The question has been asked on many forums and all over social media: What effect will Riviera’s restrictions have on their resale value and will those restrictions affect sales?
If you’re not familiar with what I’m talking about, Disney’s Riviera Resort will be the first DVC resort where contracts sold on the resale market can only be used at that resort. So, for example, if you purchase a 100 point contract at Riviera, then decide to sell it – that contract can only be used by the new buyer at Riviera, and not at any of the other 14 DVC properties. Also, points purchased via resale after January 2019 can not be used at Riviera.
So, what impact will these restrictions have on sales at Riviera? We are a long way from a definitive answer on that. Some reports have it that Riviera sales are in line, or even ahead, of other DVC resorts at this point in their sales cycle. That would be good news for DVC.
However, there are indications that suggest it might not be going as well as some think. Let’s look at some facts:
- A recent Riviera contract went on the resale market. The price offered was $133, and it ended up selling at $100 p/pt. That’s an $88 per point LOSS off the current retail price. By any measure, that’s excessive. Now, to be fair – Riviera hasn’t opened yet. Once it does, depending on how well-received it is (and I have a feeling the reviews will be better than good), it’s resale value may improve. Keep in mind – this is only one resale contract, so as I said before, I can’t make any definitive statements about what the norm will be, but it certainly isn’t good news.
- Disney has started offering incentives on fixed week contracts at Riviera. This is the first time that Disney has offered any kind of incentive on fixed weeks. Fixed week contracts are normally sold at a premium. If you’re not familiar with them, these contracts guarantee you a room during a set week every year. So, let’s say you always travel from Dec 12-19 every year. You can purchase a fixed week contract and a reservation is automatically made for you every year. If you decide you want something different, you just need to call member services, cancel the reservation then you can use those points the same as any member. Disney has always charged a premium for this, but some people have received calls offering a sales incentive for fixed weeks, which would indicate that they are not selling as many contracts as they hoped.
- Conversations I’ve had with people inside DVC have suggested that sales are not meeting expectations. One person inside DVC confided to me that he felt they needed to re-visit the resale restrictions because “Riviera isn’t selling as well as we expected”
Now, it is very important for me to reiterate this point: ALL of this is happening BEFORE Riviera opens its doors. It is possible that all of this changes once people are able to see the property. However, if sales don’t improve after the grand opening, DVC will be forced to consider amending their resale restrictions. I’ve taken the tour of the Riviera rooms and LOVED them, and everything I’ve seen in the marketing material is really appealing to me. I’ve considered purchasing a contract at Riviera several times, but it comes back to those restrictions. If the time comes that I want to sell the contract, I’m afraid it won’t be worth anything. That may all change after I step foot inside the finished product – only time will tell.
I knew about the resale Riviera being listed for $135 but I didn’t know it closed yet and only for $100/point! I would have bought that. What are the fixed week deed offers? I’d probably be interested in those as well. I’ve not gotten any notification about that yet.
A lot of people will not buy here for resell due to not being able to use it else where, if they open it up to allow Riviera resell to be able to book at the other 14 DVC resorts then in the same light they would have to remove the Jan 2019 restriction the other way, I do not think Disney will do this. To be honest I am sure many people will buy here but I am also sure that many will be resell instead due to the crazy restrictions.
I agree Pete. I think the restrictions will need to be revisited. I for one would NOT buy there due to this restriction. Noone ever “plans” to sell but life happens and even if this one contract shows the possible loss, it is substantial enough to have this potential DVCer second guess a contract here.
The restrictions didn’t affect our decision to purchase at Riviera. We wanted the longer contract than we could get at BC or BWV but still easy access to both Epcot and HS We bought two 75 point contracts, making it easier to pass on our 2 20-something sons later in our life.
From everything I have seen the resort just doesn’t have the wow factor. More like “meh.” I feel Disney has missed the mark with the Riviera, Copper Creek cabins, and the Poly bungalows. For those of us with smaller contracts (150-250) it is impossible to stay in a cabin or bungalow. The SSR THV’s use to be a good deal until Disney did a redo on the points chart a few years ago. The $180+ market is starting to dry up and Disney is learning just because they build it doesn’t mean people will buy it quickly. I think it just boils down to the Rivera not being a good value for the $.
I also purchased despite the restrictions. I did buy a smaller amount, though. Just 58, so if I ever do decide to sell it won’t be a huge loss if the go cheap.
We would have purchased Riviera. However, after learning about the restrictions, we decided to purchase our DVC from the resale market. If Disney removes the restrictions, I would immediately jump on the Riviera bandwagon as—while not ideal location—we would like to add an Epcot property. Unfortunately, I highly doubt Disney will go this route. Then again, I’m glad their attempts to “have their cake and eat it too” have backfired. There is a reason DVC has retained its value, and it’s not because of the mouse. It’s because people know that if worse comes to worse they can sell their interest and recoup some of their investment. Removing that safety net, removes some of the value to the consumer…which ultimately is reflected in the resale price.
Why spend your hard earned money on as asset that will depreciate so quickly like Riviera will with these restrictions? The resort is so huge, I’m sure booking at 7 months will not be an issue with my current contracts.
No. No. Heck no. No chance I would ever buy at Riviera with those restrictions. I could understand if someone fell in love with the resort and would buy a smallish contract to get the 11 month window for peak times. But, the resale market will be very low, IMHO. Maybe Disney is counting on that and will keep buying back the contracts. That is a nice chunk of change if they can sell at $188 and buy at $100. Eddie Murphy and the Duke Brothers would approve.
I was interested in purchasing at Riviera, and the only reason we won’t be is the resale restrictions. Realistically will I want to visit WDW for the next 50 years? Unlikely as I will be in my 80s by then. I love Disney, and have gone frequently as a kid, teenager, in my 20s, and now in my 30s. But I know my children may not always want to go. And I know when I am Senior it may seem too physically demanding. Who knows. So I want my contract to hold some value, which is more likely if I buy at any other DVC property. I did book a stay at Riviera, so I still want to stay there, just not own there.
I agree the resale restriction made it a non starter for me, but I wonder how many people think about it. The Disboard groups contain great information, but I can not help to think that most people buying DVC Directly do not really know all that much about it – I mean heck, it seems like so many take what the guides say as Gospel. Im very interested to see the direct sales report for July when it gets put out in a few weeks, since its the first month where CCV was “sold out”
We own three contracts, but I’m hoping for $100 per point resale so I can convince my husband to buy a small resale contract for the two of us to go for a long weekend to Food & Wine!
They may also experience low sales because it looks like a generic chain resort rather than a themed Disney hotel. Look at AKLV and then the Riviera and there is no comparison. I think we are used to extraordinary design at Disney and the new trend towards generic/cookie cutter is not worth the extra dollars.
Thinking about this further, if I wanted to buy DRR, I would 100% buy my point total in contracts of 25-50 points, It will up your closing costs a little, but I think it will be excellent insurance against a potential resale loss of equity. People who want those small add ons often want them to get one more night, or an upgraded view, and they often want it at THAT resort, so I think buyers would be much more willing to accept the resale restrictions on 25-50 points – and you can get a premium on that.