DVC RESALES
DVC RESALES

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Old 11-24-2013, 05:13 PM   #76
Nabas
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Originally Posted by DougEMG View Post
If they ever offered extra FP+ tickets to on site guests based on the resort they were staying at, they could if they wanted exclude resale buyers from that perk.

When I originally looked at DVC I decided the value wasn't there for me at direct prices so did not buy. It was only a few years later that I found out about resale and determined that resale price did work out, and so bought some points. Of course during the years prior to not owning resale I still went to Disney and just stayed in a hotel. So you could say the hotel side of their business lost my business once I bought resale. On the plus side I go for a lot more days than before and spend more annually now owning DVC then prior to owning DVC, so overall Disney is getting more money from me than previously.
Since FP+ is essentially free for Disney, I think extra FP+ selections is an excellent perk for Disney to offer to distinguish between direct and resale buyers. Could be a strong selling point for guides to use to close the deal.

Like you, I'd been number crunching DVC for years. Direct or resale, I never could get it to work for me; the break-even point was too long for my tastes.

However, after years of Cash Room price increases and the resale price drop in 2011/2012, I finally was comfortable with DVC financially and was able to negotiate even lower prices in a buyer's market.

I haven't bought as many points as you but I do have enough for my needs.
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Old 11-24-2013, 05:48 PM   #77
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Originally Posted by DougEMG View Post
If they ever offered extra FP+ tickets to on site guests based on the resort they were staying at, they could if they wanted exclude resale buyers from that perk.....
So what would happen if you booked your DVC stay using both direct and resale points from the same resort at eleven months out? Like I transferred two Dec resale OKW points to my Sept direct OKW contract to book my stay for the spring?
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Old 11-24-2013, 07:13 PM   #78
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DVC apparently does feel that it's important to have a deeded ownership, which implies that there are going to be resales. If they didn't want people to be able to resell their membership, there are innumerable ways to do it. They chose to make their membership be a deeded one, as do most timeshare developers.
I think you're equating option with intent. Their intent is to sell as many points as possible and make as much profit as possible, the questions is how to reach that goal. That one has the right/option to sell,doesn't mean it was DVD's intent for anyone to actually do so. All timeshares in the US have to be deeded in some way. DVD chose to do so directly and others have done so in a trust format. If I read you correctly you're saying DVD purposefully chose this option for some purpose, my view which you may have seen me post previously, is that it was a mistake on their part to do so. They created additional difficulties and work for themselves while depriving the system of benefits and leverage they could have avoided. I'm not aware of a single timeshare within the US that one doesn't have the right to sell, the question is price and limitations. I don't think there's a way to make them non transferable deed or no deed.

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Now as to whether Disney cares whether the resale market is high or low, I think they actually do care if the price is too low. OTOH, it's pretty clear Wyndham doesn't care. And Hilton does care, and Marriott seems to care at least a little bit.
Again, it's not price they care about but sales. I suspect you're referring to ROFR, if so, don't equate that with caring about price but rather the ability to pick up cheaper options. That's how Marriott approaches it. Bluegreen and Wyndham simply can't keep up because the increased obligations would overwhelm them from a cost and fee standpoint.

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I had a discussion about this with someone who used to work in the titling office at DVC, and I asked what the purpose of ROFR was: primarily to keep the resale price up, or primarily to get points to resell. She said it was entirely to keep the price up. She said it was believed around the office that they had to keep the price of the property high, because it was important to people's perception of the value of DVC. Now, it could be that they've changed their opinion since she left; she said she had no idea how they were currently making their decisions about what to exercise ROFR on. Maybe they primarily see it as a way of getting cheap points back. But they get plenty of points back via foreclosure, so it wouldn't seem like ROFR is primarily a way to get points.
They certainly haven't bought contracts sufficiently to suggest they actually care about resale prices and this is their only support option. The reality is they would prefer resale prices to be very high but for other reasons such that people who looked at both would still think it worth buying retail. Thus it's the retail purchase they're interested in, not the price itself and that was my point all along.

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I know you think they don't need to keep the resale price up. And I'm not saying you're wrong. I agree that most people don't know about resale and will never look into it. The effect on direct sales if resale prices went to near-zero would probably be fairly minimal. But contrarily, I don't think it would reduce the number of deeds sold that much. And if the price goes low enough, some number of people who might have sold their ownership will instead just refuse to pay their dues until Disney forecloses, or call Disney and get a deed in lieu of foreclosure and walk away, and Disney will eat that contract instead of having it pass to another dues-paying person.
My view again is that it's the effect of pushing people to retail they are interested in, that there are other ways to affect the number and variability of resales than just price and that there really isn't anything they can do that will prop up prices enough to fulfill their goals. IMO they've proven they can't prop up prices enough to do what they want so they either have to look the other way and accept the inherent losses or take action which many are not going to like. In the absence of either, we have what we have now where buying retail for most options is a costly option comparatively with no real benefit for almost all situations.

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Nonetheless, I think Disney has shown through their actions that they do want to put a floor on the price to some extent. Perhaps they do worry that low resale prices will negatively affect sales, or perhaps they worry about damage to the brand. All it takes is a few little old ladies on 60 Minutes saying things like, "When I bought this I thought it would be a nice vacation, and I could always sell it if I didn't want it any more. Well, the fees just kept going up and up, and finally I said I'd sell it. Disney told me I was on my own. People are giving their ownerships away to get away from the maintenance fees. Disney cheated me!"
I'm of the opinion that Disney doesn't care nearly as much what people think or even say as many here on DIS seem to feel they do. We've seen lots of threat's here over the years, esp starting with the first reallocation in recent times, valet parking issue and a few reservation/remodeling issues over the last few years.

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Turn this around: suppose Disney tried to keep resale prices up as high as they could. They could do what Marriott does and have their own resale broker that they promote. They could tell their sales staff that if someone is going to walk away because of price, they can salvage a small commission by referring them to the Disney-owned resale broker.
They have and failed. Marriott used to have their own internal resale sales department which they've closed because it wasn't viable. They've also had trade in options and when they did, they've tried to collect a commission as if they'd sold the item being traded in. Bluegreen has their own resale arm as well which they will often use to lure those in that aren't going to buy retail but have perceived interest. Disney could go that route as well but they've chosen not to most likely because it competes with their more lucrative retail sales.

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In any event, if the resale price is high, basically it's no problem competing with resale. Who would buy resale to save a few dollars? Only the most fervent bargain hunters. And if they can actually drive the resale price of the sold-out resorts up above $130, then it becomes easy to raise direct prices. Or it becomes a sales convincer: they can just show people the TSS web site and say, "Look - resale prices are above the price these people paid. How many other timeshares can say that?"

Ultimately there is nothing that will validate a high direct price better than resale prices being high as well.
No argument, the question is whether there is a method they can do that successfully pushing most to retail, the truth is there isn't by propping sales prices and they've proven it. I'd also suggest getting there by a robust resale activity is counterproductive to their goals you've laid out.
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Old 11-24-2013, 07:14 PM   #79
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Originally Posted by Deb & Bill View Post
So what would happen if you booked your DVC stay using both direct and resale points from the same resort at eleven months out? Like I transferred two Dec resale OKW points to my Sept direct OKW contract to book my stay for the spring?
I think you're assuming they would still be able to be combined.
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Old 11-24-2013, 09:06 PM   #80
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One strategy that Disney could take is to make smaller high demand resorts with high prices and with a limited supply of points. Then one could plan to sell out the entire resort before resale contracts for that resort hit the market. Which seems like what they are doing with VGF and the up coming Poly DVC.

To me it seems like if Disney was at all concerned with resale and were willing to do something about it then the introduction of the VGF would have been the time to do something.
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Old 11-24-2013, 09:08 PM   #81
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Originally Posted by Nabas View Post
Since FP+ is essentially free for Disney, I think extra FP+ selections is an excellent perk for Disney to offer to distinguish between direct and resale buyers. Could be a strong selling point for guides to use to close the deal.

Like you, I'd been number crunching DVC for years. Direct or resale, I never could get it to work for me; the break-even point was too long for my tastes.

However, after years of Cash Room price increases and the resale price drop in 2011/2012, I finally was comfortable with DVC financially and was able to negotiate even lower prices in a buyer's market.

I haven't bought as many points as you but I do have enough for my needs.
Yup, the price drop in 2011/2012 was what finally brought DVC with my price range.
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Old 11-25-2013, 05:09 PM   #82
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I think you're equating option with intent. Their intent is to sell as many points as possible and make as much profit as possible, the questions is how to reach that goal.
Totally in agreement there.

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I don't think there's a way to make them non transferable deed or no deed.
It clearly can be made nontransferable. They could make the "club" a discount club, where you just get a fancy timeshare-style villa at a specific discount. The numbers could be exactly the same, but you don't "own" anything. The problem is that people have trouble laying out a bunch of money unless they are "buying" something with that money, so timeshare developers choose to make it an ownership. I think you agree that it's really all about making people comfortable with with paying all that money; people like owning things.

What's not really possible is selling someone something that is owned via a deed or something similar, and then stopping them from selling it to someone else. The first sale doctrine applies, at minimum. And then whatever that deed actually is title to has to actually transfer. The more you load up the membership with non-deeded amenities, the more you risk people seeing it as more like the "club membership" thing and less like a "ownership."

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Thus it's the retail purchase they're interested in, not the price itself and that was my point all along.
Absolutely. They care about the resale price only to the extent that it helps them sell direct. And perhaps to some extent the effect on the Disney brand, but that's got to be somewhat secondary.

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I'm of the opinion that Disney doesn't care nearly as much what people think or even say as many here on DIS seem to feel they do. We've seen lots of threat's here over the years, esp starting with the first reallocation in recent times, valet parking issue and a few reservation/remodeling issues over the last few years.
They don't care about random complaints from owners about small-potatoes stuff like the valet parking thing. They would absolutely care about a big investigative report into "the sleazy timeshare division of Disney that is fleecing retirees". So they need to make sure that never happens. They do care about the Disney brand, so there are places they can't go that maybe another more fly-by-night company could go.

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No argument, the question is whether there is a method they can do that successfully pushing most to retail, the truth is there isn't by propping sales prices and they've proven it. I'd also suggest getting there by a robust resale activity is counterproductive to their goals you've laid out.
I think resale is highly supply-constrained. There are a few owners who are sitting on the sidelines and will put their ownership up for sale if the price rises, but it's clear that the supply of resale deeds is primarily driven by people who are tired of owning DVC or have hit financial problems and can't afford their membership. If Disney did anything to increase resale demand, prices would go up. For example, Disney could quietly invest money in one of the DVC resellers and provide them with more promotional money to drum up resale business. They could rent one of their mailing lists, like D23 or something, to a reseller at a bargain price. Anything that causes the number of buyers to go up in the resale market will drive the prices up. It wouldn't take that many people.

Yes, this might have an effect in the short term on their direct sales, but not by much; the resale market is a fraction of the size of the direct market. And once resale prices were a significant fraction of direct prices across the board, Disney would be in a better position to make direct sales, because as we both agree, high resale prices make people feel better about paying high direct prices.

The alternative, continuing to add resale restrictions, drives resale prices down, which hurts their direct sales among the people who know about resale. That's not a lot of their customers, but certainly it's some of them.

Timeshares are a weird business. If you ask any other real estate developer if they'd prefer third-party home sales to trend higher or lower, they'd think you were an idiot for asking the question. Their direct prices are anchored to the (much larger) resale market, and they know they'll make more money if the resale market goes up. In the timeshare business, they rely on the lack of transparency in the resale market to charge people way more than the resale price, even in a case (like DVC) where the direct price is actually financially supportable.

Disney is not ripping people off with their direct prices; the product is worth, arguably, even more than they're charging right now. There's no reason resale prices couldn't be even higher than they are now.
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Old 11-25-2013, 08:14 PM   #83
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It clearly can be made nontransferable. They could make the "club" a discount club, where you just get a fancy timeshare-style villa at a specific discount.
I'm pretty sure that's not possible in FL at least. As for the rest, I think we're pretty close just approaching the issues from different sides. I do disagree on their options (or reasonable ones) to prop up the resale market. As you say, it's not a transparent system. People sometimes want to discuss it like new/used cars and those issues don't apply. The main problem for timeshares is that market forces aren't the main issue due to the inherent fringe nature of timeshares, even at Disney. And I do feel there will be more resale restrictions and retroactively. We'll see.
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