Why did you sell your resale contracts and buy direct?

[Brian Noble]

Good news! The foreclosure period for new resorts is going to be much longer.

 

[supercarrie]

They likely dont have that many points. It has exited the foreclosure period and the price in resale isn't low enough for ROFR likely often enough.

You essentially have the active selling period where they have points: 2-3 years (2010->2013)
Then you have 5 years of foreclosures to sell: (2013->2018)

Covid had a temporary reprieve for all resorts but other than that I wouldn't expect much for BLT unless they add-on to the resort with another tower or there is a massive economic downturn where they end up with a bunch of excess points again.

While I agree with this sentiment, they sell VGF at $265 per point and routinely having been ROFRing it at $155+ this year.

The spread on BLT is a fair bit larger ($275/$120-130). What do you think the reason is for their active VGF buy backs? More demand?

 

[sethschroeder]

While I agree with this sentiment, they sell VGF at $265 per point and routinely having been ROFRing it at $155+ this year.

The spread on BLT is a fair bit larger ($275/$120-130). What do you think the reason is for their active VGF buy backs? More demand?

Likely demand with people adding on since it was the most recent resort that sold out? Its always interesting how they choose where to ROFR at times.

 

[supercarrie]

Likely demand with people adding on since it was the most recent resort that sold out? Its always interesting how they choose where to ROFR at times.

Yes, it is fascinating. (VGC cough cough)

 

[patm95]

People focus on the direct-benefits as the reason to buy direct, and how those benefits aren't enough to justify an extra $10k over resale. But the biggest benefit of direct (for me at least) is that those points are completed unrestricted. You can use them at Riviera, Disneyland Villas, eventually Lakeshore Lodge, etc.

People overlook this because, until Riviera, a resale point was just as unrestricted as a direct point. And a lot of people are still stuck in that mindset.

As time goes on, the gap will only widen (in the five years the policy has been in place, the gap is already sizable). After 2042, the gap will spike. After 2066*, every resale point will presumably have 0% flexibility and every direct point will still have 100% flexibility.

Resale restrictions are annoying, but Disney did it to entice people to buy direct... and it's working.

*I originally said 2068 (CCV expiration date) but it's actually 2066 (Poly expiration date). For the two years in between, CCV's unrestricted points will still exist, but they will have zero resorts left for the resale-owner to use the points at

I agree. I’ve been saying this for awhile now. This almost never gets mentioned. It will become more important as the years go by.