Multi-Site POS Revision Dated 01/19/19

[Frederic Civish]

I would expect that they would have some sort of prorated buy back based on the remaining life of the contract. They could certainly put it well below current market resale values. But if they were 100% in control of the buy backs then people either sell back at DVC pre-determined rate or gift to family. Otherwise i guess they could foreclose on the contract and get nothing back. This would really pin people in a corner when they have to get out of their DVC contract.

It seems they are putting so much effort into restricting re-sale -- why allow resale in the first place? It just makes the system that much more confusing.

I do see a buy up option for those Rivera resales. They will make the resale of those contracts pretty unattractive, thus pushing someone to buy up to the option of having a better booking window.

We really all just have to sit back and watch it unfold and see what DVC's next move will be.

They can't go out and institute any changes so that they could buy back ALL the contracts they want, at a price they specify. They COULD have done it, if they had put it in the original contracts, but they didn't. And there are now over 225,000 DVC contracts out there. Can't implement that type of sales control and restrictions after the fact. All they have now is ROFR at the Established Market Rate.

If Disney wanted to KILL the resale market, they could not do so. If they wanted to seriously DAMAGE the resale market, there are various things that they could try. But most of them would be truly counterproductive. Look at an example like this (This is not possible, just an example for illustration purposes, and is no where near reality).

Suppose Disney made it so that ALL resales had the following stipulations attached to them:

* Resales required a $1000 'Registration Fee' to register your Resale with them and set up an new account.
* Resales were placed on an 8 month window, when all the other Direct Owners at that resort still had an 11 month priority.
* Resales could ONLY stay at their Home Resort.
* Resales got no fast passes until the 30 Day Window.
* Resales were not allowed to Bank, Borrow or Transfer points.
* Resales were saddled with every other restriction that you could think of.

Well, what happens then? Suppose the Resale price drops to $25 a point (because, suppose, Disney was REALLY EFFECTIVE in driving the price down). How will this help Disney? The answer is, IT WON'T. Because people would look at those points and say, "Wow, I can purchase 100 points at Polynesian for $2,500, plus a $1000 fee, and stay in a Polynesian room for 4 or 5 nights, EVERY YEAR FOR THE NEXT 45 YEARS! That stay is worth an easy $2000 value per year! I AM DEFINITELY BUYING SOME OF THAT!" So, EVERYBODY, including people who would never have considered buying DVC before, jumps into the resale market. This has two effects. One, the Resale buyers are not buying ANYTHING Direct from Disney. Why pay $200 a point when you can get it for $25 a point! And, second, with so many people interested in getting a good deal and buying Resale, the bidding war for contracts would make the price start to go back up.

Once again, Disney would have shot itself in the foot, created more "Ill Will," and provided more 'Cautionary STOP Signs to ANY Buyers, including Direct Buyers.' And they would have driven down the price of Resales. But, did it help them? Nope. Not at all. Would it increase Direct Sales? Nope, not at all. In fact, it probably would GREATLY decrease Direct Sales.

So, that is why Disney REALLY cannot 'Destroy' the Resale Market, and why they don't really want to even TRY. As they said in, The Count of Monte Cristo - "Do your worst!"

The point is, Disney may see it being in their best interest to try to limit Resales, and Drive the price down, in order to Increase the Relative Value of Direct Sales, but there are real limits on what they can do, besides Legal limits. The Market will make sure of that. And it brings up the question of whether it is beneficial to them AT ALL to try to harm the Resale Price or Resale Market.

 

[crvetter]

They can't go out and institute any changes so that they could buy back ALL the contracts they want, at a price they specify. They COULD have done it, if they had put it in the original contracts, but they didn't. And there are now over 225,000 DVC contracts out there. Can't implement that type of sales control and restrictions after the fact. All they have now is ROFR at the Established Market Rate.

If Disney wanted to KILL the resale market, they could not do so. If they wanted to seriously DAMAGE the resale market, there are various things that they could try. But most of them would be truly counterproductive. Look at an example like this (This is not possible, just an example for illustration purposes, and is no where near reality).

Suppose Disney made it so that ALL resales had the following stipulations attached to them:

* Resales required a $1000 'Registration Fee' to register your Resale with them and set up an new account.
* Resales were placed on an 8 month window, when all the other Direct Owners at that resort still had an 11 month priority.
* Resales could ONLY stay at their Home Resort.
* Resales got no fast passes until the 30 Day Window.
* Resales were not allowed to Bank, Borrow or Transfer points.
* Resales were saddled with every other restriction that you could think of.

Well, what happens then? Suppose the Resale price drops to $25 a point (because, suppose, Disney was REALLY EFFECTIVE in driving the price down). How will this help Disney? The answer is, IT WON'T. Because people would look at those points and say, "Wow, I can purchase 100 points at Polynesian for $2,500, plus a $1000 fee, and stay in a Polynesian room for 4 or 5 nights, EVERY YEAR FOR THE NEXT 45 YEARS! That stay is worth an easy $2000 value per year! I AM DEFINITELY BUYING SOME OF THAT!" So, EVERYBODY, including people who would never have considered buying DVC before, jumps into the resale market. This has two effects. One, the Resale buyers are not buying ANYTHING Direct from Disney. Why pay $200 a point when you can get it for $25 a point! And, second, with so many people interested in getting a good deal and buying Resale, the bidding war for contracts would make the price start to go back up.

Once again, Disney would have shot itself in the foot, created more "Ill Will," and provided more 'Cautionary STOP Signs to ANY Buyers, including Direct Buyers.' And they would have driven down the price of Resales. But, did it help them? Nope. Not at all. Would it increase Direct Sales? Nope, not at all. In fact, it probably would GREATLY decrease Direct Sales.

So, that is why Disney REALLY cannot 'Destroy' the Resale Market, and why they don't really want to even TRY. As they said in, The Count of Monte Cristo - "Do your worst!"

The point is, Disney may see it being in their best interest to try to limit Resales, and Drive the price down, in order to Increase the Relative Value of Direct Sales, but there are real limits on what they can do, besides Legal limits. The Market will make sure of that. And it brings up the question of whether it is beneficial to them AT ALL to try to harm the Resale Price or Resale Market.

I agree with what you are saying. I don't think Disney wants to kill the resale market at all. I think Disney wants to kill points being bought on the resale market that are cheap with the intention of never using them at that resort. So in my opinion Disney wants to quarantine a resort they feel isn't performing well in resale (they would probably prefer resale to be as high as possible because than offering incidental benefits would be enough to drive people to buy Direct). Because no matter the resale restrictions if BCV got you BCV only people would pay those inflated fees. If VGF got you VGF only people would pay those fees. VGC is a perfect example I bet almost every person that buys resale there does so to only stay there and if we removed them from being able to book at WDW those prices wouldn't drop. Now some other resorts only got you those place I think the price would drop dramatically. If I had to take a wild guess it's Direct buyers concerned with what they paid to resale buyers who paid much less (maybe at a different resort). It's really about making Direct buyers comfortable with what they paid and for Disney to easily carve out a resort they feel isn't performing well.

Its really about DVC is in a pickle that they ran out of prime real estate and need other things to sell a resort. Deluxe category a big thing is access to a park aside from Buses. They are running out of opportunity and didn't do that with some existing resorts.

 

[KAT4DISNEY]

Correct but that isn't the argument Disney is making, nor what was being referenced really. Their argument is certain resorts (don't know which for sure) are booked predominately late as a fall back option. Not really the desired resort. Because purchases of those points are paying less than direct with little to no intention of staying there. Simply because they are the cheapest on resale. This is exactly what I was told was the reason for the change when I asked why they would ever shoot their product in the foot. They told me this and they felt the way it currently operates wasn't the intention. It's about Disney satisfying and pandering to future Direct buyers not if old resorts are sold out. If an old resort is skewing the system a way a new Direct buyer wants it is in Disney's best interest to fix that because it effects their ability to sell new resorts.

.

Strangely I feel another "Bull" response coming on to DVC's comments. I'm afraid I'm a broken record.

Lengthen the home priority window and give those poor people longer to book their home resorts. Or let them buck up butter cup (in a nice Disney way of course). They already have 3 more months than is required for them to book their resort.

 

[Mumof4mice]

Correct but that isn't the argument Disney is making, nor what was being referenced really. Their argument is certain resorts (don't know which for sure) are booked predominately late as a fall back option. Not really the desired resort. Because purchases of those points are paying less than direct with little to no intention of staying there. Simply because they are the cheapest on resale. This is exactly what I was told was the reason for the change when I asked why they would ever shoot their product in the foot. They told me this and they felt the way it currently operates wasn't the intention. It's about Disney satisfying and pandering to future Direct buyers not if old resorts are sold out. If an old resort is skewing the system a way a new Direct buyer wants it is in Disney's best interest to fix that because it effects their ability to sell new resorts.

As I said I don't agree with their statement. But they are trying to convince people buying direct is better and I'm assuming that potential direct owners (and current) are saying why pay you 180 for 100 points when I can pay 90-100 for 200 points and book a 1 bedroom over a studio at 7 months in the room I want. I think this is exactly what some peoples choice is and a free market allows this to happen. Disney is attempting to remove the free market aspect to a certain degree by redefining the rules.

If I had to take a wild guess it's Direct buyers concerned with what they paid to resale buyers who paid much less (maybe at a different resort). It's really about making Direct buyers comfortable with what they paid and for Disney to easily carve out a resort they feel isn't performing well.

Its really about DVC is in a pickle that they ran out of prime real estate and need other things to sell a resort. Deluxe category a big thing is access to a park aside from Buses. They are running out of opportunity and didn't do that with some existing resorts.

Yes, this line of reasoning seems to be the official line. The quality assurance CM I spoke with said Disney was [coming down really hard on resales. So people can't just buy the cheapest possible points to book choice resorts, and make it harder for direct buyers at that resort].

When I asked him to speculate on the potential impact the restrictions might have on Riviera resale value, he said that all resorts going forward will be that way, so Riviera will not be any worse off than Rehab and other future resorts.

 

[crvetter]

Strangely I feel another "Bull" response coming on to DVC's comments. I'm afraid I'm a broken record.

Lengthen the home priority window and give those poor people longer to book their home resorts. Or let them buck up butter cup (in a nice Disney way of course). They already have 3 more months than is required for them to book their resort.

I actually see a valid argument and don’t think their response was bull but probably is the reason they are doing it. It’s a question to me if it was the appropriate response which I don’t think so. But to an effect it’s going to quarantine resorts to desirable ones (that won’t feel resale effects since you’ll always want to stay there) and less desirable ones (that will feel the resale effects). The market already tells us that information (on desirability) based on the price per point on the market. The ideal situation is each point would be roughly equal in cost (adjusted for contract length) over all resorts. Clearly Disney failed at making resorts that this would occur in the free market. Unfortunately they have no incentive to really fix that aspect (make resorts more desirable) so they instead are just filtering them out.

 

[KAT4DISNEY]

I actually see a valid argument and don’t think their response was bull but probably is the reason they are doing it. It’s a question to me if it was the appropriate response which I don’t think so. But to an effect it’s going to quarantine resorts to desirable ones (that won’t feel resale effects since you’ll always want to stay there) and less desirable ones (that will feel the resale effects). The market already tells us that information (on desirability) based on the price per point on the market. The ideal situation is each point would be roughly equal in cost (adjusted for contract length) over all resorts. Clearly Disney failed at making resorts that this would occur in the free market. Unfortunately they have no incentive to really fix that aspect (make resorts more desirable) so they instead are just filtering them out.

Yes, bull may not be truly correct - but it's the feeling it evokes.

As you say - they are likely stating the actual reason they are using to do it but there are other ways to take care of the member concern. I don't particularly agree with "taking care of it though". The 7 month window was known by all buyers. That SSR is cheaper is not relevant IMO because there still is the 4 month window when owners can book their own resorts. Stating that the owner can book anywhere at 7 months is also a sales tactic that was used a lot - even still is said today by guides. And was strongly used when selling SSR. With that in mind, if DVC is going to be concerned about the effect they created with a very large non-park resort that likely should have been at point requirements all equal to OKW is once again upon them. Fixing that supposed problem should be done in the least onerous way for members that is possible - IMO.

 

[crvetter]

Yes, bull may not be truly correct - but it's the feeling it evokes.

As you say - they are likely stating the actual reason they are using to do it but there are other ways to take care of the member concern. I don't particularly agree with "taking care of it though". The 7 month window was known by all buyers. That SSR is cheaper is not relevant IMO because there still is the 4 month window when owners can book their own resorts. Stating that the owner can book anywhere at 7 months is also a sales tactic that was used a lot - even still is said today by guides. And was strongly used when selling SSR. With that in mind, if DVC is going to be concerned about the effect they created with a very large non-park resort that likely should have been at point requirements all equal to OKW is once again upon them. Fixing that supposed problem should be done in the least onerous way for members that is possible - IMO.

I agree with your statement. I think they set SSR too expensive point wise and they attempted to fix this with the booking category creation. I think other fixes should have been explored first but I’m guessing other issues would have occurred. They should have asked for feedback first probably. Maybe a survey or something. But that would have preempted people. So I don’t know the real solution. I know I don’t like the one they offered.

But the people less likely to stay at their home resorts and buy cheaper points is in my opinion the only logical reason I can see them doing this. As that really makes buying direct more advantageous to buyers that would see they can get twice the amount of points for the same money.

Though I think you and I agree that we don’t like the change.

 

[Wakey]

The only thing that puts me off SSR is the rooms. The refurb looks lovely and when done, it will be one of my first choice resorts as we like walking, like the Disney Springs Restaurants and find the grounds and pools there lovely.
It needs a full refurb of the restaurant and a destination bar putting in like the one at Copper Creek, and it will quickly become a top resort, particularly if they put the Skyliner or other transport down to it, but it still will be even without that.

 

[Spartan86]

Interesting. Certainly 15 million points floating around at the “least desirable” resort is going to have an effect. Similarly however, I’m amazed at how often I have read/heard “I have never stayed at my home resort” from folks who own BLT, PVB etc. I’m sure a lesser effect than the SSR points but an interesting one as well. We rag on the guides for telling people they can “always” book elsewhere at 7 months, but that seems to be a basic tenet of timeshare sales and ownership mentality. Anyone I have spoken with about their non-Disney timeshare ownership almost immediately describes all the places they can book but at which they don’t own. I realize of course that RCI etc is a different animal in that regard, but still an interesting parallel.

 

[skier_pete]

OK. The point about SSR is well-taken. It IS a disaster from a point of view of a LARGE resort that is rarely the owners first choice. Sure, there are plenty of owners that want to move around, but a lot of resorts the owners enjoy staying at their own resort. Having SSR as a sinkhole for unused rooms is definitely not what they wanted out of it. It certainly doesn't help that SSR is overpriced from a nightly point perspective. As others have said, they attempted to fix this by setting up the standard/preferred rooms, but all that did was make 40% of the resort WAAAYYY overpriced while setting the other 60% more where it should be.

BUT- Disney/DVC brought these problems on their own - all through it's own greed. The same as the problem of too much studio demand (by selling so many small contracts) or the problem of the bungalows/cabins taking up points that no-one can afford to book. All brought on

That's why I don't completely get this restriction...it seems like a "close the barn door after the horse escapes" mentality. They aren't really affecting resales at the old resorts at all. How many people are going to now say..."wait I can book anywhere but this ONE resort?" and turn to direct buying. And let's face it, the amount of Riviera contracts that will be on the resale market while it's on sale will be fairly thin.

The fact is - it seems like Disney MOSTLY benefits by resale prices being high. If you are only saving $40 a point and losing out on a lot of benefits, that's a lot better argument for buying direct. But when prices are low then more people are going to go to it - regardless of restrictions. And that's what I am not sure that I get this decision to restrict Riviera so much. As I said, it will be by far the cheapest resort on the resale market. But because of that, there's a good chance it will still be very popular in the resale market - even if you HAVE to stay there - there will be people that will say "Oh I'm at Disney".

So it makes me wonder if they are just shooting themselves in the foot with this decision. Will it turn off new buyers to the product when they devalue the resales so much? I guess we'll find out.

 

[crvetter]

OK. The point about SSR is well-taken. It IS a disaster from a point of view of a LARGE resort that is rarely the owners first choice. Sure, there are plenty of owners that want to move around, but a lot of resorts the owners enjoy staying at their own resort. Having SSR as a sinkhole for unused rooms is definitely not what they wanted out of it. It certainly doesn't help that SSR is overpriced from a nightly point perspective. As others have said, they attempted to fix this by setting up the standard/preferred rooms, but all that did was make 40% of the resort WAAAYYY overpriced while setting the other 60% more where it should be.

BUT- Disney/DVC brought these problems on their own - all through it's own greed. The same as the problem of too much studio demand (by selling so many small contracts) or the problem of the bungalows/cabins taking up points that no-one can afford to book. All brought on

That's why I don't completely get this restriction...it seems like a "close the barn door after the horse escapes" mentality. They aren't really affecting resales at the old resorts at all. How many people are going to now say..."wait I can book anywhere but this ONE resort?" and turn to direct buying. And let's face it, the amount of Riviera contracts that will be on the resale market while it's on sale will be fairly thin.

The fact is - it seems like Disney MOSTLY benefits by resale prices being high. If you are only saving $40 a point and losing out on a lot of benefits, that's a lot better argument for buying direct. But when prices are low then more people are going to go to it - regardless of restrictions. And that's what I am not sure that I get this decision to restrict Riviera so much. As I said, it will be by far the cheapest resort on the resale market. But because of that, there's a good chance it will still be very popular in the resale market - even if you HAVE to stay there - there will be people that will say "Oh I'm at Disney".

So it makes me wonder if they are just shooting themselves in the foot with this decision. Will it turn off new buyers to the product when they devalue the resales so much? I guess we'll find out.

Unfortunately for us Disney is playing the long game. They are thinking how the restrictions will effect DVC not for the existing 14 but how it will effect new resorts coming online in the next 20 years. Really they should have just invested more infrastructure at their resorts. But we just need to remember DVC is built by Disney because they need cash. Building a DVC resort provides cheaper cash than going to the bond market and borrowing. So each DVC resort when sold has financed some aspect of WDW or fixed a problem at the resort it expanded. So this mentality led them to phone it home for a bit. Seems like with Riviera they at least realized it needed to be on the Skyliner (which wasn’t created because Riviera was being built) but I suspect Riviera was used a liquidity source for the Skyliner or another project. DVC is merely a means to an end and that end isn’t solely a resort destination for the benefit of DVC members but cheap cash for Disney.

 

[Wakey]

I suspect there's good reason for the ''you can sell it on once and the buyer can use Riviera' addition.
DVCMC have to act in the interest of members.
If they agreed to allow Riviera to join the club but restricted the buyers of current members, it could mean the current member's contracts are worth less on selling, and thus damaging to them.
This would potentially give a cause of action against DVCMC for breach of their fiduciary duty.
Just a guess...

 

[AdamsMum]

I personally think that DVC needs to do a better job at making all the resorts a desirable place to stay. Obviously people will prefer the convenience of certain locations but what sticks out to me is how many people avoid staying at SSR like the plague. Hopefully the long overdue refurb will help make it more current, but what would entice people who own SSR points to stay there most of the time?

I don't see anything ever trumping location. Some people do love the location of SSR as close to Disney Springs, but let's face it, most people are going to the parks. The locations of BWV/BCV and BLT are fantastic for location. That's not to say there's no value in other resorts, but Disney research department should be able to spot that a mile away. To have the same expectation of resorts that require bus transport to get to parks, as those that have walkability is unreasonable. There are times that waiting for buses to return to resorts after park closing is near unbearable after being on your feet all day. Some thing that might change the appeal of SSR would be better transportation options. What if they extended the Skyliner to OKW and SSR. I don't think that would happen, though, as they are sold out resorts and Disney would gain nothing from that expense.

 

[crvetter]

I was told:

Effective January 19, 2019, Club Members at all other DVC Resorts, including any future DVC Resorts, who purchase an Ownership Interest at any DVC Resort other than Riviera Resort, including at any future DVC Resort, from a third party other than directly from DVD, or other seller approved by DVD, may not convert the Vacation Points related to the Ownership Interest from the other DVC Resort to DVC Vacation Points to reserve Vacation Homes at Riviera Resort through the DVC Reservation Component. Purchasers who purchase an Ownership Interest at any DVC Resort, other than Riviera Resort, from a Club Member who owned the Ownership Interest prior to January 19, 2019, are excluded from the prohibition set forth in this Paragraph 2.
​

I was told this sentence in no way was to mean that if you purchase from an owner who owned prior to 1/19/19 you would be allowed to use Riviera. They said this was to say if you bought prior to 1/19/19 you would be grandfathered in no matter what.

They said legal would follow up in next week and they would give me a call back. But they said they do not intend at all to do what the thought might have been.

This was all told to me by leadership in Qualitu Assurance so he is going up to his higher department which is legal and compliance.

 

[KAT4DISNEY]

I was told:

Effective January 19, 2019, Club Members at all other DVC Resorts, including any future DVC Resorts, who purchase an Ownership Interest at any DVC Resort other than Riviera Resort, including at any future DVC Resort, from a third party other than directly from DVD, or other seller approved by DVD, may not convert the Vacation Points related to the Ownership Interest from the other DVC Resort to DVC Vacation Points to reserve Vacation Homes at Riviera Resort through the DVC Reservation Component. Purchasers who purchase an Ownership Interest at any DVC Resort, other than Riviera Resort, from a Club Member who owned the Ownership Interest prior to January 19, 2019, are excluded from the prohibition set forth in this Paragraph 2.
​

I was told this sentence in no way was to mean that if you purchase from an owner who owned prior to 1/19/19 you would be allowed to use Riviera. They said this was to say if you bought prior to 1/19/19 you would be grandfathered in no matter what.

They said legal would follow up in next week and they would give me a call back. But they said they do not intend at all to do what the thought might have been.

This was all told to me by leadership in Qualitu Assurance so he is going up to his higher department which is legal and compliance.

If Disney is going to get into all these particular restrictions it seems like they need to sharpen their writing skills.

 

[crvetter]

If Disney is going to get into all these particular restrictions it seems like they need to sharpen their writing skills.

That’s what I told them. I told them the reading was very clear to me. I said it seems that they made a mistake in their writing if they meant different. Which is why it’s going to legal and compliance

 

[CarolynFH]

If Disney is going to get into all these particular restrictions it seems like they need to sharpen their writing skills.

That’s what I told them. I told them the reading was very clear to me. I said it seems that they made a mistake in their writing if they meant different. Which is why it’s going to legal and compliance

I agree with both of you!

 

[Mumof4mice]

They said legal would follow up in next week and they would give me a call back. But they said they do not intend at all to do what the thought might have been.

This was all told to me by leadership in Qualitu Assurance so he is going up to his higher department which is legal and compliance.

Legal and compliance lacking basic literacy skills, it seems. What's next? Accounting that can't add up the number of points at resorts accurately? Wait a second....

 

[Wakey]

I was told:

Effective January 19, 2019, Club Members at all other DVC Resorts, including any future DVC Resorts, who purchase an Ownership Interest at any DVC Resort other than Riviera Resort, including at any future DVC Resort, from a third party other than directly from DVD, or other seller approved by DVD, may not convert the Vacation Points related to the Ownership Interest from the other DVC Resort to DVC Vacation Points to reserve Vacation Homes at Riviera Resort through the DVC Reservation Component. Purchasers who purchase an Ownership Interest at any DVC Resort, other than Riviera Resort, from a Club Member who owned the Ownership Interest prior to January 19, 2019, are excluded from the prohibition set forth in this Paragraph 2.
​

I was told this sentence in no way was to mean that if you purchase from an owner who owned prior to 1/19/19 you would be allowed to use Riviera. They said this was to say if you bought prior to 1/19/19 you would be grandfathered in no matter what.

They said legal would follow up in next week and they would give me a call back. But they said they do not intend at all to do what the thought might have been.

This was all told to me by leadership in Qualitu Assurance so he is going up to his higher department which is legal and compliance.

If this is correct, whoever drafted the POS is incompetent.

 

[texanlawyer]

I was told this sentence in no way was to mean that if you purchase from an owner who owned prior to 1/19/19 you would be allowed to use Riviera. They said this was to say if you bought prior to 1/19/19 you would be grandfathered in no matter what.

They said legal would follow up in next week and they would give me a call back. But they said they do not intend at all to do what the thought might have been.

This was all told to me by leadership in Qualitu Assurance so he is going up to his higher department which is legal and compliance.

I'm curious about legal and compliance's response. That language does not sync at all with what Quality Assurance told you. Something was lost in translation from the talking points about the new restrictions to what's actually reflected in the POS.

I have an add-on BLT contract that I got in before the 1/19 deadline and I'm worried that it's going to get ROFR'd. If legal and compliance confirms the way that people in this thread have been reading that section of the POS, it'll take the sting out of the ROFR since I should be able to find another contract from someone who owned before 1/19.