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.
YOUR THOUGHTS
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!
Thank you so much for sharing this information. I just wanted to make sure that I am understanding clearly. If I purchase resale DVC points I would only be able to use the them at the 14 DVC locations. I would not be able to use them on things like Disney Cruises, or the Adventures by Disney, or convert them to use with RCI?
I am looking into buying resale and I want to have all the information.
Yes, you are correct. Resale points (other than Riviera where you can only use resale Riviera points at Riviera) are only good at the 14 original resorts including Vero Beach, Hilton Head Island, Grand Californian, Aulani and the WDW resorts (not including Riviera). You cannot use resale points to book non-DVC Disney resort hotels, Adv by Disney, DCL. You can use them for RCI, but that is an expensive way to use DVC points. Use DVC for DVC only.
The reason why many DVC owners try to sell their resort contracts is because of the significant limitations and restrictions in banking, borowing, transferring, and resort booking windows. As DVC owners begin to understand the complexities of using their vacation point allocations, it becomes clear that managing points is very complex and the process always benefits Disney and not the DVC owner. Vacation points should never expire and should alway carry forward to the next year regardless if they are banked, borrowed, or transferred points. If this change was made by Disney, few DVC owners would ever sell their resort contracts.
The only real change that impacted all owners was the 50% limit on borrowing. Other than that, every other restriction or limits were in place when they bought their points. There is no charge to bank or borrow or to make a change to a reservation. It comes down to people not understanding what they bought. More people sell their contracts because they become too expensive when they have to also pay for transportation, park admission, food, etc, that they never considered with their purchase of points. Their family changes in size, when they can go to WDW or even in desire to go.
DVC owners will never be able to roll over points year after year with the points never expiring. That’s just poor management by the company to allow that.
Aulani Boondoggle!
Thanks so much for the amazing article. We were interested in Aulani and we are hopeful on why you described this Oahu stand-alone as a ‘boondoggle.’ How can we get smart prior to a purchase? Please explain and advise. We appreciate your wisdom!!!
Great article-this gave me a lot to think about. Just to clarify-these “home resort only” restrictions are for new buyers? I’m going to dig up my contract but that would have drastically changed our initial plans to purchase. I was sold on the simplicity of selling or deeding to my children.
Are we still able (at this point) to will our contracts with the recipient getting full use?
We bought in ‘04
I have heard that gratuitous transfers maintain the benefits of the original owner. Sales do not.
What you call a “home resort only” restriction is currently for resale of Riviera until more resorts are built. They would be limited to only the newer resorts, none of the original 14.
Do if I add on more points to my existing points but buy into any resort but Riviera I can still stay at other resorts not just the one I purchased into? I round think since I’m adding on to an existing membership that might make a difference.
Great article. I think this restriction kills vacation club in the king run. It will be like every other time share out there
If I had it to do over -we would have liked to own at different resorts. It would open up more availability at the two different resorts. Just my thoughts
I wonder if DVC hasn’t quite thought about the long term math and effects of this policy. Overtime, and increasing percentage of the Rivieras resort will be held by resale. Those folks can only book reviera. So overtime, more of the hotel will be booked and not swapping. Therefore, overtime more of the resort will be unavailable to Disney direct buyers of any resort. Sad policy decision…
FOMO may work on uniformed impulse buyers but won’t with anyone smart enough to know timeshares typically become burdensome. I’d wager the latter group make up a significant portion of members; they’ve gone to a presentation and left without buying but eventually bought direct from Disney after doing their homework– that was me personally. I have to think these short-sighted, restrictions portend a transition toward hard close sales tactics and away from their soft sell tradition of acquiescing to “be backs”.
“…portend a transition toward hard close sales tactics and away from their soft sell tradition…”
That has already started to happen. Even in terms of management, there are fewer “DVC old-timers” and more typical timeshare people poached from WorldMark, Marriott, and Wyndham.
I read your guide to DVC resale and you don’t talk about length of contract. Tell me if I’m missing something here, I looked at resale contracts and it seems to me the length of contract should be considered as well as the cost per point. If the contract is 2040 then $100 per point is $5 per year. If the contract is 2050 then it’s only $3.33 per year. So all things being equal a longer contract is a better deal.
I don’t think that the comment about Riviera being nothing special is a fair one. It is a gorgeous and well thought out resort in my humble opinion. We toured the facility (very thoroughly) back in February. We are already DVC owners at Copper Creek and wanted to purchase into another resort and I wasn’t sold on Bay Lake, the Polynesian or the Grand Floridian (lake resorts). I love how elegant this resort feels over the other super themed properties as well. I think the Skyliner is a HUGE win and the restaurants are incredible. I understand the hesitation for people who think they will sell before the lifetime of their ownership is up but for folks who are already DVC owners and don’t plan on selling but rather passing their ownership to their children, I think Riviera is a great option! Additionally, we just scored Riviera points (direct) for less than what we paid for Copper Creek 2 years ago with a DVC only deal (incremental discounts based on number of points purchased)
We stayed at Riviera on a cash reservation and it was wonderful (though I had 35% off to make prices reasonable). As someone who spent every summer growing up on the real French Riviera (We grew up overseas) I have to disagree with the comment that it is not anything special–the design really blew me away and instantly transported me back to the Riviera. But as much as I loved the resort theres no way I would buy DVC. Once you factor in annual dues it’d be a very long time before we start seeing savings over discounted cash stay or renting points. I suspect that is a big part of why people sell their contracts eventually.
I guess I’m not really all that concerned about any of this news, since we paid cash for our points and own at BLT, where resale value will always be strong due to the demand for that particular property. Of course, we don’t plan on selling our points, but rather passing them down to the kids (since we’ll both be dead by the time our contract expires in 2060 or whenever).
With the new restrictions on points, though, I doubt that we would buy into DVC if we hadn’t already done so. The ability to stay at different resorts was a HUGE part of the appeal of the DVC for us. I suppose we’ll see if that is a universal feeling by how quickly future resorts sell.
I’m curious — do other DVC owners stay at only their home property, or do you stay at different resorts on each visit? We stay at BLT only every third or fourth trip, mixing it up with stays at the Boardwalk, Beach Club, Wilderness Lodge, and Old Key West, usually, although we’ve stayed at almost every DVC property at least once, including the Grand Californian several times (despite what the article says about the difficulty booking there).
To answer your question – at least for us, we do both. Our first contract is at Saratoga Springs and we stay there fairly regularly (inexpensive and always available). Our second contract is Vero and, even though we’ve owned it 5+ years, I’ve never stayed there. We bought resale and the points offered were the best deal at the time in our price range.
We bought Saratoga Springs (two different contracts) for the price – and have NO regrets. We stay there a couple times a year and stay elsewhere once -or twice a year – if we’re lucky. We had to cancel a stay at the Poly in August due to the Covid situation, but we’ll do several days in October at SSR. Indeed, people stay all over the property! I can see no good for new purchases coming from the restrictions that Tom described. That is, no good for the buyers.
This post is wildly negative and I wonder if author stayed at Riviera? I’m there now, own at Floridian and in terms of the rooms and the property itself I believe it is nicer. If you frequent Epcot there’s no better combination then the Riviera and the gondola.
I think it depends on park preference. I see my wife and I spending a lot more time here as the kids get older.
Your post is more or les what we bought into mid 90’s , I’ve researched other timeshares and I didn’t like the idea of being limited on the week or so bought into . With DVC the point system was better depending on the resort . I haven’t heard anyone state ani about being able to trade with the association of RCI which was a big plus for us since we live in Texas midway of Disneyland and Disney World . When we couldn’t travel to neither resort we were able to book at over 100 or more resorts all over the states and Mexico ! Maybe this is a limited benefit? For instance one year we stated at the Tanque Verde Ranch Resort in Arizona and visited my sister in Tucson. The resort was all inclusive- 3 meals a day , horseback riding in the mountains-3 rides , The cabins were great with indoor and outdoor pools and bar , an Oasis in the desert at the foot of the mountains overlooking Tucson !
We ended up staying there 3 years in a row ! We even stayed at Disney World Japan and visited my daughter in the AirForce stationed close by , so her and family joined us for a week. It’s al how you do your plans and research !
We bought at Saratoga Springs and we didn’t actually stay there until a few years after we purchased. That was the best part of DVC iwas staying someplace different every time. Also, as the kids got older our vacations changed and we liked different things. They are slowly taking away everything that made us want to buy DVC and what made us choose DVC over other timeshares.
This is a well written and very thoughtful article. I think it’s one of the best written DVC articles I have read in a long while. I agree the DRR resale restrictions is a non starter for current DVC owners. If DVC would lift the restriction DRR would sell like hotcakes.
As you can see from the dates on the comments…this is not “new” news…it’s originally from early 2019 with some updated information. While I was reading the article I thought that this was not new.
Agreed 100%
How can Disney legally allow some owners to use the property of others (points at new resorts) and not others (points not purchased from Disney hereafter).
Until now, all points were equal after the home-booking advantage ended. A point is a representation of an ownership share. How where the purchase originated change one’s legal contractual right to the use of their property? In other words, If I own points that were purchase from resale have to allow some non-property owners (that bought direct) stay at my property, but I cannot stay at theirs.
I understand that Disney can require all owners to book at only their home resorts. But if we are part of a pool of points, then we all own the pool. I can’t see how it is legal to kick people out of the pool. It’s either all in the pool or all at their home resorts. From whom one purchases the property decides the rights of the property just does not compute – logically or legally.
Until DVC actually starts selling points at Riviera, none of us will know the details. They may be starting DVC2 with Riviera and Reflections.
Thank you ! DVC2 Makes the most sense, actually. That way the points can have a different basis from DV1. For usage, Disney would be trading the points inventory they control. New premium resorts at the gate of a new park would be extremely popular and it makes sense not to have to work it into valuations based on the 30-year old business environment and assumptions.
Do you have to buy a fixed week at Riviera? I keep seeing it mentioned in other chats, but I can’t find any source to this. Thought you might have the details!! Thanks!
At this point, no body knows because DVC hasn’t released any details on points and purchasing. But I doubt they would require fixed weeks and may still offer them like the other more recent DVC resorts.
I’m thinking of buying at Boardwalk Villas because I really like the resort. With Disney Direct prices at $190 a point and resales being around 129, that’s a 12K difference (on the 200 Points I’m looking to buy) that I’m just not willing to pay, just to have the convenience of MAYBE being able to book Riviera. There’s many times in the past that I tried booking Boulder Ridge (when it was Villas of the Wilderness Lodge) and I wasn’t able to get it, because that time of the year was hard for non owners, so there’s not even a guarantee you would be able to get anything anyway. The Educated buyer will almost always buy Resale and I really don’t think this will change things too much. However, I do think resales on this are going to suck and if it goes low enough, I’ll probably buy it, even if it’s the only resort it’s good for.
I had read your article and was considering buying base points from Disney and the additional points from resale. Will this strategy be impacted by this change? If so, can you describe? Thanks!
Your direct points will get you any DVC perks and you can use them to book any resort, including Riviera. Your resale points will allow you to book any of the 14 current resorts and they cannot be used for any DVC perks. If you buy direct points at Riviera, you can use them anywhere. But if you sell them, they may be worth less because the buyer can only use them at Riviera, no other resort at this time. Maybe the new Ft Wilderness resort, but that isn’t beyond the design phase. Other resorts made it to design phase and were discontinued at that point like the Eagle Pines resort (the property was sold to build Golden Oaks) or the Newport CA resort which was sold to Marriott (I think).
When you say DVC PERKS… what exactly are you talking about?
DVC Perks include things like shopping and dining discounts, the ability to purchase a discounted annual pass and an annual pass (Gold) that is only available to Florida Residents. It gives you access to the member lounge in Epcot. But perks change all the time. Discounts come and go. Years ago, members got free valet parking. That disappeared overnight and members who had parked the night before, woke up owing for valet parking for the previous night. There are also a few scheduled events in one of the parks every so often and that park is only open to the registered DVC members.
So if you’re traveling and are using your resale points for that particular stay. Would it be safe to say that you wouldn’t be allowed into the member lounge at Epcot, get discounts on dining, or shopping? Only when you travel using your base points? Or because you’re a member of both would you get the perks all the time?
If you have direct points, you get a blue member card. If you only have resale points from the point where the rules changed, you only get a white card. You need a blue card to get the discounts and lounge access. The CM at the desk or counter or table will ask to see your blue member card and an ID.
But if you want to use points for a non-DVC stay like a Disney Cruise, a Disney hotel or the annual member cruise, you can only use points that got you that blue card. You can go on the annual member cruise and pay cash, but it tends to be kind of expensive.
Thank You that definitely clears that up!
You really don’t think you’ll see a fifth gate in your lifetime? With UO likely having their new park built within the next 10 years I find it hard to believe we wouldn’t see a new Disney park pop up by the end of 2040 at the latest. For my sake, and yours, I hope we’re around to see that.
I think the critical number for Disney is the average vacation duration for Americans. With that stat on the decline (and under 5 days), all a new park would do is cannibalize the existing parks.
Who knows, though–2040 is a long time away.
I looked at the DVC page for Bay Lake Tower after reading the article, it looks like the points per night per room are going up by at least 2 points (some more) for all rooms and all rental periods. 2018 and 2019 were the same as each other. Are point increases something they do periodically? Or even regularly? Aside from ever increasing member numbers and more difficulty to book rooms less than 7+ months out, it seems like point increases would be a fairly big factor in the value calculations of buying into the club!
*going up beginning 2020
They can’t raise point requirements without lowering them in another time/unit. Total points are supposed to be static, However, with this most recent adjustment, they seem to have created more points by raising points on studios and one bedrooms, but lowering them on two bedrooms. It’s the lockoff adjustment that everyone is talking about. A lockoff two bedroom is a lot less than the studio and one bedroom separately. It’s DVC math that many members can’t figure out.
Thanks!