Over the past several weeks, Disney Vacation Club has become more aggressive in buying-back points at many of its older properties.
A Disney Vacation Club owner can sell their deed to a third party, but if they do, Disney Vacation Development can exercise its Right of First Refusal (ROFR) and buy the deed instead. DVD just has to agree to the same price and terms as in the original transaction.
The last few weeks have seen a surge in DVD exercising its Right of First Refusal on resale transactions. The two charts below show ROFR activity for the 7-month period from February to August 2015 and the ROFR activity for last 6 weeks. The data is limited to the nine DVC resorts at Walt Disney World and Disney’s Vero Beach Resort. ROFR data was not tabulated for Disney’s Hilton Head Island Resort, Villas at Disney’s Grand Californian Resort, or Aulani, Disney Vacation Club Villas.
First, the Right of First Refusal data for February to August 2015:
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Next, the Right of First Refusal data for September 1 to October 14, 2015:
DVD has repurchased about two-thirds as many deeds in the most recent six weeks than it did in the prior seven months. Or, put in terms of the average number of deeds per month, Right of First Refusal activity has surged from about 14 deeds per month to about 43 deeds per month, a jump of over 200%.
Although there has been a surge in the number deeds being repurchased, the prices paid for those deeds have been a mixed bag. As seen in the last column of the second chart, DVD has paid more for some resorts, has paid about the same for others, and has actually paid less for one resort.
Its nice to know the prices paid by DVD when it exercises ROFR, but they should be viewed with some reservation. The number of deeds for some resorts is so small that one or two deeds could distort the average price. Furthermore, the data available for this study doesn’t take into account whether the deeds are stripped or fully loaded with points. Nor does it reflect any closing costs, maintenance fees, or other expenses that DVD might have incurred when reacquiring these points.
Surges in buy-back activity have happened in the past. From March 2013 to August 2013, DVD exercised Right of First Refusal on 235 deeds containing 50,225 points, the longest period and greatest volume of ROFR activity since such data started to be collected in June 2010.
This data shadows DVD’s decisions to exercise Right of First Refusal by about four to eight weeks. The repurchased deeds are not recorded until the closing of the resale transaction, which means that DVD’s decision to exercise ROFR actually occurred weeks before. Thus, this data reflects what DVD did in the past, not what it might be doing today.
