DVC Resumes Right of First Refusal Buybacks

Whoever had August 7th, 2020 on their Right of First Refusal (ROFR) crystal ball just won the prize. I’ll be honest that when I wrote an article on this about two weeks ago discussing Disney Vacation Club resale trends, I didn’t think it would happen this fast, but Disney has been known to surprise more than once before.

On Friday, we learned from our sponsors at the DVC Store that Disney has resumed buybacks of resale contracts via ROFR. For those unsure what this means, DVC reserves the option to repurchase each contract sold if the seller would ever look to resell in the future. If they like the resale price, they can say the word, and the contract is there’s. 

As of this article’s publication, contracts that we are aware of that have been repurchased include: 

  • Grand Floridian – 200 points @ $139 per point.
  • Saratoga Springs – 200 points @ $91 per point.
  • Saratoga Springs – 385 points @ $92 per point.
  • Saratoga Springs – 200 points @ $97 per point.
  • Old Key West – 220 points @ $81 per point.
  • Old Key West – 270 points @ $89 per point.

This buyback is pretty big news since Disney has not repurchased a contract for roughly five months due to the ongoing pandemic. Throughout our DVC Fan Community and over on DISboards, many were surprised, as was I, that this was occurring given the financial position in which Disney finds itself.  

So why now and what does this mean for the DVC resale market? Here are a few quick takes I have:

When it comes to Disney exercising their ROFR again, we need to look at the bigger picture of Disney Vacation Club’s direct sales. While we can argue until we are blue in the face whether Disney’s Riviera Resort is selling well, what can’t be argued is that Riviera is not selling as well as they had hoped it would. That being the case, the current pandemic has allowed them to re-evaluate their sales technique. Instead of a preview center, DVC now has Villas available in each Disney Vacation Club property that you can tour throughout Walt Disney World.

So imagine for a minute that you are touring a Cascade Cabin at Copper Creek or a Grand Villa at the Grand Floridian as your first ever exposure to DVC. You are then given another resort option to purchase, but it is not the one you fell in love with and see you and your family staying at for the next 40-50 years. What are a few more thousand dollars to get that sold-out resort and that vacation dream you want? I believe this is exactly the line of thinking Disney wants people to have moving forward. They will still get plenty of people who opt to purchase the shiny new Riviera Resort, but why not appeal to the others and make money off those points that they can scoop up and repackage for double what they paid to get them? I think what we are seeing is a cultural shift in how DVC does business, and it is a move many of us have been surprised hasn’t occured sooner.  


To me, this decision is good for all involved. While we may not see some of the crazy low deals we have seen in the resale market over the past few months, the value of these contracts as investments will begin to level off from the downward slide that was occurring.  

Only time will tell, but I think 2020 will be a year we remember for more than just a pandemic, and perhaps also a start of a new era of Disney Vacation Club sales.

I would love to hear your thoughts in the comments! What do you make of Disney’s decision to resume ROFR buybacks? What do you think it means for the future of Disney Vacation Club?

12 thoughts on “DVC Resumes Right of First Refusal Buybacks

  • August 8, 2020 at 9:48 am
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    I think it is very telling that the majority of the contracts they opted to buy-back are at the resorts with the lowest price per point at WDW and the largest inventory. I agree that they are likely re-evaluating the go-forward strategy with new Direct Buyers and also Riviera. I think they are going to back to basics and trying to sell those classic resorts that make people want to return to Disney. With the presumed cancellation of Reflections this is a solid change in pace for Disney from a marketing and sales strategy. The price per point they are charging along with the statements from DVC Guides that minimum direct points are increasing, will make the next few months very interesting to watch.

  • August 8, 2020 at 11:36 am
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    I am trying to do a private deal with a family friend for a substantially lower amount any idea how this might effect ?
    Thanks

    • August 8, 2020 at 12:21 pm
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      Any contract will have to be routed through Disney. If Disney likes the price they will take the contract itself and your friend will be out of luck.

      ROFR is in place to protect this sort of thing which is why we recommend going through a licensed resale broker in order to price a contract at a price that will not be taken by Disney.

      Good luck, though!

      • August 8, 2020 at 3:44 pm
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        Respectfully, DVC does not seem to take certain resorts like POLY or AUL and I’ve watched them focus on particular resorts and then move on to others over the years. If anyone knows what triggers a particular contract to be taken by ROFR they win the lottery. It does not seem to be based on price alone if you watch the disboard ROFR thread. believe that whatever price both parties agree on is the right price. I never base my offer on ROFR. I’ve bought eight resales and never lost one to ROFR and got a great deal on each.

    • August 17, 2020 at 12:03 pm
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      In this case, there are ways around things as long as you fully trust the person, just think creatively, I am sure you can figure out what you could do.

  • August 8, 2020 at 11:46 am
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    I think this is Disney just trying to establish a minimum in the market and putting brokers on notice that they are buying back resort Y at $X per point or less. It automatically raises the resale prices since brokers will now tell potential buyers that are trying to negotiate prices that Disney is now buying back and has bought back at price $X and below at resort Y. This establishes the floor and the lets a buyer evaluate direct vs resale without being enticed by the possibility of a low ball offer slipping through. If I were DVC I would not be as alarmed by the SSR or OKW points as I would be the GF points in this set of buy backs. I feel they are also going to take this as an opportunity as well to toss around ideas for 2042 resort direct prices and possibly even SSR and see how well they can resell direct as possibly “mini DVC” packages with only 20 or 25 years left especially after the hard goods remodels when rooms are in basically new condition.There will be a time soon I think in resale when the prices of the older resorts have to drop off considerably with the length of time left. Disney will have to address what they do with all the contracts being unloaded as they get older. Do they let them all go and let resale totally dictate 2042 and 2054 resort prices? Or do they start some sort of battle plan now and try to make some money and stabilize the prices and give guest a clear distinction between the older DVC and 2060 expiration and beyond resorts? I think there is certainly money to be made on the older resorts still and if Disney can find a way to capture it without cannibalizing new resort sales they will certainly do it,

    • August 8, 2020 at 1:59 pm
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      The only trend I think this indicates for Disney is that they are looking to stabilize the resale market and stop the $80-$100 per point discounts vs buying direct. This is much too small of a sampling to say Disney is making such a huge shift in policy, at least at this point.

      Also, to say that you would spend just “a few more thousand dollars” buying direct versus buying resale is a misleading statement. If you were to buy direct at one of the resorts that isn’t sold out and currently has incentives, then that might be the case. But buying a sold out contract direct with no incentives versus buying resale can allow you to spend more than just a few thousand less or buy significantly more points for the same money. Just doing a quick calculation, you can save roughly 35%-40% buying resale vs sold out direct, again dependent on the resort and points purchased. Small point contracts, yes, the relative savings is small, but the more points you buy, the bigger the savings.

      A year and a half ago, when we decided to invest in DVC, we saved nearly $9,000, or just shy of 30%, by buying a small direct contract from DVC at a sold out resort and then a resale contract at another resort versus buying the same number of points at Copper Creek before it officially sold out. All of this for 195 points total.

  • August 8, 2020 at 12:47 pm
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    I’m gutted… we are currently on week 4 of ROFR, for SSR at a price that you’re showing they’ve brought back. How frustrating after waiting a month to now see we’re probably not going to be successful. Especially after I’ve seen lower prices go through in the last couple of months.

  • August 8, 2020 at 7:21 pm
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    I don’t know if this is a new strategy or if they simply have demand for these particular contracts, user years, etc. if so it makes complete sense to buy them and flip them for a huge profit. I can’t see DVC just buying contracts for no specific reason as they want to get rid of inventory. If they are buying back it is likely they will flip that very quickly.

  • August 9, 2020 at 12:50 am
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    So stoked that they are building a walkway from the magic kingdom to the grand floridian. Yay!!!!!!

  • August 9, 2020 at 3:11 pm
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    I always wondered why they DIDN’T buy back automatically to control the market. Then they come out with “resale purchasers get no perks” etc…Always wondered why they would be so petty when they didn’t exercise ROFR.

  • August 11, 2020 at 4:38 am
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    I spoke with our direct guide today in the interest of adding on and was surprised to find out I could actually add on anywhere I wanted AND I could do so by the end of the phone call… He said the “sold out” resorts are now called Limited Inventory resorts in others words it seems like they are going to keep trying to sell whatever home resorts people are asking for.

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