Will DVC remove the Riveria resale restrictions due to Covid-19 /economy?

[CastAStone]

Cash, the lifeblood of business. And loan repayments. They will need cash and as much of it as possible, ASAP. If it wasn’t an absolute behemoth of a company, Disney would have been looking at bankruptcy.

Disney isn't doing great but Parks and Resorts could have survived on its own for some time. We see others who entered this in far worse financial shape like Six Flags, Cedar Fair, and Sea World still operating and out of bankruptcy. Heck, Cedar Fair still hasn't reopened half their parks.

 

[sethschroeder]

Unsure if this has been mentioned but perhaps DVC keeps the resale restriction in place but lowers the point threshold for direct DVC benefits to 50-75 points

They just raised is so at this point there would be very small demand for that. There would also be people like myself who end up going direct because even at 100+ points it came out cheaper to sell off 2 smaller resale contracts and then buy.

I think what is more likely is some form of buy X and get all your resale points to become direct points.

 

[ChipNdale8887]

Cash, the lifeblood of business. And loan repayments. They will need cash and as much of it as possible, ASAP. If it wasn’t an absolute behemoth of a company, Disney would have been looking at bankruptcy.

Exactly. Its also the reason they are likely continueing with the DVC tower because they know that will sell extremely fast. Just look at resale prices for VGC and direct prices. Theres so much pent up demand out there for. More DVC. They could sell it at 265 initially and it would likely sell fast.

 

[ljlaurajane]

Cash, the lifeblood of business. And loan repayments. They will need cash and as much of it as possible, ASAP. If it wasn’t an absolute behemoth of a company, Disney would have been looking at bankruptcy.

Yes hadn’t really thought of that. Although I still suspect they will offer additional incentives such as APs or 0% finance before they will remove those restrictions

 

[CLE2WDW]

Yes hadn’t really thought of that. Although I still suspect they will offer additional incentives such as APs or 0% finance before they will remove those restrictions

That’s a great idea. Much like auto companies are currently doing offer the consumer 0% financing for an extended period and sell the receivables to a 3rd party for 95 cents on the dollar. It’s fast and easy cash at a time where cash is absolutely king.

 

[sethschroeder]

I think everyone needs to put this in perspective.

If Disney were to fully sell out Riviera tomorrow they would have sold it for roughly $1.3B in total revenue. 20% of that has already been sold so we take that down to $1B. In 2019 Parks made that like every 2-3 weeks in revenue.

So we are saying they are going to systematically change their whole future so they can pull down $1B in revenue over the course of the next 3 years vs next 4 years.

 

[CastAStone]

I think everyone needs to put this in perspective.

If Disney were to fully sell out Riviera tomorrow they would have sold it for roughly $1.3B in total revenue. 20% of that has already been sold so we take that down to $1B. In 2019 Parks made that like every 2-3 weeks in revenue.

So we are saying they are going to systematically change their whole future so they can pull down $1B in revenue over the course of the next 3 years vs next 4 years.

Bingo.

 

[Sandisw]

I just want to add they currently added a 40% Passholder rate...I believe RiV can be had for $360/night.

Makes more sense for them to simply increase cash discounts as they sell...that’s a good rate for sure!

 

[Aussie RJ]

I just want to add they currently added a 40% Passholder rate...I believe RiV can be had for $360/night.

Makes more sense for them to simply increase cash discounts as they sell...that’s a good rate for sure!

So it’s cheaper to stay there on cash than to buy DVC. That will work for sales.

 

[glamdring269]

So we are saying they are going to systematically change their whole future so they can pull down $1B in revenue over the course of the next 3 years vs next 4 years.

We don’t know how big of a deal this structural change is to their future. For all we know it was heavily contested and was decided by the slimmest possible margin. It could have been a test to see how the market would react. Etc.

I do know that if they can pull forward a few hundred mil in revenue in order to achieve short term corporate profit objectives that they will seriously consider it either way. I see this type of short term decision making all the time in my industry. Short term positive cash flow is a much easier sell relative to any perceived long term benefit related to these Riviera restrictions.