Why reduced ROFR in February

[tom1944]

Could it be that rather than ROFR contracts Disney has decided to pursue foreclosures. All across the country Covid put a limit on evictions and foreclosures and while I doubt timeshares were protected from those actions Disney might have had an internal policy to cut back.

The reason I was thinking that is I just looked at the county site and since March 1st there were over 40 foreclosures.


I will do a year over year comparison for the first few days of March and see if that number is an outlier compared to other years.

 

[Sandisw]

No one knows but since I have been an owner…bought in 2009..the past year or so seem to have a much higher rate of ROFR then I remember.

Many times I years past ROFR was minimal…I just think that whatever reason they wanted contracts and points is no longer there.

One thing to also remember is that they can rent rooms for cash with the DVC points which means they could close down more of the rooms at the cash resorts…and reallocate the staff, etc,

When they reopened after Covid, the DVC resorts were used for cash reservations so they didn’t have to open the other resorts as fast.

One thing clear to me is that when ROFR doesn’t happen, the price gets back to a level that reflects the market.

 

[tom1944]

I could not have been more wrong.

Using the first 3 days in March

2020-109 foreclosures
2021 103
2022 77

 

[Brian Noble]

[Edited: I wrote the following before seeing your YoY numbers.]

Pursue might be too strong a word. I suspect that if people fall behind on their loan payments and/or Dues that Disney does not mess around. So, if there are more foreclosures YoY, I would expect that's because more people are missing payments, not that Disney would suddenly care more about missing payments. I also suspect that foreclosure is quite a bit less expensive than ROFR at current market prices--particularly because FL has an option of a non-judicial process.

In other words, I don't think it's an either-or thing.

 

[Nursemanit]

This is a return to normal, bubbles burst. Disney ( like the rest of us) can't see what will happen in the next year so they are exercising caution.

 

[Robbie Cottam]

Disney lost over a billion dollars a quarter for the last 2 or 3 quarters….

Maybe Mickey tightened the belt on inventory.

I bought two contract from Disney after BLT was sold out, one they had in stock, one they had to take ROFR ….

it Is kinda a buyer market right now, maybe Disney knows they can not compete

 

[AaronEuth]

I think the explanation is simply in the next few months they will have a lot of Direct Inventory to sell. VDH, new Poly, new VGF, RIV, AUL; plus anything leftover from a very ROFR heavy 2022. They may feel that the demand for resorts outside the five is less than their remaining inventory, and if not they can always ROFR more later.

 

[sethschroeder]

I find it all pretty easy to explain:
End of the 50th (which people predicted would drive up DVC prices)
Economy downturn (which is not doing well no matter how many people want to claim otherwise)

Too many people gloss over the economy.

 

[Robbie Cottam]

I think the explanation is simply in the next few months they will have a lot of Direct Inventory to sell. VDH, new Poly, new VGF, RIV, AUL; plus anything leftover from a very ROFR heavy 2022. They may feel that the demand for resorts outside the five is less than their remaining inventory, and if not they can always ROFR more later.

New poly will not go on sale for at least a year….

 

[Lucky Wall-E]

New poly will not go on sale for at least a year….

This is why I also think ROFR will be non existent for 1 maybe 2 years.
Why would Disney buy back old contracts that they are not going to be able to sell directly and sit on all those points? Let them stay bought so people are paying dues.

Disney will be focusing on selling out VDH (which will sell, demand is there) and try to continue promoting VGF and RIV. Unless they come back with older resort discounts, but I think they got all they could from those promotions last year, they will not need to buy very many sold contracts back for new buyers.

Disney has to come through this downturn in economy right now and I think letting go of ROFR is in their best interest.. that is until it affects direct sales.

 

[Robbie Cottam]

This is why I also think ROFR will be non existent for 1 maybe 2 years.
Why would Disney buy back old contracts that they are not going to be able to sell directly and sit on all those points? Let them stay bought so people are paying dues.

Disney will be focusing on selling out VDH (which will sell, demand is there) and try to continue promoting VGF and RIV. Unless they come back with older resort discounts, but I think they got all they could from those promotions last year, they will not need to buy very many sold contracts back for new buyers.

Disney has to come through this downturn in economy right now and I think letting go of ROFR is in their best interest.. that is until it affects direct sales.

Disney will buy back anything they can sell….
Some members don’t want resale

 

[Sandisw]

This is why I also think ROFR will be non existent for 1 maybe 2 years.
Why would Disney buy back old contracts that they are not going to be able to sell directly and sit on all those points? Let them stay bought so people are paying dues.

Disney will be focusing on selling out VDH (which will sell, demand is there) and try to continue promoting VGF and RIV. Unless they come back with older resort discounts, but I think they got all they could from those promotions last year, they will not need to buy very many sold contracts back for new buyers.

Disney has to come through this downturn in economy right now and I think letting go of ROFR is in their best interest.. that is until it affects direct sales.

The number of points that DVD took back via ROFR in the last year was much, much higher than the points sold at those resorts.

So, while one reason for them to take back sold out resorts is sales, it is not the only reason because what we have seen does not match up in anyway.

All points they own can be used for cash rentals, to stock up on OTU points to offer members, and I am sure for other reasons we are not privy to...so, while having a lot of direct points could definitely contribute, I don't think that in itself is what is behind the reason that ROFR seems to be on hold.

 

[Jlo85]

It’s the $5.5B in budget cuts y’all. If 2nd QTR results are good (scheduled for May 10th I think), then I think they will restore the ROFR budget. Iger is just trying to get a handle of the stock going into freefall. Corporations don’t radically change a business practice unless it comes directly from the CEO.