DVC Right of First Refusal Report (ROFR): April ’19 Report2 Comments
Year-to-date (YTD), Disney has exercised their right of first refusal (ROFR) on 278 Disney Vacation Club (DVC) contracts, and DVC Resale Market has sold 1,467, resulting in a 19% buy back rate. (Contracts Bought Back year-to-date / Contracts Sold year-to-date). The year-to-date waiver rate is 81%.
We witnessed 114 buy backs in the month of April, which is the most ever in a given month. This record-breaking month for buy backs can be attributed to 3 things: 1. High Sales Volume 2. Disney taking nearly 50 days for some buy back decisions and perhaps catching up in April? 3. Generally High Buy Back Rate in 2019. This high amount of buy backs in April raises the YTD buy back rate to roughly 19%. To put this in perspective, the buy back rate for 2018 was 10.5% and 6.9% in 2017.
The silver lining for those who want to easily avoid getting their contract bought back by Disney is the buy backs in 2019 thus far have continued to be highly resort dependent. YTD, 6 DVC Resorts still have zero buy backs: Aulani, Grand Californian, Polynesian, Vero Beach, Copper Creek and Boulder Ridge. Meanwhile, 5 DVC Resorts have buy back rates of 20% or higher: Animal Kingdom, Bay Lake Tower, Beach Club, Hilton Head, and Old Key West.
The chart below shows the relationship between the average selling price per point and the buy back rate from April 2018 through April 2019. Historically, we have observed resale price per point and buy back rate have an inverse relationship. This inverse relationship didn’t hold true in April, but this may have been due to an abnormally high amount of buy backs in April with Disney making decisions on a lot of sales from late February and March in April.
What is Right of First Refusal (ROFR)?
For those new to the concept of Right of First Refusal, it is the option Disney Vacation Club has to purchase any resale contract after a sales price has been agreed upon, and the contract has been executed. Each contract must be forwarded to DVC for review.
DVC typically takes no more than 30 days to review the contract. At their discretion, Disney may step in and purchase the property themselves at the terms agreed upon by the Seller and original Buyer. DVC then becomes the Buyer, and the purchase is complete. Once DVC is the buyer there is not an opportunity to come back with a better offer in hopes of still purchasing the contract.
Disney Vacation Club Resort Contracts Bought Back in 2019
YTD, 8 different DVC resorts experienced buy backs (in order of buy back volume): Animal Kingdom, Saratoga Springs, Bay Lake Tower, Beach Club, Old Key West, Boardwalk, Grand Floridian, and Hilton Head.
Please refer to the graph below for the total amount of buy backs at each DVC resort for contracts sold by DVC Resale Market YTD in 2019:
Details on DVC Buybacks
In April, with 114 buy backs, rather than providing details of every contract and significantly delaying the delivery of the ROFR report, we thought we would summarize the details by providing the selling price range per point along with the volume by DVC Resort for all contracts bought back.
The selling price range and volume summary for all buy backs in April is below:
|Resort||Selling Price Per Point Range of Buy Backs in April||Number of Buy Backs in April|
|Animal Kingdom||$98 – $110||29|
|Bay Lake Tower||$124 – $142||17|
|Beach Club||$129 – $145||14|
|Boardwalk||$109 – $119||7|
|Grand Floridian||$137 – $152||9|
|Hilton Head||$59 – $75||3|
|Old Key West||$86 – $94||11|
|Saratoga Springs||$89 – $102||24|
Buy Back Rates for Disney Vacation Club Resorts
The table below shows the percentage of buy backs for all 8 different resorts purchased back in January through April of 2019. Note, the buy back rate for Aulani, Grand Californian, Polynesian, Vero Beach, Copper Creek and Boulder Ridge in 2019 has been 0%.
|Resort||Buy Backs||Number Sold||Percentage Bought Back|
|Bay Lake Tower||55||150||37%|
|Old Key West||21||86||24%|