December DVC Sales Tumble

[MerlinandtheMouse]

A talented Guide.

Or this, most definitely. The serotonin of a good family vacation and an excellent guide can work magic.

 

[AstroBlasters]

Or this, most definitely. The serotonin of a good family vacation and an excellent guide can work magic.

Someone buys pre-sale and then has a life change or decides VDH is not for them….

Listed at $189 for 200 points….trying to sell restricted points at unrestricted prices….

 

[Heroes_or_Villains]

They might make more in total as a rental. But, those earnings are over a long period of time (I'd hope the analysis mentioned above included the time-value of money in its calculations. If not, they are probably wrong.) Even so, selling it as a timeshare has two different advantages.

Advantage one: it returns capital faster, which looks better on the balance sheet (important for quarterly reports) and allows them to recycle the capital more often. So, it's not a one-to-one comparison for timeshare vs. hotel, because the same capital can be deployed to build more timeshare units than hotel units over the lifetime of the hotel.

Advantage two: It transfers the risk of reduced travel demand from the company to individual owners. I suspect this is a bigger reason why Disney has gone down the DVC route so aggressively. Those of us who were around TWDC during the 9/11 and Great Recession periods remember some pretty stark moves. They closed parts of Port Orleans during the 9/11 travel slump "for refurbishment" but really to get those rooms off the books. During the Great Recession, they ran a "buy 4 get 3" promotion on hotels/tickets---effectively giving a discount north of 40% on the room.

And we all remember what happened during the pandemic. DVC resorts re-opened first, and the others took a while to come back online.

There was also a good Laughing Place article that Kevin Yee wrote way back when that looked at a consultant/internal report about what Peak Oil might do to WDW's viability. The short verison: If oil got north of $X/bbl, WDW ceases to be an interesting business because flying becomes prohibitively expensive. $X was lower than you'd think.

Thankfully, fracking to the rescue on the whole oil thing. But. the lesson remains: having a huge resort dependent on the whims of the general public to travel is risky. Timeshare owners, on the other hand, have already paid for their lodging, and are contractually committed to continue doing so. That reduces their travel friction, and essentially builds in some structural demand for the product.

Since 9/11, Disney has opened precisely three cash resorts/resort components: AoA (which started construction prior to the attack), the Gran Destino Tower (convention business--a different beast), and parts of Aulani (Hawaii, also a different beast). Everything else is either new DVC builds, bulldozing cash rooms for DVC builds (CBR->Riviera, CR-North->BLT), or converting cash rooms to DVC (GFV2, Jambo, CCV).


They can't be, because they are not a general benefit, they are a Blue Card thing. Anything that is Blue Card is essentially paid for out of sales.

Agree with all of this. Advantage three is that Disney is able to pass off certain operating costs to the timeshare owners as part of annual dues. Very helpful in those periods where people are not inclined to travel as they're not the ones bearing the brunt of operating costs for minimal revenue.

 

[DanCali]

Haha we should create an Addonitis Anonymous group, keep ourselves financially responsible and rational

Resale restrictions are apparently a very good cure for Addonitis.

If they removed those restrictions from RIV and kept the same price, it'd sell like hotcakes.

 

[Cfabar1]

Resale restrictions are apparently a very good cure for Addonitis.

If they removed those restrictions from RIV and kept the same price, it'd sell like hotcakes.

As much as I think they have an impact, I don't think that's the entire story....

RIV is a beautiful resort, but it does have some other problems:
- Higher dues than some other properties
- Undesirable location (not walkable to any of the parks)
- Extremely high points chart

It didn't help that they were selling VGF for a while during the time RIV was for sale, which has lower dues, better location, and no restrictions. (VGF points chart is also very high, so that's a draw).

I would consider RIV resale despite those drawbacks, but would not consider RIV direct unless it was a small contract that I needed to top off a trip.

Additionally, DVC knows that if they price somewhere around $160 a point based on the sales this summer, they can get extremely high demand. They don't seem to care about that, or maybe don't want extremely high demand for the sales.

 

[AnnaKristoff2013]

VDH is not popular. Riviera did over triple the sales! That TOT and the high dues are likely killing it.

Doesn’t bode well for CFW and their absolutely insane $12.16 starting price for annual dues. I wouldn’t take that resort resale for free, in ten years of dues increases it’s going to be a liability people will be trying to flip on eBay or giving away like Vero beach will.

 

[DanCali]

As much as I think they have an impact, I don't think that's the entire story....

RIV is a beautiful resort, but it does have some other problems:
- Higher dues than some other properties
- Undesirable location (not walkable to any of the parks)
- Extremely high points chart

It didn't help that they were selling VGF for a while during the time RIV was for sale, which has lower dues, better location, and no restrictions. (VGF points chart is also very high, so that's a draw).

I would consider RIV resale despite those drawbacks, but would not consider RIV direct unless it was a small contract that I needed to top off a trip.

Additionally, DVC knows that if they price somewhere around $160 a point based on the sales this summer, they can get extremely high demand. They don't seem to care about that, or maybe don't want extremely high demand for the sales.

If they priced RIV at $160 or even $150 I don't think it will sell anywhere close to what VGF did in the summer and early Fall. And I think it's 90% the resale restrictions' fault. Not everyone buying direct cares about resale values, and some may not even know there is a resale market, but many potential buyers probably know and do care.

As you said, the points charts are comparable so that's not the issue. The dues are indeed about 15% higher, so that probably makes some difference. On the other hand RIV has an extra 15% life (6 extra years) so that's some extra value there. And personally, I find the location quite desirable - how bad can it be to grab a coffee and fresh pastry in the lobby and get a 8-12 minute ride on the skyliner to either of two popular resorts? VFG is "walking distance" from MK, but it's double the distance you'd have walking from BLT - not a distance that's fun to walk briskly between May and October in Florida. Obviously the monorail is a great option there too.

I would definitely consider Riviera direct if it had no restrictions and the price was right. I'd also consider Riviera direct even with restrictions if DVC played the restrictions game as it's played by other developers and added incentives that entice the informed resale buyers (a-la "point washing"). That's something only DVC can offer resale buyers and would get those buyers to overlook the immediate large capital loss they incur when buying a restricted resort. Until then, I expect that the more Riviera resale prices drop, the less direct sales they will have.

 

[tjkraz]

If they priced RIV at $160 or even $150 I don't think it will sell anywhere close to what VGF did in the summer and early Fall. And I think it's 90% the resale restrictions' fault. Not everyone buying direct cares about resale values, and some may not even know there is a resale market, but many potential buyers probably know and do care.

Riviera outsold Grand Floridian head-to-head for 6 months in 2022 when RIV was priced a few dollars lower. And Riveira also sold at all-time high pace in 2019-2020 before Covid.

I don't know what sort of data DVC has internally about the help or harm of resale restrictions. But there seems to be ample evidence that they don't particularly hurt sales in a 1:1 comparison. The biggest factor that clearly does matter to buyers is price.

 

[Cfabar1]

Riviera outsold Grand Floridian head-to-head for 6 months in 2022 when RIV was priced a few dollars lower. And Riveira also sold at all-time high pace in 2019-2020 before Covid.

I don't know what sort of data DVC has internally about the help or harm of resale restrictions. But there seems to be ample evidence that they don't particularly hurt sales in a 1:1 comparison. The biggest factor that clearly does matter to buyers is price.

this, and the monorail is not the same as the skyliner... The location is inferior to beach club and boardwalk.

 

[AstroBlasters]

If they priced RIV at $160 or even $150 I don't think it will sell anywhere close to what VGF did in the summer and early Fall. And I think it's 90% the resale restrictions' fault. Not everyone buying direct cares about resale values, and some may not even know there is a resale market, but many potential buyers probably know and do care.

As you said, the points charts are comparable so that's not the issue. The dues are indeed about 15% higher, so that probably makes some difference. On the other hand RIV has an extra 15% life (6 extra years) so that's some extra value there. And personally, I find the location quite desirable - how bad can it be to grab a coffee and fresh pastry in the lobby and get a 8-12 minute ride on the skyliner to either of two popular resorts? VFG is "walking distance" from MK, but it's double the distance you'd have walking from BLT - not a distance that's fun to walk briskly between May and October in Florida. Obviously the monorail is a great option there too.

I would definitely consider Riviera direct if it had no restrictions and the price was right. I'd also consider Riviera direct even with restrictions if DVC played the restrictions game as it's played by other developers and added incentives that entice the informed resale buyers (a-la "point washing"). That's something only DVC can offer resale buyers and would get those buyers to overlook the immediate large capital loss they incur when buying a restricted resort. Until then, I expect that the more Riviera resale prices drop, the less direct sales they will have.

My wife has told me she has no desire to ever go on the Skyliner because she would always worry about it breaking down and our family being stuck OR high wind/rain making it unable to operate and we are stuck with busses.

That’s just one opinion, but that’s also one less family that would ever consider RIV.

 

[ClaraOswald]

Yes I voted and commented 150ish was our price to add on to our direct points. Stingiest is a bit of an understatement

After reading the latest Genie+ DL vs WDW thread, just reaffirms our desire to stick to the west coast parks & Aulani.

Which section of the forum is that thread in? I want to read it.

My wife has told me she has no desire to ever go on the Skyliner because she would always worry about it breaking down and our family being stuck OR high wind/rain making it unable to operate and we are stuck with busses.

That’s just one opinion, but that’s also one less family that would ever consider RIV.

We are also anti-Skyliner so would never consider Riviera, which works out well right now since we only have resale anyway. (The Rivieria resort isn't really my 'style' either so there's that as well.)

 

[DanCali]

Riviera outsold Grand Floridian head-to-head for 6 months in 2022 when RIV was priced a few dollars lower. And Riveira also sold at all-time high pace in 2019-2020 before Covid.

The biggest factor that clearly does matter to buyers is price.

But were Riviera resale listings in 2022 routinely being priced in the $120s and even $110s? And what were the resale prices of Riviera in 2019 and 2020? It's was a new resort and new restrictions. It takes years to start to see the damage the restrictions actually cause. It was different in 2019 and 2020 when the damage of the resale restrictions cannot yet be observed versus now that it's starting to materialize

I don't disagree that to some buyers, price (or price + dues) is the top consideration. To me, when it comes to a direct purchase, it's more about the delta between resale and direct. Because of that, it'd be much easier for me to justify buying Poly2 direct in the $190s (assuming same association, no restrictions) vs. Riviera in the $170s.

 

[intamin]

But were Riviera resale listings in 2022 routinely being priced in the $120s and even $110s? And what were the resale prices of Riviera in 2019 and 2020? It's was a new resort and new restrictions. It takes years to start to see the damage the restrictions actually cause. It was different in 2019 and 2020 when the damage of the resale restrictions cannot yet be observed versus now that it's starting to materialize

I don't disagree that to some buyers, price (or price + dues) is the top consideration. To me, when it comes to a direct purchase, it's more about the delta between resale and direct. Because of that, it'd be much easier for me to justify buying Poly2 direct in the $190s (assuming same association, no restrictions) vs. Riviera in the $170s.

If Riviera is going for 170 direct and resale 120 and Poly direct goes for 190 and resale 130-140 like it is right now wouldn't that put them at around the same delta?

 

[DanCali]

If Riviera is going for 170 direct and resale 120 and Poly direct goes for 190 and resale 130-140 like it is right now wouldn't that put them at around the same delta?

Poly is a stable resale market while Riviera is still a very nascent resale market. Current owners at Riviera have owned for 0-4 years at most, and the resort is not even 60% sold out. So I don't think Riviera resale supply today is anywhere near what it will be at a "steady state" with a sold out resort and some percentage of total owners selling each year. Higher supply usually leads to lower prices. That's a long way to say that I think whatever Riviera's resale price is today, it's probably higher than it should be due to lack of adequate supply. Since it's the first resort with these restrictions, I don't know where it ends up (at prevailing prices, I'd prefer BLT much more), and that uncertainty is also part of the problem.

 

[MerlinandtheMouse]

But were Riviera resale listings in 2022 routinely being priced in the $120s and even $110s? And what were the resale prices of Riviera in 2019 and 2020? It's was a new resort and new restrictions. It takes years to start to see the damage the restrictions actually cause. It was different in 2019 and 2020 when the damage of the resale restrictions cannot yet be observed versus now that it's starting to materialize

I don't disagree that to some buyers, price (or price + dues) is the top consideration. To me, when it comes to a direct purchase, it's more about the delta between resale and direct. Because of that, it'd be much easier for me to justify buying Poly2 direct in the $190s (assuming same association, no restrictions) vs. Riviera in the $170s.

So are restrictions an absolute no for you, no matter what or where? I just feel like it’s a thing going forward with DVC and right now it’s easy to dismiss RIV or VDH or CFW but what if the tower is restricted? Or even if it’s not, it’s almost guaranteed that future projects will be restricted (let’s be honest, if they did it to CFW, they’ll do it everywhere). Will you be ok with never having access to them? Or if you have some direct legacy points, get whatever is left over at 7mo?

I guess if you have all your home resorts already that you love, that unless something comes along that is super enticing to you, you’re set with what you have. But this comes back to the idea that everyone has a price (or desired resort, in this case). Maybe RIV doesn’t hold enough to tempt you but something might come along in the near future that will, restrictions be damned. Although if you’re able to hold steadfast to your ideals, more power to you, I know I’m already too weak when it comes to the next shiny new thing. My wallet fears future me

I’d like to hope I have another 40+ good years left of Disney trips (if I’m really lucky another 10-15 on top of that cruising on a little ECV) so for me it’s no longer a matter of can I avoid them, it just goes back to do I want x resort as my home resort, restrictions are just an annoying but inevitable fact now. Disney is doing what they think is best to get people to buy direct through them. At some point the scales will tip in their favor, whether it be because they introduce a bunch of new restricted resorts that people have too much FOMO about them, or the number of legacy resorts dwindle down to too few to have as much draw, but Disney will surely be in it for the long haul. DVC is more popular than ever, and as many here have repeatedly pointed out, the product is much worse now than it was the first few decades, and yet it’s still doing very well, their best sales year in a decade if the numbers are to be believed. I’m not sure I see them going back to the good old days.

 

[intamin]

Poly is a stable resale market while Riviera is still a very nascent resale market. Current owners at Riviera have owned for 0-4 years at most, and the resort is not even 60% sold out. So I don't think Riviera resale supply today is anywhere near what it will be at a "steady state" with a sold out resort and some percentage of total owners selling each year. Higher supply usually leads to lower prices. That's a long way to say that I think whatever Riviera's resale price is today, it's probably higher than it should be due to lack of adequate supply. Since it's the first resort with these restrictions, I don't know where it ends up (at prevailing prices, I'd prefer BLT much more), and that uncertainty is also part of the problem.

I agree, Riviera's resale market is not stable. Do we not think that the fact that it's still actively selling is affecting the price at all? Obviously I don't expect it's resale value to be as high as prior non-restricted resorts but I also don't know if it's going to be as drastic of a delta as it is currently . Over time it will become the norm and won't be the lone restricted step child lol.

 

[DanCali]

So are restrictions an absolute no for you, no matter what or where? I just feel like it’s a thing going forward with DVC and right now it’s easy to dismiss RIV or VDH or CFW but what if the tower is restricted? Or even if it’s not, it’s almost guaranteed that future projects will be restricted (let’s be honest, if they did it to CFW, they’ll do it everywhere). Will you be ok with never having access to them? Or if you have some direct legacy points, get whatever is left over at 7mo?

I guess if you have all your home resorts already that you love, that unless something comes along that is super enticing to you, you’re set with what you have. But this comes back to the idea that everyone has a price (or desired resort, in this case). Maybe RIV doesn’t hold enough to tempt you but something might come along in the near future that will, restrictions be damned. Although if you’re able to hold steadfast to your ideals, more power to you, I know I’m already too weak when it comes to the next shiny new thing. My wallet fears future me

I’d like to hope I have another 40+ good years left of Disney trips (if I’m really lucky another 10-15 on top of that cruising on a little ECV) so for me it’s no longer a matter of can I avoid them, it just goes back to do I want x resort as my home resort, restrictions are just an annoying but inevitable fact now. Disney is doing what they think is best to get people to buy direct through them. At some point the scales will tip in their favor, whether it be because they introduce a bunch of new restricted resorts that people have too much FOMO about them, or the number of legacy resorts dwindle down to too few to have as much draw, but Disney will surely be in it for the long haul. DVC is more popular than ever, and as many here have repeatedly pointed out, the product is much worse now than it was the first few decades, and yet it’s still doing very well, their best sales year in a decade if the numbers are to be believed. I’m not sure I seem them going back to the good old days.

I agree, Riviera's resale market is not stable. Do we not think that the fact that it's still actively selling is affecting the price at all? Obviously I don't expect it's resale value to be as high as prior non-restricted resorts but I also don't know if it's going to be as drastic of a delta as it is currently .

I guess we got lucky with attractive direct pricing at O14 resorts this past year (AKV and VGF) so we have some direct points with access to new resorts. I'm totally fine with taking my chances at 7 months or waitlisting. With Riviera's points charts, preferred view doesn't usually sell out at 7 months anyway.

I try to never say never to buying a certain resort, direct or resale. In my opinion (based on how it's played out with the Westin/Sheraton system), I think these restricted resorts will ultimately have resale prices substantially lower than the unrestricted ones that expire in the 2050s and 2060s. Under that assumption, I may buy resale at a restricted resort if I really liked a resort, wanted to stay there, and trading in was hard. But the price now is nowhere near what I would pay... And, under that same assumption of depressed resale prices at restricted resorts, I would only consider buying direct if (i) direct prices were correspondingly lower, which is unlikely, or (ii) they offered something of value to me but relatively costless to them like point washing ("buy 200 points and we'll treat 600 of your resale points as direct"). Yes, I'm taking a big capital loss on the direct buy, but at least I'm also getting something I care about that only DVC can make happen.

Over time it will become the norm and won't be the lone restricted step child lol.

"Over time" could take decades with some of the O14 resorts expiring in the 2060s. I actually think those remaining O14 resorts after 2042 will be highly sought after and selling at a premium if everything else by then is restricted.

But even if these restrictions were the new norm, what could also become the new norm is permanently lower resale prices under those conditions, just like most other timeshares. Since the product is so different, resale prices may be 20% to 40% of direct pricing instead of what we've been used to with the relatively unrestricted resale contracts.

 

[tidefan]

So are restrictions an absolute no for you, no matter what or where? I just feel like it’s a thing going forward with DVC and right now it’s easy to dismiss RIV or VDH or CFW but what if the tower is restricted? Or even if it’s not, it’s almost guaranteed that future projects will be restricted (let’s be honest, if they did it to CFW, they’ll do it everywhere). Will you be ok with never having access to them? Or if you have some direct legacy points, get whatever is left over at 7mo?

Just my opinion and not to speak out of turn, but for lots of us that have owned for a while, I think restrictions are a hard pass, no matter the resort.

One of the biggest selling points DVC had, at least when we first bought in back in 2007, was how well it held up comparatively in resale. With restrictions, this will be gone, IMHO.

I know people say, “well, you can just rent”, but that’s more work than at least I would like to deal with.

 

[Minniemoo15]

So are restrictions an absolute no for you, no matter what or where? I just feel like it’s a thing going forward with DVC and right now it’s easy to dismiss RIV or VDH or CFW but what if the tower is restricted? Or even if it’s not, it’s almost guaranteed that future projects will be restricted (let’s be honest, if they did it to CFW, they’ll do it everywhere). Will you be ok with never having access to them? Or if you have some direct legacy points, get whatever is left over at 7mo?

I guess if you have all your home resorts already that you love, that unless something comes along that is super enticing to you, you’re set with what you have. But this comes back to the idea that everyone has a price (or desired resort, in this case). Maybe RIV doesn’t hold enough to tempt you but something might come along in the near future that will, restrictions be damned. Although if you’re able to hold steadfast to your ideals, more power to you, I know I’m already too weak when it comes to the next shiny new thing. My wallet fears future me

I’d like to hope I have another 40+ good years left of Disney trips (if I’m really lucky another 10-15 on top of that cruising on a little ECV) so for me it’s no longer a matter of can I avoid them, it just goes back to do I want x resort as my home resort, restrictions are just an annoying but inevitable fact now. Disney is doing what they think is best to get people to buy direct through them. At some point the scales will tip in their favor, whether it be because they introduce a bunch of new restricted resorts that people have too much FOMO about them, or the number of legacy resorts dwindle down to too few to have as much draw, but Disney will surely be in it for the long haul. DVC is more popular than ever, and as many here have repeatedly pointed out, the product is much worse now than it was the first few decades, and yet it’s still doing very well, their best sales year in a decade if the numbers are to be believed. I’m not sure I see them going back to the good old days.

The bigger issue for me is that restrictions are the new norm for DVC..when it suits them.

Restrictions for RIV! None for GFV2. Restrictions for the cabins! None (likely) for PVB2. This flip flopping is what makes me especially nervous to buy into a resort with restrictions.

 

[kilik64]

The bigger issue for me is that restrictions are the new norm for DVC..when it suits them.

Restrictions for RIV! None for GFV2. Restrictions for the cabins! None (likely) for PVB2. This flip flopping is what makes me especially nervous to buy into a resort with restrictions.

What flip flopping?

Three (forgot to include VDH) are new resorts. And two are add ons to existing resorts that didn’t have resale restrictions. There is no inconsistency.