The new resale rule: The Empire Strikes Back

[bicker]

Good post...but I think it's legitimate for people to be ticked off to see a de-valuation in their fiscal net worth. Pick whatever word you choose...disappointment, anger, surprise.

However, note that those three words are not synonymous. Surprise and disappointment are not directed, or directed internally. Anger is directed externally. I will never question someone when they point inside themselves and say that's where something went wrong. By the same token, many people will, as a matter of course, refuse to look inward, and instead simply "go to anger". There are myriad examples of why that's bad for society, overall.

Pretty normal reaction, especially in the context of the "what will come next" discussion. Classic incrementalism. Disney can't get what they want up front, so they do a little at a time.

Disney did get what they wanted up-front. What they got up-front was the unequivocal flexibility to do what they just did. The assumption that they are taking more than they already effectively had is what's driving the logic off the rails.

I don't blame Disney (I am an unabashed Capitalist) for maximixing profits (I own Disney stock), but given the branding they sell, I am surprised, since Disney generally tries not to anger their customers...it's just bad business to anger/disappoint/surprise customers, especially long term ones that bought into DVC.

In my career, it never ceased to amaze me how often consumers (specifically) overstate, or even more insidiously, overvalue their own significance. The number of customers "upset" is always a fraction of that which may be indicated by the number of customers expressing their upset. Let me turn it around the other way: A company that essentially kowtows to all expressions of customer dissatisfaction will (really: has; I remember specific examples) fail. Business isn't about being blind - in either direction. Business is about understanding all the input, and putting it all in perspective, coming to know the significance of each bit of input, and often that results in dissatisfying some customers. There is very rarely a "best" business decision that doesn't sub-optimize customer satisfaction. That's a fact of life.

I also think this is bad business because I don't think Disney will achieve their goals of increasing up front sales/maintaining current and future price points.

I would love to see your market research showing that. We know Disney did theirs, and we know Disney is just about the best at getting the most amount of money out of their offerings. So given all that, there is no reason to believe that they got this specific decision wrong until the evidence is presented that they did. It isn't that they never make mistakes, but it is irrational to assume that this is one of their mistakes without evidence showing that, when the more likely explanation is simply that the folks claiming it is a mistake simply don't like how the decision affected them personally.

Time will tell, but a sinking tide lowers all boats.

And ice cream has no bones.

By reducing their perceived value for their product in the Aftermarket, they've just gone down the road of US Car manufacturers.

That's a bogus analogy imho. Cars aren't vacation club membership. There are no good analogies, because nothing matches this specific circumstance well-enough. So the message here is that trying to draw an analogy is useless as anything other than self-serving rhetoric.

Complaints about this are like complaints about what many telecom and cable/satellite service providers do, providing bonuses to their new customers that they withhold from their legacy customers. People complain about that a lot, I assure you. However, that doesn't make it the wrong decision. Service providers know that the legacy customers already realize how much of a good deal they're getting continuing with the same provider. And just looking over my portfolio, most of those telecom and cable/satellite service providers are doing quite well. So that's a great example of a situation where long-time customers (many of whom claim to be "loyal") are dissatisfied, yet the decision is still the best business decision.

Going back to the beginning: Yes, it makes a lot of sense that people are disappointed. It seems clear that lot of people are choosing to try to cast an accusation of evil on something or someone to assuage their disappointment, but there's not much more else you can legitimately say than that, until you present clear and compelling evidence to the contrary - not just a consumer's knee-jerk reaction or inadequate parallels to irrelevancies.

 

[Dean]

Good post...but I think it's legitimate for people to be ticked off to see a de-valuation in their fiscal net worth. Pick whatever word you choose...disappointment, anger, surprise. Pretty normal reaction, especially in the context of the "what will come next" discussion. Classic incrementalism. Disney can't get what they want up front, so they do a little at a time. I don't blame Disney (I am an unabashed Capitalist) for maximixing profits (I own Disney stock), but given the branding they sell, I am surprised, since Disney generally tries not to anger their customers...it's just bad business to anger/disappoint/surprise customers, especially long term ones that bought into DVC.

I also think this is bad business because I don't think Disney will achieve their goals of increasing up front sales/maintaining current and future price points. Time will tell, but a sinking tide lowers all boats. By reducing their perceived value for their product in the Aftermarket, they've just gone down the road of US Car manufacturers. Who wants to buy a car that drops 30%+ in value right off the lot, when you can buy a Honda that keeps much more of its resale value over the course of it's useful life. Instead of going negative, they could have added perk(s) to Direct sales instead of negatively targeting Resale perks. Would have been a less bitter pill to swallow and better business...But hey, Disney makes good money(yeah!!!, stock just went over $40/share) and their Marketing group is top notch. I'm sure the focus groups they used all gave them top grades on this idea

It has been very effective with other timeshares and combined with the draw of the Disney name and parks, it should be even more successful with them than anyone else.

While I can understand one being unhappy with the change, I can't see appropriate blame to DVC or DVD. Everyone either knew or should have known that perks could be changed or eliminated. Every knew or should have known that disney is a Timeshare. This is the nature of the beast with timeshares. IMO, anyone who isn't OK with this type of change really shouldn't be involved in timesharing. It's like buying an item that you can't take back and it goes on sale the next week. It's essentially the "fool me one shame on you, fool me twice shame on me" idea where the first time was the purchase.

I think you CAN expect other changes along these lines, another reason to get out now if one can't stomach it. I doubt this change alone will have enough of the desired effect but when it comes down to it, most people will still buy in, most will still add on and few will sell. As Bicker indicated, people, esp DVC members, tend to significantly overvalue their own worth and power of complaining. I was reviewing the BVTC and RCI agreements a couple of days ago. There is a statement in there that essentially says that members must be in good standing AND eligible to participate. Given the nature of the corporate memberships in those two exchange companies and the fact that Disney own's BVTC, I could easily see those options going away as well. Where I think we'll end up when this is said and done is that, as a min, resale buyers at some point will only be able to use resale points at DVC resorts but the same as other members and to trade only privately and with independent's. The real question isn't what perks will resale buyers lose but whether they will create a VIP system, new system that we all lose future potential options or have to pay extra to participae and whether there will be a way to get resale points back into the fold, maybe with a minimum retail purchase of additional points or an extension.

 

[going/again]

There are different membership levels in many, many other timeshares. And this holds true for service levels in almost every other type of business, too.

Frequent Flyer Programs are free, but you get a bunch more points if you get an airline credit card which charges additional annual fees.

Most used cars retain little, if any, of the original new car warranty.

Coffee clubs, buy x number of beverages or pounds of coffee and get one free.

Target VISA users receive a 5% discount on all Target purchases. Those using a Walmart card receive a 3¢ per gallon discount at their gas stations. AARP members get discounts at Denny's, Walgreen's, Hilton hotel stays and many other venues.

How is this any different, really?

And which of the above do you have to pay a huge up front fee, and maintenance fees, how can you compare any of the above to DVC ownership,

I don''t think its nice or fair, to have a subset of members who have to pay the same amount of dues as everybody else, you think it's ok, does it affect us, no, just don't like where they are going.

 

[going/again]

That's a bogus analogy imho. Cars aren't vacation club membership. There are no good analogies, because nothing matches this specific circumstance well-enough. So the message here is that trying to draw an analogy is useless as anything other than self-serving rhetoric.

Totally agree with this.

 

[Sandisw]

Good post...but I think it's legitimate for people to be ticked off to see a de-valuation in their fiscal net worth. Pick whatever word you choose...disappointment, anger, surprise. Pretty normal reaction, especially in the context of the "what will come next" discussion. Classic incrementalism. Disney can't get what they want up front, so they do a little at a time. I don't blame Disney (I am an unabashed Capitalist) for maximixing profits (I own Disney stock), but given the branding they sell, I am surprised, since Disney generally tries not to anger their customers...it's just bad business to anger/disappoint/surprise customers, especially long term ones that bought into DVC.

I also think this is bad business because I don't think Disney will achieve their goals of increasing up front sales/maintaining current and future price points. Time will tell, but a sinking tide lowers all boats. By reducing their perceived value for their product in the Aftermarket, they've just gone down the road of US Car manufacturers. Who wants to buy a car that drops 30%+ in value right off the lot, when you can buy a Honda that keeps much more of its resale value over the course of it's useful life. Instead of going negative, they could have added perk(s) to Direct sales instead of negatively targeting Resale perks. Would have been a less bitter pill to swallow and better business...But hey, Disney makes good money(yeah!!!, stock just went over $40/share) and their Marketing group is top notch. I'm sure the focus groups they used all gave them top grades on this idea

I do agree that people who took into consideration that their DVC was an asset to hold value have the right to feel disappointed that the value it held in the past may not still be there after March 20th.

But it is also okay to realize that there are plenty of DVC members who went in to this without any expectation that a timeshare would hold value, regardless of how DVC had held its value in the past and bought because they wanted to have a pre-paid vacation at WDW for years to come.

I went in assuming my DVC was worth $0 on the resale market. Fortunately, I was able to pay for it and only have MF's as an expense. If life throws me a curve ball and I can no longer afford those yearly MF's and I have to sell, anything I recoup from my initial amount will be a bonus.

And, let's not forget that there are many current DVC members out there who are picking up resale contracts for great prices because you have sellers in distress and because Disney has relaxed its stance on ROFR. This, to me, has contributed to the decline just in the past 2 years. BWV has gone done approximately $10/ppt since I started looking and in some cases, I am seeing it over $20/ppt less.

There are so many things that can play a role in the value of your DVC on the resale market, none which are within the control of the owner. Because of this, I would caution ANY new buyer to go in with their eyes wide open and to not let resale value play a role in your decision in any way shape or form.

In addition, it is important that new buyers know what they are buying--the right to stay at their home resort and any other DVC that remains part of the overall system.

 

[Dean]

And which of the above do you have to pay a huge up front fee, and maintenance fees, how can you compare any of the above to DVC ownership,

I don''t think its nice or fair, to have a subset of members who have to pay the same amount of dues as everybody else, you think it's ok, does it affect us, no, just don't like where they are going.

It's certainly true of every Timeshare I know of and many car dealerships to a degree. The spread both in price and resale vs retail distinction is far larger for most other timeshares. I just took my car in yesterday (unexpectedly unfortunately) to the Toyota dealership. They have a separate lounge with computers, breakfast, drinks, leather furniture and a big screen TV for those who are a member of their VIP club. It was free to join, just cost me two new hybrid Toyota's.

Given the dues pay for the resort management and reservation options and not the perks, the yearly maint is irrelevant to the discussion.

 

[jodifla]

Good post...but I think it's legitimate for people to be ticked off to see a de-valuation in their fiscal net worth. Pick whatever word you choose...disappointment, anger, surprise. Pretty normal reaction, especially in the context of the "what will come next" discussion. Classic incrementalism. Disney can't get what they want up front, so they do a little at a time. I don't blame Disney (I am an unabashed Capitalist) for maximixing profits (I own Disney stock), but given the branding they sell, I am surprised, since Disney generally tries not to anger their customers...it's just bad business to anger/disappoint/surprise customers, especially long term ones that bought into DVC.

I also think this is bad business because I don't think Disney will achieve their goals of increasing up front sales/maintaining current and future price points. Time will tell, but a sinking tide lowers all boats. By reducing their perceived value for their product in the Aftermarket, they've just gone down the road of US Car manufacturers. Who wants to buy a car that drops 30%+ in value right off the lot, when you can buy a Honda that keeps much more of its resale value over the course of it's useful life. Instead of going negative, they could have added perk(s) to Direct sales instead of negatively targeting Resale perks. Would have been a less bitter pill to swallow and better business...But hey, Disney makes good money(yeah!!!, stock just went over $40/share) and their Marketing group is top notch. I'm sure the focus groups they used all gave them top grades on this idea

Of course the Honda costs thousands of dollars more than a comparable American car. If if you keep them both throughout their life (and the life is similarly long) you actually came out ahead buying the less expensive American car.

If resales go for around $60 a point let's say, and direct sales are over $140, that's a HUGE price differential just for perks most folks don't use anyway.

In 15 years of ownership, I've used the Concierge Collection a grand whopping ONCE! All the other times I've used my DVC, its been at the DVC hotels.

 

[DVC92]

If resales go for around $60 a point let's say, and direct sales are over $140, that's a HUGE price differential just for perks most folks don't use anyway.

I don't think you can compare $60 resales with $140 direct sales. Only new properties (e.g., BLT) are selling for $140. Resales at $60 are OKW, etc. with many less years of use. I have only bought new when there was no resale market for the particular properties, and the value of these properties has increased. When the resale market begins for these properties with appreciably reduced cost, the resale buyer gets fewer years of remaining use and has lost several years of vacationing which helps recovers the initial outlay.

 

[huey duey & luey]

so instead of "removing" a perk, how should Disney have proceeded in order to attract direct buyers, when they can't compete with the price point?
Shouldthey have offered their direct buyers "free dining" or discount park passes (othe than AP). These would really benefit and hurt alot more of their club members than the current plan.
At the end of the day it's about profit not pixie dust

 

[crisi]

so instead of "removing" a perk, how should Disney have proceeded in order to attract direct buyers, when they can't compete with the price point?
Shouldthey have offered their direct buyers "free dining" or discount park passes (othe than AP). These would really benefit and hurt alot more of their club members than the current plan.
At the end of the day it's about profit not pixie dust

The don't "own" either of those things. Different divisions of Disney. They can't give what they don't own.

Although differenting between discount levels for high points owners is what most people seem to think is coming next. You won't get that AP discount if you don't have 300+ points or something.

Don't look for MORE discounts and perks for buying direct. Look for small points owners and resale buyers to be entitled to less.

 

[huey duey & luey]

The don't "own" either of those things. Different divisions of Disney. They can't give what they don't own.

Although differenting between discount levels for high points owners is what most people seem to think is coming next. You won't get that AP discount if you don't have 300+ points or something.

Don't look for MORE discounts and perks for buying direct. Look for small points owners and resale buyers to be entitled to less.

I don't disagree with this. Was just trying to make a point that they are going to come up with a plan that ultimately benefits them first, membes 2nd. It's they way of the world, and to think that Disney is different is a bit naive in my opinion

 

[Figment2]

Shouldthey have offered their direct buyers "free dining" or discount park passes (othe than AP).

Actually they have offered AP as an incentive. I believe it was when they started selling AKV and had an event at the Doorway to Dreams in Schaumburg IL. If you bought x number of points you got "A." If you bought y number of points you got "A & B" and so on. One of the incentives was annual passes. I don't know if the incentives offered at Doorway were available to people buying in FL

Cyn

 

[huey duey & luey]

Actually they have offered AP as an incentive. I believe it was when they started selling AKV and had an event at the Doorway to Dreams in Schaumburg IL. If you bought x number of points you got "A." If you bought y number of points you got "A & B" and so on. One of the incentives was annual passes. I don't know if the incentives offered at Doorway were available to people buying in FL

Cyn

I actually meant the current discount offered on AP.
I know they have also offered, free cruises and points (builders?)

The point I was (trying) making is that this is just another tool in order to attract direct buyers away from the resale market

 

[bicker]

so instead of "removing" a perk, how should Disney have proceeded in order to attract direct buyers, when they can't compete with the price point?
Shouldthey have offered their direct buyers "free dining" or discount park passes (othe than AP). These would really benefit and hurt alot more of their club members than the current plan.

The don't "own" either of those things. Different divisions of Disney. They can't give what they don't own.

Yet, good point, but even beyond that, even if they did, it would cost them money to offer those things. What we've been discussing up-to-now is whether Disney will make more or less revenue as a result of this change, vis a vis its impact on new and old customers. What we haven't talked about yet is how this affects cost (and of course, the impact of these changes on cost is completely in a positive direction, for Disney). Together, the positive impact on revenues we've been discussing, and this positive impact on cost that this point raises, combines to make the change so much more strongly positive for Disney.

At the end of the day it's about profit not pixie dust

If a company I own stock in starts putting "pixie dust" over profit, I'll assuredly sign-on to the class-action shareholder lawsuit.

 

[CarolAnnC]

so instead of "removing" a perk, how should Disney have proceeded in order to attract direct buyers, when they can't compete with the price point?
Shouldthey have offered their direct buyers "free dining" or discount park passes (othe than AP). These would really benefit and hurt alot more of their club members than the current plan.
At the end of the day it's about profit not pixie dust

I suspect their plan is to lure away a group of buyers who are already "sold" on DVC, just get them to buy direct rather than resale. What better way than to make it more appealing via limiting the use of those cheaper, resale points (DVC's thinking, not mine, lol). This achieves their goal of capturing more direct buyers, without any cost to DVC. Note, I am not saying that I agree with these tactics...but surprised at it, no. Disney/DVC is not a non-profit organization..

 

[divehard]

I suspect their plan is to lure away a group of buyers who are already "sold" on DVC, just get them to buy direct rather than resale. What better way than to make it more appealing via limiting the use of those cheaper, resale points (DVC's thinking, not mine, lol). This achieves their goal of capturing more direct buyers, without any cost to DVC. Note, I am not saying that I agree with these tactics...but surprised at it, no. Disney/DVC is not a non-profit organization..

I couldn't agree with you more.That's what pushed us over the edge from wishing we were members to buy now (resale) and getting in under the wire. The idea of being grandfathered in now was a hedge against future restrictions to resale contracts IMHO, and buying direct was too costly for our family.
After March 20 what will be next?

 

[going/again]

I suspect their plan is to lure away a group of buyers who are already "sold" on DVC, just get them to buy direct rather than resale. What better way than to make it more appealing via limiting the use of those cheaper, resale points (DVC's thinking, not mine, lol). This achieves their goal of capturing more direct buyers, without any cost to DVC. Note, I am not saying that I agree with these tactics...but surprised at it, no. Disney/DVC is not a non-profit organization..

But what they have done is made even more people aware that there are resales to be had cheap.

Their are more posters saying they are going to look at picking up a bargain, than those saying only direct for me, We are now looking at resales for the first time.

 

[Chuck S]

Yes, but most of those saying they are going for the "no benefits" resale bargains are already DVC members looking to do small-ish add-ons, not the first time DVC buyers.

I think in the past, many existing members would recommend DVC to family and friends. but steered them to resales because it was cheaper AND carried the same options as a direct purchase. They may see fewer first time buyers going the resale route because of this change.

 

[Dean]

I don't disagree with this. Was just trying to make a point that they are going to come up with a plan that ultimately benefits them first, membes 2nd. It's they way of the world, and to think that Disney is different is a bit naive in my opinion

They really don't have options that could create enough separation without taking away from one group. They don't have control of the other options except if they simply pay for them like the original free passes for OKW and VB. They could have taken them away for all resale owners retroactively and even for all current owners if they wanted.

The point I was (trying) making is that this is just another tool in order to attract direct buyers away from the resale market

That is the express purpose of the change. I'm sure we'll see more changes, some likely tangible like this one and some more emotional like increased sales pressures.

But what they have done is made even more people aware that there are resales to be had cheap.

Their are more posters saying they are going to look at picking up a bargain, than those saying only direct for me, We are now looking at resales for the first time.

I doubt it. Those who investigate will find out about resales and this change just like they would have found out about resale before ONLY if they investigated. They will only address the issue if it becomes applicable. They will not make it part of the sales process unless a prospective buyer brings it up or as a hammer to close the deal if it looks like they potential buyer isn't going to buy. There is a boatload of info to suggest that once a potential buyer exists the tour, it is VERY unlikely they will buy retail. Low enough to make it not worth following up for most companies. Disney is a little different in this area but I think the principles still hold. I'm sure they have a boatload of stats to know what's going on in these areas. This and getting more people in to tour are reasons I think you'll see them more aggressive in such areas.

 

[TLSnell1981]

I suspect their plan is to lure away a group of buyers who are already "sold" on DVC, just get them to buy direct rather than resale. What better way than to make it more appealing via limiting the use of those cheaper, resale points (DVC's thinking, not mine, lol). This achieves their goal of capturing more direct buyers, without any cost to DVC. Note, I am not saying that I agree with these tactics...but surprised at it, no. Disney/DVC is not a non-profit organization..

But, see...it doesn't entice me to EVER purchase direct. Disney has lost trust and devalued DVC overall, IMO. Why would I EVER pay full price, knowing it will be worth much less? We were considering Aulani, but have decided against it. This change tipped the scale, just not worth it anymore.