Disney to sell their DVC unit?

[mlayton14]

And what about those who bought into SSR and OKW? You can't annex us from the the DVC properties, we bought into DVC just as others did.

not so sure Disney can’t annex you (other than guaranteeing you get opportunity to book at home resort) - but I understand why you wouldn’t want that

 

[tjkraz]

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.

This deal directly contributed to Children's Place filing for bankruptcy in 2008. There isn't any evidence that CP "whipped them back into shape." The CP deal required them to spend a large amount of money to renovate stores, while paying royalties back to Disney. CP reported significant losses during the 3 years they owned the stores.

Disney was motivated to reacquire the stores to keep them out of the bankruptcy proceedings.

 

[CanadaDisney05]

point taken , I guess my point is that if Disney really wanted to reduce its exposure to DVC there would probably be a good business case for the buyers available , especially if land were included in the deal to repurpose or build new

At the end of the day, the business case is going to be made based on the purchase price. If the buyer was buying Riviera for $205/pt (or whatever they are selling it at now), then there is no profit to be made. If they are buying for $8/pt, then it looks could be a good deal for the buyer. However, at that point it would be a bad deal for Disney.

Is there a price point that adds enough profit for the buyer that it's worth them using up their cash/debt, that also moves the needle enough for Disney?

 

[DonMacGregor]

This deal directly contributed to Children's Place filing for bankruptcy in 2008. There isn't any evidence that CP "whipped them back into shape." The CP deal required them to spend a large amount of money to renovate stores, while paying royalties back to Disney. CP reported significant losses during the 3 years they owned the stores.

Disney was motivated to reacquire the stores to keep them out of the bankruptcy proceedings.

Not to mention the obvious fact that brick and mortars, particularly those located in malls, are suffering across the board.

Business Insider

 

[Brian Noble]

It’s always been there, but it’s steadily accelerated over the ye years.
But I think you knew that.

It seems to have ebbed and flowed over the years. We are in a "flow" period, but the ebb will be here eventually.

And even then it's not all in one direction. For example, Disney has taken over management of the Morocco pavilion. SSE has been back and forth in the last ten years as well. But, Space 220 is an OP.

 

[ckb_nc]

The current DVC structure would make it hard to sell current properties into Tiers. Pretty big class action lawsuit if all of sudden SSR members can't book BLT overnight. In the future, sure - I see Tiering of properties.

 

[mlayton14]

The current DVC structure would make it hard to sell current properties into Tiers. Pretty big class action lawsuit if all of sudden SSR members can't book BLT overnight. In the future, sure - I see Tiering of properties.

Is being able to book or try booking BLT by an SSR owner an explicit right in the contract ? Asking because I don't know

 

[Sandisw]

The current DVC structure would make it hard to sell current properties into Tiers. Pretty big class action lawsuit if all of sudden SSR members can't book BLT overnight. In the future, sure - I see Tiering of properties.

That is not true. The current POS details out very specifically what gives owners the right to book elsewhere.

If a resort is removed from BVTC, you don’t get to trade to resorts that are part of it.

Now, there are rules and laws they need to follow to remove the resort. But, as owners we bought those terms.

So, if they legally sell and legally remove resorts from trading, then owners are guaranteed what they bought. Staying at home resort.

 

[FinnFogg]

That is not true. The current POS details out very specifically what gives owners the right to book elsewhere.

If a resort is removed from BVTC, you don’t get to trade to resorts that are part of it.

Now, there are rules and laws they need to follow to remove the resort. But, as owners we bought those terms.

So, if they legally sell and legally remove resorts from trading, then owners are guaranteed what they bought. Staying at home resort.

What are the rules and laws to be followed to remove a resort from BVTC? Does it require any type of owner vote, or is is a unilateral action by Disney?

 

[DVC92]

I was an original owner at OKW which I recently sold. Being stand alone resorts, SSR and OKW, I could see Disney selling those but not the resorts attached to their hotels, particularly BLT and VGF, which I still own. Even now, they are converting one of the Floridian buildings to DVC. These units are too integral to the hotels for conversion. That being said, with every inane thing that is going on in the world right now, particularly at WDW, nothing would surprise me.

 

[crisi]

I don't know about that -- without DVC -- I'd never have bought an annual pass...and probably would be going once every 3 or 4 years. And I'm not sure if I'd be staying at deluxe resorts either.

I'm sure I can't be the only one -- and when you factor in all of the other food costs and golf/spa things that DVC members partake in -- pissing off your most loyal fanbase is not a smart, long-term move (not to mention how much DVC members proselytize to friends/family).

Oh sure, DVCers spend more money once they get there - that's why Disney sells DVC. But they get THAT benefit even if they sell the business unit.

 

[RoseGold]

I'm surprised at all the responses here acting like a small conversion of an aging VGF building shows commitment. The building had to be renovated anyway, and this is a small project, maybe 2Mish points. The Reflections site is now permitless and resod, and VGF is is the only new thing in 4+ years. To me, it shows no DVC expansion for the foreseeable future.

 

[Maistre Gracey]

It seems to have ebbed and flowed over the years. We are in a "flow" period, but the ebb will be here eventually.

And even then it's not all in one direction. For example, Disney has taken over management of the Morocco pavilion. SSE has been back and forth in the last ten years as well. But, Space 220 is an OP.

When Disney takes control of something, I’m betting it’s not by choice.

Regardless, I think a shinning example is the evolution of today’s Disney Springs. I mean, I don’t know the exact number, but very few things there are authentic Disney.

ETA: I know it’s been several years, but when valet parking got outsourced, I was blown away. I mean, the first people you meet at the resort are not even Disney employees.

 

[Brian Noble]

I mean, the first people you meet at the resort are not even Disney employees.

If you weren't told that they were outsourced, would you be able to tell? I don't think I could, but perhaps I'm just not very discerning (or just flat out not paying attention.)

Edited to add: it took me a minute to come up with something Disney clearly chose to take on. On the one hand, you could say they chose to take over SSE, because I'm sure if they made sponsorship free, ATT would still be there. There is some number between "free" and whatever they were asking ATT to pay that would have kept ATT as a sponsor, and setting the price above that with no Siemens in the wings to take over is a choice.

I wonder if ME is a better example? It was a subcontract, but most guests probably never knew, and there was also a distinct before/after where it definitely wasn't Disney by any measure.

 

[Maistre Gracey]

If you weren't told that they were outsourced, would you be able to tell? I don't think I could, but perhaps I'm just not very discerning (or just flat out not paying attention.)

Maybe not. Same thing can be said about Yak &Yeti, or many other third party venues.
My guess is the DVC Members may not even realize it if DVC was run by Marriott or the like.

 

[RivShore]

I'm surprised at all the responses here acting like a small conversion of an aging VGF building shows commitment. The building had to be renovated anyway, and this is a small project, maybe 2Mish points. The Reflections site is now permitless and resod, and VGF is is the only new thing in 4+ years. To me, it shows no DVC expansion for the foreseeable future.

What about the California project?

 

[RivShore]

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.

Can you (hint) at where he posted this?

 

[CarolMN]

Maybe not. Same thing can be said about Yak &Yeti, or many other third party venues.
My guess is the DVC Members may not even realize it if DVC was run by Marriott or the like.

Except some of us hope "Marriott or the like" would run a decent booking website. If so, I'd sure notice, LOL!

 

[RoseGold]

What about the California project?

California has been in the works for decades. If they could build five more, they would. But that isn't going to happen.

 

[Sandisw]

What are the rules and laws to be followed to remove a resort from BVTC? Does it require any type of owner vote, or is is a unilateral action by Disney?

Owners have no say in whether or not a resort is removed. It is completely up to the BVTC. The DVC Resort Agreement is pretty detailed as to what some of the reasons could be and how it can be done. For example, it can be deleted for casualty, eminent domain or automatic or other deletion. They also have the right to "suspend" the participation of any resort, under their own discretion which again, prevents owners from trading to other places.

So, if part of the resort is damaged and not all of it replaced, it can be removed. It will be removed at the end of the term, or earlier if the vacation plan is terminated. So, it doesn't read to me that they can simply say one day "Hey, we just don't want SSR to be part of BVTC". but there are certainly things that can happen that can impact an ability to stay anywhere but the home resort.

Again, if Disney decided to sell off any aspect of DVD, DVCMC, then it is possible this aspect of the program could be eliminated because BVTC reserves the right to terminate the agreement with DVD/DVCMC at any time.

Plus, if there is no timeshare plan to manage, there is no reason for Disney to keep BVTC…it too would be dissolved.