New DVC Resales Restrictions

[freediverdude]

I also just heard recently that up until yesterday, all members would be greeted with Welcome Home. If you purchased after the 4th you will be greeted with a generic hello and 'Welcome to (pick your resort).

You can't be serious, lol.

 

[LuvtheGoof]

Why would it hurt direct sales? It won't at all. Very few people buy DVC thinking about how they are going to resell it. The resale market is a huge benefit (comparing to other timeshares) that most people hardly consider. It's obvious from the posts here that current owners don't think about it much either. People are only worried about whether the perks still apply to them but aren't understanding that this move devalues all DVC points whether you still get the perks or not. It only benefits the DVC sales people since they now have another talking point if someone brings up buying resale. As soon as those prospective direct buyers become DVC owners their points will be worth less on the resale market then they would have been on 4/2/16 before this went into effect. It's bad for all DVC owners.

Nope. It affects all of us. See above.

There is no proof that this will affect resales at all. Might it? Sure, but it might not. Why don't we wait and see in a year what happens, and then discuss. Oh, and it does not affect me for the simple reason that we will never sell our points for any reason. Our kids love WDW, and have no problem with taking over our contracts at some point. I'm sorry that others MAY get affected, but it's way to early to state that it WILL affect them.

 

[Ralphlaw]

Classic economics still prevails when information is thorough and transactions are logical. A part of the lure for resale was fully participating in the events (for some) and to get the discounts (for virtually all). Those small sticks in the bundle of resale ownership rights are now gone for future resale purchasers. Perhaps most importantly, the view of many potential resale purchasers may shift to a feeling of being 2nd class owners, thus worrying that resale, and even DVC overall, is less alluring than it once was.

Would you pay the same price for a used car if you knew that the cruise control doesn't work, or it leaks oil, or its mpg is a mile less per gallon? I wouldn't. You pay less when the thing your buying is of less value to you. At the restaurant next to my office, they give free dessert on Wednesdays, and the parking lot is full. I guarantee that the place would be far emptier if that small perk was taken away.

Although some feel that they may never sell, most of us have a Plan B back up option that if all doesn't go well (job loss, health tragedy, terrorist attack), we can always sell our points and get at least some of our money back (or even make a profit like I did with my BLT points a few years back). Now, if classic economics prevails, that option may be less real than it was a few days ago, and that apprehension of ever-eroding rights may be even more jarring to possible resale purchasers. "What will they take away next?" is a big reason not to buy. IMO, that's the real decrease in our value.

Here's the thing, back when I bought 300 resale points for Boardwalk at The Timeshare Store a few years back, I had a minor concern that these points couldn't be used for the RCI Collection or on the Cruise Ships. It was minor because I never really planned to use them for those purposes anyway. Nevertheless I would have been willing to pay a couple bucks per point more to have full ownership rights. Yup, $600 did not go to the original owners because those little extras were gone.

Now, other potential buyers have one less reason to buy and/or one less reason to pay a bit more, and thus our points have lost a bit of value. Maybe nobody would care, but overall I think they will. Of course, there's no perfect way to test this because the deed has already been done.

 

[ParentsOf4]

Why would it hurt direct sales? It won't at all. Very few people buy DVC thinking about how they are going to resell it. The resale market is a huge benefit (comparing to other timeshares) that most people hardly consider. It's obvious from the posts here that current owners don't think about it much either. People are only worried about whether the perks still apply to them but aren't understanding that this move devalues all DVC points whether you still get the perks or not. It only benefits the DVC sales people since they now have another talking point if someone brings up buying resale. As soon as those prospective direct buyers become DVC owners their points will be worth less on the resale market then they would have been on 4/2/16 before this went into effect. It's bad for all DVC owners.

I agree that, theoretically, it's bad for all DVC members. However, is it really?

As a group, people buying resale are value shoppers. Pretty much the only reason to buy resale is the lower initial purchase price. These new restrictions barely touch that mental calculation. After all, don't most resale buying guides advise that any perk can be eliminated at any time, and that prospective resale buyers should plan accordingly?

Ultimately, SSR is still going to resell for $85/point (roughly the current resale price). I doubt these additional restrictions are going to cause these prices to move much.

Nor, with direct SSR prices at $135/point, is anyone going to think these additional restrictions are worth the $50/point difference.

At best, they are going to chase a handful of resale buyers away.

Meanwhile, I buy more than I would while at WDW because of the DVC discount. Take away that discount and I promise Disney that I will buy less. If there are others out there like me, then elimination of discounts might hurt food and merchandise sales from future resale buyers.

To me, this smells of a poorly thought out reaction to weak PVB sales, with management deciding that "something" needed to be done and viewing resales as the problem.

Yes, the latest restrictions will give Disney's sales reps a few more talking points to help close the deal. Really though, how many direct buyers are truly aware of the resale market? One thing those of us more familiar with DVC sometimes fail to appreciate is exactly how complicated DVC is. The average newbie is overwhelmed by information. These new restrictions would seem to be more noise for the vast majority of DVC direct buyers.

Maybe, just maybe, resales are not the problem.

Maybe, just maybe, the real problem are the direct prices, with sales struggling even as the economy is the best it's been in years.

Maybe DVC prices have finally reached that tipping point we've talked about for years.

 

[raymusiccity]

I agree that, theoretically, it's bad for all DVC members. However, is it really?

As a group, people buying resale are value shoppers. Pretty much the only reason to buy resale is the lower initial purchase price. These new restrictions barely touch that mental calculation. After all, don't most resale buying guides advise that any perk can be eliminated at any time, and that prospective resale buyers should plan accordingly?

Ultimately, SSR is still going to resell for $85/point (roughly the current resale price). I doubt these additional restrictions are going to cause these prices to move much.

Nor, with direct SSR prices at $135/point, is anyone going to think these additional restrictions are worth the $50/point difference.

At best, they are going to chase a handful of resale buyers away.

Meanwhile, I buy more than I would while at WDW because of the DVC discount. Take away that discount and I promise Disney that I will buy less. If there are others out there like me, then elimination of discounts might hurt food and merchandise sales from future resale buyers.

To me, this smells of a poorly thought out reaction to weak PVB sales, with management deciding that "something" needed to be done and viewing resales as the problem.

Yes, the latest restrictions will give Disney's sales reps a few more talking points to help close the deal. Really though, how many direct buyers are truly aware of the resale market? One thing those of us more familiar with DVC sometimes fail to appreciate is exactly how complicated DVC is. The average newbie is overwhelmed by information. These new restrictions would seem to be more noise for the vast majority of DVC direct buyers.

Maybe, just maybe, resales are not the problem.

Maybe, just maybe, the real problem are the direct prices, with sales struggling even as the economy is the best it's been in years.

Maybe DVC prices have finally reached that tipping point we've talked about for years.

I agree. Generally, all properties are going to resell for the current resale price. DVC could pile on as many additional restrictions as they'd like, but, ultimately, the average consumer is just trying to stay at a DVC resort for the perceived savings of becoming a 'member'. I don't think 10% discounts or glorified meet and greets are swaying anyone to buy 'direct'. This seems to be a pretty similar analogy to the new 'premium parking'. Just as you pass someone in the hall in BLT, you really don't care if they're a 'Member' or not. Maybe they're even staying at DVC as a cash customer. The people riding the tram from the parking lot are stopping along the way to pick up the 'Premium' customer. All everyone else sees are a bunch of people getting off the same tram, or a bunch of people exiting a DVC resort. Labels don't matter much..... just the experience and how much you paid for it.

 

[FNG]

They technically do already. If I want points at a sold out resort, I simply call my guide. They check to see if they have them available (from ROFR), and if not, they put me on a list and get back to me when they have them. Trouble is that they then charge me something closer to the current price, not what they stole them for on the resale market.

You might see this happen more now as these would be considered direct points with all the perks and discounts.

That sounds like it works for current DVC members only? Do non DVC members have the option to call and see if "sold out resorts" have points available through DVC directly? I have been considering buying DVC resale, but this will make me think twice.

 

[kbmum]

Are these perks even substantial? I don't see anything that makes buying direct really worth it.

We occasionally use a discount for certain table service meals, but that's pretty much it for my family.

I received an email from a resale company. Granted, they're trying to save their business, but they make an interesting point:

"When reviewing these discounts and the limited inventory with Disney directly, the 40-50% savings from purchasing resale hardly compares. For example, lets use a 200 point Animal Kingdom contract to compare savings to benefits: Disney Vacation Club is currently charging $160 per point which would make a 200 point contract cost $32,000 + closing costs and annual dues. The average resale for this resort is around $85 per point or approximately $17,000 + closing costs and annual dues for a 200 point contract. That’s an up-front savings of $15,000! A family of four would have to purchase annual passes at the discounted rate for over 37 years to see that amount of savings with member benefits."

 

[lostpro9het]

We occasionally use a discount for certain table service meals, but that's pretty much it for my family.

I received an email from a resale company. Granted, they're trying to save their business, but they make an interesting point:

"When reviewing these discounts and the limited inventory with Disney directly, the 40-50% savings from purchasing resale hardly compares. For example, lets use a 200 point Animal Kingdom contract to compare savings to benefits: Disney Vacation Club is currently charging $160 per point which would make a 200 point contract cost $32,000 + closing costs and annual dues. The average resale for this resort is around $85 per point or approximately $17,000 + closing costs and annual dues for a 200 point contract. That’s an up-front savings of $15,000! A family of four would have to purchase annual passes at the discounted rate for over 37 years to see that amount of savings with member benefits."

This is funny because the DVD agents are using almost the exact same tactic when trying to sell their points direct except they are comparing rack rate at the poly to ownership and how you can buy something like 3,000 disney shirts with all the savings with direct ownership.

 

[LuvtheGoof]

Classic economics still prevails when information is thorough and transactions are logical. A part of the lure for resale was fully participating in the events (for some) and to get the discounts (for virtually all). Those small sticks in the bundle of resale ownership rights are now gone for future resale purchasers. Perhaps most importantly, the view of many potential resale purchasers may shift to a feeling of being 2nd class owners, thus worrying that resale, and even DVC overall, is less alluring than it once was.

Would you pay the same price for a used car if you knew that the cruise control doesn't work, or it leaks oil, or its mpg is a mile less per gallon? I wouldn't. You pay less when the thing your buying is of less value to you. At the restaurant next to my office, they give free dessert on Wednesdays, and the parking lot is full. I guarantee that the place would be far emptier if that small perk was taken away.

Although some feel that they may never sell, most of us have a Plan B back up option that if all doesn't go well (job loss, health tragedy, terrorist attack), we can always sell our points and get at least some of our money back (or even make a profit like I did with my BLT points a few years back). Now, if classic economics prevails, that option may be less real than it was a few days ago, and that apprehension of ever-eroding rights may be even more jarring to possible resale purchasers. "What will they take away next?" is a big reason not to buy. IMO, that's the real decrease in our value.

Here's the thing, back when I bought 300 resale points for Boardwalk at The Timeshare Store a few years back, I had a minor concern that these points couldn't be used for the RCI Collection or on the Cruise Ships. It was minor because I never really planned to use them for those purposes anyway. Nevertheless I would have been willing to pay a couple bucks per point more to have full ownership rights. Yup, $600 did not go to the original owners because those little extras were gone.

Now, other potential buyers have one less reason to buy and/or one less reason to pay a bit more, and thus our points have lost a bit of value. Maybe nobody would care, but overall I think they will. Of course, there's no perfect way to test this because the deed has already been done.

Hmm, but a person buying resale is NOT paying the same as a direct purchase buyer, so why should the person paying less get the working cruise control, or that extra MPG? If I buy direct, I expect all the extras. If I buy resale, paying less in the process, then I get less in return. The thing is, we are talking about removing a few discounts that, quite honestly, we rarely took advantage of (except for the AP discount), because we saved more in other ways. For the vast majority of resale buyers, I seriously doubt that it will affect too many purchasers. They want to save money on their resort costs, and that's what they'll do. Heck, a lot of them don't even buy AP's since they don't go often enough to justify the cost, so that savings won't even matter to them. If we had been receiving good discounts on regular park tickets, that might be different, but we have never gotten that.

Look, I'm not defending DVD for this policy. If this is a reaction to PVB sales (and NO ONE outside of DVD management has ANY idea if it is or isn't), then it's a really stupid idea. I will completely agree that Disney has raised the prices way too high for buying direct. When we bought, we paid less than $90 per point. Would we buy direct now? Well, maybe a smaller contract, but probably not the 360 we currently own.

 

[LuvtheGoof]

That sounds like it works for current DVC members only? Do non DVC members have the option to call and see if "sold out resorts" have points available through DVC directly? I have been considering buying DVC resale, but this will make me think twice.

Despite what anyone says, you can purchase points directly from Disney for ANY property whether a current owner or not. You may have to go on a waiting list until Disney can ROFR the points, or they may have some available already through foreclosures. Do NOT let a guide tell you that you can ONLY purchase Aulani or Poly. Get a different guide, as that person is lying to you.

 

[Ralphlaw]

Good points, all. We bought direct from Disney originally, and only then did I start to look at the resale market and see that direct was way way way overpriced. Getting on The Timeshare Store's email list got me very familiar with the "market" price of points. I agree that most people will probably buy direct the first time, but it makes very little economic sense once you become familiar with the resale market to do anything but buy resale.

The big debate is whether or not to buy into it in the first place, or stay in it long term. I must admit, when I get the bill for maintenance fees, and when I see the yearly discounts and free dining, I wonder. In that respect, DVC's competition seems to be Disney itself. At some point, we may be making a trip just to burn up our points and to have a pretty good time even though we might prefer going somewhere else for vacation that particular year.

Also, where does Disney come up with their ridiculously high prices per point? I've never seen a breakdown. It seems to be that much of this is an attempt to continue gouging for insanely huge profits, and marginalizing the discounter. ParentsOf4's number-crunching on the SSR points makes my jaw drop. Truly, who in their fully-informed mind would buy direct when the discount price is nearly 50% lower?

Incidentally, little perks do make a difference. A discount helps prod a wavering customer. Sell the sizzle not the steak. Sell the free dessert, not the sandwich. And it's not even noon yet and the parking lot for the restaurant next door is already full.

 

[LuvtheGoof]

The big debate is whether or not to buy into it in the first place, or stay in it long term. I must admit, when I get the bill for maintenance fees, and when I see the yearly discounts and free dining, I wonder. In that respect, DVC's competition seems to be Disney itself. At some point, we may be making a trip just to burn up our points and to have a pretty good time even though we might prefer going somewhere else for vacation that particular year.

So you're really going to bring up room discounts and free dining???? Our last DVC trip we stayed in a 1 bedroom at VGF. The cash cost at the time we went (there was NO discount then) was just over $7,000 without even adding in the 12.5% fees and taxes that cash guests have to pay. When you factor in what our points cost us - which are maintenance fees only - we paid just over $2,000 for the same room. We saved over $5,000 just on this ONE stay there. Even a 30% discount on the room only gets you to $4,900. So go ahead, sell your points, and take that 30% discount. We saved over 70%, and since the rack rate has historically gone up more than our dues, we'll save even more in the future.

Free dining?!?!?!?! It just needs to go away forever.

 

[EOD K9]

It is funny that two weeks ago I was at the Poly and was asking some questions about the bungalows and a few other things. He (the DVC gentleman at the kiosk) then told me now was a great time to buy more points.
I said no thanks and told him I just bought resale and he had such a look of disappointment on his face.
I also heard that new resale members will not be eligible for the DVC Member door magnet on DCL cruises and cannot buy Member Only merchandise at resorts.
I just made up the above paragraph.

 

[EOD K9]

You can't be serious, lol.

It came from a bus driver.

 

[Ralphlaw]

So you're really going to bring up room discounts and free dining???? Our last DVC trip we stayed in a 1 bedroom at VGF. The cash cost at the time we went (there was NO discount then) was just over $7,000 without even adding in the 12.5% fees and taxes that cash guests have to pay. When you factor in what our points cost us - which are maintenance fees only - we paid just over $2,000 for the same room. We saved over $5,000 just on this ONE stay there. Even a 30% discount on the room only gets you to $4,900. So go ahead, sell your points, and take that 30% discount. We saved over 70%, and since the rack rate has historically gone up more than our dues, we'll save even more in the future.

Free dining?!?!?!?! It just needs to go away forever.

Good notions to consider. The problem is that trying to determine room rates is not easy. It's usually so wrapped in a package with park hoppers and meal plan options that you don't really know how to compare it to the cost of just a room. Disney likes to keep it mystical, which is one reason why DVC point charts only list studios (which are smaller than standard hotel rooms) and then villas (which are larger than standard hotel rooms). They don't want you to compare apples with apples. I've never dug down to find out what rack rates are, especially when that rack rate seems to go down substantially with a package that includes a bunch of other things.

For us, we stay on points, but then get park hoppers and buy food as we go along (no dining plan). Sure, I could probably find the room rate in isolation, but if a package gets me that room AND includes a park hopper magic band AND gives me a dining plan, how can I really separate it out? Also, how do you put a dollar value on extra space and a kitchen and laundry, all of which are very nice amenities for DVC? I'm glad some number-crunchers like you are out there to count the beans for me.

What you say makes me feel very good for dropping over $20,000 on our 300 Boardwalk points, with the corresponding $1,800 in dues every year. Comparing that to $5,000+ just for the room makes very good sense.

Thanks again, everyone, for the thoughtful responses.

 

[GoofGoof]

There is no proof that this will affect resales at all. Might it? Sure, but it might not. Why don't we wait and see in a year what happens, and then discuss. Oh, and it does not affect me for the simple reason that we will never sell our points for any reason. Our kids love WDW, and have no problem with taking over our contracts at some point. I'm sorry that others MAY get affected, but it's way to early to state that it WILL affect them.

I agree that, theoretically, it's bad for all DVC members. However, is it really?

As a group, people buying resale are value shoppers. Pretty much the only reason to buy resale is the lower initial purchase price. These new restrictions barely touch that mental calculation. After all, don't most resale buying guides advise that any perk can be eliminated at any time, and that prospective resale buyers should plan accordingly?

Ultimately, SSR is still going to resell for $85/point (roughly the current resale price). I doubt these additional restrictions are going to cause these prices to move much.

Nor, with direct SSR prices at $135/point, is anyone going to think these additional restrictions are worth the $50/point difference.

At best, they are going to chase a handful of resale buyers away.

Meanwhile, I buy more than I would while at WDW because of the DVC discount. Take away that discount and I promise Disney that I will buy less. If there are others out there like me, then elimination of discounts might hurt food and merchandise sales from future resale buyers.

To me, this smells of a poorly thought out reaction to weak PVB sales, with management deciding that "something" needed to be done and viewing resales as the problem.

Yes, the latest restrictions will give Disney's sales reps a few more talking points to help close the deal. Really though, how many direct buyers are truly aware of the resale market? One thing those of us more familiar with DVC sometimes fail to appreciate is exactly how complicated DVC is. The average newbie is overwhelmed by information. These new restrictions would seem to be more noise for the vast majority of DVC direct buyers.

Maybe, just maybe, resales are not the problem.

Maybe, just maybe, the real problem are the direct prices, with sales struggling even as the economy is the best it's been in years.

Maybe DVC prices have finally reached that tipping point we've talked about for years.

Assuming that this change has no impact on resale sales then really what's the point? Even if it has no impact on resale sales it still also adds no benefit to current owners so it's at best neutral to current owners.

 

[Ralphlaw]

Yeah, just checked The Timeshare Store. Boardwalk points are selling for about $100 per point. We bought at $79 in 2014. Even with the 10% commission, I'd make $11 per point, or $3,300 in just two years. That's a 14% rate of return.

In that same time, I spent $3,700 in maintenance fees, and stayed 19 nights in a one room villa at Christmas. Doing the math, it cost me a total of $400, or $21 per night, to stay over Christmas! Yup, $21 per night. At Christmas, the most expensive time of the year. I also saved a few bucks everyday with various discounts, and received a little better treatment here and there, especially when it came to last minute dinner reservations. If you add (or subtract) an extra benefit of about $15 per day for these incidental benefits, we effectively stayed for about $6 per day. At Christmas!!! Throw in the benefits of a kitchen and laundry, and YIPPEE!!!

I guess I really shouldn't be worried about a small drop in potential demand due to the loss of member events and on again off again discounts. Thanks LuvtheGoof for taking me down this mathematical road. I'll sleep a little better tonight.

 

[Tiggerish]

If we had been receiving good discounts on regular park tickets, that might be different, but we have never gotten that.

We used to get a discount on Length of Stay passes, back when those were a thing. That perk was replaced with the AP discount.

 

[LuvtheGoof]

We used to get a discount on Length of Stay passes, back when those were a thing. That perk was replaced with the AP discount.

Well that was awhile back!

 

[LuvtheGoof]

Yeah, just checked The Timeshare Store. Boardwalk points are selling for about $100 per point. We bought at $79 in 2014. Even with the 10% commission, I'd make $11 per point, or $3,300 in just two years. That's a 14% rate of return.

In that same time, I spent $3,700 in maintenance fees, and stayed 19 nights in a one room villa at Christmas. Doing the math, it cost me a total of $400, or $21 per night, to stay over Christmas! Yup, $21 per night. At Christmas, the most expensive time of the year. I also saved a few bucks everyday with various discounts, and received a little better treatment here and there, especially when it came to last minute dinner reservations. If you add (or subtract) an extra benefit of about $15 per day for these incidental benefits, we effectively stayed for about $6 per day. At Christmas!!! Throw in the benefits of a kitchen and laundry, and YIPPEE!!!

I guess I really shouldn't be worried about a small drop in potential demand due to the loss of member events and on again off again discounts. Thanks LuvtheGoof for taking me down this mathematical road. I'll sleep a little better tonight.

Exactly my point, and you're welcome. I like doing the math, and trust me, we did a lot of math and research before our purchase and add-ons.

I really think that most people, when they really think about it, and crunch the numbers, will not miss the "perks", and will buy resale anyway due to the savings. If we were buying right now, then we would probably buy resale initially, and then add the 25 point direct if it meant that much to us to have the card and get the discounts. We pretty much only use the AP discount anyway, since we have other options for dining and merchandise. Just how we roll.