Resale Restrictions Predictions

cbyrne1174

Mouseketeer
Joined
Sep 1, 2018
I know most of you on here only own DVC, but Wyndham has done the same thing before by trying to restrict resale buyers by only giving them access to part of the club. Club Wyndham has 4 ownership types: Club Wyndham select (deeded to 1 location), Club Wyndham Access (deeded to a trust that has a collection of deeds at all locations), Presidential Reserve (deeded to a presidential resort with ARP at all presidential locations) and Margaritaville Vacation Club (deeded to the Margaritaville properties).

Now here is where it ties into DVCs resale restrictions, Margaritaville properties are only currently in Nashville, St. Thomas, and Puerto Rico. It's all newly constructed 4 star resorts. Now what Wyndham tried to originally push was that only VIP members and Margaritaville vacation members can have access to the properties. By doing that, people said to themselves, well it's not worth a $27,000+ retail purchase just to have access to that section of Club Wyndham, so it didn't improve sales at all and hurt the Margaritaville inventory because Margaritaville owners could trade out of their subsection of Club Wyndham, but most people couldn't trade into it.

Wyndham eventually fixed the issue by opening up the inventory to all owners at the 5 month mark
. Now all those locations are at high capacity spending their money at the 5 o'clock bar, restaurants, rentals and whatnot and they can still push the fact that VIP members get 6, 8 or 10 month ARP at the locations depending on VIP level, so if you want to go during the busy season, you get first pick at the inventory being a VIP.

I am willing to bet Disney will have the same issue eventually with their new resorts and they can legally follow the same model that Wyndham has where retail DVC points can book at all resorts at 7 months and resale can book at 5 months. That is what makes the most sense because it still gives incentive to buy retail and gives owners piece of mind that if they need to sell, the resale value will still be there. Plenty of people will pay the difference to have the 2 extra months to make their reservations with resale getting last pick at the newer resorts.
 
Except I don't think it will ever happen, because Riviera will still get booked, there won't be many empty rooms like Wyndham. After all, Riviera is a WDW resort, not somewhere else in FL, SC, or even Hawaii. If outside of WDW or DL, than I can perhaps see DVC having that problem. So, don't hold your breath for it. Of course, that's just my own opinion / prediction. Restrictions are here to stay.

Great3
 
Except I don't think it will ever happen, because Riviera will still get booked, there won't be many empty rooms like Wyndham. After all, Riviera is a WDW resort, not somewhere else in FL, SC, or even Hawaii. If outside of WDW or DL, than I can perhaps see DVC having that problem. So, don't hold your breath for it. Of course, that's just my own opinion / prediction. Restrictions are here to stay.

Great3

This was my first thought as well; if they can rent it out then they wouldn't really care. But as I type this, I started thinking that capacity/rooms is just part of it. If they have slowing sales on the new resorts as well, it kind of defeats the advantages of building and selling a DVC resort. At that point, they're just back to be a normal resort/hotel. So I could see the restrictions being a concern IF they can't sell enough points.

So here's an alternate thought. What if they didn't open up the restrictions to book into Riviera - because capacity isn't the main concern. I mean if it wasn't for the resale restrictions; buying Riviera direct isn't a bad deal with all the incentives right now. So I think if there was a change, it'd be a change to what resale buyers of Riviera would be able to book rather than all the other resale buyers getting access to Riviera.
 
Thanks for the history, @cbyrne1174!

(We are long-time Worldmark owners ... before Wyndham's takeover of our developer and resort management.)
 


Honestly, any change..and I am not sure it will happen...would not happen until down the road when there are a decent amount of resale buyers.

If sales slow...and just my opinion...they would up incentives rather than list resale,

Most buyers when listening to the pitch are not thinking about selling down the road so while it is an issue for those of us who are on the DIS and have done a lot of research, many are impulse buys.
 
Wasn't there an analysis someone here did recently that showed for most 'mature' (2042) resorts, only ~10% of the contracts were resale? If (a) I'm remembering correctly and (b) the 10% number is correct, the resale restrictions won't be an issue for the resort as a whole.
 


Wasn't there an analysis someone here did recently that showed for most 'mature' (2042) resorts, only ~10% of the contracts were resale? If (a) I'm remembering correctly and (b) the 10% number is correct, the resale restrictions won't be an issue for the resort as a whole.

That analysis was based on data assembled by @dvcsince93 who at some point in the discussion mentioned that they didn't count "contracts bought back by Disney" as resales. I asked for clarity re whether that meant contracts taken via ROFR were not counted, because I believe those are indeed resales (the owner put them up for sale, found a buyer, agreed to terms, then Disney chose to step in as buyer on the same terms). However, my question was not answered. Contracts taken by Disney via ROFR could add a significant number to the number/percentage of resale contracts - or certainly add to the number of contracts sold by the original direct purchaser (obviously, if Disney takes it, Disney later sells it as direct points). So until that question is answered, I think we need to be careful about assuming that only 10% of original (direct buy) owners have sold their contracts.
 
That analysis was based on data assembled by @dvcsince93 who at some point in the discussion mentioned that they didn't count "contracts bought back by Disney" as resales. I asked for clarity re whether that meant contracts taken via ROFR were not counted, because I believe those are indeed resales (the owner put them up for sale, found a buyer, agreed to terms, then Disney chose to step in as buyer on the same terms). However, my question was not answered. Contracts taken by Disney via ROFR could add a significant number to the number/percentage of resale contracts - or certainly add to the number of contracts sold by the original direct purchaser (obviously, if Disney takes it, Disney later sells it as direct points). So until that question is answered, I think we need to be careful about assuming that only 10% of original (direct buy) owners have sold their contracts.
i see your point, if your assumption turns out to be true, but I believe the point of the analysis was to also see how many “resale” points existed on the market. Since those points bought back by Disney are converted back to direct points essentially. The question was is the % based on total resort points of the total number of direct deeds.

Now to the point, I think you maybe alluding to, is there a double counting or depressing of the resale rates (or even possibly over inflation too), that really isn’t known. But because it is a rate if the ROFR contracts were counted on both ends the turn over rate probably is still about the same, but the number of resale contracts expected on the market could be under/over inflated.
 
i see your point, if your assumption turns out to be true, but I believe the point of the analysis was to also see how many “resale” points existed on the market. Since those points bought back by Disney are converted back to direct points essentially. The question was is the % based on total resort points of the total number of direct deeds.

Now to the point, I think you maybe alluding to, is there a double counting or depressing of the resale rates (or even possibly over inflation too), that really isn’t known. But because it is a rate if the ROFR contracts were counted on both ends the turn over rate probably is still about the same, but the number of resale contracts expected on the market could be under/over inflated.

I’m looking at it another way. IIRC, the original analysis was done to evaluate the previously commonly quoted metric that “the average DVC owner only keeps their contract for 10 years” (usually quoted in the context of deciding whether or what to buy, to indicate that what the contract will be worth in 20 or 30 years is irrelevant) and concluded that most owners actually do keep their contracts longer than that. Contracts taken by Disney via ROFR definitely need to be included when looking at it from that side. In the context of this discussion, trying to project the effects of resale restrictions on competition for bookings, it may or may not be relevant.
 
I think we need to be careful about assuming that only 10% of original (direct buy) owners have sold their contracts.

I agree with you. But relevant to this thread: if only 10% of most resorts points are resale, then the resale restrictions shouldn’t cause widespread booking chaos** for Riviera.

(** chaos that could arise from having a significant number of owners locked into one resort and thus always booking their one available resort at 11 months.)
 
I agree with you. But relevant to this thread: if only 10% of most resorts points are resale, then the resale restrictions shouldn’t cause widespread booking chaos** for Riviera.

(** chaos that could arise from having a significant number of owners locked into one resort and thus always booking their one available resort at 11 months.)
Yep, I agree.
 
I agree with you. But relevant to this thread: if only 10% of most resorts points are resale, then the resale restrictions shouldn’t cause widespread booking chaos** for Riviera.

(** chaos that could arise from having a significant number of owners locked into one resort and thus always booking their one available resort at 11 months.)
That is a mighty big "IF." 8-)
 
I agree with you. But relevant to this thread: if only 10% of most resorts points are resale, then the resale restrictions shouldn’t cause widespread booking chaos** for Riviera.

(** chaos that could arise from having a significant number of owners locked into one resort and thus always booking their one available resort at 11 months.)
Try booking a studio at 7 months out the first 2 weeks in December. Even SSR can have no inventory. RIV already has a few days gone in September for Tower and Standard view studios.
 
I think that Disney has proven that their new business model is "do what you need to do to make more money no matter who it hurts". All of the timeshare developers hang out together and compare notes. If one has a restriction that is making more money, others will follow.

:earsboy: Bill

 

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