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?