New DVC Resales Restrictions

[DVC Mike]

The dealership gets zero value from giving perks to non customers. Disney gets tremendous value from repeat visitors regardless of where they purchased their points.

Disney Vacation Development makes profit selling direct to customers. DVD doesn't make any money when one DVC member sells their contract to someone else.

They want to...

A. Force more direct buy.

Obviously, that is the point of any marketing campaign - to get more people to buy your product.

B. Extract a teeny tiny bit more money out of those that choose resale.

DVD doesn't make any money off a resale. DVC had a member who owned the points before, and after the sale, still has a member who owns the points. To DVC, it's just a name change.

 

[lostpro9het]

DVD doesn't make any money off a resale. DVC had a member who owned the points before, and after the sale, still has a member who owns the points. To DVC, it's just a name change.

They don't? Didn't they just increase Estoppel from $50 to $150?

 

[DVC Mike]

They don't? Didn't they just increase Estoppel from $50 to $150?

Seriously? What would be a reasonable figure to charge for this administrative service? And how does the previous increase in the fee relate to the topic at hand?

 

[GoofGoof]

DVD doesn't make any money off a resale. DVC had a member who owned the points before, and after the sale, still has a member who owns the points. To DVC, it's just a name change.

They don't make much direct money but having a healthy resale market ensures that the maintenance fees keep coming in. I've seen other non-Disney timeshares that had to significantly increase maintenance fees to remaining members because units are left in foreclosure and no fees get paid. Disney can't have these properties that are (in a lot of cases) integrated into their deluxe resorts sit and rot due to lack of MFs and they would also have a much harder time selling direct memberships if the MFs were higher or there was a history of large increases. I think the resale market is healthy for DVD and TWDC in general.

 

[DVC Mike]

They don't make much direct money but having a healthy resale market ensures that the maintenance fees keep coming in. I've seen other non-Disney timeshares that had to significantly increase maintenance fees to remaining members because units are left in foreclosure and no fees get paid. Disney can't have these properties that are (in a lot of cases) integrated into their deluxe resorts sit and rot due to lack of MFs and they would also have a much harder time selling direct memberships if the MFs were higher or there was a history of large increases. I think the resale market is healthy for DVD and TWDC in general.

And how will this change by DVC affect the resale market? The first time they did this, prices temporarily dropped for a short time, and then rose to the highest levels ever.

I think the same thing is going to happen with this change. Most people will still realize it is less expensive to buy resale despite the loss of any perks.

Heck, the perks for direct purchasers might even get better. We'll have to wait and see.

 

[lostpro9het]

Seriously?

Yup.

And how does the previous increase in the fee relate to the topic at hand?

Because you stated they make no money off of resale, I thought it was pretty obvious.

 

[xdan0920]

Disney Vacation Development makes profit selling direct to customers. DVD doesn't make any money when one DVC member sells their contract to someone else.

Semantics. DVD is part of TWDC. TWDC makes LOADS of money off people who buy resale.

Obviously, that is the point of any marketing campaign - to get more people to buy your product.

If the point is to make DVC more appealing, then this is a big failure. Two ways...

1. It shows what little perks DVC members receive.
2. It shows how petty TWDC is being lately.

DVD doesn't make any money off a resale. DVC had a member who owned the points before, and after the sale, still has a member who owns the points. To DVC, it's just a name change.

TWDC makes money off having people stay onsite, eat their food, buy their merch, and visit their parks. Pretty simple really. Anything they do to discourage folks buying DVC, is IMO, stupid.

 

[GoofGoof]

And how will this change by DVC affect the resale market? The first time they did this, prices temporarily dropped for a short time, and then rose to the highest levels ever.

I think the same thing is going to happen with this change. Most people will still realize it is less expensive to buy resale despite the loss of any perks.

Heck, the perks for direct purchasers might even get better. We'll have to wait and see.

We don't know the exact impact. It may or may not hurt the resale market, but what we do know for sure is it won't help it. I agree that based on history and continued direct price increases the resale market will probably be just fine.

The real question is if this is going to have next to no impact on resale sales like you are saying, then what was the point? The only thing I can think of is that it's simple cost cutting. By eliminating perks from a growing number of DVC owners they spend less on the perks. I doubt very much that those cost savings will result in more or better perks for us. Simple cash grab.

 

[xdan0920]

I doubt very much that those cost savings will result in more or better perks for us. Simple cash grab.

And it cuts two ways. They save by not offering some perks, and they line their coffers a bit by charging full price to resale buyers for things like Mickey Mouse plushes and Annual Passes.

It is literally impossible to find a positive here. I saw @ParentsOf4 reached for one, saying special events might be easier to get into, but that's such a reach, I think he was probably kidding.

 

[GoofGoof]

I also think it's a little strange creating 2 classes of owners. It is one thing to limit trade-ins like they did in the past or to remove merchandise and food discounts. Those are just monetary savings behind the scenes. To exclude these new owners from member events seems just wrong. Aren't they members? Someone joked about not greeting them with a welcome home, but it almost seems like that's the way they will be treated. Future resale owners will essentially be treated like guests staying at a DVC resort on rented points.

 

[GoofGoof]

And it cuts two ways. They save by not offering some perks, and they line their coffers a bit by charging full price to resale buyers for things like Mickey Mouse plushes and Annual Passes.

It is literally impossible to find a positive here. I saw @ParentsOf4 reached for one, saying special events might be easier to get into, but that's such a reach, I think he was probably kidding.

He may have been kidding, but it's actually a valid point. As time goes on more and more contracts will be sold and all those new resale owners will be restricted from events so the pool of people attending will get smaller and smaller unless Disney continues to sell direct points at the same pace which is unlikely. Of course if the pool gets small enough they will just cancel the events due to lack of interest. So no longer a positive.

 

[DVC Mike]

Semantics. DVD is part of TWDC. TWDC makes LOADS of money off people who buy resale.

TWDC makes more money from a direct sale than a resale.

If the point is to make DVC more appealing, then this is a big failure. .... Anything they do to discourage folks buying DVC, is IMO, stupid.

The point is to encourage more direct sales, which are more profitable.

The real question is if this is going to have next to no impact on resale sales like you are saying, then what was the point?

It's another tool that the DVC sales guides can use to justify the higher cost of a resale purchase. They are trying to differentiate buying direct from the resale market. Most people who visit sites like DVCinfo.com will learn resale still makes the best sense from a financial perspective.

It is literally impossible to find a positive here.

Some direct buyers may think this can turn into a positive if DVD increases the perks offered to direct buyers while removing them from resale buyers.

I'm not saying this is good for DVC members. I'm just saying DVD is well within their rights to do this (frankly, I'm surprised it took them this long). I have never said I favor this change.

 

[xdan0920]

TWDC makes more money from a direct sale than a resale.



The point is to encourage more direct sales, which are more profitable.



It's another tool that the DVC sales guides can use to justify the higher cost of a resale purchase. They are trying to differentiate buying direct from the resale market. Most people who visit sites like DVCinfo.com will learn resale still makes the best sense from a financial perspective.



Some direct buyers may think this can turn into a positive if DVD increases the perks offered to direct buyers while removing them from resale buyers.

I'm not saying this is good for DVC members. I'm just saying DVD is well within their rights to do this (frankly, I'm surprised it took them this long). I have never said I favor this change.

I'm not arguing that this isn't allowed. They can remove all perks from everyone if they feel like it. I am arguing that this is stupid, and petty, and unbecoming. If it's this hard to sell direct, lower the prices, or stop building DVC units.

 

[EOD K9]

If someone does their homework, you could go take a tour, see what's offered and then buy resale. If perks really don't matter for some, resale is a no brainier. @GoofGoof The no Welcome Home comment was mine, and while almost impossible to do, wouldn't surprise me. I have both and really think it is total BS that perks for resale are diminishing.

 

[WWWD]

You almost have to laugh that ideas like this actually get out of committee and become policy. You would think one person would speak up and say "you're going to anger our most loyal guests" and at what cost. This move doesn't effect me (at this time), however if Disney ever decides to drastically chip away at my perks, I'll respond accordingly. The DVC properties are close to many of Central Florida's attractions that I never get around to visit and a lot more of my meals can be taken care of by services such as Garden Grocery.

 

[ParentsOf4]

It is literally impossible to find a positive here. I saw @ParentsOf4 reached for one, saying special events might be easier to get into, but that's such a reach, I think he was probably kidding.

Let's look at the upcoming late night at Typhoon Lagoon.

As I understand it, Disney is opening this up first to DVC members staying on points. Presumably if it doesn't fill-up, Disney will then open it to DVC members not staying on points.

With the new resale restrictions, those who buy via resale as of April 4 will not be able to attend, presumably opening up this event to direct sale members who are not staying on points.

 

[seascape]

Disney Vacation Development makes profit selling direct to customers. DVD doesn't make any money when one DVC member sells their contract to someone else.


Obviously, that is the point of any marketing campaign - to get more people to buy your product.



DVD doesn't make any money off a resale. DVC had a member who owned the points before, and after the sale, still has a member who owns the points. To DVC, it's just a name change.

Disney does make lots of money off of ALL DVC MEMBERS in their annual dues. We pay for Disney transporation which charge a fee and makes a healthy profit. We pay for laundry which is sent to Disney laundry service. We pay for check in and that is provided by Disney and profitable. Now I think this is a good thing but don't think for a second that Disney or any timeshare company doesn't make a profit yearly after selling out. If that were the case no timeshare company would exist. Sales are extremely profitable but the yearly profits on services are high too.

 

[ParentsOf4]

Disney does make lots of money off of ALL DVC MEMBERS in their annual dues. We pay for Disney transporation which charge a fee and makes a healthy profit. We pay for laundry which is sent to Disney laundry service. We pay for check in and that is provided by Disney and profitable. Now I think this is a good thing but don't think for a second that Disney or any timeshare company doesn't make a profit yearly after selling out. If that were the case no timeshare company would exist. Sales are extremely profitable but the yearly profits on services are high too.

DVD collects roughly $400M annually in DVC Maintenance Fees. As you note, Disney has markups on the services it provides to DVD, such as management fees and housekeeping.

There's a bit of a game being played here. Per Florida statue, it's my understanding that a timeshare company (e.g. DVD) is supposed to charge maintenance fees at cost, but there's nothing stopping the companies it contracts with (e.g. Disney) from profiting from the services they provide

Disney's DVC margins don't match cash rooms but in support of what you wrote, it would be misleading to suggest that Disney doesn't profit at all from DVC fees.

 

[perelandra]

In most businesses, the perks you get from buying something new are not transferrable.

For example, a nearby automotive dealer offers free oli changes for life. If I bought a new Ford from that dealer, I would get the benefit of free oil changes. But, if I desired to save some money and buy the same vehicle from an individual who isn't happy with the vehicle they bought from that dealer and sells it to me, I wouldn't get the free old changes.

Does that mean their are two classes of buyers? Sure, but we all accept this as reasonable.

Why shouldn't we think it's also reasonable for DVC to do the same thing? Buy direct from them and DVD gives you some perks, but buy resale to purchase from an individual who purchased direct from DVC and the benefits are not transferrable.

Actually, if you buy used Toyota within the first two years, they honor the remaining 2 years worth of oil changes, as well as the remaining manufacturers warranty. They also want you to associate yourself as a Toyota owner and they want you to visit their dealerships and repair facilities often. They do not want you to be treated differently because you bought used. That would ruin resale value and resale value is a major selling point. Maybe DVD should try to use that to their advantage instead of trying to kill it.

 

[perelandra]

I think no matter how you slice it, it was a bad PR move. Seriously, you are going to take away my plastic member card? That is clearly creating a class distinction with ownership, but if I bought a week before, I'm a "real" member.
If it's all about money, then why doesn't Disney eliminate the resale market all together by exercising ROFR on everything within reason, and then control the resale game themselves?