Multi-Site POS Revision Dated 01/19/19

[Aron1012]

As for the person that called she did work with DVCMC (Member Services) who you will now be getting a call from is DVD, no longer DVCMC, though they are the same physical people, but very much separate legal entities.

I guess that's one of the biggest issues I have with all this (including the lock-off premium in the 2020 original point chart) is that how can you be a fiduciary and yet have the same people work for both the organization that represents the members and the one that stands to benefit from negatively impacting those members? I get that they are supposed to very much be separate legal entities but doesn't seem like TWDC is operating as such.

 

[Aron1012]

I had a long conversation with Yvonne Chang last week. On the 1/19 restrictions, her comments were:

…..5. Y stated that it's members (rather, potential buyers?) who demand the differentiation between the products. "The incidental benefits have already be taken away. But members still ask us, what do I get more, when I buy direct? We care about all members, that's why we choose to grandfather existing members. But it's members that ask for some of these differences."

This was the quote more along the lines of what I was expecting rather than the answer of strictly to increase direct sales. By the way I think Y's answer here is simply b.s. The answer I got was the truth, but surprised they said it that bluntly.

 

[TK-Tampa]

I finally received my call today from Member Relations in response to email I sent last Tuesday. The lady was pleasant but seemed to be making the call only because she had to. She said it was to follow-up to the email, but then didn't even ask one question. I started by asking her why they were doing this. Her answer was very simple and straightforward that it was to drive more direct sales. Frankly I was somewhat caught off guard with that answer. I really expected her to say it was based on member feedback that they had told others.

At that point I decided to follow-up with a question that I had planned on avoiding, and that was who exactly she worked for? She said she was with DVC member services and her team was focused on member feedback. So then I asked her if that "team" worked for DVD, DVCMC, or TWDC? She basically avoided that question even though I asked it two more times. She kept going back to DVCMC is an arm of the DVC division as a whole. Next I made the mistake of stating that I thought DVCMC was supposed to be our fiduciary that worked on behalf of the member's best interest so why would they care if DVD sold more direct points? The conversation pretty much shut down at that point and she said my questions would have to be forwarded on to Legal/Compliance. I told her that was fine and I would like to speak with them.

Before we ended I circled back to some of the issues that we have discussed here about the reputational and brand hit they were creating with these decisions. I told her that DVC members are some of the best salespeople DVD has and that at least 3 people in our circle had bought direct points because we told them how great it was if planning to go regularly. I also pointed out resale is a key back-up plan for members considering purchasing direct that they could at least sell it for a reasonable price. I also brought up that when a member stops using their points they also aren't coming to the parks and spending money or going to restaurants. By allowing a healthy resale market new energized owners are brought into the system that are excited to come spend with TWDC. She didn't have much response at all to that and was clear she had fulfilled her duty by calling and was content to move me on to Compliance for the rest.

Thanks for posting. It is interesting that she openly admitted that they were trying to hurt the resale market for their own financial benefit.

 

[Drewferin]

Maybe you should have started the conversation with "This phone call is being recorded for quality assurance and may be used in future legal filings and or maybe to also improve employee training programs"... lol

 

[Grumpy6264]

The Club as it is today is starting to get very saturated. As more and more members are buying into the system, the 7 month booking experience is getting more competitive. The 'cheap' or highly desirable rooms are going to be harder and harder to book at 7 months.

This isn't affected by resale directly, but every time a new resort is added it is getting harder and harder to switch at 7 months. The restriction on resale owners of 'old' being prevented to reserving new resorts and the other way is an attempt to stop the saturation.

I don't think that it is fair that resale is restricted and direct is not, I don't think that only restricting resale owners is going to fix this very much.

No good solution, DVC is just getting too big.

 

[skier_pete]

I started by asking her why they were doing this. Her answer was very simple and straightforward that it was to drive more direct sales. Frankly I was somewhat caught off guard with that answer. I really expected her to say it was based on member feedback that they had told others.

The impression that I've gotten is that the only relation to member feedback is that they have gotten indications from buyers that they want to see more differentiation between resale and direct in order to buy.

I don't think Disney wants to tank resale prices per se - but I wonder if the impression they have is that "no change we make to the membership agreement actually seems to adversely affect resale prices, so we might as well keep going further." Because here is the scenario that is in Disney's best interest: RESALE PRICES ARE HIGH BUT THE PRODUCT RECEIVED IS SIGNIFICANTLY DIFFERENT SO THAT YOU WILL BUY DIRECT. In the end, the product is very high. Most desirable resorts are only $30-50 less than direct buys, but what there seeing is that people don't see the differences as significant enough. So - people are still out there buying $150 resale contracts for the Poly because they don't care that they can't get an AP or go to Moonlight Magic. So what Disney is figuring is maybe they'll care enough that they can't leave their resort. Short term its only one resort - but in 20 years (or 23 years specifically) it'll be a whole bunch of resorts. And they are betting that Riviera resales will stay high even with this restriction. Maybe not AS high - but high enough. I'm sure they'd love it to stay in the $120-130 range.

Now, us sharp DVCers are saying "There's no way Riviera will have that kind of support - who would buy there when you can buy at XXX and get all the other resorts?" But maybe there's enough buyers out there that will like Riviera enough to not care. Heck I bought a BWV contract and if you told me "You can never use these points anywhere else" I would be like "OK!".

 

[crvetter]

I guess that's one of the biggest issues I have with all this (including the lock-off premium in the 2020 original point chart) is that how can you be a fiduciary and yet have the same people work for both the organization that represents the members and the one that stands to benefit from negatively impacting those members? I get that they are supposed to very much be separate legal entities but doesn't seem like TWDC is operating as such.

This resale restriction change didn't come from DVCMC but rather from BVTC, which doesn't have a fiduciary role to DVC members. Perhaps DVCMC should force BVTC so honor our original Resort Agreements but my view is BVTC may amend them (as I stated previously) and the Resort Agreement is exactly what dictates our rights are as a Club Member and how the membership functions. So I don't believe DVCMC necessarily failed fiduciary role in the change, simply because they didn't create the change and are explicitly forbidden based on our Resort Agreements to (either the amending or admitting new resorts). Some argument can be made that DVCMC "sues" BVTC but again the amendments that BVTC can make without input really would limit this from the "not up holding our Resort Agreement argument". Though DVD as a whole should listen to all member feedback and so far I think has done a good job of doing that. Though the 2020 Point Reallocations were very different in my eyes because DVCMC, through a fiduciary role, is expressly charged with setting the point charts for home resorts through our Membership Agreement, though DVCMC only sets the cost for you to use your Home Reservation Component. The cost per night of the DVC Reservation Component is set by BVTC in the Resort Agreement; however, they have been using a 1 to 1 adoption for the point charts (though in theory they can create point charts for BLT to trade to the others, CCV to trade to the others, etc), but BVTC has no requirement to do this in the best interest of the members since they are not a fiduciary.

Though with this being said I really disagree with DVD's decision and perhaps different people should be the board of each of the three arms DVD, DVCMC, and BVTC so each operates as to what is the best for its profits (DVD and BVTC) or best for its members (DVCMC). Though the fact they are so closely related is what makes DVC somewhat cheaper I would expect a change like this to increase our MF costs.

The Club as it is today is starting to get very saturated. As more and more members are buying into the system, the 7 month booking experience is getting more competitive. The 'cheap' or highly desirable rooms are going to be harder and harder to book at 7 months.

This isn't affected by resale directly, but every time a new resort is added it is getting harder and harder to switch at 7 months. The restriction on resale owners of 'old' being prevented to reserving new resorts and the other way is an attempt to stop the saturation.

I don't think that it is fair that resale is restricted and direct is not, I don't think that only restricting resale owners is going to fix this very much.

No good solution, DVC is just getting too big.

Personally I think DVC has probably gotten too big and "classes" of resorts have been created because of it. Think all the discussions on here (pre-restrictions) where people were saying they would never buy Riviera because it was a moderate location with moderate themes. I think this is showing the size of DVC. They probably viewed the need to prevent this from occurring in some regard, thus the changes. Perhaps they have other things up their sleeves with running out of room to keep building DVC without cannibalizing the Deluxe resorts that are currently doing well capacity wise.

The impression that I've gotten is that the only relation to member feedback is that they have gotten indications from buyers that they want to see more differentiation between resale and direct in order to buy.

I don't think Disney wants to tank resale prices per se - but I wonder if the impression they have is that "no change we make to the membership agreement actually seems to adversely affect resale prices, so we might as well keep going further." Because here is the scenario that is in Disney's best interest: RESALE PRICES ARE HIGH BUT THE PRODUCT RECEIVED IS SIGNIFICANTLY DIFFERENT SO THAT YOU WILL BUY DIRECT. In the end, the product is very high. Most desirable resorts are only $30-50 less than direct buys, but what there seeing is that people don't see the differences as significant enough. So - people are still out there buying $150 resale contracts for the Poly because they don't care that they can't get an AP or go to Moonlight Magic. So what Disney is figuring is maybe they'll care enough that they can't leave their resort. Short term its only one resort - but in 20 years (or 23 years specifically) it'll be a whole bunch of resorts. And they are betting that Riviera resales will stay high even with this restriction. Maybe not AS high - but high enough. I'm sure they'd love it to stay in the $120-130 range.

Now, us sharp DVCers are saying "There's no way Riviera will have that kind of support - who would buy there when you can buy at XXX and get all the other resorts?" But maybe there's enough buyers out there that will like Riviera enough to not care. Heck I bought a BWV contract and if you told me "You can never use these points anywhere else" I would be like "OK!".

I agree with you 100% that Disney doesn't want to tank resale at all. I think they know fully that resale is a benefit to them, which is probably why they built in the out already to the restrictions. Perhaps the restrictions won't kill resale too much (it won't kill it on certain resorts such as VGF, VGC, BWV, BCV and some degree BLT and slightly lesser PVB for the fact their are enough people that think like you did for BWV). I think there might be enough people who do want to buy and stay at Riviera, plus if that doesn't happen poof the resale restrictions are lifted for Riviera and no depressed resale values. We just won't know that until 1-3 years after being sold out really.

 

[skier_pete]

We just won't know that until 1-3 years after being sold out really.

This is exactly right. Riviera resales will likely stay high initially because few will be available. That said, resale buyers are generally more in tune to the product than direct buyers - resale is not an impulse buy. People may stay away from Riviera right from the start. If Riviera resale hangs around $100-120 right from the beginning, the floor is probably below SSR and OKW.

That said, I expect Riviera will not drop much lower than those two. The location is still more preferable than SSR and OKW, so even with the restriction of not being able to go elsewhere, it won't be much lower than those.

And I don't buy the argument that Riviera is a moderate resort. DVC is all essentially segregated by the same key as every other piece of real estate. There's a reason it ranks like this:

VGF / BC
Poly/ BLT / BWV
WLV / CCV
AKV
OKW
SSR

To me Riviera will end up either just above WLV/CCV or just below it on the "preferred location" scale. Without the Gondola it's below AKV, but with it, it's probably above WLV/CCV. That said, even SSR can trade into BC and VGF on resale. Your Riviera points will never let you "upgrade".

 

[crvetter]

And I don't buy the argument that Riviera is a moderate resort. DVC is all essentially segregated by the same key as every other piece of real estate. There's a reason it ranks like this:

VGF / BC
Poly/ BLT / BWV
WLV / CCV
AKV
OKW
SSR

I don't agree either that Riviera is moderate. I just see/saw a lot of view points on here prior to the restrictions that many felt this and wouldn't buy there because of this view. I just wanted to point out that the issue with DVC is resale and direct all have a view of "classes" of resorts that is independent of restrictions, which really dictated the price if you are in the "upper" class resort. You hit it right on right on the head it's mostly location and the pie in the sky view of the cash resort the DVC is with (if applicable). VGF is so high because who wouldn't want to stay at the GF (though to be fair the interiors might look the highest quality, I'm lucky enough to try it out over the 4th of July so I'll know then if they are for sure).

I wish DVC would back down on the resale restrictions a bit; I was planning on buying Riviera direct to get an Epcot/HS resort (I wanted BCV put only a small contract which is too pricey for my taste, though I did offer on a contract once that was taken) but I'm in a holding pattern and will have to wait and see how resale ends up. Unless I decide on a GW for a Tower Studio, which will hold resale value because of the low cost for an entire week.

As for your ranking I definitely agree that Riviera will be above or on par with WLV/CCV depends how well the Skyliner runs and when it stops running (can Riviera access Boardwalk and other resorts after the parks close for a bit). As an aside, as a WL lover I'm hoping Reflections increases amenities on that side in a good way (new dining, new boats or some other form of transportation for those resorts).

Edit: Thought I'd share my actual rankings for fun too:

BLT/VGF
Poly/BCV/BWV
VWL/CCV
AKV
OKW
SSR

As for Riviera being next to CBR I actually think it's kind of nice because you get all the land to roam around that the moderates afford, currently can pool hop to CBR, which will be very easy for Riviera if they allow it still, and more QS selections than Deluxe typically have. I'm with the poster below, Riviera will be up (just marginally below) with BCV/BWV if the Skyliner works as intended, which from an engineering perspective there isn't anything to suggest it won't.

 

[TexasChick123]

And here is how I think WDW should be ranked:

VGF
BLT
Poly
BCV/BWV
AKV/WLV /CCV
OKW
SSR

I am not a big fan of the Poly, but it is higher because it's a monorail resort. I think Riviera will be closer to BCV/BWV than people initially think. The gondola may get you to Epcot faster than walking from BWV (one of my home resorts). I do think it will get you to HS faster than walking from BWV or BCV. This will all be fun to review in about 5 years.

 

[ljmiii]

If they really implement the "purification fee" for resale points, my guess is that it'll very high. in the region of $80+. They cannot make it more convenient to buy resale and then "purify", if anything it should cost more.

From our what it's worth department, MVCI's current direct price for Vacation Club points is $14.10/pt. Newbies happily pay this each and every day.

On the other hand, the standard discount for owners 'adding-on' is 20% or $11.28/pt. If you say 'no' to that price and seem to know what you are doing MVCI will offer a 'direct resale' package somewhere in the range of $8/pt (I was offered $8.10/pt last month).

Meanwhile, the resale market for points is quite active with prices (and ROFR) usually somewhere between $4-5/pt. MVCI then charges a little over $3/pt to 'activate' resale points which from that point on are treated *exactly* like direct points.

So...in summary MVCI charges new buyers around $14/pt and maintains a price of around $8/pt for knowledgeable buyers. It seems to work for everyone involved.

 

[Mumof4mice]

This was the quote more along the lines of what I was expecting rather than the answer of strictly to increase direct sales. By the way I think Y's answer here is simply b.s. The answer I got was the truth, but surprised they said it that bluntly.

Thanks for sharing your conversation with MS @Aron1012 . I think Y merely phrased it better; the two answers essentially state the same thing.

Y's Corporate-Mumble-Jumbo-Kungfu is more powerful. The force is not as strong with the front line CMs.

 

[EYL]

Does anyone think that all these restrictions to attack future resale value is DVD paving its way of spawning a "resale division" or partnering up with a resale company? The new Multi-site POC states, in multiple areas, that if you "do not purchase an ownership interest directly from DVD, or from an approved seller..." you lose this and that. So if we buy resales from DVD or from an approved seller, then we would retain the benefits? There is a reseller out there that charges an administrative fee, and people still buy from them. Could DVD ask an approved seller to charge an extra $10/point and forward that fee to DVD to retain the benefits?

New DVC owner thinking out loud here. Please be gentle!

 

[ziravan]

Does anyone think that all these restrictions to attack future resale value is DVD paving its way of spawning a "resale division" or partnering up with a resale company? The new Multi-site POC states, in multiple areas, that if you "do not purchase an ownership interest directly from DVD, or from an approved seller..." you lose this and that. So if we buy resales from DVD or from an approved seller, then we would retain the benefits? There is a reseller out there that charges an administrative fee, and people still buy from them. Could DVD ask an approved seller to charge an extra $10/point and forward that fee to DVD to retain the benefits?

New DVC owner thinking out loud here. Please be gentle!

That’s more likely than an $80 fee because it serves a dual purpose of killing off resellers. But not $10.

Let’s say $30/point and DVC ROFRs anything less than $30 below what it’s reseller is charging. Then, there’s no profitable gap between generic reseller and DVC sponsored reseller.

Let’s say “Official DVC reseller” charges $150/point for BLT with $30 going to DVC. If DVC ROFRs anything less than $120/point, then resellers really only have a market of $30 and that doesn’t come with benefits. Because DVC is setting the floor and not the ceiling, anybody selling is only going to get $120. Period. Official reseller is offering $120 to market points, other brokers will have trouble selling above $120 and getting buyers.

DVC has the choice of turning their sub $120 ROFR contracts around as direct points or dumping them off on official reseller.

Most likely, at that point, DVC turns over its entire “sold out” resort business to its approved reseller.

 

[ziravan]

Once DVC killed off the organized resellers, they could adjust their fee however they like and at that point just ROFR the stray contracts.

If you KNOW you can get $120 for BLT and the approved reseller can afford, as a quasi-monopoly, to bottom feed fees, why go with reseller X and their 10% fees when Approved seller A is offering 5%?

And DVC has an argument to direct purchasers: even “pre-owned” buyers have to pay the mouse.

 

[miTnosnhoJ]

Does anyone think that all these restrictions to attack future resale value is DVD paving its way of spawning a "resale division" or partnering up with a resale company? The new Multi-site POC states, in multiple areas, that if you "do not purchase an ownership interest directly from DVD, or from an approved seller..." you lose this and that. So if we buy resales from DVD or from an approved seller, then we would retain the benefits? There is a reseller out there that charges an administrative fee, and people still buy from them. Could DVD ask an approved seller to charge an extra $10/point and forward that fee to DVD to retain the benefits?

New DVC owner thinking out loud here. Please be gentle!

I think you are right on this.
The purification of points will not come through a fee. It will come through Disney ROFR of contracts whose resale value is suppressed, and reselling as direct. They can maximize their profits by selling new resorts through the Disney cast members who work through DVC and selling purified resorts through non-Disney employees who work for a captive resale company or a designated resale company.

 

[Frederic Civish]

That will somewhat drive down the resale prices of Rivera and any other upcoming resorts and at the same time give Disney the option to ROFR cheap contracts and those that they dont ROFR the new owners will pay to have qualifying points.

Doesn't Disney realize that 'driving down the price of Resales' will be ultimately unsuccessful as a strategy? They can drive it down as far as possible, and it still won't help them with Direct Sales. Why? First, because there IS inherent value in DVC points. They can be used to stay at DVC resorts. Even if that resort is ONLY Riviera, when the price is low enough, people will buy it, just so they can save money at Riviera. When that happens, Disney will once again lose the sale. Someone will look and say, "Hmmmn. I could buy 100 Rivera points Direct (or Reflections, or whatever they are selling then) or, for the same amount of money I can get 400 points at resale, and stay four times as long. Duhh!" In fact, when that happens, Riviera Resale will be so appealing that Disney will lose and lose and lose.

I think a strategy of trying to take away value from Resales, and drive the price down, is idiocy. THE MARKET WILL ALWAYS SELF ADJUST, because there IS value there and when the price is right, it will always be very attractive. Meanwhile, there will be a lot of people looking at Riviera or Reflections or whatever and saying right from the beginning, "I'm NOT going to buy there, Direct from Disney! Why would I? I love the resorts. I like staying at them, but Disney is NOT treating their owners nice, and they are driving Resale prices down. If I buy Resale instead, then I can NEVER lose money, because it won't go down any more, AND I will get more points, too."

I just don't understand how all the 'smart people' at Disney are not seeing this? They can NEVER beat the Resale market by attacking the Resale market. If they want to win, they can only make their own product worth more, and more attractive. And if that also causes Resale prices to rise, that will be EVEN BETTER for them. Higher Resale prices tip the balance towards Direct prices.

 

[Mousewerks]

Just my two cents.. I don't care what they do. I have resale points from before the first restrictions were put in place. If I want to get 11 month privileges at a resort, I'll buy it resale. I expect to pick up Riviera points under $100 eventually and maybe that will drag other resorts prices down as an overreaction. All of it is a win for me. My points work at Riviera and any future resorts they want to build. I'm never going to by retail...

 

[TK-Tampa]

Just my two cents.. I don't care what they do. I have resale points from before the first restrictions were put in place. If I want to get 11 month privileges at a resort, I'll buy it resale. I expect to pick up Riviera points under $100 eventually and maybe that will drag other resorts prices down as an overreaction. All of it is a win for me. My points work at Riviera and any future resorts they want to build. I'm never going to by retail...

All your points work at all resorts today. But Disney is essentially saying that they can arbitrarily restrict any owner's access to any other than their home resort any time they want, including 11 month privileges. That is what is a bit troublesome to me.

They just happen to be making a distinction between direct and resale with their last statement. I can certainly see how this can be perceived as a win for many. But if ever you ever decide to sell, Disney has made the choice to take some of the money you might have made and put it directly in their pocket. They are doing this by giving lesser rights to the future owner you sell to. Those rights that are lost by the new buyer go directly to Disney.

 

[Frederic Civish]

Look at it from DVC point of view.
Let's say it costs them $50 pp to build and sell a resort. Not sure the exact amount, but probably not far from that. If a contract is sold on average for $180pp after incentives, then their net gain is $130pp. Why should they sell you an option to have the same exact contract for a much smaller profit? The idea is for them to crush the resale market so everyone buys direct so they can get their $130pp margin.

From a buyer point of view: you decide to buy Riviera to stay at Riviera and happy to pay $100 for a small contract there resale, with no plan to purify. Then Disney opens a couple of resorts you like much more than Riviera, you now have the choice to sell the Riviera contract, take a loss on the sale of the contract and buy direct points at $200pp. Of you could purify your points for $80-$100. A bargain.

Or, you could wait and just buy Resale points in the new resorts that you now prefer better. Spend $100 to upgrade your Riviera points so you can use them there, or use the same money to buy cheap resale, and now you own at both of them.

This is the trick. It's the long game. They can't wait for these L14s to expire. I think they've overestimated the value of DVC (hello $200+ prices) but they still think there will be buyers. When they started DVC, timeshares had a nasty reputation. They've established the brand - 25 years in, it is NOT a nasty brand. A win. So how do they increase profits? Differentiate to justify their massively insane direct prices.

What they are missing is the tarnished brand. We'll buy an L14 - but we won't consider a new resort the way they treat DVC now. We really debated buying L14 - but appeal of WDW with a 2 y/o and a 4 y/o is absolutely there for the next 10+ years. If they've managed to tank the resale market by then, no harm no foul for us - if we sell, we'll appreciate whatever we can recover from our sunk cost. This is not an investment - and I've never viewed it that way.

There's also the legal aspect - did folks who signed many years ago agree to arbitration? The legal aspect seems harder to prove - though I appreciate the analysis done in this thread a whole lot (I'm sure brokers and DVC appreciate it too... but they're being quiet. ) They're destroying the broker market more than the resale market, or attempting to, and it's nasty.

Then again, they've been pricing the middle class out of WDW for 20 years. Why stop now?

Disney can't shut down the Resales market or the Resales brokers. It is Real Estate. As such, people who specialize in Real Estate will find a way to sell it, and then make money as the middle men. Disney does not control the Real Estate market and it cannot. And, if they set up 'approved' resellers, then they either are going to charge a lot more (which will give access to all future resorts) or else they will lose money. When they sell Direct, they can set the price. When they sell Resales, the price is set by the buyers.

I don't know if the contracts said anything about Arbitration. I don't think so, but if they did, then great. It will cost less when they are sued, since Arbitration is quicker and more efficient than all the money that gets spent on lawsuits in court.

Many years ago, Disney set out on a course of doing whatever it takes to increase profits. First it started with raising theme park prices (and that has continued) then building hotels and raising hotel prices, and on and on. Up until the 'old guard' finally was out of the picture, they kept much of Walt Disney's dream alive. But after that, they decided that their image was just their image, NOT their purpose, and they became just like every other company in America, though I would deny that ALL companies seek maximum profit at the expense of being good neighbors and contributors to society. Anyway, they have reached the point where, by seeking maximum profits, they do lock out the middle class, and they are killing their future.