The DVC community has been in overdrive (myself included), since the first whispers of an impending minimum point requirement broke on DISboards.com last week. For the sake of those not familiar, I’ll explain.
The Issue
As of September 17th the minimum number of direct points required for ‘membership extras’ will go up to 100 points. This DOES NOT affect anyone who is currently a member (provided you already have your blue card). It only applies to NEW members coming in. If you already have your 75 direct points from DVC then you’re fine. This only affects people who are considering buying in for the first time.
Resale Restrictions
This follows on the heels of DVC’s most recent restriction aimed at resales. In January 2019, DVC announced that only points purchased directly from Disney would be valid at the new Riviera Resort (opening in Dec 2019). This policy also applies to all future DVC resorts as well. Restrictions were also previously extended on the use of resale points on Disney Cruise Line vacations, Adventures by Disney vacations, the Concierge Collection and select other products (which are a complete waste of points anyway, so you’re really not losing anything there).
I have encouraged people to purchase 75 points direct from Disney, and then purchase the rest of their points on the resale market. In the effort of full disclosure, I should mention that this site does have a financial relationship with DVCStore.com. That’s not the reason I suggest this combination of direct/resale points, but I feel I should be transparent about the connection nonetheless.
This change means the minimum direct purchase you can make to join DVC as a full member has increased by $4700 to $18,800. When you consider that a resale contract at Saratoga Springs for 100 points is selling for around $110 per point that’s a difference of nearly $8,000. There have already been a lot of questions surrounding whether or not member perks are worth the price difference versus resale, but we’ll get into that in another blog.
So far, here are the theories I’ve seen regarding this new minimum:
Theory #1 – Riviera is tanking
The theory being floated by many on social media is that DVC has decided to do this in order to boost sales for Riviera, hoping to get a rush of people to buy those 75-point minimum contracts prior to the cutoff. Disney’s fiscal year ends Sept 30th and a surge of new contracts before that date would definitely improve DVC’s numbers for the year, so I understand why some might think this.
I’ve written previously about Riviera sales and how they may not be doing as well as Disney would like us to believe, but shy of actually getting real sales figures from DVC, that’s all speculation. While I agree that might be a possible reason for the increase, my gut is telling me that DVC isn’t quite that short-sighted. The fact is, you don’t ‘raise the price’ on something if it’s not selling well. If they were going to do this to boost sales anywhere, it would be Aulani – not Riviera. Aulani officially opened on August 29, 2011, and still isn’t sold out.
Theory #2 – The ever disappearing studio
Another theory I read on our DVC Fan Facebook Page is that too many people were buying in at 75 points with the idea of getting studios at 11 months out. It only takes a cursory look at any Disney discussion forum like DISboards.com (which is one of my other websites) to see the complaints about how it’s nearly impossible to get studios anymore. This has led to many upset members.
Folks who didn’t do hard research before purchasing may not have been told by their DVC guides that getting studios (which consume the lowest number of points per night) is a challenge even with the 11-month booking window. Since DVC is a member-driven economy, it’s possible that they want to encourage fewer ‘new purchasers’ at 75 points if they feel people will be more satisfied with their options at 100. While I can see this as a remote possibility, the fact is – at this point in order to satisfy the desire of the existing membership for studios, DVC would need to build about 30 new all studio resorts and that’s not likely to happen.
Theory #3 – It’s the economy, stupid
This one is mine, and it’s what I’m leaning towards right now. DVC is a business, and businesses need to show growth in profit to their shareholders. The ‘membership extras’ that we talk about (and this is especially true of Moonlight Magic, the after-hours parties in various Disney theme parks) – all still need to be paid for by DVC. DVC cannot use member dues to pay for those perks, so they must be offset by the sale of direct memberships.
I also think that DVC remains as popular as ever right now, and as a business owner myself, I look at an increase in price as a sign that things are going well. As I said, if you’re not selling enough of something, you don’t raise the price on it unless you’ve hit your head and fallen down a flight of steps. Is it possible that DVC is that short-sighted? Sure, this is Disney we’re talking about after all and it wouldn’t be out of the question, but my gut tells me that’s not the case here.
So, what are your thoughts on the new increase? What do you think the reason behind it is? If you were considering buying into DVC, will this change affect your decision?
Just playing devil’s advocate for a minute….could it be possible that they are doing this in advance of an increase in the points required to stay per night?
Legally based on how the deeds are written and Florida Timeshare Law they are not allowed to increase the points required to stay per night. They can rearrange the allocations by a set percentage but have to stay within certain guidelines.
Only a re arrangement of points can occur the point chart is locked as a total number of points. So the rooms that require a higher point cost must be lowered in order to raise the lower ones. I was a member, sold both contracts(made $ on both), waiting 3 years and recently purchased 75 points again. I feel a lot of people are waiting to just purchase the minimum. Another 25 points allows Disney to profit that much more. They use analysts to figure the proper point prices and what works for them on average. They have all that data. I personally, would not have bought at OKW if I had to do so today. I most likely would have bought at VB due to the cheap price per point for my needs. I love almost all of the resorts, some a lot more than others. I only hope the perks for being a member continue for years to come. Otherwise, I will be reselling again.
This is tough to figure out. You never know what Disney is thinking or what analytics they use. While there are still die hard Disney travelers that are are members and have 100s of points I think many new members buy just enough to belong so they are a true “Disney Person”. This is a luxury good that every person on the planet is now buying and I think that is evident by basic membership questions asked on many of the boards by members AFTER they buy a contract. It can also be seen in the complaints about marginal increases in dues from year to year. Clearly more people are paying for these month to month then before and any increase in their payment upsets the apple cart. If Club 33 had a payment plan there would be a line a mile long. Disney knows all of this. They are marketing geniuses. They make people feel they MUST buy this to belong and to get a free backpack. So through financing( which also drives revenue with high interest on the loans) and marketing they can convert many tours in to sales on the spot. So why the 100 then? Because 100 is a decent amount if you bank and borrow. So if you did do any research and travel only every other year and want to be a “real” member then resale no longer makes sense. What this basically does is makes everyone who was buying the small resale contracts (25-50 points) and then 75 from Disney buy 100 from Disney and none on the resale market. This now puts everyone on level playing field. If you want a blue card you have to buy the same amount as a new direct purchaser that takes the tour and buys that same day on property. There is no longer a way to circumvent the rules by buying resale first and then direct. Disney is trying to control as many of the points and dollars as possible. By driving new members to direct purchase only and to crack down on resale. The more valuable they can make direct appear the more they can eliminate the resale market. I think they will try 100 for a while and if they feel they can push it higher they will.
Some good thoughts here Pete “Orlando Resident” or “Disney Expert” – You’ve been collecting titles in the news of late 🙂
I think you are probably correct, but if they really wanted to get people to move to 1 Brdm, they’d have to up the points considerably. In many instances a 1 Bdrm is MORE than double the points of a Studio. I fear we are going to see the price of studios increasing in the next few years.
One other Theory – a rosier one – that I have seen is that maybe Disney is planning on offering additional perks for members? Or many this would allow them to consider it? I mean, I’d like to believe that could be the reason, I don’t, but I’d like to ?
Completely agree it’s an economic driven price increase. But still think it’s short sided. They’re chasing there tail in a way and are never going to catch it. The lack of studios is still my biggest factor for not buying into DVC. The increase in minimum points just adds a another check in the “no”column on why I’d never buy direct.
“This DOES NOT affect anyone who is currently a member (provided you already have your blue card).” This and the language on the DVC site (“Effective September 17, 2019 to obtain a Disney Vacation Club Membership Card, Members must accumulate a total of at least 100 Vacation Points purchased directly from Disney Vacation Development, Inc.”) leads me to believe that if you go online today to request your blue card, you will only be able to get one if you have a 100-point direct purchase. And then when the blue card you might already have expires on December 31, 2021, you will not be able to get a new one unless you have a 100-point direct. But this is inconsistent with the mad dash yesterday to put in the requests with the guides for those 75-point contracts. Do you know what is right?
Hey Beth – The language on the DVC website is identical to the previous language that was in place for the 75pt. minimum’s. That being said with no other language being changed and guides saying current cardholders will be grandfathered in I think it is safe to assume this won’t occur. Never say never though!
Another comment–The posts, podcasts, anything, where you provide your theories on why things are happening are some of my favorites. Gives me stuff to think about!
I agree with Pete’s assessment. We bought direct in March 2011. At that time the minimum buy in was 100 points. I have heard from others that minimum was 120 or even 160 when they bought in. It just fluctuates from time to time.
There is a difference between the resort minimum and minimum for membership benefits. Through 2017, the direct membership minimum was 25 points. Up to 75 in 2018, and now 100. Also, the “minimum” has rarely been real. I’ve added on direct at 36 points, so they will sell you anything over 25.
I think it has to do with the economics of running DVC. The more members and contracts they have to service the more expensive it is. I think by having a minimum that’s higher to get the perks they are hoping people will get there with one larger contract rather than multiple small ones. This would cost less to manage. Also, when they negotiate with Disney Parks and Resorts for the discounts, if they say there are fewer people eligible to use the perks DVC won’t have to pay as much for them.
“Running DVC” is covered by maintenance fees. The perks are there as a sales pitch to future buyers.
One things no one has actually talked about is the fact that maybe the sales are going really well and they feel the demand is high enough to increase the minimum. the numbers I have seen do not support what I am hearing about slow sales. Also the resort is not open yet either. I enjoy reading everyone thoughts, time will tell who is more accurate.
I cannot remember a time where Disney has ever lowered their prices on anything. From $0.75 churros to $2.75 pins to $89 platinum annual passes etc. It just keeps going up and up. As much as I would love to stay at the new resorts, I have to ask myself is it worth it to spend triple the points at a new resort than an older one? How much time do I really spend at the resort? Most of my trips I have been in the parks and only come back to the resort to sleep for six hours until I get up and do it allover again. This is something I’d like to change in the future though as it is just exhausting. Unfortunately, as the years progress I see more and more resale restrictions coming our way. On a side note, I purchased Aulani in 2011 during construction and I’m very surprised it has not sold out years ago! I know the flights to get there are $$$ but I think it is the nicest resort of them all.
I wonder if this is just another move to diminish the resale market by DVC. They started to tackle this with the new resale restrictions we see for Riviera and presumably Reflections (DVC 2.0 resorts) and now in order to get full benefits, you need to buy full 100 point contract direct from DVC. 100 points may be sufficient for a lot of families who may just come every 2 years to Disney instead on annually and the cost of those 100 points direct may just deter add-onitis via resale. We may see this direct point minimum requirement continue to increase over the next couple of years until purchasers have to decide to either buy new entirely to get benefits or just buy resale and live with the 14 original resorts, many of which expire in 2042. Personally I think this is a long term play by DVC to diminish the robust resale market which is ultimately their chief competitor for sales and to better control their market. For reference, I joined DVC back in 2017 and I think min buy-in for benefits at that time was only 25 points if you already were a member (I bought resale contract first). My guess is that these direct point requirements will continue to increase over the next year or two until we see min levels exceed 150 – 175 points which for many families is the desired contract amount. If these families want full member benefits, they will likely only buy the one new contract and be done with purchasing, especially given the cost. Add-onitis won’t really be an option via resale at that point unless families want to effectively double their points since most contracts in the market exceed 100 – 150 points and cannot be broken up. This all adds up to diminishing the resale market over the long term.
I will say however that in order for member benefits to be worthwhile, DVC will need to increase the desirability of those benefits over what is offered today. The discounts etc that are offered today are basically the same annual pass holders get so DVC will need to do more things in line with Moonlight Magic etc to justify the cost.
My two cents.
They are able to do this because the economy is doing well. The next economic downturn will result in them throwing incentives our way
To me, this just further makes the math not work out to buy direct. The difference between direct and resale for 100 points is much greater than the discounts especially if you assume a one-a-year week long trip. I didn’t think it made sense at 75 points either so this makes it clear.
Prices have really been skyrocketing the last couple of years at Disney, everything from food and souvenirs to parking and tickets. Maybe Disney is projecting a lot more resales becoming available therefore bringing their price down and making them look even more appealing.