COME ON DVC....GET YOUR Stuff together....

[Chuck S]

I don't think DVC backed off the "lockoff premium" out of the goodness of their hearts, nor simply because members didn't like it. I have a feeling the legal department got involved and decided that it wasn't exactly legal to do it the way they were wanting to. Remember, we had a new VP in charge of DVC and their new team probably had no idea how everything was supposed to work with points and such, and thought no one would question them. It was a rather abrupt turn around.

 

[crisi]

almost all costs associated with "giving" those rooms to DVC members are covered in our dues.
Housekeeping is the biggest - paid for in dues.
Admin, front desk - paid for in dues.
Transportation - paid for in dues.

If this is the route they take - and I am not saying they will or they should, but it is an option, and DVC paid the resort the dues money alone, the room would be covered as far as cost goes.
Add on the money that the guests spend while on property - it would be a profitable situation for Disney. Plus there is the immeasurable customer satisfaction aspect to it all.

Casinos have been comping rooms for a long time and have gotten to be pretty big hotels!

Some of those costs are covered. Most of them are not. IF Disney has to refund our current dues or lower dues next year because lack of housekeeping this year (and they might need to because how that is done is controlled by timeshare law), then they won't have that money for extra housekeeping next year to cover housekeeping for a room at the Contemporary or BWI. Plus, if Disney's attendance is really low following this - due to economic pressures and fears - its better for them to just close some resorts like they did in 2002. That gets rid of a lot of costs.

The customer satisfaction aspect of it is meaningless is Disney is struggling for its life. And frankly, its meaningless with DVC owners - its FAR more important to keep cash guests happy than us.

 

[crisi]

And Disney doesn't need to do any more direct sales of DVC other than to sell off Riveria slowly. This will cause Disney to review their ENTIRE portfolio of investments and decide what and where their profit and risks are in a world of pandemics and terrorism and global warming. And they may say "lets stop with Reflections. that isn't a good thing right now" (They will almost certainly put Reflections on hold for several years). When Disney stops building DVC resorts, they don't need to worry about selling DVC direct.

I suspect they will invest heavily in the future in home media. You will see more games. And the theme park and resort expansions will be low priority for a few years. And that is assuming Disney survives. They aren't the airlines, you can make a case that airlines are needed to keep the economy moving once it opens back up. They are a bank, or a car manufacturer. Entertainment companies will be low on the bail out list. If they don't survive, who cares about bad word of mouth on Facebook.

 

[TraderSamWDW]

Some of those costs are covered. Most of them are not. IF Disney has to refund our current dues or lower dues next year because lack of housekeeping this year (and they might need to because how that is done is controlled by timeshare law), then they won't have that money for extra housekeeping next year to cover housekeeping for a room at the Contemporary or BWI. Plus, if Disney's attendance is really low following this - due to economic pressures and fears - its better for them to just close some resorts like they did in 2002. That gets rid of a lot of costs.

The customer satisfaction aspect of it is meaningless is Disney is struggling for its life. And frankly, its meaningless with DVC owners - its FAR more important to keep cash guests happy than us.

You are right about the time share laws, my misunderstanding.

Disney just secured another 4 billion in short term funding (less than 1 year) from Citibank yesterday. The short term agreement suggests Citibank it not concerned about Disney's inability to pay it back in the time frame - so they aren't too worried about Disney's life.

It is important to keep all guests happy, last I checked, I payed for all my APs, meals and merchandise with cash.

Also does not mean they will not stop reflections, I suspect they will, but they did just file a bunch of permits within the last two weeks for it.

I will admit, I am not discontent, and I really don't care what they do. I merely suggested it was an option, but a certain someone sees it necessary to jump down my throat all the time to that point that it is harassing and frankly ruins these boards.

So whatever.

 

[crisi]

You are right about the time share laws, my misunderstanding.

Disney just secured another 4 billion in short term funding (less than 1 year) from Citibank yesterday. The short term agreement suggests Citibank it not concerned about Disney's inability to pay it back in the time frame - so they aren't too worried about Disney's life.

It is important to keep all guests happy, last I checked, I payed for all my APs, meals and merchandise with cash.

Also does not mean they will not stop reflections, I suspect they will, but they did just file a bunch of permits within the last two weeks for it.

I will admit, I am not discontent, and I really don't care what they do. I merely suggested it was an option, but a certain someone sees it necessary to jump down my throat all the time to that point that it is harassing and frankly ruins these boards.

So whatever.

The fact that you have an AP means that you are exactly the sort of customer they can write off right now, and woo later. You are a DVC member with an AP. Your money has been spent - you'll spend more over the long term, but in terms of Disney meeting the payments on that $4 billion in short term funding, you are not terribly useful as a revenue generator. And that is, honestly, a lot of DVC members. Per lifetime customer - we are AWESOME - per short term trip, our per capita spend isn't great - we maximize park days per dollar with APs, we bought DVC so the majority of the accommodations revenue has already been booked, we have kitchens, or at least kitchenettes, so in economic bad times its easy for us to forgo dining, and those of us who are into souvenirs have a ton of them already - we might add some each trip, but we are less likely to impulse spend on crap.

I'm sorry if you find that people disagreeing with you and pointing out the issues in your logic is harassing and that ruins these boards. I find that a greater understanding of Disney as a business is what has made me be able to get the most out of my membership without having unrealistic expectations that would be dashed.

 

[crisi]

Oh and for "Its important to keep all guests happy" that's naive and I suspect you know it. I run a small business. We regularly tell customers to go pound sand if they aren't the sort of customers we want. My business is IT consulting - and there are both consultants and clients we just won't work with. Often they are too demanding. We can make better money with less hassle being selective in who we work with. Both consultants and clients who expect us to trim our margins down to the point where there isn't any profit in it for us are not at all useful to us, since the purpose of us being in business is to make a profit - for my business partner, its how she pays her mortgage and feeds her kids (for me, its my travel budget, I came into the business post retirement).

 

[TraderSamWDW]

I'm sorry if you find that people disagreeing with you and pointing out the issues in your logic is harassing and that ruins these boards. .

Not people. 1 person. And its way beyond that. It's more obsessive. And condensing. And very stalkerish. And based on private conversations, I know I am not alone on those feelings.

 

[TraderSamWDW]

Oh and for "Its important to keep all guests happy" that's naive and I suspect you know it. I run a small business. We regularly tell customers to go pound sand if they aren't the sort of customers we want. My business is IT consulting - and there astalkers.

finally you are not alonesultants and clients we just won't work with. Often they are too demanding. We can make better money with less hassle being selective in who we work with. Both consultants and clients who expect us to trim our margins down to the point where there isn't any profit in it for us are not at all useful to us, since the purpose of us being in business is to make a profit - for my business partner, its how she pays her mortgage and feeds her kids (for me, its my travel budget, I came into the business post retirement).

You don't have quests you have clients. But I should rephrase, important to keep all potentially profitable customers happy. You and your partner can only bill so many hours a day. So yes. Take the highest margin clients. Suicide not to. Disney didn't have to make those decisions, its a volume game for them.

Also you are not alone with spending less that the average cash guest. I spend more once the room is excluded. Because I eat out every meal and still buy things. I'm not the only one in that group either. But this is really conjecture as neither you or I have data. Disney does.

 

[crisi]

You don't have quests you have clients. But I should rephrase, important to keep all potentially profitable customers happy. You and your partner can only bill so many hours a day. So yes. Take the highest margin clients. Suicide not to. Disney didn't have to make those decisions, its a volume game for them.

Also you are not alone with spending less that the average cash guest. I spend more once the room is excluded. Because I eat out every meal and still buy things. I'm not the only one in that group either. But this is really conjecture as neither you or I have data. Disney does.

Disney doesn't have guests EITHER, they just call their customers guests like I call mine clients.

 

[TraderSamWDW]

Disney doesn't have guests EITHER, they just call their customers guests like I call mine clients.

The point is, being an IT guy, the cardinality of the relationship. You can bill your time to one client at a time, so you have to be much more concerned with margin. I would not devote my time to a 5 percent margin, nor someone unlikely to pay. I'm sure you don't either. Disney can. They have the resources, and 5 percent margin is still profit.

Margin is nice. But its profit that pays bills and goes to the bank. 10 percent margin sucks.... until it's on billions! Small business people such as you and I don't have that luxury. We have to shoot for 40 or 50 on a much smaller number.

And see...no issue that you and I do not fully agree. You speak logically and respectfully toward me. We discuss. Not everyone is capable of doing that, and that is when I find it harassing.

 

[crisi]

The point is, being an IT guy, the cardinality of the relationship. You can bill your time to one client at a time, so you have to be much more concerned with margin. I would not devote my time to a 5 percent margin, nor someone unlikely to pay. I'm sure you don't either. Disney can. They have the resources, and 5 percent margin is still profit.

Margin is nice. But its profit that pays bills and goes to the bank. 10 percent margin sucks.... until it's on billions! Small business people such as you and I don't have that luxury. We have to shoot for 40 or 50 on a much smaller number.

And see...no issue that you and I do not fully agree. You speak logically and respectfully toward me. We discuss. Not everyone is capable of doing that, and that is when I find it harassing.

Before I did IT consulting - years before, I worked for a Fortune 100 company in Tax and Finance. One that doesn't exist any longer. Big businesses don't work that way either. What you are talking about isn't Disney lowering their margins to 10%, its giving away something at a loss, hoping that they will make it up somewhere later along the line in increased customer spend due to goodwill. That works, when you have the cash flow to support it. Disney doesn't right now. (And whether it does work has been somewhat of a controversial thing in business circles in the past 20 years or so. I think it CAN work, but that it also can blow up in a corporation's face - and I've seen it happen - with big corporations)

There are other problems with what you are proposing, like it might violate GAAP, which would create problems with the SEC. It might not be considered responsible fiduciary management, which could cause them to face a shareholder lawsuit, it might create legal problems under Florida timeshare law. It might cause Disney to violate their debt convenants - depending on what they needed to agree to to get that short term loan. Those are just a few of the potential issues - all which are going to need to be reviewed by various attorneys and are going to wait until Disney has a better handle on just how far behind the eight ball they are. Making any commitments now to customers, shareholders, employees, or vendors is not something Disney is in a position to do without creating complications further down the road - complications that may be the tipping point between me getting to a healthy Disney that can afford to continue to invest in itself in 2025 and having a limping company, drowning in debt, fighting lawsuits in 2025. Or one that went bankrupt and is in reorganization.

 

[KAT4DISNEY]

Goodness - mostly it's just talking about establishing a new trade option with Disney hotels. It's not GAAP related nor SEC etc etc.

Timeshares trade. DVC technically trades within it's own resorts. They have a close trading relations with Disney hotels, cruise lines etc. They constantly change trade options. And yes, they've done discounting on trades in the past when they've had excess availability specifically with DCL and probably more often with Disney Adventures. ie - it isn't even new territory in relations between DVC and Disney Collection.

 

[crisi]

Goodness - mostly it's just talking about establishing a new trade option with Disney hotels. It's not GAAP related nor SEC etc etc.

Timeshares trade. DVC technically trades within it's own resorts. They have a close trading relations with Disney hotels, cruise lines etc. They constantly change trade options. And yes, they've done discounting on trades in the past when they've had excess availability specifically with DCL and probably more often with Disney Adventures. ie - it isn't even new territory in relations between DVC and Disney Collection.

That depends on how Disney intends to pay for trading between its timeshares and its hotels. That IS GAAP related. And that means it feeds into the SEC. I don't know the details on how they are legally structured, but that is the devil in the details that may make this impossible.

 

[KAT4DISNEY]

That depends on how Disney intends to pay for trading between its timeshares and its hotels. That IS GAAP related. And that means it feeds into the SEC. I don't know the details on how they are legally structured, but that is the devil in the details that may make this impossible.

If they were to significantly change the how but if it were to happen it's more likely to be a rate change which they've done and do every year at will.

 

[crisi]

If they were to significantly change the how but if it were to happen it's more likely to be a rate change which they've done and do every year at will.

How are they going to pay for it between divisions? Thats the problem. Transfers between operating companies need to be done at a fair price. Disney resorts can't give DVC rooms. That's the GAAP violation that causes IRS and SEC issues.

 

[bookwormde]

How are they going to pay for it between divisions? Thats the problem. Transfers between operating companies need to be done at a fair price. Disney resorts can't give DVC rooms. That's the GAAP violation that causes IRS and SEC issues.

I see the transactions being similar to the current blue card only benefits

DVD pays Disney resorts for the rooms at a very discounted rate and then supplies them to members who lost either at no cost or the discounted rate. The justification would be reputation management to prevent damage to future DVD sales/earnings

Do not want to say this to loudly, but technically they could supply this benefit to direct purchased points only

 

[crisi]

The problem is the "very discounted rates" and then the "how do they pay for them" - those points have no value after their expiration - that's how they sit on the books. So DVCMC has, in expired points, an asset worth NOTHING. So getting what GAAP demands to be a fair value over to the Disney Resorts division using points worth nothing isn't going to be possible. DVCMC needs to give Disney Resorts something with a fair value worth nights in the resorts.....that has to be a transfer made on the books from one operating company to another, with a balancing transaction going the other direction as well.....i.e. Resorts gives DVCMC three room nights to make up for my lost reservation, DVCMC gives Resorts.....????????? - it HAS to be something that has the value of three resort nights. They can be three heavily discounted resort nights, but resort nights are worth something and have to be accounted for on each companies books somehow. And DVCMC has no assets other than points and dues.

 

[Ms.Minnie]

Looks like we have a pitcher who can't catch...

 

[bookwormde]

The problem is the "very discounted rates" and then the "how do they pay for them" - those points have no value after their expiration - that's how they sit on the books. So DVCMC has, in expired points, an asset worth NOTHING. So getting what GAAP demands to be a fair value over to the Disney Resorts division using points worth nothing isn't going to be possible. DVCMC needs to give Disney Resorts something with a fair value worth nights in the resorts.....that has to be a transfer made on the books from one operating company to another, with a balancing transaction going the other direction as well.....i.e. Resorts gives DVCMC three room nights to make up for my lost reservation, DVCMC gives Resorts.....????????? - it HAS to be something that has the value of three resort nights. They can be three heavily discounted resort nights, but resort nights are worth something and have to be accounted for on each companies books somehow. And DVCMC has no assets other than points and dues.

Like blue card benefits it is not DVCMC doing this but rather DVD that is providing these to some members, though this could be an IRS issue since it is an umlinked sales incentive of substantial value, though that risk exists will current blue card "gifts" from DVD. The only GAAP fair value issue would be between disney resorts and DVD and recovery value of rooms that are likely not reserved is typically low

 

[crisi]

Like blue card benefits it is not DVCMC doing this but rather DVD that is providing these to some members, though this could be an IRS issue since it is an umlinked sales incentive of substantial value, though that risk exists will current blue card "gifts" from DVD. The only GAAP fair value issue would be between disney resorts and DVD and recovery value of rooms that are likely not reserved is typically low

YES!..... It depends on how they structure it...... But it isn't necessarily a simple thing and each of us are making educated guesses. And while the recovery value of rooms is low, it isn't zero (just the costs of housekeeping on those rooms means its something), and depending on how many rooms are needed to make members whole, it could be a material cost significant enough to create issues. And those are things Disney will not know until this phase is over. Although I'm not sure if it would be DVD....this is about current member management, not future sales. They might be able to make the case that this is marketing costs, but if I were a lawyer in a shareholder lawsuit, I might make a point of that being a problem in the inevitable shareholder lawsuit - and DVD is going to be very cash strapped itself for the next several years - with Riviera sitting on their books not completely sold and sales drying up.