Disney to sell their DVC unit?

[Wakey]

All this talk of the gambling got me thinking- Will Disney allow the ‘card slappers’ you see in Vegas on the Boardwalk and go the full on Vegas experience? Perhaps a blue card benefit?

 

[Cfrone]

Not sure if this is even remotely accurate but just my two cents. While anything is certainly possible, I'd think at the very least Disney would be extremely invested in maintaining the quality of the resort experience (and in turn, DVC) since they want to keep guests (and their money) in the Disney bubble as long as possible.

I almost equate it to Las Vegas - don't worry about the rooms making a profit as long as guests are onsite, spending their money at your casino, restaurants, etc. From a Disney perspective, I imagine they want to ensure guests are spending money on park tickets, at their restaurants, in the gift shops, etc.

If the resort experience declines and more guests begin staying offsite (or worse, stop going), that directly impacts other revenue streams. And the more time guests spend outside the Disney bubble, the more opportunities they have to NOT spend money with Disney.

I could see them potentially hiring (or selling to) a management company to run DVC but I'd like to think Disney would remain highly vested in the success of DVC moving forward - the last thing they want/need is empty resorts.

 

[RoseGold]

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'.

Tried to call someone? Tried to use the website? Tried to do something really crazy like combine reservations or borrow a few points or change the lead guest?

DVC's nosedive in customer service is obvious. I agree the demand is there -- the resale pricing proves that. But DVC is having trouble doing basic management of its basic functions of booking and running these resorts. And Aulani is pretty much the definition of bloat. Disney is carrying around millions of points it can't sell and maybe never will.

If the O14 resale demand proves that the RIV model doesn't work, then maybe it is time to quit. DVC doesn't want to be a resale broker. They make money pumping out huge hotels with expensive contracts they can sell at kiosks.

 

[Brianstl]

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.

Looking at the 2021 estimated budgets for the properties, it appears that Disney was going to take in over $43 million in management fees. So that pure profit Disney makes off managing the properties since all the expenses of managing the properties are covered by the rest of the income from dues.

 

[Brianstl]

One potential benefit of selling the DVC unit for Disney might be having a partner to share the cost with on new resort projects. Disney would cover the cost of the hotel room construction/planning, their DVC partner would cover the DVC construction/planning and they could share the cost of everything else (pools, restaurants, parking lots, etc) at any future resort projects.

 

[Sandisw]

Looking at the 2020 estimated budgets for the properties, it appears that Disney was going to take in over $43 million in management fees. So that pure profit Disney makes off managing the properties since all the expenses of managing the properties are covered by the rest of the income from dues.

That is not pure profit because that is what pays the expenses of DVMC. Running that company, paying salaries if people like CMs who answer phones, etc.

But, being a flat fee it means anything over and above the actual expenses is profit. So, if it took 20 million..and that’s a random number.. to find and run DVMC, then yes, that extra $23 M would indeed be profit.

 

[RivShore]

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.

So true! The complexity of this transaction and the interconectivity of it all really makes it a longshot and it would have so many unintended consequences.
But unfortunately big companies can be dumb as %$@#$@ about such things. I have seen first hand many companies "outsource" their messes so either someone else can fix them or they now conveniently have someone else to blame.

 

[EM Lawrence]

Relevant to the conversation, for those of you who have not listened to the podcast, is that Disney DID sell all of their Disney Stores (the ones that used to be in malls) to The Children's Place clothing retailer. The Children's Place got them whipped back into shape, closed a bunch of them, and presumably made the stores profitable again, at which point Disney reacquired them. Even that did not end up saving the day, and now there are only 25 Disney Store locations left, plus the sections of Target that are devoted to Disney merchandise. Of course there is more to the story than that, but the bottom line is that Disney has had third parties that have expertise in managing things take over parts of their business in the past.

 

[chalee94]

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.

 

[ckb_nc]

In parts of South Carolina they can only build back to current height/

 

[Mai Ku Tiki]

View attachment 608584View attachment 608586

Oh yes! I remember. DL & '64 World's Fair too.
But investing $$$ in a project in return for advertising is very different than purchasing & controlling real estate, with or without the land included.

What could change in DVC memberships would depend upon percentage owned by each company who might be involved & who controlled memberships & properties. I read somewhere that this Testa (?) said he heard 3 companies interested in a deal...

Whichever part of the Disney Company began the Celebration community in the '90s, they had ZERO concern 10 yrs later for the homeowners when they sold to a private investor. Most of those 1st gen owners had bought to live in "Disney's Town." They were not well-treated; felt abandoned. Much anger & broken hearts.

Does anyone know if Disney shareholders would have a say in this hypothetical (I hope) sale of DVC properties?

 

[DonMacGregor]

I read somewhere that this Testa (?) said he heard 3 companies interested in a deal...

Testa said his "friend" overheard three individuals sitting at a table eating lunch next to him, allegedly from three separate investment firms, discussing "what if" Disney were to sell off DVC.

 

[Mai Ku Tiki]

Testa said his "friend" overheard three individuals sitting at a table eating lunch next to him, allegedly from three separate investment firms, discussing "what if" Disney were to sell off DVC.

Lots of stuff now floating everywhere. I hope it IS as iffy as you say.
He did respond directly in a forum on another site a friend showed me. (No mention of his friend hearing things at lunch)
He stated there are 3 financial firms involved in the discussions....That there is a company with lots of real estate holdings interested in DVC....That based on who those firms are he didn't think the conversation was coming from inside Disney.

I just want ALL of this to go away!!!! For all of us.

 

[Amyeliza]

According to the last latest Disney Dish show it is being explored.

I would think it would be good business practice to explore this option to see if they could save $$. Who knows, with all the complaints about Member Services, this could be a positive thing.

 

[corpcomp]

Does anyone know if Disney shareholders would have a say in this hypothetical (I hope) sale of DVC properties?

Doubtful. The major shareholders (financial institutions, etc..) have the majority of shares. If they deem an increase in share price, it will happen if it even came up for a vote at an annual meeting.

 

[Mai Ku Tiki]

I would think it would be good business practice to explore this option to see if they could save $$. Who knows, with all the complaints about Member Services, this could be a positive thing.

Yes. Member Services is struggling. But this could impact so much more...like how our memberships will work going forward. I have no idea but I just hope it all goes away. No one needs to sell any part of DVC just to improve customer service.

 

[WilsonFlyer]

13 pages I have watched over the last couple of days. And I have LOL at the speculation and inuendo in this thread. Some of y'all have lost your ever-loving minds. Hell will freeze over... and THAW, before Disney sells off any WDW DVC properties to a third party. There. I said it. At least somebody here is on record.

 

[Jwaire]

I have no doubt DVC is having problems. However, I don't see Disney giving up control of significant portions of their prime real estate properties like the Grand Californian, Disneyland Hotel, Polynesian, Grand Floridan or Contemporary to an outside company. I don't see the Disney board supporting that either. The Disney executive that convinced corporate to incorporate DVC into those flagship properties really set DVC up to be protected.

If this was just OKW or even SS, maybe, but these are prime real estate locations. Chapek has got to go before he ruins the company. We will see if Iger actually does retire in December. I hope he stays. Pretty sure DVD falls under Josh D'Amaro. Here's hoping he puts up a fight if this turns out to be true.

 

[MrWonderful]

13 pages I have watched over the last couple of days. And I have LOL at the speculation and inuendo in this thread. Some of y'all have lost your ever-loving minds. Hell will freeze over... and THAW, before Disney sells off any WDW DVC properties to a third party. There. I said it. At least somebody here is on record.

I approve this message

 

[ckb_nc]

I have no doubt DVC is having problems. However, I don't see Disney giving up control of significant portions of their prime real estate properties like the Grand Californian, Disneyland Hotel, Polynesian, Grand Floridan or Contemporary to an outside company. I don't see the Disney board supporting that either. The Disney executive that convinced corporate to incorporate DVC into those flagship properties really set DVC up to be protected.

If this was just OKW or even SS, maybe, but these are prime real estate locations. Chapek has got to go before he ruins the company. We will see if Iger actually does retire in December. I hope he stays. Pretty sure DVD falls under Josh D'Amaro. Here's hoping he puts up a fight if this turns out to be true.

The Swan and Dolphin are the daily reminders why Disney should never sell prime real estate. Disney would LOVE to get these pieces of real estate back. Can't see them giving any control of BLT to anyone. And the SSR property is incredible value. Heck, I imagine someone approaching Disney