What's is Disney's ROFR strategy

[carlos1117]

Friends,

Can we get a dialouge going concerning this issues. I go back and forth tring to decide what their up too. Are they attempting to put the resellers out of business? Are they just forcing prices higher? Did someone realize they could buy points at 70 and sell them at 89?

There has to be a "bigger picture view". What is your opinion?

 

[AmyBeth68]

I wish I could answer that question for you. I'd sure like to know LOL!

Here are some of the things I've heard and thought myself.

1. The disparity between price per point for resales and the new SSR is big and may get bigger (imagine if SSR hits $100/point and you could still buy OKW at $69/point).

2. WDW is offering the vacation incentive to buyers of SSR. Do they need "points" available to make good on all the points they are giving away over the next 12 months? Think of how many DVC properties will be requested when phase 2 and phase 3 sells out and many of those folks take the incentive. This is just my own thought...it could be flawed since I'm a newbie and just learning the process.

I'm sure the experts here have some better ideas.

 

[jel0511]

As someone who chicken out of ROFR and did buy her add-on at $89 per point, here is my take..... I really think DVC was at first was just letting resales go through at current levels, because with SSR selling at $84 per point at first, the price disparity didn't seem too much. With the recent price increase to $95 per point, they decided to raise the price on sold out resorts to $89. I also think they started buying back properties to keep their current customers happy (that would be me!). Some DVC members would like to add-on, but can't do it too easily in the resale market because it's usually a cash transaction, DVC offers financing. There is a base there for them to cater to, as well as the idiots (that again would be me!) who just pay DVC what they want because it's easier and pay cash anyway. I also think that the price disparity, even with the additional 12 years, was getting too high, and DVC is trying to force the price higher. I also believe with the invention of the new wait list procedure, DVC will be buying back contracts to fulfill this list, thus keeping members happy. Since this is relatively new, the ROFR action will definately be higher for the next few months, and I also think DVC is trying to keep people guessing. I'm not one for waiting, and since DVC came through so quickly, I went with them. With me getting all 2004 points (my resale didn't have any left), and my ability to rent them or use them, the price difference came down to around $4 per point, definately worth not having to wait on ROFR. It will be interesting to see how all this shakes out, but I definately see resales that previously flying through, will be eaten up. If anyone is trying to get one of the hot resorts; BWV, BWV or VWL through nowadays, I'd think an offer of at least $74 per point and buyer paying closing and maintenence on any current points will be the minimum getting through.

 

[Dean]

It's actually very simple. DVC is trying to keep the resale prices high enough to make it easy for a potential member to buy retail over resale. DVC will make no real money at the current spreak so that is not it, even though some erroneously have thought that. The reality is that there have only been a couple of times in history where it appeared the ROFR price directly affected the overall resale offering prices. Arround the time they announced SSR, they got very aggressive for about 5-6 months or so and now is possibly another push like that one. Otherwise the natural market forces has kept the overall prices high enough it wasn't much of an issue. Where it does come into play is when someone finds a seller who is unaware of desperate to sell and is willing to accept an unreasonably low offer.

 

[DrTomorrow]

My $.02 of the "bigger picture":

1. Disney likes to keep control of things (see: Reedy Creek Improvement District). If there's a resale market, Disney wants to be the major player; and help "guide" the resale prices.

2. If there's money to be made, Disney wants to be in on it. Buy low, sell high, repeat.

3. It's not that much extra work. Disney already has a DVC sales organization in place, and exercising ROFR isn't that tough, so it keeps the pipeline filled.

4. Customer demand. I doubt that anyone at Disney ever wants to tell a customer - particularly one who's ready to buy NOW - "Sorry, we're all out."

IMHO - YMMV.

 

[RuthnPaul]

Lori mentioned that Disney's implementation of a waitlist and buying back more contracts will allow them to satisfy current members wanting to add-on which I agree with.

Looking at this from a slight different perspective, do you think that Disney takes into account whether you currently own at DVC when determining whether they will exercise ROFR? We have 2 BWV contracts and are still waiting to hear on the darn ROFR for VWL.

 

[carlos1117]

That's a interesting point, Ruth. I'm curious to see if you pass, of course where all pulling for you. Any edge you can get is good!

 

[kaw1106]

Ruth,

When did you offer on your contract? Just curious...we are waiting as will on ROFR on BWV. This is our second attempt, it has only been a week.

 

[Dean]

Originally posted by RuthnPaul
Looking at this from a slight different perspective, do you think that Disney takes into account whether you currently own at DVC when determining whether they will exercise ROFR? We have 2 BWV contracts and are still waiting to hear on the darn ROFR for VWL.

There have been hints in the past that DVC does consider whether you are a member or not. I doubt it makes much difference overall but there have been suggestions in the past that DVC was "slightly" more likely to buy the contract for a member buying a different use year. Whether it's true or not is certainly a question and obviously it hasn't made a big difference. But I took it your question was whether DVC was more likely to let it go through for a current member and that appears to be a definite NO. Overall it's more likely they are neutral.

There have also been suggestions that DVC has been more likely to buy back contracts of members they see as trouble makers. Again, no definite information in this area. You know how rumors can be. This is likely a good question to ask for people like ********, Jaki and TTS people. They should have the best feel in these areas.

 

[smjj]

We bought back in May OKW 190 pts. at $69.00 per pt. for a June use year. I guess if we had waited just a month longer this contract would not have passed ROFR based on what I am reading here. Looks like lady luck was on our side on this deal that I am now sure was the deal of the lifetime...smjj

 

[RuthnPaul]

Originally posted by kaw1106
When did you offer on your contract? Just curious...we are waiting as will on ROFR on BWV. This is our second attempt, it has only been a week.

Our contract was submitted to Disney on Friday, July 30. Just heard from our agent today who said that there was still no word from Disney on ROFR. Although there are some ROFRs that go through in a week or so, I believe it is more typical for the process to take 2-3 weeks. Since it will be 3 weeks this coming Friday, DH & I feel this may be the week we get the "word" (hopefull, good)!! Good luck on your second attempt at BWV. Keep us posted!! I'm sending you a PM!!

Originally posted by Dean
But I took it your question was whether DVC was more likely to let it go through for a current member and that appears to be a definite NO. Overall it's more likely they are neutral.

Darn, Dean -- and here I thought I was something special to Disney!! LOL!!

Ruth

 

[DVCconvert]

1. Disney likes to keep control of things (see: Reedy Creek Improvement District). If there's a resale market, Disney wants to be the major player; and help "guide" the resale prices.

I agree.

I bot a 230 pt contract at BWV @ $70 /paid closing costs just a few weeks ago.

I just found out I got ROFR'ed on a BCV contract of 700 points @ $70 with me paying the closing costs today!

 

[Dean]

Originally posted by RuthnPaul
Darn, Dean -- and here I thought I was something special to Disney!! LOL!!

Ruth

$$$$$$$$$$$$$$$$$ and more $$$$$$$$$

 

[RuthnPaul]

Originally posted by Dean
$$$$$$$$$$$$$$$$$ and more $$$$$$$$$

Ain't it the truth!!

 

[lovwdwalot]

I had talked to my guide this past week at WDW and I had asked him about Disney using ROFR. And he said that they will be buying back more contracts on ROFR. The reason for this he said was that they wanted the market to come up alittle more than what it has been lately. He stated that some of the prices for resale were too low at the moment.

 

[TravelingJen24]

It is hard to gauge what they are doing, because although they are buying some, they are letting some go through. We got through last week with 280 at OKW at 71, and three others that were basically the same cost, were ROFR'd. Maybe it is just up to whoever gets your contract at Disney to look over. Ours took 10 days total to get back, so I don't understand why some take longer than others.

 

[tjkraz]

Originally posted by TravelingJen24
It is hard to gauge what they are doing, because although they are buying some, they are letting some go through.

And that uncertainty may be just enough to put the market where DVC wants it. With the threat of ROFR hanging over your head, impatient folks may be more inclined to offer a few dollars more to get through ROFR.

Others who are patient may eventually slip through at a discount rate, but hard telling how many tries it may take.

 

[JimC]

Their strategy may include many variables (and under each variable there may be resort specific and/or use year specific tactics):

1. SSR sales pace -- desire to move inventory and to keep the guides busy if they are on commission

2. add-on requests -- to satisfy member requests and to provide income to guides if they are on commissions.

3. contract size -- possibly a larger contract provides DVC with more flexibility.

 

[SoCalKDG]

I'm a new buyer, and I passed ROFR last Monday at 73 per point at BWV, I paid closing and MF on 110 pts. Same contracts at 71 didn't pass last week. From these boards I had read of people passing in the 60's in previous months. BWV, VWL, and BCV all are priced very close.

This just means prices have went up $4-5. Just make bids at $73 for empty contracts, and $75-$76 for loaded contracts. Still cheaper than resale, and should go through.