Analysis of Riviera sales as of 5/10/2019

[miTnosnhoJ]

Yes - you are correct - it's likely not an issue for at least 10 years. That doesn't mean it's never going to be an issue.

I think that current DVC management has a very short term mentality. If this becomes a problem in 10 years a new management team will have to deal with it. So the current management team does not care.

 

[TexasChick123]

I think that current DVC management has a very short term mentality. If this becomes a problem in 10 years a new management team will have to deal with it. So the current management team does not care.

I agree. If the direct owners start complaining too much because it becomes an issue, they can always address it then and decide how to handle it. No one can predict what will happen in 1 year let alone 20.

 

[dvcsince93]

There are two sides to the "trade out" issue- while there is certainly a need for some to trade out to open up space, you have people who are buying cheap points in the resale market and then never using them at their home resort. Those actions also upset the balance of points in the system.

The full extent of any potential point balance is not possible without knowing usage numbers (which DVD does not provide). You would need to know exactly how points are being used at 11 months and at 7 months for the various resorts.

However, we can look at contract sales and see the more likely impacts.

For example, based on the deed recordation in Orange County, it appears that the maximum of about 10-12% of contracts that ever been sold by DVD have been resold. Since that includes OKW which has been around for 25+ years, gettting to 20% or even 25% resale does not seem likely. It seems that a vast majority of people do not sell their contracts.

On the other hand, using that same 12% number of resale contracts at the larger resorts-SSR, OKW and AKL, there may be as many as 3-4 Million SSR, OKW and AKL resale points out there. Those large number of points are a significant portion of the total points at smaller resorts like VGF, BCV, VWL among others.

If the people buying points at the large resorts don't ever use those points in their home resort, then the 7 month window at the smaller resorts is flooded with those points. In view of the numerous complaints on this board about room shortages at 7 months, that problem may already be occuring.

As to DVD management, while I don't agree with all the steps they have taken, it is hard to judge without knowing the real purpose of their actions.

 

[Madame]

There are two sides to the "trade out" issue- while there is certainly a need for some to trade out to open up space, you have people who are buying cheap points in the resale market and then never using them at their home resort. Those actions also upset the balance of points in the system.

The full extent of any potential point balance is not possible without knowing usage numbers (which DVD does not provide). You would need to know exactly how points are being used at 11 months and at 7 months for the various resorts.

However, we can look at contract sales and see the more likely impacts.

For example, based on the deed recordation in Orange County, it appears that the maximum of about 10-12% of contracts that ever been sold by DVD have been resold. Since that includes OKW which has been around for 25+ years, gettting to 20% or even 25% resale does not seem likely. It seems that a vast majority of people do not sell their contracts.

On the other hand, using that same 12% number of resale contracts at the larger resorts-SSR, OKW and AKL, there may be as many as 3-4 Million SSR, OKW and AKL resale points out there. Those large number of points are a significant portion of the total points at smaller resorts like VGF, BCV, VWL among others.

If the people buying points at the large resorts don't ever use those points in their home resort, then the 7 month window at the smaller resorts is flooded with those points. In view of the numerous complaints on this board about room shortages at 7 months, that problem may already be occuring.

As to DVD management, while I don't agree with all the steps they have taken, it is hard to judge without knowing the real purpose of their actions.

It’s not as if these buyers of cheap points are scooping up all the near park studio reservations during fall frenzy! Who cares if they pay 3x the points for 1 bds during spring break & summer?!? Someone is going to get them at 7 months. Seriously, this is a DVC talking point only and not a serious problem.

 

[aoconnor]

There are two sides to the "trade out" issue- while there is certainly a need for some to trade out to open up space, you have people who are buying cheap points in the resale market and then never using them at their home resort. Those actions also upset the balance of points in the system.

....

If the people buying points at the large resorts don't ever use those points in their home resort, then the 7 month window at the smaller resorts is flooded with those points. In view of the numerous complaints on this board about room shortages at 7 months, that problem may already be occuring.

Agreed, but neither the 1/19 restriction or the Riviera resale restriction does anything to solve that issue. SSR, OKW, and AKV still have 29 million points that will flood the most desirable resorts (VGF/BWV/BCV/Poly/BLT).

A very small percentage won't be able to go after Riviera (resales post 1/19) but whatever benefit that would have had in improving 7 month availability there will be vastly outweighed by Riviera resale owners booking Riviera 100% of the time IMO.

 

[KAT4DISNEY]

There are two sides to the "trade out" issue- while there is certainly a need for some to trade out to open up space, you have people who are buying cheap points in the resale market and then never using them at their home resort. Those actions also upset the balance of points in the system.

One of the points I first learned about timeshares is that they are something that you need to plan in advance to use. DVC was always designed from day 1 to give an exclusive booking window at your home resort that actually could go to as little as 1 month but has 4 months. That people trade at 7 months is nothing to complain about. Book earlier or else know that you'll be left taking what is available. It's always been pretty clear and simple that way. IF DVC were actually concerned about this then what they ought to do is to extend the home resort priority window. But that does nothing to address why they really placed the restrictions in place - to give a perception of more value buying direct. If they can market it as being done for owners benefits and that is believed then it's a plus in their minds.

 

[dvcsince93]

The restrictions may not change the system in the short term, but if the requirements are in all of the future resorts, it will. DVD isn't stopping with DRR or even Reflections. They will keep building resorts and keep selling contracts. You will be able to continuing buying resale points and using resale points at the O14 resorts.

By 2042, there will be a number of new resorts. And, with the new restrictions, there will be no way to replicate the existing setup. People won't be able to buy resale points at one of the new resorts and use it at any resort that comes on board going forward. Then, starting in 2042, points of the O14 will start coming out of the system and be replaced with resorts that have the restriction. Eventually, long after I'm gone, points in the O14 resorts will disappear. So, it takes 20+ years, not sure that matters, DVD didn't even add its first resale restriction for nearly 20 years after DVC was established and this restriction came almost 30 years after the beginning of DVC. They seem to be considering the setup of DVC well beyond 2042.

As to the existence of millions of cheap resale points and the 7 month window, until and unless we know how points are actually being used, and what effect that has on the system, it is all just guess work and your guess is as good as mine. I realize the popularity of the resale market on this board and the prevailing view that DVD actions must be in the wrong because DVD hates resale. I just happen to disagree.

 

[Madame]

The restrictions may not change the system in the short term, but if the requirements are in all of the future resorts, it will. DVD isn't stopping with DRR or even Reflections. They will keep building resorts and keep selling contracts. You will be able to continuing buying resale points and using resale points at the O14 resorts.

By 2042, there will be a number of new resorts. And, with the new restrictions, there will be no way to replicate the existing setup. People won't be able to buy resale points at one of the new resorts and use it at any resort that comes on board going forward. Then, starting in 2042, points of the O14 will start coming out of the system and be replaced with resorts that have the restriction. Eventually, long after I'm gone, points in the O14 resorts will disappear. So, it takes 20+ years, not sure that matters, DVD didn't even add its first resale restriction for nearly 20 years after DVC was established and this restriction came almost 30 years after the beginning of DVC. They seem to be considering the setup of DVC well beyond 2042.

As to the existence of millions of cheap resale points and the 7 month window, until and unless we know how points are actually being used, and what effect that has on the system, it is all just guess work and your guess is as good as mine. I realize the popularity of the resale market on this board and the prevailing view that DVD actions must be in the wrong because DVD hates resale. I just happen to disagree.

They don’t hate resale. They’re scapegoating resalers openly to direct buyers to deflect from the fact that they’ve sold too many small studio only contracts, especially against cabins & bungalows. Much easier to intimate that all system woes are the result of “cheap” resale points than to openly admit that THEY broke the system.

They’ll blame resalers when they jack up the point charts to profit from the lockoff premium. They’ll blame resalers when DRR direct buyers start having difficulty reserving at certain times. And so-on and so-on ad-nauseum.

 

[chicagoshannon]

They don’t hate resale. They’re scapegoating resalers openly to direct buyers to deflect from the fact that they’ve sold too many small studio only contracts, especially against cabins & bungalows. Much easier to intimate that all system woes are the result of “cheap” resale points than to openly admit that THEY broke the system.

They’ll blame resalers when they jack up the point charts to profit from the lockoff premium. They’ll blame resalers when DRR direct buyers start having difficulty reserving at certain times. And so-on and so-on ad-nauseum.

I would go farther and say that Disney loves resales. It's because of resales that they can increase their per point price so sharply. If the resale market wasn't so good they'd still be selling contracts for a bit over $100 per point I think.

 

[dvcsince93]

Sorry, I simply haven't seen facts that support your position that DVD broke the system.

For example, you point to small contracts but the average points/contract actually went back up with CCV and the early DRR contracts to levels near BLT, SSR and BCV.

Average Points/Contract
BCV-160
SSR-161
BLT- 157
VGF-142
PVB-134
CCV-154
DRR-152 for the first 850 deeds recorded.

The good part is that the newest restriction will effectively separate direct points from resale points going forward, so we will all get to see how this works out.

 

[crvetter]

Personally I think they system “broke” because of two main things:

1) change in marketing and intentions of those buying DVC. Originally people bought to upgrade their accommodation size for similar prices they were paying before. Basically buying into the home away from home attitude and wanting the 1-2 beds. Now many are buying to save for the same accommodation size (hotel to DVC studio) or upgrade from values/moderates to deluxe

And

2) DVC created a resort (SSR) with the sole purpose to get rid of the Disney Institute that failed after 9/11. They may have rebuilt the property but did very little to increase amenities at the resort, considering when all later resorts (and most before) were attached to deluxe hotels thus giving them a strong edge. SSR is an outlier in the system (aside from OKW but that was the first, has the benefit of huge rooms, and cheaper point charts) DVC knew that when selling which is why from most accounts on here it was pitched as buy these points to stay at that resort. We see them fixing some issues with splitting into two categories to drop the greedy point charts it was sold under and the revitalized DS and rehab of the resort should help if resale buyers start buying to stay there and direct owners clamor to stay there (both of which could eventually happen).

And

3) high cost point units

 

[Bing Showei]

As to the existence of millions of cheap resale points and the 7 month window, until and unless we know how points are actually being used, and what effect that has on the system, it is all just guess work and your guess is as good as mine. I realize the popularity of the resale market on this board and the prevailing view that DVD actions must be in the wrong because DVD hates resale. I just happen to disagree.

The sentiments of this statement captures beautifully the success of Disney’s campaign against the resale market.

It would suffice for you to say simply “As to the existence of millions of cheap points and the 7 month window...” but instead you chose to single out resale. To me, this is interesting because for YEARS, Disney sold SSR direct with exactly this pitch. “Don’t worry you can use these points anywhere.” This was part of the sales pitch when SSR was the actively sold resort. As supported by your contractual findings, there are far more direct SSR owners out there than resale owners. And statistically, they will have paid far less than most SSR resale owners. But ignoring that inconvenient little fact, and with zero data on how those points are being used, you’re prepared to perpetuate the notion that the millions of cheap resale owners continue to tax the smaller resorts.

Disney sold SSR contracts on their flexibility to fill a gaping hole that the Disney Institute left behind. They knew the location was not ideal. Plenty of direct owners bought and continue to be sold today direct OKW/SSR/AKV points that do not bear the restrictions that were conceived to address the 7-month booking issue.

Disney created the SSR problem. They had no qualms about selling it to people who had no intentions of using it there in 2004. Walk into the sales center tomorrow, tell them you don’t want to stay at OKW but like the entry price, the RTU, and how you can book anywhere at 7 months, and they’ll sell you whatever points they have available.

So yeah, disagree all you want. But it’s a fact and a continued practice that Disney Developers create issues, because their job is to move product, then they set Disney’s timeshare management to “fix” the problem. And as a lovely proxy bonus they get owners out there perpetuating the fallacy that the ills that a broken system are not the fault of the product and how it’s sold, but rather the resale cretins who have corrupted the once perfect system that Disney has created.

 

[dvcsince93]

Wow, your post is so personally accusatory, it is sad. I have found that baseless personal attacks are used to hide the weakness of an argument.

 

[Bing Showei]

Wow, your post is so personally accusatory, it is sad. I have found that baseless personal attacks are used to hide the weakness of an argument.

That's interesting. What exactly was I accusing you of? And at what point did I attack you? It's not like I suggested you're a Disney plant who decided to join the boards just two months ago after 26 years of ownership only to provide detailed analysis and interest in the statistics of the resale model which subtly suggests that the resale issue is a real issue and that a small vocal minority is creating a false narrative that is counter to statistically based evidence that conveniently supports actions on the part of the Disney Corporation.

That would be personally accusatory and a baseless personal attack. I didn't do that. I'm only pointing out that when owners perpetuate the notion that resale owners are a pariah to be addressed, they are furthering the Disney narrative. I made no judgement as to whether or not that was deliberate.

But perceived attacks aside, I'd appreciate it if you could punch holes in any of the weak assertions that I did make. I'm happy to be wrong about it.

 

[crvetter]

I think a good way to think about the issue is that "cheap" resorts are symptoms of a disease. So DVCMC and DVC is deciding to treat the symptom (through resale restrictions) but ignoring the disease, which I feel is what I highlighted (though I'm sure other have better more thought out ideas than me). The "cheap" points symptom manifesting as a 7 month availability at near park resorts isn't solely because of resale buyers but also direct buyers as @Bing Showei highlighted. It's just that DVCMC and DVC only can treat the symptom by going after resale owners, since they can't retroactively correct the error they made with SSR. Then again will this treatment work is what people are calling into question because if they go after resale owners too much they risk destroying brand value (though I'd have to believe DVC will reverse course if that happens, high resale actually justifies high direct prices to a degree) and wouldn't correct anything in the near term for the L14 (likely will help the future resorts, possibly at the detriment of the L14, with DVC being able to control trading much easier). Though DVC could decide to treat the disease instead by making sure all resorts in the future are compelling and of equal footing in desirability but my guess is it would effect the margin too much so the band-aid is better.

Though of course this only addresses one of the three problems I highlighted. The desirability of only wanting studios they seem to have experimented with PVB if a studio only resort would be good at 7 month but that seems to be a failure and possibly leading to a larger turnover of contracts at PVB. Personally DRR/BLT seem to be a good balance of room types, though a little high point chart at DRR.

Essentially I see the issue a blend of the issues highlighted on this thread. Just kind of the gray area.

 

[Bing Showei]

If the restrictions argument is to be believed, that there was some inequity in usage that needed to be addressed, Disney had a simple solution at their disposal to address the issues: BVTC.

If there were a system set up that actively measured the degree to which a resort was booking home or non-home points and adjusted the exchange accordingly, as opposed to the 1:1 we see today, the system would quickly correct itself over time. IF BCV's point charts were different for a VGF owner vs. an SSR owner, the system would begin to equilibrate. SSR studios would start to look like Value rooms. 200 SSR points won't get you as far as 200 VGF points will at VGF. This would eventually address membership inequities.

But this will never happen. Not only would it be grossly unpopular with most owners, it would cripple the "flexibility" Disney sells its timeshare on. It would completely throw some of their most loyal owners who bought 27 years ago under the bus and it would give people pause about buying into the system, not knowing how popular/unpopular their properties will turn out to be.

There are far more elegant ways to handle this than what I ham-fistedly laid out above, but in theory, using BVTC to address an exchange issue would go much further in addressing membership needs than the current restrictions in place.... of course it would do nothing to further, and would likely damage, the selling of the product.

And at the end of the day, that's what it all comes down to. So blaming resale and putting on the restrictions for show is the best solution the current regime came up with. Will it work? I have no idea. But I sat through a presentation from a guide who stated unequivocally that "resale owners were abusing the system." Those. Exact. Words. And that is the saddest thing about this whole thing to me over these new restrictions.

 

[KAT4DISNEY]

Sorry, I simply haven't seen facts that support your position that DVD broke the system.

For example, you point to small contracts but the average points/contract actually went back up with CCV and the early DRR contracts to levels near BLT, SSR and BCV.

Average Points/Contract
BCV-160
SSR-161
BLT- 157
VGF-142
PVB-134
CCV-154
DRR-152 for the first 850 deeds recorded.

The good part is that the newest restriction will effectively separate direct points from resale points going forward, so we will all get to see how this works out.

I'll assume you're using a mean average? What is the median? And I'm not certain your considering the point requirements of studios at the resorts you listed because those are not contracts for 1BR's which at all of those that have 1BR's the points were or are at 200 points plus even for the cheapest view.

Just studio numbers are:

Resort Adventure Season/Dream Season/Premier Season (Your listed Average)
BCV is 107/120/181 (160)
SSR - when it was in sales was prior to the standard view. Point requirements were probably similar to BCV/CCV. (161)
BLT lakeview is 123/141/199 (157)
VGF standard view is 125/153/227 (142)
PVB standard view is 118/153/227 (134)
CCV is 107/120/176 (154)
DRR is 109/130/204 (152)
DRR Preferred is 134/162/243 (152)

Finally, up until AKV and BLT were part way thru it's sales the minimum that could be purchased by new members was 160 then 150 pts. Then it was dropped to 100, then 50. BCV and SSR are at that minimum. BLT is very close too. Then as the point charts grow even more you see a drop in your listed average contract. That doesn't point towards buying for much more than a studio.

 

[CarolynFH]

Sorry, I simply haven't seen facts that support your position that DVD broke the system.

For example, you point to small contracts but the average points/contract actually went back up with CCV and the early DRR contracts to levels near BLT, SSR and BCV.

Average Points/Contract
BCV-160
SSR-161
BLT- 157
VGF-142
PVB-134
CCV-154
DRR-152 for the first 850 deeds recorded.

The good part is that the newest restriction will effectively separate direct points from resale points going forward, so we will all get to see how this works out.

Just keep in mind that points don’t go as far in the newer resorts as they do in the older ones. 160 BCV points buy more nights in the same size unit than 160 DRR points will.

And also, you may not be as aware of the history of studio availability issues as those of us who’ve been hanging out on these boards for many years are. The first time I was aware of studio booking issues was when owners at VGF began reporting difficulty booking studios at their own resort at 11 months. The per-point $ cost and per-night points cost at VGF were so high (compared to previous resorts, not current ones!) that many buyers could afford only enough for studios - and it seemed as though they all wanted to book the first two weeks of December. So it had nothing to do with “cheap resale points” at all.

 

[crvetter]

If the restrictions argument is to be believed, that there was some inequity in usage that needed to be addressed, Disney had a simple solution at their disposal to address the issues: BVTC.

If there were a system set up that actively measured the degree to which a resort was booking home or non-home points and adjusted the exchange accordingly, as opposed to the 1:1 we see today, the system would quickly correct itself over time. IF BCV's point charts were different for a VGF owner vs. an SSR owner, the system would begin to equilibrate. SSR studios would start to look like Value rooms. 200 SSR points won't get you as far as 200 VGF points will at VGF. This would eventually address membership inequities.

But this will never happen. Not only would it be grossly unpopular with most owners, it would cripple the "flexibility" Disney sells its timeshare on. It would completely throw some of their most loyal owners who bought 27 years ago under the bus and it would give people pause about buying into the system, not knowing how popular/unpopular their properties will turn out to be.

There are far more elegant ways to handle this than what I ham-fistedly laid out above, but in theory, using BVTC to address an exchange issue would go much further in addressing membership needs than the current restrictions in place.... of course it would do nothing to further, and would likely damage, the selling of the product.

And at the end of the day, that's what it all comes down to. So blaming resale and putting on the restrictions for show is the best solution the current regime came up with. Will it work? I have no idea. But I sat through a presentation from a guide who stated unequivocally that "resale owners were abusing the system." Those. Exact. Words. And that is the saddest thing about this whole thing to me over these new restrictions.

I'm not disagreeing in any matter, it's just that I think resale restrictions could have an effect just will take 20-30 years to see it happen (if it does at all and valid arguments could be made to say it wouldn't), which is of no help to current members, thus not really a viable solution. I actually have presented this exact solution to Y that the changes should be really a normalization of points through BVTC rather than any resale restrictions. As that would be fairest correction. But as you said it hurts those that OKW who bought into DVC proving it could work might be most adversely affected.

I think there is an inequity of desire to trade (fairly evident on DIS and even acknowledged by DVC when selling some resorts) but by the 1:1 point charts it forces an actual equity of trading. Though I do wonder if BVTC can actually adopt different charts under Florida law because what happens to all the rooms that can’t be booked by members because the increased costs to trade in burned points.

 

[Bing Showei]

The first time I was aware of studio booking issues was when owners at VGF began reporting difficulty booking studios at their own resort at 11 months. The per-point $ cost and per-night points cost at VGF were so high (compared to previous resorts, not current ones!) that many buyers could afford only enough for studios - and it seemed as though they all wanted to book the first two weeks of December. So it had nothing to do with “cheap resale points” at all.

I spoke to a former guide who said that the Developers knew that this was happening when they were actively selling VGF. He's now in the resale industry, so take that with a grain of salt, but he mentioned having ethical qualms about how much Disney was "overselling" VGF on small contracts that people bought to get a piece of the resort. Developers didn't care, it would be something for Management to deal with.

This has proven to be a successful formula as VGF sold out quickly; the practice continued into PVB, and CCV as well.