Why a Healthy Resale Market is Great for Disney Vacation Club
In a 2016 Interview with the Orlando Sentinel I was asked, “Is a healthy resale market good for DVC?”. My answer was an instant, “yes, of course”. I think the answer surprised the interviewer as having a strong resale value is not common with many timeshares, and if those timeshare developers do alright then why would a healthy resale market be a good thing for a developer such as Disney? Well, as I have said in many other blogs, Disney is different.
Disney’s Different than Other Timeshares
I believe many other developers in the industry are counting on a much less informed buyer. For example, I will pick on some timeshares in Las Vegas for a moment. When my wife and I walk through many of the of the beautiful resorts in Las Vegas, we will often be approached for free tickets to a show. Having worked in the timeshare industry for a number of years I instantly know this is ultimately for a timeshare tour. Sometimes, before I can even get the words “no thanks” out of my mouth, they have already mentioned a couple of the shows and what a great opportunity this is. I’m not sure when the indication of the tour will happen, but at some point for me to get those tickets I will undoubtedly have to take a timeshare tour. My point is, for them to do this, they must get couples who do take them up on this, and my guess is those couples that enter into those tours based on the set up alone will go in for the most part fairly uneducated about the timeshare they are touring. The couple touring may not be aware of a resale market and the resale value of what they are looking at.
Additionally, many timeshares are known for applying heavy pressure for the couple to make a decision on the spot, thus eliminating more of the opportunity to research their purchase and discover the timeshare may be obtained for a fraction of the cost via resale. For information of why Disney Vacation Club typically resales for more than other timeshares please see: Why is the Resale Value of Disney Vacation Club so Much Stronger than other Timeshares?
Where Disney is different is that first, applying many of those tactics, such as not properly informing someone of exactly what the tour is about and putting them under intense pressure would be damaging to Disney’s strong reputation. Second, Disney has an enormous public following and the chances of someone either not touring informed or not researching their purchase and finding answers quickly within their 10 day legal rescission period is substantially less when compared to other timeshares. For example, there are multiple Disney Vacation Club Facebook groups in excess of 20,000 Members. These are not general Disney groups, but rather Disney Vacation Club specific groups (see Disney Vacation Club Members and DVC – Disney Vacation Club). So, Disney is typically dealing with a much more informed consumer and a consumer who has a much greater opportunity to do research if they so choose.
The Value of a Strong DVC Resale Market
Given the likelihood that the typical Disney Vacation Club consumer will be more informed before and after the sale than your typical timeshare consumer, it is valuable for Disney to have a strong resale market. The healthier the resale market, the stronger the resale value and the more sales the developer can make as the gap between direct and resale is smaller. In an informed market, who wants to buy something that has little to no resale value?
Having a more knowledgeable consumer makes DVC similar to many other markets. For example, when purchasing a vehicle do you consider it a positive or negative for the vehicle you are contemplating purchasing to have a strong resale value? Of course, it’s a huge positive to have a great resale value. A great example is with the Toyota Tacoma, ranked #1 in projected resale value by Kelly Blue Book for all vehicles. I assure you this is a major selling point for any Toyota truck salesperson. In fact, when I was looking at Tacoma’s a few years back and I mentioned resale, instead of the salesperson deflating, they were delighted. As they knew the resale was so strong it may save me a few thousand dollars but that was about it, and I would be giving up the opportunity for a new truck in perfect condition with a new warranty. Granted, I still bought resale, but the resale value is so high on those trucks many consumers will just opt to buy new, working as a huge advantage to the Toyota dealership.
I’m not saying that the resale value with DVC is as strong as with a Toyota Tacoma, certainly different resorts can have different gaps when considering resale vs. direct, but the principle of having a strong resale market is the same. Speaking from personal experience as a former DVC Sales Guide, it was always a much easier conversation to have with a Guest when the resale value was closer to the direct costs versus having a large gap in the price.
This does bring up another topic: why would DVC create restrictions on resale if keeping the resale value high is a positive? I feel the restrictions that were made in 2011 and 2016 were both minor and completely unaffected the core of what the Membership provides, which is a substantial savings at Disney’s most spacious accommodations. However, these minor restrictions still allowed there to be at least some difference between purchasing direct and resale without significantly impacting the resale value of the Membership.
Furthermore, one of the benefits Disney receives from having their Right of First Refusal (ROFR) policy is to be able to influence the resale price of DVC and keep it strong. Likely, without a strong resale market and value, direct sales of Disney Vacation Club would significantly suffer just like other markets with an informed consumer base. After all, who wants to purchase something that is known for having a poor resale value.