Riviera resale restrictions lifting: possible

[Soap_1984]

I also very much ascribe to the view that they are in it for the here and now more than the "long haul". They change rules constantly. There are not going to be 30 more dvc resorts in wdw. As Pete said, they constantly need growth and they are always hyper focused on results now and the next couple years. That means sales and profit growth and ROI on investments they make.

I think, in general, the execs have gotten way too confident in how great they are (as opposed to how great "disney" is). Perhaps a conversation for another thread, but the price increases, resale restrictions, crowd expectations on galaxys edge etc. lead me to believe there is a lot of hubris amongst the group running disney. They want results and when galaxys edge didn't do nearly as well as they expected, heads rolled. That's not a long term view, that's "we expected a big surge in x period and it didn't come". Also, makes it hard to predict what they'll do; that hubris is tricky to predict but generally speaking, I feel like reversing the restrictions is like admitting they aren't as smart or strong as they thought. This is why I feel like it would be a last resort; they always do incentives etc. so that isn't a sign of weakness so much in their mind as reversing their new restrictions. The success of the restrictions proves to them they can do whatever they want (just like price increases etc) and people will just accept it and keep buying dvc.

 

[Bearval]

I also very much ascribe to the view that they are in it for the here and now more than the "long haul". They change rules constantly. There are not going to be 30 more dvc resorts in wdw. As Pete said, they constantly need growth and they are always hyper focused on results now and the next couple years. That means sales and profit growth and ROI on investments they make.

I think, in general, the execs have gotten way too confident in how great they are (as opposed to how great "disney" is). Perhaps a conversation for another thread, but the price increases, resale restrictions, crowd expectations on galaxys edge etc. lead me to believe there is a lot of hubris amongst the group running disney. They want results and when galaxys edge didn't do nearly as well as they expected, heads rolled. That's not a long term view, that's "we expected a big surge in x period and it didn't come". Also, makes it hard to predict what they'll do; that hubris is tricky to predict but generally speaking, I feel like reversing the restrictions is like admitting they aren't as smart or strong as they thought. This is why I feel like it would be a last resort; they always do incentives etc. so that isn't a sign of weakness so much in their mind as reversing their new restrictions. The success of the restrictions proves to them they can do whatever they want (just like price increases etc) and people will just accept it and keep buying dvc.

Most people do not go in buying a timeshare thinking about what the resale value is. If that were the case who in their right mind would buy a time share direct that is only worth pennies on the dollar when the ink is still wet? I am lumping all timeshares here. Most people buy because they think this is what they want to do for vacations. If you have to worry about what the resale value is going to be than maybe a timeshare is not for you. I feel pretty certain the restrictions will not be lifted due to slow sales, they can always offer incentives if they feel the need. AUL is still not sold out in almost 10 years.

 

[jagron11]

Exactly - they would only lift restrictions because they decide it is adversely hurting sales more than it is benefiting them. Some people say "Disney is in it for the long haul."...but I don't believe that at ALL. Publicly traded companies are almost entirely in it for the now, as in the next quarter...and only really aware of the next 3-5 years. To say "Well, when all the old resorts are gone and they all have the resale restrictions, then it won't matter", that's just not something that they are remotely looking at. They want profits to INCREASE. If new resort sales are down 20%, and they believe that this is because of resale restrictions, and that reversing that decision will bring sales back up...they'd change in second. The only thing that stops them is they don't KNOW this. Until they are sure - then they aren't going to turn it around.

Last I knew Disney had a Strategy group who’s whole purpose was forecasting at the 5 yr horizon. Heavy use of analytics and Ivy trained MBAs. There had to have been a lot of research into this change. Also, I’m not so sure the difference in sales is all that material to the parks division, let alone the company overall, so although it’s material to us, the velocity of sales might not be all that worrisome.

I would love to know what was the reasoning behind the restrictions. Was it really to recapture some of the resales revenues, or was there something bigger. Could they be trying change the customer demographics and purposely moving away from “loyal” existing members. With a key metric being Per Capita Guest Spending, perhaps they want more (newer) guests with fewer points who spend more when they visit.

Who knows. Only time will tell.

 

[Sandisw]

Well I don't think the argument is a legal battle from existing owners, rather that sales are slow and perhaps the restrictions are part of the cause. The point was they lift the restrictions to boost sales; the argument was then made they wouldn't do that (which I tend to agree with) and then someone countered they have changed rules in the past. The reasoning for the change with resale restrictions at Riviera would be to increase sales rather than appease existing members.

I see both sides, they are different scenarios but I can see the point. I just think disney is unlikely to lift the restrictions unless sales are beyond terrible. And if they did, they are not doing it to help or appease current Riv owners, I can promise that.

I am with you on this. Sales may not be as strong as they had hoped, but I don’t see a change until it becomes so apparent that it is the resale restriction is the driving force behind it, I think until the resort opens and we get through the slower time of sales...one doesn’t know,

Plus, Disney doesn’t like to have no new resort to sell so until it gets to a point that Reflections Is ready for sale, I don’t think there is a rush to make any decisions to speed up those sales.

 

[sky2823]

Last I knew Disney had a Strategy group who’s whole purpose was forecasting at the 5 yr horizon. Heavy use of analytics and Ivy trained MBAs. There had to have been a lot of research into this change. Also, I’m not so sure the difference in sales is all that material to the parks division, let alone the company overall, so although it’s material to us, the velocity of sales might not be all that worrisome.

I would love to know what was the reasoning behind the restrictions. Was it really to recapture some of the resales revenues, or was there something bigger. Could they be trying change the customer demographics and purposely moving away from “loyal” existing members. With a key metric being Per Capita Guest Spending, perhaps they want more (newer) guests with fewer points who spend more when they visit.

Who knows. Only time will tell.

More than likely it was a division decision that had signed off from higher ups. DVC doesn’t move the needle enough to have a ton of resources around modifications in booking restrictions. If DVC goes sideways they would probably then have a ton of resources to fix it.

there is no good long term strategy with the restrictions. As I mentioned, they are clumsy and will only complicate Disney’s life as they move forward and is hurting the “culture.”.

you don’t mess with a customer culture like DVC if you are thinking long-term what is best.

DVC became who it is mainly because Disney loosely managed it and the customers embraced having power and feeling like they owned part of Disney (DVC monopoly). The culture was created organically without Disney interference. Any strat planner worth his salt would identify that and do whatever they could to preserve it.

the restrictions were body blow to DVC culture. It makes no sense as you didn’t have to do it and probably could have gotten close to the same bottom line profit increases using other means.

also starting them with riviera was a massive mistake. There are too many points to sell, too many questions with the gondolas and location and too much exposure if the economy tanks during the selling cycle

 

[ScubaCat]

I still don't understand how you can judge sales of something that isn't even open yet. They sold something like 80K points in October just based on a model room. How is that so terrible?

 

[Soap_1984]

Well I am not sure anyone is saying the sales are horrendous, just fewer than maybe they wanted. They sell new developments/condos etc on spec all the time with only a mock up unit so not sure that really matters. I am sure it is easier to sell once open but disney chose to open sales early so they must have assumed your concern wasn't a huge issue.

I agree generally that you won't know whether sales are really bad until it opens. After three months if the sales are still slow they will probably do something. I'm not in the market for 300 more points, but I would consider adding on some points there if there were no restrictions.

 

[Heather07438]

They did reverse the 2020 point charts. That could have been related to a growing desire to start a lawsuit, but it also could have been just because they were admitting a mistake.

I'd think Disney would want to stay far away from major DVC lawsuits where the dirty laundry gets aired and people are paying attention. Plus it's not good for the DVC brand. Preferring to make adjustments in other ways seems wise.

 

[Brianstl]

I'd think Disney would want to stay far away from major DVC lawsuits where the dirty laundry gets aired and people are paying attention. Plus it's not good for the DVC brand. Preferring to make adjustments in other ways seems wise.

They definitely didn’t want to go through the discovery process for that point chart.

 

[we"reofftoneverland]

Dvc direct prices are propped up by high resale values. For this reason, I think the restrictions will be removed. Or will be removed for other new resorts. Like RIV will be the exception. The restrictions are just too weird and such a turnoff that there is no way they will be permanent or extend to other resorts. DVC is a great product, but I think half of people buy because they know that dvc retains value and they can get out one day without losing their shirt. There is no way I would buy RIV direct with the restrictions, and I have learned over time that I am not unique.

 

[Bearval]

They definitely didn’t want to go through the discovery process for that point chart.

The “best” part about this would be that as DVC members we could be responsible for the DVC legal defense fees.

 

[Bearval]

Dvc direct prices are propped up by high resale values. For this reason, I think the restrictions will be removed. Or will be removed for other new resorts. Like RIV will be the exception. The restrictions are just too weird and such a turnoff that there is no way they will be permanent or extend to other resorts. DVC is a great product, but I think half of people buy because they know that dvc retains value and they can get out one day without losing their shirt. There is no way I would buy RIV direct with the restrictions, and I have learned over time that I am not unique.

It is the other way around. Resale prices are propped up by high direct pricing. Until the most recent restrictions were put into place the product was not that all that different, you really were not losing all that much buying resale and most people didn’t care. But now you see/hear people complaining about the restrictions so it is obvious they care now. There is a big difference between the two and you will see the price gap between the two widening. I believe DVC finally achieved what they wanted to do.

 

[Sandisw]

Dvc direct prices are propped up by high resale values. For this reason, I think the restrictions will be removed. Or will be removed for other new resorts. Like RIV will be the exception. The restrictions are just too weird and such a turnoff that there is no way they will be permanent or extend to other resorts. DVC is a great product, but I think half of people buy because they know that dvc retains value and they can get out one day without losing their shirt. There is no way I would buy RIV direct with the restrictions, and I have learned over time that I am not unique.

I agree with you that we may see them change the RIV resale restriction to include new resorts, but I do not see them ever giving them booking privileges to the L14.

I think part of this move in restricting resale at L14 to L14 is to slowly get all new points, when the 2042 expire to the resorts from RIV on.

I also do not see them doing anything in terms of changing them until they are closer to being ready to sell Reflections as if there is nothing new to sell, there is no rush to increase the sales at RIV. It is not like they are not selling, just maybe not yet as many as resorts in the past.

 

[ScubaCat]

I also do not see them doing anything in terms of changing them until they are closer to being ready to sell Reflections as if there is nothing new to sell, there is no rush to increase the sales at RIV. It is not like they are not selling, just maybe not yet as many as resorts in the past.

I agree and would add that this thread in general is both highly speculative and is a really early overreaction. I'm not saying things won't change, but it's WAY too early for anything like that to happen with regards to the new resale restriction, IMHO. If anything, they'll monetize it in some capacity like other timeshares already do before simply lifting or modifying it.

It's important to remember -- as I know I mention frequently -- that this DIS and overall online DVC community is a very small fraction of owners which is a tiny fraction of the population. The vast majority of potential and eventual buyers know nothing about any of this and don't even consider it. Overall, most people know very, very, VERY little about any of this stuff. Heck, even the cast members manning the DVC booths know less than most of us, and they talk about it with guests every day.

 

[we"reofftoneverland]

It is the other way around. Resale prices are propped up by high direct pricing. Until the most recent restrictions were put into place the product was not that all that different, you really were not losing all that much buying resale and most people didn’t care. But now you see/hear people complaining about the restrictions so it is obvious they care now. There is a big difference between the two and you will see the price gap between the two widening. I believe DVC finally achieved what they wanted to do.

The reason why I feel like resale props up direct is because I do believe a majority of buyers , especially repeat buyers, would not buy direct if they could not turn around and resell to recoup most of what they spent, or even make a gain down the road. RIV changes that. People are reselling at a serious loss. And I would not buy RIV knowing that I would take such a hit if I had to sell.

 

[Sandisw]

The reason why I feel like resale props up direct is because I do believe a majority of buyers , especially repeat buyers, would not buy direct if they could not turn around and resell to recoup most of what they spent, or even make a gain down the road. RIV changes that. People are reselling at a serious loss. And I would not buy RIV knowing that I would take such a hit if I had to sell.

I agree that those that are on boards like this where they seek advice, especially now with the 100 point minimum and the resale restriction for RIV May have trouble buying in there,

However, I believe that the vast majority of buyers do not even know about resale, let alone consider that when buying direct. They aren’t intending to sell and don’t go in looking at it as an asset meant to retain value but rather one that is meant to help them vacation less expensive at Disney.

IMO, once Reflections comes on board, and resale contracts are limited to L14 and own resort for RIV, direct will be more appealing to new buyers.


But we shall see what the future holds.

 

[Bing Showei]

The reason why I feel like resale props up direct is because I do believe a majority of buyers , especially repeat buyers, would not buy direct if they could not turn around and resell to recoup most of what they spent, or even make a gain down the road. RIV changes that. People are reselling at a serious loss. And I would not buy RIV knowing that I would take such a hit if I had to sell.

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.

 

[sethschroeder]

However, I believe that the vast majority of buyers do not even know about resale, let alone consider that when buying direct.

If that were the case then Disney wouldn't need to do anything. Why do any funky rules if a vast majority of potential buyers don't even know about your competitors.

IMO, once Reflections comes on board, and resale contracts are limited to L14 and own resort for RIV, direct will be more appealing to new buyers.

I just see Reflections as much more likely a bust than a great success. That's part of the issue I think on the other side where for the next 20 years at this point there is nothing exciting for new DVC likely but you have tons of options.

I mean the new DL DVC? Won't be able to transfer in to that anyways likely.

Disney should just put out an offer to pay like $100/point or something to make points direct. They can stop ROFR, some resorts will go cheaper, people can justify the extra price to have them direct, and Disney makes money without holding inventory.

Disney doesn't lose buyers to resale. Someone will always buy resale regardless of restrictions.

 

[Bearval]

I agree that those that are on boards like this where they seek advice, especially now with the 100 point minimum and the resale restriction for RIV May have trouble buying in there,

However, I believe that the vast majority of buyers do not even know about resale, let alone consider that when buying direct. They aren’t intending to sell and don’t go in looking at it as an asset meant to retain value but rather one that is meant to help them vacation less expensive at Disney.

IMO, once Reflections comes on board, and resale contracts are limited to L14 and own resort for RIV, direct will be more appealing to new buyers.


But we shall see what the future holds.

I couldn't agree more. DVC whole intent is to make buying direct more appealing and in a way they have finally succeeded. If you look at the long term costs DVC can say a 100 point contract at 180 a point only averages out to 160.00 dollars more a year for 50 years and look at all the direct benefits you get as opposed to buying resale........... Now, I for one would not buy direct or resale at RIV because I have no desire or need to but you can see how DVC can spin buying direct as a positive and resale as a poor choice.

 

[RivShore]

The reason why I feel like resale props up direct is because I do believe a majority of buyers , especially repeat buyers, would not buy direct if they could not turn around and resell to recoup most of what they spent, or even make a gain down the road. RIV changes that. People are reselling at a serious loss. And I would not buy RIV knowing that I would take such a hit if I had to sell.

Don't forget there's another dynamic at play that underlies all pricing - the current cash cost of rooms. As long as they hold steady or increase, resale and direct pricing will remain firm, but as soon as the value proposition deteriorates so will DVC pricing.