Any thoughts on point charts for Lakeshore Lodge

[WinterSolider]

On the other hand, I do not think it is a foregone conclusion that Lakeshore and the Cabins will be separate "home resorts". Without Lakeshore's inventory, the Cabins remain a niche product that is harder to sell. Maybe that's fine with DVD, but it doesn't seem like the path to least-sales-resistance to me.

I don't think they need to optimize sales at the exclusion of all else. I think they're okay with the idea of CFW as a niche product which is why they brought Poly2 online so close behind it.

"Normal" Orlando-heavy DVC people are being pitched Poly2, Disneyland people are being pitched VDH, Aulani people are being pitched Aulani, and Fort people are being pitched CFW. In the meantime, those cabins are going to sell just fine to cash guests so it's not like the inventory is going unsold in the near-term.

 

[Brian Noble]

Yeah, I get that. But I've long thought that one of the motivating reasons for DVC is to sell the risk of a travel downturn to guests. If you don't sell the points, you aren't selling the risk. (This was written before the pandemic---another black swan event).

Post in thread 'Disney Resorts Occupancy Rates'

Jul 21, 2016

Forgive my ignorance how does converting cash rooms to DVC units make Disney money? Apart from the initial cash injection as points are sold how do they make money moving forward? Wouldn't cash rack rate be a better money spinner?

Other people have chimed in on this, but I think the #1 reason Disney converted cash rooms to DVC was as a hedge against future travel demand uncertainty. And, I think the crash in travel demand post 9/11 was the precipitating event. Since that time, Disney has not started construction on a single cash room. True, AoA got underway in 2010, but that was...

• Brian Noble

• 

 

[maui22]

Does the trust give Disney a slight benefit toward the total points they can sell?
At one point, points for any unit were assigned a specific UY. Example, unit 1D may have been October UY (Disney decided). This was a small drag for them. When a resort neared sold out, we would often hear ___ UYs were sold out, but they had these other UYs available. At some point (guessing 2017-2020?) they eliminated that and now points for a unit (ex. 1D) can be used for all eight UYs.

They still have a tiny headache when a unit (ex. 1D) becomes close to the 2%, they often have to wait for someone wanting a small contract to get closer to the 2%.
As a result, they may have 100 units that reach 2.01-2.05% sold but can't sell any more. This may seem small, but it adds up.

With the trust, they no longer have units. If CFW has 2 million points, they can sell 1.96 million points.

Example, maybe 100 units with 20 points that can't be sold (due to the 2% breakage). That's 2,000 points. For easy math, if those points were $250/pt, that's $500k. May seem tiny in the grand scope of total numbers, but it adds up.

The math doesn't even touch how much easier it in other ways. No tracking units for points left in the unit. No longer tracking units when ROFR happens. If they have 150 points and someone is on the wait list to buy 200 points, as soon as ROFR on 50+ points is complete, they can sell to the WL person. Older unit formula, they had to have 200 points in a specific unit. Made ROFR much more difficult (as some would call it arbitrary).

Apologies if I'm off on what they actual breakage number is or some other specific detail. Hopefully, I'm getting enough of this across that people understand the trust offers a financial benefit to DVD.

 

[sethschroeder]

And, since you brought up membership extras the word they use is “may” replace, not “will”…but it also says benefits can be removed at any time but that language is something you don’t ever acknowledge.

For clarity directly from contract:

If any Benefit, or any portion of a Benefit, becomes unavailable for any reason, DVD reserves the right to substitute a replacement Benefit of a type, quality, value and term reasonably similar to the unavailable Benefit. Reservations for accommodations at a DVC Resort shall be deemed conclusively to be reasonably similar to accommodations reserved at any other property through the Program.

If something becomes unavailable -> DVD can opt to replace with similar type/quality/value/term
There is no reference to just removing benefits outright but they also dont have to replace it either if something becomes unavailable because of forces outside their control.


Regarding CFW:

Off topic so let’s get back to the trust documents. You can find them in the CFW POS and then explain a lot of how that set up can work.

I have looked briefly (as the filed contracts are over 100 pages long) and run searches on the documents and couldn't find anything in the CFW filed contracts. Even the DVC Fan articles I looked up seemingly are vague and don't show any verbiage.

So the question is whoever is stating this to be true then where exactly in the contracted documents or in a different document is it contained? What pieces are you putting together to get to that conclusion.

Even the historical DISboards thread I found seemingly just viewed it as fact without showing where it came from.

If it is possible:
I suspect there is some burden of proof of value when adding additional units to the trust. I am guessing though because I couldn't find reference where they could just change points however they wanted except for the similar verbiage about balancing point charts across seasons and if 1 point is added 1 point is removed somewhere else.

 

[Hubalorian]

From CFW regarding personal use vs renting. Will add more as I find more details

 

[Hubalorian]

Okay, I am going to try to articulate the interpretation of the document that would allow reallocation of points.

Cabins Loop A cost an average of 24 points per night.
Cabins Loop B gets declared into the use plan, and cost an average of 26 points per night.

The document attached seems to allow the reallocation of points between those two loops to bring the balance to 25. This satisfies the one increases and one decreases by the same amount of point rule. Until all of the cabin use plan is declared, they can use this mechanism to adjust points.

Side note - while LSL may be declared into the trust, I have a hard time believing it’ll be apart of the “cabin use plan”. Just seems odd that Lakeshore Lodge would be shoehorned into that use plan. Yes, the trust can have more than one use plan.

 

[skier_pete]

Prediction on point charts:

While logically you would think the point charts should be similar to that of Wilderness Lodge, my prediction would be to see a slight point inflation over that of both BRV and CCV - say 10-20%. They will argue resort is more "luxurious" which will be the excuse for inflated points charts. I don't think you have to worry about the point charts being VGF/PVB levels.

 

[Sandisw]

For clarity directly from contract:

If something becomes unavailable -> DVD can opt to replace with similar type/quality/value/term
There is no reference to just removing benefits outright but they also dont have to replace it either if something becomes unavailable because of forces outside their control.


Regarding CFW:

I have looked briefly (as the filed contracts are over 100 pages long) and run searches on the documents and couldn't find anything in the CFW filed contracts. Even the DVC Fan articles I looked up seemingly are vague and don't show any verbiage.

So the question is whoever is stating this to be true then where exactly in the contracted documents or in a different document is it contained? What pieces are you putting together to get to that conclusion.

Even the historical DISboards thread I found seemingly just viewed it as fact without showing where it came from.

If it is possible:
I suspect there is some burden of proof of value when adding additional units to the trust. I am guessing though because I couldn't find reference where they could just change points however they wanted except for the similar verbiage about balancing point charts across seasons and if 1 point is added 1 point is removed somewhere else.

I have a hard copy of the POS and the thread that was discussed last year had the actual documents from the OCC website.

So, it was based on filing.

In terms of membership extras, We agree that DVC can opt to make something else available. And my guess is they might.

But, where we disagree is that if they remove a perk, they HAVE to and given the language that says things can come and go, they are not REQUIRED to do it.

Case in points,,,free valet parking. Nothing replaced that perk when it was removed.

 

[Sandisw]

Source: Trust me bro.
See also: I made it up.

That is such an enormous leap with absolutely no evidence whatsoever beyond what the Kriegers speculated on a podcast one time (and they said AT THAT TIME, that what they were doing was pure speculation).

Disney tells us what they're doing with their naming conventions. When they announced Poly2, they announced it as an expansion to "Polynesian Villas & Bungalows." There has been absolutely no reference to "The Cabins at Fort Wilderness" in the announcements for Lakeshore Lodge.

It can be added to the trust, and then they can add inventory of DLL to the same RTU plan as the cabins.

So, it can be its own name and component site, but still be sold as a RTU vs leasehold and also incorporate the cabins under the same plan.

It could also be given it’s own RTU plan in the trust and not be combined with the cabins.

The point is that the creation of the trust allows them to choose to do DLL differently and combine if they choose

 

[Sandisw]

Literally the only point of the trust is that the cabins are trailers. Trailers are not real property, they are personal property, and you can't sell a deeded real estate interest to personal property.

That's it. Every other conspiracy theory about the trust is bullcrap.

That is not what I was told in my conversations with several at DVC.

They didn’t commit to anything but did say that they did not need the trust model to sell the cabins and that future properties could be sold the same way.

So, that is where my opinion is based and until DVC states or never does any future properties as RTU, it will remain there.

 

[WinterSolider]

It can be added to the trust, and then they can add inventory of DLL to the same RTU plan as the cabins.

So, it can be its own name and component site, but still be sold as a RTU vs leasehold and also incorporate the cabins under the same plan.

It could also be given it’s own RTU plan in the trust and not be combined with the cabins.

The point is that the creation of the trust allows them to choose to do DLL differently and combine if they choose

That is not what I was told in my conversations with several at DVC.

They didn’t commit to anything but did say that they did not need the trust model to sell the cabins and that future properties could be sold the same way.

So, that is where my opinion is based and until DVC states or never does any future properties as RTU, it will remain there.

You're conflating two different things.

You're talking about the outer limits of what may or may not be legally permissible. I'm talking about what they're actually going to do within the framework of the ecosystem they've created.

There are lots of things that they legally CAN do that it would still be nonsense to suggest they actually WILL do.

The fact that the cabins are part of a trust makes literally zero difference in terms of the actual real-world impact for owners at that resort or owners at other resorts looking to book the cabins at 7 months. The Fort Wilderness cabins function EXACTLY the same as Riviera to everyone except the lawyers and tax people at Disney and the State of Florida.

 

[Sandisw]

Okay, I am going to try to articulate the interpretation of the document that would allow reallocation of points.

Cabins Loop A cost an average of 24 points per night.
Cabins Loop B gets declared into the use plan, and cost an average of 26 points per night.

The document attached seems to allow the reallocation of points between those two loops to bring the balance to 25. This satisfies the one increases and one decreases by the same amount of point rule. Until all of the cabin use plan is declared, they can use this mechanism to adjust points.

Side note - while LSL may be declared into the trust, I have a hard time believing it’ll be apart of the “cabin use plan”. Just seems odd that Lakeshore Lodge would be shoehorned into that use plan. Yes, the trust can have more than one use plan.

This is definitely a possibility. And, the one big benefit to DVD to move from leasehold to RTU is the whole expiration issue they are facing in 2042 and beyond.

Since the property enters the trust in perpetuity unless DVD removes it, there is no expiration of property.

What expires is the RTU plan…so, it makes it easier for DVD because no more worrying about extension of ground lease etc.

Who knows how they will handle DLL, but I’d bet pretty heavy it goes into the trust model with a RTU plan.

How CFW is incorporated is less clear and I’d put that at 50/50 they are same RTU plan.

 

[Sandisw]

You're conflating two different things.

You're talking about the outer limits of what may or may not be legally permissible. I'm talking about what they're actually going to do within the framework of the ecosystem they've created.

There are lots of things that they legally CAN do that it would still be nonsense to suggest they actually WILL do.

The fact that the cabins are part of a trust makes literally zero difference in terms of the actual real-world impact for owners at that resort or owners at other resorts looking to book the cabins at 7 months. The Fort Wilderness cabins function EXACTLY the same as Riviera to everyone except the lawyers and tax people at Disney and the State of Florida.

Yes they currently function the exact same way for the other resorts.

They are the only inventory in it. But that’s not the same as saying that future inventory may not be sold this way, and that DVD may not switch things to function a bit differently down the line.

They did not officially confirm Poly tower would ne part of PVB until a few months before sales.

And so far, they have not officially confirmed that this will be sold leasehold vs RTU under a trust model.

But, the situation does allow them to create a model that does make DLL and CFW one “home resort” that would not be possible if cabins were leasehold…if they choose to go this way.

Hence, the discussion on possibilities and whether it makes a difference to someone who might buy.

 

[sethschroeder]

But, where we disagree is that if they remove a perk, they HAVE to and given the language that says things can come and go, they are not REQUIRED to do it.

Where does it state they can remove without it also being outlined its part of a replacement of unavailable benefits? Its not in the section I quoted which is where it talks about the removal process (which comes as a result of replacement).

The nondescript its in there has been used fairly often on certain topics on here but I will drop it at this point.

 

[sethschroeder]

Okay, I am going to try to articulate the interpretation of the document that would allow reallocation of points.

Cabins Loop A cost an average of 24 points per night.
Cabins Loop B gets declared into the use plan, and cost an average of 26 points per night.

The document attached seems to allow the reallocation of points between those two loops to bring the balance to 25. This satisfies the one increases and one decreases by the same amount of point rule. Until all of the cabin use plan is declared, they can use this mechanism to adjust points.

Side note - while LSL may be declared into the trust, I have a hard time believing it’ll be apart of the “cabin use plan”. Just seems odd that Lakeshore Lodge would be shoehorned into that use plan. Yes, the trust can have more than one use plan.

They can declare additional property in to the existing Resort Property per their site plan. (screenshot below of Sheet 4: Site Plan)

The can also reallocate Vacation Points across all Vacation Home Types. (screenshot below of 3.3 - 3rd paragraph middle)


@Hubalorian thanks for posting this specific section as when I first read through it previously I didn't see it. Based on your comments though and looking at the Site Plan now I understand the potential risk.

I wouldn't think they would put LSL under the "The Cabins At Disney's Fort Wilderness Resort" though which seemingly that is what would need to happen.