Davids DVC: Rental reimbursement or rescheduling?

[CanadaDisney05]

But those aren't the only choices he's asked for.

He also asked Owners to refund the 70%, no matter what the status of the points, and stated that the money would be used for fund a voucher for his entire base of customers, since he would not issue a refund to a Renter whose Owner issued a refund (because that would require David's to give up his commission).


For a very small number of Owners early on, he accepted that they contacted the Renter and re-scheduled the trip. By doing so, he decided that he was out of the agreement, and promised to pay the 30% remaining to the Owner. This quickly stopped with David's telling Owners not to do that any more. When Renters tracked down Owners, David's admonished them for contacting the Owners directly. David's also told Renters that they would contact the Owners on their behalf about re-scheduling, but quite a number of Renters and Owners in this thread stated that David never bothered to contact the other party.

Most businesses changed their tune very early on. This is not unique to David's. Lower level employees made decisions before the big boss was able to come up with a formal policy. DVC member services was doing the same thing.

So, let's talk about the vouchers...

The voucher terms can be changed at David's sole whim, or even cancelled.

If a Renter uses the voucher and the resort is closed, the Renter does not get to re-schedule and the voucher value is lost.

I said it many times, its not perfect. But atleast it's more than a free fast pass. You are still getting 60 - 90% of the value of the original contract depending on your analysis of the risk. But again, this is the problem with the original contract. It didn't indicate who was responsible when the resort closed. Now it indicates it. He had to choose one side. He chose the owner's side. IMO, he couldn't leave it ambiguous again. If he left it up in the air, would this have been a better solution for you?

The voucher is full rack rate on a cash reservation at Disney, which allows David's to pocket the agent's commission or spread (the applicable discounts offered to anyone booking through CRO versus full rack rate). Since we expect Disney to offer 30% or perhaps more of a discount in the short term, the spread gives David a considerable commission. In fact,at a Deluxe hotel, that could be as much as $200 per night at 30% off. Since his DVC rental price was likely was about $300 per night for a studio, the Renter would be paying quite a bit more to stay Deluxe, and would have to drop to moderate resorts to avoid paying more. With David's profit on the spread, his retained 30% not paid to the Owner, and his own earlier commission, he is almost entirely whole if the Renter doesn't put in additional money. If the Renter puts in money, David's could actually make a profit.

Does it explicitly say it will be at rack rate? Or does it just not guarantee an promotions? If so, I would agree that he should be selling it at whatever price Disney sells it to him at. He shouldn't be profiting (other than commission) on that portion.

The voucher can also be used to rent another DVC reservation. David's, no doubt, has a stock of points from cancelled reservations where the Owners have agreed to re-rent the points in the hope that they will get the final payment. These DVC points in stock will be prioritized towards new cash customers, in order to build up the cash position.

That is a MAJOR assumption with no evidence to support the theory.

A few of these may go to people who lost reservations and were given a voucher. However, because only David's knows what points are in stock for what resort, he can game the voucher holders and tell them he is looking for Owners to rent to him and is unsuccessful in doing so. If he is truly unscrupulous, he would never fulfill a voucher with points unless those points are coming up on expiration. This forces customers who want to book far in advance into pricier cash reservations where he makes money on the spread. If a voucher holder gets to book a DVC stay, it is at the new higher price per point, so the Renter will be paying money out of their pocket for an equivalent stay, which goes into David's pocket (David's has stated the old points are at the old price, only new points are paid at the higher rate).

Of course, some people will never use those vouchers, so all of the money, whether it is the commission plus the 30% in holding for the Owner, or the full amount because the Owner issued a refund, goes into David's pocket.

This is a lot of assumption assuming the worst. All of these are possibilities, but there is no evidence to suggest that he will operate under that manner.

Yes, some Owners will keep the 70% and walk away, but as I've explained earlier, the voucher scheme makes up for that. What the voucher scheme cannot prevent is chargebacks eating through David's cash reserves. If Renters don't like the terms of the voucher, they will issue a chargeback. If enough do, David's voucher system will be under-funded and David's will go into bankruptcy.

I never disagreed that chargebacks could be successful and cause financial hardship.

@CanadaDisney05 I find it interesting that you state that David's employees receive a commission on each booking, and even suggest an amount for that commission. While travel agents are typically commissioned, clerical employees typically are paid per hour. I haven't seen published anywhere how David's pays his employees. So, this causes me to ask you directly:

@CanadaDisney05 Are you in any way affiliated with David's? An employee, ex-employee, relative of an employee, investor, creditor, David's family member, David himself?

[/quote]

Just because I'm from Canada doesn't mean I know David from Canada......

No, I am in no way affiliated with David. I've never even done business with David. I don't know him. Never met him. Never met anyone who works there. Other than the fact that I am an owner who could potentially in the future use David or any of the other brokerages if the need ever arised, I'm about as impartial on this subject as can be.

I don't know how much they make in commission. It was an assumption. I took a brief look at his website, and it looks like the vast majority of the staff are travel agents who are typically paid a commission. I made up a number. It could be high, it could be low. It doesn't really matter. It was just to illustrate that he has to pay his employees. The $4.50 commission doesn't directly go into David's pockets as profit. He has expenses.

 

[Sandisw]

It is in this thread somewhere that Davids has expiclity stated renters who use a voucher for Disney rooms will be charged rack rate, They will not be eligible for the promotions. He claims there is some reason he wouldn’t be allowed to secure them,

 

[chicagodisneyguy]

It is in this thread somewhere that Davids has expiclity stated renters who use a voucher for Disney rooms will be charged rack rate, They will not be eligible for the promotions. He claims there is some reason he wouldn’t be allowed to secure them,

I've tried to keep up, but has anyone been allowed to book anything yet with their voucher? If not, has David's given an indication as to when bookings will be allowed?

 

[Marionnette]

I've tried to keep up, but has anyone been allowed to book anything yet with their voucher? If not, has David's given an indication as to when bookings will be allowed?

I believe someone said that they will begin booking again in August. There’s a ton of dedicated reservations that they are peddling on the website. I don’t know if they are actually booking them or just haven’t updated their webpage. Some of them are for June. The BCV reservation for 6/7-613 @$19/pt has me choking back a laugh. I sincerely hope that no unsuspecting renter pays $4K+ for what will probably end up being canceled and replaced with a voucher.

 

[CanadaDisney05]

It is in this thread somewhere that Davids has expiclity stated renters who use a voucher for Disney rooms will be charged rack rate, They will not be eligible for the promotions. He claims there is some reason he wouldn’t be allowed to secure them,

So maybe there is a reason why he can't get the promotional offers. I don't know the logistics. The assumption that he is defrauding renters by claiming he can't secure the promotional rates but then paying the promotional rates himself and pocketing the difference (I know you didn't suggest this, but the response you are replying to was in response to another user who was claiming this) is a hell of an assumption based on nothing.

 

[dsnymnkyuncle]

I am sorry but I find this pretty confusing. Could you explain what your insurance is? Credit card based? Trip insurance? Some type of umbrella?
It sounds like the whichever insurance you had based the claim on the Canadian government 'advising' no border crossing?
Then it sounds like the insurance company has not paid you. Have you been paid? If so could you add a breakdown of how much and for what?

What was the impact of David backing off of no refunds?[/QUOTE]

My insurance would cover some of those types of scenarios. Maybe not the broken bone one. I believe it even covered things like work revoking time off. So no, I was not willing to be out thousands. It actually also covered this pandemic, I imagine because I had the Canadian governments advising not to cross the border working in my favour, my complication was the insurance company wanting me to get money back from David’s first and David’s backing off of their firm no refunds.

 

[starry_solo]

Just wanted to share my experience. We had a rental at BCV for mid-April though David’s. I filed a claim with my CC travel insurance (CitiCard). I received the denial of claim this morning. The basis of the denial was because a full value voucher was issued. It did say I could re-file if voucher is unused after a year.

Not sure what I’m going to do next. If we take voucher, we would use it for a cash room reservation instead of DVC rental. It was only 2 studio nights but still not an insignificant sum of money since it was peak point season.

Here is the post @Kevin_W

 

[Sandisw]

So maybe there is a reason why he can't get the promotional offers. I don't know the logistics. The assumption that he is defrauding renters by claiming he can't secure the promotional rates but then paying the promotional rates himself and pocketing the difference (I know you didn't suggest this, but the response you are replying to was in response to another user who was claiming this) is a hell of an assumption based on nothing.

He is a TA and I think it is a stretch to suggest there could be any rational reason why he is charging voucher clients rack rate.

Sorry, but him suggesting there would be no way to book those rates is laughable at best.

 

[MIDisFan]

So maybe there is a reason why he can't get the promotional offers. I don't know the logistics. The assumption that he is defrauding renters by claiming he can't secure the promotional rates but then paying the promotional rates himself and pocketing the difference (I know you didn't suggest this, but the response you are replying to was in response to another user who was claiming this) is a hell of an assumption based on nothing.

Are there any examples of other travel agents not being able to secure promotional offers on rooms?

 

[Dracula]

Are there any examples of other travel agents not being able to secure promotional offers on rooms?

None that I know of A good friend is a TA booking Disney, she is always happy to get promotional offers for her customers!

 

[banzai75]

If you are a travel agent and the best rate you can get is rack rate then I’m not sure why anyone would use you.

 

[CanadaDisney05]

He is a TA and I think it is a stretch to suggest there could be any rational reason why he is charging voucher clients rack rate.

Sorry, but him suggesting there would be no way to book those rates is laughable at best.

At this point we are no longer debating based on the facts presented, but rather on conjecture. I have no idea if you are right or wrong. If you are correct and he can secure the promotional offers, but instead is pocketing the difference, then I am fully on your side. I think that would be disgusting on his behalf.

Unless there is actual concrete evidence to suggest this is happening, I personally choose to give people the benefit of the doubt. We'll have to agree to disagree. But that is why we are all here, to discuss, not to promote groupthink.

 

[MIDisFan]

This is my understanding and correct me if I'm wrong.

Owner's have two choices. Keep the 70% and keep the points. They can then take those points and see if they can use them personally, or try and rent them out again which means further profit. Worst case, the points expire and they lose 30%. Second choice is to allow David's to re-rent the points, and then get 100%. Overall, it's not perfect, but it's not too bad.

Renter's get one choice. They get a voucher which can be used for several different options including a future DVC stay, or a booking through his travel agency (which could include booking hotel rooms through Disney). Again, it's not a perfect solution for the renter, but it's still overall not that bad.

In order to allow the owner to keep the 70%, and then issue a 100% voucher to the renter, that requires excess cash. Doing some rough math, David's in general keeps about 24% of the funds as a commission. Now, he gives a chunk of that amount to his employees as their commission. So l assume he (the company) only keeps about 13% as gross profit (which is different than profit. He still has other expenses to cover) under normal circumstances. So far, the owner has received about 53% of the total funds (14.50 / 19 x 0.7) that the renter paid, the employee has about 10% (2 / 19) , and David has 37% (1 - 16.50 / 19). Still following me? He now has to cover a 100% voucher with only 37% of the funds to help. He is taking a 63% loss. Which means, he is taking a major financial loss on those vouchers.

In the circumstances where the owner allows their points to be re-rented, everyone is technically made whole. In the circumstance where the owner keeps the 70%, David is taking a major financial loss, the owner is taking a smaller loss, and the renter is taking zero financial loss (they are taking a qualitative loss). Yes, some of the terms are a bit different on the voucher, but these are basically the terms that everyone is saying were missing from the original agreements that lead to the mess in the first place. Again, it's not a perfect solution, but IMO it's about as much as you can ask for given the scenario. All three parties are sharing the loss, with the broker taking the the brunt of it.

He's not covering vouchers with 37% of the funds if the owners are returning points in order to keep their 70%. If anything he stands to benefit if everyone took a voucher for future travel since now his prices have gone up.

 

[CanadaDisney05]

He's not covering vouchers with 37% of the funds if the owners are returning points in order to keep their 70%. If anything he stands to benefit if everyone took a voucher for future travel since now his prices have gone up.

You are correct. In the situation where the owner refunds the money, it's basically breakeven (he upped his price, but he also upped the payout to the owner. Either way, it's immaterial). But in the situation where the owner keeps the money, he is put in a bind. He's trying to do right by the renter, irregardless to what the owner's actions are.

 

[spinchy]

He is a TA and I think it is a stretch to suggest there could be any rational reason why he is charging voucher clients rack rate.

Sorry, but him suggesting there would be no way to book those rates is laughable at best.

I remember the post you're referring to and felt it was ambiguous. I felt that the response from David's employee may have meant they had no extra or special discounts to be applied to such a booking. Not necessarily that every booking would be full rack rate. I could be wrong, but that was my impression when I read it.

 

[Minniemoo15]

I felt like the rack rate booking meant that he isn’t going to apply changes after it’s booked. So if you book a stay for December - you pay whatever today’s rate is - final sale. If free dining or 40% off or whatever comes out next month, too bad. I could be wrong on this but I don’t think he wants to be putting the man power into changing these voucher reservations several times. Which doesn’t mean it’s right - the terms on that voucher are shady to say the least.

 

[MIDisFan]

You are correct. In the situation where the owner refunds the money, it's basically breakeven (he upped his price, but he also upped the payout to the owner. Either way, it's immaterial). But in the situation where the owner keeps the money, he is put in a bind. He's trying to do right by the renter, irregardless to what the owner's actions are.

It's immaterial to the Broker, not the renters. The renters with vouchers are still having to pay the extra for a future reservation. Actually raising the price only negatively effects renters. How do you see that as doing right by the renter? I assume owners with current contracts will not be paid that raise in price, only owners moving forward.

 

[CanadaDisney05]

It's immaterial to the Broker, not the renters. The renters with vouchers are still having to pay the extra for a future reservation. Actually raising the price only negatively effects renters. How do you see that as doing right by the renter? I assume owners with current contracts will not be paid that raise in price, only owners moving forward.

I guess I have a slightly different mindset. I don't think its realistic that the broker would volunteer to make the owners and renters whole, while bankrupting itself. In fact, I don't even think it would be possible if he wanted to. So keep in mind, I'm starting with that point of view which may be different than yours.

Given that, since this is an unprecedented event, and nobody had a issue with the lack of clarity in the contract when it was signed (not the owners, not the renters, and not the brokers), everyone will share the loss to some extent, but nobody will be left with nothing. There are several ways to do that. He chose this method. Again, without conjecture, I feel that this method is accomplishing that goal.

 

[MIDisFan]

None that I know of A good friend is a TA booking Disney, she is always happy to get promotional offers for her customers!

Guess the assumptions about David's while maybe not true, aren't completely baseless.

 

[MIDisFan]

I guess I have a slightly different mindset. I don't think its realistic that the broker would volunteer to make the owners and renters whole, while bankrupting itself. In fact, I don't even think it would be possible if he wanted to. So keep in mind, I'm starting with that point of view which may be different than yours.

Given that, since this is an unprecedented event, and nobody had a issue with the lack of clarity in the contract when it was signed (not the owners, not the renters, and not the brokers), everyone will share the loss to some extent, but nobody will be left with nothing. There are several ways to do that. He chose this method. Again, without conjecture, I feel that this method is accomplishing that goal.

I still fail to find where the Broker is taking a loss issuing a voucher worth X now but when it's redeemed it worth X minus 1. In all honesty the vouchers will more than likely end up with a value of zero once the CC charge backs start to go through. Just stinks for renters who may have taken the vouchers.