Is Aulani a bad choice?

[Paul Stupin]

If you travel around Christmas or June, or if there is the possibility you will want to in the future, it will be very difficult to book at 7 months.

 

[intamin]

So I bought Aulani subsidized as SAP. The thing that ultimately swayed me toward AUL over SSR resale was so I could have some type of benefit from having a home resort at AUL to book standard view rooms and guarantee my room of choice during more coveted times during holidays in Hawai'i as opposed to WDW where I'll have 3 other home resorts at least. Aulani definitely has it's cons the biggest of which are being in Hawai'i it has different timeshare laws than Florida and it's dues being a beach resort are higher. I decided for me personally I'm okay with paying a little more in maintenance fees in the long run over SSR to have the home booking window be a little bit useful.

 

[Littlelulu01]

So I bought Aulani subsidized as SAP. The thing that ultimately swayed me toward AUL over SSR resale was so I could have some type of benefit from having a home resort at AUL to book standard view rooms and guarantee my room of choice during more coveted times in Hawai'i as opposed to WDW where I'll have 3 other home resorts at least. Aulani definitely has it's cons the biggest of which are being in Hawai'i it has different timeshare laws than Florida and it's dues being a beach resort are higher. I decided for me personally I'm okay with paying a little more in maintenance fees in the long run over SSR to have the home booking window be a little bit useful.

Your Aulani subsidized maintenance fees have far outperformed the subsidized dues at dvc Vero Beach and even SSR points.

Taking 2011 as comparison SSR has gone from $4.51 to $7.86. Vero Beach subsidized dues have gone from $5.31 to $10.13! Aulani subsidized dues have gone from $4.31 to $6.87 so a clear winner for your SAP’s.

Aulani subsidy has stayed a constant at 25% that DVD kicks in for your dues. Florida’ s Vero Beach subsidy appears to be shrinking as time passes.

The scary thing about buying Aulani resale today is they’re not good for Rivera, the Disneyland Hotel Villas or new properties down the road. 2042 isn’t too far away. I’d only be comfortable purchasing Aulani resale if I was ok with a potential to only use them for Aulani stays. Mine aren’t restricted - if they were I’d probably not have purchased them regardless of how good a deal but that’s just my comfort level.

 

[intamin]

The scary thing about buying Aulani resale today is they’re not good for Rivera, the Disneyland Hotel Villas or new properties down the road. 2042 isn’t too far away. I’d only be comfortable purchasing Aulani resale if I was ok with a potential to only use them for Aulani stays. Mine aren’t restricted - if they were I’d probably not have purchased them regardless of how good a deal but that’s just my comfort level.

Agreed regarding the soon to be reduced availability. However, the ones coming offline are BCV, BWV and BRV which are relatively low inventory so we'll see how much it actually affects booking but this was something I considered. The thing is though, with newer resorts being resale restricted, will the 7 month booking period in the future even be viable as there eventually are more and more resale owners at a resale restricted resort who can ONLY book their home resort?

I have family in CA and will likely be ultimately west coast based in the long run so I'm okay with my Aulani just being used at Aulani. My AKL is also resale and I don't mind incorporating a couple days for AKL and being stuck at Jambo house on a savanna (boohoo ). In the end I'll probably have around 800 points dedicated to Disney World alone. Also considering doing some SAP for cabin/bungalow time so if I opted for that the number would probably go to 1100.. I know I have a problem. But long story short I don't mind if I can't use my AUL at WDW, if anything it'll likely be a nice change of pace. I've bought where I want to stay

 

[Sandisw]

Agreed regarding the soon to be reduced availability. However, the ones coming offline are BCV, BWV and BRV which are relatively low inventory so we'll see how much it actually affects booking but this was something I considered. The thing is though, with newer resorts being resale restricted, will the 7 month booking period in the future even be viable as there eventually are more and more resale owners at a resale restricted resort who can ONLY book their home resort?

I have family in CA and will likely be ultimately west coast based in the long run so I'm okay with my Aulani just being used at Aulani. My AKL is also resale and I don't mind incorporating a couple days for AKL and being stuck at Jambo house on a savanna (boohoo ). In the end I'll probably have around 800 points dedicated to Disney World alone. Also considering doing some SAP for cabin/bungalow time so if I opted for that the number would probably go to 1100.. I know I have a problem. But long story short I don't mind if I can't use my AUL at WDW, if anything it'll likely be a nice change of pace. I've bought where I want to stay

The removal of the 2042 WDW resorts may not be huge...though I would say BWV is pretty big deal....it means that three near park resorts are no longer an option.

That puts all of those who own at places like SSR, OKW, and AKV, you may indeed trade out a lot, now competing for fewer near park resorts...that is going to put a strain on things since those that already own restricted BLT, CCV, VGF, and PVB...who no longer have an Epcot area resort to trade into, may choose to stay put...which means less options for those who want in.

While there will be restricted resale owners to home resorts, there will be a lot more direct owners who have trading rights everywhere which I think will mean trades at 7 months for those with unrestricted points will still remain pretty decent.

It takes a long time for a resort to increase its mix of direct vs. resale points so I don't see it playing a role for a long time to come. I wonder if what is more likely to happen is that the resale market becomes less and less of a thing as buyers decide it makes more sense to buy direct to have all the options, especially if DVD continues on the strategy of making it much more appealing, like it is right now!

 

[intamin]

While there will be restricted resale owners to home resorts, there will be a lot more direct owners who have trading rights everywhere which I think will mean trades at 7 months for those with unrestricted points will still remain pretty decent.

Agreed pretty much on all points the only other concern I have is with all these new direct owners coming in from VDH, CFW, these owners will be increasing competition for resale owners at the 7 month mark for the existing resorts without contributing anything to the resale pool of availability at 7 months. The tiny upside to the resale restrictions for resale owners who bought at the O14 is once those VDH, CFW, RIV contracts are resold, they don’t have to worry about them taking inventory from their pool of resorts anymore.

I am curious to see how their SSR sales in 2054 will go.. it being such a huge resort and then add in resale restrictions? They’re either going to have to sell the points dirt cheap or make an exception on the restrictions because I can’t imagine most buyers being okay with when resold only being able to use the points at SSR. It’ll be selling longer than Aulani has been.

Following up SSR 3 years later will be OKW.. the 2 largest resorts on sale at the same time.. DVC is going to have all the inventory in the world to sell off during that time.

 

[Sandisw]

Agreed pretty much on all points the only other concern I have is with all these new direct owners coming in from VDH, CFW, these owners will be increasing competition for resale owners at the 7 month mark for the existing resorts without contributing anything to the resale pool of availability at 7 months. The tiny upside to the resale restrictions for resale owners who bought at the O14 is once those VDH, CFW, RIV contracts are resold, they don’t have to worry about them taking inventory from their pool of resorts anymore.

I am curious to see how their SSR sales in 2054 will go.. it being such a huge resort and then add in resale restrictions? They’re either going to have to sell the points dirt cheap or make an exception on the restrictions because I can’t imagine most buyers being okay with when resold only being able to use the points at SSR. It’ll be selling longer than Aulani has been.

Following up SSR 3 years later will be OKW.. the 2 largest resorts on sale at the same time.. DVC is going to have all the inventory in the world to sell off during that time.

The thing you are thinking about is resale value though and DVD isn’t really concerned about whether or not a direct buyer can sell in the future for any set amount.

Yes, DVC has has a wonderful run in terms of it’s value on the resale market and as long as WDW exists, someone will be able to sell, but I think the days of seeing them go up in value are done.

Now, they will definitely have to have a plan for those two larger resorts if they want to keep them DVC, but maybe they won’t…or maybe they will make them different that adds to their appeal.

That is the whole point of restriction…to get people to spend more for direct points that give them the same DVC product that was in place before them…and to make the buying or resale points not worth it unless they are inexpensive.

It’s why I think it’s a mistake for anyone buying DVC to buy needing or wanting DVC to retain resale value because, as I have said, lots of variables in play that can tank that at any time.

 

[intamin]

The thing you are thinking about is resale value though and DVD isn’t really concerned about whether or not a direct buyer can sell in the future for any set amount.

Yes, DVC has has a wonderful run in terms of it’s value on the resale market and as long as WDW exists, someone will be able to sell, but I think the days of seeing them go up in value are done.

Now, they will definitely have to have a plan for those two larger resorts if they want to keep them DVC, but maybe they won’t…or maybe they will make them different that adds to their appeal.

That is the whole point of restriction…to get people to spend more for direct points that give them the same DVC product that was in place before them…and to make the buying or resale points not worth it unless they are inexpensive.

It’s why I think it’s a mistake for anyone buying DVC to buy needing or wanting DVC to retain resale value because, as I have said, lots of variables in play that can tank that at any time.

Yeah I'm aware they don't care about the resale value as that doesn't affect their bottom line at all. What I'm wondering is how much it will affect people buying direct non resort properties like SSR. How many people will pick that and forfeit the 11 month window at a resort property knowing when it's resold it can only be used at SSR? Personally if SSR came back online at 2054, I'd wait until 2060 for BLT or buy any of the other new resort properties that they're selling at that time. We're seeing right now how well resort properties like BCV and BWV are keeping their resale value and most people who are buying in there are using those points solely to stay at BCV/BWV so resale restrictions wouldn't even matter for them much like VGC. IMO SSR is going to need HEAVY incentives to sell out because I think a lot of educated buyers who do care about resale value will have second thoughts about buying at these non-resort properties. SSR is already known as the "resort of last resorts" although it really doesn't deserve that title because it's a great resort but resale restrictions is going to make it an even harder sell.

Fortunately like you I don't view DVC as a financial investment and it's more of just something I can use to guarantee deluxe Disney vacations for my family at a more affordable price although it's in reality costing me more just because I'm going so much more frequently. But it's just something to think about.

 

[Sandisw]

Yeah I'm aware they don't care about the resale value as that doesn't affect their bottom line at all. What I'm wondering is how much it will affect people buying direct non resort properties like SSR. How many people will pick that and forfeit the 11 month window at a resort property knowing when it's resold it can only be used at SSR? Personally if SSR came back online at 2054, I'd wait until 2060 for BLT or buy any of the other new resort properties that they're selling at that time. We're seeing right now how well resort properties like BCV and BWV are keeping their resale value and most people who are buying in there are using those points solely to stay at BCV/BWV so resale restrictions wouldn't even matter for them much like VGC. IMO SSR is going to need HEAVY incentives to sell out because I think a lot of educated buyers who do care about resale value will have second thoughts about buying at these non-resort properties. SSR is already known as the "resort of last resorts" although it really doesn't deserve that title because it's a great resort but resale restrictions is going to make it an even harder sell.

Fortunately like you I don't view DVC as a financial investment and it's more of just something I can use to guarantee deluxe Disney vacations for my family at a more affordable price although it's in reality costing me more just because I'm going so much more frequently. But it's just something to think about.

To be honest, I don't think the majority of new buyers go in worrying about what will happen when they sell. RIV has shown that people will buy it direct regardless of the resale restrictions.

My guess is that most direct buyers buy to use the product and if they are selling SSR, then people will buy it. SSR sold out once and it wasn't because resale buyers could use those points everywhere. It was because it was one of the resorts that was being sold at the time

I just don't see it being an issue or that they will need heavy discounts...for all we know, they may decide to do something so unique for whatever replaces it that it will be a popular destination alone that people will see its value.

And, once you have new resorts, assuming they put more DVC resorts in the Crescent Lake area in 2042, there will be plenty of buyers willing to buy direct, including at the SSR location, to have access to those at 7 months, which resale will not get you.

Of course, I don't think resale value should be considered as part of the buying decision and anyone who does is setting themselves up for potential disappointment down the line if or when prices in resale decline.

 

[intamin]

Of course, I don't think resale value should be considered as part of the buying decision and anyone who does is setting themselves up for potential disappointment down the line if or when prices in resale decline.

Yep I agree. If you consider the full cost of DVC as just paying for your vacations instead of expecting something back it'll make sense for you. But to the other stuff above, I hope I'm wrong about SSR. Resale restrictions weren't a thing when SSR went on sale but yet people still won't stop talking about them for Riviera and saying that's why they're picking VGF over Riviera. Of course, there are people like me and you who don't care about the restrictions for RIV because we love the resort/skyliner. By the time SSR goes on sale, resale restrictions will also be the norm so over the next 30 years less and less people will probably care about them I'd imagine so that'll probably help.

But do people have that same sentiment for SSR? I am yet to see SSR win any polls in terms of favorites or be in the top 5 of anything and I'm someone whose first foray into DVC was in a 1BR at SSR that we loved. I've stayed in Congress Park multiple times and love the resort but can't see myself owning there unless it's for SAP for a bungalow/cabin. Not saying that there aren't people who own there and use it primarily to stay there but general consensus seems to be buy SSR and then switch at 7 months. The 11 month booking window at SSR is probably the least useful of DVC resorts simply due to the sheer number of rooms and availability at the resort. Will it sell out eventually? Sure. Disney may very well be okay with those rooms just being paid for primarily through cash bookings until it finally does sell out but it may be awhile. But anyways, only time will tell.

 

[Sandisw]

Yep I agree. If you consider the full cost of DVC as just paying for your vacations instead of expecting something back it'll make sense for you. But to the other stuff above, I hope I'm wrong about SSR. Resale restrictions weren't a thing when SSR went on sale but yet people still won't stop talking about them for Riviera and saying that's why they're picking VGF over Riviera. Of course, there are people like me and you who don't care about the restrictions for RIV because we love the resort/skyliner. By the time SSR goes on sale, resale restrictions will also be the norm so over the next 30 years less and less people will probably care about them I'd imagine so that'll probably help.

But do people have that same sentiment for SSR? I am yet to see SSR win any polls in terms of favorites or be in the top 5 of anything and I'm someone whose first foray into DVC was in a 1BR at SSR that we loved. I've stayed in Congress Park multiple times and love the resort but can't see myself owning there unless it's for SAP for a bungalow/cabin. Not saying that there aren't people who own there and use it primarily to stay there but general consensus seems to be buy SSR and then switch at 7 months. The 11 month booking window at SSR is probably the least useful of DVC resorts simply due to the sheer number of rooms and availability at the resort. Will it sell out eventually? Sure. Disney may very well be okay with those rooms just being paid for primarily through cash bookings until it finally does sell out but it may be awhile. But anyways, only time will tell.

Try to remember that the people here on the DIs represent a fraction of the buyers out there

So, even though we hear if people who state they didn’t buy because of them, my guess is that it is a very small % of total new buyers.

I agree that SSR might not be that popular since it’s not a near park resort and I think plenty of buyers have used them as SAP.

But, so I think resale restrictions could potentially hurt resale value here a bit more than others but I don’t think it will necessarily stop people from buying direct points.

In 2054, what’s going to be left for buying at WDW in resale that isn’t restricted and how many years will it get people?

AKV and OKW will have 3 years left. BLT will have 6, VGF with 10 PVB with 12 CCV with 14.

At that point, resale will be pretty depreciated and new buyers won’t even give second thought to it by that point. So, if SSR is it then it will sell

Which is the entire purpose of this strategy. To make people buy direct because what you get on the resale market won’t give you much.

But that is so far away, they may have find better places to put DVC and that complex might be turned into something completely different!

 

[Paul Stupin]

Try to remember that the people here on the DIs represent a fraction of the buyers out there

So, even though we hear if people who state they didn’t buy because of them, my guess is that it is a very small % of total new buyers.

I agree that SSR might not be that popular since it’s not a near park resort and I think plenty of buyers have used them as SAP.

But, so I think resale restrictions could potentially hurt resale value here a bit more than others but I don’t think it will necessarily stop people from buying direct points.

In 2054, what’s going to be left for buying at WDW in resale that isn’t restricted and how many years will it get people?

AKV and OKW will have 3 years left. BLT will have 6, VGF with 10 PVB with 12 CCV with 14.

At that point, resale will be pretty depreciated and new buyers won’t even give second thought to it by that point. So, if SSR is it then it will sell

Which is the entire purpose of this strategy. To make people buy direct because what you get on the resale market won’t give you much.

But that is so far away, they may have find better places to put DVC and that complex might be turned into something completely different!

Well said. This is pretty much the reason why, as of now, I’ve switched to buying direct. No matter how good a deal some of these resale contracts seem to represent, Disney will continue to undermine their value, and that’s a process that could accelerate the faster DVC announces and initiates new projects.

 

[intamin]

Try to remember that the people here on the DIs represent a fraction of the buyers out there

So, even though we hear if people who state they didn’t buy because of them, my guess is that it is a very small % of total new buyers.

I agree that SSR might not be that popular since it’s not a near park resort and I think plenty of buyers have used them as SAP.

But, so I think resale restrictions could potentially hurt resale value here a bit more than others but I don’t think it will necessarily stop people from buying direct points.

In 2054, what’s going to be left for buying at WDW in resale that isn’t restricted and how many years will it get people?

AKV and OKW will have 3 years left. BLT will have 6, VGF with 10 PVB with 12 CCV with 14.

At that point, resale will be pretty depreciated and new buyers won’t even give second thought to it by that point. So, if SSR is it then it will sell

Which is the entire purpose of this strategy. To make people buy direct because what you get on the resale market won’t give you much.

But that is so far away, they may have find better places to put DVC and that complex might be turned into something completely different!

I think we’re pretty much agreeing on everything basically lol. You’re probably right that most new owners at that time won’t even realize DVC at one point didn’t have resale restrictions. I’m curious to know what else they can take away if anything. Pretty much the only thing that’s guaranteed with resale is being able to book your home resort at 11 months. Could you imagine if in future contracts they made it so when resold you can only book at 7 months at your home resort? That’d pretty much put the nail in the coffin. I’ll admit I still am tempted to obtain a combination of resale CCV, BLT and PVB instead of poly 2 to stay primarily at bungalows/cabins but also reserve the right to book whatever room category I want at 11 months at those resorts. I know I won’t be locked out of any future resorts because of my direct RIV points but it’s all fun to talk about.

 

[DanCali]

Try to remember that the people here on the DIs represent a fraction of the buyers out there

So, even though we hear if people who state they didn’t buy because of them, my guess is that it is a very small % of total new buyers.

I agree that SSR might not be that popular since it’s not a near park resort and I think plenty of buyers have used them as SAP.

But, so I think resale restrictions could potentially hurt resale value here a bit more than others but I don’t think it will necessarily stop people from buying direct points.

In 2054, what’s going to be left for buying at WDW in resale that isn’t restricted and how many years will it get people?

AKV and OKW will have 3 years left. BLT will have 6, VGF with 10 PVB with 12 CCV with 14.

At that point, resale will be pretty depreciated and new buyers won’t even give second thought to it by that point. So, if SSR is it then it will sell

Which is the entire purpose of this strategy. To make people buy direct because what you get on the resale market won’t give you much.

But that is so far away, they may have find better places to put DVC and that complex might be turned into something completely different!

The way I see it, an informed buyer will almost never buy direct down the line, but DVC will likely always have uninformed buyers to sell to, just like other timeshare companies.

We also own a few Westin timeshares (now Marriott Vacation Club, formerly Vistana, formerly Starwood Vacation Ownership). That world is somewhat analogous in the sense that a few early resorts can trade internally with points even if bought resale (aka "mandatory" resorts), while later resorts cannot trade internally when bought resale and can only be traded via Interval (aka "voluntary" resorts). The primary differences vis-a-vis DVC are that "mandatory" can trade internally at all resorts (similar to a hypothetical DVC world where resale VGF is able to also trade into RIV and VDH), and the deeds are perpetual and don't expire. Under this scenario, the mandatory resorts retained their resale values much better than the voluntary resorts, albeit some of those mandatory resort resale values have also tanked over time due to extremely high dues.

It's interesting to read how you view the world in 2054 due to the expiring deeds, and I think that's accurate. However, by that point I foresee that all restricted resales will be worth only a small fraction of retail sales prices. I cannot envision a resale buyer (who is informed by definition) will pay 50%+ of retail price for a resort that cannot trade internally at all when retail purchases will be able to trade into 15-20 resorts. For that reason I also suspect resale prices at RIV may go down at a faster pace than at the 14 unrestricted resorts, but it may take some time since people are still excited about it. By 2054 it's much more likely that all resale values at all resorts will be 20%-30% of retail prices and informed resale buyers will just pick up points at a few resorts of interest to use there, rather than pay full freight for a fraction of the points even if those are unrestricted.

It's also possible that DVC will start an "amnesty" program like Marriott and Starwood/Vistana did - i.e., if you own resale and are willing to buy XXX points retail, they will make those resale contracts as if they were bought direct. It's the best and most proven way to get an informed buyer to pay 5x of resale prices.

Certainly dealing with DVC has been different for us than dealingw with other vacation ownership companies. Much less pressure and much more candor when dealing with the "guides" (I still tend to call them "salespeople"). But if they start to devalue resales like other companies did, they will need to come up with schemes to attract a large portion of potential buyers that won't be able to justify the inevitable resulting retail/resale price disparities.

 

[Littlelulu01]

One of the more interesting aspects of resale restrictions should play out with Aulani and the Disneyland Hotel Villas. Will take a few years but eventually they’ll be quite a few resale points circulating that are pretty restrictive for both these resorts. I could be wrong but i guess Aulani and Disneyland hotel villa owners skew west coast residents. Purchase of either one resale and you’ll not be able to book the other. Grand Californian is so difficult to book that it’s not a viable alternative for Aulani owners. studios at Disneyland hotel villas will likely have a fair shot at availability in 7 month window- points used will just have to be direct or grandfathered.

 

[intamin]

One of the more interesting aspects of resale restrictions should play out with Aulani and the Disneyland Hotel Villas. Will take a few years but eventually they’ll be quite a few resale points circulating that are pretty restrictive for both these resorts. I could be wrong but i guess Aulani and Disneyland hotel villa owners skew west coast residents. Purchase of either one resale and you’ll not be able to book the other. Grand Californian is so difficult to book that it’s not a viable alternative for Aulani owners. studios at Disneyland hotel villas will likely have a fair shot at availability in 7 month window- points used will just have to be direct or grandfathered.

Anybody who bought AUL resale knew they weren’t going to be able to use those points pretty much to stay at DL so I’m not sure if it really ever mattered? Anybody who did their homework hoping to stay at VGC consistently and essentially DL pretty much knew the only way to do that was to buy VGC.

 

[Paul Stupin]

The way I see it, an informed buyer will almost never buy direct down the line, but DVC will likely always have uninformed buyers to sell to, just like other timeshare companies.

We also own a few Westin timeshares (now Marriott Vacation Club, formerly Vistana, formerly Starwood Vacation Ownership). That world is somewhat analogous in the sense that a few early resorts can trade internally with points even if bought resale (aka "mandatory" resorts), while later resorts cannot trade internally when bought resale and can only be traded via Interval (aka "voluntary" resorts). The primary differences vis-a-vis DVC are that "mandatory" can trade internally at all resorts (similar to a hypothetical DVC world where resale VGF is able to also trade into RIV and VDH), and the deeds are perpetual and don't expire. Under this scenario, the mandatory resorts retained their resale values much better than the voluntary resorts, albeit some of those mandatory resort resale values have also tanked over time due to extremely high dues.

It's interesting to read how you view the world in 2054 due to the expiring deeds, and I think that's accurate. However, by that point I foresee that all restricted resales will be worth only a small fraction of retail sales prices. I cannot envision a resale buyer (who is informed by definition) will pay 50%+ of retail price for a resort that cannot trade internally at all when retail purchases will be able to trade into 15-20 resorts. For that reason I also suspect resale prices at RIV may go down at a faster pace than at the 14 unrestricted resorts, but it may take some time since people are still excited about it. By 2054 it's much more likely that all resale values at all resorts will be 20%-30% of retail prices and informed resale buyers will just pick up points at a few resorts of interest to use there, rather than pay full freight for a fraction of the points even if those are unrestricted.

It's also possible that DVC will start an "amnesty" program like Marriott and Starwood/Vistana did - i.e., if you own resale and are willing to buy XXX points retail, they will make those resale contracts as if they were bought direct. It's the best and most proven way to get an informed buyer to pay 5x of resale prices.

Certainly dealing with DVC has been different for us than dealingw with other vacation ownership companies. Much less pressure and much more candor when dealing with the "guides" (I still tend to call them "salespeople"). But if they start to devalue resales like other companies did, they will need to come up with schemes to attract a large portion of potential buyers that won't be able to justify the inevitable resulting retail/resale price disparities.

Why would an informed buyer not buy direct? With fewer and fewer older resorts being the sole option for booking with resale, the opportunity to use one’s direct points at newly constructed properties seems a lot more attractive. Certainly more attractive than being locked into one property for all eternity with a restricted resale contract, no matter the price. The last few years have seen an escalation in several new DVC properties both announced and opened…and this is just the beginning.

I think you’re right that resale prices will probably plummet. But that’s due to them not being, potentially, as attractive or popular as direct. Disney is playing the long game, and it could very well be an effective strategy.

 

[Paul Stupin]

One of the more interesting aspects of resale restrictions should play out with Aulani and the Disneyland Hotel Villas. Will take a few years but eventually they’ll be quite a few resale points circulating that are pretty restrictive for both these resorts. I could be wrong but i guess Aulani and Disneyland hotel villa owners skew west coast residents. Purchase of either one resale and you’ll not be able to book the other. Grand Californian is so difficult to book that it’s not a viable alternative for Aulani owners. studios at Disneyland hotel villas will likely have a fair shot at availability in 7 month window- points used will just have to be direct or grandfathered.

Aulani‘s points aren’t restricted, and resale contracts can be used to book at a number of resorts. You could theoretically use them to book VGC at seven months. No easy task, of course, but possible, plus all the non restricted properties at WDW.

 

[DanCali]

Why would an informed buyer not buy direct?

I think you’re right that resale prices will probably plummet. But that’s due to them not being, potentially, as attractive or popular as direct. Disney is playing the long game, and it could very well be an effective strategy.

I think that answers your own question. The cheaper something is on the resale market, the more attractive it becomes vs direct. Right now we all agree VGF direct is a no brainer vs VGF resale and there's even a thread on that. That wouldn't necessarily be the case if VGF resale was selling at $120/point. There's not much reason to buy Aulani direct (even with promos) when you can buy resale for ~$100/point.

Suppose that down the road most resales are very restricted and can only be used at a single resort (which is where seemingly DVC wants to go with restrictions). Let's say by then direct prices are $250/point and resale prices (at all resorts, for illustrative purposes) are around $50/point.

If I was an informed buyer, I would rather by 3 contracts of 200 points at 3 different resorts than 200 points direct. The upfront cost would be $30K instead of $50K, and I have 600 points total instead of just 200. The fact that I can't trade internally with the resale contracts would be more than compensated by having handpicked 3 favorite resorts and having 3x vacation time to play with (maybe I rent out 200 points/year to cover dues for 400+ points). Moreover, I can sell my 600 points a few years later for around the same price I bought them as opposed to taking a large loss on the direct purchase.

In such a case DVC could entice me to buy direct perhaps if they grandfathered me into the system with my resale contracts. Otherwise, it'd be very hard to convince me to buy direct and agree to 80% capital loss 7-10 years down the road if I were to sell out. Many people go in thinking they will hold on to these contracts for decades, but that's not the typical case.

 

[Paul Stupin]

I think that answers your own question. The cheaper something is on the resale market, the more attractive it becomes vs direct. Right now we all agree VGF direct is a no brainer vs VGF resale and there's even a thread on that. That wouldn't necessarily be the case if VGF resale was selling at $120/point. There's not much reason to buy Aulani direct (even with promos) when you can buy resale for ~$100/point.

Suppose that down the road most resales are very restricted and can only be used at a single resort (which is where seemingly DVC wants to go with restrictions). Let's say by then direct prices are $250/point and resale prices (at all resorts, for illustrative purposes) are around $50/point.

If I was an informed buyer, I would rather by 3 contracts of 200 points at 3 different resorts than 200 points direct. The upfront cost would be $30K instead of $50K, and I have 600 points total instead of just 200. The fact that I can't trade internally with the resale contracts would be more than compensated by having handpicked 3 favorite resorts and having 3x vacation time to play with (maybe I rent out 200 points/year to cover dues for 400+ points). Moreover, I can sell my 600 points a few years later for around the same price I bought them as opposed to taking a large loss on the direct purchase.

In such a case DVC could entice me to buy direct perhaps if they grandfathered me into the system with my resale contracts. Otherwise, it'd be very hard to convince me to buy direct and agree to 80% capital loss 7-10 years down the road if I were to sell out. Many people go in thinking they will hold on to these contracts for decades, but that's not the typical case.

I think it’s super interesting to play around with these somewhat wild scenarios! The thing is, I’m not sure resale prices, though headed lower, will ever shrink to a level which actually justifies your logic. Having to buy more points than you need, for more stays than you want, just to stay at resorts of one’s choice may not be the best option for most people. First, resale owners would still be shut out of resorts where they might want to stay, and they would also be forced to consistently rent points out to pay for much higher annual dues.