Riviera resale restrictions lifting: possible

[ziravan]

I don’t think the issue here is, “how good are sales at RIV?”

rather:

“How good are sales within the target audience we were trying to influence with the restrictions.”

I bet those are vastly different answers.

DVC can muddle along with pixie-dusted buyers, the people influenced to buy direct because of the restrictions and informed buyers for whom this issue is not a deal-breaker. They might even attain decent overall sales as a result.

But: is the negative PR they’ve given themselves towards their more loyal following worth the change in purchasing behavior they certainly have privy to see? In the short term, I don’t see any possible way this was a win for DVC.

Might they stick by the restrictions for the long term strategy? Maybe, if they’re willing to sacrifice potential earnings for the next several business quarters. That’s not typically the case, however.

I don’t expect these restrictions to go completely away, but I do expect a major modification to them that makes them more palatable. IF DVC were planning some sort of buy-in/conversion program, they need to push that implementation up to right now.

 

[Sandisw]

I don’t think the issue here is, “how good are sales at RIV?”

rather:

“How good are sales within the target audience we were trying to influence with the restrictions.”

I bet those are vastly different answers.

DVC can muddle along with pixie-dusted buyers, the people influenced to buy direct because of the restrictions and informed buyers for whom this issue is not a deal-breaker. They might even attain decent overall sales as a result.

But: is the negative PR they’ve given themselves towards their more loyal following worth the change in purchasing behavior they certainly have privy to see? In the short term, I don’t see any possible way this was a win for DVC.

Might they stick by the restrictions for the long term strategy? Maybe, if they’re willing to sacrifice potential earnings for the next several business quarters. That’s not typically the case, however.

I don’t expect these restrictions to go completely away, but I do expect a major modification to them that makes them more palatable. IF DVC were planning some sort of buy-in/conversion program, they need to push that implementation up to right now.

I agree but wonder if they did what they did to set up for Reflections sales? Once that goes online for sales, then a modification?

The restrictions have made some current owners shy away, as well as some new buyers, that is for sure, Im just not convinced yet that Disney isn’t in it for a long term change and had to start now.

However, if by the time we get to next summer, if they are not happy with what is happening, then yeah, changes could happen.

 

[Soap_1984]

OK no offense but explain what the long term plan is? People keep saying that and there cannot be a long term plan; they care about sales now.

How long term are we talking about? Think about this:

They aren't building 16 more dvc resorts, especially not at wdw;
Starting 2042 they won't care about resale at all because they will be able to resell the contracts themselves, which is true for every dvc resort eventually;
All the restrictions are doing is preventing people from buying now, not enticing them;
They won't have the opportunity to change it for the original 14 until the contracts expire, and at that point who cares because resale for those resorts will be dead.

The negative impact of the restrictions is far far greater than whatever benefit they will get starting in 20 years when okw contracts are done and they can start instituting them at the older resorts. The sales people work on commission, the executives are judged on sales and earnings, this long term "plan" makes absolutely no sense because there is no payoff really and only short term losses.

 

[Jenniebee]

My personal theory is once Reflections opens I think that RIV resale will be able to swap into that one and any new ones going forward. Just my opinion, I may be wrong.

I think DVC shot themselves in the foot with this new restriction. I think that in the past explaining the product was about what you CAN get. Here's DVC in a nutshell: You can get this, you can get that. What it has become now, is in explaining the product it's a lot of detailing what you CAN'T get and what you can't do, this is going to be a turnoff to many buyers. It makes it super complicated. It's already hard to convey how it works, points, banking, borrowing, use year, what they did was make it even more complicated. If it can't be understood in an simple elevator pitch, then it's too convoluted.

For long term, Disney has to already have a sort of plan in mind formulated for the 2042 resorts. There is no way they are just going to let all these go. Too valuable. If they extended or resold BWV people would be clamoring for it. I don't know what they are going to do, but they are going to do something in the next 20 years. They are not going to let it go to a zero value and they are not going to tear it down.

 

[Sandisw]

OK no offense but explain what the long term plan is? People keep saying that and there cannot be a long term plan; they care about sales now.

How long term are we talking about? Think about this:

They aren't building 16 more dvc resorts, especially not at wdw;
Starting 2042 they won't care about resale at all because they will be able to resell the contracts themselves, which is true for every dvc resort eventually;
All the restrictions are doing is preventing people from buying now, not enticing them;
They won't have the opportunity to change it for the original 14 until the contracts expire, and at that point who cares because resale for those resorts will be dead.

The negative impact of the restrictions is far far greater than whatever benefit they will get starting in 20 years when okw contracts are done and they can start instituting them at the older resorts. The sales people work on commission, the executives are judged on sales and earnings, this long term "plan" makes absolutely no sense because there is no payoff really and only short term losses.

For me, long term plan is to set up how to deal with 2042, Right now. The sales for RIV are not bad, They are selling and most of the discussions about it being a concern, are just peoples opinion and not coming from Disney themselves. Slower than previous, sure..but not yet to the level that it is so out of whack.

I also think that once Rivera opens and depending on people’s ability to book there or not, and whether they like it or not, might play a role in sales, or add ons. Personally, I don’t see that the restrictions are having the doomsday impact right now that some feel it is because let’s face it, people can buy direct points and resale points if they want. It is way too early to say this is a disaster. It’s been about 7 months...not long at all to make those types of predictions IMO.

Since new resorts right now are only Rivera, it doesn’t seem like a big loss. But, once Reflections comes on board, and possibly the new one in California, one is loosing more choices via resale,

Granted, those that own enough qualified points, who don’t need more, it is less likely to entice them to buy RIVera,

The language in my RIV documents all points to them leaving lots of options, like removing and/or charging to change unqualified to qualified. For me, this shows they have a long term outlook for how to slowly change the DVC to a different product where resale doesn’t get you the same thing as direct, without, at the very least costing you money.

As I mentioned before, until they are close to Sales at Reflections, there is no rush on Disney’s part to speed up sales. They always want and need something in active sales. Aulani won’t cut it alone, so having RIV to sell until then is what they need.

 

[we"reofftoneverland]

I don’t think the issue here is, “how good are sales at RIV?”

rather:

“How good are sales within the target audience we were trying to influence with the restrictions.”

I bet those are vastly different answers.

DVC can muddle along with pixie-dusted buyers, the people influenced to buy direct because of the restrictions and informed buyers for whom this issue is not a deal-breaker. They might even attain decent overall sales as a result.

But: is the negative PR they’ve given themselves towards their more loyal following worth the change in purchasing behavior they certainly have privy to see? In the short term, I don’t see any possible way this was a win for DVC.

Might they stick by the restrictions for the long term strategy? Maybe, if they’re willing to sacrifice potential earnings for the next several business quarters. That’s not typically the case, however.

I don’t expect these restrictions to go completely away, but I do expect a major modification to them that makes them more palatable. IF DVC were planning some sort of buy-in/conversion program, they need to push that implementation up to right now.

I agree with this. I think they probably will squeeze by with ok sales as is, but they could be going gangbusters. The economy is booming right now. (Regardless of the negativity you hear in some quarters.). Unemployment is at an all time low. The stock market is at an all time high. Dh told me yesterday that our 401k has had a 20% return so far this year. We were at the parks over thanksgiving and they were very, very crowded. But dvc sales are tepid. The kiosks were empty. No one is talking to those dvc guides. We stopped by the preview center just to see RIV— empty. I think they have made a big mistake. The resale restriction on RIV makes no sense even to a pixie dust buyer. It is a red flag that gets a buyer who googles to pause because the restrictions say: TIMESHARE. We would never have bought a timeshare. We bought Disney vacation club. I get that it is a timeshare, but not in my mind. It is different. And there is a whole segment of the population that will not touch timeshares but will do Disney vacation club. Disney is losing those people. Those people definitely do at least minor research, basic googling. They are also losing those people with the huge jump in member fees. At some point the math doesn’t look so good anymore. It’s close if you ask me.

 

[Brianstl]

I think over saturation of DVC at WDW is as big or bigger of a problem than the resale restrictions. There are only so many people willing to buy a timeshare and even a smaller group willing to buy a Disney timeshare. How many units can be added before that market is tapped out?

 

[Soap_1984]

I think over saturation of DVC at WDW is as big or bigger of a problem than the resale restrictions. There are only so many people willing to buy a timeshare and even a smaller group willing to buy a Disney timeshare. How many units can be added before that market is tapped out?

I think this is an issue as well, the market is getting smaller; younger people just don't have as much disposable income as their equivalents did 10, 15, 20 years ago. Furthermore, analyzing the numbers was actually a selling point 15 years ago, now it is something that needs to be avoided or totally spin doctored in a direct sales discussion.

It is like they are trying to make up for the fact that they under priced DVC initially and are now trying to recapture that money they lost, but they have picked a bad time because: the people who would buy DVC that are older and can afford it likely already own; the vast majority of younger people (40 and under) just cannot afford to buy direct because the price is prohibitive. If you gave someone the following scenarios when trying to sell RIV:
1) you have literally no obligation to go to disney every year, but if you do go once every year for the next 20 years, you can stay at Riviera;
2) you can buy dvc and will be obligated to go every year.

If I told you that you would save money under scenario 1, why in the world would you ever buy it.

 

[RivShore]

I agree with this. I think they probably will squeeze by with ok sales as is, but they could be going gangbusters. The economy is booming right now. (Regardless of the negativity you hear in some quarters.). Unemployment is at an all time low. The stock market is at an all time high. Dh told me yesterday that our 401k has had a 20% return so far this year. We were at the parks over thanksgiving and they were very, very crowded. But dvc sales are tepid. The kiosks were empty. No one is talking to those dvc guides. We stopped by the preview center just to see RIV— empty. I think they have made a big mistake. The resale restriction on RIV makes no sense even to a pixie dust buyer. It is a red flag that gets a buyer who googles to pause because the restrictions say: TIMESHARE. We would never have bought a timeshare. We bought Disney vacation club. I get that it is a timeshare, but not in my mind. It is different. And there is a whole segment of the population that will not touch timeshares but will do Disney vacation club. Disney is losing those people. Those people definitely do at least minor research, basic googling. They are also losing those people with the huge jump in member fees. At some point the math doesn’t look so good anymore. It’s close if you ask me.

When we went on a tour in Sep., it was packed and we were barely able to get an appointment before we left. I wonder if it's partly the seasonality of sales, I recall seeing a monthly sales chart that showed Nov & Dec were consistently the slowest selling months.

 

[kboo]

When we went on a tour in Sep., it was packed and we were barely able to get an appointment before we left. I wonder if it's partly the seasonality of sales, I recall seeing a monthly sales chart that showed Nov & Dec were consistently the slowest selling months.

It was pretty busy in April, too.

 

[JETSDAD]

My personal theory is once Reflections opens I think that RIV resale will be able to swap into that one and any new ones going forward. Just my opinion, I may be wrong.

The wording in the public offering statement as well as the DVC site say otherwise.

From the POS:

Club Members who purchase an Ownership Interest at Riviera Resort from a third party other than directly from DVD or other seller approved by DVD, are not permitted to convert their Riviera Resort Home Resort Vacation Points related to that Ownership Interest to DVC Vacation Points for the purpose of reserving Vacation Homes at any other DVC Resort, including any future DVC Resorts, through the DVC Reservation Component. Purchasers should refer to the DVC Resort Agreement for details.

 

[Sandisw]

The wording in the public offering statement as well as the DVC site say otherwise.

From the POS:

Club Members who purchase an Ownership Interest at Riviera Resort from a third party other than directly from DVD or other seller approved by DVD, are not permitted to convert their Riviera Resort Home Resort Vacation Points related to that Ownership Interest to DVC Vacation Points for the purpose of reserving Vacation Homes at any other DVC Resort, including any future DVC Resorts, through the DVC Reservation Component. Purchasers should refer to the DVC Resort Agreement for details.

Agreed, But it also has language that allows them to change their minds, including letting people pay money to qualify the points.

So, if they find down the road, when it’s time to sell Reflections, that changing things up makes sales go better, they can do it.

 

[DougEMG]

Agreed, But it also has language that allows them to change their minds, including letting people pay money to qualify the points.

So, if they find down the road, when it’s time to sell Reflections, that changing things up makes sales go better, they can do it.

Does the contract allow them to change their minds (remove the restriction) and then change their minds again (put them back in place) ?

 

[Sandisw]

Does the contract allow them to change their minds (remove the restriction) and then change their minds again (put them back in place) ?

It says, “DVD has reserved the right, in its discretion to modify Or revoke implementation of any of these prohibitions, or then reinstate implementation of any of those prohibitions as it determines in its discretion from time to time, or permit such conversions for such Club Members who pay a fee or acquire additional ownership interest at Rivera or other DVC resort, or to place additional prohibition or limitations on certain Club Members including implementing such prohibitions or limitations to select Club Members or categories of Club members or to set times. “

Seems to me they have made it clear they can do what they want moving forward with changing things so not everyone or all types of contracts are treated the same.

 

[zavandor]

That's the issue for me with Riviera. DVC has written in the contract: we can do whatever we want to your contracts and you have no protection whatsoever.
That's worst than just the current restrictions. Even someone who just want to book Riviera should we weary of buying there resale, because DVC has the power to add other restrictions (booking at 10 months max anyone?). And given what they did with the 2020 original charts I do not trust them they won't do that in a way that will screw existing members.

 

[ziravan]

That's the issue for me with Riviera. DVC has written in the contract: we can do whatever we want to your contracts an you have no protection whatsoever.
That's worst than just the current restrictions. Even someone who just want to book Riviera should we weary of buying there resale, because DVC has the power to add other restrictions (booking at 10 months max anyone?). And given what they did with the 2020 original charts I do not trust them they won't do that in a way that will screw existing members.

If they keep the restrictions, they eventually WILL have to shorten the booking window for resales. Otherwise resale owners will swarm at 11 months in order to ensure decent uses of their points and this will put direct owners under pressure to also book at 11 months or be left out.

Not today. Or tomorrow. Or at sellout. But as ownership shifts to a large percentage of resale owners. 10 years out?

Every decent booking date will be subject to months long walking and the direct owners will cry foul - and I believe that DVC will respond with a 10 month resale window.

Sure, they’ll probably grandfather owners at implementation but if the problem is already bad by then, maybe not.

They can do anything they want. . .

 

[Bearval]

If they keep the restrictions, they eventually WILL have to shorten the booking window for resales. Otherwise resale owners will swarm at 11 months in order to ensure decent uses of their points and this will put direct owners under pressure to also book at 11 months or be left out.

Not today. Or tomorrow. Or at sellout. But as ownership shifts to a large percentage of resale owners. 10 years out?

Every decent booking date will be subject to months long walking and the direct owners will cry foul - and I believe that DVC will respond with a 10 month resale window.

Sure, they’ll probably grandfather owners at implementation but if the problem is already bad by then, maybe not.

They can do anything they want. . .

I highly doubt DVC will ever lift the resale restrictions, but I do agree that the language they have put in place will allow them to "fix" the booking problems in the future for direct buyers and resale buyers by shortening the resale buyers booking windows. This will give them another selling point to tell people the advantages of buying direct. Most people are not aware of the resale market unless you are here on disboards. I wouldn't be surprised if the resale restrictions went to a 7 month booking window.

 

[DebbieB]

I did the tour yesterday with a non-member friend. I told the guide I would never consider Riviera because of the restrictions. He just nodded his head, no indication they might be lifted.

 

[zavandor]

I highly doubt DVC will ever lift the resale restrictions, but I do agree that the language they have put in place will allow them to "fix" the booking problems in the future for direct buyers and resale buyers by shortening the resale buyers booking windows. This will give them another selling point to tell people the advantages of buying direct. Most people are not aware of the resale market unless you are here on disboards. I wouldn't be surprised if the resale restrictions went to a 7 month booking window.

This wouldn't be possible because the contract states that any owner must have at least 1 month advance booking than non owners.
But 10 months will be equally effective. Resale buyers: forget about tower and standard studios.

 

[zavandor]

I highly doubt DVC will ever lift the resale restrictions, but I do agree that the language they have put in place will allow them to "fix" the booking problems in the future for direct buyers and resale buyers by shortening the resale buyers booking windows. This will give them another selling point to tell people the advantages of buying direct. Most people are not aware of the resale market unless you are here on disboards. I wouldn't be surprised if the resale restrictions went to a 7 month booking window.

7 months wouldn't be possible because the contract states that any owner must have at least 1 month advance booking than non owners.
But 10 months will be equally effective. Resale buyers: forget about tower and standard studios.