DVC plans to target commercial renters

[Brian Noble]

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.

Those perks are not paid for out of Dues. They are paid for out of the marketing budget of DVD--the entity that builds DVC resorts and sells points.

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

This happens at lots of other resorts. In most others that are a part of a mini-system like DVC, those points are foreclosed upon, and resold. One of my resorts changed management companies back to the developer after using an independent management company for a few years. There was a lot of palace intrigue behind both changes that isn't worth rehashing here. But, I was ultimately in favor of moving back to the developer, for exactly this reason.

 

[Sandisw]

This thread boils down to a lot of people thinking Disney can’t do a lot of things because they’ve only ever had experience with DVC, and other posters like you (and I) who own at places like Wyndham and Marriott, who know that Disney has a lot of room to flex here. Those posters confidently posting “well, Disney can’t do that because that’s against the rules” are likely in for a rude awakening. DVC’s governing docs are very similar to Wyndham’s and Marriott’s. They can absolutely take punitive action against people they deem commercial renters including making it more difficult for them to use their points, temporary suspensions, cancelled reservations, etc. They can also define “commercial renting” however they darn well please and put the burden on the targeted mega renter to bring an action against DVC (and that will not work).

As a Wyndham owner I can say unequivocally that what Wyndham did was an absolutely net positive for the vast majority of owners who now find it easy to book in demand resorts at peak times even without home resorts priority. As with this forum, there was a lot of gnashing of teeth by those with a vested interest in keeping the status quo (*cough* organizations that buy, strip, rent, and sell), but it all worked out in the end.

Kudos to Disney for finally deciding to do something about this.

I am one who has come to realize that certain restrictions with some updated language in the RIV and beyond resorts, that more things that wouldn’t happen might.

I just have a feeling that what is coming has more to do with the explosion of the rental market and not just those “commercial” renters

I won’t be surprised to see pretty big changes for your average owner for renting.

 

[Cyberc1978]

I am one who has come to realize that certain restrictions with some updated language in the RIV and beyond resorts, that more things that wouldn’t happen might.

I just have a feeling that what is coming has more to do with the explosion of the rental market and not just those “commercial” renters

I won’t be surprised to see pretty big changes for your average owner for renting.

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.

 

[xdan0920]

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.

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

 

[Cyberc1978]

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

Compared to all other timeshares DVC is actually sellable. You don’t need to give it away or only get pennies back when you sell it.

 

[Sandisw]

Wow just looked up some of the owners from the rental companies and wow there are many LLC’s that owns a lot of points.

They but and sell all the time. Assuming they just strip and flip the contracts. Giving them a lot of points to rent.

Which is why I think the board said they have added members to the team for this.

I don’t think it’s just about enforcement either. I think it’s to address this work around to the rules as they were written

It’s why the more I think about it, I think renting is going to be very strict.

 

[Pluto1976]

Those perks are not paid for out of Dues. They are paid for out of the marketing budget of DVD--the entity that builds DVC resorts and sells points.

So to be clear, maybe I should define "perks" in the context of the post. In this context "perks" is referring to every benefit a direct buyer as that an indirect buyer does not. Examples, access to lounges (Villians Lair), special events, discounts on merchandise, discounts on dining, the ability to sell points without a new buyer assumming reservation restrictions, annual pass discounts, and etc...

If the assertion is true the DVC marketing budget accounts for all of these things, I stand surprised and corrected. Special events and regular lounges I can certainly see. The other perks (in this context) being funded that way does not seem to fit.

In most others that are a part of a mini-system like DVC, those points are foreclosed upon, and resold.

True, but there is a process that must take place for purchaser to rebuy those points and start contributing back to the resort via annual dues, and the purchaser must be willing to pay the higher fee charged by the developer (DVC). Not saying it will not happen though just it's not immediate.

 

[xdan0920]

Compared to all other timeshares DVC is actually sellable. You don’t need to give it away or only get pennies back when you sell it.

Cool. I don’t care if the price falls because there are less commercial renters. I care if my membership becomes easier to use, aka more valuable to me.

 

[Brian Noble]

If the assertion is true the DVC marketing budget accounts for all of these things, I stand surprised and corrected. Special events and regular lounges I can certainly see. The other perks (in this context) being funded that way does not seem to fit.

None of it comes out of dues. It is possible that some units offer those discounts without charging DVD for them, as loss leaders or sales inducements, but they can choose to whom to offer them. They are not paid out of dues, and they legally cannot be.

 

[Brian Noble]

True, but there is a process that must take place for purchaser to rebuy those points and start contributing back to the resort via annual dues, and the purchaser must be willing to pay the higher fee charged by the developer (DVC).

The answer to this is a Trust. Rather than own at any particular resort, you own at a blended collection of all resorts. So it doesn't matter that Timeshare Inc. is foreclosing on Mugwump Swamp points. They are being resold at the shiniest newest resort as part of the Trust.

 

[Cyberc1978]

Cool. I don’t care if the price falls because there are less commercial renters. I care if my membership becomes easier to use, aka more valuable to me.

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

 

[Brian Noble]

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.

These were always dubious reasons to buy points. And, some of us (/waves-hand) have always recommended against buying for those reasons, because any of this was possible.

It's also very (very) likely that neither of those are the reasons most of the prospects on the sales floor are buying. They are buying because they are on vacation, having the time of their lives, and a kind and helpful Guide explains how they can bottle this magical feeling and experience it for years to come at today's prices.

That's because...

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.

...this is true of LOTS of timeshares. Marriott points are worth about 20-25% of the developer price on the resale market. With Wyndham you'd be lucky to get 10%. Neither has any problem at all selling timeshares for low-to-mid five figures. Why? Because while the financial argument is a fig leaf, it's not the reason most people buy. Most people buy because they Want The Shiny Thing.

 

[Brian Noble]

It's also very (very) likely that neither of those are the reasons most of the prospects on the sales floor are buying.

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.

 

[Sandisw]

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.

At this point, I am not sure that they care. It was clear at the meeting that they recognize that owners are allowed to rent and that might need to do so occasionally.

But their definition of that has always been high…but they mentioned how social media and internet has made it a different situation.

That is why if I am an owner renting points out regularly, I’d be prepared for stricter rules. DVC gets to decide what a pattern is…it has to be more than one but could they decide two is, if it’s happening every year?

Could they actually require owners to submit rental agreements? We have to have one?

Who knows but I think what is coming may impact someone who rents regularly to offset dues, etc.

 

[Pluto1976]

None of it comes out of dues. It is possible that some units offer those discounts without charging DVD for them, as loss leaders or sales inducements, but they can choose to whom to offer them. They are not paid out of dues, and they legally cannot be.

Never said they did come out of dues. Pointing out all "perks" are not coming from DVC marketing budgets. The original point being is DVC members become categorized between direct and indirect and benefits are offered accordingly. Resale members are keeping up with their obligations (dues) and supporting Disney (visiting and buying) the same as direct so why the distinction.

Now I know the answer is it benefits Disney to do so and educated resale buyers should know what they are getting into. Resale buyers do provide benefits and a distinction between the two by DVC or other Disney units seems unwarranted.

We can agree to disagree.

 

[Pluto1976]

The answer to this is a Trust. Rather than own at any particular resort, you own at a blended collection of all resorts. So it doesn't matter that Timeshare Inc. is foreclosing on Mugwump Swamp points. They are being resold at the shiniest newest resort as part of the Trust.

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.

 

[Brian Noble]

Resale members are keeping up with their obligations (dues) and supporting Disney (visiting and buying) the same as direct so why the distinction.

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

 

[AnnaKristoff2013]

I just have a feeling that what is coming has more to do with the explosion of the rental market and not just those “commercial” renters

I'm with you 100 percent on this one. Disney cares because the rental market (and especially the two biggest players in it) are now directly competing with Disney's hotel-side operation and drastically undercutting them on prices. Owner satisfaction is likely a distant second concern to this primary concern, especially now that Disney is struggling to fill rooms (look at how much availability there is over Christmas, as of today, if you need confirmation of this).

 

[Brian Noble]

Does the trust concept apply at the original resorts? I was under the impression say the O14 are not in a trust.

In most of these systems, you can add individual ownership units to the trust by conveying their usage rights to the trust in exchange for rights to use trust assets. In particular, the developer can do this. In effect, you are creating a new product that happens to own parts of the old resorts.

I have no idea if there are any structural/legal impediments to DVC doing the same thing.

 

[Sandisw]

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.

The reason is would be tough for DVC to do is because they don’t own any unit in it’s entirety.

That is why adding inventory at the O14 isn’t really possible.

But, nothing would preclude them from adding units that they own at PVB tower to the trust before they sell them to others.