DVC resale changes coming!?!

[AllieV]

Was this a claire thing and if so what does her departure mean for this change if it was true?

 

[tjkraz]

Was this a claire thing and if so what does her departure mean for this change if it was true?

By all appearances, the original catalyst of this thread was a big fat nothing. These rumors have popped up numerous times over the years and this is just another case of it not amounting to anything. As before, probably just a sales Guide trying to make his monthly quota. Some of these same people have been telling prospects for years that DVC ROFRs everything and that you stand a good chance of being defrauded if you buy resale.

That said, anytime you have a change in leadership there will be a different perspective brought to the table. The new DVC head is apparently an outsider (currently "Senior Vice President of Disney Sports Enterprises and Downtown Disney"). I wouldn't expect any immediate changes but over time, he will begin to imprint his own philosophies on DVC and will take things in different directions than either Claire Bilby or Jim Lewis would have. It will take time to see those results and formulate opinions on them.

 

[Dean]

By all appearances, the original catalyst of this thread was a big fat nothing. These rumors have popped up numerous times over the years and this is just another case of it not amounting to anything. As before, probably just a sales Guide trying to make his monthly quota. Some of these same people have been telling prospects for years that DVC ROFRs everything and that you stand a good chance of being defrauded if you buy resale.

That said, anytime you have a change in leadership there will be a different perspective brought to the table. The new DVC head is apparently an outsider (currently "Senior Vice President of Disney Sports Enterprises and Downtown Disney"). I wouldn't expect any immediate changes but over time, he will begin to imprint his own philosophies on DVC and will take things in different directions than either Claire Bilby or Jim Lewis would have. It will take time to see those results and formulate opinions on them.

Maybe, maybe not. IF such changes were happening, it's unlikely they would have been announced before the end of the year. Even if there are no changes this year, future changes along this line are almost a certainty it appears to me and thus the conversation is still valid.

 

[niroc]

I just do not understand this concept of punishing people who buy resale points or for that matter punishing people who want to/need to sell their DVC points. When I purchase anything major (i.e. house/car) I do consider what the resale value might be. Why would I want to make a major purchase if I knew the resale value is worth close to nothing? In the example of a new car I expect to take a hit on the resale but on a purchase of a house I would expect that hit to be very small or actually turn a profit. I consider a DVC purchase to be somewhere in the middle of those two examples. When Disney restricts resale contracts it instantly hurts the value of your purchase the day you sign the dotted lone much like your new car depreciates thousands of dollars the second you drive it off the lot.

In my opinion, when you buy direct from Disney Disney already made a profit on THOSE particular points. Why should they profit again from THOSE same points if you choose to sell them? Therefore they should not restrict any resale. They are not protecting my purchase, they are only hurting it.

It would be like Ford telling me if I want to sell my F150 I would need to take out the radio because it would not be fair for anyone who wants to buy a new F150.

Maybe I am oversimplifying things but what would you expect from a simple mind

PS - Be kind. I'm new here and this is my first post

 

[Dean]

I just do not understand this concept of punishing people who buy resale points or for that matter punishing people who want to/need to sell their DVC points. When I purchase anything major (i.e. house/car) I do consider what the resale value might be. Why would I want to make a major purchase if I knew the resale value is worth close to nothing? In the example of a new car I expect to take a hit on the resale but on a purchase of a house I would expect that hit to be very small or actually turn a profit. I consider a DVC purchase to be somewhere in the middle of those two examples. When Disney restricts resale contracts it instantly hurts the value of your purchase the day you sign the dotted lone much like your new car depreciates thousands of dollars the second you drive it off the lot.

In my opinion, when you buy direct from Disney Disney already made a profit on THOSE particular points. Why should they profit again from THOSE same points if you choose to sell them? Therefore they should not restrict any resale. They are not protecting my purchase, they are only hurting it.

It would be like Ford telling me if I want to sell my F150 I would need to take out the radio because it would not be fair for anyone who wants to buy a new F150.

Maybe I am oversimplifying things but what would you expect from a simple mind

PS - Be kind. I'm new here and this is my first post

Of the three examples, timeshares are the worst by far. DVC is actually far better than most. Some are literally worth nothing when you sign on the dotted line. Every single resale is in competition for a retail sale even though some who buy resale might not buy retail. It's not the DVD cares if you sell, just that they don't lose a sale. The car companies would do the same if they could get by with it. Put another way they're not keeping you from selling again and they're not restricting anything that's guaranteed contractually.

 

[Kidanifan08]

I just do not understand this concept of punishing people who buy resale points or for that matter punishing people who want to/need to sell their DVC points. When I purchase anything major (i.e. house/car) I do consider what the resale value might be. Why would I want to make a major purchase if I knew the resale value is worth close to nothing? In the example of a new car I expect to take a hit on the resale but on a purchase of a house I would expect that hit to be very small or actually turn a profit. I consider a DVC purchase to be somewhere in the middle of those two examples. When Disney restricts resale contracts it instantly hurts the value of your purchase the day you sign the dotted lone much like your new car depreciates thousands of dollars the second you drive it off the lot.

In my opinion, when you buy direct from Disney Disney already made a profit on THOSE particular points. Why should they profit again from THOSE same points if you choose to sell them? Therefore they should not restrict any resale. They are not protecting my purchase, they are only hurting it.

It would be like Ford telling me if I want to sell my F150 I would need to take out the radio because it would not be fair for anyone who wants to buy a new F150.

Maybe I am oversimplifying things but what would you expect from a simple mind

PS - Be kind. I'm new here and this is my first post

Welcome to the boards! You will learn a lot by scouring these boards. I know I have in the past 2 years.

On any given day, the majority of points being sold are being sold to direct purchasers on site (or on a cruise) than points being sold resale. As with most timeshare purchases, the purchase is done in the heat of the moment while the buyer is immersed in the Magic of the vacation. Most are not thinking about what they are going to do about their ownership if they lose their job, have a costly medical emergency, divorce or whatever may come along. So, in the end, DVC does not care about de-valuing the product, because they do not have to deal with the consequences and that very de-valuing is not considered by the majority of the people buying into DVC.

You are obviously a more sophisticated buyer, since you are already thinking of those things. Heck, just 2 weeks ago someone asked if they could use me as a referral for a direct purchase so they could save a few bucks per point on the purchase. They were paying cash and I did my best to talk them into resale, but their "guide" led them down the route of direct purchase. I even did my first purchase direct in 2008, although at that point, there was not much of a resale market for AKV. I have since done 3 resale purchases and I am not concerned in the least about the restrictions placed on resale contracts.

If you are considering buying, have fun researching these boards. There are several people on her who are very knowledgeable about the DVC product. Keep asking questions!

 

[tjkraz]

Worst case scenario for Disney is nobody purchases direct and they don't have a product anymore.

(And whether you believe it or not, it's in the best interest of current owners that direct sales continue to be strong. Without strong sales, no new resorts are added and owner perks would dry up immediately. Care to guess how healthy the resale market will look if Disney decides to abandon the timeshare marketplace?)

If you're worried about projected resale value of a timeshare purchase, you really shouldn't be buying a timeshare in the first place. (EDIT: Maybe that's a little harsh--I think we all filed "resale value" away as one of the redeeming qualities of DVC. But it's a totally unreliable aspect of TS ownership. There are hundreds--perhaps thousands--of owners who could attest to that back in 2008/09 when the recession saw the marketplace flooded with resale contracts and few were buying.)

As Dean said, DVC is one of the better timeshares. But over time it's reasonable to expect developers--even Disney--to pursue administrative and logistical changes which are to their benefit.

Buy a timeshare because you plan to USE it--not because of some perceived safety net which may evaporate at any time in the next 50 years.

 

[Sammie]

Worst case scenario for Disney is nobody purchases direct and they don't have a product anymore.

(And whether you believe it or not, it's in the best interest of current owners that direct sales continue to be strong. Without strong sales, no new resorts are added and owner perks would dry up immediately. Care to guess how healthy the resale market will look if Disney decides to abandon the timeshare marketplace?)

If you're worried about projected resale value of a timeshare purchase, you really shouldn't be buying a timeshare in the first place. As Dean said, DVC is one of the better timeshares. But over time it's reasonable to expect developers--even Disney--to pursue administrative and logistical changes which are to their benefit.

Buy a timeshare because you plan to USE it--not because of some perceived safety net which may evaporate at any time in the next 50 years.

Exactly, The value of DVC is in the using of it, not in the selling of it.

It would be like Ford telling me if I want to sell my F150 I would need to take out the radio because it would not be fair for anyone who wants to buy a new F150.

how long would Ford be in business if no one bought brand new cars, only used.

 

[niroc]

First of all....WOW....you guys post quick!

Second, I am an owner. I purchased 350 pts resale at BLT and I'll be there in May. I could not justify buying direct. The cost savings are just too much when you buy resale. The restrictions did not bother me. Chances are we will never go on a Disney cruise (the wife hates cruises) and I have no interest in Disney adventures, etc... And because I am committed to being there at least once a year until 2062 they will make tens of thousands of dollars off my family alone even though I did not buy directly from them!

Third, I have four daughters ages 18 months to 6 years. I bought into DVC because I plan on spending a lot of time there on vacation. I did not buy it looking to resell or make a profit on it.

Fourth, that is exactly my point about Disney: if Direct purchases far exceeds resale why should they even care about resale. By imposing any restrictions you are hurting the direct buyer. Sure, it's easy to say that Disney does not care because they already have your money but I don't buy that a 100% Ultimately in the end it will hurt Disney if the value of their product goes down. That is why I think their ROFR is a great idea. It protects the product.

 

[niroc]

Exactly,
how long would Ford be in business if no one bought brand new cars, only used.

How long would Ford be in business if their used cars held no value? You can look at it from either side.

 

[tjkraz]

Fourth, that is exactly my point about Disney: if Direct purchases far exceeds resale why should they even care about resale.

Disney feels it has more to gain by imposing the restrictions than it has to lose via the restrictions.

The believe the number of people who will buy because Disney Cruises and other destinations are blocked from resale is GREATER than the number of people who will opt to not buy because they fear restrictions.

It's as simple as that.

 

[lodge]

For in park spending, I think DVC Members are to WDW what AP holders are to DLR. We help them meet overhead and profit goals in slow seasons and we're a burden on the system during peak seasons.

Yes, look at the frst week of December.... high DVC use, not a typical high use season.

 

[disbound09]

How long would Ford be in business if their used cars held no value? You can look at it from either side.

Eventually those who ignore the market are thrown out of the market. BlackBerry anyone

 

[Dean]

First of all....WOW....you guys post quick!

... And because I am committed to being there at least once a year until 2062 they will make tens of thousands of dollars off my family alone even though I did not buy directly from them!

But that's a different company technically. DVD is in the business to make money and turn a profit independent of the parks, hotels, etc. Also, like any company, last years sales are just that, ancient history. This is a standard timeshare approach. There's no reason for a resale buyer to be upset, you're losing nothing of value and the restrictions likely saved you about $10 a point on your resale.

Fourth, that is exactly my point about Disney: if Direct purchases far exceeds resale why should they even care about resale. By imposing any restrictions you are hurting the direct buyer. Sure, it's easy to say that Disney does not care because they already have your money but I don't buy that a 100% Ultimately in the end it will hurt Disney if the value of their product goes down. That is why I think their ROFR is a great idea. It protects the product.

They care because it's the margin where they make their money. I think many misunderstand both these changes and ROFR. Both are simply aimed primarily at pushing people to retail, not making money directly. ROFR only works if the price is low enough to justify buying it back, it's a protection for DVD, not for the member.

 

[patsal]

How long would Ford be in business if their used cars held no value? You can look at it from either side.

After 10 years they pretty much don't!

 

[niroc]

But that's a different company technically. DVD is in the business to make money and turn a profit independent of the parks, hotels, etc. Also, like any company, last years sales are just that, ancient history. This is a standard timeshare approach. There's no reason for a resale buyer to be upset, you're losing nothing of value and the restrictions likely saved you about $10 a point on your resale.

To play devil's advocate.....DVD is in existence to support the parent company of Disney and the parks. Let's face it...the people who buy into DVC are the people who want to stay on property when they go to the parks. They are not buying into DVC just because they want a place to stay in the Orlando area. Even though the two companies are separate entities there is still a symbiotic relationship that cannot be denied.

They care because it's the margin where they make their money. I think many misunderstand both these changes and ROFR. Both are simply aimed primarily at pushing people to retail, not making money directly. ROFR only works if the price is low enough to justify buying it back, it's a protection for DVD, not for the member.

I beg to differ. ROFR does protect the buyer as well. If all resale contracts were sold at a price much less than their value it would devalue your "property" as well. ROFR keeps the value at a certain price point.

 

[Dean]

To play devil's advocate.....DVD is in existence to support the parent company of Disney and the parks. Let's face it...the people who buy into DVC are the people who want to stay on property when they go to the parks. They are not buying into DVC just because they want a place to stay in the Orlando area. Even though the two companies are separate entities there is still a symbiotic relationship that cannot be denied.

Obviously that's true to a degree but DVD has to stand on it's own. However, from a sales and profit standpoint, they are distinctly different and essentially independent. Past profits mean absolutely nothing to DVD or to any parent company going forward.

I beg to differ. ROFR does protect the buyer as well. If all resale contracts were sold at a price much less than their value it would devalue your "property" as well. ROFR keeps the value at a certain price point.

While there have been times when ROFR affected resale prices historically, generally it hasn't. It mainly serves to drive buyers to retail. What ROFR does is to prevent the fire sale contract from going through, DVC simply gets the option to buy it back. I think you grossly overestimate any protection that ROFR gives and other than OKW recently, ROFR has had no effect for several years.

 

[chalee94]

ROFR does protect the buyer as well. If all resale contracts were sold at a price much less than their value it would devalue your "property" as well. ROFR keeps the value at a certain price point.

this is just not true.

the savings when comparing annual dues to a cash rental rate keeps the value at a certain price point.

if virtually all the buyers leave the market, ROFR is a non-issue since disney won't bid directly on your contract...you can give the contract back to disney for free or else take whatever lowball offer you can find. ROFR just gives disney the chance to step in and take the lowball deal, but it won't force a value-minded buyer to offer more money.

 

[tjkraz]

To play devil's advocate.....DVD is in existence to support the parent company of Disney and the parks. Let's face it...the people who buy into DVC are the people who want to stay on property when they go to the parks. They are not buying into DVC just because they want a place to stay in the Orlando area. Even though the two companies are separate entities there is still a symbiotic relationship that cannot be denied.

Obviously that's true to a degree but DVD has to stand on it's own. However, from a sales and profit standpoint, they are distinctly different and essentially independent. Past profits mean absolutely nothing to DVD or to any parent company going forward.

Exactly.

Ken Potrock is the (relatively new) VP in charge of Disney Vacation Club. He has sales goals to meet and profit expectations for his division. If DVC fails to meet those goals, Potrock does not simply get a "pass" if the theme parks are still doing well.

The questions posed by his superiors will be "why didn't your division meet its expectations and what are you doing to correct the situation?"

We could spend weeks debating the true impact of the resale restrictions DVC has already implemented. (Actually I'm sure we have spent weeks debating it.) But when it comes down to salesperson and prospect in a room together, that restriction gives the sales Guide one more piece of ammo to help close the sale. In many cases, I'm sure it has been enough to get the job done. Certainly (IMO) DVC has made more sales via the restriction than it's lost from folks worried about future resale value.

 

[CarolMN]

IMO, the restrictions have benefited a subset of the DVC membership as well as Disney. By limiting the number of points that are used to cruise or stay at one of the other options in the Disney Collection, the Concierge Collection and the Adventurer's Collection, the actual point cost to use those options will be less for those who qualify to use them.

As many know, DVC must send DVC resort rooms to CRO/DRC to rent for cash to pay for these options. To do this, Disney has had to significantly discount the rack rate for these rooms and many of them end up unused. That means the number of points required to use the options must be high enough to absorb all of the discounts and empty rooms (plus the "commission" to CRO/DRC to act as a TA for DVC). Disney dealt with the problem in part by limiting the number of points that may be used to cruise.

With the restrictions, fewer points are chasing those options so Disney doesn't have to send as many rooms to CRO/DRC and should not have to discount those they do send as much). For the direct purchasers who want to use points for those options, the resale restrictions will help keep the point costs lower than they might otherwise have to be.

Also, AFAIK, once the "breakage cap" is reached, - Disney gets to keep the extra $$ for itself (extra profit). Too many discounts due to too many rooms in the supply chain to pay for non-DVC options means less profit for Disney, too. For lots of reasons, Disney wants to keep room rates high.

I actually think this reason was more of a driving factor for the restrictions than was the extra "lift" it may have given the sales group. YMMV.