New Restrictions for Disney Vacation Club Resales

In a press release Disney Vacation Club has announced that it will impose new restrictions on buyers who purchase their time shares from existing owners, rather than directly from Disney.

Disney Vacation Club, which sells time shares as "points" that can be redeemed for stays in various accommodations, said it will no longer allow owners who acquire their points via resales to redeem them for nights in conventional hotel rooms at the company's five theme-park resorts worldwide, voyages aboard its cruise ships or vacations through its guided-tour operation.

Instead, such owners will be allowed to use their points only for stays in one of Disney's 11 time-share resorts, seven of which are at Walt Disney World, or in third-party hotels available through time-share exchange operator RCI.

Customers who buy directly from Disney will still be able to redeem their points at Disney hotels, aboard Disney Cruise Line, or through Adventures by Disney. The ability to use points for different Disney vacations is a perk frequently cited by Disney Vacation Club sales agents.

DVC spokeswoman Diane Hancock said customers who bought their time shares directly from Disney have requested such a change. "Our members just felt that that they should get more benefits when they purchase through Disney Vacation Club than those who purchase on the secondary market," said Hancock. She added that the change aligns Disney with other time-share operators who impose similar restrictions on resales.

Jason Garcia, Orlando Sentinel journalist, in a related article explained that Disney sells its time shares via long-term leases that typically expire after 50 years. As a result, the contracts' values decline over time and can make buying via resale appealing, particularly in a still-difficult economic environment.

Garcia quotes Kim Holtman, site administrator of MouseOwners.com, an online forum for Disney time-share owners as saying "The glut of contracts on the market has led to Disney resale prices dropping fairly consistently," Holtman said. "The change shows that DVC is concerned about the resale market. I think this is probably their first salvo in poking at the resale market."

Disney's time-share contracts include provisions giving Disney the right of first refusal when an owner wants to sell, giving Disney some ability to prevent ultra-low resale prices from undermining new sales.

But buying back such contracts eats into the company's cash flow, continued Garcia's article, and can leave Disney trying to unload older inventory, with different expiring lease dates, even as it strives to peddle new properties. Holtman said Disney has increasingly opted during the past two years not to repurchase such contracts, writes Garcia.
2 Responses
  1. Anonymous Says:

    Disney should of at least allowed for the theme parks around the world sense this is for Disney vacation club and you do associate Disney with all it's flag ship parks world wide this is the reason why so many people buy into Disney vacation club the other travels an resorts are nice along with cruise ship but to many points are needed for those options to make it worth using and RCI point trade is not worth the trade off Disney vacation club is worth it but secondary purchasers should not be treated as a minority or the red headed step child cause plan and simple a lot of use just don't need 40 or 60 years on these plans so why should I buy one for that length when realistic I would never live to see it all the way to the end in plan terms Disney is cutting there throat on sales and customers cause in future they will see big drops in the travel and cruise cause of economy where the second hand sales would be a great benefit for travel an cruise lines yes the made a big mistake cause were no different than the direct purchaser (sincerely the red headed step child)

  2. Anonymous Says:

    Seems to me that Disney is not honoring there original contract they signed with the sale of the membership. How are they able to do that. Looks like a class action law suit in the works.

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