Historical DVC Direct Pricing

[JoshF]

Is there a chart or thread out there that keeps track of historical DVC direct pricing? I like looking at data and it would be interesting to see what DVC charged for direct pricing over the last 5-10 years. Even better if direct sales incentives are included. Does this exist?

 

[BruinEd03]

Not complete, but up to 2017: https://*******.com/dvc-information/financial/history-of-dvc-direct-sales-price/

*edit* sorry, looks like the site is blocked.

 

[CastAStone]

https://www.disboards.com/threads/so-youve-decided-to-buy-dvc.3567366/#post-56896794
The current prices for the sold out resorts need to be updated but a lot of history here.

 

[davidl81]

Just crazy to see these 2010 type of prices. Even when you factor in inflation these prices are very cheap compared to today prices.

 

[sethschroeder]

Just crazy to see these 2010 type of prices. Even when you factor in inflation these prices are very cheap compared to today prices.

I actually think this leads in to the idea that resale could easily lower in price if needed. Most people I would assume would just look at it as I spent "$100 and can now sell for $120, score!"

Maybe I am wrong though and people do a correction for inflation.

 

[davidl81]

I actually think this leads in to the idea that resale could easily lower in price if needed. Most people I would assume would just look at it as I spent "$100 and can now sell for $120, score!"

Maybe I am wrong though and people do a correction for inflation.

Maybe, but if that thought process had a lot behind it then resale prices would never have gotten to the point hat they are at now. Resale prices will always be dictated by simple supply and demand (cost basis won't factor into it at all). As long as supply does not drastically increase (as seen during the great recession when a lo of people were in a finical bind and needed to liquidate things) or demand does not fall off of a cliff then resale prices will keep on the steady rise they have been on since retail prices continue to rise. There is a lot of speculation on here that resale prices are going to drop, but as of right now it actually looks like resale supply is fairly low and demand is about neutral. My guess is if demand is still here right now in the (hopefully) worse part of this COVID situation then I can't see a reason where demand would drop going into 2021 as the country continues to reopen (once aging that is an assumption). So it really comes down to supply. We know unemployment is high right now, but that has been for the most part hit hardest to the lower end of the economic spectrum (ie people who likely are not buying 20k timeshares anyway). What we have not seen yet since the govt has been pumping money into the economy in various ways is the major losses in middle to upper income jobs. One can make an assumption that those jobs may start going away, but that is just a guess. Until those jobs really start getting effected I don't think you will see a huge dump of resales. Even if a DVC owner is nervous about COVID and won't use their points for a year or so I do not think many of them will just sell since they see DVC as a long term play anyway. There will be some that will sell as always, but it may not be enough to really flood the market.

 

[sethschroeder]

Maybe, but if that thought process had a lot behind it then resale prices would never have gotten to the point hat they are at now.

IMO

• Today - Person offers $100/point, goes through ROFR, buyer gets points
• 12 months - Person offers $100/point, goes through ROFR, Disney takes contract
• Same Day - Broker tells new sellers to increase listing price / tells buyers about ROFR on $100/point offers
• Next Day - Person offers $105/point, goes through ROFR, buyer gets points

This is a single example of the basic workings on how pricing can go up. In addition people want to get the most they can for the contract. If a contract is not selling after 15-30 days you are more likely to decrease your price if in your mind you still make a profit.

Someone on the flip side that paid $100/point and now can only sell something for $80/point is more likely to hold out longer for a higher sale price because there is an incorrect attachment to the price they had paid in the past.

 

[davidl81]

IMO

• Today - Person offers $100/point, goes through ROFR, buyer gets points
• 12 months - Person offers $100/point, goes through ROFR, Disney takes contract
• Same Day - Broker tells new sellers to increase listing price / tells buyers about ROFR on $100/point offers
• Next Day - Person offers $105/point, goes through ROFR, buyer gets points

This is a single example of the basic workings on how pricing can go up. In addition people want to get the most they can for the contract. If a contract is not selling after 15-30 days you are more likely to decrease your price if in your mind you still make a profit.

Someone on the flip side that paid $100/point and now can only sell something for $80/point is more likely to hold out longer for a higher sale price because there is an incorrect attachment to the price they had paid in the past.

In timeshares though I do not know if that holds true. DVC really stands out on how well it's contract hold/build value over time. The overwhelming majority lose value, or actually have negative value over time. So many timeshare buyers are not really looking at their cost basis, they are just looking at what is the best price they can get today based on current sales. and looking at your example for instance if Disney was using ROFR for establishing a cost floor hen he resale price would be set by what the overall demand would be for resale points, ie if SSR points were only able to pass ROFR at $120 a point how many buyers would there be?
Let's say someone bought RIV last year at 190 a point but has to resell for some reason. They will be sad that they can only get 140 a point or so, but they are not going to hold out for something that is not going to happen. The broker is going to show them their "comps" and tell them before they list what a reasonable expectation on the sales point will be. at that point it will be up to the seller if they want to list it. But if the market rate is 130 a point then that is what the seller is just going to have to accept.
Disney is likely not too concerned with trying to fix prices on the resale market unless it gets to a point where say SSR contracts are so low and plentiful that not only does it effect direct sales from a cost standpoint, but it also gives the impression that DVC loses value over time and indirectly hurts direct sales that way.

 

[CastAStone]

Disney is likely not too concerned with trying to fix prices on the resale market unless it gets to a point where say SSR contracts are so low and plentiful that not only does it effect direct sales from a cost standpoint, but it also gives the impression that DVC loses value over time and indirectly hurts direct sales that way.

I would argue Aulani is already at that point. The problem is that if they buy back contracts then they'll have even more points to sell.

The same would be true in your SSR example. If at some point people didn't want SSR at say $60 a point, why would Disney want to buy the points back to try to sell for almost three times as much? In the example nobody wants them at $60 so who would want them at $165?

 

[davidl81]

I would argue Aulani is already at that point. The problem is that if they buy back contracts then they'll have even more points to sell.

The same would be true in your SSR example. If at some point people didn't want SSR at say $60 a point, why would Disney want to buy the points back to try to sell for almost three times as much? In the example nobody wants them at $60 so who would want them at $165?

In the SSR example you would be buying those to protect whatever current resort you were tying to sell. But your point is valid at some point it stops making sense to buy contracts if you can’t resell them at somewhat of a profit.

 

[sethschroeder]

In the SSR example you would be buying those to protect whatever current resort you were tying to sell. But your point is valid at some point it stops making sense to buy contracts if you can’t resell them at somewhat of a profit.

Disney can't buy back 100 contracts and only sell 50 though. Over time that will add up to simply Disney owning a large portion of the resort unless they tank the direct price which would directly impact the direct sales. This is not a short term issue instead you will see reduced direct sales, people in parks, and other issues for at least the next 9 months where possibly summer 2021 sees a slight return to things prior to COVID19.