Early this morning, Disney announced further restrictions for new buyers who purchase their ownership on the resale market, in addition to the resale policy announced in 2011. As of April 4, 2016, owners who purchase from anyone other than Disney will not have access to DVC incidental benefits (also known as Membership Extras) such as Member discounts on dining, shopping, Member-exclusive events, and certain special Member offers. With this change comes quite a few questions from current owners, buyers under contract, and prospective buyers.
What are “Membership Extras”?
Membership Extras, such as vacation options in the Disney and Concierge Collections, certain discounts, offers, and special events are incidental benefits, meaning they are secondary to your ownership and not a part of the DVC program. Incidental benefits can be removed for all owners at any time. They are subject to change or termination without notice, and may require the payment of a fee. Membership Extras are also subject to availability and block-out dates may apply, including high periods of demand such as Christmas and New Year’s Day. You should never purchase an Ownership Interest in reliance on access to or the ability to transfer these Disney Vacation Club incidental benefits.
What benefits are resale buyers really losing?
DVC Members are offered a variety of perks that change every few months or so. The current benefits include 10-15% off at select restaurants and shops, annual pass discounts up to $100, and special member-exclusive events. A complete list of offerings can be found here: 2016 Member Perks. Most of these same dining and shopping discounts already apply to annual passholders and Disney Visa cardholders.
In order to retain those member benefits, buyers must purchase their ownership directly from Disney and at a much higher retail price. Disney is very limited on the resorts they can sell so buyers will not have the luxury of choosing the resort they really want to own.
When reviewing these discounts and the limited inventory with Disney directly, the 40-50% savings from purchasing resale hardly compares. For example, lets use a 200 point Animal Kingdom contract to compare savings to benefits: Disney Vacation Club is currently charging $160 per point which would make a 200 point contract cost $32,000 + closing costs and annual dues. The average resale for this resort is around $85 per point or approximately $17,000 + closing costs and annual dues for a 200 point contract. That’s an up-front savings of $15,000! A family of four would have to purchase annual passes at the discounted rate for over 37 years to see that amount of savings with member benefits.
How does this new policy affect resale value?
Disney implemented the first set of restrictions in 2011 intending to hurt the resale market, but it actually did the exact opposite. The resale market became very strong as more owners became aware of resale and realized the savings outweighed benefits. Supply and demand for the “sold out” resorts, coupled with Disney’s more active ROFR helped to stabilize a post-recession market.
Whether you purchase direct from Disney, rent, or buy resale, you must still purchase food, park tickets, merchandise, and activities separately. Removing certain discounts on those items for resale buyers does not change the value of a DVC accommodation. Owners are still given the same ability to book 7 to 11 months in advance at their home resort, and bank, borrow or transfer points for their stays.
How does this affect current owners who purchased resale?
In a letter sent to all Disney Vacation Club owners today, Ken Potrock (Senior Vice President & General Manager Disney Vacation Club) states “as a current Disney Vacation Club Member (regardless of when or where you bought your membership), your access to Disney Differences and these additional Membership Extras will not be affected by this policy change.” You can view the official letter here: DVC Resale Policy Announcement
How will this affect buyers under contract that haven’t closed yet?
UPDATED (4/7/16): Buyers who have a contract submitted to Disney for ROFR prior to April 4th will have the same access to Membership Extras that other resale buyers currently have. The following statement was received today, April 7, 2016, from the Contract Administration Manager of DVC:
“This note is to inform you that anyone with a contract that was received by Disney Vacation Club by the end of the day on April 3, will be grandfathered in to have the same access to Membership Extras that are available to others who have purchased DVC memberships from sources other than Disney since March 21, 2011. (Note: Those members who purchased from sources other than DVC after March 21, 2011 may not use their points for the “Disney Collection” (select Disney Resort Hotels, Disney Cruise Line and Adventures by Disney) and the “Concierge Collection” resorts. As a reminder, the Membership Extras are incidental benefits offered by DVC and are subject to change.)”
If you have any questions about this new policy, please email us at firstname.lastname@example.org. For more details about the Membership Extras program, please refer to the Membership Extras Acknowledgment and Disclosure Statement found on DVCmember.com