Would you pay to have resale points be unrestricted?

[CaptainAmerica]

Almost nobody who buys a timeshare considers how much they can resell it for, if most people did then timeshares wouldn't exist since most are only worth pennies on the dollar in the resale market and that would be a stupid purchase. DVC is an outlier in that not only do their contracts hold their value they go up in value even as the years left on them decrease. What DVC is doing is making buying resale unattractive and this will in turn lower the value of resale. People will buy direct because of their FOMO and DVC will be able to exercise their ROFR to buy back resale contracts cheaper to resell as direct.

You're contradicting yourself. DVC has no interest in lowering the value of resale. They keep resale prices high on purpose via ROFR.

 

[Bearval]

You're contradicting yourself. DVC has no interest in lowering the value of resale. They keep resale prices high on purpose via ROFR.

You are wrong, DVC ROFR has almost no impact on the price of resale since they do not bid on resale contracts. They pick and chose what they want when they need points to sell direct. ROFR doesn't explain the high resale prices for RIV, competition from the resale buyers are what keep the prices high.

 

[DVCSunDevil]

If DVC were to allow resale owners to "upgrade" their points to be unrestricted for use for RIV and other future resorts (or for RIV resale owners to use literally anywhere else besides RIV) for the life of your contract, would you pay for it? If so, how much would you realistically be willing to pay--10pp? 20pp? 30pp? Bonus question: Would you pay even more to get resale points to count towards blue card status? If so, how much?

Feel like this could be a win-win situation for DVC and resale owners. Easy money for DVC and allows resale owners the opportunity to book other places like RIV and upcoming resorts. Think DVC would ever go for something like this? Is this even a good idea?

Personally, I would not. But that is only because I don't really care about staying at Riviera. If some amazing new resort opened and I really wanted to stay there, maybe I would consider it. But I wouldn't pay more than $10/pt for it (I have a 200pt contract, so that would be $2000). I don't see DVC doing this, though. Because then there would be even more incentive to purchase via resale...the resale price plus the "upgrade" would still be considerably less than the direct price.

 

[Ruttangel]

You are wrong, DVC ROFR has almost no impact on the price of resale since they do not bid on resale contracts. They pick and chose what they want when they need points to sell direct. ROFR doesn't explain the high resale prices for RIV, competition from the resale buyers are what keep the prices high.

RIV still has a low number of listings and has been slotted in at the low end of the market with SSR/AKV about $140pp and it’s still overpriced given it’s a vastly inferior product
ROFR is not consistent across resorts, some they are just buying more back than they are selling direct and hence lifting the price, BCV is now $170 and they are gathering points without selling.
There are over 1500 listings at the minute which means we are in a buyers market with lots of choice to put aggressive low bids but ROFR creates a floor where a bid is risky to pass.

 

[CaptainAmerica]

You are wrong, DVC ROFR has almost no impact on the price of resale since they do not bid on resale contracts. They pick and chose what they want when they need points to sell direct. ROFR doesn't explain the high resale prices for RIV, competition from the resale buyers are what keep the prices high.

None of this is correct. Disney doesn't bid on INDIVIDUAL resale contracts, but the ROFR process bids up the market overall. If a buyer and seller would have otherwise come to a negotiated price of $120, but both parties know that Disney is ROFRing that resort around $160, the seller is going to list for $160 and the buyer is going to pay it. It's a price floor.

Your example is like saying "the government doesn't directly hire fast food workers, so minimum wage has no impact on McDonald's labor costs."

 

[CaptainAmerica]

ROFR creates a floor where a bid is risky to pass.

And sellers know this, so ROFR shifts the supply curve.

 

[Bearval]

You

None of this is correct. Disney doesn't bid on INDIVIDUAL resale contracts, but the ROFR process bids up the market overall. If a buyer and seller would have otherwise come to a negotiated price of $120, but both parties know that Disney is ROFRing that resort around $160, the seller is going to list for $160 and the buyer is going to pay it. It's a price floor.

Your example is like saying "the government doesn't directly hire fast food workers, so minimum wage has no impact on McDonald's labor costs."

You are wrong. All the past attempts by DVC to drive people away from the resale market to buy direct have failed since there wasn't much difference between the products but you could save a decent amount of money but you also had a a lot of people buying and driving resale values up. This is why they have now put in the newest restrictions which are pretty severe and now create a huge difference between the products yet still with DVC NOT EXERCISING ROFL RIV contracts the resale prices in my opinion are too high but this is only because regular people are driving the prices up not DVC.

 

[hglenn]

You
You Are wrong.

So your take is that competition amongst people who want to buy resale is what keeps the resale price high? I don't understand how that could be the driving factor when there is an ample number of contracts available on the market and buyers are still offering above asking price based on the ROFR buy-back price.... If it were solely based on competition amongst buyers then there would be no reason to see offers above asking price. I think RIV is the exception to this as there are actually a small number of contracts available (in comparison to the other resorts) and when someone finds the right use year and points, then they do need to act quickly. Outside of that, I do think that it's the ROFR that keeps the price high... Which, to me, is the best part of owning DVC over other timeshares - Disney is not going to allow the value to tank over time.... Perhaps my perspective is way off.... (Full disclosure - I'm not an owner yet but I do have a contract in ROFR that I do not think will pass.... but I was willing to risk it based off of the low asking price.)

 

[Ruttangel]

See links below, what is the point of bidding $100 on OKW if its getting taken at $130. $100 was a perfectly fine level in 2021 and earlier but now since last summer it’s rocketed, same with SSR/AKV
https://www.dvcnews.com/dvc-program...-flat-60-of-2042-resort-contracts-bought-back

https://www.dvcnews.com/dvc-program...ales-increase-in-price-and-decrease-in-volume

 

[DVCSunDevil]

See links below, what is the point of bidding $100 on OKW if its getting taken at $130. $100 was a perfectly fine level in 2021 and earlier but now since last summer it’s rocketed, same with SSR/AKV
https://www.dvcnews.com/dvc-program...-flat-60-of-2042-resort-contracts-bought-back

https://www.dvcnews.com/dvc-program...ales-increase-in-price-and-decrease-in-volume

That price will reset though. It is now obvious that DVC was buying those OKW contracts back because there was a price increase coming. I would bet that the price on BCV will increase soon because they’ve been buying back a lot of those contracts. When DVC uses ROFR to purchase a contract, they are not only doing it because they are trying to keep some price floor. They’re also doing it because of a strategy they have in place, which is what we just saw happen. If DVC had no plans to increase the price at OKW, I would bet they would not have been using ROFR for those contracts.

 

[kilik64]

Everyone is wrong.

Its not an either or situation. Its a both situation. Both the supply and demand of the market along with the knowledge of what DVD is currently doing in the ROFR game factors into what prices are on the used market for DVC points on resorts that they exercise ROFR.

They dont do ROFR on Aulani or RIV right now, so the only factor in play for those is the supply and demand of the resale market. For every other resort, ROFR is a factor you must look at as both a buyer and a seller. Seller has the incentive know what it is so they can maximize their price sold. Why would you sell for well below current ROFR rates for similar contracts? On the flip side as a buyer you can either gamble and hope your contract passes below the ROFR or you can try to bid around it or slightly higher hoping for a pass. For the buyer its also a time game as well as it takes time and effort to find the right contract. So both sides knowing what they know, is how they come to a meeting of the minds on a price, which obviously ROFR is a factor in that.

Markets react to all information and ROFR is information that the market definitely reacts to. To say it has no Bearvaling on the resale market is ignorant of how economies work.

 

[CaptainAmerica]

That price will reset though. It is now obvious that DVC was buying those OKW contracts back because there was a price increase coming. I would bet that the price on BCV will increase soon because they’ve been buying back a lot of those contracts. When DVC uses ROFR to purchase a contract, they are not only doing it because they are trying to keep some price floor. They’re also doing it because of a strategy they have in place, which is what we just saw happen. If DVC had no plans to increase the price at OKW, I would bet they would not have been using ROFR for those contracts.

Nope. No, I can't prove it and I don't claim to be some big-time insider, but I can tell you that Disney does not care to buy and then flip resale points for a higher price. The exercise ROFR to keep the resale price high, that's pretty much* the only reason. The fact that they can resell those points is a side effect / afterthought.

Think about it like this. Disney buys a 200 point Saratoga contract through ROFR at $140 and then sells it at $190. Seems great, right? $50 margin? Yeah, except they just cannibalized a Riviera contract that they could have sold at a hell of a lot higher margin than $50.

*Setting aside the OKW 2042/2057 situation, because that's a whole 'nother kettle of fish.

 

[OKW Lover]

Not getting into the ROFR/price discussion.

But as far as DVC offering unrestricted points for a price goes, I don't think this is legally permissible. I haven't read the RIV documents but isn't the restriction part of them? If so, I don't see how they could change.

 

[Docwheeze]

New AND current members buy direct for FOMO but also FOROFR! It is the Fear that plays a role.

 

[hglenn]

New AND current members buy direct for FOMO but also FOROFR! It is the Fear that plays a role.

Yes, you are correct....Fear and Time... The amount of time it takes to get points on a resale is a big deterrent for me.... If I buy resale again it'll only be a stripped contract so I have the time to just wait....

 

[Ruttangel]

if DVC had no plans to increase the price at OKW, I would bet they would not have been using ROFR for those contracts.

That theory doesn’t work for AKV, it was $186 direct price from 2019 and ROFR forced it up to over $130 by August last year from $105, only this month has direct gone up

 

[Docwheeze]

New AND current members buy direct for FOMO but also FOROFR! It is the Fear that plays a role.

Also, FOMOR, fear of missing other resorts!

 

[BeachClub2014]

The devil would be in the details, but I am likely a "no" on the original question.

 

[CaptainAmerica]

Also, FOMOR, fear of missing other resorts!

That one always puzzles me.

- I don't like Riviera.
- I'll never visit California frequently enough to worry about DLT, nor do I expect to be able to get in at 7 months anyways.
- I already have access to the Poly.

Why would I buy direct now for access to a resort that Disney might build five years from now, which I may or may not love?

 

[heynowirv]

No I wouldn't, we have enough points for now and pretty much get to go wherever we want to. My only regret is we did not pay 15.pp to extend our OKW points from 2042 to 2057....Life has gone on.