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 as those Members who already have a contract purchased 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?

**Update on 2/11/2018** Effective, February 25, 2018, for Members to be eligible for many of the “incidental benefits” or “extras” they must own and maintain a minimum of 75 points purchased directly from Disney Vacation Development, Inc. It is important to note that all Members who are eligible for the incidental benefits as of February 24 will not be impacted by the 75 point requirement as long as they continue to meet the previously implemented requirements.

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.  (**Update on 2/11/2018** Effective, February 25, 2018, for Members to be eligible for many of the “incidental benefits” or “extras” they must own and maintain a minimum of 75 points purchased directly from Disney Vacation Development, Inc. It is important to note that all Members who are eligible for the incidental benefits as of February 24 will not be impacted by the 75 point requirement as long as they continue to meet the previously implemented requirements.
  • 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

  • Kimberly
    April 2, 2018

    I was looking for some clarification for the “add-on points” directly purchased through Disney. I have read that in order to receive full membership benefits, you need to purchase 25 points and 75 points. That’s obviously a big difference. Wondering which amount it is? Thanks!

  • Jon
    January 8, 2018

    I have a 200 Point contract that I purchased resale in 2014 so I was grandfathered in to the current only minimal restrictions. I am looking to add 250 more on the resale market, does this purchase negate my grandfathered status? Thanks for your help!
    -Jon

    • Nick Cotton
      January 8, 2018

      Jon, a purchase of points in the resale market would not negate your grandfathered in status of receiving the “incidental benefits”.

  • Larry Carroll
    December 21, 2017

    Hi Nick,

    We met with a DVC salesperson last summer and considered purchasing direct, but decided that resale was a better option for us. Once we decided to purchase resale, I advised our DVC sales person and he told me that I should consider the fact that I wouldn’t get the discounts and that that there was also talk about Disney removing the Home Resort Priority for resale customers. I already knew about the discounts not being available but losing the Home Resort Priority would be a huge loss. When I did my research, I didn’t see anything about this possibility.

    Was this guy was just trying to scare us into buying direct, or could Disney really do this?

    • Nick Cotton
      December 21, 2017

      Larry, thank you for reaching out. I’ve never heard of a real possibility of eliminating home resort priority. It is important to note that any restriction that has ever been executed was done to something “incidental” to the Membership (i.e., Disney hotels outside of DVC, discounts, etc.) and not the core part of the Membership such as the DVC Resorts. Also, any restriction that was ever put in place has been grandfathered in so that if you bought in prior to the restriction you were unaffected. Outside of the legality of an option such as doing away with home resort priority, there would also be the business side too. Assuming it is even possible to do such a drastic move legally, the direct sales would certainly suffer, because who in the world would buy direct when the resale value has plummeted? The audience for DVC is well educated and researched and I’m quite sure a move like that would be “cutting off the nose to spite the face.”

  • Shanyn
    November 8, 2017

    If we buy 50 points through Disney at Saratoga springs, and then purchase 160 points at Animal Kingdom through you, how would we be able to book a 2 bedroom 11 months out, at One of the resorts when we need all the points to book? Would we have to wait to book until it’s 7 months out???

    • Nick Cotton
      November 8, 2017

      Shanyn, great question. You will have home resort priority with just the points you own at each resort. So, in your example you would have to wait until the 7 month window to finish your reservation or you would have to bank or borrow with your Animal Kingdom contract to get the needed points for the 2 bedroom. Otherwise, you may want to consider making both your direct and resale purchase Animal Kingdom if that is ultimately where you want to have your home resort priority.

  • Linda Lapcevic
    November 5, 2017

    Is it true that now you can only use your resale points at the location it was purchased for (ex. I buy resale points at Saratoga Springs, therefore, I only stay at Saratoga Springs when using these points)? I’m asking because someone told me that this is a new rule that went into effect this year).

    • Nick Cotton
      November 5, 2017

      Linda, thank you for your question. You can use resale points at ALL DVC resorts and not just your home resort.

  • Josh M.
    October 11, 2017

    You mention you can buy 25 points but when i sat down last weekend with the DVC rep at the hotel to go over buying options that wasn’t one of them, did I miss something? She told me the minimum was 50 points.

    • Nick Cotton
      October 11, 2017

      Josh, the minimum to add-on is 25 points (exception with Copper Creek, which is currently 50). The minimum to initially join is 50 points. If you purchase resale and then add-on 25 points direct, you will receive the “incidental benefits”.

  • Danielle
    September 27, 2017

    Hi. I am thinking about buying 130 points resale and then adding on 25 points directly from Disney. If I do this, will it get me the incidental benefits, member discounts and access to special member only park nights? Thank you.

    • Nick Cotton
      September 27, 2017

      Danielle, correct, with at least one direct contract no matter the size you will receive the incidental benefits.

      • Rebecca
        March 6, 2018

        This includes using your resale and Direct points for booking cruises, correct?

        • Nick Cotton
          March 6, 2018

          Rebecca, these changes are for all resale, contracts bought from us included.

          Not sure what you are asking with the 2nd part of your question related to using points for cruises.

      • Jonathan Kentner
        October 18, 2017

        My question goes a little deeper. Say you buy 200 points resale. You don’t get the incidental benefits. Then you go buy 50 add on points through Disney. You state You then get the incidental benefits. Do you get the benefita for all 250 of your points now, or only the 50 you bought from Disney?

        Thanks,

        Jonathan

        • Nick Cotton
          October 18, 2017

          Jonathan, thank you for your question. The simple answer to your question is in your scenario you receive the incidental benefits. The incidental benefits are an all or nothing situation. So, in your scenario you are receiving the incidental benefits because you purchased a direct contract. Regardless if you have 2,000 resale points and 25 points direct or have 25 points resale and 2,000 points direct, the answer is the same, you receive the incidental benefits.

          • Mike L
            January 22, 2018

            I’m interested in buying resale points, then adding on so I get all the DVC benefits. Does this work if I buy say, Hilton Head, then add on Aulani points (since HH is not currently on sale) ?

            Thank you.

          • Nick Cotton
            January 22, 2018

            Mike, in your example that would work to receive the incidental benefits. However, with buying direct they typically have points you can buy at resorts they considered “sold out” (i.e., Hilton Head) as they sometimes get points back from right of first refusal purchases or foreclosures.

            Additionally, I wouldn’t typically recommend to get a 25 point add-on at a resort you don’t already own as that is not a lot of points to book with Home Resort Priority. Rather, if you are joining with 100 points resale and adding-on 25 points direct, I would recommend buying all points from the same resort.

  • Steven T.
    July 25, 2017

    Quick question, is there any limitations on resale points being used for newer dvc properties? I see the mention of top of world lounge being accepting of resale members, but what about the lounge in Epcot? And at these places, how do they check your membership for resale vs. direct, a scan of the membership card?

    Thank you

    • Nick Cotton
      July 26, 2017

      Steven, thank you for your questions. There is no limitation on resale points being used at the the newer DVC properties. While you can use Top of the World, using the Epcot lounge is excluded unless you have at least one direct contract or resale contract purchased prior to 4/4/2016. For the Epcot lounge they do ask you to present your Member ID card.

      • Steven T
        July 26, 2017

        How does top of world lounge work to verify that you’re a dvc member?

        • Nick Cotton
          July 26, 2017

          Steven, when I have went in the past they checked via an ID card, given that resale Members now will not have an ID card unless they bought prior to 4/4/16 or have at least 1 direct contract I’m not sure what the verification process is.

  • Nick
    July 19, 2017

    Hi Nick,

    Personally speaking, would you buy a resale contract at a lower price per point (say boardwalk) that expires in 25 years or would you pay extra for a longer subtract like Polynesian since the contract is longer. Basically, what do you think is more valuable, the upfront costs or the length of contract?

    • Nick Cotton
      July 20, 2017

      I think more than anything I would consider where I want to stay and is home resort priority important to get that stay. Aside from that if we are talking strictly economics, it comes down to 3 things: years on the contract, annual dues and price per point. One way to look at all 3 of these economics factors together is to get breakdown the numbers to a price per point per year. To do this divide the price per point by the years remaining. Then add the costs of the annual dues. We do a semi-annual analysis of this for all resorts. In our last analysis last Spring, the Polynesian was ranked #7 at $9.10 per point per year and the Boardwalk was ranked #12 at $10.31 per point per year. The #1 ranked resort to own based on economics was Saratoga Springs at $7.79 per point per year. For the complete list, please see: https://www.dvcresalemarket.com/blog/best-economical-dvc-resort-to-purchase-spring-2017/

  • 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.

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