Davids DVC: Rental reimbursement or rescheduling?

[Friendlyadvice2]

I think he raised his price per point by $1 this year. So if he used points paid to owners last year to re-rent at a higher rate, he does make an extra dollar per point.

No, it was February (or could have been late January) as my post stated.

ETA: Approximately February 4, 2020

 

[Galun]

From my understanding, CC chargebacks take the funds immediately from the business during the process, so if he is getting hit with a lot of them, he has to have the funds available to continue without those funds, until he wither wins or loses,

Typically credit card payments are deposited to the business every day. Chargebacks under investigation are usually accounted for with a hold / temporary credit on the customer's account, but the credit card company won't take the money from the vendor yet. If the credit card company ultimately rules in favor of the renter, the credit to the renter will be made permanent, and a charge will be placed on David's merchant account. The merchant account settles every day. If there is a negative balance, he won't get any cash. So essentially payment from new rentals - to the extent that there is any - will "pay" for the chargebacks.

It's a cash flow issue. If he can weather through the storm, all the piece may eventually fall in to place. If he doesn't have the cash flow to last to that point, he will go out of business. That's why he is begging owners for the 70% cash back and keeping it.

 

[Amymouse13]

Your payroll would still be covered by the payroll protection loan. You can lay off your employees now. As long as you hire them back immediately after loan origination date and before 6/30/2020 and maintain payroll for 2 months, the payroll loan will be forgiven.

If have taken out loans or incur expenses not covered by the stimulus bill, you apply for the SBA disaster loan to help with cash flow.

If you are shut down completely and own your location, you may not generate revenue / profit, but you are not incurring fixed expense either.

It certainly won't work out for everybody. But I think the government's response and stimulus plan was well thought out, and I am confident that it will ultimately work.

No idea if Canada is doing sba loans like the ones passed here...

 

[Galun]

No idea if Canada is doing sba loans like the ones passed here...

I agree that he is renting to an international audience, and many small businesses will suffer.

However, I personally think the US response is done quite well.

 

[DGsAtBLT]

I hope David’s is automatically passing on that extra $1 per point to the owners who are re-renting to new renters. Certainly helps motivate them to be willing to do so (helping all of us), that’s a few hundred dollars extra in some cases.

 

[Nennie]

Another issue that arises with credit vouchers, is that David's will have a conflict if he doesn't have enough owners to do rentals for both the credit voucher customers and the new cash-paying customers. If he is short on points, who is he going to rent them to? I think I know the answer!!

 

[fsjking]

Your payroll would still be covered by the payroll protection loan. You can lay off your employees now. As long as you hire them back immediately after loan origination date and before 6/30/2020 and maintain payroll for 2 months, the payroll loan will be forgiven.

If have taken out loans or incur expenses not covered by the stimulus bill, you apply for the SBA disaster loan to help with cash flow.

If you are shut down completely and own your location, you may not generate revenue / profit, but you are not incurring fixed expense either.

It certainly won't work out for everybody. But I think the government's response and stimulus plan was well thought out, and I am confident that it will ultimately work.

Honestly, a lot, if not most, employees are better on Unemployment right now. That extra $600 made it so its a raise over what they are making working. I think a lot of business owners will let their employees do that short term rather than getting a loan to pay them even if it does turn into a grant. They'll pay more next year on their UI, but in the short term it makes sense.

There are still expenses. Theres still an electric bill. Installment loans have to be paid. Suppliers that supplied goods prior to the shut down expect to be paid. Banks that supplied lines of credit still expect monthly payments. The loans help with cash flow, but add overhead. Combine that with no income and it's not much of a solution at all.

I know our business(spring through fall outdoor event venue that uses primarily part time help on event days) is going to be eviscerated by this situation and the stimulus does almost nothing to help us. I know other business owners in other fields who have a similar take on it. It's great if you are still open. If not....

But we've jumped way off topic here.

 

[Galun]

Honestly, a lot, if not most, employees are better on Unemployment right now. That extra $600 made it so its a raise over what they are making working. I think a lot of business owners will let their employees do that short term rather than getting a loan to pay them even if it does turn into a grant. They'll pay more next year on their UI, but in the short term it makes sense.

There are still expenses. Theres still an electric bill. Installment loans have to be paid. Suppliers that supplied goods prior to the shut down expect to be paid. Banks that supplied lines of credit still expect monthly payments. The loans help with cash flow, but add overhead. Combine that with no income and it's not much of a solution at all.

I know our business(spring through fall outdoor event venue that uses primarily part time help on event days) is going to be eviscerated by this situation and the stimulus does almost nothing to help us. I know other business owners in other fields who have a similar take on it. It's great if you are still open. If not....

But we've jumped way off topic here.

The government had thought of this with the way they structured the stimulus bill. It's going to take a little time for the banks to set the loan infrastructure (I asked, they told me they would be ready by Friday), and a couple weeks for the SBA to come up with guidelines. I have furloughed my employees so they get unemployment now. When I verify that I can get the loan and meet the forgiveness criteria, I will rehire them back (at their old pay which is higher than what they will get from unemployment). With unemployment and the payroll protection loan, my employees will essentially be paid by the government for around 3.5 - 4 months. I also get the feds to pay for 2.5 months of fixed expenses in rent and utilities. It is up to me to figure out a way for the business to bounce back during this time.

All those expenses you mentioned are certainly real, and I am fortunate that my business does not have those. However, from what I understand, most understand that this is an unprecedented situation, and are willing to help if you demonstrate the need. If you go out of business, the supplier would have lost a customer, and the bank will not get their money back.

I am sorry to read about your situation... in your case it's going to take a while for demand to bounce back even when the social distancing stuff is lifted. The stimulus bill cannot create business demand out of thin air. But it will help a lot of people and businesses, and hopefully a couple months down the road that leads to confidence that people will start throwing outdoor events again. Good luck. We all need it.

 

[starry_solo]

Well, if you are a renter, your counter party is not the hotel (Disney). Your counter party is the owner member, and David's as an intermediary.

For David's, I don't think they are on the hook for anything based on this language. "David’s Vacation Club Rentals is not liable for any operations changes by the Disney Vacation Club with respect to where you have booked your travel. This would include but is not limited to operations of resort restaurants, pools, play grounds and other amenities controlled by the Resort." However, if they don't help the renter, their reputation is ruined and they won't exist for much longer.

For the owner, I don't think they are on the hook either based on this language. "This is an agreement to rent points that represent accommodations only.""Should accommodations not be available on date of arrival due to an action or omission by the Owner, including but not limited to negligence on the part of the Owner and after communication with the Intermediary, suitable comparable accommodations for the same dates cannot be secured by the Owner, the Renter will be due a refund limited to the amount paid". The renter got the points. The accommodation was not available not due to action or omission but he owner. The renter can use the points to make another accommodation reservation, but no refund. Well, and the fact that no refund has been mentioned numerous times in the contract. That's the way I read it.

The renters rented points that representation accommodations only. I think there is a strong argument that in the current situation the renter will gets the points - and the underlying restrictions behind those points - to make another reservation. They were advised to purchase travel insurance. There is a type of travel insurance that will cover this situation - cancel at any time.

So, I think David's has a strong case to defend a chargeback. Now, will the average credit card charge back investigator understand all this. I doubt it, and I think a lot of them will just rule for the credit card holder since that's ultimately their customer. I am just saying don't be so confident about it. If you initiate a charge back and fail, you burn the bridge and David's will have no incentive to help you secure another reservation.

This was talked about many pages ago. Travel insurance, including CFAR, is telling their insureds that it doesn't cover pandemics

 

[Galun]

This was talked about many pages ago. Travel insurance, including CFAR, is telling their insureds that it doesn't cover pandemics

I saw one person stating CAFR travel insurance does not cover pandemic, without offering any proof.

I just bought CAFR travel insurance for a new trip in July I just paid for, and I specifically asked about this. I am covered when I cancel my tip 48 hours before the start of the trip. My payout will be 75% of non refundable trip cost. The payout will take longer because they will need to investigate how much was exactly non refundable. But it's certainly covered. The pandemic itself is irrelevant to CAFR policy. I make the decision to cancel within the timeframe stated by the policy, and that's what triggers the payout.

It is certainly possible that someone bought what they thought was a CAFR policy but it's not actually CAFR.

 

[Lewisc]

I saw one person stating CAFR travel insurance does not cover pandemic, without offering any proof.

I just bought CAFR travel insurance for a new trip in July I just paid for, and I specifically asked about this. I am covered when I cancel my tip 48 hours before the start of the trip. My payout will be 75% of non refundable trip cost. The payout will take longer because they will need to investigate how much was exactly non refundable. But it's certainly covered. The pandemic itself is irrelevant to CAFR policy. I make the decision to cancel within the timeframe stated by the policy, and that's what triggers the payout.

It is certainly possible that someone bought what they thought was a CAFR policy but it's not actually CAFR.

It was CFAR. The policy only covers non-refundable charges. Since the DVC resort was closed the carrier contended the rental contract wasn't valid. The carrier was arguing the owner or broker was responsible to refund. The poster said the claim was pending.

 

[McCrae]

I saw one person stating CAFR travel insurance does not cover pandemic, without offering any proof.

I just bought CAFR travel insurance for a new trip in July I just paid for, and I specifically asked about this. I am covered when I cancel my tip 48 hours before the start of the trip. My payout will be 75% of non refundable trip cost. The payout will take longer because they will need to investigate how much was exactly non refundable. But it's certainly covered. The pandemic itself is irrelevant to CAFR policy. I make the decision to cancel within the timeframe stated by the policy, and that's what triggers the payout.

It is certainly possible that someone bought what they thought was a CAFR policy but it's not actually CAFR.

What insurance company did you use?

 

[Galun]

What insurance company did you use?

I believe it's Berkshire Hathaway travel protection. Just look on one if the travel insurance aggregate websites and look for CAFR.

 

[Galun]

It was CFAR. The policy only covers non-refundable charges. Since the DVC resort was closed the carrier contended the rental contract wasn't valid. The carrier was arguing the owner or broker was responsible to refund. The poster said the claim was pending.

Well then the claim has mot been resolved yet. It's not yet "nonrefundable" because the travel insurance thinks someone else will give them a refund. Insurance companies want to be the last payer. If they ultimately don't get a refund, they should be covered by travel insurance. If they don't, complain to the state insurance commissioner.

 

[Maddiesmum03]

I hope David’s is automatically passing on that extra $1 per point to the owners who are re-renting to new renters. Certainly helps motivate them to be willing to do so (helping all of us), that’s a few hundred dollars extra in some cases.

$15.50 per point for any extra points rented but no extra $1 for points in the original transaction

 

[TheWheel]

FYI - If any renters affected wish to rebook with Disney directly you are in fact eligable for the free dining offer on a cash reservation as long as your reservation fell inside the mentioned dates.

 

[Lewisc]

Well then the claim has mot been resolved yet. It's not yet "nonrefundable" because the travel insurance thinks someone else will give them a refund. Insurance companies want to be the last payer. If they ultimately don't get a refund, they should be covered by travel insurance. If they don't, complain to the state insurance commissioner.

The poster was from Canada. The issue is a closed resort, or cancelled flight, generally means the supplier has to offer a refund. The insurance company doesn't have to pay.

The point is regular travel insurance doesn't cover it. CFAR may have a loophole. David's already said the contract isn't valid since the resort was closed. Assume the carrier confirmed that information but David's is unable to pay their bills. This might be considered a supplier default claim which may, or not, be covered.

 

[momincolorado]

$15.50 per point for any extra points rented but no extra $1 for points in the original transaction

Help me understand this (renter here). Since the so-called travel credit is for “dollar value” he’s charging the renters $1 more per point for any new reservation (so renter now pays more) but not passing it on to the owner assuming original points are being used to complete this new reservation, is this correct?

 

[Amymouse13]

Help me understand this (renter here). Since the so-called travel credit is for “dollar value” he’s charging the renters $1 more per point for any new reservation (so renter now pays more) but not passing it on to the owner assuming original points are being used to complete this new reservation, is this correct?

I'm guessing dollar value based on what you paid that now isn't worth the same in current point values... If you can even book something as some have days there is no availability this fall other has any owners willing to work with him

 

[Maddiesmum03]

Help me understand this (renter here). Since the so-called travel credit is for “dollar value” he’s charging the renters $1 more per point for any new reservation (so renter now pays more) but not passing it on to the owner assuming original points are being used to complete this new reservation, is this correct?

As I see it yes, I got the impression the rental was a new one, not for my original renters. I was paid in full for the original rental, and was told I would receive $15.50 for additional points over and above the original number of points.