DVC Right of First Refusal Report (ROFR): September ’20 Report
Year-to-date (YTD), Disney exercised their right of first refusal (ROFR) on 152 Disney Vacation Club (DVC) contracts, and DVC Resale Market (DVCRM) sold 2,909, resulting in a 5.2% buy back rate (Contracts Bought Back in 2020/Contracts Sold in 2020). The 2020 waiver rate is 94.8%.
Buy Backs Rapidly Increasing
Last month we were able to report the “Return of the Buy Back”, and this month we are able to report a significant ramping up of buy back volumes. In September, the DVCRM had a whopping 56 contracts bought back. This represented more than 1/3 of the buy backs we had experienced the entire year.
Much of the buy backs in September were dominated by two resorts: Saratoga Springs (40) and Old Key West (10). This is certainly a sign of direct sales picking up in the last few months as Saratoga Springs and Old Key West are traditionally strong “drop product” options for the direct sales team. Meaning that if a Guest is perhaps priced out of the newer resorts in the 180s or 190s per point, they can still purchase a WDW Resort direct with a less expensive alternative, such as Old Key West or Saratoga Springs at $165/pt. I’m not sure if this means that a disproportionate amount of direct purchasers are now opting for the less expensive “sold out” resort options, or if sales in general are elevating, and as a result, more “sold out” product is needed.
One thing is for sure, if you are purchasing resale and you have concerns about your potential contract being bought back, you will want to be careful with your offer price, especially on Saratoga Springs and Old Key West for the time being. It is important to note both resorts not only had a high volume of buy backs but both had a buy back that were at record price per point highs for the past rolling year.
Highest Monthly Buy Back Numbers by DVC Resort
Highest Buy Back Price Per Point by Resort from September ’19 to September ’20
What is Right of First Refusal (ROFR)?
For those new to the concept, Right of First Refusal 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 2020
Please refer to the graph below for the total amount of buy backs at each DVC resort for contracts sold by DVC Resale Market in 2020:
Buy Back Rates for Disney Vacation Club Resorts in 2020
The table below shows the percentage of buy backs for all 9 different resorts that have had at least one contract bought back YTD. Note, there were no buy backs of the following resorts in January through September: Aulani, Hilton Head, Polynesian, Riviera Resort, and Copper Creek.
|Resort||Buy Backs||Number Sold||Percentage Bought Back|
|Bay Lake Tower||4||264||1.5%|
|Old Key West||39||239||16.3%|