Disney to sell their DVC unit?

[CBMom01]

We do.

Ah. I thought the monthly fees were maintenance. Thx,

 

[DonMacGregor]

Ah. I thought the monthly fees were maintenance. Thx,

You can browse through this (closed) thread. A lot of argumentation, but there are a few posts that lay out what comprises MF's and the cost components of the resort budgets. There are only 3 or 4 pages and you don't need to go through it all.

Should resale owners pay lower dues?

 

[gharter]

I don't see this happening. There is still too much money in DVC.

 

[mlayton14]

How about this ?

Disney sells 2 large standalone DVC resorts , the benefit for the buyer is that they get OKW and SSR (including the land it sits on) - Disney as part of the deal would unload Aulani, HHI, and VB. Since all of these properties are complete standalone , it would be an easy and relatively clean break from the rest of DVC? The buyer would get property onsite at WDW to build on or resell eventually , as well as adding the other properties to their timeshare network. Disney would get a cash infusion and keep their most valuable properties that are shared with cash resorts like poly , GF , etc

Maybe to sweeten the pot Disney would include the port orleans resorts - which would represent a giant piece of on property land extending from Port orleans , to OKW, to SSR

Thoughts ?

 

[CanadaDisney05]

How about this ?

Disney sells 2 large standalone DVC resorts , the benefit for the buyer is that they get OKW and SSR (including the land it sits on) - Disney as part of the deal would unload Aulani, HHI, and VB. Since all of these properties are complete standalone , it would be an easy and relatively clean break from the rest of DVC? The buyer would get property onsite at WDW to build on or resell eventually , as well as adding the other properties to their timeshare network. Disney would get a cash infusion and keep their most valuable properties that are shared with cash resorts like poly , GF , etc

Maybe to sweeten the pot Disney would include the port orleans resorts - which would represent a giant piece of on property land extending from Port orleans , to OKW, to SSR

Thoughts ?

How much of a cash infusion would they really get though? Other than a small management fee, the buyer won't be able to generate any kind of significant profit for 20+ years for VB and HHI, 32+ years for SSR, and 35+ years for OKW. The only one with a glut of points left to sell now is AUL, and Disney themselves haven't been able to sell it.

The execs who buy this will be long retired/dead by the time any real profit may be able to be generated. Also, it's really hard to predict consumer demand that far into the future. That's a he'll of a risk for a buyer to take.

 

[mlayton14]

How much of a cash infusion would they really get though? Other than a small management fee, the buyer won't be able to generate any kind of significant profit for 20+ years for VB and HHI, 32+ years for SSR, and 35+ years for OKW. The only one with a glut of points left to sell now is AUL, and Disney themselves haven't been able to sell it.

The execs who buy this will be long retired/dead by the time any real profit may be able to be generated. Also, it's really hard to predict consumer demand that far into the future. That's a he'll of a risk for a buyer to take.

would the POR and / or all stars property included change the calculus ?

 

[CanadaDisney05]

would the POR and / or all stars property included change the calculus ?

Obviously that would add some value. In that scenario, what is really happening is the buyer is buying those two hotels, and Disney is probably lowering the price if they also take on the liabilities of the DVC resorts. If a short term cash infusion is what Disney is after (and I'm not sure that it is), they may as well just sell POR/allstars and leave the DVC resorts out of the equation.

I just don't see the value for a buyer of taking on the DVC resorts. The value of DVC was when the contracts were sold. After it just becomes a liability. Since Disney already has the money from the initial sale, they would have to pay the buyer to take the properties off of their hands.

Put it this way. Let's say Disney sells contracts at $150/pt. They then earn 5 cents per point in management fees for 50 years. The most a buyer would pay is $2.50 (0.05 x 50) per point. Even then, that just breaks even. Nobody is going to take on the headache of running DVC just to break even. The profit margin has to be significant enough. So maybe $1.50/pt? $1/pt? Either way, it's a pretty immaterial amount for Disney. All it does is hurt their reputation and trust for such a nominal amount.

And as I mentioned above, the ability to own the land and resell contracts at the end is so far into the future, it really has no value at this point in time. In 10 to 15 years from now, that may change.

 

[EM Lawrence]

There could be a scenario where a buyer takes on management of the current properties in exchange for the right to develop and sell all future DVC resorts. If the company already has the infrastructure in place to take on the day to day management of the resorts, and collect all of the management fees to offset that, the real money would be in future expansions. Although I don’t think the management fees are anything to sneeze at, particularly if a new owner could start charging fees for things like booking non-home resorts. Or, as other companies have apparently done, entice current DVC owners to buy into their current program, and bring their DVC inventory with them. There are all sorts of ways to squeeze a little more blood from the stone.

 

[EM Lawrence]

You know what else timeshare companies really want? Rear ends in their seats to sell contracts to. That is how they make money. What better place to find a lot of rear ends for your seats than the Disney parks?

 

[CWTC]

Or, as other companies have apparently done, entice current DVC owners to buy into their current program, and bring their DVC inventory with them.

Is that what most DVC owners would want? We bought DVC specifically with the intent to use all our points and WDW or DL with no plans to trade out to Disney cruises or out of Disney system. The only time we did was during covid for points we would lose otherwise- based on RCI choices and availability, I’m not sure we even want to use the points we traded out.

For us, paying to “certify” our points into another system has no value and we would potentially lose value if certifying those points made it harder to use our points at our home resorts or within the Disney ecosystem. What theoretically would certifying points even get us under new management?

 

[Sandisw]

Ahh, I did not know that DVC earns management fees. Who pays them?

They get 12.5% flat rate from each condo’s operating budget…monies taxes and capital reserves.. to manage the vacation plan.

They get )1 per owner for BVTC. And of course, the get the breakage fees above the 2.5% of our budget we get as a credit.

 

[Brian Noble]

over the recent years Disney has moved further and further from “everything on property is Disney”.

If by "recent" you mean "since Epcot opened," then yes. Nearly all of the pavilions had an external corporate (Future World) or government (World Showcase) sponsor.

 

[EM Lawrence]

Is that what most DVC owners would want? We bought DVC specifically with the intent to use all our points and WDW or DL with no plans to trade out to Disney cruises or out of Disney system. The only time we did was during covid for points we would lose otherwise- based on RCI choices and availability, I’m not sure we even want to use the points we traded out.

For us, paying to “certify” our points into another system has no value and we would potentially lose value if certifying those points made it harder to use our points at our home resorts or within the Disney ecosystem. What theoretically would certifying points even get us under new management?

I don’t think I would be interested in that. But when it comes to the general membership, who knows? I’ve given up thinking I know what other people want. LOL.

 

[Sandisw]

Is that what most DVC owners would want? We bought DVC specifically with the intent to use all our points and WDW or DL with no plans to trade out to Disney cruises or out of Disney system. The only time we did was during covid for points we would lose otherwise- based on RCI choices and availability, I’m not sure we even want to use the points we traded out.

For us, paying to “certify” our points into another system has no value and we would potentially lose value if certifying those points made it harder to use our points at our home resorts or within the Disney ecosystem. What theoretically would certifying points even get us under new management?

Remember , the ability to trade to a non home DV,C resort comes from being part of BVTC.

If that entity is sold Or dissolved…no idea if that is legal or not…the you have points as you are guaranteed. Your home resort.

So the question for me becomes can they sell off pieces of the product. DVD for sales…DVCM for management which is a three year renewable contract that could be made with someone else.

Property management is a subcontract with TWDC to run the day to day operations The land could be sold with our lease dimly being with a new landlord.

Any potential move would be huge and lots of parts. They thing is those that bought a WDW resort to stay at WDW can not lose that option because we own a piece of it and are guaranteed the right to stay there.

Of course, some may decide it’s not something they want if there is a different owner or manager. For me, I bought to be there so it would not cause me to sell as I own on property.

 

[hhisc16]

Based on the podcast, this rumor began outside of Disney correct?
I have not seen any information/rumor about selling any portion of DVC from within Disney.

 

[Mai Ku Tiki]

The podcast was by someone who owns a well-established reputable large company that helps Disney visitors...I have NO experience with him or his company but checking SM, he seems a bit in the know, FWIW.

 

[EM Lawrence]

Based on the podcast, this rumor began outside of Disney correct?
I have not seen any information/rumor about selling any portion of DVC from within Disney.

The podcast discussed a conversation overheard outside of Disney by a friend of Len Testa. Jim Hill said his sources inside of Disney view DVC as a problem and a bloated mess that might need cleaning up. That was the gist of it. Certainly nothing concrete, but also maybe not nothing.

 

[sethschroeder]

I have said before that with the stripping of benefits for on site guests, there is less and less of a case to be made for on site at WDW-especially if you rent a car and aren’t an early riser.

Honestly there is more benefit now than in the past. I could get FP+ the day off as my 4 or 5th ride on even the biggest rides when we went so the only benefit of early FP+ booking was being forced to locked in our mornings for the whole trip 60+ days out.

The daily early entry in all parks is a bigger perk than previously offered and deluxe resorts also get 2 nights of late night access as well which is about the same they did in the past although I think its 2 instead of 3 hours but honestly it should be much quieter since its only deluxe guests.

 

[sethschroeder]

Jim Hill said his sources inside of Disney view DVC as a problem and a bloated mess that might need cleaning up.

Nothing says making something less of a mess than having a 3rd party you have zero control over have partial control over your hotels and having that 3rd party's guests use your guests common area.

Heck any company taking over DVC likely will want the kiosk locations as well so now you have Holiday Inn Vacation Club kiosks as an example everywhere.

One positive if this happened though would be likely the "new" DVC management would get after Disney more often than what seems to occur at this point. If things are slipping they won't be as restricted for pushing for resolution as they won't be worried about being promoted to another area of Disney.

 

[scoobdoo]

Jim Hill said his sources inside of Disney view DVC as a problem and a bloated mess that might need cleaning up. That was the gist of it. Certainly nothing concrete, but also maybe not nothing.

This didn't make sense to me, stuck out as maybe Hill was just pontificating in an attempt to stay relevant given Testa is genuinely tapped into the machine. How on earth is DVC 'bloated' with, what, less than 15 properties nationally? Ultra high-end Peninsula has dozens of properties globally, Four Seasons has hundreds. Please Hill, tell me again how DVC is 'bloated'.