Could Riviera Resale Restrictions Be Pushing Some To Resale?

[Wakey]

I’ve lost count of the number of posts I’ve seen on Facebook along these lines- this is based on another one I saw today:

Q:

“ What’s your view on the cost of this Riviera contract, I went on a tour today”.

Reply:

“ Watch out, it has really bad resale restrictions and you could lose a lot if you come to sell”

Q:

“ That was never mentioned, I am shocked by this. What is resale and how do I look into that”.

Reply:

“There’s a big resale market. If you buy an older resort, it doesn’t have the same Riviera restrictions and your buyers could stay at 14 resorts. A Riviera buyer can only stay at Riviera, not even any future resorts”.

Q:

“ Wow, I had no idea there was even a resale market, I am now looking into resale”.

Are people who would just have bought direct being pushed toward resale?

 

[Jkarrows]

I would say yes and no, Yes they may be pushed into resell in the way you described above but no as I am sure some people will love the Riviera and only want to stay at that resort anyway, many DVC members buy there home resort and only stay there, many do not but some do.

I also think that Disney sales are being hit by this restriction and I for one would not be surprised if this is lifted or altered in some way, I could see this happening soon if the reports of poor sales are correct.

Some may say I'll rent my Riviera points out when I do not want to stay there and rent other DVC resorts when I want to stay at other resorts.

I think personally the biggest loss will be with re-sell, if for whatever reason someone has to sell there Riviera contract, with the one resort restriction I can easily see this to be the lowest points in the Walt Disney Area resort and while Disney has points to sell there will be no ROFR either.

 

[Cyberc1978]

I would say yes and no, Yes they may be pushed into resell in the way you described above but no as I am sure some people will love the Riviera and only want to stay at that resort anyway, many DVC members buy there home resort and only stay there, many do not but some do.

I also think that Disney sales are being hit by this restriction and I for one would not be surprised if this is lifted or altered in some way, I could see this happening soon if the reports of poor sales are correct.

Some may say I'll rent my Riviera points out when I do not want to stay there and rent other DVC resorts when I want to stay at other resorts.

I think personally the biggest loss will be with re-sell, if for whatever reason someone has to sell there Riviera contract, with the one resort restriction I can easily see this to be the lowest points in the Walt Disney Area resort and while Disney has points to sell there will be no ROFR either.

Seems that early sales are not as bad as some have suggested.
https://dvcnews.com/index.php/other...ring-early-sales-for-riviera-to-other-resorts
IMO as long as the resale restrictions are there the resale price of DRR should be lower than most others. How much lower all depends on the popularity of the resort when it opens.

 

[Madame]

The majority of new resort buyers are buying while on a vacation high. They don’t even take the time to search out other financing options besides what Disney offers. They finance through Disney and sell after 5-10 yrs.

I know many believe that owners hold their contracts longer than the 10-15 year figure that has been floating around here since forever, but I don’t. Older owners yes. Those that bought in at the beginning of OKW, BWV, even BCV to an extent, yes & that goes for subsequent contracts they purchased. Newer owners, no. I could see us selling SSR in another 10 years. Maybe keeping BCV if it made more sense to keep than sell.

The problems these newer owners could face when selling DRR or perhaps even booking studios at certain times of year because of restricted resalers, remain to be seen.

 

[crvetter]

This thread might be of interest. It supports the idea that the average buyer is holding much longer than 5-10 years, using actual data to support that claim. Even for new resorts the turnover rate hasn’t been significantly different that OKW (20% in 28 years). And SSR is at 14% after 15 years, BLT is 11% after 10 years, VGF is 5% after 6 years. So it seems that all have a very similar turn over rate and a much longer than 10 year holding term for the average buyer.

https://www.disboards.com/threads/analysis-of-dvc-sales-resales-and-restrictions.3752766/
Obviously things could change but it seems that historical trends suggest that owners hold on to their contracts much longer that was initially assumed on the DIS.

 

[jlb727]

In short, yes. The resale restrictions were a concern for us. But also, we didn’t like the price per point compared to the point chart. We’d almost never use the perks from buying direct. Riviera just wasn’t a good value for us.

 

[CarolMN]

Perhaps, but so far the restrictions do not appear to be impacting sales. Any negative impact on resale values will fall on the direct purchasers if they decide to sell. Don't think DVD cares about that.

 

[carli_h]

I think it really depends on the motivation of the buyer. For example someone who is buying in and wants very little risk in recovering initial buy-in would be push towards a resale option. Whereas buyers who don’t like the resort limitations of buying resale would be pushed to direct.

What works for one person will not for another so I don’t think there is a clear yes/no on this.

 

[texanlawyer]

I don't know if the resale restrictions by themselves are pushing people to resale. However, I do think that anytime DVC starts pushing a new resort, people may explore resale as a more cost-effective alternative as they do research on DVC. That was my personal experience. I first looked at DVC when Copper Creek was announced. For a number of reasons, I decided that CCV wasn't for me. After doing research, I decided that BLT resale would be the best fit for me.

The marketing dollars that Disney spends pushing a new resort help generate interest in the existing DVC resorts as well and I could see some people now following a similar path to me where they look at the new resort but ultimately decide to purchase resale at an existing resort.

 

[kniquy]

Sales probably haven't been that bad because they get the pixie dust buyers - those at WDW, do the tour and think -this is great we will save money and have deluxe accommodations. The the poor choice reality will set in for those who financially really could not afford it or those who stumble upon a hardship and have to sell. But these at the resort buyer probably are not fully versed or educated on DVC. We here know the restrictions and the potential pitfalls but we are only a small percentage of the millions of people who visit WDW.

If someone does their home work and researches exactly what they are buying and then go on a forum whether here or on FB they will likely discover the restrictions and it might make them reconsider their purchase.

 

[KAT4DISNEY]

I’ve lost count of the number of posts I’ve seen on Facebook along these lines- this is based on another one I saw today:

Q:

“ What’s your view on the cost of this Riviera contract, I went on a tour today”.

Reply:

“ Watch out, it has really bad resale restrictions and you could lose a lot if you come to sell”

Q:

“ That was never mentioned, I am shocked by this. What is resale and how do I look into that”.

Reply:

“There’s a big resale market. If you buy an older resort, it doesn’t have the same Riviera restrictions and your buyers could stay at 14 resorts. A Riviera buyer can only stay at Riviera, not even any future resorts”.

Q:

“ Wow, I had no idea there was even a resale market, I am now looking into resale”.

Are people who would just have bought direct being pushed toward resale?

I noticed that the DVC website started mentioning resale several months ago. Their spin was on why one wouldn't want to buy resale but I cringed on their behalf as there are so many people that don't have any idea about resale but still might at least make it to the DVC website. And there is where they might now learn about it and decide to investigate. There's been posts from people who are staying away from Riviera because of the restrictions just as there are people who are willing to accept them. But yes, I wouldn't be surprised that some will learn about resale that might not otherwise do so.

 

[katandmouse]

I will say that just based on my own observations it seems like resales are up lately. When I called to set up my account (new resale member) the CM told me he’s been busy and I was his 4th or 5th call that day. And looking at the Closing Time thread now it sounds like they’re backlogged loading points into people’s accounts. (Plus the long ROFR waits and backlog earlier this year.)

...When I do a Google search for “DVC Riviera” this article pops up on the first page: “Disney Just Ruined a DVC Resort That Hasn’t Opened Yet. Here’s How”
https://www.****************.com/fe...-ruined-dvc-resort-hasnt-opened-yet-heres-how(Maybe just bc of my search history lol)

Still remains to be seen how it might affect RIV sales over the long run though.

 

[KAT4DISNEY]

I will say that just based on my own observations it seems like resales are up lately. When I called to set up my account (new resale member) the CM told me he’s been busy and I was his 4th or 5th call that day. And looking at the Closing Time thread now it sounds like they’re backlogged loading points into people’s accounts. (Plus the long ROFR waits and backlog earlier this year.)

...When I do a Google search for “DVC Riviera” this article pops up on the first page: “Disney Just Ruined a DVC Resort That Hasn’t Opened Yet. Here’s How”
https://www.****************.com/fe...-ruined-dvc-resort-hasnt-opened-yet-heres-how(Maybe just bc of my search history lol)

Still remains to be seen how it might affect RIV sales over the long run though.

By all appearances to me it seems like the resale market is brisk and perhaps better than before Riviera. Just a feel and nothing I've really attempted to analyze.

 

[crvetter]

I will say that just based on my own observations it seems like resales are up lately. When I called to set up my account (new resale member) the CM told me he’s been busy and I was his 4th or 5th call that day. And looking at the Closing Time thread now it sounds like they’re backlogged loading points into people’s accounts. (Plus the long ROFR waits and backlog earlier this year.)

...When I do a Google search for “DVC Riviera” this article pops up on the first page: “Disney Just Ruined a DVC Resort That Hasn’t Opened Yet. Here’s How”
https://www.****************.com/fe...-ruined-dvc-resort-hasnt-opened-yet-heres-how(Maybe just bc of my search history lol)

Still remains to be seen how it might affect RIV sales over the long run though.

Though I wonder which is selling more points. While resale might be up are the contracts resale buyer passing to resale buyer, are they smaller contracts, etc. It’s hard to know any real impacts as counting number of deeds recorded isn’t a fair comparison. I suspect DVC finds the sales going along just fine because they haven’t reversed.

Sales probably haven't been that bad because they get the pixie dust buyers - those at WDW, do the tour and think -this is great we will save money and have deluxe accommodations. The the poor choice reality will set in for those who financially really could not afford it or those who stumble upon a hardship and have to sell. But these at the resort buyer probably are not fully versed or educated on DVC. We here know the restrictions and the potential pitfalls but we are only a small percentage of the millions of people who visit WDW.

If someone does their home work and researches exactly what they are buying and then go on a forum whether here or on FB they will likely discover the restrictions and it might make them reconsider their purchase.

Also as to the commonly stayed “pixie-dusted” buyer that buys as a mistake then dumps right away considering the fairly low turn over thus far it seems many of the “pixie-dusted” buyers aren’t selling so perhaps aren’t all that unhappy in the end. Though I wonder if the resale restrictions would make someone dump a contract in resale; though, I see no reason for this why take the hit right away when you can use the product and take the hit later. Perhaps more disgruntled buyers will say their resale is low and the small minority thay sells in the short term could become the vocal majority, but this is the point restrictions will probably change again.

 

[Frederic Civish]

The question isn't whether the Resale Restrictions are pushing EVERYONE (or even MOST) people towards Resale.

The question is whether it is pushing SOME people towards Resale, and the answer to that is a definite YES.

Let me use myself as an example. I know a fair amount about DVC. I own 8 contracts, 5 of which I bought Direct.

Those of you who were following my posts last fall saw me turn from Cautious about Riviera to Bullish. I posted several times as I saved up more money. Telling people $10,000 saved. $15,000 saved. $20,000 saved. Eventually I had $24,000 saved and I told everyone multiple times that this was going to be a DOWN PAYMENT. In other words, I expected to buy a contract for SEVERAL TIMES THAT AMOUNT.

But then came January and the Restrictions, and I decided no way in X$X$ was I going to pay that kind of money for a resort that might trap me into losing the bulk of my investment if I ever decided to sell. I might or might not sell. I might pass it on to my kids, but I am turning 65 this year and Resale value is something I need to consider.

So I instantly bailed on the idea of buying Direct. I would still like to buy, maybe, if the price is good on resale, but I will not again buy Direct. EVER. And also NEVER AGAIN ON ANY OTHER FUTURE DISNEY PROPERTY. And the BIGGEST reason is because I don't want to take an unnecessary financial bath because of Disney's decisions, which could still get a lot worse in the future. IF the price is 'Discounted' because it is Resale, then that is less money I will lose. And with what I saw in January, I just don't trust Disney anymore, so I NEED to build that in. I won't be paying for, 'That new car smell,' but I will be getting a better deal, and if I buy at Resale, I could probably always turn around, even immediately, and sell if for at least what I bought it for. Not so if I buy Direct. But I formerly was willing to eat that bullet.

You could say, so what, I am 65. How much more could I buy? And the answer is, A LOT. I could retire right now. I own a business with two expensive buildings and 45 employees. The business would continue to exist and feed me money. But I plan to work until at least 75, health permitting, BECAUSE I ENJOY IT. So, I will have even more discretionary income down the road. But I won't buy any more Direct.

Now, I WILL buy RESALE if the price is decent, and I don't think it even has to be THAT MUCH lower, Perhaps $40 or $50 below their Direct Price (which will probably be over $200 by next year at this time). So, as a buyer, they have turned me from "I would have bought Direct," To, "Can't wait to buy Resale."

I know I am not Disney's usual 'Target Audience' when it comes to DVC sales, but I am sure I am not the only person who thinks this way. Congratulations, Disney. You turned a nice, dependable DIRECT buyer into an ONLY AND FOREVER RESALE BUYER.

 

[Minniemoo15]

We just bought our first contract (resale).

Initially, we were considering direct. CCV did not interest us, but Riveria did. I love the area and theming. Initially we were leaning towards that. However - the restrictions were a total dealbreaker. We don’t plan on selling, but life happens and I don’t want to lose a huge chunk of money if I don’t have to. Part of DVCs appeal to me is the strong resale market. I would say the strong resale market is a huge factor that we bought in, and had it been like other timeshare resales (pennies on the dollar) we never would have even considered it.

Once we decided to buy an L14 Resort it just made sense to buy resale. We bought at PVB and saved over $20,000 USD (almost $30,000 Canadian!)

 

[RaymOOOnd]

I think people may be pushed into resale for now, but this is a long game for Disney. After about 2042 resale may be all but dead, when the original 14 are expired and/or the pickings are increasingly slim.

 

[Brett Wyman]

I can’t believe people looking into buying DVC don’t know about resale! Ten minutes of research on your 20k or higher purchase quickly explains direct vs resale.

 

[DaveNan]

I can’t believe people looking into buying DVC don’t know about resale! Ten minutes of research on your 20k or higher purchase quickly explains direct vs resale.

I believe that isn't the only thing many buyers don't know about. They don't know that based on time of year and villa type you need to book your home resort at or near 11 months They don't know that 7 month availability is little to none for many resorts. They buy after the guide explains the system, and may not give a full description of availability. Then, when they own and availability is poor, they and Disney blame it on resale. The underlying principle that certain times of the year and certain villa types have varying demand, and DVC point charts and villa mix do not balance those high and low demand spaces which is totally independent of ownership. But for many people it is easier to blame some anonymous third party, who suffers the same availability problems, but paid less, than to blame themselves for making a mistake (not doing research on cost and availability) or the mouse, who created the problem and profited from their lack of research.

 

[KAT4DISNEY]

I think people may be pushed into resale for now, but this is a long game for Disney. After about 2042 resale may be all but dead, when the original 14 are expired and/or the pickings are increasingly slim.

In 2043 there will still be SSR, OKW, AKV, BLT, VGC, Aulani, VGF, PVB and CCV for another 12-26 years. Still a pretty nice portfolio to chose from. And all we know for certain is Riviera and Reflections. We might expect another 2-3 resorts if they continue being able to build at the same rate. So still 9 vs 4 or 5. And in that time DVC will want to continue with price increases.