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DVC Members Might Want to Pass on the Riviera. Here's Why.

The Disney Vacation Club (DVC) announced some groundbreaking changes early in 2019. They altered the rules of the program in a way that seems to arbitrarily punish a resort that hasn't even opened yet, Disney's Riviera Resort. We wanted to ask the experts what they thought about this change. We picked their brains about the most unique DVC room design to date, also. Finally, we asked them for their thoughts about Disney's recently canceled Downtown Disney resort. A lot is happening with DVC right now, and we wanted to provide you with the most informed opinions on these hot-button topics.Here's what they have to say.

Do you expect Disney’s Riviera Resort to do well in spite of the changes or do you believe it’s facing an uphill battle? Why?

Image: DisneyRachel Thompson, Resales DVC: I would have to think twice before purchasing Riviera, especially direct from Disney, knowing that when I sell the property, there will be much less value to the property due to the restrictions Disney has implemented.  On the other hand, if you are particularly looking for Riviera and want to only stay there, I would buy resale.  This way, if you do have to resell the property in the future, you will not see as big of a loss.  Only time will tell what will happen with Riviera pricing, so I would probably wait until they become available on the resale market to see what pricing does.  

Melissa Mullett, David's Vacation Club Rentals: I think Disney's Rivera resort has the potential to do very well. However, at this point, I think that the Rivera is at a disadvantage right out of the starting gate and it will be difficult to overcome. I feel this way due to the restrictions established by the Disney Vacation Club. What the Disney Vacation Club has inadvertently done is increased expectations about the luxury, service, and amenities offered. I do think it was the Disney Vacation Club’s intention to set this property apart from others. If you look at the announcement that was available to DVC Members, there is some strong wording in there that gives the reader the feeling of the exclusivity of this resort.

Image: Disney“This Spring, Members can begin booking stays at Disney’s Riviera Resort with Vacation Points, accessing exclusive, protected inventory which is being held just for our Members.”

Hopefully, the Rivera can deliver on its message. If it does, I think that it could be very successful. The flip side is if it doesn’t deliver superior service or if the resort doesn’t appear to be as exclusive as it boasts, then it will scare many owners away. The new rule changes require a level of commitment from Members that no other DVC contract has ever required, and this will leave Members scrutinizing what really sets the Rivera apart from other DVC resorts.

Lastly, although many are hesitant, the gondolas could be a transportation feature of the Rivera, especially once Star Wars: Galaxy’s Edge opens, and later on Guardians of the Galaxy and Ratatouille over at Epcot. If the Rivera can offer this type of transportation and it turns out to be effective and efficient, then I believe that the Rivera will gain momentum in popularity due to its proximity to all of these amazing new experiences.

Image: DisneyNick Cotton, DVC Resale Market: While I feel it is a risky move, if I had to make a projection, I believe the odds are still in favor of it doing fine. 

I sold directly for DVC for almost seven years, and during that time I sold DVC on land, sea, and over the phone.  For the land channel (the bulk of direct sales), I believe the restriction may boost sales, or at least they will likely stay flat as a result of this change.  The reason I say this is that the majority of people who come on a DVC tour during their vacation know little to nothing about DVC.  So, they may know just enough to ask about resale but not really be familiar with all the facts.  In today’s world, the Sales Guides counter resale with not being able to use resale points on Disney Cruises, and that doesn’t really matter as the value is not there. They also counter with not being able to get discounts that would never add up to the savings you get with resale.  Keep in mind that top performing guides have a great way of making these relatively minor restrictions sound like a mountain, while other Sales Guides may still struggle against resale. 

Now, with a restriction of just being able to use points at the resort you purchase if you buy Riviera resale, all Sales Guides can deliver a strong message.  While this message may work on your less informed prospect, for your more researched guest, they will likely avoid buying direct even more given the potential loss in resale value. However, DVC may be assuming they are losing most of those prospects who have thoroughly researched resale already.    

Image: DisneyAnd this is where phone sales and sales on the ships for DVC could be more negatively impacted by this change. Over the phone you tend to get the a more researched consumer, and at sea you often see more seasoned Disney vacationers, as they have typically done a few land vacations before they go to sea. 

Keep in mind that even if direct sales are flat or even lose a little as a result of this change, DVC may still come out ahead financially with likely higher margins made in buy backs, an increase in foreclosures and potentially more revenue opportunity in the “Breakage Period”.  For more details, please see: https://www.dvcresalemarket.com/blog/new-dvc-resale-restrictions-and-who-is-most-impacted/

Kristen Tutas: The flexibility of being able to choose from multiple resorts has always been a strong selling point with DVC as a direct purchase and for resale. So the newer resorts being drastically restricted could cause some issues for owners in the years to come.  I’d personally have a hard time purchasing that property knowing from the start that when I go to sell it one day, its restricted to use at one resort only, which will impact the value. Riviera will have to be a very special, “one of a kind” resort to entice owners to pay a premium and only be able to book that particular resort. 

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