I mean at this point, why is anyone buying direct?

[hglenn]

But that's because you have five years ago to compare. Families going with their pre-school kids now for the first time do not---and I will bet it is just about as magical for them as it ever has been for first-timers in that age bracket.

It is perfectly possible to have a fine trip without doing much if any planning. You'll "accomplish" a lot less, but maybe the vacation isn't about how many rides you get on, but what the experience feels like.

Very true... I suppose the same thing for me who is new to DVC (resale) and is not bitter about all of the extras that used to be available... Had I bought in when there were free passes, I might have a different take...

 

[Sandisw]

Good points about how there could be a material difference between contracts vs point total.

I will say that one article is looking at YTD (through NOV) and the DVC news articles were looking at two quarters at the end of 21 and beginning of 22. That’s only 25% of the data if you are making a claim about 2 years. I also don’t think your can exclude RIV, VGF, and POLY when talking about WDW sales and there has been 0 ROFR there.

I still hypothesize that if you look at all resorts (not just WDW excluding large properties in active sales) that if the avg contract holding period of 7-10 years holds that there is at least a billion to be made in extra money (spread out over decades) monetizing resale outside of ROFR over the life of those contracts.

When DVD made the decisions, starting in 2012, to differentiate, they had to have a reason.

What do you think has changed since that time that would cause them to want to reverse those decisions?

 

[kboo]

The RIV points we bought? We find every time we go to book it we are put off by the point chart and use the points somewhere else.

You bought RIV points? Direct? I though you were a never-Riviera because of the restrictions.

So you are coming in to the equation looking at BLT/VGF/POLY its $6k for a longer contract, the only one next to Epcot, and you do get the benefits (no new APs today but you might think they are coming).

The math isn't that far off plus you need to account for getting your contract instantly and booking your first trip (plus a welcome home stay if you need it likely).

This is exactly the analysis we went through when deciding whether to add on to BLT or not. Our prior BLT resale points were unrestricted, but if we added on, we would have had some restricted points. The delta was around $5,000 as I recall, and we did the pre-opening "tour" on a move day for a split stay. What did we get for $5000 extra (in order of importance):
1. new home resort near EP/HS
2. nonstripped contract, immediate choice of UY
3. instant gratification
3a. Booked a New Years stay in April 2019 48 hours later - with spectacular fireworks views
4. easy transportation to our second resort for our split stay
5. free FPs on a very heavy holiday week
5a. we had to go to Poly to re-sign some docs, it took about an hour, and they gave us MORE free FPs for the inconvenience
5b. some issue with FPs being pulled from the correct account and inventory (e.g. using an "all access" FP for a low priority ride in MK etc), which led to even more FPs
6. free ice cream

while some of these are tongue in cheek, the FP snafu ended up having the effect of us not waiting in line for much of anything after we bought - it felt like the equivalent of a VIP tour .... over 4-5 days. For us, we liked Riviera resort, preferred the room layout over BCV/BWV and that was already worth the extra $5000. We spent New Year's at Riviera over 2019 and 2021 and IMO it's the best resort because you can see fireworks at MK and Epcot.

 

[tjkraz]

I will say that one article is looking at YTD (through NOV) and the DVC news articles were looking at two quarters at the end of 21 and beginning of 22. That’s only 25% of the data if you are making a claim about 2 years. I also don’t think your can exclude RIV, VGF, and POLY when talking about WDW sales and there has been 0 ROFR there.

All resorts including RIV, VGF and PVB are included in the ROFR and sale data I linked. There are other stories out there for all of 2021 and most of 2022 if you wish to find them.

RIV was excluded from my estimate of WDW points when calculating percents, simply because I thought it disingenuous to include since it's such a new resort with few resales.

If you want exact numbers, as of the end of 2022 there were 60,822,664 points (give or take a point or two) in the 11 condo associations at WDW. From January 2021 to October 2022, 1,481,109 points changed hands via private sales at the top 13 brokers. That's 2.435% of all points in WDW-based resorts over a span of 22 months.

I still hypothesize that if you look at all resorts (not just WDW excluding large properties in active sales) that if the avg contract holding period of 7-10 years holds that there is at least a billion to be made in extra money (spread out over decades) monetizing resale outside of ROFR over the life of those contracts.

I suspect DVC views it as stepping over dimes to pick up pennies. Better to use the perks to promote direct sales and use ROFR to reacquire points and re-sell for more than $20 profit.

DVC doesn't HAVE to maintain the high direct prices they currently have published for older resorts. Earlier this year they were ROFR-ing BLT around $160. DVC's published price is $275. There's a LOT of wiggle room there to offer discounts and incentives, and still make a pretty penny re-selling those points. (But RIV and VGF are even more profitable, so that's where they will primarily steer buyers.)

As for this 7-10 year holding average, that's certainly not indicative of the program as a whole. Maybe that's the average lag between buying and selling for contracts which actually appear on the resale market. (e.g., DVCRM sees a contract bought in 2015 and sold in 2022 and computes 7 year holding.) But it doesn't seem those numbers are being offset by the tens-of-millions of points purchased and never resold.

Per this data, only 2-2.5% of points are being re-sold (inc ROFR) each year.

 

[tom1944]

I don't have any data at hand so I hate to even guess.

Hypothetically, if the going rate for BLT is around $150 per point, DVC is more likely to pass on a 50-point contract which sells for $165 (scarcity premium) and pounce on a 500 point contract which had to be discounted to $135 because there are few buyers looking to spend $67k.

Generally speaking, they let the little ones go and grab the big fish. And in the middle (say, 100-300 range) is an area where they would selectively pick up contracts based upon price, loaded vs stripped, etc.

It's not really that cut-and-dried, but that helps illustrates why contract numbers vs points show different trends. If you pass on ten 50-pt contracts and ROFR one for 500 points, the ROFR rate is only 9% of contracts but 50% of points.

Thanks, as part of my overthinking on making my initial purchase all these bits of knowledge are welcome.

 

[AstroBlasters]

When DVD made the decisions, starting in 2012, to differentiate, they had to have a reason.

What do you think has changed since that time that would cause them to want to reverse those decisions?

Have you ever known Disney to not try and find a way to monetize something that is monetiziable? (Genie+?) There are a decade and counting of monetiziable resale points in the system and a time will come when some executive with a short time horizon until retirement needs to hit a certain revenue target to make their annual bonus and restricted stock allotments.

IF direct point sales start to dry up and incentives on new points don’t do the trick then they will have to consider options to monetize resale points. “One time wash”, “at ROFR option to wash”, “per booking wash fee”… they will think of something. Direct will be upset that it is too low and resale will complain that it’s higher than they want but admit it’s low enough that a lot of people will probably still do it.

IF direct sales never drop below acceptable levels then it would never happen. But there are a lot of things that can happen between now and 2042 that could cause someone to pull that cash infusion lever.

 

[AstroBlasters]

All resorts including RIV, VGF and PVB are included in the ROFR and sale data I linked. There are other stories out there for all of 2021 and most of 2022 if you wish to find them.

RIV was excluded from my estimate of WDW points when calculating percents, simply because I thought it disingenuous to include since it's such a new resort with few resales.

If you want exact numbers, as of the end of 2022 there were 60,822,664 points (give or take a point or two) in the 11 condo associations at WDW. From January 2021 to October 2022, 1,481,109 points changed hands via private sales at the top 13 brokers. That's 2.435% of all points in WDW-based resorts over a span of 22 months.


I suspect DVC views it as stepping over dimes to pick up pennies. Better to use the perks to promote direct sales and use ROFR to reacquire points and re-sell for more than $20 profit.

DVC doesn't HAVE to maintain the high direct prices they currently have published for older resorts. Earlier this year they were ROFR-ing BLT around $160. DVC's published price is $275. There's a LOT of wiggle room there to offer discounts and incentives, and still make a pretty penny re-selling those points. (But RIV and VGF are even more profitable, so that's where they will primarily steer buyers.)

As for this 7-10 year holding average, that's certainly not indicative of the program as a whole. Maybe that's the average lag between buying and selling for contracts which actually appear on the resale market. (e.g., DVCRM sees a contract bought in 2015 and sold in 2022 and computes 7 year holding.) But it doesn't seem those numbers are being offset by the tens-of-millions of points purchased and never resold.

Per this data, only 2-2.5% of points are being re-sold (inc ROFR) each year.

Thank you. That is some great data.

 

[Sandisw]

Have you ever known Disney to not try and find a way to monetize something that is monetiziable? (Genie+?) There are decade and counting of monetiziable resale points in the system and a time will come when some executive with short time horizon until retirement needs to hit a certain revenue target to make their annual bonus and restricted stock allotments.

IF direct point sales start to dry up and incentives on new points don’t do the trick then they will have to consider options to monetize resale points. “One time wash”, “at ROFR option to wash”, “per booking wash fee”… they will think of something. Direct will be upset that it is too low and resale will complain that it’s higher than they want but admit it’s low enough that a lot of people will probably still do it.

IF direct sales never drop below acceptable levels then it would never happen. But there are a lot of things that can happen between now and 2042 that could cause someone to pull that cash infusion lever.

Since they have the power to adjust pricing and minimums, there is just so much they can do if sales dip.

Look at what happened in 2021. They changed the minimum to 150 from 125. But that change allowed them to offer VGF as low as it did and still make money compared to keeping the minimum lower and charging closer to it’s sold out price.

I certainly do see a situation where they may try to offer owners a way to convert points, but I just see no situation where they do it on the cheap.

Lower minimums and put in short term incentives and you will garner much more that way and keep the notion that buying direct gives you something resale does not.

And, when we look at resale sales, we have to remember that not all of those sales are from owners who don’t already own enough direct points..or grandfathered points.. who are eligible for perks and for use everywhere.

They just raised the price of the resorts, on average, of $10/pt so it doesn’t appear they are worried about sales numbers.

It is a great discussion for sure! It will be interesting to see what happens with VDH and Poly tower as that will give us more info to try and guess what DVD wants to do long term!

 

[Brian Noble]

From January 2021 to October 2022, 1,481,109 points changed hands via private sales at the top 13 brokers. That's 2.435% of all points in WDW-based resorts over a span of 22 months.

And probably some of those resold points had already been sold once.

I certainly do see a situation where they may try to offer owners a way to convert points, but I just see no situation where they do it on the cheap.

I am of the same opinion. Marriott charges 15-20% of retail to "wash" dirty resale points. If Disney goes this route, you can bet they will charge at least that much and probably more: I figure something in the $35-$50/pt range at today's prices, and possibly higher.

 

[tjkraz]

Since they have the power to adjust pricing and minimums, there is just so much they can do if sales dip.

Look at what happened in 2021. They changed the minimum to 150 from 125. But that change allowed them to offer VGF as low as it did and still make money compared to keeping the minimum lower and charging closer to it’s sold out price.

I certainly do see a situation where they may try to offer owners a way to convert points, but I just see no situation where they do it on the cheap.

Agree.

With regard to older resorts, one of the things DVC has done in the past was to jolt the market with a sudden wave of ROFR. Imagine BLT is commonly passing for $160. Suddenly DVC gobbles-up everything at $160 and below. They have 30 days to make a decision and can sit on contracts for a few weeks, suddenly grabbing thousands of points in one swoop.

A bunch of buyers are shocked by not getting their contract. Some respond by making new offers at higher prices. Suddenly the going resale price rises to $170-180. Meanwhile, DVC decides to run a "special" on all the points they recently required. They offer a limited-time special on BLT for $225 each. Some of those people who were pursuing resale suddenly say "oh heck, I'll just buy direct from Disney." Especially if they wanted smaller add-on contracts. First, good luck finding a 50-pt BLT contract, especially with same Use Year. And you're going to pay a premium for a small contract resale. Suddenly paying an extra couple thousand to DVC doesn't seem so bad for points that include current Use Year, can be used immediately, at every resort, and contribute to perks eligibility.

In this example, from DVC's perspective, they're ROFRing at $160 or less and still selling for $65 per point profit.

That's one pattern DVC has followed when the economy is strong.

Still, resorts like VGF and RIV are far more profitable than that. Rule of thumb is about 50% of the selling price of a timeshare is profit. It's probably more in DVCs case since Disney already owns the land. (I'm sure there's some internal bookkeeping charge between parks & resort and DVC for the land use, but TWDC isn't shelling out cash for the new Poly land on 7 seas lagoon.)

When DVC is selling RIV and VGF for $217 each, figure at least half of that is profit. Probably double the $65 per point in my BLT illustration.

All reasons why DVC isn't going to bend over backward to make resale points equal to direct for just $20 each. They'd rather use the advantages of direct as leverage to swing more people to a direct purchase. @AstroBlasters: nobody is suggesting that you should have forgone your resale purchases and bought ~700 points direct from Disney. But for a lesser upcharge, you COULD have bought 150 from Disney and the rest resale. You'd have access to all of the member perks and SOME amount of points that could be used at every resort.

 

[AstroBlasters]

Agree.

With regard to older resorts, one of the things DVC has done in the past was to jolt the market with a sudden wave of ROFR. Imagine BLT is commonly passing for $160. Suddenly DVC gobbles-up everything at $160 and below. They have 30 days to make a decision and can sit on contracts for a few weeks, suddenly grabbing thousands of points in one swoop.

A bunch of buyers are shocked by not getting their contract. Some respond by making new offers at higher prices. Suddenly the going resale price rises to $170-180. Meanwhile, DVC decides to run a "special" on all the points they recently required. They offer a limited-time special on BLT for $225 each. Some of those people who were pursuing resale suddenly say "oh heck, I'll just buy direct from Disney." Especially if they wanted smaller add-on contracts. First, good luck finding a 50-pt BLT contract, especially with same Use Year. And you're going to pay a premium for a small contract resale. Suddenly paying an extra couple thousand to DVC doesn't seem so bad for points that include current Use Year, can be used immediately, at every resort, and contribute to perks eligibility.

In this example, from DVC's perspective, they're ROFRing at $160 or less and still selling for $65 per point profit.

That's one pattern DVC has followed when the economy is strong.

Still, resorts like VGF and RIV are far more profitable than that. Rule of thumb is about 50% of the selling price of a timeshare is profit. It's probably more in DVCs case since Disney already owns the land. (I'm sure there's some internal bookkeeping charge between parks & resort and DVC for the land use, but TWDC isn't shelling out cash for the new Poly land on 7 seas lagoon.)

When DVC is selling RIV and VGF for $217 each, figure at least half of that is profit. Probably double the $65 per point in my BLT illustration.

All reasons why DVC isn't going to bend over backward to make resale points equal to direct for just $20 each. They'd rather use the advantages of direct as leverage to swing more people to a direct purchase. @AstroBlasters: nobody is suggesting that you should have forgone your resale purchases and bought ~700 points direct from Disney. But for a lesser upcharge, you COULD have bought 150 from Disney and the rest resale. You'd have access to all of the member perks and SOME amount of points that could be used at every resort.

Oh, I never took it as such and appreciated the additional perspective.

I live in Oregon, so 90% of my DVC usage will be HI and CA, where resale works just fine. l’m 41 and will be happy to have access to lots of resorts for the next 19ish years (age 60) and stay at VGF on the rare occasion we decide to make the trek out to FL for the 20ish years after that (age 60-80).

I just hear and read stats around the avg length of contract and the % of contracts ROFR’d and think that something could happen at some point that makes an executive want a quick cash grab. We shall see, not happening anytime soon.

 

[sethschroeder]

There was a formula error in a spreadsheet I was looking at. 2 year totals are approximately 1.6M points resold privately and 1.1M ROFR. Combined, about 5% of all points at WDW resorts excluding Riviera.

Okay I saw where you got it now and it broke down to about 2.5% on an annual basis. Then further reducing to about 1.5% going to new owners being entered in to the system (or new memberships at least).

With the spike of purchasing of all goods that occurred over that timeframe tracked it seems to fit with previous information I have come across.

I would be interested in seeing more recent data but their data source stopped being updated in early May 2022 (I know as I have a link to the source and have checked a few times since then).

 

[Eviejim]

We just bought direct, first time DVC owners in Feb of 2022. I was really torn over direct vs. resale for awhile but it really came down to FOMO for us. I don't want restrictions. I also really liked the perk that we got double points for our first year so we went twice this year and had a blast! I couldn't afford to buy as many points as I wanted direct though so that's my only regret, I would like more points but I hear "Addonitis" is gonna hit no matter how many points I have.

 

[tjkraz]

I would be interested in seeing more recent data but their data source stopped being updated in early May 2022 (I know as I have a link to the source and have checked a few times since then).

Through October 2022, it was largely business as usual. In fact, for the first 10 months of 2022, DVC ROFRed more points than all of 2021, and they actually took slightly more points than they allowed through. DVC exercised ROFR on 636k points and waived ROFR on 609k.

I haven't seen the full year numbers but it sounds like they dropped off abruptly in November and December. We'll post some sort of a year-end wrap up in the near future.

 

[AstroBlasters]

Through October 2022, it was largely business as usual. In fact, for the first 10 months of 2022, DVC ROFRed more points than all of 2021, and they actually took slightly more points than they allowed through. DVC exercised ROFR on 636k points and waived ROFR on 609k.

I haven't seen the full year numbers but it sounds like they dropped off abruptly in November and December. We'll post some sort of a year-end wrap up in the near future.

There are a lot of Aulani points going through the system that ROFR is not touching.

 

[tjkraz]

There are a lot of Aulani points going through the system that ROFR is not touching.

I'm sure that's true since DVC typically avoids ROFR on actively-selling resorts. Problem Hawaii's public records website doesn't allow us to gather relevant data from the deeds like we can with Orange County FL. Also cannot get that data for California.

 

[Chuck96]

I'm a recent purchaser and went direct. I had spent years crunching the numbers (2018-2022), and had been planning on resale for most of that time. Once VGF was (re)offered, it started to make more sense to go direct for our particular situation. It gave me a long remaining contract at a highly desirable monorail property that suited how we vacation. Going direct probably cost my family an addition $4000-5000 dollars. But it yielded a much easier transaction experience, an immediate ability to use those points for a planned December 2022 vacation (which saved us about $3000 right there), and gave my spouse peace of mind wrt DVC perks being "assured" (such as TotW Lounge and the DVC discount), and I could use those points at future resorts.

If we ever decide to purchase additional points we would probably select resale, since the benefits of direct are now diminished.

In the end, I was more comfortable making this particular purchase direct. It was a gut feeling. I felt no sense of regret, even as I watched the resale VGF price drop down by several dollars per point this spring and summer. Got to make a decision you can live with, and the metrics are different for different people/families.

 

[AstroBlasters]

I'm sure that's true since DVC typically avoids ROFR on actively-selling resorts. Problem Hawaii's public records website doesn't allow us to gather relevant data from the deeds like we can with Orange County FL. Also cannot get that data for California.

I did some digging on my 3 AUL contracts and they originally sold from Disney within the last 4- 8 years. According to records one lives in NY, one in Miami, and one was local in HI. With two (NY and Miami) of them I am the 3rd owner, and it looks like they were purchased by Intl buyer (Japan) first.

I wonder if AUL has a higher turnover rate than WDW parks. It probably has the highest % of Intl buyers. My guess is that it is probably the hardest to sell direct as well.

 

[kboo]

Still, resorts like VGF and RIV are far more profitable than that. Rule of thumb is about 50% of the selling price of a timeshare is profit. It's probably more in DVCs case since Disney already owns the land. (I'm sure there's some internal bookkeeping charge between parks & resort and DVC for the land use, but TWDC isn't shelling out cash for the new Poly land on 7 seas lagoon.)

And this isn't even counting the financing $$$ when Disney sells new resorts directly at a 150 point minimum!

@Chuck96 - I would love more Riviera points to use at Riviera, but resale prices haven't gone down enough! I was on these boards back in 2019 thinking that I would be happy to jump on 100-ish points resale at a price <$130ish to use only at Riviera (all our other points are grandfathered/unrestricted)... needless to say, we ended up buying more points than that, and direct. Oops.

 

[naman1221]

My wife and I are purchasing today and are purchasing direct - it is just not worth the headache. We are in our mid-late 20s and plan on using this for at least another 30+ years. What happens in 19 years when we can no longer go to 5+ resorts because they have been flipped to the new association.

We are also big fans of Riviera - but wanted the option to MAYBE stay elsewhere. Buying Riviera resale came with the restriction to only stay there. The perks were not the reason for us to buy direct - it was protection from whatever Disney may do to resale buyer restrictions in the future.