Major Disney Vacation Club Resale Restrictions
Last year, Disney Vacation Club implemented major restrictions on resale purchases. Going forward, contracts purchased for the original 14 resorts at Walt Disney World, Disneyland, etc. will only be able to use their points at those resorts. Effectively, this creates two tiers of DVC resorts. (Updated August 30, 2020.)
Stated different, any resale buyers will not be able to use their points at Disney’s Riviera Resort, Reflections — A Disney Lakeside Lodge (if it somehow isn’t cancelled), the Tower at Disneyland Hotel, and whatever else is built after that. Because obviously Disney isn’t going to stop building DVC anytime soon.
More significantly, buyers who purchase a resale of Disney’s Riviera Resort right now will only be able to stay at the DVC resort they purchased. While we’ve seen resale restrictions in the past, this is the harshest to date. It will unquestionably have significant ramifications. Here we’ll cover why it also matters to potential new members considering a direct purchase at Disney’s Riviera Resort…
In fact, the big downside of buying direct at Disney’s Riviera Resort is a handcuffed resale market. This will be the case because the ‘product’ will have significantly less utility once resold. Instead of being useable at every DVC resort (as would be the case for the direct buyer) it’s only useable at one resort (as would be the case for the subsequent resale purchaser).
This may not be a big deal for some people who plan on owning DVC forever, but savvy buyers will certainly balk at the prospect of their ‘investment’ dropping significantly the moment they ‘drive it off the lot,’ so to speak. In vehicle terms, this would be the equivalent of subsequent buyers not being able to drive a car on the highway. The initial buyer may not care so much–but they should because it impacts the value of their investment.
Admittedly, I was never in the market to buy at Disney’s Riviera Resort in the first place, but I certainly wouldn’t be now. There’s no price-point, no purchase incentive, etc., that could convince me Riviera is a smart buy before it has a few years to settle in price on the resale market. Without having any reasonable insight into its future resale value, Riviera is simply too risky.
When initially writing this post prior to this restriction taking effect, we wrote: “With a thriving point rental market and demand for both Walt Disney World hotels and Disney Vacation Club being higher than ever, I doubt these restrictions will have much of an impact on Disney’s Riviera Resort’s value in the short term. However, DVC is a long-term purchase and Riviera will certainly be the most vulnerable property when the economy isn’t as strong or if Disney’s popularity wanes.”
Well, that recession is now here. Following the multi-month closure of Walt Disney World, direct DVC sales have tanked and the point rental market is not currently thriving. Moreover, we are already in the midst of a recession that is disproportionately impacting the travel and tourism market. The general consensus among experts is that Walt Disney World won’t fully recover until 2023 at the earliest. On top of that, there’s an unresolved Disney Vacation Club Point Pool Problem that will have ramifications for 2021 and beyond.
Many prospective buyers of Disney’s Riviera Resort might think: “So what? I’m buying for the long term and don’t plan on selling.” Few people plan on selling when joining Disney Vacation Club, and yet the average duration of membership is not a lifetime–it’s well under a decade.
At a time when there’s unprecedented volatility and economic uncertainty, no one knows what the future holds. Those with stable employment right now may not have that in a few months or a year. That probably sounds a bit bleak and harsh, but these are the painful realities we must confront before making major purchases like Disney Vacation Club that require a long-term commitment and recurring payments.
Buying into Disney’s Riviera Resort direct from DVC at $195 per point would be a non-starter for me. I don’t know what my economic circumstances might be next year and might only be able to sell my Riviera contract for $100-$125 per point in 2021. Both unknowns are concerning, but the significant component is the much bigger issue.
By contrast, every other resort is a known quantity on the resale market, so to speak. Prices shift over time, but there are observable trends and established patterns. Pricing of other resorts will probably drop during a recession, but they’re not going to be subject to such a precipitous plummet.
As such, we would recommend sticking with the 14 ‘classic’ Disney Vacation Club resorts if you’re buying right now (in reality, we would strong recommend not buying at all right now and instead waiting 6 months or so). This is not a significant restriction for the classic resorts, but it will be for the new resorts once they start hitting the resale market.
Beyond the above considerations, our rationale for recommending the existing DVC resorts is simple: they’re in all the best locations at Walt Disney World. Disney Vacation Club has been added to every single monorail resort, and has nearly full coverage at the resorts near Magic Kingdom, Epcot, Hollywood Studios, and Animal Kingdom. There’s no way to beat the locations at the classic resorts and it’s unlikely that they’ll be topped thematically, either.
The most appealing attribute of the Riviera is the gondola. We’d argue this ‘amenity’ is bested by BoardWalk and Beach Club, which have Skyliner access but are also within walking distance of DHS and Epcot. If it is built, ‘Reflections’ is going to be a generic knock-off of the Wilderness Lodge properties…and that’s the best case scenario.
Unless Walt Disney World gets a fifth gate (I doubt I’ll see that in my lifetime), there’s currently a DVC resort everywhere that matters. The parcels being developed at this point are ‘consolation prizes’ of sorts. “Where will they build the next DVC?!” is such an open-ended question because there are no obvious locations.
Given how much of a boondoggle Aulani has been (with Hilton Head and Vero Beach doing only marginally better), don’t expect future stand-alone DVC development. Disneyland is another story entirely, and there are already plans moving forward there to add another tower to Disneyland Hotel.
However, the Grand Californian is already so difficult to book that you pretty much need to own there in order to get it, and the same will undoubtedly be true of the tower at Disneyland hotel and other California properties built there in the future. So, even those resale owners who aren’t technically subject to the restriction will be shut out from a practical perspective, anyway.
Disney probably has several rationales for implementing this restriction, but my suspicion is they believe that it will make direct sales easier. Right now, when a potential buyer brings up resale, the agent’s retort revolves around perks, ancillary benefits, and using DVC points on things that are a bad use of points, anyway.
The argument is now much more clear cut: if you buy resale, you won’t have full access to the Disney Vacation Club resort portfolio. As a scare tactic, there’s certainly value in that.
DVC guides are masterful salespeople. They will certainly be able to paint a rosy picture of Disney’s Riviera Resort, talking it up and how cool it’ll be to take a gondola from the resort to see Star Wars: Galaxy’s Edge. There will be an emotional appeal in this to some potential buyers. There shouldn’t be since Riviera is nothing special at all, but there will be.
I’d argue that there’s also tremendous potential for that to backfire. If someone is asking about resale in the first place, they are at least semi-informed. (Most potential buyers don’t even know there’s a resale market, much less the advantages of it.)
In his assessment, Nick Cotton posits a few other theories as to why Disney is implementing these restrictions: increasing buy-back margin, Disney being able to obtain more resorts in foreclosure, and increasing breakage revenue. While those are all plausible motivations, I think the most compelling explanation is the aforementioned ‘sales pitch scare tactic.’
Fear of missing out is a powerful motivator, and many potential buyers might be very reticent to purchase via resale if they don’t have the ability to use their points at Disney’s Riviera Resort and whatever future resorts are in the pipeline. I think this very well could be a miscalculation by Disney–my ‘fear of missing out’ lies more with dollars on the resale market if I ever wanted to liquidate my points. I’m less concerned about using points at future resorts when I already have 14 options, including every single ideal theme park-adjacent location at Walt Disney World.
If you’re thinking about joining DVC, be sure to read our Ultimate Guide to Disney Vacation Club. This covers the pros & cons, resale v. direct, how much money you’ll save, and other important things to know before taking the plunge. If you still can’t decide whether membership is right for you, “try before you buy” with the recommendations in How to Save BIG on Deluxe Disney Accommodations Renting DVC Points.
What are your thoughts about the major restriction taking affect for Riviera, Reflections, and beyond? Do you think this will have a negative impact on resale values, or is it too early to tell? Will this cause you to not purchase Riviera or Reflections? Any questions about the restrictions? Hearing from you is half the fun, so please share your thoughts in the comments below!
I have a 160 point resale contract bought in 2017 at BLT then I got a 25 point direct contract with Disney at BLT. I have the blue card. Now if I buy a resale of say 100 point. Can I use the total 285 points to book at the Riviera?
Please let me know.
I understand the scare tatic in sales. However, I would love to see a lawyer go through this to see if it is even legal for them to do this. DVC is a realestate transaction and I know you are only buying the points and the benefits can come and go as Disney sees fit. What I think may be agaisnt the law is for them to selectively segregating resale and direct memebers. Lets face it every resale contract had to be purchased directly at some point and then sold. Disney hasn’t lost any money on these points and resale memebers still pay the same annual dues as the original owner. To me this is a way for Disney to save money rather than try to force people to buy direct. For example, if you were to buy a condo from the original owner but you still have to pay HOA fees but you dont get access to the pool or trash service or any other benefits on site, to me that would be against the law to segregate original owners from resale owners and expect the resale owner to pay the same fees.
Curious about the restrictions in a situation where a family member on the DVC Membership has died and the process has been done to remove that person and replace them on the contracts with their child. So not actually a re-sale. Would that person still have access to the DVC membership discounts?
It’s any of the 14 DVC. It’s only the new properties where they have this restriction right now.
To me resale is the way to go. I’ve been a dvc member for 16 years and I really wished that I new about resale when we had bought ours. We have saratoga springs and it’s nice and it close to disney springs but we go there once In 7 days. This past january we were able to stay a the beach club first time ever always wanted to stay and loved it. Within a walk to my two favorite parks. I did the numbers of how much money you save on per point on resale compared to buying direct with the perks they call it in a 50 year contract say you will be farther ahead with buy resale. There aren’t that many perks.
As we have always said to people looking to buy DVC whether its direc tor resale is buy where you want to to stay. That way you won’t be disappointed if restrictions come in the future. If you are looking at selling before you even buy then DVC isn’t for you. Nearly every thing loses value as soon as you buy it. DVC is not sold as an investment so don’t expect to get back what you bought it for .
My biggest complaint is that if Riviera resale owners can’t go elsewhere then I won’t be able to go there with my direct purchased points. There are only but so many rooms available and as it ages, resale owners will only increase.
Alyson: Like Joelle said, you can use your resale points at any WDW resort other than Riviera or any new one after that. You can use your points at both HHI and VB. And you can use your points at Grand Californian DVC. You wouldn’t be able to use your points at the newer DLR DVC once it is built. But if the purpose of buying DVC is to use it at WDW, buy a WDW resort at a minimum so you can always book at 11 months out at your home resort at WDW. It is getting harder to book at seven months out now except for a few times during the year. Summer isn’t too bad, but Sept through early January can be very hard. Spring Break, holidays can be hard. SSR or BLT have longer contracts than most and right now have annual fees a bit lower than some of the other resorts. Just make sure you won’t mind staying at the resort you bought in case you can’t change that reservation at seven months out.
You can use your resale at all the resorts except Riviera and that Disneyland one.
Those that bought resale in 2015 were the last Blue Card eligible.
Also, buying resale FAR out weighs the ability to stay at Riviera. You can save 10 grand or more.in resale!
Finally, I wouldnt buy vero bc: A they can have higher dues since it is off WDW and B u will have a harder time getting a WDW resie if u go at a busy time….get OKW or SSR …or any really.
Hoping you can provide some clarification for me as I’m looking at resale. If I buy resale at OKW or VB, am I restricted to just my home resort? Or can I use my resale points at any of the classic 14 DVC properties?