DVC plans to target commercial renters

[DonMacGregor]

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.

Are they required to hold back a percentage of each unit, or just the resort as a whole? Can’t remember the specific language.

 

[DonMacGregor]

...and definitely not Third Prize.

Mitch and Murray…errrr, Mickey and Minnie, wouldn’t be happy.

 

[Brian Noble]

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

I know you believe this is true, and I dimly recall that you've found some Florida Statue (?) language that supports it. But, Wyndham has UDI timeshares where the entire resort is sold as an undivided interest, and parts of those have been conveyed into their trust.

So, I'm not 100% sure it can't happen. And if there is a way, no matter how obscure, you can bet Disney's in-house counsel will find it. Assuming, of course, that this is the plan. It may not be---recycling non-performing and unsalable points is not a problem DVC currently has.

 

[AnnaKristoff2013]

Most people think I'm a little bit goofy (and not the good kind) for this attitude.

Most people don't understand that DVC is still a timeshare, and ultimately will suffer the same fate as every other timeshare. You're spreading the truth to people wearing rose-colored glasses.

 

[hhisc16]

Right, and Disney can easily do the same.

I expect the same thing will happen here. Many will give up and sell. A few will try to fight and then give up. Some outfits will go out of business.

At the end of the day, the two biggest outfits, DVC Rental Store and Davids have nobody to blame but themselves. They are a victim of their own success, and they flew too close to the sun. You can’t watch a single Disney blogger, video, read an article, browse a Disney-adjacent message board without ads for them popping up everywhere, and sooner or later Disney was going to notice that they were effectively competing with them. Add in a post-covid travel downturn in bookings on Disneys’ hotel side and the writing has been on the wall for this for quite some time.

Finally, it wouldn’t even really take much effort by Disney here to completely decimate these two biggest players, along with some of the other bigger-medium players. They wouldn’t have to reinvent the wheel either, they could literally just copy what Wyndham did. Just start cancelling some random spec reservations listed on the big two and word would get out quickly that it was no longer “safe” to book through third party websites, because your reservation might be cancelled. That was really all it took for Wyndham.

I think the big 3 DVC rental companies are watching all of this unfold.
Two of them worked for DVC and know their potential.

 

[sndral]

I know you believe this is true, and I dimly recall that you've found some Florida Statue (?) language that supports it. But, Wyndham has UDI timeshares where the entire resort is sold as an undivided interest, and parts of those have been conveyed into their trust.

So, I'm not 100% sure it can't happen. And if there is a way, no matter how obscure, you can bet Disney's in-house counsel will find it. Assuming, of course, that this is the plan. It may not be---recycling non-performing and unsalable points is not a problem DVC currently has.

Even assuming arguendo a Florida statute currently exists that could be interpreted to require DVC to own an entire unit in order to put it into a trust model, that could change in the next legislative session because statutes are amended all the time.
I’ve read that the trust model in other timeshare systems creates availability issues, if so & if a trust system is DVC’s long term plan, then I can see another reason for DVC to proactively shut down commercial renters.

I think the big 3 DVC rental companies are watching all of this unfold.
Two of them worked for DVC and know their potential.

But did they work at the level making these plans/decisions or in the legal department interpreting them? I doubt the CMs working the Liberty Belle/TSI knew plans were out there to drain rivers of America.

 

[Genie+]

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.

Pretty sure most of us think any of your goofiness is the good kind and well appreciated around here. On your last point, that is always a definite possibility. WDW/DVC could dive in popularity and get wrecked. The economy could tank.

I used to think there must be a ceiling to WDW or real estate around NYC though, and now even at these crazy prices not cooling. Just seems like higher demand stuff gets more and more competitive nowadays. More people vying, thicker wallets, and limited amount to go around. The imbalance seems to keep growing.

 

[hhisc16]

Even assuming arguendo a Florida statute currently exists that could be interpreted to require DVC to own an entire unit in order to put it into a trust model, that could change in the next legislative session because statutes are amended all the time.
I’ve read that the trust model in other timeshare systems creates availability issues, if so & if a trust system is DVC’s long term plan, then I can see another reason for DVC to proactively shut down commercial renters.

But did they work at the level making these decisions or in the legal department interpreting them? I doubt the CMs working the Liberty Belle/TSI knew plans were out there to drain rivers of America.

Out of the top 3, two were former DVC guides.

 

[VGCgroupie]

For folks who want to understand more about this: Go back and look through the history of the "we loooooove Club Wyndham Bonnet Creek" thread on the Orlando Resorts board.

Bonnet Creek used to be the number one darling of the offsite crowd, and it was not close. It dethroned Sheraton Vistana as the previous King Of The Heap. And, for good reason! The Bonnet Creek parcel is landlocked by Disney on three sides, and I-4 on the fourth. The only way in or out is via Buena Vista Drive, with the entrance between CBR and Typhoon/Disney Springs. It is not on Disney-owned/controlled property, but it "feels like" it is inside The Bubble. It is an easier drive to many WDW destinations than SSR or OKW, and you will often drive right by it if you are staying at either of those. The units are better equipped than the typical DVC villa. For example, the freezers all have ice makers, and the dining room tables all seat six. Comfortably. Several of the buildings have great views of Epcot. The Presidential units are gorgeous.

They even used to run Stacy's Must-Dos on the resort TVs.

And, for a very long time, it was stupid cheap to rent here. And I mean STUPID CHEAP. For a variety of reasons, it was possible for large-point owners to profitably rent stays for less than a "regular" owner would pay in maintenance fees. Even regular owners could rent a stay here for very good prices. For example, my non-discounted cost to book a full week in a 2BR Villa in peak season (Easter, Christmas, etc.) is less than $1,540, and that's probably only slightly better than average for a rank-and-file owner. I can rent that out for a few bucks more than you'd pay to book a single Disney Moderate in early March---with the current promotion---and pocket a grand without sweating.

So, you can imagine how big this market was. BIG.

Wyndham took a bunch of steps to curb this. They closed the loophole that let large-point owners book ultra-cheap stays in advance. They added friction to the guest certificate process. They added the Owner Priority list. All of those things helped, but mostly they just made the stays more expensive, and people were still booking them.

That all changed almost overnight when a few renters showed up to check in to their rooms, only to find the room had been cancelled. Within months, people had stopped renting there, and more importantly DISers started recommending people NOT rent there---unless, of course, you rent from Wyndham's "official" rental arm, Extra Holidays. For example, here's one poster that @AnnaKristoff2013 was talking with just a few months ago (emphasis added):

Yes my reservation is for that week so I assumed (based on what I was reading) that it would be a priority period for them. You really did just confirm my concerns. While I feel bad for the owners who have points they can't use and want to rent them with the way Wyndham is handling things now I'm thinking I'm backing out even though I really like the property and can't get another for the same price and proximity (price wise I can go over to Marriott Royal Palms and get a 3 bedroom but the commute over is such a pain... and I can't afford a 3 bedroom stay on a Disney property even renting a DVC). Oh well, I guess it's better to give up this dream now then find out I'm homeless when I go to check in. That, by far, would be a nightmare. Again, thank you for the response back!

There is still some rental traffic here, and a few of the larger point brokers are still in business. But the volume of that business is a shadow of its former self.

I could be completely wrong as I am purely speculating based off the current flooding of the market of Aulani listings with stripped points and delayed closings. It seems that some mega owners have already been notified and Disney is doing right by the renting guests and allowing those reservations to remain in place. I think that is fair, I would hate to be that renter showing up to a cancelled room.

 

[zavandor]

I may be wrong, by isn't there a rule that contracts owned by companies can only be used by their employees? Wouldn't enforcing that rule be enough to shut down all points owned by LLCs?

 

[OKW Lover]

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.

How is this different than a member using their points for those same rooms?

 

[Cyberc1978]

I may be wrong, by isn't there a rule that contracts owned by companies can only be used by their employees? Wouldn't enforcing that rule be enough to shut down all points owned by LLCs?

The multi pos states:….is limited solely to the personal use of Club Members, and their lessees, guests, invitees, licensees, or exchangers and for recreational use by directors, officers, principals, or employees of corporations or other similar business entities owning Ownership Interests while staying as a registered guest at a DVC Resort.

 

[crvetter]

How is this different than a member using their points for those same rooms?

The only reason I can think is they would want owners let their points expire if they can't use them. Thus allowing DVCMC could rent the rooms as breakage. That is basically how most timeshares work, they are profit drive up front (selling the deeds) and profit driven on the back end (renting the wasted, expired points).

Disney is different than other timeshares that they also have the strong revenue stream of you staying on site leads to higher guest spending at the parks, merch, etc.

The reality of the situation is Disney wants to diversify their hotels and guests staying on property. More guests on property capture more of the guest spending on their property. Essentially, you'd be less likely to spend on their competitors during that trip.

 

[Sandisw]

I may be wrong, by isn't there a rule that contracts owned by companies can only be used by their employees? Wouldn't enforcing that rule be enough to shut down all points owned by LLCs?

It does say something to that effect…employees, and board owners maybe.

It does seem like that would have been an easy way to entice.