Why do I feel like I am being punished by DVC for buying resale?

[MrInfinity]

Nope, I didn't misread. You aren't devaluing your widget. Your widget is only worth $15k. The widget that someone bought from Disney for $30k is also only worth $15k. Nobody will pay you $30k for the widget. Disney's price does not accurately reflect market value.

I say you may be misreading it because you keep going back to Disney. I'm saying in the case of anything else... Say you own something. Let's call it a ...TV (random item, substitute any word you want). I want it. You have 10 that you don't use and want to sell. That TV goes for $200. I want one, you want to sell yours. I'm willing to pay $200. You, however, know of a place to get them for $100 that I don't know about. In fact you only paid $100 for each of yours. Would you sell your item or do you consider that unethical to not tell me I should go pay $100? Keep in mind I'm perfectly happy to pay $200 because that is the going rate, and most people myself included do not even know about your $100 source. Would you educate me first on where to buy them for $100, or would you just sit on 10 TVs you don't want?

Making a profit is not inherently unethical.

BTW you ignored my question of whether the BB kid in my example is unethical or not... I would argue he is not but I'm curious if you think he is for attempting to sell something he does not think is worth it.

On the same note, I do not consider a timeshare salesperson unethical because they do not say "you really shouldn't buy this from me because you can buy it elsewhere for less". I actually think my guide is a pretty nice person, and I believe him to be quite ethical based on what little I know. He's a salesperson yes, and good at it... but not unethical. I don't think he'd keep my wallet if I left it on a desk after talking to him.

 

[Dtw002]

I recently bought resale and knew what I was getting into. Prices are/should be lower in resale as a result of less perks, which hurts every owner. That said, I knew it and decided to buy anyway.

Now if Disney did change the game further on me, say down the road removing perks that I currently have,that would be a different story and something I would take exception to. However, I think they are at least doing it right grandfathering people in.

Ultimately they have to do something to differentiate - i don't think it's Evil Corp but Disney logically creating/protecting their business model from discount resales. Cost conscious people who take the time see through this thin veil of perks; people who would rather have the ease/clarity and $5-$10k isn't a lot of money to them just go direct (and feel like they are getting something for it). If anyone of us owned DVC we would be doing the same thing to protect the business.

 

[prestoncaldwell]

Nope, I didn't misread. You aren't devaluing your widget. Your widget is only worth $15k. The widget that someone bought from Disney for $30k is also only worth $15k. Nobody will pay you $30k for the widget. Disney's price does not accurately reflect market value.

This is exactly right.

 

[prestoncaldwell]

I say you may be misreading it because you keep going back to Disney. I'm saying in the case of anything else... Say you own something. Let's call it a ...TV (random item, substitute any word you want). I want it. You have 10 that you don't use and want to sell. That TV goes for $200. I want one, you want to sell yours. I'm willing to pay $200. You, however, know of a place to get them for $100 that I don't know about. In fact you only paid $100 for each of yours. Would you sell your item or do you consider that unethical to not tell me I should go pay $100? Keep in mind I'm perfectly happy to pay $200 because that is the going rate, and most people myself included do not even know about your $100 source. Would you educate me first on where to buy them for $100, or would you just sit on 10 TVs you don't want?

Making a profit is not inherently unethical.

BTW you ignored my question of whether the BB kid in my example is unethical or not... I would argue he is not but I'm curious if you think he is for attempting to sell something he does not think is worth it.

On the same note, I do not consider a timeshare salesperson unethical because they do not say "you really shouldn't buy this from me because you can buy it elsewhere for less". I actually think my guide is a pretty nice person, and I believe him to be quite ethical based on what little I know. He's a salesperson yes, and good at it... but not unethical. I don't think he'd keep my wallet if I left it on a desk after talking to him.

What you're really analogizing is this:

You have a $200 TV you want to sell for $200. I own the same TV. Someone comes along and asks where they can buy a TV like mine. I should conceal the option of the $100 sellers from them so that you can get your $200.

Nope. If they want to go to the store and buy a shiny new TV for $200, that's up to them. But I have no qualms letting them know that there is a $100 TV that's 97% as shiny. The real facts are that our TV isn't worth $200, I have no obligation to ensure that you get your $200, and letting them know all their options hasn't devalued my TV a penny. It's still worth the $100 it was before they asked about it.

ETA: From the developer's perspective, if they were interested in preserving that $200 TV price, they would ROFR every single resale that came across them for less than $200. They ROFR at a certain level and that gives them inventory to sell at arbitrage, but buying back everything that comes to them isn't a good business model for them, either.

Finally, if you were able to build a cartel that restricted resale of that TV to $200, Every original buyer would be stuck with that TV for the rest of her life. And the developer would still remove a few perks to make sure you bought from them instead of the reseller. Even if resold at full retail, the developer arm of DVC doesn't make another dime off that contract once the original sale is paid off. This is why Marriott opted to add the junk fee instead of further devaluing their contracts with differential rules.

 

[Dean]

Well, that's an interesting read. I think a lot of it comes down to the flurry of sites that have cropped up which bring buyers and sellers together that didn't exist before. When one can sell a timeshare, it stops looking like a purchase and becomes more like a 5 or 10 year rental. 10 families may get the use of one block of points over 50 years instead of 10 families each buying their own block. Timeshare companies have to discourage this selling of points because the whole model is based on sucking the family in up front, then having them stuck w the points (and maint fees) for life, or a very long time. When the points are fluid and people can just sell, you have to keep re-encouraging people to keep their points and not ditch them by keeping the quality of offerings up.

I like Disney's approach w the ROFR. When they want to prevent a timeshare being sold, they can just buy it back and sell it direct plus markup. As long as the demand is there, this model works. This model wouldn't work for other companies since they don't have the built-in demand for their product that Disney has of being in the Disney bubble.

It's interesting to watch the recommendations of owners out here. When someone comes out here asking for advice on buying, everyone says to buy retail, you're uneducated if you buy direct, etc... but really, encouraging everyone interested to buy resale and shun direct is just going to hurt the resale market in the long run. The greater the shift from direct to resale, the more Disney will be forced to do like the above, driving people to buy direct by removing perks to devalue resale.

So many people come out here and say "I just bought direct I'm so excited did I make the right decision?" and people just lay into them about not having researched... which is self defeating. To have a strong resale market, you want the direct market to remain strong first and foremost. If the direct market remains strong, then the resales can be ROFR'd at higher prices, and that preventing of the bottom from falling out like it does w other timeshares is what will ultimately serve to protect the price for owners and keep the product offering growing. When Disney sells out the Poly, they'll build something new. Every time they build something new, our value improves.

There's no doubt that a healthy retail market is necessary to keep the system going. If people don't buy retail, there are a lot fewer resale options and the system likely degrades fairly rapidly with no perks for anyone in all likelihood, higher fees and less options to get out if needed. It's one of the reasons I believe DVD could/should do some things differently in the sales process that might hurt a few people or at least be different than they wanted, but would be good overall for the membership and/or good for the product. The difference between this line of thinking and below is that it can be good for both sides looked at overall.

Personally I don't believe in buying to sell later, too many variables and too much risk but I do believe it's a good idea of have a long term game plan and a exit strategy if it's needed unexpectedly. I think you're giving far too much credit to ROFR. It does have an effect but I don't believe it has much of one long term. The difference is plain and simple IMO even for the off property locations, it's the on property hotel options/prices. Still, just a few years ago DVC prices for resort already available were half what they are now with almost no active ROFR and will be again (or lower), if/when there is such an economic downturn. Part of the issue for me is while it may be good for the system and good for all of us who are owners for a given person to buy retail, it's almost always a bad choice for them even when they think it's a good one. Whether they're paying 50-100% more than they need to or buying something they can't afford. I can't throw them under the bus with a good conscience for the benefit of the system or the rest of the owners.

Just because a developer withholds an alternative to suit its business needs doesn't make me feel right to do the same.

Timesharing in general is a lot like used car sales only worse. There's the sales process and the product. Even with Disney, one needs to separate out the 2 IMO. If they can't, they likely shouldn't participate. However, there are extremely few situations (almost none really) where one can legitimately use the terms feel and fair in the same sentence with timeshare. IMO one who understands the system can get away from feel and fair and deal with the facts. That fact is what we bought is a timeshare and our guarantees are very limited. Even the contractual items can be changed on a whim in most cases without our input.

I disagree. I think you have it backwards. Just because Disney was able to sell the widget for $30k doesn't mean it's worth $30k. Nobody else can sell it for that price. You take the depreciation hit the moment you sign the deal.

Disney is selling a $15k widget for $30k by throwing in about $2k of extras. But since those extras are not transferable, you still own a $15k widget, no matter if you paid Disney $30k or bought resale.

That's timesharing in a nutshell. Timeshare are sold, not bought. Certainly DVC is a little of both but the principles still apply. It's actually worse than a new car scenario but with the same principles involved. Likely a better comparison is buying a used car from a dealer vs a different but cheaper source. It's only worth what it's worth on the open market resale at most. Still, timeshares don't follow a true supply and demand analysis, they're more like a collectible.

 

[supersnoop]

I say you may be misreading it because you keep going back to Disney.

I keep bringing up Disney because it's relevant to the scenario. Without Disney, you're describing unsustainable arbitrage. The widget is worth the price people will pay for it on the open market. The Disney price is not an open market price; it's a manufactured market where they exert certain price controls through perceived differentiation.

 

[prestoncaldwell]

The collectible that keeps on collecting....

 

[prestoncaldwell]

Timesharing in general is a lot like used car sales only worse. There's the sales process and the product. Even with Disney, one needs to separate out the 2 IMO. If they can't, they likely shouldn't participate. However, there are extremely few situations (almost none really) where one can legitimately use the terms feel and fair in the same sentence with timeshare. IMO one who understands the system can get away from feel and fair and deal with the facts. That fact is what we bought is a timeshare and our guarantees are very limited. Even the contractual items can be changed on a whim in most cases without our input.

That bolsters the point I'm trying to make. You are absolutely correct that timeshares, at least retail timeshares, are sold, not bought. The fact that salespeople have to, or believe they have to, revert to sales practices that range between gray area and unethical to push their sale doesn't and shouldn't obligate me to support their cause under the guise of artificially raising the real value of my timeshare on the resale market.

 

[Dean]

Regarding VIP benefits, Wyndham will not count resale contract points toward the points requirement for VIP status.

This is basically the way BG functions as well. One you qualify, you can use ALL points under the master contract towards VIP options. Also, BG combines contracts even if titled differently or different UY.

 

[prestoncaldwell]

This is basically the way BG functions as well. One you qualify, you can use ALL points under the master contract towards VIP options. Also, BG combines contracts even if titled differently or different UY.

Same with Wyndham, although they had a push to try and align all use years within each member account. They didn't get them all then, and they don't seem to be pushing it going forward from that point in time.

 

[Dean]

That bolsters the point I'm trying to make. You are absolutely correct that timeshares, at least retail timeshares, are sold, not bought. The fact that salespeople have to, or believe they have to, revert to sales practices that range between gray area and unethical to push their sale doesn't and shouldn't obligate me to support their cause under the guise of artificially raising the real value of my timeshare on the resale market.

I don't think they're one and the same, I believe and have said on DIS a number of times, there are ways to push sale and be ethical and that's OK. IMO DVC leaves a boatload of sales on the table. They don't actively recruit those who check in and are not members, they don't actively court members to buy more points (an area where most retails sales come from in timeshares in general) and they have been TOO low pressure historically during the tour process, IMO. I remember a report of someone who toured and were going to buy but they never asked them to and so they assumed they didn't qualify and didn't buy. I agree, they're worth what they're worth and sold for what they're sold for and there isn't that much relationship between the 2. MOST buyers don't know enough to make an informed decision though I think it's changed % wise over the years due to the internet, etc. One thing I've marveled at over the years is how often and poorly otherwise smart methodical people tend to approach timeshare purchases. They don't read the contract, much less the POS. They take what a sales person told them as gospel. I think it's a combination of greed and vacation related emotions but the reality is that historically timeshare sales people are among the best sales people out there. If they turned to illegal ventures, they'd legitimately be labeled con men/women. They make successful car sales people look like it's their first day on the job. Realize the sales fails have cost us as members a number of off property resort options over the years so there's a real cost and negative to this reality.

 

[BillPA]

Disney tracks every move you make. They know what you buy, when and where you eat, what you eat/drink, they even know which bathrooms you use and how long after a meal you use it. I think they will start adding a toilet paper fee on you room bill.