The COVID-19 pandemic has already impacted so many people’s health and economic well-being. Understanding that the most important concern is to stay healthy, I want to address the uncertainty and concern surrounding the Disney Vacation Club market. Disney has never been closed for such an extended period of time. During this uncertain time, there are more questions than answers. How will Disney Vacation Club recover from the COVID-19 pandemic? Will sales rebound, or increase, or will the economy be so negatively impacted that sales will slow and take years to recover? These are tough questions to answer, but we may find some answers if we examine the past as we attempt to navigate these uncharted waters. Most of us have never experienced a pandemic in our lifetime (unless you are over 100), however, we have been through the 9/11 tragedy and the crippling financial crisis of 2008. Since Disney Vacation Club was in full swing during these events, these events offer insight on how Disney Vacation Club will fare in the short and long term following the COVID-19 pandemic.
There is no question that when this pandemic ends everyone will look forward to spending time with families and friends. People will appreciate the most basic things like grocery shopping, going out to eat, going to a movie or shopping at the mall. And what about vacations? Everyone will be grateful to enjoy a week or two a year to get away from it all and spend valuable time with the people they love. At this moment, a vacation may seem like a distant memory. When the pandemic ends, I am confident that vacations will be more needed and more treasured than ever before.
Prior to September 11, 2001, Disney Vacation Club was selling at a fantastic pace, both direct and resale. Disney Vacation Club had five resorts back in 2001, including Old Key West, Vero Beach, Hilton Head, BoardWalk, and Wilderness Lodge. The newest property at that time was Wilderness Lodge Boulder Ridge, which opened in November 2000. The Beach Club Villas were under construction and scheduled to open in July 2002, and Saratoga Springs, the largest property yet, was also on the horizon to open in 2004. Disney Vacation Club was expanding quickly, but then the September 11, 2001 tragedy happened. The shocking events left the United States, and the world in an extremely uncertain time. I do not think anything could have prepared us for that day…our world changed overnight. 9/11 and the COVID-19 pandemic have their obvious differences, but in this current uncertain time, it is helpful to consider how the tragedy of 9/11 impacted Disney Vacation Club membership. After 9/11 sales obviously slowed at an incredible rate…but as we recovered as a nation, the sales came back. After about two months of slow sales, the buyers came back, and we were generally selling packages within about a 30-day window. Surprisingly, the resale prices did not dramatically drop after 9/11. The resale market stayed relatively stable. Disney continued to review sales of Disney Vacation Club properties under right of first refusal and bought back properties if the sale was below market value. Disney protected its product, and the Disney Vacation Club market really did not change too much during that tragic and uncertain time.
The housing market crash and stock market drop of 2008 (The Great Recession) is another time in history that is instructive because that event also was an extremely uncertain time for our nation. Families lost their homes and their life savings in the stock market. The economy and American families suffered. During this economic crisis, Disney Vacation Club resale packages actually increased in value, and sales increased. Disney reviewed sales contracts under the right of first refusal and purchased back properties if the sale was below market value, however at that time, the purchase prices were generally higher than Disney’s buyback price, so Disney purchased fewer properties back. The Resale market was strong at that time, as resale membership benefits were the same as direct membership benefits, just at a lower cost. The people who discovered resale purchased a resale.
When the pandemic is over, I think there will be an adjustment period. I believe the resale prices will generally remain stable, mostly because I think that Disney will protect the brand as they have in the past. It could be a good opportunity to buy. We can anticipate that some sellers will seek to sell under market value based upon the unfortunate financial hardship caused by this pandemic. Sellers that are agreeable to a lower offer will provide opportunities to buyers, assuming that Disney does not step in at right of first refusal. Disney has their right of first refusal and will decide if they want to buy back properties, which historically they have exercised presumably to protect their brand. Likewise, there will be an opportunity for the seller, because buyers will have a renewed appreciation for vacation and see value in time spent with friends and loved ones. These buyers will be ready to buy so they can secure that quality time on future vacations with their loved ones. The market should remain stable as it has historically, and I expect there to be opportunities for both buyers and sellers.
In the long term, Disney Vacation Club will be fine, and the market will remain strong. Being a DVC resale specialist for over 20 years with The Timeshare Store, Inc.® and personally a DVC Member for the past 16 years, I have confidence that the Disney Vacation Club value will stay strong, as the Disney magic always does. In the short term, this may be a time to purchase a property at a great price. The Disney Vacation Club market has traditionally been a seller’s market, but with the current economic climate, there is an adjustment period that is creating a buyer’s market.
When this is all over, I know I will certainly appreciate vacationing with my loved ones more. I will also appreciate the simple things a bit more….like walking down Main Street or sitting on a bench at EPCOT and watching the world go by. I am looking forward to the brighter days ahead and please Stay Safe everybody.