Would a crackdown on point renting help availability?

freediverdude said:

Yes, they're YOUR points, not someone else's. You purchased them for you to use, not for someone else to use. Renting should just be an incidental thing that happens once in a while, not a "we have to rent out x number of points every year to pay this much" type of thing.

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Actually, I purchased enough points to be used in whatever manner I choose to be appropriate while not breaking the POS. We are a family of 3. We've always intended to share points with others...

freediverdude said:

Please re-read my post. I never said that renting is prohibited. I'm saying the general purpose of purchasing DVC should not be to rent every year.

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Could you point out anywhere this "general purpose" is spelled out, except in your personal opinion? If the POS doesn't prohibit it and EXPRESSLY ALLOWS IT, no one is doing anything wrong, no matter how much you may not like it.

Could you please point out where in Disney's marketing it advertises DVC as a rental income property and not a personal timeshare?

freediverdude said:

Could you please point out where in Disney's marketing it advertises DVC as a rental income property and not a personal timeshare?

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Marketing doesn't control how we use DVC points. The POS does. And you've already conceded that the POS allows rentals. Marketing is where they tell you that if you own 100 points at VGF you'll have no problem booking a studio in December, rofl. I wouldn't put much stock in what Marketing says!

MountainMouse said:

So in looking for a room marathon weekend and having a very limited selection it got me to wondering. Marathon weekend is very popular at Disney, but why is it so popular with DVC. The typical DVC buyer wouldn't seem to me to also be a typical marathon runner. And if you were a DVC owner why would you want to come on a busy week/weekend if you weren't a runner or supporter of one? So why are all the DVC rooms booked up? Is it owners renting points? If perhaps there were a crackdown on heavy renters could we all see availability increase on the typical busy times? I'm all for allowing rental of points to help owners avoid a potential loss, but I don't think renting points consistently or buying points solely to rent should be tolerated if it is impacting availability.

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As noted, the ability to rent is expressly and legally allowed and that really can't be taken away. There is language related to commercial renting but the problem is that those who are totally or somewhat opposed to renting will have one definition of what's allowed and others will have a different one. In reality DVC can't limit the reasonable point owner from renting in anyway other than as allowed in the POS. And while there are those that would like to impose that anything for profit is commercial, that is not contractual, reasonable or practical. I doubt it's part of this issue regardless but it may be for other times. It's the nature of the system and something one should realize going into the ownership.

MountainMouse said:

The point really is that this is an exploitable characteristic of how DVC is currently run. It's not technically allowable, but it's overlooked. I'm not sure if that's a good thing or a bad thing. What I don't know is does this impact availability. How many of those marathon weekends, or thanksgiving week, or December are booked with rented points? It's not a question I think anyone will be able to answer definitively but I would be interested in the opinions.

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I think it can and has been answered definitively, that's not to say it won't change over time somewhat.

Dean Marino said:

Related to this thread....

If WDW does NOT institute a crackdown or BAN on point renting? I will be surprised... and I will be convinced that WDW has Management in Empty Suits .

Let me explain.... currently, WDW lists a Deluxe Studio at WL WDW for $401 average per night, rack. David's Point Rentals shows the cost of the same room at $215 per night. Folks, that's a 53.75% savings. We OWN at the WL at WDW - and we know, with dues and up front investment, our actual COST is close to $90 per night.
This is VERY BAD from a WDW perspective... they have engineered a situation where it actually becomes PROFITABLE for a person with up front cash to buy into DVC with the intention of running a business.

This is NOT about how much one could save - rather, it is all about WDW eating it's seed corn. WDW, as of today, can not compete effectively against WDW . They have overpriced their rooms significantly, and are now in direct competition with themselves via the DVC Point Rental Channel.

Now - Disney executives tend to be a bit stupid.... but how long do you think these people will let this go on? They have set up a situation of competing with THEMSELVES - and the competition is significant. For a Point Rentee? Well, this is a Goldmine, as long as you trust the RENTER. For WDW? Pretty much an economic disaster....

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As noted, I don't think they can other than those with many thousands of points and those who run their own website. I could see them eliminating the broker option and possibly starting to collect certain taxes but that's about it. They really can't do much else. And the limited things they could do to make it difficult would affect each and every one us us as well under the law of unintended consequences. Things like a change of name or any date change is a cancelation and rebook. Realize that people buy and use for different reasons as well people's situations changing. One thing not brought up yet, but often in such discussions is the wording in the POS about personal use. It's a passage required by FL law and intended to prevent DVC from selling people using the buy and rent for profit as a sales enticement. It's a statement of expectation and is not a statement of limitation.

MountainMouse said:

Well, I may be a bit ignorant here. I was unaware that renting was allowed at all. How are the 20 reservations calculated? Per contract? I doubt many contracts make that amount. Really should be more of a percentage of the contract size (e.g. 250 contract, you can rent 500 points in a 5 year span). However, I'm not a lawyer, but if it does read in the public offering that the points can be rented there may be nothing that could be done about it.

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See above. Since there is an express allowance to rent, they have to limit in such a a way that any and everyone would agree that it was commercial. That means basically the common and limited situation that we all would agree on. It's not actually a limit of 20 but that they start looking at 20 per year to see what you're doing. It's also a pattern over time and web presence such as their own website, not just advertising on a website.

DVC Mike said:

Actually, that specific language referring to a limit of 20 reservations has been removed from the POS.

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That language was never in the Public Offering Statement. It was announced several years ago by DVC as a point where they could possibly take action against a member for commercial renting.

duplicate post

DVC Mike said:

DVC expressly allows renting. Section 5.1 of the Disney Vacation Club Membership Agreement states:...

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Different POS have different numbers. The one you quote is GFV I think?

Deb & Bill said:

Different POS have different numbers. The one you quote is GFV I think?

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I believe this is usually altered for all resorts at the same time. So they change them all (as applicable) when they make changes as a new resort rolls out or any time they want but theoretically within the laws of FL and the limitations of each resort individual POS.

Marketing shows how the company wants the product to be used, and the general use of the product. I feel like I shouldn't even have to post this, but apparently I do.

freediverdude said:

Marketing shows how the company wants the product to be used, and the general use of the product. I feel like I shouldn't even have to post this, but apparently I do.

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So DVC wants all of us to trade our points for 500+ RCI locations? Or ABD? That's what they are marketing.

MountainMouse said:

So in looking for a room marathon weekend and having a very limited selection it got me to wondering. Marathon weekend is very popular at Disney, but why is it so popular with DVC. The typical DVC buyer wouldn't seem to me to also be a typical marathon runner. And if you were a DVC owner why would you want to come on a busy week/weekend if you weren't a runner or supporter of one? So why are all the DVC rooms booked up? Is it owners renting points? If perhaps there were a crackdown on heavy renters could we all see availability increase on the typical busy times? I'm all for allowing rental of points to help owners avoid a potential loss, but I don't think renting points consistently or buying points solely to rent should be tolerated if it is impacting availability.

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freediverdude said:

Marketing shows how the company wants the product to be used, and the general use of the product. I feel like I shouldn't even have to post this, but apparently I do.

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I would disagree, marketing is used to sell the product. I would submit that how DVD wants the product to be used is irrelevant and really mostly unknown. The laws of the state, the POS and the subsequent implementation of the management system determine how it can be used and generally how it will be used.

MountainMouse said:

The typical DVC buyer wouldn't seem to me to also be a typical marathon runner.

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Why would you think that? I personally know quite a few DVC owners who have participated in Disney marathon events. What makes you think the demographic is so much different?

If perhaps there were a crackdown on heavy renters could we all see availability increase on the typical busy times?

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Simplest answer to this is it would likely have no impact whatsoever on availability. Purely hypothetically, if renting were limited or eliminated, heavy renters would sell their points. The new buyers would use points in any manner of their choosing, which would bring availability levels back up to the current level.

Dean Marino said:

Let me explain.... currently, WDW lists a Deluxe Studio at WL WDW for $401 average per night, rack. David's Point Rentals shows the cost of the same room at $215 per night. Folks, that's a 53.75% savings. We OWN at the WL at WDW - and we know, with dues and up front investment, our actual COST is close to $90 per night.
This is VERY BAD from a WDW perspective... they have engineered a situation where it actually becomes PROFITABLE for a person with up front cash to buy into DVC with the intention of running a business.

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Disney did that knowingly when the Disney Vacation Club debuted. Every single owner is someone who is paying much less today than they would if they'd have remained a cash guest.

The fact that some of the people are renting DVC accommodations doesn't change the equation much. Disney took the up-front capital in return for years of discounts. Quid pro quo. Doesn't really matter whether it's a single individual using those points for 50 years...multiple families as a contract is bought and sold...or a rotating lineup of renters.

This is NOT about how much one could save - rather, it is all about WDW eating it's seed corn. WDW, as of today, can not compete effectively against WDW . They have overpriced their rooms significantly, and are now in direct competition with themselves via the DVC Point Rental Channel.

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Well, Disney still has in the neighborhood of 8000 deluxe hotel rooms on property...and they do a pretty good job of filling them. DVC availability is limited, rental cancellation policies are not palatable to all, there is some risk involved and many people are simply ignorant of the ability to rent.

DVC has clearly been cannibalizing Deluxe demand to some degree but it's not a pressing issue. Disney has taken 700-800 hotel rooms out of service for DVC in the last decade (BLT, AKV, Poly) and they'll continue to adjust. Hotel rate discounts are also an effective means of goosing occupancy if/when necessary. But the deluxe hotel business isn't going to dry up overnight.

The legal realities of what they can and cannot do under the timeshare umbrella will tie their hands. Ultimately the only solution to stem the tide of renting is to stop building DVC resorts and selling more points. That isn't going to happen.

Deb & Bill said:

So DVC wants all of us to trade our points for 500+ RCI locations? Or ABD? That's what they are marketing.

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Yes, yes they do.

freediverdude said:

Yes, yes they do.

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Probably so but for their benefit not ours.

I don't think DVC really cares, it doesn't make a huge impact on the bottom line. Plus it gives potential new members a "test drive". That's how I bought. It technically wasn't renting as we are discussing, it was a 2 bedroom with the member being a friend of a friend who was also staying in the same room (I did pay her for staying there) but I had no intention of buying until that stay. 6 months later I was buying.

Deb & Bill said:

That language was never in the Public Offering Statement. It was announced several years ago by DVC as a point where they could possibly take action against a member for commercial renting.

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No, DVC did alter the POS in 2007 and then removed the language a year or two later.

DVC revised each resort’s Component Site Public Offering Statement at the end of 2007 to reflect the Commercial Use policy adopted by the Association. It describes the “Multiple Reservation Rule”.

POS Revisions Dated 12/31/2007

Commercial Use Policy. The Disney Vacation Club (DVC) Public Offering Statement makes it clear that DVC memberships are intended for personal vacation use. The Declaration of Condominium and the Membership Agreement for the Resort expressly limits the use of Ownership Interests to personal use and prohibits use for “commercial purposes,” – a pattern of rental activity or other occupancy by an Owner that the Board of the Association, in its reasonable discretion, could conclude constitutes a commercial enterprise or activity.

DVC Members may make as many reservations as they desire. However, if, in any 12-month period, a DVC Member desires to make more than 20 reservations, the DVC Member shall be required to establish, to the satisfaction of the Board, that all of the reservations made by the DVC Member in such 12-month period are for the use of accommodations by the DVC Member, the DVC Member’s family and/or the DVC Member’s friends (collectively, “Personal Use”), and not for commercial purposes. If, in any 12-month period in which a DVC Member attempts to make more than 20 reservations but is unable to establish, to the satisfaction of the Board, that all such reservations are for Personal Use and not for commercial purposes, all reservations in excess of the first 20 reservations shall be presumed to be the use of Vacation Accommodations for commercial purposes in violation of the Declaration and the Membership Agreement (the “Multiple Reservation Rule”).

Enforcement of this policy will be the responsibility of DVC Member Services as follows. For each reservation made by a DVC Member, Member Services shall determine, before confirming the reservation, the number of reservations made by such DVC Member which are occurring or have occurred in any rolling twelve-month period in which the reservation then being made will occur. If, as a result of Member Services’ review of the DVC Member’s reservation history, the reservation the DVC Member is then attempting to make violates the Multiple Reservation Rule and the DVC Member has not established, or cannot then establish that all of the DVC Member’s reservations, including the reservation then being made by the DVC Member, are for Personal Use, DVC Member Services will not honor or confirm the reservation and the DVC Member shall be advised that the reservation violates the Multiple Reservation Rule and the prohibition on use of Vacation Homes for commercial purposes. For reservations canceled for violating this policy, the cancellation shall be deemed to be a cancellation by the DVC Member and the provisions of the Home Resort Rules and Regulations relating to cancellations (including, without limitation, Sections 5(d), 13 and 14) shall apply.

The Association shall have the sole discretion to interpret this policy. Further, pursuant to the DVC Property Management Agreement and the DVC Membership Agreement for the Resort, the Association delegates the authority to interpret and enforce (through the Home Resort Reservation Component and the Home Resort Rules and Regulations) the policy to DVCMC as property manager for the resort.

This policy is not intended, and shall not be deemed, either (i) to constitute an exclusive act or statement by the Association regarding any breach of the commercial activity prohibitions set forth in the Declaration of Condominium and Membership Agreement, or (ii) to be an exhaustive list of all activities that shall be deemed to be commercial activity. Accordingly, the Association reserves the right to promulgate such additional rules or to take such additional actions or measures as it deems appropriate with respect to any breach of such prohibitions.

Thanks Dean:
The TV show South Park, on Comedy Central, had an episode where they noted how in almost every movie in which Morgan Freeman appears, he comes in at the end and perfectly explains everything that everyone else had found confusing.
It seems to me that Dean fulfills that role here.

They may want us to book those other options as it's profitable if we do, but regardless it's part of the marketing because it's part of the general use of the product as a personal vacation ownership.