Will DVC Ever Offer to Upgrade Resale to Direct

[katandmouse]

To expand on my thoughts. Maybe not to make points fully qualified - but to allow booking at new resorts. I think that they want a piece of the resale market. I think the 'can not book at any resort other than the one bought' rule at Riviera is not tanking sales enough for them to rescind and I think their path forward - especially once there are more new resorts out there - is an upgrade path to booking all resorts. No, it's not going to be the same price as direct. It will give them a piece of the resale market without having to pay dues by ROFRing everything.

DVC is really about getting tens of thousands of people to cover the maintenance of their hotels and guarantee they (or whomever they rent to) will be there yearly for the next 50 years. The value prop for owners SHOULD just be nicer accommodations at a more reasonable price - but some people buy in on the 'club' touchy feely stuff and various other pixie dusted concepts.

I agree with you, and also because as PP said RIV’s resale restriction already has that language, plus it’s a way to address the “existing members will have access to new resorts” that’s in all the POS once Reflections or other new ones open. Sure, resale can have access - if they pay. So I see them offering this for the resort booking restriction, but I also understand why they would only offer Member Benefits to those who purchase a certain amount direct.

ETA: My guess is they will have to offer this when Reflections opens.

 

[skippytx]

I'm still pessimistic that it might happen, but y'all make some good points. We bought where we wanted to stay so I'm not concerned about using my points at other resorts, but I can understand how that might be attractive to many people. It's also basically free money for DVD which corporate folks can't resist.

 

[TheHuns]

I think an upgrade is complicated and could run into one of the many issues other people have brought up.

It makes more sense for Disney to do what they normally do to make a lot of money: Create a limited offer. This would be an offer for resale only members that gives them access to incidental benefits after an add-on of X points. This would allow Disney to boost sales for a new resort while encouraging existing members to spend more time at Disney.

If I were given the option, I’d consider adding on 50 direct Riviera points for member benefits. For my family the gold AP would cover the difference between that and a 50 point Poly resale in 4 trips.

 

[Maistre Gracey]

They would have to charge less than the "average difference between resale and direct". If they didn't then there would be zero benefit to buying resale, and the program would fall apart.

IMO, it would work in Disney's favor to find a price point somewhere between resale and direct. This way, Disney does not have the cost (maintenance fees) and opportunity cost (using the funds elsewhere) of having to ROFR. They simply make an easy profit without any real investment.

If they charged less than the difference it would make (almost) zero sense to by direct.

 

[Katie L]

If they charged less than the difference it would make (almost) zero sense to by direct.

It makes less than zero sense financially to buy BCV direct right now. But people do.

 

[TCRAIG]

Agree with the majority here - don’t see it happening - I do see perhaps a points plus cash option to use resale to stay at Riv or Reflects if sales aren’t strong

 

[CraigInPA]

I don't see it happening, but if they did choose to offer it, I predict it would be a minor (10-20%) savings over the cost of buying direct.

 

[Maistre Gracey]

I don't see it happening, but if they did choose to offer it, I predict it would be a minor (10-20%) savings over the cost of buying direct.

Shoot... 20% is not minor imo.

 

[CanadaDisney05]

If they charged less than the difference it would make (almost) zero sense to by direct.

There are still benefits of buying direct.

1) Ease and quickness of transaction
2) Ease of financing
3) Inventory on active resorts that are not available on the resale market
4) lower closing costs
5) prorated annual fees for the first year
6) previous years points automatically
7) your choice of use year

I don't think offering this "upgrade" takes much away from direct sales on their active resort. What it does is take away direct sales on the sold out resorts. But between the overhead of making those sales, cost to buy the contracts on ROFR, and maintenance fees on inventory, the "upgrade" has a much lower overall cost to Disney. Let the resale brokers do all the work, let the current owners pay for holding inventory, and take all the profits.

Just to be clear, I am not suggesting that it would be a nominal fee. I'm sure the net cost would be closer to direct than resale. But it has to be below, otherwise it just doesn't work.

 

[Maistre Gracey]

There are still benefits of buying direct.

1) Ease and quickness of transaction
2) Ease of financing
3) Inventory on active resorts that are not available on the resale market
4) lower closing costs
5) prorated annual fees for the first year
6) previous years points automatically
7) your choice of use year

Exactly.... that’s why I said “almost”.

 

[suemom2kay]

There are still benefits of buying direct.

1) Ease and quickness of transaction
2) Ease of financing
3) Inventory on active resorts that are not available on the resale market
4) lower closing costs
5) prorated annual fees for the first year
6) previous years points automatically
7) your choice of use year

I don't think offering this "upgrade" takes much away from direct sales on their active resort. What it does is take away direct sales on the sold out resorts. But between the overhead of making those sales, cost to buy the contracts on ROFR, and maintenance fees on inventory, the "upgrade" has a much lower overall cost to Disney. Let the resale brokers do all the work, let the current owners pay for holding inventory, and take all the profits.

Just to be clear, I am not suggesting that it would be a nominal fee. I'm sure the net cost would be closer to direct than resale. But it has to be below, otherwise it just doesn't work.

I agree with all except #2. Financing is no easier through Disney than say Monera, unless I'm missing something.

 

[Chuck S]

I don't see this ever happening. It would be a perceived devaluation of purchasing direct.
And adding perceived value to direct purchases is why the restrictions were put in place.

 

[CanadaDisney05]

And adding perceived value to direct purchases is why the restrictions were put in place.

This is purely assumption....

I don't think disney cares about how many direct purchases they make. I think, they care about how much money they make. While the profit margin on direct purchases right now is much higher than resale, the profit margin on this hypothetical "upgrade" is infinitely higher.

 

[Chuck S]

This is purely assumption....

I don't think disney cares about how many direct purchases they make. I think, they care about how much money they make. While the profit margin on direct purchases right now is much higher than resale, the profit margin on this hypothetical "upgrade" is infinitely higher.

I wonder what fraud lawsuits would cost, though? If Disney decided to grant the same "direct" perks to resale, even for a fee, after they've made direct sales based on the marketing that such perks would be exclusive to direct purchasers, the State timeshare commission would probably not be happy at all.

 

[crvetter]

I wonder what fraud lawsuits would cost, though? If Disney decided to grant the same "direct" perks to resale, even for a fee, after they've made direct sales based on the marketing that such perks would be exclusive to direct purchasers, the State timeshare commission would probably not be happy at all.

Well they already stated to a degree they might offer a way to upgrade resale points to be unrestricted from future resorts through a fee, stated as a possibility in the DRR POS, which was approved by the regulatory agencies. As for fraud on the Membership Extra side, I'm not really sure one could be had even, plenty of products and services change over time from the initial sales offerings. Doesn't other Timeshares doe this already to a degree.

Personally I would suspect that the price Disney would charge for "upgrading" your points will end up being at least at or more expensive per point (upgrade fee + resale price) than what Disney is even offering the points for when bought direct. The market already is proving that it can bear that cost so why would they ever offer it less. All this would really do is increase Disney's profit margin because they would make more money per point (no overhead of ROFR) while satisfying some customers that would have bought direct otherwise.