Disney promotions and DVC "buyer's remorse"

[slappy magoo]

Hey there hi there ho there...

Anyone who's been on this forum for a bit has seen the occasional gripe from DVC owners that they can't take advantage of a "spectacular" deal like free dining or deep room discounts because of their DVC membership.

I am not asking if YOU think it's unfair, though I suppose I can't stop you from expounding on that question if you so choose.

I'm also not asking whether or not you think those "spectacular" deals are all that spectacular, considering the lesser quality or more crowded they often make the resorts.

My question is: Do you think that perception that some people have might be part of the rapid devaluation of DVC points in the resale market?

2 years ago, it was much more common to see people selling their points in, say, BCV for 90 bucks or more per point. Now it's not uncommon to see people selling BCV memberships for the low-to-mid-70s per point. Hilton Head below 50 a point! And some people already seem to be dropping their AKV memberships to $80pp and below.

I know a lot of this is just the harsh economic times in which we live. But those harsh economic times are what's fueling the deeper discounts we've seen lately, which I suspect makes some people regret buying DVC, which in turn makes them sell for less than they would have a few years ago, perhaps even taking a loss from their initial payments. And that sort of resentment, as shortsighted as it may seem to some of us, will only get worse until/unless the economy turns around.

What think you?

 

[Cubs Brian]

You must spend a lot of time thinking. i do most of my thinking in a small room where it's uncomfortable to bring in a laptop( it sticks to my legs). But seriously, I think it's more to do with the economy. All of a sudden that couple hundred dollar payment you started 3 years ago was affordable, now not so much. Now looking back over your post not sure if my answer is relevant.:shrug:

 

[Victoria]

I'm not even sure most of the general public is aware that once you buy DVC you are essentially giving up the option to use whatever discounts Disney might give out. DVC certainly doesn't put it in their sales presentation and I doubt too many even think about it until after their purchase. Once a new DVC owner comes to the realization it is too late to do anything about it, but I don't think it is the cause of a mass exodus of owners. I blame the saturation (and subsequent devaluation) of the resale market more on the crappy economy.

Families that used to have two incomes might now be functioning with only one due to someone being laid off. People in sales based fields are finding their commissions significantly lower than they used to be. Paying $400 a month for DVC points wasn't a big deal when the family had expendable income. Now that expendable income is gone...therefore making $400 a month a major hardship. If it comes down to paying the mortgage on the house you actually live in vs. paying the mortgage on a timeshare the timeshare is going to lose every time.

There are only two ways to get rid of a DVC commitment...foreclosure or putting it up for sale. The resale market has been flooded with new listings lately. Contributing to the flood is the fact that people aren't buying up those resales as quickly as they used to either. Lots of listings coming in, very few actually going out. This is the way I see things at least. Yes, lots of people (DVC or non DVC) complain about how they can't take advantage of the general public discounts. My analysis of those people is that they just don't understand (or care?) how DVC really works. :shrug:

 

[mrerk]

Honestly, I think it is just the economy. A lot of people are having a really hard time right now and the first thing to go is a luxury like DVC. And because there are so many resales available the prices tend to go down. You know, the whole supply and demand thing. On the other hand, it is a great time to be buying.

 

[DisneyJoe]

Many who get "buyers remorse" when seeing the public offers are assuming that the public offers are better than the long term benefit of owning DVC.

Each needs to do the math for themselves, because depending on their family makeup and vacation style, the value proposition will be different.

 

[slappy magoo]

I'm not even sure most of the general public is aware that once you buy DVC you are essentially giving up the option to use whatever discounts Disney might give out. DVC certainly doesn't put it in their sales presentation and I doubt too many even think about it until after their purchase. Once a new DVC owner comes to the realization it is too late to do anything about it, but I don't think it is the cause of a mass exodus of owners. I blame the saturation (and subsequent devaluation) of the resale market more on the crappy economy.

Families that used to have two incomes might now be functioning with only one due to someone being laid off. People in sales based fields are finding their commissions significantly lower than they used to be. Paying $400 a month for DVC points wasn't a big deal when the family had expendable income. Now that expendable income is gone...therefore making $400 a month a major hardship. If it comes down to paying the mortgage on the house you actually live in vs. paying the mortgage on a timeshare the timeshare is going to lose every time.

There are only two ways to get rid of a DVC commitment...foreclosure or putting it up for sale. The resale market has been flooded with new listings lately. Contributing to the flood is the fact that people aren't buying up those resales as quickly as they used to either. Lots of listings coming in, very few actually going out. This is the way I see things at least. Yes, lots of people (DVC or non DVC) complain about how they can't take advantage of the general public discounts. My analysis of those people is that they just don't understand (or care?) how DVC really works. :shrug:

One nit to pick - DVC owners are always "allowed" to take advantage of a general public promotion. They just have to use it along with, or instead of, their DVC points. Ain't no law that says you can't make your vacation longer, maybe a week on points and a week paying cash so you can get free dining or free passes. Or that you can't bank points one year. Your job or wallet may hold you back but WDW won't stop you.

 

[stlbobby]

One nit to pick - DVC owners are always "allowed" to take advantage of a general public promotion. They just have to use it along with, or instead of, their DVC points. Ain't no law that says you can't make your vacation longer, maybe a week on points and a week paying cash so you can get free dining or free passes. Or that you can't bank points one year. Your job or wallet may hold you back but WDW won't stop you.

This is absolutely true. When the passholder discounts get ridiculously low my wife and I will grab an extra few days and save or points for big group vacations.

And since I got a discount on the annual pass for being a DVC member in the first place it all seems to build to even better deals.

 

[Victoria]

One nit to pick - DVC owners are always "allowed" to take advantage of a general public promotion. They just have to use it along with, or instead of, their DVC points. Ain't no law that says you can't make your vacation longer, maybe a week on points and a week paying cash so you can get free dining or free passes. Or that you can't bank points one year. Your job or wallet may hold you back but WDW won't stop you.

I understand that. Sorry for being unclear. The DVC owners who make it sound like the sky is falling are the ones who say they are being denied access to these discounts. We all know that is false. They are more than welcome to use cash, but in my opinion it seems like a silly move. Long term savings of DVC far out weigh a one time % off discount from Disney. :shrug:

 

[mousefan1972]

I understand that. Sorry for being unclear. The DVC owners who make it sound like the sky is falling are the ones who say they are being denied access to these discounts. We all know that is false. They are more than welcome to use cash, but in my opinion it seems like a silly move. Long term savings of DVC far out weigh a one time % off discount from Disney. :shrug:

Absolutely true. And there is no guarantee as to how long the % off discounts or package deals (free dining) will continue.

 

[Master Yoda]

This is something I asked in another DVC thread but it was never answered. Has any one calculated the break even point (if there is one) of DVC accounting for 30%-40% discounts on rooms vs full price?

 

[DisneyJoe]

This is something I asked in another DVC thread but it was never answered. Has any one calculated the break even point (if there is one) of DVC accounting for 30%-40% discounts on rooms vs full price?

It depends on too many factors:

- when you travel and how often
- family size, and therefore, room size needed - those who need a 2-bedroom villa can really throw off the calculations

I did the math once for 160 points at OKW for a studio, which I believe got me 2 weeks per year in value season and factored the price over the life of the membership and compared the per night point cost to today's rack rate and it was significantly over 40% - actually closer to 75% discount.

Once you start needing a 2-bedroom villa, all of the math changes.....

I once saw another poster come up with a 76% discount over the life of the membership...

 

[Phonedave]

I think the reduction in price is and indicator of the current state of the economy, as are the large discounts.

Unfortunately the two go hand in hand, it's feast or famine. It is "I have no disposable income to spend on DVC and look at the discounts for paying cash - I need to unload this sucker" or it's "Wow, I can easily pay for my DVC and I am also making out like a bandit because there are almost no discounts out there"

DVC swings like a pendulum do.


Time shares are down all over the place. My friends have a time share on the Grand Caymans that they let me stay in with them (they will be with me at my DVC in October). Last time we were in GC I mentioned that I wondered how much a timeshare like theirs cost. Their answer was free. Airfare has gone up, and people can't afford to travel or make the maintenance payments. If they default, they loose the timeshare and get a black mark on what is most likely already shaky credit ratings. So you can pick up one week time shares in the Grand Cayman's for roughly $700 - closing costs and ownership transfer fees. People are giving them away. I think it speaks pretty well that the value of DVC has not dropped like a rock. Of course the ROFL keeps it beatifically high.


-dave

 

[krisrunsdisney]

I haven't read through all the posts so I may be repeating other opinions. Sorry. First, I am sure the resale market is now GREAT for those who can afford to buy. I sorta wish now that we had waited; I might now be able to afford what we really wanted but were too impatient to wait for. Not that I am upset with what we got. As for the discounts we apparently aren't getting, well I don't see it that way. We can bank points and borrow points. So if there are some great cash deals for when we plan to go, we use those and save our points for another time. Just because we own DVC points does not mean we aren't allowed to use cash or to stay at non-DVC resorts. We prefer the DVC resorts, especially for longer trips for the laundry and kitchen, but it's not always necessary. DVC heard some of what owners griped about and started to offer the Dining Plans to DVC owners staying on points.

And, as previously mentined, we did agree to take hte chance when buying DVC. There was no guarantee we'd always make out better than the regular guest. though I am pretty sure we do anyway.

 

[stlbobby]

I couldn't find the link, but I did read an article maybe nine months back that said the timeshare resale market as a whole was flooded and buyers were getting steals. It also mentioned Disney as one of the timeshares that was holding it's value better than most.

So it is all relative. If you look at strictly the Disney market compared to past years it looks down, but if you compare it to other timeshare properties and the relative resale values it looks strong.

Sorry I couldn't provide the link.

 

[DVCOwner]

I think that anither part of the reduction in price is due to the amount of time left on the sale of the property. The contracts a a fixed length (50 years or less depending on when you purchased) and as the years left on the contract decrease, the value of the property will go down. I own points in BWV and am hoping that DVC offers extensions to the contracts such as they did at OKW.

 

[mp2bill]

Hey there hi there ho there...

Anyone who's been on this forum for a bit has seen the occasional gripe from DVC owners that they can't take advantage of a "spectacular" deal like free dining or deep room discounts because of their DVC membership.

Why would you want/need to take advantage of deep room discounts if you're using DVC points? On the flip-side, they can't force you to use your DVC points, so this statement doesn't make much sense. Or am I missing something?

 

[tjkraz]

The economy was the biggest factor. The resale market got flooded with contracts in the fall of '08 when unemployment began to skyrocket.

But I do think two other major factors have come into play:

1. Addition of the Bay Lake Tower and (to a lesser extent) Grand Californian. Before these resorts were introduced, BCV and BWV were the only two "close to a theme park" destinations available. That is the factor which undeniably drove their popularity.

When BLT and VGC came onto the scene with 50 year contracts and low dues, not only did demand for BCV and BWV fall but even some owners sold their interest specifically to buy elsewhere.

In my opinion, Animal Kingdom Villas had a similar effect on VWL values since the style of the two resorts is similar.

2. Going hand-in-hand with #1 is the diminishing contract duration of BCV and BWV. Five years ago I thought people were insane to pay $90+ per point for BCV / BWV rather than buying SSR with 12 more years and lower dues. Today the insanity is even greater. :ROFLOL:

The lower resale prices are appropriate. $90+ per point just is not a sustainable price when alternatives are available with 18 additional years on the back end (a 56% longer ownership period) and lower dues for the duration.

When you get right down to it, it's basic supply and demand. All of these factors have applied pressure on the resale market to varying degrees. BCV and BWV lost customers because people saw other resorts as better alternatives. Meanwhile, more BCV and BWV owners put their contracts on the market to buy elsewhere or their vacation habits changed or they lost a job and needed money.

Greater supply plus less demand equals lower price.

 

[dizzney]

I think that anither part of the reduction in price is due to the amount of time left on the sale of the property. The contracts a a fixed length (50 years or less depending on when you purchased) and as the years left on the contract decrease, the value of the property will go down. I own points in BWV and am hoping that DVC offers extensions to the contracts such as they did at OKW.

I agree, I hope they offer BWV extensions as we will purchase them, not sure how many purchased OKW extensions, but I think BWV and BCV would have a higher purchase rate

 

[slappy magoo]

Why would you want/need to take advantage of deep room discounts if you're using DVC points? On the flip-side, they can't force you to use your DVC points, so this statement doesn't make much sense. Or am I missing something?

There's a perception - and I'm not necessarily saying I agree with it - that when Disney offers deep discounts in certain promotions (like a few years back when, due to Free Dining, 4 adults sharing a Value for 90 bucks were getting free food that amounted to $140 a day), it makes the Vacation Club seem like it offers less "bang for the buck."

 

[Hakunamatata]

Our decision to sell our DVC was out of complete lack of faith in the economy or a rebound thereof. In fact, I don't see it getting any better any time soon and actaully will get worse the more our governments spend money that they don't have and tax us more. Have we quit going to Disney. Nope. Just got back from a two week trip the first of June. Will we go back. Yep, probably not until the FL rehab is complete.

All being said, the market is an evolving beast. People who are selling DVC cheap are making people happy that are buying resale cheap. It may not happen for another few month or even a year or more, but at some point in time, all those cheap points that have been thrown onto the market will start dissappearing fast as peoples confidence in the economy increases. I hope Im in a position financially to pick up a few hundred points allot cheaper than what I sold ours for.