Less “Incidental Benefits” for New DVC Resale Members, But How Much Do These Incidentals Matter?

Filed in Disney Vacation Club, DVC, DVC Resale, Interval International, RCI, Timeshare, Walt Disney World

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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.) ”

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Comments

  • Mary Lee
    June 5, 2017

    Hi, can I combine resale DVC points with direct DVC points to use towards Adventure by Disney, Concierge Collections, Disney Collections and Disney cruises? All points are purchased this year.

    • Nick Cotton
      June 5, 2017

      Mary, thank you for your question. You cannot combine resale points with direct points for the collections you mentioned as resale points cannot be used towards those collections. What I would recommend considering in that situation is to rent your points through a company such as DVC Rental Store where they pay as much as $14.50 per point to you and then take those cash proceeds to book for those other collections. By doing that you will super stretch your value and may be able to do twice as many cruises.

  • Vicki
    May 30, 2017

    may not use their points for the “Disney Collection” (select Disney Resort Hotels. What resorts are these?

    • Nick Cotton
      May 31, 2017

      Vicki, these are resorts that are Disney owned but not Disney Vacation Club.

  • Vicki
    May 30, 2017

    may not use their points for the “Disney Collection” (select Disney Resort Hotels,

    When I looked up Disney Collections it seemed that all of the deluxe value resorts were on the list. Is this true?

    • Nick Cotton
      May 31, 2017

      Vicki, it is everything that is a Disney hotel that is not Disney Vacation Club. For example, the Contemporary hotel would be part of that “Disney Collection”, however, Bay Lake Tower at the Contemporary is considered Disney Vacation Club and is not part of the “Disney Collection”. Moreover, the point conversions for the “Disney Collection” hotels are very different (much higher) than the point conversions for Disney Vacation Club resorts.

  • Mike
    May 15, 2017

    Hi Nick,
    Thanks for the FAQ, I am curious about the contract time. Most resale contracts expire in about 25 years. How much of a factor should that be when deciding to purchase direct or Resale?

    Also what kind of clauses exist to extend the contract beyond this date or will my kids have to start from scratch?

    • Nick Cotton
      May 15, 2017

      Mike, great questions. First, it is important to note that the end date will be the same whether you purchase direct or resale. The end date is determined by the resort only. For a reference on all the end dates, please see: https://www.dvcresalemarket.com/buying/dvc-deed-expirations/

      Second, in regards to going beyond the current end date, there are no clauses currently providing that option. I can tell you in 2007, DVC started offering the opportunity to extend Old Key West contracts from 2042 to 2057. The original cost was $15/pt. and later it went up to its current price at $25/pt. Since then DVC has not offered extensions to other DVC properties, however, we still have time as the first expiration dates do not come up for another 25 years.

  • Mike
    March 23, 2017

    What other resorts or properties are allowed when using DVC resale points? Is it basically just Walt Disney World Properties in Orlando or does it include others?

    • Nick Cotton
      March 23, 2017

      Mike, you can use resale points on all 13 DVC properties (soon to be 14) including all the Walt Disney World properties, the Grand Californian in Disneyland, Vero Beach and Hilton Head on the Atlantic Coast and Aulani in Oahu. Also, you can use resale points at the thousands of options through the World Collection (RCI). For a directory of those locations please see: http://b2b.rci.com/resort-directory/DVC/landing

  • Izzy
    March 22, 2017

    As a recent resale buyer does the restriction also a0ply to purchasing the disney world annual gold pass?

    • Nick Cotton
      March 22, 2017

      Izzy, the restriction does apply to the discount DVC Members get on an Annual Pass. The discount is usually around $100 per person in the household.

  • Holi
    March 12, 2017

    Hi Nick! Wondering if we have any access to top of the world or any other place, with resale after the change last year? Thanks for you time!

    • Nick Cotton
      March 12, 2017

      Holi, DVC Administration Leadership did confirm for us at the time of this change in April of 2016 that resale Members would still have access to Top of the World Lounge, pool hopping and DVD rentals.

  • David Simpson
    March 7, 2017

    When we purchased DVC membership in 2009 the only resort available as a home resort was Animal Kingdom. We go to California more often than Florida and want to buy into the Grand Californian. My question is: If I purchase say, 50 points in the after market (while keeping my 250 Animal Kingdom points) could I book the Grand Californian 11 months out for my whole account or just the 50 points? For example I want to book 4 nights in a 3-bedroom grand villa the first week in November (526 points) , if I had 50 or 100 points in the Grand Californian could I book that stay today (March 7, 2017)?

    • Nick Cotton
      March 7, 2017

      David, you would just get the 11-month booking window at Grand Cal with the 50 points you own at Grand Cal. Now, you could use a current year’s points, bank and borrow and book up to 150 points 11 months out at Grand Cal with a 50 point Grand Cal contract.

  • Brandon
    February 16, 2017

    We have purchased DVC through DVC back in 2007 and have loved our membership. If we purchase through the resale, additional points, what will we be restricted on with these new points? We are wanting to use them for cruises in addition to our original membership from DVC.

    • Nick Cotton
      February 16, 2017

      Brandon, great to hear you guys are loving your DVC Membership! Since you guys are already Members you will still be eligible for the “incidental benefits” that were discussed in this blog. However, you cannot use resale points purchased after March 2011 for Disney Cruises. That being said, many Members find it more financially advantageous to rent their DVC Points out through a professional company such as DVC Rental Store and take those proceeds to pay for a Disney Cruise. By doing this Members nearly double the value they get, so nearly 2x the cruises!

  • Matthew Engel
    February 12, 2017

    Hey Nick.

    My wife and are not Florida residents. If we purchased via resale would be inherit the current “incidental privilege” of access to the Gold Annual Pass? I’ve read that this pass is currently only available to FL residents and DVC members. Does this benefit apply to all members or simply Direct Disney purchases?

    • Nick Cotton
      February 12, 2017

      Matthew, thank you for your question. From my understanding, you would have to have at least one contract bought direct or a resale contract bought prior to 4/4/2016 to be eligible for the Gold Pass. Otherwise, you can purchase the Platinum Pass, which is $120 more, but doesn’t have any blockout dates where the Gold Pass does include 4 weeks of blockout dates for 2017.

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