July direct sales

[Brian Noble]

Seemed strange that Disney called out DVC during the earnings call.

It was in the quarterly report, but I did not see it in the call transcript.

 

[BeachClub2014]

I will say the same about your opinion

That's fine. I'll add more detail for you. Here are some of the other variables that can impact purchase decisions, in no particular order: resort location, transportation options, resort theming, resort amenities, decor, size, nearby parks, size, room configurations, name appeal, length of contract, and I am sure that there are others.

The best evidence to suggest that resale restrictions aren't significantly impacting sales from DVC's perspective is that they are still in play, and DVC just doubled down on them when they opened their newest resort. If DVC felt that the restrictions significantly impacted new sales, they could remove them with the proverbial stroke of the pen.

I am sure that some folks have chosen not to purchase Riviera because of the restrictions, but I don't think it is the major factor that others may believe.

 

[Brian Noble]

VGF outsold RIV by almost 3:1. That difference is probably too large to be explained by a minor price difference (which can be also easily justified by a longer contract life of 6 years). It seems that, when given a choice, many buyers who are relatively informed prefer buying direct at a resort with no resale restrictions versus one with severe resale restrictions

This doesn't explain the months in which RIV outsold VGF, during which the restrictions were exactly as they are now.

However, I do not think price explains it either. I think the most likely explanation is that Guides are pushing VGF harder than RIV. There are several possibilities as to why. They may have been told to do so. They may have different financial incentives for doing so. There may be other reasons. But, they all come down to one true thing about timeshares: for the most part, they are sold not bought.

 

[sethschroeder]

If VGF is set to sell out for early next year with the current pace, then DVD might lower the incentives to extend the time frame. At least until Poly tower goes on sale.

Why? You have Riviera and you for sure want VGF sold out before POLY is sold. Additionally not like the economy is making a u-turn likely to end the year.

Now I can get the argument to reduce the incentives if you think overall you will make more money. That piece have basically no way of knowing but Disney likely has some metrics on that.

 

[BeachClub2014]

This doesn't explain the months in which RIV outsold VGF, during which the restrictions were exactly as they are now.

However, I do not think price explains it either. I think the most likely explanation is that Guides are pushing VGF harder than RIV. There are several possibilities as to why. They may have been told to do so. They may have different financial incentives for doing so. There may be other reasons. But, they all come down to one true thing about timeshares: for the most part, they are sold, they are not bought.

I think this is right. I think DVC is pushing hard to have VGF sold out before the Poly Tower goes into sales.

 

[reddog21]

This opinion ignores all of the other variables that can impact a purchase decision and is also short on any actual evidence to suggest that it is solely the resale restrictions that are the difference.

I would agree, I think that the restrictions are only part of the problem. It seems it's a love/hate relationship with this resort people either love it or hate it there doesn't seem to be middle ground. I'm on the I just don't like the resort group so I wouldn't buy there even without the restrictions.

 

[sethschroeder]

Despite popular DIS opinion- VGF was not significantly cheaper to explain the massive difference- Restrictions are hurting sales

RIV was cheaper and was outselling VGF then VGF was cheaper and outsold RIV wasn't it? Fill me in if I am wrong and thats not what occurred.

Lots of new buyers are clueless, the guides drive people to the contracts they are pushing, and I suspect guides see the cheaper option of new shiny resorts to be the easier to sell.

Just looked up and its a $1000 difference on 150 points right now where VGF is cheaper. That is not nothing and most people are likely sold on "stay anywhere".

 

[Sandisw]

VGF outsold RIV by almost 3:1. That difference is probably too large to be explained by a minor price difference (which can be also easily justified by a longer contract life of 6 years). It seems that, when given a choice, many buyers who are relatively informed prefer buying direct at a resort with no resale restrictions versus one with severe resale restrictions even when the direct purchase has the same full functionality. Resale restrictions are not the only reason for the difference, but probably matter a lot. We'll see what happens next year when the choice is Restricted Resort A vs Restricted Resort B vs Restricted Resort C...

We're relatively new to DVC and RIV was the first resort we visited. While it was a short stay, and we didn't experience it too much, we really loved what we saw. Rooms were great, facilities were great, and that Skyliner that get you to 2 parks in 10 minutes is super convenient. I can totally see us buying resale at RIV if 7-month booking becomes a challenge. But I won't buy direct unless the price difference vs resale is relatively small and the more restrictions they place, the more they hurt resale prices, the more incentives I would need in order to buy direct. But we already have 300+ direct points so it's a different situation relative to a new buyer who may not have a choice if they want to book the new resorts.

Here are all factors that could make VGF sell more:

MK resort
Lots of studios
Lower dues
Not as many larger units so home resort is more important.
No restrictions.

I don’t think anyone would say that restrictions don’t play some role, but when RIV outsold VGF 2:1 last year, it had restrictions and people chose it.

And everyone said it was only because it was cheaper..but not now it’s reversed, VGF is cheaper and that doesn’t matter?

If restrictions were the main reason people are not choosing RIV, it would never have had months in which is sold 80k, let alone a few that were over 100k.

 

[BeachClub2014]

I would agree, I think that the restrictions are only part of the problem. It seems it's a love/hate relationship with this resort people either love it or hate it there doesn't seem to be middle ground. I'm on the I just don't like the resort group so I wouldn't buy there even without the restrictions.

Which totally makes sense. There are many current DVC resorts that I have zero interest in owning, and none of them have restrictions.

 

[Sandisw]

Which totally makes sense. There are many current DVC resorts that I have zero interest in owning, and none of them have restrictions.

Me too! People love AKV and even having stayed one night in March in a CL room, it didn’t change my opinion. Wouldn’t buy there

That’s the plus of DVC. We can find our own niche. And I agree with you that there are a lot of factors that can influence people.

I mean look at VDH.. it’s doing well..people have no choice to accept the restrictions as part of the product

If they add them to FW cabins and decide to make Poly tower a new resort with them, it will begin to be seen as the norm.

 

[DanCali]

This doesn't explain the months in which RIV outsold VGF, during which the restrictions were exactly as they are now.

The restrictions are exactly the same, but not the incentives.

In May VGF outsold RIV by about 40% (March and April was similar). In June, with the new incentives, VGF outsold RIV by 87% and in July by 190%. I've seen dozens of posts in the summer incentives thread (mine included) of people buying 150 points at VGF at $161 and justifying it with "it's less than resale prices". You didn't see that before June. So maybe the mix of uninformed vs informed buyers has changed since June and that trend continued further in July with people posting and reading these boards jumping into the mix of buyers.

I guess it's also certainly possible that the guides are pushing VGF more than RIV - I wouldn't know. That would certainly also explain things, but I'm not sure that at this magnitude. Perhaps it more explains the 2023 reversal with VGF taking the lead over RIV relative to 2022 in Jan-May, before the June incentives kicked in.

 

[Nursemanit]

That's fine. I'll add more detail for you. Here are some of the other variables that can impact purchase decisions, in no particular order: resort location, transportation options, resort theming, resort amenities, decor, size, nearby parks, size, room configurations, name appeal, length of contract, and I am sure that there are others.

The best evidence to suggest that resale restrictions aren't significantly impacting sales from DVC's perspective is that they are still in play, and DVC just doubled down on them when they opened their newest resort. If DVC felt that the restrictions significantly impacted new sales, they could remove them with the proverbial stroke of the pen.

I am sure that some folks have chosen not to purchase Riviera because of the restrictions, but I don't think it is the major factor that others may believe.

Every thing you listed could go in favor of RIV over VGF and yet one is massively outselling the other. You have to look for what is the driver. Restrictions are the most obvious choice.

 

[Cyberc1978]

Why? You have Riviera and you for sure want VGF sold out before POLY is sold. Additionally not like the economy is making a u-turn likely to end the year.

Now I can get the argument to reduce the incentives if you think overall you will make more money. That piece have basically no way of knowing but Disney likely has some metrics on that.

Yes they want VGF to sell out. But they also want the additional option. Now they have a MK resort and RIV which is not anything. I know they say it’s a Epcot resort but just because they call it that doesn’t mean it is. If you could easily walk to epcot then it was an epcot resort.

The want to give a few options so by lowering the incentives the sale might last longer and depending on how they do it VGF could last until or maybe a month before Poly2 opens.

 

[DanCali]

If you could easily walk to epcot then it was an epcot resort.

Have you taken that Skyliner route?

 

[Brian Noble]

I'm not sure that at this magnitude.

The vast majority of DVC buyers are not intentional about their purchase. That seems really odd to say, because we are in the middle of a community of very intentional DVC owners.

But it's true.

Most DVC buyers are on vacation, having the time of their lives, when a Guide helpfully explains how they can bottle this magical feeling for themselves and their families for decades to come "at today's prices." Most DVC buyers are also not thinking about what it means to sell. That's because the pitch is not "own for five or ten years and sell at a profit." The pitch is "decades of great vacations for you and your family."

DVC is also far from the only company able to do this. Marriott has no trouble selling points despite the fact that owners take a loss of about 75% when they sell on the secondary market.

Sure, restrictions might matter at the margins. But only just. They are probably top-of-mind to the average DISBoarder. They are way down the list---if they make it at all---for the typical buyer.

 

[DanCali]

Here are all factors that could make VGF sell more:

MK resort
Lots of studios
Lower dues
Not as many larger units so home resort is more important.
No restrictions.

I don’t think anyone would say that restrictions don’t play some role, but when RIV outsold VGF 2:1 last year, it had restrictions and people chose it.

And everyone said it was only because it was cheaper..but not now it’s reversed, VGF is cheaper and that doesn’t matter?

If restrictions were the main reason people are not choosing RIV, it would never have had months in which is sold 80k, let alone a few that were over 100k.

Those are some valid points. I just don't know how many buyers ask about the number of studios vs 1BR units when they buy.

Regarding prices, I don't think it's just the prices of RIV vs VGF that matter in how they sell. I think the direct vs resale prices for each resort separately that matter much more. June was a game changer with VGF in that regard (buy direct for $161 or buy resale for $160-$190, depending on contract size) and probably pushed many informed owners who might never buy direct to buy direct. Even more so with the realization this may be the last chance to do that and get a resort without the new resale restrictions.

 

[Brian Noble]

I think the direct vs resale prices for each resort separately that matter much more.

You are thinking like a member of the DIS DVC forums, not a typical DVC buyer. They are not the same.

 

[DanCali]

Sure, restrictions might matter at the margins. But only just. They are probably top-of-mind to the average DISBoarder. They are way down the list---if they make it at all---for the typical buyer.

You are thinking like a member of the DIS DVC forums, not a typical DVC buyer. They are not the same.

And what would be really interesting to know is how many of the 756 VGF deeds sold in July were sold to Disboarders, (both active posters and just passive readers) and how that number compares to April or May! I probably articulated things in a convoluted way, but my main point is that it's the mainly Disboarders (active and passive) accounting for these drastic changes in VGF sales since June. No way to actually tell though...

Keep in mind that 100 Disboarders making a purchase is probably at least 200 deeds since the vast majority would split a 150-point purchase into 2 (or even 3) deeds.

 

[BeachClub2014]

Every thing you listed could go in favor of RIV over VGF and yet one is massively outselling the other. You have to look for what is the driver. Restrictions are the most obvious choice.

Price is likely the biggest driver. When Riviera was outselling VGF it had these same restrictions but better incentives. So, Riviera has sold more with and less with restrictions, leading one to believe that price is likely the larger driver.

 

[Sandisw]

The restrictions are exactly the same, but not the incentives.

In May VGF outsold RIV by about 40% (March and April was similar). In June, with the new incentives, VGF outsold RIV by 87% and in July by 190%. I've seen dozens of posts in the summer incentives thread (mine included) of people buying 150 points at VGF at $161 and justifying it with "it's less than resale prices". You didn't see that before June. So maybe the mix of uninformed vs informed buyers has changed since June and that trend continued further in July with people posting and reading these boards jumping into the mix of buyers.

I guess it's also certainly possible that the guides are pushing VGF more than RIV - I wouldn't know. That would certainly also explain things, but I'm not sure that at this magnitude. Perhaps it more explains the 2023 reversal with VGF taking the lead over RIV relative to 2022 in Jan-May, before the June incentives kicked in.

But still RIV outsold VGF last year 4 to 5 months and some of those were 2:1.

Why? It had restrictions. But you actually just made the point that what has boosted sales of VGF is not it’s lack of restrictions but the aggressive incentives of getting current owners in at $161/point.

Until they made VGF direct prices in line with resale, it could not sell at these numbers.

The numbers in 2023 shifted to VGF when DVD decided to price it lower. That can’t be ignored. It just goes to show that pricing and incentives were needed.

And, if the goal is to get VGF sold out faster, it makes sense.

Again, restrictions certainly come in to play but since in 2022 RIV had no problem selling better than VGF, one can’t use July sales to say it’s is just those that made the difference.