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New Restrictions Announced on Disney Vacation Club Resales

20 January 2011 No Comment

In what is largely seen as an effort to bolster its own sales, Disney has announced that it will begin imposing new restrictions on buyers who purchase their time shares as resales.

Disney’s time-share program, Disney Vacation Club, operates with a point system.  Points are purchased over a long-term lease period, and normally expire after 50 years.  But with the downturn in the global economy, time-share memberships – including the ones held by some DVC members – have been one of the first luxuries to go.

Disney’s plan is to restrict the ways in which buyers of DVC resales can redeem their points.  Going forward, they will only be able to use points to book at one of Disney’s 11 time-share resorts (seven of which are located on Walt Disney World property), or with third-party hotels via Disney’s partner, RCI.  On the other hand, those customers who purchase DVC membership directly through Disney can book conventional hotel rooms at the resort, or apply them toward a Disney cruise, or even a trip with Adventures by Disney.

A Disney spokesperson says that the move is in response to what customers want.  “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,” responded Disney Vacation Club spokesperson, Diane Hancock.

But industry professionals disagree with the reason behind the move, citing the slumping economy and soft sales that DVC has reported over the last few years.  Tim Krasniewski, publisher of DVC.com, recently discussed the information in an interview with the Orlando Sentinel, and came to his own conclusions:

“I think it’s pretty clear that this isn’t about expanding the customer base. They’re not adding new benefits to make DVC more appealing.  It’s about shifting business from resales to direct sales, by making the direct purchase look that much more appealing.  There was a dramatic upturn in the number of points and contracts that [recently] hit the market.  As a leisure purchase, that’s going to be one of the first things to go, if you’re paying $200 a month to DVC for the mortgage.”

The recently-announced changes speak to the fact that Disney is concerned about the resale market, which has been flooded with resale points, leading to consistently falling prices on inventory.

Disney does exercise the right of first refusal for DVC members who decide to sale their interest in the company, but more and more, they are passing on the option to buy back the points, according to Krasniewski and Kim Holtman, site adminstrator for Mouseowners.com, another unofficial online forum for owners.

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