DVC Price Increase Pushing Some Resorts Over $200 Per Point!13 Comments
Disney Vacation Club will be adjusting many DVC resort prices per point effective January 17, 2018. With the exception of Vero Beach, all resorts considered “sold out” and “live” will be experiencing price increases.
Impact of Price Increase to DVC Resale?
While DVC resale prices will not increase instantly, certainly history has shown that overtime DVC resale prices typically rise in the months following a direct price increase, especially on resorts that experience large price increases. It is important to note that with this round of price changes, 4 resorts will have price increases of $20 per point or higher.
For a full list of current direct prices and the new prices, effective January 17, 2018, please see below:
|Resort||Current Price Per Point||Price on 1.17.18 Per Point||Variance Per Point|
|Bay Lake Tower||$185||$191||+6|
|Old Key West||$145||$151||+6|
Possible Strategy Behind the DVC Price Change
Besides the obvious reason of when you raise the price, you raise your margin (at risk of losing volume), there could be several reasons for these price increases:
- Announcing an upcoming price increase for Polynesian as it reaches a near sell-out level provides excellent urgency to finish the sell-out phase quickly.
- The price increases of the “live” inventory, Copper Creek and Aulani are mild compared to many of the other price increases and will soon look inexpensive by comparison to those “sold out” properties such as Polynesian, Grand Floridian and Grand Californian, which will be north of $200 per point. The average increase per point for the “live” inventory (excluding Polynesian as it is nearing sell-out) will be $6/pt. compared to that for all other properties at over $14/pt. Having the “live” product, what you have the most of to sell, look the most attractive is a sound strategy.
- The large increases in price for Polynesian, Grand Floridian and Grand Californian provide for much stronger margins if and when Disney exercises their right of first refusal (ROFR) on these properties. Year-to-date, DVC Resale Market has only observed 1 contract bought back through ROFR for all 3 of these resorts combined. Year-to-date, DVC Resale Market has observed 161 contracts bought back from other resorts. This low buy back rate may initially come as a shock, but when you consider these premium location properties typically resale in the 130’s to 150’s per point, the resale margin for Disney gets much tighter. For example, Saratoga Springs contracts have routinely been bought back this year through ROFR in the 80’s per point and resold direct at $145 per point. Making $65 per point off of an $80 per point Saratoga Springs contract is much stronger financially than making $40 per point off of a $140 per point Grand Floridian contract.