Would a crackdown on point renting help availability?

[disneynutz]

The profit to Disney wouldn't cover their expenses and enforcing the rentals might be an issue. There are also legal and tax issues to consider and DVC can't do the job that they are paid to do now.

Bill

 

[Deb & Bill]

One reason DVC says there is to be no compensation for point transfers is because they do not put a value on the points, except for a sale and that is for ownership, not one time use. However, they could rent out like they offer members one time use points at $15 a point. But then they are dealing with lots of individuals who will need to have money returned to them for renting their points. The way DVC IT is now, do you really want to chance that?

 

[Dean Marino]

The profit to Disney wouldn't cover their expenses and enforcing the rentals might be an issue. There are also legal and tax issues to consider and DVC can't do the job that they are paid to do now.

Bill

No Bill . My proof? We already have brokers making a profit. That profit may be traced and documented. The rest? As I said.... Disney has great lawyers, and accountants. Perhaps they should consider practicing.

 

[Dean]

If there were ONE thing I would welcome - this would be it. And I can tell you how I believe it could be enforced, and why Disney should think about it....

Now - no smear on brokers.... they perform a legitimate function. There IS one hard truth to brokers - they must turn a profit. That brokers turn a profit should be the trigger for WDW to consider what I'm about to say ... there is money going someplace else, than to Disney .

So - consider the following hypothetical...

1) ANYONE may rent points (yup, in the contract). But the MECHANISM for doing so is NOT in the contract .
2) DVC decides that IT is the sole avenue for point rental. If you are not personally there, and don't have your "DVC Guest of Guest" code? No room .
3) DVC will never take a profit - unless YOU do. At that point, their profit becomes everything beyond 2% of the actual value of the points rented . Folks, for any DVC member - that "actual value of the points rented" is basic back end computer math. If WDW can't find someone competent to code it? I will - then GIVE it to them .

Now - I made all this up . And I guessed at the "2% of the actual value of the points rented". I also have not addressed how DVC would, or could, deal with "under the table" transactions. That's a bigger issue involving everything from DVC to scalped Event Tickets and scalped ADRs. Disney has GREAT Lawyers... I'm sure they will eventually do their job .

The point was that there is a legal way, within the contract, to allow people to rent points, CLIP personal profit taking (or at least divert it to Disney), recover costs for the infrastructure involved (time, computer system load), and insure that DVC point Rental for DVC MEMBER profit goes extinct .

I would welcome a move like this... the only time Sandy and I EVER "rented points" was to my son & daughter in law. We did this at COST. Probably just me - but this is sort of what I would hope other members would do... Yes, help family and friends - but do so in moderation, with no expectation of "making money".

Not possible and not feasible. Disney could offer a renting alternative, other companies have done so and most have abandoned it as too much work for too little profit. I do believe that DVC could curtail the brokerage type renting but that's about it. You're welcome to charge what you want, when I do that for immediate family, I con't charge them anything. I think Disney's legal department is smart enough to stay out of a quagmire they know they couldn't win if pushed.

 

[Dean Marino]

One reason DVC says there is to be no compensation for point transfers is because they do not put a value on the points, except for a sale and that is for ownership, not one time use. However, they could rent out like they offer members one time use points at $15 a point. But then they are dealing with lots of individuals who will need to have money returned to them for renting their points. The way DVC IT is now, do you really want to chance that?

Now this one BAFFLES me. Not arguing about what Disney says.... simply stating that, at any given time, Sandy and I know EXACTLY what the value of our points are. And I can do this with a stupid EXCEL spreadsheet.

Our pathetic Windows 7 computers know...

1) The up front money we paid in.
2) The inflation rate in any given year.
3) The TRUE, discounted cost of any room WHEN we are going to stay ("real rack").
4) Time value of money calculation on 1), based on yearly average CD rates.

Entirely possible I've forgotten something... I coded the thing years ago. The point? If Disney has a decent Intel I5, they have this data.... they just don't seem to have the intelligence to extract or use it.

At the very least? They could certainly use their OWN NUMBERS. If they rent DVC units (and they do).... YOUR Rental should never undercut THEIR rental (and I say that only as a suggestion of sound business practice). If one rents below what WDW offers? Human nature will dictate that people take the "lower" price. Disney - don't do that .

 

[Dean Marino]

Not possible and not feasible. Disney could offer a renting alternative, other companies have done so and most have abandoned it as too much work for too little profit. I do believe that DVC could curtail the brokerage type renting but that's about it. You're welcome to charge what you want, when I do that for immediate family, I con't charge them anything. I think Disney's legal department is smart enough to stay out of a quagmire they know they couldn't win if pushed.

Dean (hey, same first name ) - yes, possible, as no legal restriction prevents "avenue". Yes, low profit - in fact, ZERO profit if it works properly . Costs? whatever the costs ARE, those are a renter's costs - we pay Disney for it's costs. Disney is already paying for those costs..... it's simply someone else making any profit .

Notice that in this hypothetical scenario... no one gets "hit" for simply transferring points to Family or friends. Rather, anyone seeking to latch on to Disney like a remora to a shark? Their profit motivation vanishes .

 

[Goofy DVC]

I doubt many villas would go unused in any situation, members would use their points for the most part even if they couldn't rent. Even if they did, those go to CRO at 60 days out in the form of breakage inventory. Then proceeds go to reduce MF up to 2.5%. Not everyone would rent through DVC but some would.

Dean, but do you think Disney is some ways supports the renting of points? As it is now, they struggle renting those rooms, let alone having to try to rent more at 60 days if additional points were dumped into the CRO pool. Thoughts?

 

[DVC Mike]

I think Disney's legal department is smart enough to stay out of a quagmire they know they couldn't win if pushed.

I agree.

.

 

[DVC Mike]

the only time Sandy and I EVER "rented points" was to my son & daughter in law. We did this at COST. Probably just me - but this is sort of what I would hope other members would do... Yes, help family and friends - but do so in moderation, with no expectation of "making money".

So, if you were going to leave your state to work elsewhere, and decided to rent out your house, you're saying you'd only charge the cost and never make a profit? Some people buy homes to earn rental income, and not to live in them.

This is the U.S.A and we are a capitalist country. There is nothing inherently wrong with making a profit. You're saying it's OK to rent your points only if you charge just the cost?

Certain religions state that you shouldn't charge interest on a loan. But there isn't a law against making a profit.

I just don't understand why you think DVC is somehow special and we should only rent "at cost". Even Disney states in the POS that DVC Members "are permitted to rent their occupancy rights on terms and conditions that they may establish".

 

[gdrj]

So your premise is that if renting was more limited, more members would waste points? I kind of doubt that. I think more members would find DVC doesn't work for them and sell their points.

I have 150 points that did me quite well ... I'm not wasting them, so we've rented them If that option weren't available, I wouldn't spend nearly $2000 a year in dues

I know this was not the point of you post but if you are paying nearly $2000 for 150 points something is wrong.

 

[crisi]

I know this was not the point of you post but if you are paying nearly $2000 for 150 points something is wrong.

Typo, its $1000.

 

[Dean]

Dean (hey, same first name ) - yes, possible, as no legal restriction prevents "avenue". Yes, low profit - in fact, ZERO profit if it works properly . Costs? whatever the costs ARE, those are a renter's costs - we pay Disney for it's costs. Disney is already paying for those costs..... it's simply someone else making any profit .

Notice that in this hypothetical scenario... no one gets "hit" for simply transferring points to Family or friends. Rather, anyone seeking to latch on to Disney like a remora to a shark? Their profit motivation vanishes .

IMO it's not possible nor practical to either use profit/cost or to limit to internal rentals only. It's not practical because everyone's cost going in is different and it be impossible to get consistent numbers from those renting out. It's not possible or practical to limit it to internal both because in order to do so you'd have to limit to ONLY those on the deed plus it would seem (and be) self serving for Disney. Plus on top of that I understand that FL courts have ruled that a management company can't have one set of rules for themselves and another for the owners for Condo's, I think that would be applicable here as well. In short the reason for the limitations on transfers is simply they can, it's not a contractual option. Just like they could charge to bank/borrow or institute a minimum stay. If it wasn't a contractual right, it'd still be a property rights issue but they'd have a little more power. That's not to say that there aren't things they could do but rest assured there isn't anything they could do that would truly curb renting by individuals without having a very LARGE impact on the membership as a whole. Making each and every change a cancellation and re-booking OR a fee to change would certainly be the first change area if they wanted to curtain it. On top of that I don't believe any one member has the right to tell another how to use their points that is within the rules, we all bought for different reasons and have different situations. Remember also that we all only own at X resorts and if we use other resorts or other points, we're just exchanging in to those resorts and don't own there and thus really have no say in how those resorts are managed or how those members use their points.

Dean, but do you think Disney is some ways supports the renting of points? As it is now, they struggle renting those rooms, let alone having to try to rent more at 60 days if additional points were dumped into the CRO pool. Thoughts?

No, I think it's something they'd rather not see happen but ultimately know they do not have control. In many ways it's just like resale, a necessary evil that they have no legal option but to tolerate.

 

[DougEMG]

A crack down on renting will not help availability. Take a look at What is happening at VGF. For popular times owners there are having a tough time getting what they want even at 11 months out. The members all want the same rooms at the same time. DVC is sold to be close to 100% occupancy all year round! that means demand has to spread out evenly. With a point system you get the flexibility of not being tied down to a fixed week, but you accept the possibility of not being able to get your most desired days. If getting exactly what one wants is important, buy where you want to stay and book exactly at 11 months, anything else and there will be times you aren't going to be able to get what you want.

 

[Dean]

A crack down on renting will not help availability. Take a look at What is happening at VGF. For popular times owners there are having a tough time getting what they want even at 11 months out. The members all want the same rooms at the same time. DVC is sold to be close to 100% occupancy all year round! that means demand has to spread out evenly. With a point system you get the flexibility of not being tied down to a fixed week, but you accept the possibility of not being able to get your most desired days. If getting exactly what one wants is important, buy where you want to stay and book exactly at 11 months, anything else and there will be times you aren't going to be able to get what you want.

It would actually decrease availability in all likelihood.

 

[Goofy DVC]

IMO it's not possible nor practical to either use profit/cost or to limit to internal rentals only. It's not practical because everyone's cost going in is different and it be impossible to get consistent numbers from those renting out. It's not possible or practical to limit it to internal both because in order to do so you'd have to limit to ONLY those on the deed plus it would seem (and be) self serving for Disney. Plus on top of that I understand that FL courts have ruled that a management company can't have one set of rules for themselves and another for the owners for Condo's, I think that would be applicable here as well. In short the reason for the limitations on transfers is simply they can, it's not a contractual option. Just like they could charge to bank/borrow or institute a minimum stay. If it wasn't a contractual right, it'd still be a property rights issue but they'd have a little more power. That's not to say that there aren't things they could do but rest assured there isn't anything they could do that would truly curb renting by individuals without having a very LARGE impact on the membership as a whole. Making each and every change a cancellation and re-booking OR a fee to change would certainly be the first change area if they wanted to curtain it. On top of that I don't believe any one member has the right to tell another how to use their points that is within the rules, we all bought for different reasons and have different situations. Remember also that we all only own at X resorts and if we use other resorts or other points, we're just exchanging in to those resorts and don't own there and thus really have no say in how those resorts are managed or how those members use their points.

No, I think it's something they'd rather not see happen but ultimately know they do not have control. In many ways it's just like resale, a necessary evil that they have no legal option but to tolerate.

OK Dean, here's my thought. When Disney sells points to someone who has decided, for whatever reason, to rent points on a regular basis, it is somewhat similar to when Disney may sell a block of rooms to a travel agent or a company like Orbitz. They sell the rooms or points at a discounted price. In return, Disney has locked in that revenue. Whether the rooms are rented or not is not Disney's problem. And more importantly, the price that they're rented for is a price that Disney could never get away with renting themselves to the public. So we have rooms that Disney struggles to move, because in large part, they priced themselves out of that market, now rented by others, resulting in more heads in beds and more money for Disney.

 

[Dean]

OK Dean, here's my thought. When Disney sells points to someone who has decided, for whatever reason, to rent points on a regular basis, it is somewhat similar to when Disney may sell a block of rooms to a travel agent or a company like Orbitz. They sell the rooms or points at a discounted price. In return, Disney has locked in that revenue. Whether the rooms are rented or not is not Disney's problem. And more importantly, the price that they're rented for is a price that Disney could never get away with renting themselves to the public. So we have rooms that Disney struggles to move, because in large part, they priced themselves out of that market, now rented by others, resulting in more heads in beds and more money for Disney.

I see your point but the issue is that in your wholesale model, Disney gets income now but at a reduced rate. And they'd rather not so next year they may not do the wholesale direction if they don't need to. For DVC, any income they received was a year or years before and they're hungry now plus it's decades, not just on slower years or at slower option. Also any rentals are in competition with their own rentals and I get there's some of that with your example as well. Disney get's income no matter who uses the points, I don't buy that there will be increased waste if the rentals aren't occurring. I do buy that SOME who rent might spend more per capita than DVC members but I doubt it's a significant difference. One of the problems that I think some are missing is that in general it's not a few big owners that are doing this, it's a lot of nickel and dime rentals from people that we see every day. It's a bunch of owners doing it occasionally and a few doing it so they can afford to own multiple villas for the 11 month advantage. It's the family who had a layoff but don't want to sell out if they can help it, that haven't managed money well and are trying to avoid bankruptcy, that want to go on DCL or pay for a non DVC vacation, etc.

I know there are those out there that would like to see all rentals stop, usually on the board they won't actually say that but they use code like not for "profit" or only to close family and friends (not referring to this thread but to these types of threads over the years).

 

[Goofy DVC]

I see your point but the issue is that in your wholesale model, Disney gets income now but at a reduced rate. And they'd rather not so next year they may not do the wholesale direction if they don't need to. For DVC, any income they received was a year or years before and they're hungry now plus it's decades, not just on slower years or at slower option. Also any rentals are in competition with their own rentals and I get there's some of that with your example as well. Disney get's income no matter who uses the points, I don't buy that there will be increased waste if the rentals aren't occurring. I do buy that SOME who rent might spend more per capita than DVC members but I doubt it's a significant difference. One of the problems that I think some are missing is that in general it's not a few big owners that are doing this, it's a lot of nickel and dime rentals from people that we see every day. It's a bunch of owners doing it occasionally and a few doing it so they can afford to own multiple villas for the 11 month advantage. It's the family who had a layoff but don't want to sell out if they can help it, that haven't managed money well and are trying to avoid bankruptcy, that want to go on DCL or pay for a non DVC vacation, etc.

I know there are those out there that would like to see all rentals stop, usually on the board they won't actually say that but they use code like not for "profit" or only to close family and friends (not referring to this thread but to these types of threads over the years).

Well said. My opinion is strictly based on what I think Disney 's take is on renting. And, because its opinion, I may be dead wrong. Personally, I've never rented points to anyone or rented from anyone. The closest I've come to either, is gifting points to family. I also feel that because we book early, that it really doesn't matter what the realities of renting are. We are not affected. My view is not tainted by any agenda or lost vacation opportunity.
I just keep seeing thru CRO all those deluxe rooms available for unrealistic prices, increasing DVC room numbers at deluxe DVCs affiliates (VWL,VGF, Poly studios), and decreasing hotel rooms at those same DVCs. While at the same time moderates and values are booked with little to no availability. That tells me a lot. Maybe I'm just reading it wrong. BTW, I enjoy the conversation. Great thoughts.

 

[Goofy DVC]

I see your point but the issue is that in your wholesale model, Disney gets income now but at a reduced rate. And they'd rather not so next year they may not do the wholesale direction if they don't need to. For DVC, any income they received was a year or years before and they're hungry now plus it's decades, not just on slower years or at slower option. Also any rentals are in competition with their own rentals and I get there's some of that with your example as well. Disney get's income no matter who uses the points, I don't buy that there will be increased waste if the rentals aren't occurring. I do buy that SOME who rent might spend more per capita than DVC members but I doubt it's a significant difference. One of the problems that I think some are missing is that in general it's not a few big owners that are doing this, it's a lot of nickel and dime rentals from people that we see every day. It's a bunch of owners doing it occasionally and a few doing it so they can afford to own multiple villas for the 11 month advantage. It's the family who had a layoff but don't want to sell out if they can help it, that haven't managed money well and are trying to avoid bankruptcy, that want to go on DCL or pay for a non DVC vacation, etc.

I know there are those out there that would like to see all rentals stop, usually on the board they won't actually say that but they use code like not for "profit" or only to close family and friends (not referring to this thread but to these types of threads over the years).

One other interesting point, when we purchased back in 93 DVC gave a fill in the blanks rental agreement to use when they sent all of your final documents.

 

[Dean]

Well said. My opinion is strictly based on what I think Disney 's take is on renting. And, because its opinion, I may be dead wrong. Personally, I've never rented points to anyone or rented from anyone. The closest I've come to either, is gifting points to family. I also feel that because we book early, that it really doesn't matter what the realities of renting are. We are not affected. My view is not tainted by any agenda or lost vacation opportunity.
I just keep seeing thru CRO all those deluxe rooms available for unrealistic prices, increasing DVC room numbers at deluxe DVCs affiliates (VWL,VGF, Poly studios), and decreasing hotel rooms at those same DVCs. While at the same time moderates and values are booked with little to no availability. That tells me a lot. Maybe I'm just reading it wrong. BTW, I enjoy the conversation. Great thoughts.

They can always rent a certain % of rooms even if they have to discount them which they'll do up to 35% at times. It's a little like Bealls and Kohl's, mark it up then put it on sale and people think they're saving money. I too enjoy discussing some of these issues, some would say it's a character flaw.

 

[keishashadow]

I am looking to book marathon weekend and NOT run. We want it because our college kids (mine and SIL's) will still be off on break. It's a low crowd time and low points so we have decided to make that our family trip for the next several years (then DH and I will do F&W). I didn't realize, at first, that is was also marathon weekend. We picked it for low crowd and college kids being off.

I'm being told it's a busy time as Jersey week precedes the weekend. guess i'll find out soon enough.