Less “Incidental Benefits” for New DVC Resale Members, But How Much Do These Incidentals Matter?184 Comments
Disney Vacation Club is doing a second iteration of DVC resale restrictions on “incidental benefits”, which will be effective April 4, 2016. In summary, this change in incidental benefits states, “new purchasers of Disney Vacation Club® ownership interests not purchased directly from Disney Vacation Development, Inc. will not have access to Membership Extras, including Member discounts on dining, shopping, Member-exclusive events, and certain special Membership offers, as well as Disney and Concierge Collection options, already restricted for secondary market purchasers as of March 21, 2011.” It is important to note that access to Top of the World Lounge at Bay Lake Tower (for a Member staying at WDW), pool hopping privileges and no nightly rental fee for DVDs will still be accessible to all members. In addition, core Disney Vacation Club Membership privileges such as Home Resort Priority and use of other Disney Vacation Club Resorts will remain unchanged. All DVC Members will still be able to book stays through RCI and Buena Vista Trading Company.
The main impact of this will be for any new Member joining DVC via resale on or after April 4, 2016 (and for those whose only contract is through resale and was not closed and recorded prior to 4/4/2016) as those Members who already have a contract purchased, closed and recorded prior to April 4, 2016 whether direct or resale will still be unaffected. However, will this negatively impact the value for all Members’ contracts? This answer really depends on whether the buying public believe this restriction on “incidental benefits” makes a difference, and if so, how much of a difference?
To gain some perspective, consider the first round of resale restrictions that went into effect on March 21, 2011, which prevented Members buying on the secondary market the ability to use those points to book Disney Hotels (outside of the DVC Resorts), Disney Cruise Line, Adventures by Disney and the Concierge Collection. To many Members these restrictions were not significant as the points needed for those vacations didn’t have nearly the same value as using points for the core of the Membership, which is Disney Vacation Club Resorts. Moreover, many Members whether purchasing direct or resale found it financially better to rent their points and take those proceeds to pay for those types of vacations. Also, those restricted options were and still are considered “incidental benefits”, which can be changed or taken away at anytime regardless of how the Membership is purchased. What is being changed with this second round of iterations is another “incidental benefit” as defined by Disney Vacation Club.
Given that these restrictions are once again to “incidental benefits”, below are the reasons why the impact may be just as insignificant as before:
- Incidental benefits can be changed or taken away at any time regardless of whether the contract is purchased direct or resale. Use of the word “incidental” is significant as incidental is defined as “minor consequence” or “occurring merely by chance”, and history has shown this to be true. For example, complimentary valet parking, once available to all DVC Members has now been removed. Also, DVC has enforced cruise blocks in the past not allowing any Members to use points on DCL cruises regardless of how the points were purchased with the most recent block in 2012.
- The discounts historically provided with being a DVC Member can pale in comparison to the savings when purchasing via resale. For example, say that a family was considering purchasing 200 points at Disney’s Saratoga Springs. Direct from Disney that would currently have a purchase price of $28,000. The average listing price for a 200 point Saratoga Springs contract at DVC Resale Market is approximately $16,450. This difference is $11,550. At the current Member discount of 20% off, a Member would have to buy 1,925 t-shirts at $30 per t-shirt to break-even. Next, lets consider what may be the biggest discount, the annual pass discount. If you are a family of 4 and each year your family purchases annual passes with the DVC Member discount for all 4 family members, you would break-even on the $11,550 difference in over 28 years, which will exceed the expiration dates of nearly half of the DVC Resorts, and thus never actually realizing the break-even. Of course, this break even assumes that the incidental benefit of the annual pass discount for DVC Members remains for the next 28 years, and that all 4 family members remain in the same household for 28 years or are otherwise added to the deed for a title fee later unless originally all 4 family members were 18 years or older at the time of joining.
- Disney Vacation Club should be purchased for the core of what you are buying as that is what is guaranteed. The core of the Membership includes the Disney Vacation Club network of resorts, and that is where the Membership is intended to save you money. Although, RCI is included regardless of how you purchase, it should also not be considered a reason to purchase or not purchase as it could change. For example, at one time Disney traded with Interval International and not RCI. These trading companies use different resorts, and so when purchasing into DVC a buyer should not have reliance on any particular trading company Disney is using. Further, these trading companies are not owned by Disney as for example, RCI is owned by Wyndham Worldwide, a competitor of Disney in timeshare development. Perhaps the reason access to RCI continues to not be a restriction is that it could encumber on RCI Members’ ability to trade in with Disney, with less DVC Members being able to trade out.
- There are many other ways to still get discounts. Historically, the Disney Visa credit card as well as the annual pass have offered much of the same discounts DVC Members receive. Moreover, if having the discounts and being eligible for all Member events is important, another option would be to purchase the majority of the points via resale to still receive the savings, and purchase 25 points directly through Disney Vacation Club. If a DVC Member has at least one contract purchased directly through Disney, they will have access to Membership extras.
- Member events can change with frequency, costs and availability. Member events much like discounts are considered incidental benefits, which may or may not be continued in the future. Moreover, there is no guarantee on availability and/or costs of future Member events, and Member events as with all incidental benefits should not be considered a deciding factor when joining Disney Vacation Club. And if the eligibility to all Member events is a concern a new Member can always realize the savings of resale by purchasing the majority of their points on the secondary market and then adding on 25 points directly through Disney afterwards.
IMPORTANT UPDATE FROM DISNEY as of 4:18 pm EST on 4/7/16:
“As you are aware, on April 4, 2016, we announced the following important change to our incidental benefits policy: New purchasers of Disney Vacation Club® ownership interests not purchased directly from Disney Vacation Development, Inc. will not have access to Membership Extras, including Member discounts on dining, shopping, Memberexclusive events, and certain special Membership offers, as well as Disney and Concierge Collection options, already restricted for secondary market purchasers as of March 21, 2011. This note is to inform you that anyone with a contract that was received by Disney Vacation Club by the end of the day on April 3, will be grandfathered in to have the same access to Membership Extras that are available to others who have purchased DVC memberships from sources other than Disney since March 21, 2011. (Note: Those members who purchased from sources other than DVC after March 21, 2011 may not use their points for the “Disney Collection” (select Disney Resort Hotels, Disney Cruise Line and Adventures by Disney) and the “Concierge Collection” resorts. As a reminder, the Membership Extras are incidental benefits offered by DVC and are subject to change.) ”