With the move to the 75 point minimum to get direct benefits, there seems to be a lot of talk about Disney trying to cut down on resale contracts. I can see some logic to them trying to do this, but actually think that they want to keep the resale market strong, as it benefits them to have strong resale value more than to get a few extra bucks here and there via a direct sales contract.
Why they would want to keep it strong:
1. When people buy in, they for the most part know that they can sell their contracts for most of their value back, if not a profit. A strong resale market ensures this. If the resale market were to dip significantly, it would give more people pause about buying in. I know that the strong resale market acted as a bit of a safety net when I bought my points. I never plan to sell them, but it is comforting to know that I will be able to if the need ever comes up. This is not the case with many other timeshares.
2. Allowing people to easily sell their contracts if they are priced right on the resale market cuts back on foreclosure costs. It also ensures that MFs are nearly 100% covered, meaning that they can keep their dues as low as possible, and make this a stronger selling point for those looking to buy in for the first time.
3. ROFR still allows them to flip a contract whenever they want. By having people sell their points when they are done with them, Disney ensures themselves a limitless supply of points at any resort that they want to sell.
4. A strong resale market justifies an increase in direct sales prices, which ultimately benefits Disney. They just raised their prices on all of their resorts except for Vero, which happens to be the cheapest priced resale contract right now. While these high prices may push a few more people to consider resale for now, they will have no choice but to buy new if they want to get into Riviera. Disney makes the most money off of new property sales, not flipping ROFR'd contracts for new ones. If BCV resales are going for $195/pt, then Disney will have no problem moving Riviera points for $225 or more each. If, on the other hand, BCV were selling for $100 on the resale market, it would drive many more people to look there than to even consider spending $180 per point at Riviera.
There are also reasons why Disney would want to undercut the resale market, but I find those to be a lot less convincing. I think this move to 75 points is just their way of making sure that they get their piece of the pie, but also allowing others to get theirs in order to benefit everyone. I may be reading this wrong, but that's how I see this all working out.
Why they would want to keep it strong:
1. When people buy in, they for the most part know that they can sell their contracts for most of their value back, if not a profit. A strong resale market ensures this. If the resale market were to dip significantly, it would give more people pause about buying in. I know that the strong resale market acted as a bit of a safety net when I bought my points. I never plan to sell them, but it is comforting to know that I will be able to if the need ever comes up. This is not the case with many other timeshares.
2. Allowing people to easily sell their contracts if they are priced right on the resale market cuts back on foreclosure costs. It also ensures that MFs are nearly 100% covered, meaning that they can keep their dues as low as possible, and make this a stronger selling point for those looking to buy in for the first time.
3. ROFR still allows them to flip a contract whenever they want. By having people sell their points when they are done with them, Disney ensures themselves a limitless supply of points at any resort that they want to sell.
4. A strong resale market justifies an increase in direct sales prices, which ultimately benefits Disney. They just raised their prices on all of their resorts except for Vero, which happens to be the cheapest priced resale contract right now. While these high prices may push a few more people to consider resale for now, they will have no choice but to buy new if they want to get into Riviera. Disney makes the most money off of new property sales, not flipping ROFR'd contracts for new ones. If BCV resales are going for $195/pt, then Disney will have no problem moving Riviera points for $225 or more each. If, on the other hand, BCV were selling for $100 on the resale market, it would drive many more people to look there than to even consider spending $180 per point at Riviera.
There are also reasons why Disney would want to undercut the resale market, but I find those to be a lot less convincing. I think this move to 75 points is just their way of making sure that they get their piece of the pie, but also allowing others to get theirs in order to benefit everyone. I may be reading this wrong, but that's how I see this all working out.