictions. I currently booked my trip for August using direct points. I saw some Riviera rooms open up this morning but the only way I could book is to cancel my current reservations to free up my direct points, and rebook some of my old reservations with my resale points, and hope book Riviera, if its still even available by the time I do all that. What a headache! I l need start looking at dumping all my resale points in the next 10 years and just buy direct to avoid this complexity.

 

[Paul Stupin]

"They've said" is pretty meaningless until we see something more concrete. We know they are always adjusting plans.
Even if kept in the same condo association, it doesn't guarantee there wouldn't be re-sale restrictions. Such restrictions are contract based, not association based. Just like they can change price, they can change other things. The extent to which they can change re-sale restrictions, isn't that clear. Unquestionably -- they CAN make the change, but it's a question of HOW. Just like they were able to offer OKW owners an extension of their contracts using quit claims. There are definitely things that can be done to make changes. Whether easy or hard, whether Disney would make those changes, that's less clear.

You’re right, of course. But if Disney perceives the resale restrictions as hindering Riviera sales, this gives them an opportunity to sell a “new” property without them, without having it appear as if they’re changing policy…which would justifiably anger owners at Riviera..

 

[Paul Stupin]

There are a LOT of things that are different about this past May and June compared to other years, not just the fact that the primary on-property resort happens to be RIV with resale restrictions.

For example, it is entirely possible that sales of "sold out" resorts are being driven by people who (a) are adding on or (b) were already actively in the market and (c) are not visiting WDW in person as part of the sales process. As we've seen in other segments, the upper, say, 20% of the socio-economic ladder has a lot of extra cash to burn coming out of the pandemic, and a fierce desire for travel. On the other hand, it is very likely that the tour flow volume for on-property DVC sales is down significantly over May/June '19, between park capacity restrictions and the fact that several WDW resorts that would normally be full remain closed. And, that tour flow is what generates the bulk of sales for whatever resort happens to be on the lips of the DVC Guides at the moment.

More broadly: If I'm in management for any travel business, I am not using Q2/Q3 of 2021 as indicative of anything in particular going forward, either as a basis of concern or celebration, for a variety of reasons.


The property sure is, but the location is arguable, IMO. Oahu is probably the first island most tourists visit, but it's probably not the island the come back to the most frequently. Then, take Aulani's relative isolation vs. Waikiki, the North Shore, etc. etc. and it's certainly not my first choice of locations on what is not my first choice of islands. The Ko Olina lagoons still aren't fully built out IIRC, and the Marriott has been there for how long now?

This pattern of sub-standard location has been repeated over and over by Disney's non-park resorts. Vero is too far north to really be a prime year-round destination. HHI is on the wrong side of the road vs. the ocean.

The relative isolation from Waikiki is a positive for us, and Aulani is a bit closer to the North Shore, I think, than Waikiki. If you want to be in the heart of the tourist hub, though, it’s definitely not for you.

 

[havoc315]

2. Your argument re seven month availability seems to be based exclusively on studios. Yes, a lot of folks book them, but a lot of folks book one, two, three bedrooms, cabins, bungalows, and grand villas. Many folks who stay primarily in studios will bank or borrow to splurge on a one bedroom. And, yes, I guess you can resell your direct contract to someone who only wants to use it to book studios at Riviera, but thats certainly limiting your pool of available buyers, right? And a limited pool of buyers means a lower resale price.

Yes, it can have an effect on the re-sale price. But it's MOST people who book the studios primarily. So most of the marker is unaffected. Check the 7-month mark -- typically there are 1-BRs, cabins, bungalows, etc, available. It's the studios that are almost always gone, even though studios greatly outnumber all of the other units.

So yes, the re-sale market might be slightly more limited. But should that really deter someone -- If Riviera is their first choice of a new direct purchase right now, should they really be worried that in 10 years, there is a chance that the re-sale value might be 5% less than some of the other resorts?

The fun of a dvc contract for any resort, except Riviera, is trying out all the resorts, which buyers can still do, depending upon the time of year. Sure, studios are challenging at 7 months, but they're not impossible.

??? You are contradicting yourself. If you buy resale, then you can NOT try ALL THE RESORTS. Period. You can't do that with a re-sale Riviera contract, you can't do that with a re-sale contract from any resort. A re-sale BLT contract won't let you stay at Riviera, Disneyland Tower, or the other new resorts that is built in the future.

So if the fun is to stay at all resorts -- then you need to buy direct.
If you're okay being limited, then Riviera limits you... the other re-sale contracts limit you as well, just a different limit.

3. Agree re Disneyland Tower. I was just assuming that most people who buy want to stay primarily in Orlando, but everyone will want the Disneyland Tower as well. That's pretty much the only new resort, two to three years down the line, you'll be able to book. And I think Disney might very well revive Reflections, or something like it, in two or three years. So, in 5-7 years, resale Riviera buyers will have two other options. Maybe three? Buyers of other contracts will have 14.

WHy would anyone buy direct if they are only going to hold it for 5-7 years??? That's a money losing proposition.
I understand most people don't keep it for 50 years, but barring financial difficulty, people typically plan on keeping for 10+ years.

Where would we be in 10+ years? Buying a re-sale contract limits you to the 14 oldest resorts, probably excluding the 3-5 newest resorts. In addition, almost half the properties would only have 10 years left.

4. Good points re travel time to Epcot and DHS. Though I actually do love the Riviera, I still don't love its location. However convenient the skyline is (and it is convenient!) that patch of land by Caribbean Beach, for me, just isn't Crescent Lake.

I understand what you're saying. I agree -- Riviera is not a BOARDWALK area resort. It's not the same as the Boardwalk or Beach Club/Yacht Club. It's not the same atmosphere as those resorts. And in terms of travel, it's always nice to have a walking option. But in terms of an Epcot/DHS area resort -- quick easy access to those resorts, Riviera is currently the only DVC option with a contract longer than 2042.

As I said, Riviera is a good resale buy for existing owners looking to add on, or folks who only want to stay there and nowhere else.

Well yes.... as a re-sale buy, it's only good for those that only want to stay at Riviera.
But how many Grand Floridian DVC owners decide, "hmm, I really want to trade into SSR at the 7 month mark!"

Being "locked" in to 1 of the nicest (some would say THE nicest) resorts on property isn't such a terrible thing.

 

[Brian Noble]

The relative isolation from Waikiki is a positive for us

For me, the best way to be isolated from Waikiki is to stay on Kauai.

 

[havoc315]

You’re right, of course. But if Disney perceives the resale restrictions as hindering Riviera sales, this gives them an opportunity to sell a “new” property without them, without having it appear as if they’re changing policy…which would justifiably anger owners at Riviera..

My understanding is that it has not hindered direct sales at all. It's only a "thing" in the minds of the DVC fanatics on message boards. You'd be surprised -- a high proportion of DVC sales are borderline impulse purchases made after a DVC tour. Lots of people don't even realize a re-sale market exists. It's almost 2 universes: On these message boards, re-sale buyers may outnumber direct buyers. But once you leave this message board, most buyers are direct buyers.

Sales were hurt tremendously by Covid -- the parks shut down for 3 months of what would have been the prime sales period (right after the grand opening), and the ability to do full sales tours still hasn't returned. Pre-Covid, Riviera sales were exceptionally strong.

The last pre-Covid month:

https://dvcnews.com/dvc-program/financial/news-34867/4723-direct-sales-data-for-february-2020

 

[brazzledazzler]

My understanding is that it has not hindered direct sales at all. It's only a "thing" in the minds of the DVC fanatics on message boards. You'd be surprised -- a high proportion of DVC sales are borderline impulse purchases made after a DVC tour. Lots of people don't even realize a re-sale market exists. It's almost 2 universes: On these message boards, re-sale buyers may outnumber direct buyers. But once you leave this message board, most buyers are direct buyers.

Sales were hurt tremendously by Covid -- the parks shut down for 3 months of what would have been the prime sales period (right after the grand opening), and the ability to do full sales tours still hasn't returned. Pre-Covid, Riviera sales were exceptionally strong.

The last pre-Covid month:

https://dvcnews.com/dvc-program/financial/news-34867/4723-direct-sales-data-for-february-2020

You'd never know direct sales to RIV are hurting based on how many tours they are doing there daily. My family took a tour in June and they were funneling groups through like it was a Disney ride. There were around half a dozen guides minimum, and the resort lobby was full of families waiting to take tours. We passed multiple groups in the hallways while we went from one room size to another.

I agree the DISboards are not a true indicator of DVC purchaser sentiment or intent. These boards are a niche of a very large group of DVC members. However, for anyone seriously researching into joining DVC, it's hard to miss the DVC resale side. The resale stores invest too heavily into SEO to not see resale information in browser searches.

While I do think most purchasers are direct, I don't want to dismiss that the resale market is hidden. Clearly, it's widespread enough for resale restrictions to be added to RIV and potential future resorts.

COVID, the housing bubble, travel restrictions...etc. are all factors affecting DVC sales, I think it's hard to define what is considered poor/satisfactory sales at this time unless we are privy to sales goals for DVC.