DVC plans to target commercial renters

[AnnaKristoff2013]

Interestingly, I don’t see this as hurting the membership.

It certainly won't hurt membership for the vast majority of DVC owners who use the points for themselves, or only occasionally rent. (Even with Wyndham you can get away with occasionally renting). It may crash the resale market a bit as high volume renters try to exit their positions. This definitely happened with Wyndham. Plenty of people will still buy direct though, especially with those pesky resale restrictions. Plenty of people still buy Wyndham direct as well.

 

[AnnaKristoff2013]

Thing is it won’t be easier to use. At least not in terms of getting BWV resort view rooms or value rooms.

Sure it will. It did with every other timeshare system that has implemented this kind of change. Why do you think Disney is any different?

 

[Genie+]

gg

I saw this comment way back on this thread's first page, and I know you are a frequent poster on the boards so genuinely interested in your thoughts on a counterpoint to this assertion.

The main point of the counterpoint would be whether or not an owner is direct (Disney) or indirect (i.e. resale) should not matter when it comes to DVC extras (ex. access to lounges, perks) because the on-going expense of annual dues is the same regardless of which type of owner one is. Annual dues are a post-purchase DVC ownership expense shared by all members equally, yet a class system is created by establishing non-access to various DVC extras for indirect buyers.

A resale owner is still supporting the DVC resort's upkeep and maintenance financially just the same as direct owners and they are getting less benefits in doing so.

I know this next point is a stretch so bare with me with this rhetorical question; What if there was no resale market and owners let their contracts go deliquent instead of being able to resell them? If this happened existing owners dues would increase b/c less owners would be sharing the expenses for resort upkeep; therefore, resale owners are providing a benefit and should not be categorized differently.

To wrap it up, I would say there is obvious finanical benefits to purchasing resale, but there are also benefits to buying direct from Disney. The biggest is the ease and efficiency of the purchase process which is widely known as compared to going resale which is a completely different experience from the buyer's perspective.

Both ways of purchasing have their pros and cons, but they are realized during the initial purchase period and afterwards all DVC owners should have access to the same perks and be equal because they are both equally supporting Disney as guests and contributors to annual DVC dues.

As stated, interested in your thoughts on this. Respectfully!

It’s already been pointed out how it is DVD’s marketing budget, not dues, that pay for those perks. I just thought it might be helpful to compare it to a new car dealership.

They might offer free oil changes and other maintenance to their new car buyers, but not allow transfer of those perks if the car gets resold. It makes sense from a business perspective because they were only involved in the first transaction, not the second. They only profit on the first transaction, and just like DVD did not profit at all on the second transaction. The used car’s value relies on its usefulness outside the perks. With DVC resale market exploding over the last decade I can understand why DVD removed perks in perpetuity.

The resold DVC product still has much value. That is what is selling it. But DVD gets nothing when it is resold. Why pay the marketing budget for resale brokers? Plus, if Direct was no different than resale it would hurt their sales. The perks help differentiate the resale product from the direct product, giving people another reason besides restrictions to choose Direct.

 

[Pluto1976]

Those entitle you to (a) stay at the resort and (b) the use and enjoyment of visiting and buying. Nothing else.

The same applies to Direct members

 

[AnnaKristoff2013]

Does the trust concept apply at the original resorts? I was under the impression say the O14 are not in a trust. No trust and back to the original point of an absence of a contributing dues owner which will be filled eventually.

A trust can buy up, ROFR, foreclose on, and get plenty of points from the O14 resorts into it. That's how Marriott and Wyndham did it.

 

[Genie+]

The same applies to Direct members

Yes, plus the ability to be included in perks and book restricted resorts.

 

[Cyberc1978]

Sure it will. It did with every other timeshare system that has implemented this kind of change. Why do you think Disney is any different?

If you remove ie 30 mega renters and assuming they book the majority of BWV resort view and value rooms - 30 other owners will take their place. With a total of more than 45.000 owners at those two resorts alone - I agree your chances are better with 30 owners gone now only 44.970 owners left to compete for the rooms.

 

[Pluto1976]

Yes, plus the ability to be included in perks and book restricted resorts.

Correct. And that's sorta of the basis of this subjective debate. Nonetheless, before the mod chimes in I feel my post has steered us

Completely support greater restrictions on walking reservations and limiting commercial renters. There back on topic. Best to all!

 

[Genie+]

This is also probably true of many (if not most) owner add-ons. They might be telling themselves "Well, I can always rent if I don't use them" while they are signing on the line which is dotted. Heck they may even be doing it because they plan to rent them out to offset dues and "vacation for free."

I've seen a LOT of people on this board admit that that was the plan, but they eventually just used all the points.

This is the biggest reason I’m afraid to buy excess points. More risky to me than possible changes under commercial use, which at least I’d have an easier time planning an exit strategy around.

 

[xdan0920]

Sure it will. It did with every other timeshare system that has implemented this kind of change. Why do you think Disney is any different?

Because it won’t be easier for him. Especially financially.

 

[xdan0920]

If you remove ie 30 mega renters and assuming they book the majority of BWV resort view and value rooms - 30 other owners will take their place. With a total of more than 45.000 owners at those two resorts alone - I agree your chances are better with 30 owners gone now only 44.970 owners left to compete for the rooms.

Faulty logic. Not every owner is competing for those rooms. However, nearly every landlord is.

 

[nalababybear]

Interestingly, I don’t see this as hurting the membership.

You may not. DVC sales may -- and that's what drives the engine and building more buildings and expansion of the DVC empire.

If Poly doesn't sell, Reflections will stop...again.

 

[Disfamwa]

The risk is that whatever changes is implemented will hurt the membership.

A lot of owners are adding on because DVC is easy sellable and if you can’t use your points you can always rent them.

If you can’t rent anymore the average owner won’t add on more points and the points might not be as easy to sell as they were.

The price will subsequently go south. That will be known to all owners maybe not new owners because they might not know of DVC before they bought in but still the overall pool of buyers will be much smaller than before.

I think the average owner that buys direct or adds on direct isn’t as concerned with resale prices or the ability to rent out points (that may be the case for savvy resale buyers), and those are the buyers that DVC cares most about.

 

[nalababybear]

Sure it will. It did with every other timeshare system that has implemented this kind of change. Why do you think Disney is any different?

Yes, DVC is different. Very much so. It maybe smaller by 50% to Wyndham -- but it has a singular destination in mind -- WDW.

Yet, with that, DVC maintains resale values close to 50% of direct sale value. Name any other timeshare system that does that. -- there's value in there as well as the eyes of keeping the machine going at the pace that it does. 250k members for one primary destination. That's a big house of cards.

I agree with your primary point: If DVC rentals are impact hotel occupancy's, Disney will make a change and start with big easy targets like the exchanges that directly hold thousands of points.

They may actually make narrow definitions like 20 active reservations per membership year. That will curtail those with sizable rental activity --- it will change their rental activity to longer stays probably, but those are less impactful on hotel side of the Disney business.

It's about the hotel occupancies -- the cash cow of the park business.

 

[Brian Noble]

It's about the hotel occupancies -- the cash cow of the park business.

I suspect the parks are the cash cow of the parks business. There is a reason admission is rarely discounted without having to buy it in bulk.

Though lately the cash cow has probably been the cruise ships.

 

[GoingSince1990]

The most obvious thing to do is for Disney to focus on the low-hanging fruit which is the listings on the internet of large numbers of confirmed reservations for rent. The beauty of that is that they can cross-reference the listed reservations with their system to check who the point owners are, and they will have many of these point owners dead to rights in terms of violating the "no commercial rentals" rule. I suspect that they would then issue stern warnings to the owners in the spotlight, but only end up with the PR nightmare of actually canceling reservations as an absolute last resort which hopefully would not be necessary. This would go a long way to eliminating the worst abuse while not impacting regular owners doing the occasional rental.

Imposing restrictions on things like lead guest name is much trickier. As an example, my son asked me if I had any spare points for a colleague of his to use for his first trip to Disney, and I did, and was happy to make the reservation for him, with no payment taking place. Obviously this is not a rental, not at all "commercial", but the lead guest has a different name from me. As things stand, all owners have an absolute right to make unlimited reservations for others that are not rentals, and I don't think Disney can legally take this away. And in these days of people having hundreds of Facebook "friends" it's almost impossible to prove whether someone is making a reservation for a friend or as a rental transaction. (An owner regularly changing the lead guest name on their reservations, however, as opposed to making reservations in a different name from their own, could be more of a red flag, as a sign of someone who is regularly renting out confirmed reservations).

 

[Genie+]

Interestingly, I don’t see this as hurting the membership.

I don’t either.

As far as resale prices, how far could they plummet before people step in to buy. If I’m a potential renter and all of a sudden see SSR at $50pp… maybe I decide not to pay $5k to a broker for one week in a 2BR and buy SSR instead. How far could Poly dip without a bunch of us on the wings scooping them up? It’s not like these contracts will be LESS valuable after commercial profiteers exit. They’d still hold alot of value to all the people interested in repeat visits to WDW. A mass exit could create a dip but I think it would later stabilize anyway. If real estate and coveted locations have shown us anything, it is the market just keeps growing and with bigger wheel barrows of money.

And the big issues with commercial for-profit use is they pull the cream and pull it ASAP. Like they aren’t saying oh, darling we can’t visit until next Oct so I can’t do anything with any of these high demand bookings showing up. They are using points sooner than later. They are pouncing on any high demand availability that pops back into the system. If I see 4 weeknights at BCV studio pop up first week of May, I don’t take it if we already have trips planned Feb and Oct. The commercial renter will grab it because they have the entire public to find a match. Much different than how a typical family uses the DVC system. By the time a personal use owner that could do May comes by, a commercial renter likely already scooped it.

We’ll have to see how much difference any changes will make. I’m guessing typical personal use part of the membership will find improvement. If the booking system only kept becoming more of a challenge, that seems to be much worse for the brand. All in all I doubt a move like Wyndhams would hurt the membership. *** see #378 below - If the experience improves it could help to off a dip in valuation. Like instead of increased bad experience also hurting the market, at least protecting the experience could help keep it from getting punched down further.

 

[Brian Noble]

The valuation almost certainly won't improve, because there isn't much of an organic demand for timeshares. They are sold, not bought. Landlords exiting the market will remove a non-trivial chunk of ongoing demand, and provide a short-term bolus of supply.

However, I've long argued that one should never consider resale value when buying a timeshare, and instead treat it like found money if it is worth anything at all when you sell it. So I don't consider this "harmful to the membership." Most people think I'm a little bit goofy (and not the good kind) for this attitude. But there is a world in which more people want to leave the market than enter it, and that is structural. Once you get there, prices tend to drop fast.

 

[DonMacGregor]

This is also probably true of many (if not most) owner add-ons. They might be telling themselves "Well, I can always rent if I don't use them" while they are signing on the line which is dotted.

Because DVC Guides want Cadillacs, not steak knives…

 

[Brian Noble]

...and definitely not Third Prize.