As with many of you – I am fascinated with the idea that Riviera sales may be affected by the resale restrictions to enough of a degree that they decide to rescind it. Of course, I am talking about the restriction that says that resale contracts at Riviera can only stay at Riviera. In my opinion, this change implemented at the beginning of 2019 hurts not only resale owners but direct owners as well, because it results in lower resale values for these contracts.
There is no predicting with certainty what Disney might do, but a review of direct sales data may at least give us a hint as to the effect of the resale restrictions.
So, what I did was collect data from the last three years of sales. All this data was collected from the very reliable source of www.dvcnews.com, who publishes the amount of points sold across all the resorts (excluding Aulani) each month. I gathered data for the last three years 2017-2019. Sales data typically lags by 30 days or so, so, for instance, December 2019 sales data is actually representing November 2019 dates.
To ensure that data was not being skewed by the economics of direct pricing, I started by checking to see what sales levels were for all three years. The first chart below shows monthly sales for 2017-2019, with lines representing the average monthly sales for the year.
We can see a fairly consistent pattern throughout the year, with sales high in January and March through June, then tapering off in the second half of the year. Outliers occur of course, like when Copper Creek went on sale March 2017, or Riviera came into the system in March of last year. 2019 actually has the highest average monthly sales at 189,900 points, with 2017 only 1,200 points less, and 2018 being 8,300 points lower. The conclusion is that sales in 2019 are not weaker than the previous two years. In fact, they if anything are slightly stronger.
But these charts include all resort sales – not just new resorts. Over the last three years, we’ve seen three resorts on the market sold as “New” direct sales: The Polynesian, Copper Creek, and Riviera. Our second chart shows monthly sales for new resorts from when they came on-line to the point at which Disney raised the Direct prices and stopped selling them as NEW.
You can see that Copper Creek and Polynesian were selling together for almost a year, while Copper Creek only overlapped with Riviera for about 5 months. The combined sales of all “new” resorts are represented by the black dots, and it should be noted that the last 4 months of sales have been the lowest in the last three years. With the information from these two charts – we next looked at new resort sales compared to overall sales. This gives us another interesting chart.
The three-year data shows a pretty strong trend. From the start of 2017 through July 2019, sales of “new” resorts versus the “classic” resorts were ranging between 77% and 90%, with an average around 82%. Starting in August of 2019 though there was a big dip that coincides with when Copper Creek went off the market. Suddenly, there was a significant uptick in “classic” resort sales while Riviera sales languished. We decided to test this by looking at Saratoga sales over the last three years.
This data is really something – Saratoga sales have SPIKED in the last 4 months, each month being in excess of 10,000 points. These are the only 4 months out of the last 36 that show sales over 10,000 for the month.
So, what is the story this data is telling us. The factual conclusions we can make is (a) 2017-2019 total sales were fairly consistent, (b) Riviera sales since launch have been about 20% lower than Poly and CCV sales were in years just prior, and (c) lower Riviera sales have coincided with higher direct sales at the other WDW resorts during the same time period.
At this point, we have to move from the Kingdom of “fact-land” through the “realm of speculation”. In my view – this shows pretty strongly new members have been buying other resorts in preference of Riviera, even though Disney has over the last two years significantly RAISED the direct prices on those resorts. I can only see three potential reasons for this.
(1) Riviera sales are low because the resort was not yet open, and people would rather buy a “known” property.
(2) There is something about the Riviera resort that people don’t like, whether the point charts, the location, the theme, or the Skyliner, that is hurting sales.
(3) Riviera sales are being hurt by the resale restrictions.
So the good news for Disney is that the first reason is going away – the resort is now open and people can see the resort for themselves. Starting with next month’s sales, this potential cause is eliminated. This will leave the other two reasons going forward. The next six months of data will tell us if reason #1 was the real problem.
However, if the data trend stays the same, Disney will have a decision to make. Do they live with the weaker new resort sales or do they consider retracting the resale restrictions. You might say that Disney could consider there not to even be a problem. Sales remain strong, even if Riviera sales are soft. But Disney MUCH prefers new resort sales to old resort sales, and current pacing says Riviera could take 5 years or more to sell out, which is pretty clearly not what Disney was hoping with Reflections set to open in 2022.
So what do you think? If the data continues to track as is, does Disney make a policy change? Or do they just “ride it out”? When it comes to knowing what Disney will do, your guess is as good as mine.