Riviera resale restrictions lifting: possible

[Bearval]

I can tell you that the product understanding checklist,which says It was revised Jan, 2019, no longer says what you posted.

It says, “From time to time, the number of Vacation Points required to reserve a specific night, in a particular Vacation home May change, This “reallocation” occurs for various reasons, such as a change in the pattern of Member Usage.

So, it’s been changed, I will try to scan that tomorrow. I am going to try to compare to the link you posted! And will scan differences If they exist

I don’t have a real problem with them doing a reallocation of points for seasons , weekends etc. as long as the points for each room group do not increase and other groups decrease. As an example, making it require less points to have a 3 bedroom but increase the points needed for a studio.

 

[Sandisw]

I don’t have a real problem with them doing a reallocation of points for seasons , weekends etc. as long as the points for each room group do not increase and other groups decrease. As an example, making it require less points to have a 3 bedroom but increase the points needed for a studio.

Yes, balancing for demand is their responsibility but I think what this shows is that they updated the document to make sure it was more vague than before,

In the multi-site POS goes into more detail about the increase and decrease as long as 100% of all use days in a unit remain neutral.

 

[zavandor]

Yes, balancing for demand is their responsibility but I think what this shows is that they updated the document to make sure it was more vague than before,

In the multi-site POS goes into more detail about the increase and decrease as long as 100% of all use days in a unit remain neutral.

Sorry, does the multi site POS say that rebalancing has to happen within the same Unit?
I think it was reported last year that the multi site POS stated that points could be reallocated across different units as long as the whole resort remained neutral.
If this is the case, they wouldn't be allowed to reallocate THV points with 2BR because they are in different units. Also, since in many resorts Units vary in compositions (some are one GV, others a group of 2BR, some include a dedicated studio others don't) it would make practically impossible to reallocate across different room types.
Would you mind to scan that paragraph? Thanks a lot!

 

[Sandisw]

Here is a snapshot of what it says. It does say Vacation home and unit. I guess the question becomes can they redefine what a unit is?

Or, is that listed somewhere.

One Way to interpret this though is it has to be point neutral for the year, Given the seasons, and such, there could be a way to adjust across room types as long as the total for a specific unit remains the same,

So, when there are units that include more than one room type, then it would allow for changes. In terms of THVs, were any nights kept the same? What about premium weeks. Could thst have been used in some way to make it end up equal?

 

[Sandisw]

Another thought. Since Disney retains ownership of points, could that play a role in reallocation since there is a clause of 100% of points balancing..never increasing or decreasing?

Just trying to see if they can play fast and fancy free with things.

 

[zavandor]

Here is a snapshot of what it says. It does say Vacation home and unit. I guess the question becomes can they redefine what a unit is?

Or, is that listed somewhere.

One Way to interpret this though is it has to be point neutral for the year, Given the seasons, and such, there could be a way to adjust across room types as long as the total for a specific unit remains the same,

So, when there are units that include more than one room type, then it would allow for changes. In terms of THVs, were any nights kept the same? What about premium weeks. Could thst have been used in some way to make it end up equal?

I am extremely surprised that this is the current text, I thought they changed it a lot, while this is almost identical to the SSR one.. It basically states that points can be reallocated only within one vacation home and a lockoff studio is a vacation home in its own (more so a dedicated studio). There is mention of points remaining the same for a unit and in their POS DVC's definition of a Unit is non consistent across a board *. At OKW for example a Unit is one building. In SSR is a collection or rooms (not the while building). But I don't think this matters a lot, given how etherogeneous Units are, given the beginning of the paragraph says points can be reallocated within the same Vacation Home, the substance of the rule is clear.
As I read it, this forbids a lockoff premium increase or increasing studios to decrease 1BR (or other similar rebalancing). But it forbids also reclassification of units by view and the creation of booking categories like SSR standard and preferred.
So, it's very much possible that my interpretation is wrong. Otherwise we're in for a surprise for the next point charts.


* = the definiton of a Timeshare Unit in the Florida law matches that of a Vacation Home in the DVC POS. I haven't found a "Unit" defined in Florida law anywhere. So the apparent contradiction of the paragraph disappears If we read Unit as a "Florida Law Defined Timeshare Unit" which equals a "DVC Vacation Home".

 

[zavandor]

The language about the premium weeks means that the 20% limit on reallocation per year doesn't not apply on floating holidays. Or, if for example they decide marathon week end becomes a 'premium week end'.

 

[Sandisw]

I am extremely surprised that this is the current text, I thought they changed it a lot, while this is almost identical to the SSR one.. It basically states that points can be reallocated only within one vacation home and a lockoff studio is a vacation home in its own (more so a dedicated studio). There is mention of points remaining the same for a unit and in their POS DVC's definition of a Unit is non consistent across a board *. At OKW for example a Unit is one building. In SSR is a collection or rooms (not the while building). But I don't think this matters a lot, given how etherogeneous Units are, given the beginning of the paragraph says points can be reallocated within the same Vacation Home, the substance of the rule is clear.
As I read it, this forbids a lockoff premium increase or increasing studios to decrease 1BR (or other similar rebalancing). But it forbids also reclassification of units by view and the creation of booking categories like SSR standard and preferred.
So, it's very much possible that my interpretation is wrong. Otherwise we're in for a surprise for the next point charts.


* = the definiton of a Timeshare Unit in the Florida law matches that of a Vacation Home in the DVC POS. I haven't found a "Unit" defined in Florida law anywhere. So the apparent contradiction of the paragraph disappears If we read Unit as a "Florida Law Defined Timeshare Unit" which equals a "DVC Vacation Home".

The part where it says it has to remain the same says per unit. The first part just says the can increase or decrease a vacation home, but where is has to be point neutral is within a unit...whatever that is for each resort.

It also has the maximum reallocation chart in the back. The way I read that is that this is what it would look like if there were no seasons.

Here is how Unit is defined, ”shall mean that portion of a DVC resort which is subject to exclusive ownership by one or more persons.”

Here is how Vacation Home is defined “ shall mean those portions of a unit designed and intended for separate use and occupancy.

It seems to be that the Unit is defined pretty loosely, which could be used by DVC as a way to justify point neutral changes across the resort?

To me, I think the language is such that it is muddy. And they do have the right to have lock off premiums. That is clear in another section, but I don’t think that allows them to not end up point neutral as a unit.

Again, I’m just guessing as that is how I see it. Lol

 

[zavandor]

The part where it says it has to remain the same says per unit. The first part just says the can increase or decrease a vacation home, but where is has to be point neutral is within a unit...whatever that is for each resort.

1) The first part explains how points can be moved: they can increase and decrease within the same Vacation Home
2) The second part states the end result: points within the same Unit must remain neutral.

Both must be true.
Now, if you move points from a 1BR to the studio of the same unit, the total doesn't change (so 2 is ok) but you haven't moved points within the same Vacation Home, so you have violated 1).
But if you move points only in the point chart of each Vacation home (so 1 is ok), then of course the result is that the points are neutral for the Unit (so 2 is ok as well).
At least, this is my interpretation.

It also has the maximum reallocation chart in the back. The way I read that is that this is what it would look like if there were no seasons.

Correct. The interpretation that allows DVC to increase the lockoff premium is that only the points needed to book the 2BR are counted, the points to book the lockoff portion don't. Since the total points sold at a resort are calculated only for the full 2BRs, I can see the appeal of this interpretation.
However for the resorts with dedicated studios, with the proposed 2020 charts, the new maximum reallocation value for some resots was greater than the value in the POS. Crevette raised this with Y. but she replied something like "the maximum reallocation value is there just for illustrative purposes, it is not legally binding", or something like that.

Here is how Unit is defined, ”shall mean that portion of a DVC resort which is subject to exclusive ownership by one or more persons.”

Units are well defined. In the POS there is a section with the map of all Units. Your contract will tell you that you own a 0,x% of Unit YYY. Units are what are declared in DVC inventory when rooms are released for members bookings. The definition is generic, but the Units themselves are decided when the resort is built and the POS created, they cannot change them in any way.

To me, I think the language is such that it is muddy.

I agree that, as probably most contracts, there are parts that are not 100% clear and could be interpreted in different ways. Otherwise how could lawyers earn their living?
However I don't think DVC wrote the POS muddy on purpose to exploit it later. They've just realised they could interpret it in a different way.
That's also the reason discussions on forums like this one are very important for all members: if we gain a better knowledge of the POS and the contracts, we can argue withe DVCMC management and possibly avoid things like the lockoff premium.

And they do have the right to have lock off premiums. That is clear in another section, but I don’t think that allows them to not end up point neutral as a unit.

The lockoff premium is part of the point chart released with the resort. I don't think there is any way we could contest it's not legal at all. That's the increase of the lockoff that is under scrutiny. For a number of reasons. One is what you say, the reallocation being point neutral for each Unit(but if all units are made of the same number of dedicated studios, 1BR and 2BR they would be point neutral even with the increase of the lockoff premium, I don't know if this is ever true for any resort, one should study the composition of each Unit).
Then there is part 1 of the reallocation rules. The maximum reallocation rule. And biggest of all: DVCMC has a fiduciary responsibility to act in the interest of the majority of members. Increasing the lockoff premium did hurt the majority of owners.

 

[Sandisw]

1) The first part explains how points can be moved: they can increase and decrease within the same Vacation Home
2) The second part states the end result: points within the same Unit must remain neutral.

Both must be true.
Now, if you move points from a 1BR to the studio of the same unit, the total doesn't change (so 2 is ok) but you haven't moved points within the same Vacation Home, so you have violated 1).
But if you move points only in the point chart of each Vacation home (so 1 is ok), then of course the result is that the points are neutral for the Unit (so 2 is ok as well).
At least, this is my interpretation.



Correct. The interpretation that allows DVC to increase the lockoff premium is that only the points needed to book the 2BR are counted, the points to book the lockoff portion don't. Since the total points sold at a resort are calculated only for the full 2BRs, I can see the appeal of this interpretation.
However for the resorts with dedicated studios, with the proposed 2020 charts, the new maximum reallocation value for some resots was greater than the value in the POS. Crevette raised this with Y. but she replied something like "the maximum reallocation value is there just for illustrative purposes, it is not legally binding", or something like that.


Units are well defined. In the POS there is a section with the map of all Units. Your contract will tell you that you own a 0,x% of Unit YYY. Units are what are declared in DVC inventory when rooms are released for members bookings. The definition is generic, but the Units themselves are decided when the resort is built and the POS created, they cannot change them in any way.





I agree that, as probably most contracts, there are parts that are not 100% clear and could be interpreted in different ways. Otherwise how could lawyers earn their living?
However I don't think DVC wrote the POS muddy on purpose to exploit it later. They've just realised they could interpret it in a different way.
That's also the reason discussions on forums like this one are very important for all members: if we gain a better knowledge of the POS and the contracts, we can argue withe DVCMC management and possibly avoid things like the lockoff premium.




The lockoff premium is part of the point chart released with the resort. I don't think there is any way we could contest it's not legal at all. That's the increase of the lockoff that is under scrutiny. For a number of reasons. One is what you say, the reallocation being point neutral for each Unit(but if all units are made of the same number of dedicated studios, 1BR and 2BR they would be point neutral even with the increase of the lockoff premium, I don't know if this is ever true for any resort, one should study the composition of each Unit).
Then there is part 1 of the reallocation rules. The maximum reallocation rule. And biggest of all: DVCMC has a fiduciary responsibility to act in the interest of the majority of members. Increasing the lockoff premium did hurt the majority of owners.

Thanks and you answered a question I thought of and that was if the could redraw the units..ie: Change what rooms are part of a unit...and they obviously can’t if that is decided at the beginning.

Well, the language at top of maximum reallocation chart states that a member would be able to book at least one night at those levels, so I am surprised the answer was it wasn’t meant to be binding.

I agree that I do t think anything was done in a way to try to screw with members, but rather, as you said, realized it was vague enough that they could interpret it a different way, except of course, what they tried to do last year.

I really can’t wait to see if things change with 2021 charts. It’d be nice if that could be asked at meeting, but I know they limit topics to budget.

 

[Brian Noble]

If resale was worth 0, would new direct contracts sell for as much as they do? I agree that a portion of new buyers do not worry or even know about resale. But I suspect all add on customers are aware of the resale value of contracts. This factors into their decision to add on. If resale plummets, especially for specific contracts, I do think direct purchases for those contracts will suffer.

As much as they do? Maybe not. But still healthy. Many other timeshare systems do just fine in terms of developer sales despite the lack of any functional aftermarket.

 

[Bearval]

As much as they do? Maybe not. But still healthy. Many other timeshare systems do just fine in terms of developer sales despite the lack of any functional aftermarket.

There are dozens of timeshares out there that are essentially worth zero, charities won’t take them as a donation, the timeshare company won’t take them back and yet they still find new buyers.

 

[CanadaDisney05]

There are dozens of timeshares out there that are essentially worth zero, charities won’t take them as a donation, the timeshare company won’t take them back and yet they still find new buyers.

If someone is willing to pay top dollar for a timeshare that they can buy on eBay for zero, then they weren't going to buy resale anyways. This doesn't mean the developer sells any extra units.

If Disney drives the price down of the resale market, it doesn't mean more people buy direct. It just means those who buy resale are buying at a cheaper price. In order for resale prices to go down, there needs to be a transaction. In order for there to be a transaction there needs to be a buyer and a seller. A seller is usually someone who no longer wants the financial commitment and will we willing to sell for what the market bares. If there is a buyer in a resale transaction, that is one more buyer not buying direct.

The only way I see how Disney drives more direct purchases is

1) create more purchasers by making a better product.

2) reduce the number of sellers by keeping them happy, engaged, and keeping costs down.

Simply keeping the same number of buyers and sellers in the overall system does nothing to increase profit to Disney.

The only way any of this makes sense is if their eventual plan is to start charging a fee like Marriott does to convert "resale points" into "direct points". For this to work, the resale price has to be significantly lower than direct, and there needs to be product differentiation. Free profit for Disney while the resale broker does all the work.

 

[we"reofftoneverland]

As much as they do? Maybe not. But still healthy. Many other timeshare systems do just fine in terms of developer sales despite the lack of any functional aftermarket.

Right but aren’t other timeshares less expensive than Disney to buy direct?

 

[Bearval]

If someone is willing to pay top dollar for a timeshare that they can buy on eBay for zero, then they weren't going to buy resale anyways. This doesn't mean the developer sells any extra units.

If Disney drives the price down of the resale market, it doesn't mean more people buy direct. It just means those who buy resale are buying at a cheaper price. In order for resale prices to go down, there needs to be a transaction. In order for there to be a transaction there needs to be a buyer and a seller. A seller is usually someone who no longer wants the financial commitment and will we willing to sell for what the market bares. If there is a buyer in a resale transaction, that is one more buyer not buying direct.

The only way I see how Disney drives more direct purchases is

1) create more purchasers by making a better product.

2) reduce the number of sellers by keeping them happy, engaged, and keeping costs down.

Simply keeping the same number of buyers and sellers in the overall system does nothing to increase profit to Disney.

The only way any of this makes sense is if their eventual plan is to start charging a fee like Marriott does to convert "resale points" into "direct points". For this to work, the resale price has to be significantly lower than direct, and there needs to be product differentiation. Free profit for Disney while the resale broker does all the work.

Disney is already making a better product, they are just using the George Orwell 1984 method.

 

[Brian Noble]

Right but aren’t other timeshares less expensive than Disney to buy direct?

Not necessarily. Typical Wyndham buyers spend tens of thousands of dollars. My relatively modest resale deed would cost about $27K at current prices---and that's if you negotiate hard.

 

[iflyjetzzz]

Right but aren’t other timeshares less expensive than Disney to buy direct?

We went to a Hilton timeshare tour in Vegas; a 1BR week ran ~$60K and that was a few years ago. So no, a lot of other timeshares are at least as expensive as DVC.

 

[ziravan]

I own at Wyndham but bought all my points resale and I would never consider buying direct.

I would have never considered buying any timeshare direct. So I bought a resale BCV contract.

my exposure to DVC with BCV as a resale owner directly influenced my decision to buy Poly direct. A significant part of that decision was my best guess on resale value. I bought Poly direct because I felt that I could reasonably rely on the contract holding its value. I know there were no promises as such. “past performance doesn’t equal future success yada yada.” But it was a decent bet made by someone who bought Wyndham points for pennies on the dollar.

I bought Poly direct in 2015. It wasn’t until 2016 that DVC really started screwing with restrictions, the 2011 restrictions being very mild.

I would not consider buying a new contract at Riv or anywhere with the new restrictions. I had thought to buy a 100 point contract at Riv but I would not do so with the current restrictions in place.

Here’s the thing: the people who buy high on pixie dust who never heard of resale - these restrictions never matter to them. The whole point of the restrictions was to impact someone with enough information about resale that the restrictions would affect their decision-making, tipping the balance to buying direct. In that way, these new restrictions have back-fired. For as many potential buyers that the new restrictions have tipped their decisions towards buying RIV direct, there are at least as many or more buyers that have been turned off to RIV because of the restrictions.

The pixie dusted buyers keep on buying having never heard of resale and only being told about restrictions in passing, if at all. If the restrictions were lifted tomorrow, it wouldn’t matter anymore than if they weren’t.

The people the restrictions were set up for in order to convince them to buy direct instead? This has been a disaster. DVC turned off far too many of these buyers instead of tipping them towards direct.

 

[we"reofftoneverland]

We went to a Hilton timeshare tour in Vegas; a 1BR week ran ~$60K and that was a few years ago. So no, a lot of other timeshares are at least as expensive as DVC.

Wow that is crazy

 

[sky2823]

I agree that a lot of buyers make an emotional decision without being educated on direct vs resale.

However, if they maintain these restrictions, in the long-term markets will be efficient and it will start impacting these first time buyers. Eventually there will be enough news articles and info out there that even an emotional purchaser will be warned off by a quick google search.

The restrictions are a sledgehammer, where they should have used a small hammer and achieved a better result for themselves in the long-term. They will need to change it IMO.

I dont blame Disney for wanting more of the pie. There was an inefficiency in the market and they were leaving money on the table. However, the “restrictions strategy” is just a terrible way to achieve their goals. Just from a purely business strategy perspective, it’s just BAD. Like “7th grade class project” bad.

If you are going to upset your core buyer anyway, you should have at least cleaned it all up and made the logistics and IT easier for yourself. DVC 1 vs DVC 2, direct vs resales, grandfathered in contracts every time there is a rule change. ITS A TOTAL MESS.