Disney renting DVC resorts to Florida residents

[sethschroeder]

Do all resorts split the all up breakage? I suspect that is the way it works but anyone know for sure?

 

[Sandisw]

Do all resorts split the all up breakage? I suspect that is the way it works but anyone know for sure?

My understanding it is by resort However, the breakage income has always hit the cap.

 

[going/again]

.A significant percentage of the revenue from those rentals will go to reduce member dues. Since members aren't booking those rooms, that's a win for us as far as I'm concerned.

Is there any guarantee of this ?

 

[CarolMN]

Is there any guarantee of this ?

Breakage income is described in the documents we signed and received at purchase. You can see a line item for it in the annual budgets.

 

[drusba]

The POS documents provide (i.e., require and thus guarantee) that breakage income for a resort goes first to offset 2.5% of the annual budget (not 2.5% the actual total annual budget but 2/5% of the annual budget less taxes and certain other items like legal fees). Then income goes next to cover the annual costs of BVTC plus 5% of those costs (i.e., a profit for BVTC). BVTC is the Disney entity that is in charge of exchanges including the DVC Reservation Component which is the computer system applicable to members using points to reserve, at 7 months out, DVC resorts they do not own. Whatever is left goes to DVCM, the managing entity at each resort, mainly as profit.

Several years ago I was informed by a DVC manager that the total breakage income has annually exceeded both the 2.5% dues offset and the amount that goes to BVTC. With the pandemic, 2020 may be the first year when that turns out not to be the case.

As to whether the income is determined per resort, the answer is yes to determine whether the 2.5% is reached, but for giving amounts to BVTC and DVCM, it really makes little difference since they both serve all resorts and both are Disney companies.

 

[CarolynFH]

The POS documents provide (i.e., require and thus guarantee) that breakage income for a resort goes first to offset 2.5% of the annual budget (not 2.5% the actual total annual budget but 2/5% of the annual budget less taxes and certain other items like legal fees). Then income goes next to cover the annual costs of BVTC plus 5% of those costs (i.e., a profit for BVTC). BVTC is the Disney entity that is in charge of exchanges including the DVC Reservation Component which is the computer system applicable to members using points to reserve, at 7 months out, DVC resorts they do not own. Whatever is left goes to DVCM, the managing entity at each resort, mainly as profit.

Several years ago I was informed by a DVC manager that the total breakage income has annually exceeded both the 2.5% dues offset and the amount that goes to BVTC. With the pandemic, 2020 may be the first year when that turns out not to be the case.

As to whether the income is determined per resort, the answer is yes to determine whether the 2.5% is reached, but for giving amounts to BVTC and DVCM, it really makes little difference since they both serve all resorts and both are Disney companies.

Thank you for this clear and detailed explanation - as always!

 

[zavandor]

Several years ago I was informed by a DVC manager that the total breakage income has annually exceeded both the 2.5% dues offset and the amount that goes to BVTC. With the pandemic, 2020 may be the first year when that turns out not to be the case.

Disney is moving cash guests from closed resorts to DVC. That's because once they hit the breakage cap, it's basically free for them, DVC members pay for the resort expenses. However they cannot move cash guests to DVC resorts and not pay at all. I think the cap will be reached this year too.

I also suspect that the breakage is shared between resorts. We all know that in normal times booking resorts like BCV or VGC is extremely difficult at 7 months. How much breakage could they generate? Every opening is quickly filled in as soon as it's available.
And yet they hit the cap too. I suspect DVC considers the breakage at less popular resorts being generated by the points used by owners of those resorts elsewhere. So they credit part of the breakage income at SSR or OKW to BCV, VGC and others.
If they really do this, I would say it's fair. Otherwise SSR owners would have breakage income while very popular resorts would have next to nothing.

 

[EM Lawrence]

The POS documents provide (i.e., require and thus guarantee) that breakage income for a resort goes first to offset 2.5% of the annual budget (not 2.5% the actual total annual budget but 2/5% of the annual budget less taxes and certain other items like legal fees). Then income goes next to cover the annual costs of BVTC plus 5% of those costs (i.e., a profit for BVTC). BVTC is the Disney entity that is in charge of exchanges including the DVC Reservation Component which is the computer system applicable to members using points to reserve, at 7 months out, DVC resorts they do not own. Whatever is left goes to DVCM, the managing entity at each resort, mainly as profit.

Several years ago I was informed by a DVC manager that the total breakage income has annually exceeded both the 2.5% dues offset and the amount that goes to BVTC. With the pandemic, 2020 may be the first year when that turns out not to be the case.

As to whether the income is determined per resort, the answer is yes to determine whether the 2.5% is reached, but for giving amounts to BVTC and DVCM, it really makes little difference since they both serve all resorts and both are Disney companies.

Would BVCT be the entity that employs the people who set up new member accounts and transfer points upon sales, etc? It is a sore point to me that resale buyers are being slow-walked through the process of both ROFR and gaining access to their newly purchased contracts on Disney’s end. And nobody seems to know if the people who handle those responsibilities are paid by member dues or by some other means of income.

 

[sethschroeder]

Would BVCT be the entity that employs the people who set up new member accounts and transfer points upon sales, etc? It is a sore point to me that resale buyers are being slow-walked through the process of both ROFR and gaining access to their newly purchased contracts on Disney’s end. And nobody seems to know if the people who handle those responsibilities are paid by member dues or by some other means of income.

I think people buying resale need to get aggressive, tell the resale agent to stop appeasing Disney, and do their job of closing the contract that YOU are paying them to do.

Even if members are paying as long as they are not purposely making it slower it doesn't matter. There is a ton of extra working going on right now with of the previous cancellations, current cancellations, manual booking with returned points, ect.

The issue is that the system is broken. Disney doesn't ever have to respond if they didn't want to because there is no requirement for them to say they waive ROFR based on what people keep saying.

 

[Lsdolphin]

Interesting that they are showing Poly Villas to be available for Sept when they are telling guests who have Sept reservations in non-DVC buildings that they Can’t be moved over to DVC because they are filled and sending them to CR.

 

[Chuck S]

Would BVCT be the entity that employs the people who set up new member accounts and transfer points upon sales, etc? It is a sore point to me that resale buyers are being slow-walked through the process of both ROFR and gaining access to their newly purchased contracts on Disney’s end. And nobody seems to know if the people who handle those responsibilities are paid by member dues or by some other means of income.

They have a specific time limit to exercise ROFR. I doubt the process would be hurried along because of resale members complaints. Just like when you buy a house, you have a certain time limit get financing, inspect the property, and so forth. Some people finish earlier, some don;t. As long as they finish in the specified time contractual time frame, it doesn't matter if they finish it the last hour of the last day. Giving you access to your points has two phases. One created\s the account, and inputs relevant info like if you're paying your dues monthly through draft or whatever. Another set of people go through the point contract to verify that the points are totaled correctly accounting for banking/borrowing/ usage by previous owner and so forth. All of this happens AFTER the deed has been recorded bu the Orange County comptroller (assuming WDW contract) Given the number of resale contracts that run through the office, it is doubtful the process will be streamlined further.

I have waited weeks after buying properties and formal closing for my county courthouse to record the deed. And several months for the changes to be updated at the tax office.


Resale really doesn't make DVD (DVC's developer) any money, nor does it make Disney any money. This is why almost all timeshares put restrictions on resale purchased contracts, and take their time doing the paperwork. Seriously, what's in it for them if they hurry it along?

 

[Sandisw]

Would BVCT be the entity that employs the people who set up new member accounts and transfer points upon sales, etc? It is a sore point to me that resale buyers are being slow-walked through the process of both ROFR and gaining access to their newly purchased contracts on Disney’s end. And nobody seems to know if the people who handle those responsibilities are paid by member dues or by some other means of income.

Membership administration is responsible for the part of getting the contract loaded and points put into a members account.

Currently, they have many workers on furlough which is what is causing the backlog. Normally, it is about a 3 week process from deed recording to having points.

Right now, it appears that process is doubled because of the smaller workforce...which, unfortunately, as owners, we have no say in that aspect.

 

[EM Lawrence]

Membership administration is responsible for the part of getting the contract loaded and points put into a members account.

Currently, they have many workers on furlough which is what is causing the backlog. Normally, it is about a 3 week process from deed recording to having points.

Right now, it appears that process is doubled because of the smaller workforce...which, unfortunately, as owners, we have no say in that aspect.

This is the best answer I’ve gotten so far. I know that many employees are furloughed, my question is, why are they furloughed and it is necessary? Are they paid my member dues? If so, then why are they not being paid to work from home? If they are not paid by the members, then I guess I have no quibble, just annoyance. But if they are paid by members, then I just don’t understand why these employees are not collecting their salaries and able to work remotely. Member dues have not stopped being collected during the turndown. Have these employees been reassigned to handle more customer service duties instead of administrative duties? That would make sense too.

 

[Maistre Gracey]

I clicked on this thread for an update, but see the topic has changed a wee bit.

 

[Sandisw]

This is the best answer I’ve gotten so far. I know that many employees are furloughed, my question is, why are they furloughed and it is necessary? Are they paid my member dues? If so, then why are they not being paid to work from home? If they are not paid by the members, then I guess I have no quibble, just annoyance. But if they are paid by members, then I just don’t understand why these employees are not collecting their salaries and able to work remotely. Member dues have not stopped being collected during the turndown. Have these employees been reassigned to handle more customer service duties instead of administrative duties? That would make sense too.

So we don’t get too off topic...it’s up to the company to decide how to hand the employees...we pay them to be the managers but don’t get a say in the operation aspect.

Any credits during 2020 from the shut downs or furloughs will be seen when we get info for 2021...they have already shared that.

The company gets money from breakage....which is why Disney is using DVC rooms vs, opening more of their own resorts....and maybe there was concern there. Not really sure.

I think they are slowly bringing people back but from the time when they didn’t, there was quite a backlog.

 

[sethschroeder]

Interesting that they are showing Poly Villas to be available for Sept when they are telling guests who have Sept reservations in non-DVC buildings that they Can’t be moved over to DVC because they are filled and sending them to CR.

Wouldn't that be the case though? Disney can't just take everything they want. I know they take a bunch when its not filled so many days out but have to think they are trying to walk a thin line right now between taking the rooms for cash rentals vs allowing DVC members to book last minute because of everyone with all these extra points from cancelled trips. Its a good thing because I have to think Disney will easily max out the bucket of money they have to give for renting out DVC rooms for cash (forget the name of it).

 

[Deb & Bill]

I read somewhere else that there currently is only one person handling resales right now. The article said there were usually four and three haven't been recalled yet.