Riviera vs. 2042

[sethschroeder]

The larger group of, buy resale SSR and AKL for SAP or only trading out, is blocked.

So they buy direct instead? Yes through Disney then but that only helps Disney I think some are asking how does this help me as a direct owner.

That does hurt Disney directly both in selling DVC (much smarter to rent if you don’t go yearly), and hurts by losing those dollars on rooms. It’s also a growing business.

Except rentals will only increase. Selling prices go lower, meaning faster break even to rent and hold contracts, meaning more points rented instead of a resale buyers hands. It also points those on the fringe towards rental instead of purchase because they cant/won't pay direct prices.

I don't see the benefits to direct buyers except in a tiny group being restricted to RIV. Doesn't have to make sense those Disney decides and then I determine if their "dumb" rules are worth dealing with for the benefits offered.

 

[mousemagic00]

So they buy direct instead? Yes through Disney then but that only helps Disney I think some are asking how does this help me as a direct owner.



Except rentals will only increase. Selling prices go lower, meaning faster break even to rent and hold contracts, meaning more points rented instead of a resale buyers hands. It also points those on the fringe towards rental instead of purchase because they cant/won't pay direct prices.

I don't see the benefits to direct buyers except in a tiny group being restricted to RIV. Doesn't have to make sense those Disney decides and then I determine if their "dumb" rules are worth dealing with for the benefits offered.

You’d have to quote my whole post, not the snippets, to get the systematic impacts.

The benefits in this case, are to direct buyers. Not all owners. And potentially weighted, because of what resort this change started with, to RIV direct buyers.

Everyone please don’t read this as saying RIV is better, it’s not. It’s simply the first resort that forces the change.

1. Benefit to direct RIV owners: It’s also a growing group of people being blocked out from RIV. From now on, cheap SAP resale won’t work. People can buy direct SAP, which DVC benefits from, and the cost savings is reduced. For those people who bought SSR resale after Jan 2019, or resale Aulani, or resale HHI, AKL or VB....never intending to use those points at those resorts.... RIV buyers don’t have to compete for 7 month bookings. So as resale happens at other resorts, those people can’t impact RIV.

(((Writing that I realize this could help DVD sell Aulani direct to help fix the sales there.)))

2. RIV & future resorts are somewhat shielded from a chunk of the professional rentals. Rental will still happen but over time, if it’s less of a profit center, the money stays with the direct owners. This factor will grow with time and my guess - drive up rental costs because the owners can push for higher return per point. Sure rental companies will figure a way to use resale points limited to the new resorts but the FTE time needed to get reservations and manage the points etc.... it’s going up, which drives up the rental cost... which makes it easier for Disney rack rates to be competitive.

The rest of my earlier post put the downside to this as well.

 

[sethschroeder]

You’d have to quote my whole post, not the snippets, to get the systematic impacts.

The benefits in this case, are to direct buyers. Not all owners. And potentially weighted, because of what resort this change started with, to RIV direct buyers.

Everyone please don’t read this as saying RIV is better, it’s not. It’s simply the first resort that forces the change.

1. Benefit to direct RIV owners: It’s also a growing group of people being blocked out from RIV. From now on, cheap SAP resale won’t work. People can buy direct SAP, which DVC benefits from, and the cost savings is reduced. For those people who bought SSR resale after Jan 2019, or resale Aulani, or resale HHI, AKL or VB....never intending to use those points at those resorts.... RIV buyers don’t have to compete for 7 month bookings. So as resale happens at other resorts, those people can’t impact RIV.

(((Writing that I realize this could help DVD sell Aulani direct to help fix the sales there.)))

2. RIV & future resorts are somewhat shielded from a chunk of the professional rentals. Rental will still happen but over time, if it’s less of a profit center, the money stays with the direct owners. This factor will grow with time and my guess - drive up rental costs because the owners can push for higher return per point. Sure rental companies will figure a way to use resale points limited to the new resorts but the FTE time needed to get reservations and manage the points etc.... it’s going up, which drives up the rental cost... which makes it easier for Disney rack rates to be competitive.

The rest of my earlier post put the downside to this as well.

I fully quoted you this time. Again I will repeat it doesn't help RIV owners in the long run. Yes there is roughly what 20% of the points that have been resold at older resorts?

A) You already had 11 month advantage so locking out resale does nothing for RIV owners at RIV for the booking advantage
B) 14 resale owners being locked out of RIV will mean availability will be more locked in at those 14 resorts, so less people waiting on RIV at 7 months and instead booked at their home resort or wait listing 14 resorts giving RIV owners slightly less flexibility if they want to move (example resale owner would like to book at RIV opening up space at GFV but since they can't book there they stay at their home resort not opening a space for the RIV owner)
C) Future RIV resale are locked in to the resort and thus will be booking more likely at 11 months compared to someone with options, not to mention I think it will push people more to walking reservations if you only have 1 shot
D) New resorts will only add more points direct (possibly faster than resale but someone might have the numbers on that)
E) You are stilling going to have 80% of the DVC points able to be used at RIV
F) Rentals will only increase, instead of selling people will hold their contracts and rent them out in the future, there will be a quicker breakeven (Saratoga as an example after 2042 and pool of hotels are limited, buying resale will be much less valuable leading to depressed prices, on the flip side with less flexible/low priced resale will force more in to the rental market thus driving up the pricing)

So I don't see how this could ever be confused with helping the RIV direct owner.

As far as the professional rental companies. If they own the contracts Disney can already take legal action from what I understand. The rental companies from my understanding are also renting others points not their own so that doesn't impact direct RIV vs resale RIV since both would have rental points for RIV available if they tried renting it out.

 

[Bing Showei]

People keep asking how the resale restrictions benefit owners.

This is controversial but it may benefit direct RIV owners for a good part of our contract.

Because while everyone points out the resale owners can only stay at RIV, the resales at the oldest resorts run about 20%.

That number may drop as watching the debate about RIV has shown some owners have sold because the price was too good to pass up.

There will still be resale, but I think the glory days of something like BCV selling for more than the purchase price is over for DVC. Which does suck, I agreed.

What is helpful, possibly, for RIV owners is you will no longer be competing against resale owners for stays.

The larger group of, buy resale SSR and AKL for SAP or only trading out, is blocked.

And, more specifically, I do think Disney wants to hit rental organizations who have the time to stalk reservations with resale points to cut the costs of cash stays. That does hurt Disney directly both in selling DVC (much smarter to rent if you don’t go yearly), and hurts by losing those dollars on rooms. It’s also a growing business.

So you are competing against direct owners only for stays at 7 months. Plus reading here the VIP contracts have people less likely to trade out to stay elsewhere. Plus RIVs points per night also make it more GFV-like to stay at point-wise, so also less attractive if you are stretching points or only have a small direct number of points.

I’m hesitant about the restrictions and trying to book, so don’t get me wrong, I wrote the above as discussion. I bought a guaranteed week because I can see how it could go poorly.

I also think my trying to stay at Poly is going to be much harder at 7 months because of this whole situation, so it has a big downside. To the point I know I’ll buy at Poly, either through resale or direct.

Let’s assume, for the sake of discussion, what you suggest does play out; it would literally take decades of your Riviera ownership for enough new resorts to come online, for those new resorts to turn over in resale, and for enough grandfathered resale contracts to turnover in resale, for you to see any benefit at all to the 7-month booking window that you are describing.

Throw another SSR-type resort into the mix of new resorts that open with these anti-owner restrictions, and those millions of direct “less-popular” points will flood your 7-month window anew.

If this is the only benefit you can come up with for the restrictions, it’s a great case for waiting on several more newly restricted resorts to come online to see how Disney’s grand experiment plays out, and a horrible argument for buying Riviera today.

Additionally, the trouble with embracing changes that hurt current owners (as these restrictions do, direct or resale) in the interest of the potential long term benefit of future owners is that the minute you sign that contract and Disney has your money, you immediately become a current owner. Will you be as understanding when the next round of restrictions hurt you?

Suppose for example you buy in, projected how you can be made whole by higher rental rates (as you noted could happen above) and then Disney decides that rentals are hurting their bottom line (as you also noted above) and rather than targeting commercial agencies specifically, they hit all owners and add a new restriction that renting is no longer allowed. It won’t hurt new owners as they’ll know that going in and won’t factor that into their projected risks. But it would hurt you as clearly you’ve considered rentals potentially offsetting any loss you might incur from these very same resale restrictions you are defending.

How much comfort do you take in believing they would never do that to you when you have just readily acknowledged that the latest restrictions hurt every owner (resale and direct) except new Riviera owners?

 

[mousemagic00]

I fully quoted you this time. Again I will repeat it doesn't help RIV owners in the long run. Yes there is roughly what 20% of the points that have been resold at older resorts?

A) You already had 11 month advantage so locking out resale does nothing for RIV owners at RIV for the booking advantage

It does because you have less competition beyond 7 months and the 20% number I believe was oldest resort OKW, so for many years you’ll be well under 20% locked in RIV owners.

B) 14 resale owners being locked out of RIV will mean availability will be more locked in at those 14 resorts, so less people waiting on RIV at 7 months and instead booked at their home resort or wait listing 14 resorts giving RIV owners slightly less flexibility if they want to move (example resale owner would like to book at RIV opening up space at GFV but since they can't book there they stay at their home resort not opening a space for the RIV owner)

This is partially true, until new resorts open, should a RIV owner decide to go to other resorts. I’m assuming people will, but RIV owners have the same 7 month pressure everyone has at the other resorts.

C) Future RIV resale are locked in to the resort and thus will be booking more likely at 11 months compared to someone with options, not to mention I think it will push people more to walking reservations if you only have 1 shot

Not part of my original post, it’s something I’ve talked about elsewhere and mentioned potential frenzy during F&W not unlike value, or club level rooms.

D) New resorts will only add more points direct (possibly faster than resale but someone might have the numbers on that

Yes, this creates a value for DVC selling direct, and yes, creates more 7 month opportunity for RIV direct, and wasn’t part of my post. Elsewhere it’s been talked to etc.

E) You are stilling going to have 80% of the DVC points able to be used at RIV

Yes, if it’s 20% total resale currently...but that was what I was talking towards on value to RIV direct to the owners with blocking out the resale SAP vs use of VIP points. People have contracts per this board they trade out less frequently vs those points bought with no intention to ever use at the home resort.

F) Rentals will only increase, instead of selling people will hold their contracts and rent them out in the future, there will be a quicker breakeven (Saratoga as an example after 2042 and pool of hotels are limited, buying resale will be much less valuable leading to depressed prices, on the flip side with less flexible/low priced resale will force more in to the rental market thus driving up the pricing)

So I don't see how this could ever be confused with helping the RIV direct owner.

This is where I think we diverge more readily on value to RIV (or new resorts). If prices drop to the point resale is not appealing financially, and renting is, then owners renting may go up, but the direct points are still all the same at 7 months. Likely, securing vacations for other people will mean a chunk of points stay at home resorts. Resale contracts can’t rent at RIV, so no issues with those points, as that pool continues to grow, unless they are RIV contracts, and those points already belong to the resort... plus I’ve mentioned I don’t disagree with potential issues later in ownership.

As far as the professional rental companies. If they own the contracts Disney can already take legal action from what I understand. The rental companies from my understanding are also renting others points not their own so that doesn't impact direct RIV vs resale RIV since both would have rental points for RIV available if they tried renting it out.

The rental value of renting resale points from any resort into RIV is gone.

 

[Soap_1984]

Haha I won't be here in 50 years if I am lucky I may get 20 and I won't get tired of going in that time frame. I will never lose my job because I am the job and I retire early in 3 years with several pensions and annuities. Not everyone is in the same position as others you just like to assume they are.
BTW DVC is hardly an asset ... assets don't have end lifes.

What kind of a business owner makes this statement. What magical assets are you buying that last forever?

I get dvc should not be seen as an asset in the traditional sense, but it does have a value and can earn income. Similar to a motorcycle you could buy it and rent it out or just use it, either way everyone would like to sell it at the end and recover something.

Unfortunately Doug I don't really share your views on tangible assets. Like a vacation you shell out for at a one time possible cost of 5-10K I view my timeshare in the same light. I simply bought to have a vacation in place I enjoy at a reduced cost I don't expect other people to compensate me for it the future. I view most people here disregarding Riviera and DVC in general as tire kickers who just want.. want .. want like spoiled children and are never happy with what they get.

Now with that being said I am sure upper management won't care for my statement as well as the posters who frequent this forum. I am sure my new friend Bing Showei will attack me with vitriol for that but it won't bother me in the least. Resale .. resale .. resale it hurts the resale it doesn't hurt resale it hurts what you expect to get in return you want to pay 100% and get 150% back after you use it for ten years and then I hear how honest people treat their clients and Disney should return the favor. Some of you should listen to yourselves disingenuous at best.

Just so you know Doug because you are definitely unaware, it's not the house that makes the value it's the land, yes that's right, the real estate is the inherent value. I will see you at Disney I will be the guy with a big happy face enjoying myself at Riviera while you try to figure out how to get your money back and then some from your DVC purchase.

Sleep well and all the best
John

You don't agree with the accepted definition of what an asset is? What are these magical assets you own that don't ever age?

You amortize assets over their useful life, meaning they have a life which eventually ends. No one goes into buying dvc with the intention of selling, it just happens. It you ever need to sell you can take whatever you get from the sale and give it to Disney.

You state you want to own Riv to save money but the whole point made by everyone who has a rudimentary understanding of finance is that you can't save money at riviera by buying dvc for three + decades. You stated yourself you are retiring soon; if you are retiring at close to average age you won't save money in your lifetime.

Disney has every right to charge whatever they want and restrict as much as they like with new properties, i think most people here simply think it is a mistake and it might backfire on them.

 

[mousemagic00]

Let’s assume, for the sake of discussion, what you suggest does play out; it would literally take decades of your Riviera ownership for enough new resorts to come online, for those new resorts to turn over in resale, and for enough grandfathered resale contracts to turnover in resale, for you to see any benefit at all to the 7-month booking window that you are describing.

Throw another SSR-type resort into the mix of new resorts that open with these anti-owner restrictions, and those millions of direct “less-popular” points will flood your 7-month window anew.

If this is the only benefit you can come up with for the restrictions, it’s a great case for waiting on several more newly restricted resorts to come online to see how Disney’s grand experiment plays out, and a horrible argument for buying Riviera today.

Additionally, the trouble with embracing changes that hurt current owners (as these restrictions do, direct or resale) in the interest of the potential long term benefit of future owners is that the minute you sign that contract and Disney has your money, you immediately become a current owner. Will you be as understanding when the next round of restrictions hurt you?

Suppose for example you buy in, projected how you can be made whole by higher rental rates (as you noted could happen above) and then Disney decides that rentals are hurting their bottom line (as you also noted above) and rather than targeting commercial agencies specifically, they hit all owners and add a new restriction that renting is no longer allowed. It won’t hurt new owners as they’ll know that going in and won’t factor that into their projected risks. But it would hurt you as clearly you’ve considered rentals potentially offsetting any loss you might incur from these very same resale restrictions you are defending.

How much comfort do you take in believing they would never do that to you when you have just readily acknowledged that the latest restrictions hurt every owner (resale and direct) except new Riviera owners?

Bing, because I discuss something doesn’t mean I’m touting something or “finding comfort”. You isolate it out to “me” and how “I” feel.

I answered a question someone asked about advantages. I answered with a scenario I see in the current system.

I didn’t say anything about anyone having to embrace change.

But what I’m presenting for discussion is another angle to the repeat message on this board.

It’s not me trying to do anything, but, it’s bringing up discussion points since none of us know how this will play out. I even tried to clearly state that this time.

“I” made my choice. For reasons mentioned elsewhere, and you know you and I don’t agree with why I made my choice. But I thought we got past the whole RIV owners not getting message we were crossing an internet picket line by buying.

For discussion:

Only Aulani, CCV and RIV have unsold points that aren’t fully in the system. Even other direct sales from ROFR are accounted for in potential points competing. New resales post 2018 can’t be used at RIV, creating the advantage buffer I was talking towards in the near future, not later.

Everything for RIV is frozen as is, as of, Jan 2019.

VIP vs SAP contracts is why I think there will be a faster advantage. As long as SAP continue and resale continues to be the way to go, advantage at RIV 7 month builds. Few people are buying BCV direct to stay at RIV instead other than a 1 off.

People may buy SSR or AKL direct to use them unrestricted at 7 months (happy DVD), but so far I haven’t seen substantial contracts being reported for direct on those.

People still see and want the L14 system for good reasons everyone here stresses.

Downside for *me* personally? I believe to stay at Poly now, I’m definitely going to be buying points.

As far as new resorts... they are not here yet, so the direct points from them impacts RIV later, as they are built. Plus, assuming they carry the same restrictions, the resales from even a refreshed, or new SSR type won’t ever flood the system via SAP type contracts, because those points get locked at the home resort. The 7 month window for direct owners if resale reduces (I do believe it will) can get crowded, but if it’s all direct flowing in and out, wouldn’t it achieve the balance touted here regularly as to why DVC works?

So this is not RIV specific. Those new resorts are also now going to get more home field advantage at 7 months as RIV resale is locked in place... etc etc.

Now again, I’ve said before it’s bonus to me if that resale restriction goes away, because *I’d* rather have DVC without this issue, but I didn't tip into buying makes more sense until this year.

So from my way of considering the new system, I won’t be battling resale purchases as it happens post 2019 and it will continue because for now is “the way” to buy. 100 points (now) for perks if people want and then resale. It was my original plan until a few personal reasons made me want to take advantage of the current offers for RIV.

BTW, I actually believe if the rental market does continue to challenge Disney with half price type stays... it’s next on the chopping block. Yes, that would suck.

What I find interesting is I’ve never said I was in favor of these changes.

And I didn’t change anything. Disney did. I’m in the same boat as everyone here as far as not fully understanding the downstream effects.

 

[Spark65]

What kind of a business owner makes this statement. What magical assets are you buying that last forever?

I get dvc should not be seen as an asset in the traditional sense, but it does have a value and can earn income. Similar to a motorcycle you could buy it and rent it out or just use it, either way everyone would like to sell it at the end and recover something.

You don't agree with the accepted definition of what an asset is? What are these magical assets you own that don't ever age?

You amortize assets over their useful life, meaning they have a life which eventually ends. No one goes into buying dvc with the intention of selling, it just happens. It you ever need to sell you can take whatever you get from the sale and give it to Disney.

You state you want to own Riv to save money but the whole point made by everyone who has a rudimentary understanding of finance is that you can't save money at riviera by buying dvc for three + decades. You stated yourself you are retiring soon; if you are retiring at close to average age you won't save money in your lifetime.

Disney has every right to charge whatever they want and restrict as much as they like with new properties, i think most people here simply think it is a mistake and it might backfire on them.

Hey Soap

A little gleaning from the internet and I believe your financial advisor would agree.

" Real estate usually over time appreciates in value and can be sold for cash. Do not confuse owning real estate with that of a timeshare though. Timeshares are the dictionary definition of illiquid, as they cannot be converted into cash. The truth of the matter is your timeshare is a liability."

I retire early and the savings will end up with my kids in the end like I have said which you missed in your readings. I am not looking at making money either you missed that one as well I used disposable money for my purchase something everyone here should be doing.
With that being said Soap as I am an L14 owner and RIV owner I enjoy Disney for what it is and will continue while Disboard posters allow resale to affect their enjoyment and leave that unenjoyable bad taste in their life forever.

 

[CanadaDisney05]

A little gleaning from the internet and I believe your financial advisor would agree.

" Real estate usually over time appreciates in value and can be sold for cash. Do not confuse owning real estate with that of a timeshare though. Timeshares are the dictionary definition of illiquid, as they cannot be converted into cash. The truth of the matter is your timeshare is a liability."

Don't believe everything you read on the internet.......... Choose to believe me or not (fwiw, I'm a CPA), but a timeshare by definition is an asset. A bit of interpretation of the quote above; what the writer is suggesting is that due to poor management, traditional timeshare's depreciate very quickly and end up with large maintenance fees. While the maintenance fees are not technically a liability by definition, they are costs that you will be forced to pay on a nearly fully depreciated asset.

In my personal opinion, just because most timeshares are run by crooks, doesn't mean I should just accept the same type of behavior from a large corporation like Disney, Marriott, Hyatt, Wyndham, etc.... The reason we pay a premium for DVC (vs the competitors) is because of the brand recognition, and the expectation that they have a reputation to uphold.

 

[DougEMG]

I’d love to do this, although suspect the response would be frustrating.

What did they say Doug?

So I spent the first 25 minutes going over some of the things we have been discussed here around resale restrictions, lock offs and how the general feeling on discussion boards like this had taken a negative tone against DVC. They seemed unaware that these changes were not being taken well by some of their members. They definitely seemed concerned though as they eventually had me talking to three separate people, one of whom was the highest ranking executive at the event. I tried to leave it on a positive note though by saying how much I really loved DVC because it wasn't like other timeshares and that I would hate to see it turn into every other timeshare.

Overall I feel they did a good job listening to my concerns.

 

[jerseyduke]

" Real estate usually over time appreciates in value and can be sold for cash. Do not confuse owning real estate with that of a timeshare though. Timeshares are the dictionary definition of illiquid, as they cannot be converted into cash. The truth of the matter is your timeshare is a liability."

Last I checked this board was sponsored by a company that can convert your DVC to cash, so there goes the illiquid argument.
It is a liability in the sense that there is ongoing cost of ownership, unlike a house where....oh wait....nevermind......

It could take a while to convert your DVC asset to cash, just as it could a home, depending on how you price it.

DVC has an expiration date, and so does everything and everyone.

Momento Mori!

 

[DougEMG]

I’d love to do this, although suspect the response would be frustrating.

What did they say Doug?

The other thing we talked about was that first resale RIV contract going for $100 per point and how that would effect them. They weren't happy about that.

 

[McCrae]

For the majority of owners I don’t see this as a problem. If you own at some of the less popular resorts where people buy cheap points and plan to use them at more popular resorts I can see how this could impact their resale prices. I can see a two tier resale market.

 

[Wakey]

It's a crying shame threads like this exist. Dis persuaded me to take my first contract with excellent advice. It was essential research for me and without it, I doubt I'd have bought in.
Back then, not that long ago, whilst realistic warnings were always put forward regarding perks can be taken away etc, the overall tone was overwhelmingly positive.
Now because of DVC's actions, the tone is necessarily much more negative, as myself and other members see it hurtling towards 'just another timeshare' in order to increase the bottom line.
I'm very worried, as per Doug's conversation, that the management don't realise how the tone has changed.
The whole point and ethos of DVC, it's very reason for it's initial existence and enduring popularity (and profitability) is because it isn't just another timeshare.
It's like taking any other product and ripping out it's core being. Bad idea long run- but what exec is in it for the long run? DVC seems to be a fast track to retirement or a stepping stone.

 

[ELMC]

I like to analyze major purchases and do mainly worst case scenarios. One scenario is being forced to sell early for some reason. I would like to know at what point would a sale “break even“ versus cash only stays. Resale comes into play in that any value it provides means I can sell earlier and still come out ahead. I don’t expect to make a profit, just save money on our stays.

In comparing to the 2042 resorts, RIV has an advantage over them with a lower depreciation rate, which I wanted to confirm with other members here. While not on par with the resale restriction, it is one of the many factors that should be considered in deciding a home resort.

To oversimplify an answer to your question, buying direct yields a roughly 10-15 year breakeven vs. cash stays, a 15-20 year breakeven vs. discount cash stays, and a 20-30 year breakeven vs. renting points. These are general ranges and they vary depending on assumptions, but I think they are fair. Buying resale shaves about 5 years off of each of those spreads. To your point about saving money on your stays, it has been my contention for quite some time that at today's pricing model, DVC is not an efficient way to save money on your stays. It still offers a LOT, and for those who get value out of controlling your reservation, AP discounts, special events, etc. then DVC is still a great product. But it is no longer a slam dunk on savings. Something to consider.

I would also add that if this recession does come, and Disney is forced to discount rooms in order to stimulate demand, DVC owners will not be beneficiaries of this move. It would also change the math and push those projections out very far into the future. I just booked a 1BR at the Riviera using the Chase Disney Visa 40% off deal. The numbers work out that if I were to do that for 50 years, it would likely be a better deal than buying. The counter, of course, is that this deal won't be available for 50 years. But if we hit a recession and similar deals are available for the next 5-8 years, I'll likely be dead before I would ever break even on a RIV contract and I'm still in my 40s. [In fairness, this is for a 1BR. The pricing on studios is a lot less attractive for cash bookings.]

As for the depreciation rate, I would be very careful with this one as it is completely dependent on time. If you buy any resale resort today, you will likely only realize a 10% depreciation immediately in the form of a potential dip in price and the commission you would pay in order to sell it. It's not likely that resale prices track much higher from here, but I've been wrong on that before. Buying Riviera, however, would lead to an instantaneous drop of anywhere between 25%-50%. As time goes on you are correct, and RIV will have an advantage in depreciation rate. In 23 years it's a slam dunk...the 2042s will have experienced 100% depreciation (they will have expired) and Riviera will likely have some value.

An asset is a resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide a future benefit. (Investopedia.com)

I think that under that definition, DVC is an asset. I certainly consider DVC an asset, same as I consider an annuity an asset or a car an asset. Both those items go to zero eventually.

Houses are also assets and eventual they fall down and go to zero, it just takes a long time.

One of the reasons that assets can be depreciated is that they go to zero eventually.

Maybe I am getting the wrong impression from your posts, but the impression I get is that you think it is perfectly reasonable for "timeshares" to have zero value the minute after they are sold. That fact that many of them do just means that the developers in my opinion are a bunch of crooks and con men looking to rip off their uniformed customers.

I think that there is a general consensus that a timeshare is an asset. To state otherwise is folly and I question the motives of why someone would engage in this argument. That said, it is not a safe asset. It is subject to significant variances and tremendous potential drops in value. You and I have been having this conversation on here for years...while DVC technically is not an investment, it has served as one for many members of the boards. For anyone with that experience, it is difficult to accept this new normal we find ourselves in. And for those coming into things where the new normal is all they know, it is virtually impossible to see it any other way.

Yes, people on here spend their time bemoaning the loss of something which was really unusual, i.e. what DVC used to be. You can almost vividly see the Disney execs saying to each other "wow, that deal we've been dishing out for the past couple of decades was WAY too good...what were we thinking? How can we tactfully back out of it?" The ability to have spent well under $100pp years ago on the most in-demand resorts, use the contracts for 20 years, and then sell for 2-3x the original buying price -- that's not a time share, that's an irresponsibly good deal on the part of a company which doesn't need to be bargaining itself away in that manner. This forum is proof of it: what other Timeshare, in all other contexts a terrible use of one's money and typically marketed to the sadly uninformed via egregious gifts and freebies simply for tolerating the pitch, has ever inspired a whole community of people who lurk around here -- so excited as to not only talk about their own purchases, but to deliberate oddly year after year about other people's potential purposes, to speculate about pricing and point charts for resorts two years from opening, etc etc. All things which are too good to be true must come to an end, as is happening in this case.

We should not expect to get any significant amount of money back for our new contracts. It was odd that we ever could, and lately Disney has decided to acknowledge it.

This is so incredibly well said. To add to your beautiful statement above I would like to say that DVC as a product hit its peak on day one and has been getting worse ever since. When OKW first came online buyers paid $48 per point ($91 in today's dollars) and received numerous perks that no longer exist such as free valet parking and close to ten years worth of park admission. Over the years Disney changed the deal, making it better for them and worse for the consumer. And as you state above, that is perfectly ok. Remember when the Disney Dining Plan was a fraction of the cost and included an appetizer and gratuity? Point is, you're absolutely right. They literally gave these things away as a means of growing their business because that's what they needed to do. The original Disney Vacation Club nearly failed. Let's also not forget that in the 1980s The Walt Disney Company was in such poor shape that they nearly got taken over by greenmailers.

To your point, Disney has corrected and these amazing deals no longer exist. The only question is this: have they over-corrected?

It's a crying shame threads like this exist. Dis persuaded me to take my first contract with excellent advice. It was essential research for me and without it, I doubt I'd have bought in.
Back then, not that long ago, whilst realistic warnings were always put forward regarding perks can be taken away etc, the overall tone was overwhelmingly positive.
Now because of DVC's actions, the tone is necessarily much more negative, as myself and other members see it hurtling towards 'just another timeshare' in order to increase the bottom line.
I'm very worried, as per Doug's conversation, that the management don't realise how the tone has changed.
The whole point and ethos of DVC, it's very reason for it's initial existence and enduring popularity (and profitability) is because it isn't just another timeshare.
It's like taking any other product and ripping out it's core being. Bad idea long run- but what exec is in it for the long run? DVC seems to be a fast track to retirement or a stepping stone.

Excellent points all around. I would add that it's not just with DVC; I think we are seeing it across the board in every aspect of the Disney business model. I still love Disney and I still love DVC but it's requiring a little more suspension of disbelief in order to enjoy the "Magic". I still buy my Annual Passes and I still eat in the restaurants. But the days of my buying $35 t-shirts and $200 DVC points are over. I've already sold three of my five DVC contracts and I'm looking more and more at staying offsite for a fraction of the cost (I include the Swolphin in this category as well). It's sad and I wonder if they will ever pull back towards the center.

 

[_auroraborealis_]

To oversimplify an answer to your question, buying direct yields a roughly 10-15 year breakeven vs. cash stays, a 15-20 year breakeven vs. discount cash stays, and a 20-30 year breakeven vs. renting points. These are general ranges and they vary depending on assumptions, but I think they are fair.

And I would add that financing adds years to breakeven. I have seen some dodgy "financial calculations!" that fail to include their 12% interest loan. Which... it's fine to admit something was an emotional decision.

 

[lmhall2000]

Someone stated CCV sold out in record time. It’s not sold out yet- we were told it was 95% sold out but they are still selling points as of last week- for $210 and no incentives.

 

[_auroraborealis_]

Someone stated CCV sold out in record time. It’s not sold out yet- we were told it was 95% sold out but they are still selling points as of last week- for $210 and no incentives.

It's sold out.

They are also selling points at Saratoga and Bay Lake Tower.

 

[Brianstl]

Nobody should ever consider something an investment when the people responsible for that asset have no fiduciary responsibility to you.

 

[treygn]

So after 18 months of struggling with this question I finally bought at Boardwalk direct from Disney this past weekend. Ultimately, Boardwalk is where I want to stay and I didn’t want to wait another 2 years (4 Disney trips) to see how Riviera plays out with resale and capacity issues. I had considered buying Riviera or Copper Creek direct and adding a Boardwalk resale, but ultimately all I can afford right now is a $20K investment and the DVC membership is something that is important to me. It was a very personal decision and I’m satisfied with it even though I know I may only have 24 years to enjoy the investment, or risk depressed resale values if I decide to sell in 10-15 years.