Direct Purchase benefits announced!

[Dean]

The only thing erroneous is this response.

On March 21 a property will have a value of less then what it was on March 20. It has been well documented that Disney changed the benefit to devalue the current value of ownership to increase Disney's profit.

Properties will have one value on or before March 20; They will have a lesser value on and after March 21. That is factual, not an assumption. So for one to state the value did not have an actually value that was greater prior to this change is disingenuous at best, hyperbole at worst.

That's correct. It's not actually DVD's intent (remember DVD is not the same as DVC) to devalue what we currently own but to direct new buyers away from resale and towards resale. The end effect is the same though. That was the intent of ROFR as well but that's an ineffective process to do so.

My view is that although they have the power, I would refrain from calling it a right. It is not reasonable in any stretch of the imagination for Disney to not have a responsibility for resale value.

ROFR is solely about establishing a certain re-sale value. Maintaining and updating properties is partially about retaining retaining a re-sale value. Changing benefits was solely about lowering the value so Disney can profit at current owners expense.

In my opinion Disney has also devalued direct purchase ownership and in the long run my effect sales. By making a DVC ownership worthless on the secondary market they have taken away a key purchasing point.

Not only is it not their responsibility, they have you sign paperwork that you acknowledge that you are not buying expected resale or rental gains. I would somewhat disagree on ROFR. It's not about establishing a resale value per se but rather keeping resale value high enough so you are comfortable buying retail. It is not, as some erroneously think, mainly about buying up cheap resale contracts. To say DVC is worthless resale is a stretch, it will be less, we don't yet know how much less.

king974:

Many on the boards claim that many (some even say most) direct buyers don't even look into resale and/or don't care about resale as they claim they are likely never going to sell (as I have said, I hope these people's lives continue without any possible financial issues that may cause them to have to sell). I find this absolutely baffling and amazing. If one buys 250 points at BLT for $110 that is a $27,500 purchase!! People buy home theater systems in the thousands and spend hours and hours researching which is the best. People spend hours reseaching what car to buy some of whom even think about resale. (Toyota's advertising talks about it.) The list goes on and on. To think that someone makes a $27500 purchase without wondering what would happen if they have to sell, makes no sense to me at all unless one has unlimited funds.

To make this about one's personal situation is no applicable. As I've noted, this change likely affects me more than most because I do have a moderately large contract I've been planning to sell. I likely won't now but will cont to mostly rent it instead.

Disney could have taken many actions other then the action they did take.

They could have lowered the price point they are charging per point for one thing. Lowering the price of direct sales to bring them in line with what the market can sustain would have been the fairest action. What Disney did is akin to a car manufacture saying we are not going to make spare parts for your model car any longer thus killing any residual re-sale value forcing a buyer to buy a new car if they wanted to get a full value.

Disney could have offered incentives to increase new sales. 0% interest loans for example.

They also could have increased the amount of times they executed ROFR. That in turn would have raised the cost of re-sales and made them less attractive to buyers.

Increasing overseas marketing. The dollar is at a low which makes overseas purchases cheaper.

Disney could have cut overhead and costs at DVC thus lowering annual dues, which have been skyrocketing. That in turn would have made sales more affordable for a wide range of buyers and possible slowed the amount of people looking to sell off ownerships. Less ownerships for sale translates to higher re-sale cost.

Disney had many options. They chose to devalue current owners values on the secondary market instead.

I can't think of any action that was reasonable that this BBS would have liked given that simply adding on perks for retail purchases wouldn't even move the needle. Drawing purely from direct timeshare experience here are some things I can think of and I bet you wouldn't like any of them.

• A VIP system where those who buy retail get added benefits based on how many points they own while those that buy resale don't.
• Removal of all exchange options (RCI & BVTC).
• More pay to play to keep dues down.
• More aggressive tactics to get people in to tour, esp from the resorts and parks. How about knocks on the door and multiple phone calls per day.
• More aggressive sales techniques.
• Developer preview stays, maybe $299 and a timeshare tour get you 4 nights in a studio.
• Higher Transfer fees (? in FL) but some companies charge as much as 10% of the retail purchase price.
• Developer deposits to RCI.
• Force you to go through a tour desk as part of the check in process and encourage signing up for a tour then.

I'm sure we could add to the list.

 

[tjkraz]

For those of you who continue to advocate for DVC's position, is it fair to say that many of you bought at relatively reasonable per point costs versus what people have been paying over the last few years? (Many of you may have received payback years ago.) There has to be some explanation for your support of DVC.

My so-called "support" of DVC is limited to the fact that I never ruled out this possibility. Doesn't mean I'm happy with it. Doesn't mean I don't see the downside to me. It just means that I wasn't hanging my hat on my ability to re-sell for any specific price at a point in the future.

Disney has a history of making decisions that will maximize THEIR profits (seasonal menu pricing, pre-payment for select ADRs, abnormally high price increases for hard ticket events, pre-payment for dining plan, just to name a few).

I think it's fair to say that nobody here is waving a flag and championing this move. This isn't a "yea, Disney!" moment. But the possibility was always out there and it's part of the risk we assumed when we signed by the Mickey heads.

The only thing I expected was a room for 50 years. God willing I'll never be forced to sell but again, that was part of the risk. I never assumed any specific resale value, nor did I assume Disney would adopt policies which would protect my value. In fact, the cynic in me assumed exactly the opposite.

To support a business' right to execute sound business plans is one thing, to watch and support a business who has openly (in USA Today) and purposely made attempts to devalue their owner's interests is another. These are the owners who are currently paying all the bills......

BTW, the comments in USA Today are just a copy of the weekly parks update posted to the website MousePlanet.com:

http://www.mouseplanet.com/9523/Walt_Disney_World_Resort_Update

USA Today and Mouseplanet apparently have some arrangement which causes the MP postings to be fed to USA Today. But don't get the impression that it made the print edition of the paper or that it was a result of any sort of investigative reporting. All they did was reprint the MousePlanet blog info--in its entirety--from a couple weeks ago.

 

[Sandisw]

I find it very odd that people in general no matter when they purchased would support a company whose actions have the intent to purposely hurt their members.

And, I guess this is where we need to agree to disagree. DVC's current move to make resale contracts different than direct buy contracts is no way hurts me, as a member, because they have done nothing to violate our agreement/contract.

Oh, and I bought in 2009, and my average price for my BLT points is right around $98/pt.

 

[maminnie]

And, I guess this is where we need to agree to disagree. DVC's current move to make resale contracts different than direct buy contracts is no way hurts me, as a member, because they have done nothing to violate our agreement/contract.

Oh, and I bought in 2009, and my average price for my BLT points is right around $98/pt.

Agree to disagree is the best way to put it at this point.....

Have a good night all...

 

[vicki_c]

VickiC:

I never said any of that...you did.

Definition of INSINUATE
transitive verb
1
a : to introduce (as an idea) gradually or in a subtle, indirect, or covert way <insinuate doubts into a trusting mind>
b : to impart or suggest in an artful or indirect way : imply <I resent what you're insinuating>

I know you didn't SAY it. It was my reading between the lines in numerous posts in the thread, yours and others. If that wasn't anyone's intent, then I guess I misread.

 

[Dean]

And yes annual dues have been skyrocketing. Look at the numbers:

My bluegreen dues went up 14% this year without a SA and have averaged about 8% the 5 years I owned. Granted they are cheaper to start than DVC as are almost all other timeshares except maybe Westin, Four Seasons and the Ritz.

For those of you who continue to advocate for DVC's position, is it fair to say that many of you bought at relatively reasonable per point costs versus what people have been paying over the last few years? (Many of you may have received payback years ago.) There has to be some explanation for your support of DVC.

To support a business' right to execute sound business plans is one thing, to watch and support a business who has openly (in USA Today) and purposely made attempts to devalue their owner's interests is another. These are the owners who are currently paying all the bills......

I don't see how the price paid affects the reasonableness of the decision. Some of my points were cheaper and some more but none a fire sale compared to resale at the time of the purchase. Don't put too much stock in the USA today information. It wasn't an information piece done by USA today but rather a reprint editorial from a member who contributes to Mouseplanet. You have a poster on this thread who doesn't agree with you who runs such a Disney site as well. I'd contend it doesn't make him right or wrong either way. As for who is currently paying fees, remember we're talking 2 different companies. One is DVD, as sales company, and the other, DVCMC a timeshare management company. They have different functions and responsibilities. DVD has your money already and has moved on.

I find it very odd that people in general no matter when they purchased would support a company whose actions have the intent to purposely hurt their members.

Then you shouldn't be involved in timesharing, use credit cards, shop at a grocery store, etc, etc, etc.

Remember some of us most surprised and disappointed by DVC's execution of this plan continually get attacked that we did not read our documents. Trust me.....I READ THE DOCUMENTS!!!! (I am the one who has the condo fee calculations through the life of my timshare. Unfortunately I was right and they are steadily rising at about 2.5 to 3%.) But once again there is nothing historically that caused resale prices to drop or rise except the economy, supply and demand and ROFR. There was no reason for me three weeks ago to think that my owner interest resale value could be compromised in the near future let alone possibly on or around March 21. For this I am deeply disappointed in DVC and it is forcing me to reconsider my owner interest. This was not at all my intent three weeks ago.

Then you either didn't understand their intent or assumed they didn't apply in your situation. Either way you made assumptions that were not accurate or reasonable from what I can see based on your posts here. Many of us did not make those same assumptions.

 

[Brian Noble]

For those of you who continue to advocate for DVC's position

Again, I don't think anyone is advocating for DVC's position so much as we understand it is within Disney's rights to make a change like this. Acceptance is not advocacy.

 

[DebbieB]

I find it very odd that people in general no matter when they purchased would support a company whose actions have the intent to purposely hurt their members.

I don't think the intent is to purposely hurt their members as much as to further their own cause (increase their business).

I have no intention of selling anytime soon, so I'm not getting all riled up about this. I did buy over 11 years ago and think I've already got my money's worth. I would be more upset if I was a new owner and paid so much more. I doubt I would be buying at today's direct prices.

 

[bicker]

The only thing erroneous is this response.

The fact that you disagree with something doesn't mean that IT is erroneous.

On March 21 a property will have a value of less then what it was on March 20.

Evidently, you didn't actually read the message you replied to (or simply stopped reading the message you replied to, before you got to the end of the sentence), since what I said was an, "erroneous assumption," was ,"that your property had value that it actually did not have (i.e., the value associated with the fact that those benefits that are affected by this change were to be available to buyers should you resell)."

 

[bicker]

Again, I don't think anyone is advocating for DVC's position so much as we understand it is within Disney's rights to make a change like this. Acceptance is not advocacy.

Yes, very much the case, and rejection of an unfounded sense of entitlement is also not "advocacy" for anything other than objection to unfounded entitlement.

 

[bicker]

That is twice now where you have stated as fact that it is their "intent to purposely hurt/devalue DVC Members." Again, distinctions between direct purchase and resale is the norm in the timeshare industry.

You've really hit the nail on the head, with regard to what's triggering my reaction to some messages in this thread: The unfounded attempt to cast Disney as malicious instead of accepting that what is happening is nothing more than the person posting the criticism simply being disappointed with how things have worked out.

If you purchased thinking DVC was something at it's core other than a timeshare, then that is your error. If you based your purchase on the assumption that resales would not or could not at some point have different usage rules for items not clearly spelled out in those contracts, it was a poor assumption on your part. Disney/DVD/DVC can not be held responsible for your wrong assumptions, only what is in our contracts. I actually think DVC has shown consideration to the membership by not making the resale changes retroactive, as some other timeshares have done.

This cannot be overstated.

 

[JimMIA]

Drawing purely from direct timeshare experience here are some things I can think of and I bet you wouldn't like any of them

• A VIP system where those who buy retail get added benefits based on how many points they own while those that buy resale don't.
• Removal of all exchange options (RCI & BVTC).
• More pay to play to keep dues down.
• More aggressive tactics to get people in to tour, esp from the resorts and parks. How about knocks on the door and multiple phone calls per day.
• More aggressive sales techniques.
• Developer preview stays, maybe $299 and a timeshare tour get you 4 nights in a studio.
• Higher Transfer fees (? in FL) but some companies charge as much as 10% of the retail purchase price.
• Developer deposits to RCI.
• Force you to go through a tour desk as part of the check in process and encourage signing up for a tour then.

I'm sure we could add to the list.

For those who don't know much about timeshares other than DVC, Dean has taken a page out of most other timeshares' operations manuals. I'm not a timeshare expert by any means, but Wyndham does almost all of the above list -- and does some of them in ways that would REALLY freak out many DVC owners. The only ones they don't do are removing exchange options and charge higher transfer fees.

Things Wyndham DOES do:

• VIPs get longer booking windows than regular owners, and also enjoy automatic upgrades at many resorts
• A transaction fee is charged for reservations, cancellations, banking, etc.
• A housekeeping fee is charged for each stay, with the amount varying according to the size of the unit. (We get a certain number of transaction and housekeeping credits free, depending on the size of our points holdings.)
• A "program fee" to cover the administration of the accounts is charged to all contracts regardless of size. For small contracts, that fee makes annual dues somewhat higher per point than owners of larger contracts pay. In this system, an owner of four 25-point contracts would pay four program fees but an owner of one 100 point contract would pay only one. Since there are base costs involved in administering any account regardless of size, I think a good argument could be made that this is actually a more fair and accurate allocation of costs than spreading everyone's costs out based on total points.
• A pretty high fee to use RCI/II -- not sure exactly how much, but close to $200 per exchange.
• And they do all of the sales weasel tricks Dean listed, with blatant lying thrown in as an added bonus.

 

[maminnie]

For those who don't know much about timeshares other than DVC, Dean has taken a page out of most other timeshares' operations manuals. I'm not a timeshare expert by any means, but Wyndham does almost all of the above list -- and does some of them in ways that would REALLY freak out many DVC owners. The only ones they don't do are removing exchange options and charge higher transfer fees.

Things Wyndham DOES do:

• VIPs get longer booking windows than regular owners, and also enjoy automatic upgrades at many resorts
• A transaction fee is charged for reservations, cancellations, banking, etc.
• A housekeeping fee is charged for each stay, with the amount varying according to the size of the unit. (We get a certain number of transaction and housekeeping credits free, depending on the size of our points holdings.)
• A "program fee" to cover the administration of the accounts is charged to all contracts regardless of size. For small contracts, that fee makes annual dues somewhat higher per point than owners of larger contracts pay. In this system, an owner of four 25-point contracts would pay four program fees but an owner of one 100 point contract would pay only one. Since there are base costs involved in administering any account regardless of size, I think a good argument could be made that this is actually a more fair and accurate allocation of costs than spreading everyone's costs out based on total points.
• A pretty high fee to use RCI/II -- not sure exactly how much, but close to $200 per exchange.
• And they do all of the sales weasel tricks Dean listed, with blatant lying thrown in as an added bonus.

If I wanted another timeshare such as the ones mentioned I would have bought those not DVC but I didn't. Not only did I buy once direct, I bought twice because I believed in the type of program DVC was executing and managing. Yes I understood the docments, the risks, the this, the that, but DVC was not that type of timeshare the past 18-20 years, were they???

Enjoy your day everyone.....

 

[CMOORE185]

If I wanted another timeshare such as the ones mentioned I would have bought those not DVC but I didn't. Not only did I buy once direct, I bought twice because I believed in the type of program DVC was executing and managing. Yes I understood the docments, the risks, the this, the that, but DVC was not that type of timeshare the past 18-20 years, were they???

Enjoy your day everyone.....

I also bought DVC because it was different than other timeshares. I was not interested in the timeshare industry, but DVC seemed different than the rest. I actually still believe they are. I understand your frustration, I do not like what they are doing, but I understand why they are doing it. I really think they are trying to do what they need to do with the least amount of impact to us. Let's wait and see how this change impacts resale value.

 

[jodifla]

I also bought DVC because it was different than other timeshares. I was not interested in the timeshare industry, but DVC seemed different than the rest. I actually still believe they are. I understand your frustration, I do not like what they are doing, but I understand why they are doing it. I really think they are trying to do what they need to do with the least amount of impact to us. Let's wait and see how this change impacts resale value.

Yes, this.

I feel with as big as DVC was getting they likely HAD to take cruises out of the equation anyway. Look at how we were blocked out of using our points for a year on cruises!

 

[JimMIA]

If I wanted another timeshare such as the ones mentioned I would have bought those not DVC but I didn't. ...but DVC was not that type of timeshare the past 18-20 years, were they???

No, they weren't -- you're correct.

I think the difference goes back to what Dean said above -- what we consider one DVC is really two different companies. Disney's main revenue source from DVC comes from Disney Vacation Development (DVD), but they also derive revenue from management fees and rental of unused or exchanged inventory.

In recent years, I think all of the changes we perceive as negative have been either to cut costs (outsourcing valet parking and eventual elimination of free valet), reduce competition (changes in transfer rules and tightening up on commercial renters), and maximize revenues from "new" DVD sales (the current initial changes, price increases, etc.).

I have no doubt they will continue to try to reduce costs and increase revenues and profits in the future, so I expect further changes -- not all of which will thrill me. If DVC/DVD didn't continue those efforts, they really would not be meeting their responsibilities to their stockholders.

 

[crisi]

I also bought DVC because it was different than other timeshares. I was not interested in the timeshare industry, but DVC seemed different than the rest. I actually still believe they are. I understand your frustration, I do not like what they are doing, but I understand why they are doing it. I really think they are trying to do what they need to do with the least amount of impact to us. Let's wait and see how this change impacts resale value.

I did as well, but I faced that they weren't all that different from the industry a long time ago. About six months after we purchased ten years ago. HOWEVER, they still bring value to our vacations.

I'm also a little different, and I suspect most of the "realists" are. I never bought into the "this was the best purchase we ever made." I've always though "Welcome Home" was a silly marketing ploy. I own a "piece of the magic" by owning stock - not DVC. For us, DVC has been a way to get regular vacations at Disney in a multi room unit. If I were making the decision today, I wouldn't do it - its way too expensive now and Bonnet Creek is nearby and lovely. Plus, the switch to RCI has made trading in from a different timeshare MUCH more reasonable. But I wouldn't buy a timeshare at all now. We got a good deal in 2002 when we bought. Or we wouldn't have done it.

 

[JimMIA]

For those concerned about their eventual resale values, I think the answer to that depends on supply and demand -- not on ROFR or changes like the current one. And supply and demand will vary greatly with where you own.

To me, there are really two classifications of DVC resorts -- those onsite at WDW, and "the others." I believe onsite WDW DVC resorts will hold their values better than DVCs in any other location, and better than most timeshares generally.

The reason is simple -- supply and demand again. DVC is currently the only timeshare ONSITE at Walt Disney World. There are hundreds of beachfront timeshares on the East Coast of the US and hundreds more on the Gulf Coast; there are dozens of timeshares which are very convenient to Disneyland (not onsite obviously, but offsite is very different in CA than at WDW); and there are hundreds of timeshares in Hawaii (most of them in better locations than Aulani).

There are also dozens, if not hundreds of timeshares in the Orlando/Kissimmee area (Wyndham alone has 5). The Orlando area is considered a pretty overbuilt area and it is quite easy to get reservations at timeshares there. But ONSITE WDW is a different matter, as we all know.

It remains to be seen how easy or difficult exchanging into DVC will be with RCI over the long term, but currently it's pretty limited from what I've read. So to stay onsite at WDW, you either have to pay pretty high cash rates or be a DVC member.

DVC continues to maintain that quality of exclusive access -- something no other resorts can claim. I believe that will help onsite DVC resorts maintain their value as much as any timeshare retains value. I don't expect DVC to be selling for $1 on eBay, like many very fine timeshares do.

 

[jcf]

Expected some type of changes...that is why I sold out of other resorts VWL, BCV, AKV when BLT went on sale...I figure the location alone should maintain resale value especially once BLT sells out and is selling @ $140/pp+ with NO Discounts...

 

[dizfan]

For those concerned about their eventual resale values, I think the answer to that depends on supply and demand -- not on ROFR or changes like the current one. And supply and demand will vary greatly with where you own.

To me, there are really two classifications of DVC resorts -- those onsite at WDW, and "the others." I believe onsite WDW DVC resorts will hold their values better than DVCs in any other location, and better than most timeshares generally.

The reason is simple -- supply and demand again. DVC is currently the only timeshare ONSITE at Walt Disney World. There are hundreds of beachfront timehares on the East Coast of the US and hundreds more on the Gulf Coast; there are dozens of timeshares which are very convenient to Disneyland (not onsite obviously, but offsite is very different in CA than at WDW); and there are hundreds of timeshares in Hawaii (most of them in better locations than Aulani).

There are also dozens, if not hundreds of timeshares in the Orlando/Kissimmee area (Wyndham alone has 5). The Orlando area is considered a pretty overbuilt area and it is quite easy to get reservations at timeshares there. But ONSITE WDW is a different matter, as we all know.

It remains to be seen how easy or difficult exchanging into DVC will be with RCI over the long term, but currently it's pretty limited from what I've read. So to stay onsite at WDW, you either have to pay pretty high cash rates or be a DVC member.

DVC continues to maintain that quality of exclusive access -- something no other resorts can claim. I believe that will help onsite DVC resorts maintain their value as much as any timeshare retains value. I don't expect DVC to be selling for $1 on eBay, like many very fine timeshares do.

Agree with you Jim.

Another example, is Marriott announced that they will be spinning their TS business off from the main company.
I could see Disney doing this with off property resorts. However, I have a hard time picturing Disney would ever do the same for the on property resorts. (Please note, I'm not advocating spinning off the off property resorts, just pointing out something that is a possibility in the documents we signed).