Concerned about the Future of the DVC resale

[TiggerBouncy]

FWIW - I had a kiosk DVC guide at DCA tell me that this was already the case, only she said 7 months, and this was for all resale contracts. Now, I understand this info is about as good as if I had talked to the guy at the churro cart, but I think you'd see a fire sale with people getting out of DVC if this ever turned out to be true.

I don’t think a change like that would stand up in court.

As is traditionally the case, they would grandfather current contracts and it would only affect new contracts as of a certain date. There would not be a mass sell off.

 

[toontoy]

I really don't understand the resale restrictions. Simply put, we own a new home in an HOA. So when I sell my home, the new owners have to pay the same dues as the original owners but aren't invited to anything and are looked at by the other original owners and association as 2nd tier owners. That kinda rubs me the wrong way. When people say you have the option to buy direct instead of resale. I simply wonder how many people would go to a BMW dealership and buy a 2002 BMW 7 series for the price of a 2019 model?

It seems strange to me that this is the "problem" they are trying to combat. I am not sure who would own a property for the entire lifespan, which for DVC is 50 year-ish. From everything I have researched is like buying a car and the dealer forcing you to return it to them if you want to sell it as they will take the steering wheel out if you try and sell it yourself. I realize that many timeshare companies do this, but always thought Disney would be different. That was an illusion. The new changes have rubbed me the wrong way and my wife won, we won't be buying. Owning other systems I have to say that I am curious how this will affect the value and ease of using DVC.

In one of the clubs I owned for a little under 2 years, they had restrictions on resale only at your home resort and it was often impossible to get exactly what you wanted since you had owners wanting to book and then once it went to club you were stuck, nothing was ever open for changes or last min options. Everyone could book your resort and others but you could only book the one. Needless to say I received it with some money as the seller paid me to take it and I paid someone to take it off my hands. it got little use and cost overall next to nothing, but it was a waste of my time.

Having read through the major documents and rules I realize they leave the option for changes and its very open ended for Disney. I just wonder when and or if they will make the resale rule retroactive as that is possible. I am just curiously sitting on the sidelines as one who jumped the cool-aid train so to speak. I almost had my wife on board but for us it wouldnt be a full 50 year ownership at Reiveria or Beach club or Bay lake. We would want to be able to sell it down the road and this gives me too many concerns and with the capital outlay I am not sure if its the best option.

 

[MickeyMouse3!]

If the DVC does restrict new sales/reservations to just that resort, I would think that could drive potential buyers to consider a non Disney time-share. Most of the major hotel groups have their own form of time-shares which are located all around the world, and at a significant discount compared to DVC. If DVC wants to stay competitive, they would have to consider what others are offering. Personally, I am hoping the recent restrictions will be rethought and abandoned.

 

[Matty B13]

If the DVC does restrict new sales/reservations to just that resort, I would think that could drive potential buyers to consider a non Disney time-share. Most of the major hotel groups have their own form of time-shares which are located all around the world, and at a significant discount compared to DVC. If DVC wants to stay competitive, they would have to consider what others are offering. Personally, I am hoping the recent restrictions will be rethought and abandoned.

We might actually see this happen with Riviera Resort, but the jury is still out on this, it will take a few more months/years of sales to see what the new restrictions and high initial costs do to Direct Purchases.

 

[jarestel]

Resale won't get squeezed out no matter what DVD does because some people will always look for cheaper alternatives. Whether resale prices will continue along their current historically high levels (especially the 2042 resorts) is another matter and probably more related to expiration dates than anything DVD dreams up. As with most Disney related storms, this too will blow over and things will return to "normal" for a month or two until the next storm appears.

 

[kboo]

buying direct for $188 or resale for $140 (give or take depending on the resort).

Consider at larger point values (200+), RIV with developer incentives was $166 pp, BLT was $145 (or you'd get ROFR'd), VGF was $165 and up, and so on. So it really depends on the resort. I don't think that it was any accident that the price was about equal to VGF resale, as the tour was very much about, "this is the Grand for EP/HS area, but look at how we learned from the Grand..."

although I think RIV with Membership Benefits could offer a deal compared to some sold out resorts resale (ahem, BCV) - except for the changes to RIV’s contract and the resale restriction.

BCV and VGF come to mind - I have grandfathered VGF points, but given that I still paid a premium for them compared to what resale prices were at the time, I have an internal aversion to using them as sleep around points. I understand that I have the OPTION to use them elsewhere, but how much is that worth? I think it depends on an individual buyer, how they plan on using the points, and their travel style. Some people like to sleep around, some do not.

As for "killing resale," of course that's not going to happen, as PPs have said. Also, it depends on what you mean by "killing." As long as WDW exists, there will always be a resale market. Some people might go to off-site timeshares, but many may still feel it's worth a premium to have early FPs, EMHs, and Disney transportation and the Disney bubble. Disney wants to really differentiate resale v. direct and they have done that with RIV. This will likely make the price gap between direct and resale bigger with RIV than the L14, but that is probably resort-dependent. People who are willing to pay a premium for BCV are most likely planning to use it for BCV only. Yes, they have the OPTION to book elsewhere, but those buyers place a lower value on the option than, for example, the majority of SSR/OKW/AKV buyers. That's not to say that there aren't plenty of SSR/OKW/AKV owners who 90-99% choose to stay at their home resort.

 

[skier_pete]

It should be understood - Disney cares about only one thing - New resort sales. Not reselling existing resorts - which they do only because some people insist.

I'm am sure they are smart enough to realize that they cannot stop resale from existing. Resale occurs for two main reasons - dissatisfaction with the product and hardship buy the owner that forces them to sell the product. People don't sell there DVC timeshare because "Hey I can get $150 for it now - time to sell!"

So Disney cannot really control the number of resale contracts out there unless they start buying them all back - which they are NOT going to do. They do a certain amount of this - but it stays around 10-20% of the resale contracts on the market - and if you look historically it amounts to around 20-25% of direct sales. Look at the below chart from DVC news. July Direct Sales data totaled under 40,000 points at the 12 "old" resorts, and 160,000 at the two "new" resorts. (And this doesn't include Aulani - which would still fall in the "New" category.) So again, less than 20%, and even this number is on the high end of the range, where more typical is 20,000-30,000 points from resale most months.



If I look back a year when CCV was the prime seller - I see a similar number 134,000 pts at CCV, and 170,000 pts overall says 21% of sales were from older resorts.


Again - reselling old contracts is NOT what Disney wants. They buy-back an AKV contract at $110 a point and then sell it at $170 a point sure they make $60 a point on something they sold already - BUT, that AKV contract is creating a sale that they see as replacing a NEW Riviera sale - that they look at as $150 per point or more profit.

Disney's "best interest" should really be to keep the cost of resale relatively high while still differentiating the resale from direct. An ideal world is to be able to convince you that $188 at Riviera is "Worth it" versus paying $135 at Boardwalk - and there's good arguments for that.

Which is still why I don't get this most recent restrictions. They hurt resale value, sure - but they hurt direct value as well. It doesn't make sense.

 

[ELMC]

BCV and VGF come to mind - I have grandfathered VGF points, but given that I still paid a premium for them compared to what resale prices were at the time, I have an internal aversion to using them as sleep around points. I understand that I have the OPTION to use them elsewhere, but how much is that worth? I think it depends on an individual buyer, how they plan on using the points, and their travel style. Some people like to sleep around, some do not.

This is very similar to my situation. I just listed my BLT contract and here's why: I bought it under the "buy where you want to stay" philosophy. What I've learned in the past few years is that that is a bit of an oversimplification. We love BLT and love to stay there, but we stay almost exclusively in Theme Park View 1BR units. Those are some of the last units to book and we have never had an issue finding availability at 7 months. And even if we do, we can just stay somewhere else at that time. If we wanted standard studios, the 11-month window would be important. But it's not important for us. So I'm selling my expensive BLT points and replacing them with some much less expensive resale points. We'll see how that goes...

 

[ELMC]

Resale occurs for two main reasons - dissatisfaction with the product and hardship buy the owner that forces them to sell the product. People don't sell there DVC timeshare because "Hey I can get $150 for it now - time to sell!"

I don't mean to be argumentative, but I actually fit that quote. Last year I sold VGC because I got $190pp for a stripped contract. Right now I'm selling my BLT because I can (hopefully) get $40 more per point than what I paid. I still love DVC and still love those resorts, but I'm selling mostly because of the price (and with BLT because I can achieve my goals with a less expensive home resort: see above) The deeper underlying reason is that I am concerned about the long term "value" of these "assets" and I'm locking in a gain while I can. But I'll concede that I am probably the exception here.

Which is still why I don't get this most recent restrictions. They hurt resale value, sure - but they hurt direct value as well. It doesn't make sense.

I don't think DVC executives would agree that they are hurting the value of the direct product. And even if they do, they'll certainly never say it.

 

[skier_pete]

I don't think DVC executives would agree that they are hurting the value of the direct product. And even if they do, they'll certainly never say it.

Oh, I have no doubt that they won't admit it. But they are.

 

[ELMC]

Oh, I have no doubt that they won't admit it. But they are.

But do you think they see it? I'm really trying to understand their perspective here. Do you think that they think they are truly helping protect direct buyers? Or is it more of a shiny finish put on a program designed to maximize profits?

 

[skier_pete]

But do you think they see it? I'm really trying to understand their perspective here. Do you think that they think they are truly helping protect direct buyers? Or is it more of a shiny finish put on a program designed to maximize profits?

I suppose it is possible they heard some complaints from direct buyers about resale getting unfairly good treatment, but I seriously doubt it was a lot of members doing this. Have you EVER seen a post on this message board by a Direct member complaining about a resale member? I haven't. I think it is a way that they thought they could differentiate resale from direct to help at minimum maintain sales.

Honestly outside of anecdotes from Pete, I have not seen anything that says Riviera sales are "slow". The closest you can come up with is to look at the two tables above, and if you consider this data is from after CCV "sold out", then the fact that CCV is still as high as it is versus a Riviera number that's a little on the soft side - then MAYBE. I think you need at least 6 months of sales and a truly sold out CCV to tell if Riviera is truly soft. I also think until the resort opens they will use the excuse that the resort not being open is the reason, not the resale restrictions. Continued soft sales after the resort opens may make them admit the truth, in which case removal of the restriction will be "due to guest demand" just like adding it was.

 

[jerseyduke]

Honestly, I am not worried about the future of the resale at all. Disney can only really destroy it on the newer properties. As to the L14, the contracts are written, they cannot restrict them within the L14. What is the worst they can do, make a future resale of an L14 come with ZERO perks - Yes, but what does that mean, as of new resales you basically get no perks anyway (big one being the AP discount) and the resale market has stayed very strong. The biggest perk is the discounted APs, and people are basically against buying 75 direct points now to get that perk, they sure as heck arent going to buy 100 to get it.

They would have to drastically increase the perks of direct points to do anything.

Now, with DRR and moving forward, it is a different story. The resale future of DRR and reflections could take a hit.

Thats my way of looking at it.

 

[Bing Showei]

Have you EVER seen a post on this message board by a Direct member complaining about a resale member? I haven't.

I disagree - this restriction may limit the number of people I'm competing with (in the future) for the resorts that I want to go to. I'm no longer competing with "future" resales buyers that paid $xx at another resort in order to use those points at my chosen resort. So yes, there are some instances where one would be happy about this, correct? Unless I'm understanding it wrong - which is entirely possible. LOL

Now you have.

 

[Bing Showei]

Then there was this gem:

I singled out resale because the facts in my possession point to differences in point usage between direct and resale purchasers:

1. There are numerous posts on this board where people say they are buying cheap only to use elsewhere-never the home resort.
2. People on this board freely disclose that they own hundreds of points at SSR and also disclose how much they avoid SSR.
3. A number of direct purchasers on this board have pointed out how much the like SSR and don't avoid SSR at all costs.

The issue is not whether there is block of resale points that are never used in their home resort, it is how big is that block- based on resale numbers, that block may be as large as 3-4 million points.

 

[KAT4DISNEY]

Then there was this gem:

Ah yes, because nobody buys SSR direct to get benefits and still sleep around.......

 

[Bing Showei]

Ah yes, because nobody buys SSR direct to get benefits and still sleep around.......

Of course not! That flood of 75pt contracts they are happily selling today are probably because of those new Murphy beds they’re putting in.

And if not... management can deal with it.

 

[E2ME2]

I have to say this is the most thought-provoking thread I've read in a while. I'm conflicted within this debate and, as in many complex issues that deal with future projections, it's very speculative to take a hard stance in either camp. I think the one-day(year)-at-a-time strategy works for me. I'm not the Veteran DVC owner that has been around since the beginning, but I am coming up on year 9 as an SSR owner (DVC Direct).
I have added on once (also Direct), and may consider adding more as I near retirement. I had planned to add on Resale, but now I'm not sure. Oddly enough, some SSR resales are currently selling for more than I paid back in 2011. Since I already own more than the 100 minimum, I don't need to buy direct for perks, but I may want to book at RIV or some other future DVC resort, and don't want to be excluded from that either. I do like the fact that DVC is limited to < 50 years. I also feel good about being able to sell at a profit, if I needed to for some unexpected reason. I think I will continue to move forward at a measured pace, and only add-on when needed, which also manages the increase in MFs that come along with more points.
I think I'm going to read through this thread again; there were a few posts that I may want to provide some direct feedback on,
VERY INTERESTING!!

 

[E2ME2]

Marriott timeshares are complicated but some of this is inaccurate.

There is a resale market (just not one with an ecosystem like DVC). Marriott will rarely buy back certain resort weeks directly - if the situation suits them - but they typically have ROFR available as an option also.

If you own a timeshare week, you have the right to rent it (but as above, there's no system of brokers like David with Marriotts). It's more complicated and takes more legwork.

But when Disney is selling direct, most new buyers aren't asking about what happens if they need to get out. Many will look at the shiny pictures, enjoy the positive vibes and generally not find out about the negative word of mouth until they come here to find out why they are taking such a hit when they need to resell.

I don't know much about Marriott's model, but I actually had to walk away from a Wyndham Timeshare opportunity recently. My wife's Aunt is stuck with a contract that she rarely used, and now will probably not use since her husband passed, and she was willing to let us take it off her hands at a ridiculous price, just to get out from under it. We couldn't do it, because the Wyndham restrictions were terrible. It was a fixed week at a less popular destination, and off time of year. To convert it to flexible points, and to get enough to use at a more desired time/location, Wyndham would have required us to buy "Founder" points (I think they were called Founder, or something similar), and the price was astronomical compared to what we saw as equivalent with what we have at DVC.
It made me greatly appreciate the DVC model, by comparison.

 

[zavandor]

BCV and VGF come to mind - I have grandfathered VGF points, but given that I still paid a premium for them compared to what resale prices were at the time, I have an internal aversion to using them as sleep around points. I understand that I have the OPTION to use them elsewhere, but how much is that worth? I think it depends on an individual buyer, how they plan on using the points, and their travel style. Some people like to sleep around, some do not.

Let's say DVC introduce another restriction: resale can only book at the home resort in the 11 to 7 months window and if you need to cancel within the 7 months window you lose your points.
Would you still buy VGF at the same price?
Because it's what the resale restrictions may mean for DRR owners.
Sure, if everything goes according to plans you'll use your VGF point only at your home resort, but life happens and if anything happens being able to book SSR, OKW or AKV instead of losing the points is still a good option.