Will Corona Virus Force Lifting of Resale Restrictions at Riviera?

[BWV Dreamin]

Well I foresee all DVC sales taking a hit. Disney And DVC are going to have to come up with another marketing strategy to justify such a large purchase at a time when the country will be trying to recover from a wartime economic impact. Lifting the restrictions would be a start.

 

[ChipNdale8887]

Well I foresee all DVC sales taking a hit. Disney And DVC are going to have to come up with another marketing strategy to justify such a large purchase at a time when the country will be trying to recover from a wartime economic impact. Lifting the restrictions would be a start.

It'll be interesting to see how long disney can pay their employees like they are or how prepared they are to weather this. If a Company Like Disney isn't prepared, then honestly this will not be good for the general population and their Jobs.

We could realistically see the parks being closed until July 1st maybe longer honestly. If that happens then what does that mean for people's Jobs being shut down, banks, hospitals.

Honestly, I think you may be right, everything might be on the table Eventually.

 

[Sandisw]

The Only thing with this is if the Gap becomes wider and wider the bigger deal you get via resale. Though if you are talking about just Riviera then there is no problem but the larger the gap is between Direct Versus Resale the harder it is to justify. People are becoming even more tech savy now than in the 2000's so more and more people will do their own research on DVC and eventually will come to the Resale market. It's the same thing that has happened to the travel industry and travel agents. With more technology in people's hands the more informed they are.

If direct prices are over $220 a point and resale are dropping to 60-120 then they might have a problem. And I'm not talking just Hilton Head and Vero Beach in the 70-100 range either.

I can only imagine that the Resale Market and percentage resale of all points is growing more and more every year. This is why Disney is trying to curb the resale market. They can't touch the legendary 14 resorts really so they are trying a new method. Now I'm just rambling on. lol

I was referring to only selling RIV and that the resale value because of restrictions would be an issue,

So, if resale values are a lot less than direct, Disney can use it to support the notion that buying for resale value Shouldn’t be considered,

Not saying it would help with sold out resorts, but just something to make the restrictions and what one could sell for down the road not seem so important.

 

[_auroraborealis_]

If the economy is tanking, "look, no resale restriction if you sell this direct contract later" is not going to be a big winner. Removing the restriction or allowing O14 resale to book Riviera bolsters the resale market more than it does direct in a downturn.

 

[Miffy]

I was wondering if Disney might remove the restrictions on all resale contracts. This would have to be the result of an extreme situation--but look where we are right now. It's pretty extreme and no one could've predicted it.

For example, what if a significant enough number of DVC contracts were defaulted and Disney is left holding all these contracts that they're used to getting regular MFs for? At that point, wouldn't they rather have resale buyers who pay MFs? And so be willing to maybe ease up on the resold contract restrictions, like letting resale buyers purchase discounted APs?

Maybe something that extreme won't happen, but, what if?

 

[Matty B13]

I wonder if DVC will offer 0% financing, I would think that they have access through Disney to cheap money. This would be a much bigger incentive than removing restrictions that most people don’t know about.

 

[ELMC]

We are looking at quick cash. That is what lifting the restrictions would provide. It is going to take Disney YEARS to recover from this.

Possibly, but I'm not convinced. By all accounts this closure is going to cause Disney in the range of four billion dollars. By contrast, they made eleven billion dollars last year. This hurts, no doubt about it, but I don't think the damage is that long term or irreversible.

I think that significant dollars off of a purchase...real cash money right now...is going to have more impact over a prospect's decision to buy than lifting of some restrictions. Furthermore, we still haven't established with any degree of certainty exactly what impact the resale restrictions have had on direct sales. Sure, people on here are upset, but we are less than 1% of the DVC population and we are also amongst the most sophisticated DVC buyers. Riviera is close to 20% sold out in less than a year. Animal Kingdom villas have roughly the same number of points and that took seven years to sell out (in a similar economic climate as the one we are heading into. With all due respect, I think peoples' desire to see the restrictions removed is allowing them to come up with justifications as to why Disney should remove them.

Well I foresee all DVC sales taking a hit. Disney And DVC are going to have to come up with another marketing strategy to justify such a large purchase at a time when the country will be trying to recover from a wartime economic impact. Lifting the restrictions would be a start.

Cash is king. Also, in sales it's important to sell the sizzle, not the steak. Restrictions are part of the "meat" of DVC, good and bad. $20 off per point, free annual passes, comp for an existing stay, 10% free points...the list goes on. These are attractive, buzz-worthy incentives that will help sell more than the removal of restrictions that have not even been established to be a deterrent. Additionally, given that the restrictions are part of a long term master plan, I don't see them abandoning them in exchange for a short term boost. That's never been Disney's MO.

 

[BWV Dreamin]

I was wondering if Disney might remove the restrictions on all resale contracts. This would have to be the result of an extreme situation--but look where we are right now. It's pretty extreme and no one could've predicted it.

For example, what if a significant enough number of DVC contracts were defaulted and Disney is left holding all these contracts that they're used to getting regular MFs for? At that point, wouldn't they rather have resale buyers who pay MFs? And so be willing to maybe ease up on the resold contract restrictions, like letting resale buyers purchase discounted APs?

Maybe something that extreme won't happen, but, what if?

This is exactly what happened 2008-2011. Literally no ROFR. Prices tanked and opportunists bought. This is way worse than 2008.

 

[BWV Dreamin]

@ELMC...... a lot of Riviera's success was fueled by a sizzling economy. Our economy haz now forever changed. How long will the recovery take? I see all new DVC put on hold or totally scrapped. Defaults on DVC loans. And then there is still Riviera to sell.....

 

[AKNOTTS66]

@ELMC...... a lot of Riviera's success was fueled by a sizzling economy. Our economy haz now forever changed. How long will the recovery take? I see all new DVC put on hold or totally scrapped. Defaults on DVC loans. And then there is still Riviera to sell.....

I could still see them possibly moving forward with the Disneyland DVC tower. That thing will still sell like hotcakes, just look at the Grand Californian, resale is snatched up at really high prices and booking at 7 months is impossible.

 

[KAT4DISNEY]

I could still see them possibly moving forward with the Disneyland DVC tower. That thing will still sell like hotcakes, just look at the Grand Californian, resale is snatched up at really high prices and booking at 7 months is impossible.

VGC did not sell like hotcakes when it opened during the last deep recession. I would be surprised that any DVC will sell like hotcakes in the near future.

DVC may have another PR issue if they stick with not allowing UY's who had their reservations cancelled after their banking deadline and were not been allowed to bank their points. It's hard to want to buy from a company that makes a decision like that in the light of a pandemic.

 

[Sandisw]

This is exactly what happened 2008-2011. Literally no ROFR. Prices tanked and opportunists bought. This is way worse than 2008.

All that undeclared inventory of RIV can be offered for cash. Disney Parks and Resorts will be looking to build up their division again, so having nice, brand, new rooms, with lots of space, to offer at a great discount...they did some 40% off already...allows them to do that. We could very well see 50% off if needed.

So, for Disney, as a company, if DVC sales slow, they have a back up to generate income on all those RIV rooms.

 

[ELMC]

@ELMC...... a lot of Riviera's success was fueled by a sizzling economy. Our economy haz now forever changed. How long will the recovery take? I see all new DVC put on hold or totally scrapped. Defaults on DVC loans. And then there is still Riviera to sell.....

I don't disagree with you regarding the economy, I'm about as bearish as they come on that. But I think the comparison is a fair one: AKV was launched in the midst of the last recession existed during the heyday of DVC resale, and yet it sold out. It took a long time, but it sold out. Riviera is only 20% sold heading into this recession (when it almost inevitably gets here) and while I'm sure they're not thrilled, I don't think they're hitting the panic button just yet.

This is exactly what happened 2008-2011. Literally no ROFR. Prices tanked and opportunists bought. This is way worse than 2008.

I agree with you that this is worse than 2008, but it's also different. This is a bit of an oversimplification of a complex financial meltdown, but I would suggest that 2008 started by hammering those at the top in the form of a market meltdown. The very same people buying $20,000 timeshares were the people losing their shirts. This economic event is starting by hammering hourly workers and the middle class. Executives and those able to work from home by the nature of their jobs are still not significantly impacted. And while peoples' 401k might have taken a hit, all this really did was take us back to 2017 levels. If the market can hold even a little going forward this demographic won't be wiped out in quite the same way they were in 2008. These are the people buying DVC and for now they are the least impacted by this of anyone.

 

[ELMC]

DVC may have another PR issue if they stick with not allowing UY's who had their reservations cancelled after their banking deadline and were not been allowed to bank their points. It's hard to want to buy from a company that makes a decision like that in the light of a pandemic.

I agree that it's messed up, but sadly I don't really see anybody caring. Not enough to move the needle anyway. They'll spin it that they were looking out for all owners by protecting future availability and that it is unfortunate that a small number of owners were adversely impacted but that they are working with them individually to come to some agreement and the whole thing will just go away. Either that or Justin Bieber will get a pet tiger (or something equally as ridiculous) and it will be blown out of the discourse in this "30-second-attention-span" world we live in.

 

[LAX]

I am more curious about how the restriction will actually play out in real life. When those newly minted owners start losing their jobs and are forced to sell, then realize what they bought is now worth about 2/3 (or may be worse) of what they paid for less than a year ago. To make matter worse, resale buyers interested in snapping up RIV contracts will likely be limited because of the restrictions (at least until the price is too good to refuse, I guess), so there might be a glut of RIV contracts waiting for buyers looking for bargains. This might get ugly.

LAX

 

[Aussie RJ]

I’m going to call it. DVC will lift the restrictions on Riviera at the conclusion of these lockdowns. They will return on future resorts but with the incoming recession and record high unemployment , DVC will have no choice.

 

[BWV Dreamin]

I’m going to call it. DVC will lift the restrictions on Riviera at the conclusion of these lockdowns. They will return on future resorts but with the incoming recession and record high unemployment , DVC will have no choice.

This. Remember Disney is losing BILLIONS. Each day they stay closed bigger their deficit. Look at Disney Shanghi, Tokoyo, Paris, Hong Kong. What are their losses? Don’t think any have reopened ( to my knowledge). What going on 3-4 months now? I can only imagine the financial devastation if Disney stays closed for 6 months. They will take any cash they can get.

 

[ChipNdale8887]

All that undeclared inventory of RIV can be offered for cash. Disney Parks and Resorts will be looking to build up their division again, so having nice, brand, new rooms, with lots of space, to offer at a great discount...they did some 40% off already...allows them to do that. We could very well see 50% off if needed.

So, for Disney, as a company, if DVC sales slow, they have a back up to generate income on all those RIV rooms.

Thats if and when they can get people in those rooms. And only will help if other resorts are filled also. Selling DVC now gets cash immediately whether rooms are booked or not. Letting people book Riv rooms on a cash basis likely only gets them 1 nights deposit, selling points at Riv gets them much more whether those people are booked for trips or not. Something to think about also. Riv might be better of sold for points than cash rooms.

 

[ChipNdale8887]

I don't disagree with you regarding the economy, I'm about as bearish as they come on that. But I think the comparison is a fair one: AKV was launched in the midst of the last recession existed during the heyday of DVC resale, and yet it sold out. It took a long time, but it sold out. Riviera is only 20% sold heading into this recession (when it almost inevitably gets here) and while I'm sure they're not thrilled, I don't think they're hitting the panic button just yet.

I think the big difference of RIV VS AKV is the parks will likely be shut down for atleast Half of March, all of April and May. Thats a lot of revenue lost and not just a resort taking long to sell out. Someone said they lose 40 million a day for WDW being shut down so 2 months and a half comes out to 3 billion dollars lost. Its more than just Riviera taking a long time to sell out. This is all so different than a Recession, but a complete closure. Itll be interesting to see how this changes Disney. I think I saw somewhere that 40% of the WDW company is parks oriented and 20% or so is from their movie business which is also hampered now with theaters closed down.

 

[AvidDisReader]

So in 2008 resale prices tanked, heck the economy tanked. But what happened--after 2011 we started one of the longest sustained periods of growth in our history with Feb 2020 showing the lowest recorded unemployment rates. The point I want to make, does Disney take a short term view and offer big incentives or cancel the restriction---or take the long term view betting that the economy will explode after we finally defeat this virus in another year or so. I betting on the latter with some small incentives but no major roll backs.