Will a Rental Crackdown Reset DVC Resale Prices?

[mort1331]

If there is a drop in resale value, I believe it will be short lived. Once those who are dumping contracts are done, then regular resales will be back. Not worried.

 

[Genie+]

Interesting, so you always thought there would be stricter rental enforcement?

It was only a guess but yes I did plan on that because it is not sustainable to the system. The more and more that booking motivations are driven by profit, the less functionality remains for personal use owners. This has been highly debated in the past but I could not dismiss all the ways a business endeavor would gain advantage over ‘natural’ users.

 

[MerlinandtheMouse]

Guys, remember way back when, in simpler times when all we had were 15 threads about the Poly Tower association and all other roads (DVC threads) led back to the tower? Look at CFW causing such a stir. And here I thought the cabins were going to be the easiest and least exciting part of DVC in 2024

 

[eandt]

This would be problematic I think for the majority of owners - not every modification is due to walking. We might book 8 nights at month 11 and decide at month 10 to add a night. Someone else might have a flight or work schedule change necessitating a few days shift. I think everyone needs to be careful what they wish for - would disallowing any modifications fix walking? Yup. Would disallowing any modifications significantly alter flexibility for members? Yup.

Who says Disney wants to ‘fix walking’? I don’t believe they mind it at all in fact the process was explained to us during our onboarding call with member services when we bought our initial contract.

 

[MerlinandtheMouse]

If there is a drop in resale value, I believe it will be short lived. Once those who are dumping contracts are done, then regular resales will be back. Not worried.

But back to the subject, I think I agree with @mort1331 here. I think there’s going to be a short period where things go a little wonky, maybe drop for a bit (hopefully we get some great contracts pop up!) but it should stabilize after a while.

I also think that because the rental market did a great job in bringing a ton of awareness to DVC, showed non-members who might not have ever considered DVC the tangible savings that comes from it (seeing the numbers and data is one thing, experiencing it is another), that if the rental option is no longer readily available, many families might strongly consider buying DVC when they might not have ever before. And I assume those people will want the best savings so they’ll go to resale, and so more buyers, more likely the prices go back to normal. At least until there’s more restricted options on the market then not, but that’s a whole different conversation.

 

[DVChris]

The “Instant Sale” option may soon disappear from broker sites with this new language.

 

[HyperspaceMountainPilot]

Can't make THEM sell, but could start canceling reservations, and then they would be paying dues and not having any income coming in on these points causing loses for the company.

This is the theory— there are thousands (maybe over a hundred thousand?) points being used for commercial rentals, and if they can no longer rent for profit, the only option is to sell them (causing a big spike in supply and a decrease in demand)— unless Disney offers/agrees to buy the points directly at some negotiated price.

 

[HyperspaceMountainPilot]

There are many times I got an offer on a contract rejected because “the seller states they are perfectly fine to continue renting the points every year and won’t sell below x price”. Those sellers would be forced to accept a lower price….. I’m looking at you Subsidized Aulani sellers….

Great point.

 

[ShaneDJ]

The “Instant Sale” option may soon disappear from broker sites with this new language.

Why? What about “Instant Sale” is restricted in the new CFW terms?

 

[HyperspaceMountainPilot]

Sorry for posting 3x in a row but I’m catching up on everything that happened while I was asleep.

I think that ending commercial renting at a large scale would be great for owners/users but not great for sellers for at least a couple years. In general macroeconomic theory would suggest that eliminating a lot of demand (commercial ownership) and also increasing supply should impact pricing, but I don’t think it will be more than 10-20% in the long run. If Disney doesn’t privately purchase most of the DVC rental store points, I think you could temporarily see prices go down by 25-50%.

 

[UrsulaWantsYourSoul]

The "Theory" is that there are some big companies out there that own a lot of DVC points and rent them out, thus if they get shut down they will have to sell those points on the resale market causing a flood of new resale contract on the market driving prices down. Many of the same companies also are brokers for resale contracts.

Wait. Supply and Demand? Crazy talk

 

[AstroBlasters]

Why? What about “Instant Sale” is restricted in the new CFW terms?

If commercial brokers can’t buy/strip/flip or rent out the points through an LLC then they most likely wouldn’t have an Instant Sale feature.

 

[ShaneDJ]

If commercial brokers can’t buy/strip/flip or rent out the points through an LLC then they most likely wouldn’t have an Instant Sale feature.

Thanks for the explanation.

 

[sndral]

Why? What about “Instant Sale” is restricted in the new CFW terms?

“Repeated or frequent purchase and resale in the Vacation Ownership Property or Vacation Ownership Plan whether in the name of an owner or those related to such owner…” seems to be the new CFW language that targets the practice of brokers buying contracts at reduced ‘instant’ prices & then reselling them at higher prices.

 

[New Mouse]

Sorry for posting 3x in a row but I’m catching up on everything that happened while I was asleep.

I think that ending commercial renting at a large scale would be great for owners/users but not great for sellers for at least a couple years. In general macroeconomic theory would suggest that eliminating a lot of demand (commercial ownership) and also increasing supply should impact pricing, but I don’t think it will be more than 10-20% in the long run. If Disney doesn’t privately purchase most of the DVC rental store points, I think you could temporarily see prices go down by 25-50%.

If prices went down by 25 to 50 percent disney would have a near impossible time selling direct. What the executives fail to understand is that a healthy resale price is a good part of what made direct successful compared to any other timeshare.

 

[Matty B13]

This would be problematic I think for the majority of owners - not every modification is due to walking. We might book 8 nights at month 11 and decide at month 10 to add a night. Someone else might have a flight or work schedule change necessitating a few days shift. I think everyone needs to be careful what they wish for - would disallowing any modifications fix walking? Yup. Would disallowing any modifications significantly alter flexibility for members? Yup.

Yes this would be problematic but would fix the walking issue. Maybe all modifications would have to be made by a phone call to a DVC, which would make sure that all the members on the party haven't changed and would allow for the modification.

 

[CWTC]

Maybe all modifications would have to be made by a phone call to a DVC, which would make sure that all the members on the party haven't changed and would allow for the modification.

That still takes away flexibility and adds an extra time premium for members. Member services opens an hour after online reservations do so I I have 7 days booked and want to add an 8th I have to wait an hour. Additionally I have to take time out of my work day to call, be placed on hold for an indefinite amount of time, and member services has to pay a cast member to help me do something that I could have done online by myself.

It seems in all the recent threads complaining about walking and 11 month availability, someone suggests limiting or disallowing any modifications to reservations which significantly limits the flexibility for members and which potentially increases the time/hassle for member services to help those members on the phone.

I suspect the fix for walking would be a lot more problematic and limiting for members. All I’m saying is we need to be careful what we wish for.

As a side note, we have never rented our points and don’t intend to. I have also walked exactly 1 reservation in our 15 years of ownership. We though routinely tweak a reservation to add a day here or there.

 

[Matty B13]

That still takes away flexibility and adds an extra time premium for members. Member services opens an hour after online reservations do so I I have 7 days booked and want to add an 8th I have to wait an hour. Additionally I have to take time out of my work day to call, be placed on hold for an indefinite amount of time, and member services has to pay a cast member to help me do something that I could have done online by myself.

It seems in all the recent threads complaining about walking and 11 month availability, someone suggests limiting or disallowing any modifications to reservations which significantly limits the flexibility for members and which potentially increases the time/hassle for member services to help those members on the phone.

I suspect the fix for walking would be a lot more problematic and limiting for members. All I’m saying is we need to be careful what we wish for.

As a side note, we have never rented our points and don’t intend to. I have also walked exactly 1 reservation in our 15 years of ownership. We though routinely tweak a reservation to add a day here or there.

I feel bad for the people this affects, but I don't think it is a great number of people. I however think that the spec reservation problem has become an issue that needs to be addressed, it is on almost every facebook page now, and the rental companies are openly breaking the "no commercial use" part of the contract.

 

[HyperspaceMountainPilot]

I feel bad for the people this affects, but I don't think it is a great number of people. I however think that the spec reservation problem has become an issue that needs to be addressed, it is on almost every facebook page now, and the rental companies are openly breaking the "no commercial use" part of the contract.

There are a huge percentage of people who want to add or subtract a grandparent or adult child who got the time off work, or add an extra day when Disney announces a special event, etc. It’s the downside of forcing owners to book 8-11 months in advance…lots can change closer to the date.

This is why Disney shouldn’t fix the rental problem by eliminating walking, but by cracking down on the commercial rental business—which is what it appears they are going to do.

 

[Tatebeck]

I would be okay with something along the lines of a maximum amount of modifications before locking the reservation from completely changing the guest list to wholly different party. That would stop big players from walking reservations into popular times, then turning around and continuously renting the reservations out instead of using them.

Example: You modify a reservation a few times to the maximum allowed. Let's say they make the maximum 3 times. Maybe adding a day early on, moving the trip a few days later with a small walk, and then dropping a couple of the earlier days due to family schedule. Each time it could warn you that you have x modifications left before a required party member be set. After the third modification, if you try to modify it again, it will ask for a required party member confirmation. You will have to set at least 1 party member who cannot be removed or changed from that point on, and one of those required party member(s) will HAVE to be there at check in.

No renting out a walked reservation to strangers on the internet, yet no hurt for people modifying for their family stay as long as they know 1 person that will for sure be going, even if they need to walk their dates. If your entire party is unable to go, then you would obviously cancel the trip and get your points back.