Riviera resale restrictions lifting: possible

[kboo]

They're not trying to kill resale value. They're trying to sell direct. They just don't care if resale goes down the toilet in the process. There is a difference.

It would actually be great for Disney if Riviera resale prices were $180/point. If resale was a materially inferior product (as it is with the resale restriction on new resorts), but cost was close to direct, Disney would be ecstatic. They will win over a buyer every time and more likely than not, that new owner will finance.

Totally agree! Everyone seems to forget that financing to new owners is also a significant - possibly more significant- source of income than the cost of the points themselves.

If Disney sold out Riviera by January 2020, it would matter most because it would mean 99% of Riviera owners bought through Disney. It also means odds are better than not that they financed through Disney. And if they default (which a lot of owners do when making a major purchase on a whim while on vacation), Disney just repackages and sells them new again. The longer it takes a resort to sell out, the more resale product lands on the market and the more market share Disney potentially loses. Look at Aulani.

Foreclose/ROFR, sell w financing, rinse, repeat. I mean, in that instance you’re literally selling the same points twice at the direct price and it’s not costing a whole lot to get your supply.

And Disney has another data point that the restrictions are absolutely the right move for the shareholders.

Good thing I’m diversified: I own DVC *and* DIS

 

[Sandisw]

I just got my Rivera documents and not only is there language in there about the restrictions, they have in big bold letters a few paragraphs that specifically discuss the resale value and and rental income.

I don’t remember it being so strong, including discussing that one should not buy with any expectation of a resale value and the ability to rent as they would have a lot of completion with Disney..paraphrased..but you get the point,

From the way that I read it, while resale restrictions can be reversed, they can also be put back in at Disneys discretion. There are also amendments to the multi-site POS about creating restrictions that apply to some members and not others.

I think they have taken steps to ensure that anyone buying has a clear understanding but also that they are committed to this business model in treating owners of resale contracts differently.

 

[Bing Showei]

I don’t remember it being so strong, including discussing that one should not buy with any expectation of a resale value and the ability to rent as they would have a lot of completion with Disney..paraphrased..but you get the point,

The VGF POS had similar language and that language has been required disclosure for resale purchases as well, I believe (not unlike the Blue-card benefits disclosure).

For giggles, can you take a look at Mumof4mice's thread below and see if your POS is the same MS POS that she posted?

https://www.disboards.com/threads/multi-site-pos-revision-dated-01-19-19.3734585/
If not, would you mind scanning and posting it?

I think they have taken steps to ensure that anyone buying has a clear understanding but also that they are committed to this business model in treating owners of resale contracts differently.

You're being very generous.

Disney created a product understanding checklist that stated explicitly:

If vacation points for one specific night increases, it will be offset by a decrease on another night or nights, except for normal variations which occur in the calendar from year to year.

This is a document that we are asked to sign, and that according to Florida State Laws that govern timeshares, should function as a bullet point summary of the terms owners are buying into. Yet when these terms were brought up as a conflict with the retracted 2020 reallocation, Disney's position was that the checklist, like marketing material, and guide verbal promises/suggestions/insinuations, are not legally binding.

Yeah, so basically the one thing you actually ask us to sign and send back when we buy in means absolutely nothing. Magical.

 

[Sandisw]

The VGF POS had similar language and that language has been required disclosure for resale purchases as well, I believe (not unlike the Blue-card benefits disclosure).

For giggles, can you take a look at Mumof4mice's thread below and see if your POS is the same MS POS that she posted?

https://www.disboards.com/threads/multi-site-pos-revision-dated-01-19-19.3734585/
If not, would you mind scanning and posting it?

You're being very generous.

Disney created a product understanding checklist that stated explicitly:

If vacation points for one specific night increases, it will be offset by a decrease on another night or nights, except for normal variations which occur in the calendar from year to year.

This is a document that we are asked to sign, and that according to Florida State Laws that govern timeshares, should function as a bullet point summary of the terms owners are buying into. Yet when these terms were brought up as a conflict with the retracted 2020 reallocation, Disney's position was that the checklist, like marketing material, and guide verbal promises/suggestions/insinuations, are not legally binding.

Yeah, so basically the one thing you actually ask us to sign and send back when we buy in means absolutely nothing. Magical.

I can tell you that the product understanding checklist,which says It was revised Jan, 2019, no longer says what you posted.

It says, “From time to time, the number of Vacation Points required to reserve a specific night, in a particular Vacation home May change, This “reallocation” occurs for various reasons, such as a change in the pattern of Member Usage.

So, it’s been changed, I will try to scan that tomorrow. I am going to try to compare to the link you posted! And will scan differences If they exist

 

[zavandor]

I can tell you that the product understanding checklist,which says It was revised Jan, 2019, no longer says what you posted.

It says, “From time to time, the number of Vacation Points required to reserve a specific night, in a particular Vacation home May change, This “reallocation” occurs for various reasons, such as a change in the pattern of Member Usage.

So, it’s been changed, I will try to scan that tomorrow. I am going to try to compare to the link you posted! And will scan differences If they exist

It would be interesting to ask Disney which other reasons there might be. Until now, a change in usage patterns was the only reason.
Is "increasing the lockoff premium to give Disney more breakage profit" a possible reason?

 

[Wakey]

It would be interesting to ask Disney which other reasons there might be. Until now, a change in usage patterns was the only reason.
Is "increasing the lockoff premium to give Disney more breakage profit" a possible reason?

It’s hard to imagine what other reasons there could be. The duty is to balance demand, so changes in usage are the only reason demand would change.

 

[Wakey]

I just got my Rivera documents and not only is there language in there about the restrictions, they have in big bold letters a few paragraphs that specifically discuss the resale value and and rental income.

I don’t remember it being so strong, including discussing that one should not buy with any expectation of a resale value and the ability to rent as they would have a lot of completion with Disney..paraphrased..but you get the point,

From the way that I read it, while resale restrictions can be reversed, they can also be put back in at Disneys discretion. There are also amendments to the multi-site POS about creating restrictions that apply to some members and not others.

I think they have taken steps to ensure that anyone buying has a clear understanding but also that they are committed to this business model in treating owners of resale contracts differently.

This is interesting, sounds like they are trying to what we in England call ‘red hand’ the warnings to limit liability. Can you copy and paste exactly what is now said.

 

[zavandor]

It’s hard to imagine what other reasons there could be. The duty is to balance demand, so changes in usage are the only reason demand would change.

Maybe they've read my posts about the destructive damage paragraph, not allowing a reallocation after a Unit is removed.
But probably they just want the power to do whatever they want, removing any guarantee the owners have.

 

[we"reofftoneverland]

This is not unique to Riviera, but rather a function of buying any Disney timeshare resort direct.

If you buy ANY Disney timeshare direct and had to sell shortly thereafter, you would experience a serious loss.

If you‘re talking about buying resale, Riviera’s resale should shake out to price out just as any other resale product would. Its delta with its direct counterpart may be greater, but as a product, the restrictions will be baked into the value, and over time I imagine the value should move similar to how other resale products move. Anyone buying a Riviera resale product will know exactly what they are getting.

On these boards, there is a divide on the restrictions. Some hate them and won’t ever buy. Some don’t like them but will buy anyway. Most don’t really care too much either way and judge the resort more on location, amenities, etc., but just don’t have enough data to make a decision yet. Once Riviera opens, things will only tip in Disney’s favor. And the scale will move towards Riviera being a continued Disney timeshare success story.

That divide is just on these boards. We are a microcosm of a much bigger ownership that didn’t buy an “asset” that retains value, they bought a commitment to a utility that entails monthly payments not unlike their electric bill. They don’t break down cost/point/stay, they look to the monthly cost of their Dinsney timeshare bill to determine what their vacations cost.

The only people who care about any of this are a small group of people hanging out in places like this. And of those people, an even smaller smaller percentage of people like me will waste time calling, emailing, hand wringing, and posting about things that we see as a detriment to the product.

Resale prices don’t prop up anything. Disney could cripple the resale product, grandfather everyone in today, and it would take years, if ever, for the change to financially impact the product enough to warrant policy change. And by then the executives who made the decision that set it all in motion will have moved on.

Grandfathering owners into restrictions isn’t done as a goodwill gesture to owners, it’s an act of self preservation designed to prevent insurgency.

Riviera will sell just fine. Restrictions will not be reversed. Prices will continue to rise. And the ownership will adjust.

The only people hurting will be those who can’t let go of the days when there existed a better product. Everyone else will he gleefully pointing out the purple tapstiles as they’re welcomed home.

If resale was worth 0, would new direct contracts sell for as much as they do? I agree that a portion of new buyers do not worry or even know about resale. But I suspect all add on customers are aware of the resale value of contracts. This factors into their decision to add on. If resale plummets, especially for specific contracts, I do think direct purchases for those contracts will suffer.

 

[Sandisw]

This is interesting, sounds like they are trying to what we in England call ‘red hand’ the warnings to limit liability. Can you copy and paste exactly what is now said.

Yes, I will try to get it scanned in and posted today! I definitely think they are making it more evident not to assume anything, other than enjoyment,

 

[SPLzero]

If resale was worth 0, would new direct contracts sell for as much as they do? I agree that a portion of new buyers do not worry or even know about resale. But I suspect all add on customers are aware of the resale value of contracts. This factors into their decision to add on. If resale plummets, especially for specific contracts, I do think direct purchases for those contracts will suffer.

I would say most add on customers on the disboards are aware of resale value. I know the few Direct buyers I know personally have no idea about resale and just believe what their guide tells them.

I don't get your argument. If other timeshare brands can sell at a highprice with resale prices in the gutter why wouldn't disney be able to?

 

[Sandisw]

If resale was worth 0, would new direct contracts sell for as much as they do? I agree that a portion of new buyers do not worry or even know about resale. But I suspect all add on customers are aware of the resale value of contracts. This factors into their decision to add on. If resale plummets, especially for specific contracts, I do think direct purchases for those contracts will suffer.

I think owning a timeshare at Disney is unique enough that it will continue to sell, despite what happens to resale. Could it affect sales? Sure, but I doubt to the extent that it will make a huge dent in profits for Disney.

Long term, I think Disneys plan is to convert all resort resales to restrictions of booking only at home resort, unless one buys direct points and pays extra to convert resale points. There is language to this effect in my new documents that seems to indicate they could do this.

Owners who bought years ago, at a good price, if resale values tank, due to restrictions, will have gotten more than their money’s worth.

Of course, in reality, it will be at least 10 to 15 years, before we see any contracts go that low, so I’m betting that Disney has a plan how to successfully deal with it.

 

[DougEMG]

In the latest Disboard pod cast on the new Disneyland DVC resort, they briefly mentioned they heard that there was talked at Disney about the resale restrictions and potentially removing them. Seems to be some concern over how fast RIV was selling.

Have to say I am surprised and thought Disney would tough it out and keep the restrictions in place no matter what.

 

[Sandisw]

In the latest Disboard pod cast on the new Disneyland DVC resort, they briefly mentioned they heard that there was talked at Disney about the resale restrictions and potentially removing them. Seems to be some concern over how fast RIV was selling.

Have to say I am surprised and thought Disney would tough it out and keep the restrictions in place no matter what.

Interesting, I remain skeptical and think it’s still just a rumor. I would be surprised if it happened any time soon.

 

[sethschroeder]

Interesting, I remain skeptical and think it’s still just a rumor. I would be surprised if it happened any time soon.

For Pete to actually state it on the show though? I feel as if that is past just "rumor" phase and in the phase of them actively discussing at least. The way he said it made it seem like its not happening tomorrow though but is on the table for down the road further.

I do think Disney wants to get through the first couple months of having RIV open to see what uptake is likely. Weird things can happen though when the person in charge is not going to hit their bonus.

 

[Sandisw]

For Pete to actually state it on the show though? I feel as if that is past just "rumor" phase and in the phase of them actively discussing at least. The way he said it made it seem like its not happening tomorrow though but is on the table for down the road further.

I do think Disney wants to get through the first couple months of having RIV open to see what uptake is likely. Weird things can happen though when the person in charge is not going to hit their bonus.

Maybe and it’s true he may have sources beyond those that the rest of us have. But, in my conversations over the past week, with MS CMs, supervisor from Membership Satisfaction, and with my guide, that is not the message I am getting.

The paperwork does state that they can remove those, as well as make different rules for different members, So, they left the door open for sure.

So, I am just not convinced it will happen anytime before they are closer to selling Reflections and remain skeptical But what do I know...lol

 

[RivShore]

Maybe and it’s true he may have sources beyond those that the rest of us have. But, in my conversations over the past week, with MS CMs, supervisor from Membership Satisfaction, and with my guide, that is not the message I am getting.

The paperwork does state that they can remove those, as well as make different rules for different members, So, they left the door open for sure.

So, I am just not convinced it will happen anytime before they are closer to selling Reflections and remain skeptical But what do I know...lol

I'd be surprised too, given the conflicting data we keep seeing. I posted an article a few weeks ago that said Riviera was outselling CCV over the intial sales period but other data points show slowing sales. I do wonder if the Add-ons are what's really hurting. Current owners would be much more aware of how the restrictions could hurt them and they may be looking to add on with the expectation of unloading the points sooner than later. They would also be more educated on the point charts and MF's. This article speaks to that:

https://dvcfan.com/2019/11/26/are-add-on-contracts-at-disneys-riviera-resort-suffering/

 

[sethschroeder]

I'd be surprised too, given the conflicting data we keep seeing. I posted an article a few weeks ago that said Riviera was outselling CCV over the intial sales period but other data points show slowing sales.

Correct me if I am wrong on dates.

The big thing is CCV had to contend with POLY when it first launched. Riviera sales launched in May to everyone while CCV was "sold out" in June. So that is a single month where they had dual sales of new resorts.

On the flip side CCV launched in April 2017 and POLY didn't sell out until January 2018. So that is a good 9 months of dual selling against a resort with MK views.

So its unfair to just stack them side by side and say CCV is losing. Now if CCV was outselling RIV over the same time period that would be a very bad sign. Points sold is also another tough one that is in favor of RIV since those buying a Studio/1 week rental/during summer will be purchasing more points because of the points charts. So are we looking at "rooms" sold or just points sold?

 

[RivShore]

Here's the post about that article that mentioned Riviera sales were running ahead. It was points based and your right lots of factors play into it including those that you mentioned - Poly competion and the need for increased points at Riviera and there's also the seasonality of sales and the fact that CCV was a known and much loved resort vs. Riviera which was just a picture in a book. Probably impossible to really compare the two with so many variables...

Some updated data here:

https://www.dvcnews.com/index.php/d...27-direct-sales-unspectacular-in-october-2019
Including this relevant (to this thread) paragraph:

In the seven months since sales began, Riviera is averaging about 96,320 points a month. By comparison, Copper Creek Villas & Cabins at Disney’s Wilderness Lodge averaged 110,108 points a month from the start of sales in April 2017 through June 2019 when it was officially considered to be “sold out.” However, Riviera is actually outperforming Copper Creek if viewed by their comparable ages. Copper Creek sold only 374,089 points during its first seven months, over 300,000 points less than what the Riviera has sold in its first seven months.

 

[Sandisw]

Here's the post about that article that mentioned Riviera sales were running ahead. It was points based and your right lots of factors play into it including those that you mentioned - Poly competion and the need for increased points at Riviera and there's also the seasonality of sales and the fact that CCV was a known and much loved resort vs. Riviera which was just a picture in a book. Probably impossible to really compare the two with so many variables...

Your point about Rivera being an unknown location isn’t one I ever thought about, especially in relation to CCV.

It will be interesting to see what happens once open and people have an opportunity to visit. I think someone mentioned that by June, sales should give us a better idea of whether or not they are truly slow.