When will Riviera resales be available

[DaveNan]

I do not believe DVC wants high resale prices. In general, they want them as low as possible. Almost all other timeshares have low resale values, yet they continue to sell new properties. Most DVC buyers (timeshare buyers in general) do not consider resale price when buying. Most folks buy thinking they are going to own forever (and it appears many do own DVC for along time) and they buy under the influence of pixie dust. Unlike those of us on these boards who learn about the product and weigh the alternatives, they buy while on a vacation. The question is, "How much tougher would it be to sell if resale was lower?" Many buyers are totally unaware of resale, and even if they are aware of resale they may look at it as an alternative market for points, rather than a safety net. By making resale points way less desirable, and thus less expensive, they may decrease the desire to buy by eliminating the safety net, but they have also made the alternative way less desirable because the flexibility is gone. In the extreme, DVC might like to see resale super low. They would not exercise ROFR while selling a new property, because the new points have 100% sunk cost and the cash from new sales has no additional cost to DVC, so why by points for anything while they still have new points. However, once a property is sold out, they just buy at the same rate that buyers want to buy sold out properties from them. They can now change UY and they can split contracts. They can just let contracts sit in ROFR waiting to see if they have a buyer. If a buyer comes along, they take it. If no buyer comes along, they let it pass at 30 days. The lower the contract price, the bigger the margin DVC gets. Passing ROFR would seem random and not always make sense. It would be based on sold out property demand coming into DVC, not on the contract price. We might even describe the process as a drunken monkey. Oh wait, that has always been the case.

 

[KAT4DISNEY]

I do not believe DVC wants high resale prices. In general, they want them as low as possible. Almost all other timeshares have low resale values, yet they continue to sell new properties. Most DVC buyers (timeshare buyers in general) do not consider resale price when buying. Most folks buy thinking they are going to own forever (and it appears many do own DVC for along time) and they buy under the influence of pixie dust. Unlike those of us on these boards who learn about the product and weigh the alternatives, they buy while on a vacation. The question is, "How much tougher would it be to sell if resale was lower?" Many buyers are totally unaware of resale, and even if they are aware of resale they may look at it as an alternative market for points, rather than a safety net. By making resale points way less desirable, and thus less expensive, they may decrease the desire to buy by eliminating the safety net, but they have also made the alternative way less desirable because the flexibility is gone. In the extreme, DVC might like to see resale super low. They would not exercise ROFR while selling a new property, because the new points have 100% sunk cost and the cash from new sales has no additional cost to DVC, so why by points for anything while they still have new points. However, once a property is sold out, they just buy at the same rate that buyers want to buy sold out properties from them. They can now change UY and they can split contracts. They can just let contracts sit in ROFR waiting to see if they have a buyer. If a buyer comes along, they take it. If no buyer comes along, they let it pass at 30 days. The lower the contract price, the bigger the margin DVC gets. Passing ROFR would seem random and not always make sense. It would be based on sold out property demand coming into DVC, not on the contract price. We might even describe the process as a drunken monkey. Oh wait, that has always been the case.

Since most DVC resorts are about getting a room onsite for a lower price than paying cash for one it's never going to work to push resale prices low. I don't know that other timeshares necessarily want that either, it just happens. The easiest reason for a sale person to use when selling direct to someone who is considering resale is that the price is not very different but that they will get all kinds of perks and benefits if they just spend the few extra dollars to purchase directly. If there's a big monetary difference then suddenly people start to think about it more and evaluate more and often conclude they can go without the benefits because the lower cost of the onsite room more than makes up for anything offered by DVC.

 

[suemom2kay]

Just my opinion, but I think it benefits DVD for resale prices to be as close as possible to direct prices. Owners reselling are competing against Disney and I think that is why they keep trying everything in their power to make resale contracts less attractive.

With the Riviera restrictions they may have shot themselves in the foot. But, that remains to be seen.

 

[Frederic Civish]

I do not believe DVC wants high resale prices. In general, they want them as low as possible. Almost all other timeshares have low resale values, yet they continue to sell new properties. . . . . .The question is, "How much tougher would it be to sell if resale was lower?" Many buyers are totally unaware of resale, and even if they are aware of resale they may look at it as an alternative market for points, rather than a safety net. By making resale points way less desirable, and thus less expensive, they may decrease the desire to buy by eliminating the safety net, but they have also made the alternative way less desirable because the flexibility is gone. In the extreme, DVC might like to see resale super low.

Yes, Disney might want DVC Resales to be super low. Yes, it is true that other Timeshares are super low at Resale. However, if they are trying to look at that, then they don't understand their own product.

Let's assume that Disney, somehow, is able to remove the ability to rent out points. I don't think they can, but let's assume they did. Now, your DVC would not have ANY kind of profit incentive, but the worth would be ONLY what value it held to the owners, in their use of it.

Then, let's assume that Disney WAS able to drive Resale value down to a level comparable with other Timeshare Resale Properties and was able to get it down to only 1/20th of the Direct Price. I use this figure of 1/20th, because I have bought other Timeshares on the open market for 1/20th of what they cost initially. This type of discount is not unusual at all.

So, Disney steps back, proud of themselves, and says, "Ahh. Now everyone will HAVE to come to us to get their points." Why? Why would this encourage people to come buy Direct? Because they get a few discounts here and there?

Not on your life. Instead, people look and say, "Wow. Disney is selling Animal Kingdom Lodges for $200 per point, or NEW resorts like Reflections for even more. BUT, I can stay at Animal Kingdom for 25 points per night, so for 100 points, to stay for 4 days, I can get that on the market for 1/20th of what Disney is charging, or, $10 per point. So, I pay that once, $1000 for 100 points. And then I can stay EVERY YEAR for the next 20 years. If Caribbean Beach is renting hotel rooms for $250 a night (it is renting for more, really, if you average it out for every night of the year), then I can stay at a more luxurious resort, AKL, and I come out ahead after the first year!!"

I know that seems like an exaggeration, but it is the real value of other timeshares. However, other timeshares don't let you stay at Disney World every year. The point is, DVC IS NOT just another Timeshare, and never will be. So Disney should get any ideas like that out of their mind. Thinking like that would be a grave error on their part. If they try to treat it like other timeshares, they will just be making things HARDER for themselves. Lowering the price of the Resales only makes them more desirable to Resale purchasers, so, once again, Disney LOSES DIRECT SALES. Because DVC points have a real, Intrinsic Value, the lower Disney drives them, the more attractive they become, so people STILL will be buying them, rather than Direct points.

It makes more sense for Disney to do everything they can to siphon off a bit of the 'Value' of Resales, by some minor restrictions that at least look good on paper (they have already done that), but then to try to push Resale Prices AS HIGH AS POSSIBLE. And THAT would actually drive Resale Buyers towards Direct. As well as make Direct MUCH easier to sell, because they could always point out to owners that if they ever do need to sell, they could get 3/4ths of their money back (or more), and that is AFTER using it for 10 years.

 

[Wakey]

I too find it difficult to work out what can be achieved.

Make resale undesirable? Points value resale goes down. Direct becomes less desirable. If it's DVDs intention to make resale undesirable they must be banking on a) The number of direct purchasers gained is greater than those lost, or b) They will ROFR nearly all points cheaply and resell and control the resale market. The problem with b is that it may inflate the price (supply and demand) so they have to make it so undesirable people don't want it at any sensible price. At that point a lot of people say- 'No thanks, its a timeshare like the rest'

I find the whole thing puzzling. Here we have a company that's the most successful timeshare on earth, an enormously profitable business. I'd have said the best strategy is to enhance the things that made so many buy it in the first place- customer care, trust, the product is golden and appreciates so buyers are unlikely to take a bath, members always treated with respect and ITS NOT ANOTHER TIMESHARE. It's that last point which is so important and why so many of us bought this and wouldn't touch another timeshare.

My first contract was resale. But I was so happy with how I was treated as a resale buyer and the efficacy of DVD, I felt good about them. So when I added on, it was one reason I went direct.

If I were running it, and I run multi million dollar customer centric businesses, I'd be enforcing the core values to the hilt. Look back at the stories and interviews with Eisner and his management when they decided to go ahead with it, the core values and not being another timeshare were front and centre. Those core values, together with location, built an empire of timeshare. Is it now believed location can do it all on its own?

People may say, yes but I don't have a clue, the people running it know what's best for their business. Maybe, maybe not. I see very large businesses run very badly day to day.

I can see why they'd offer blue card, discounts etc to direct buyers, in a way. But that separation was the beginning of the eroding of the core values. I think we understood and accepted it. The problem is with understanding and acceptance is that can translate to happy, and let's now move to phase 2.

Go back on the boards to 2015. Yes you always get the odd complaint about availability etc, but the views of members were overwhelmingly positive. It's not another timeshare members screamed, it's brilliant. They recommended it to anyone who asked. Now I'm afraid the same boards are filled with one negative story after another. DVD obviously rely on the fact most buyers, buy on a whim and don't research- Just like a regular timeshare.

I still think it's a brilliant product, and the resorts themselves and experience are generally second to none. But I am genuinely fearful of what may come next. Are DVD happy they are making members like me fearful of the product? I won't sell now I'm in unless it gets worse and I know how it works, but I definitely think I'd never have bought in had I seen the boards now.

 

[Frederic Civish]

Excellent analysis.

 

[Bearval]

Disney does not keep resale prices high, buyer demand is what keeps the prices high. Disney would love resale to be as close to direct pricing at the new resort so they can say why buy Poly resale with less years and no member benefits when for just $20 more per point you can have Riveria ?

 

[crvetter]

Since most DVC resorts are about getting a room onsite for a lower price than paying cash for one it's never going to work to push resale prices low. I don't know that other timeshares necessarily want that either, it just happens. The easiest reason for a sale person to use when selling direct to someone who is considering resale is that the price is not very different but that they will get all kinds of perks and benefits if they just spend the few extra dollars to purchase directly. If there's a big monetary difference then suddenly people start to think about it more and evaluate more and often conclude they can go without the benefits because the lower cost of the onsite room more than makes up for anything offered by DVC.

Yep since the day the restrictions were announced I’ve believed this. I don’t think it was DVC intention to destroy resale as it hurts the justification for direct pricing (no matter restrictions or not). Though what I do feel DVC wanted to do with the restriction was make it less desirable for a resort that “is cheap” to be considered when a person is looking at direct vs resale. Right now I assume SSR is probably problematic for them (to a degree) when selling direct because people consider that for trading at 7 months and it works well for that purpose (especially 1 bedrooms). My guess is DVC probably thought the BVTC trade component wasn’t factored too much in most resorts resale prices and likely has done some analysis on exactly your point of no matter the resort it’s a discount on cash rooms thus there is s floor.

We all know the restriction by DVC can be removed at any point thus if they find it hurting direct sales, which if a resort bottoms out to 1/20th or the price it would, they simply will remove the restriction because of member demand.

 

[jerseyduke]

They haven’t. That was my point when I said...

What point are you trying to make?

I was adding to your sarcasm, but obviously it went over like a lead balloon.

 

[jerseyduke]

Disney does not keep resale prices high, buyer demand is what keeps the prices high. Disney would love resale to be as close to direct pricing at the new resort so they can say why buy Poly resale with less years and no member benefits when for just $20 more per point you can have Riveria ?

It is more than just buyer demand, but of course that is probably the largest component.. Demand is affected by Disney's actions. When they jacked up VGF to 245 a point, what do you think happened to the resale contracts?
I suppose you could say that that caused resale demand to go up, which made the prices go up. Chicken or the egg?

 

[Littlelulu01]

DVC has problems selling Aulani. If RIV resale was at $80, I bet DVC would be very upset. This resort is supposed to be the VGF for Epcot. VGF resale is crazy high right now.

Aulani isn’t wdw property = more problems selling but nonetheless it’s an actively marketed resort with lots of points to sell yet they do nothing to keep resale value up so I guess you could say they are “fine” letting resale land whatever the market bears.

They didn’t exercise rofr on gfv much till it was long sold out. I remember seeing it go for $119 not long ago.

The new restrictions would drive me to direct Rivera purchase over resale, which dvc was going for when they introduced them. Resales on Rivera would need to be much lower than $130 for me to be willing to commit to 50 years at one resort.

I’d say about 50% of our stays have been switched around under 7months. I’ve been able to stalk, wl... and cobble together last minute stays... and not let points go to waste. The date changes solely due to kids changing plans- a product of them getting older and busier. Rivera resale doesn’t have the flexibility of switching vacation dates at last minute. To give that up seems reasonable to place resale value at less than half but dvc sells for more than I think is reasonable so what do I know.

 

[AvidDisReader]

This discussion has one aspect that I just cannot get my head around. Disney Restrictions on their new resort, with Gondola's to the new Star Wars land, will most likely keep resale values relatively low. So who is going to scoop up the available resale contracts-Investors. If the current PP is approx. $20, what will you be able to charge on this resort? $22-$25 a point? So they are going to turn the beautiful new resort into an Investor rental property? It just does not make sense.

 

[KAT4DISNEY]

This discussion has one aspect that I just cannot get my head around. Disney Restrictions on their new resort, with Gondola's to the new Star Wars land, will most likely keep resale values relatively low. So who is going to scoop up the available resale contracts-Investors. If the current PP is approx. $20, what will you be able to charge on this resort? $22-$25 a point? So they are going to turn the beautiful new resort into an Investor rental property? It just does not make sense.

DVC has a restriction on commercial renting and have enforced that in the past to the point where I know for certain at least one person was required to sell their interests. They would do the same on Riviera. Of course from direct buyers perspective having "investors" interested would be something to help support the resale pricing more than not having them there.

 

[Littlelulu01]

This discussion has one aspect that I just cannot get my head around. Disney Restrictions on their new resort, with Gondola's to the new Star Wars land, will most likely keep resale values relatively low. So who is going to scoop up the available resale contracts-Investors. If the current PP is approx. $20, what will you be able to charge on this resort? $22-$25 a point? So they are going to turn the beautiful new resort into an Investor rental property? It just does not make sense.

I think the majority of dvc is purchased by individual fans of Disney wishing to save on future vacations. There’s a very small percentage that has used as an investment but I seriously doubt any investment advisor recommending purchase of dvc for investment purposes. It’s just not a sound idea and even dvc has this written on their website. The income and equity from our rental properties and retirement accounts over time has FAR surpassed any income I could possibly have earned if I had instead invested in dvc. Dvc has made Disney vacations more affordable. Can’t say that renting my points was a financial gain the one time I did it. I got my $ back but it wasn’t a wise use of my points. Dvc is a little something I can hopefully have my grandkids enjoying some day but our “real” real estate investments are what set us up for retirement.

 

[AvidDisReader]

I respect both LittleLulu01 and Kat4Disney comments, but disagree. An individual investor/Disney enthusiast is allowed to purchase up to 4000 point, a husband and wife team could own 8000 points. As for a profit, as I stated this is based on the assumption that the resale will be low. I did the math and it is staggering the profit that could be made, even with deducting the maintenance fees. Plus, as opposed to owning investment properties, you do not have to worry about tenants not paying so the expense of evictions or getting 2am calls about plumbing issues. I am an avid reader of several discussion boards and there are several who post that are private investors already. They are just the ones who would jump at the opportunity to grab up cheap points just for the purpose of renting. That is why I go back to my original thought as to not understanding why Disney would take this chance with the Resale restrictions.

 

[KAT4DISNEY]

I respect both LittleLulu01 and Kat4Disney comments, but disagree. An individual investor/Disney enthusiast is allowed to purchase up to 4000 point, a husband and wife team could own 8000 points. As for a profit, as I stated this is based on the assumption that the resale will be low. I did the math and it is staggering the profit that could be made, even with deducting the maintenance fees. Plus, as opposed to owning investment properties, you do not have to worry about tenants not paying so the expense of evictions or getting 2am calls about plumbing issues. I am an avid reader of several discussion boards and there are several who post that are private investors already. They are just the ones who would jump at the opportunity to grab up cheap points just for the purpose of renting. That is why I go back to my original thought as to not understanding why Disney would take this chance with the Resale restrictions.

DVC does watch for it. The stated number is that your account will be looked at after 20 reservations. I do not know how consistent they are but again, they definitely have gotten people over this and people here have reported being contacted.

 

[zavandor]

DVC does watch for it. The stated number is that your account will be looked at after 20 reservations. I do not know how consistent they are but again, they definitely have gotten people over this and people here have reported being contacted.

But if you rent saying minium number of points per reservation is 200 (not difficult to reach if one wants a 2BR), you can buy 4000 points for commercial renting and still be under the 20 reservations limit. I wouldn't do it, my pension scheme gives me much higher returns with zero effort, but it's not impossible to do.

 

[littlestar]

I have a nephew that was looking at becoming a DVC member. Since the restriction on Riviera resort was announced and those large annual pass increases happened, he is now leery of owning DVC. I think an occasional few nights at a Disney moderate or Wilderness lodge with the rest of their vacation off site looks safer to him now. He said the product has changed from what it used to be. To me it’s like a Westgate or Orange Lake timeshare salesman took over the product.

 

[littlestar]

I read on another site that a Riviera resale was listed at $130 a point and sold for less. But I personally never saw this contract. I feel sorry for the circumstances of that person that caused them to have to sell so soon.

 

[KAT4DISNEY]

But if you rent saying minium number of points per reservation is 200 (not difficult to reach if one wants a 2BR), you can buy 4000 points for commercial renting and still be under the 20 reservations limit. I wouldn't do it, my pension scheme gives me much higher returns with zero effort, but it's not impossible to do.

Yes, that would get you around what apparently is the trigger. To consistently find such large rentals in quantity would take a fair amount of work I think.