Disney to sell their DVC unit?

[hhisc16]

I just listened to the podcast like I do every Monday, and came here to join the discussion. I am not at all interested in owning a generic timeshare, or even a Disney location timeshare run by a typical timeshare outfit. I bought a Disney Vacation Club contract. If it becomes just another Marriott or whatever timeshare I am so out of here. Timeshares in general have a bad reputation for very good reasons. Could Bob Chapek be so blinded by the potential for SPORTS BETTING profits that he would alienate the park's most loyal fanbase? The possibility that the answer to that question could be YES is not comforting.

I agree that we bought DVC for Disney.
We would not own a timeshare if DVC was not owned/managed by Disney.

I would imagine the majority of DVC owners feel the same way.

 

[RescueRanger]

Folks, I believe this is a Jim Hill podcast. He is notorious for throwing things against a wall to see what sticks. He is not reliable at all. I would sooner believe a bus driver.

 

[EM Lawrence]

Folks, I believe this is a Jim Hill podcast. He is notorious for throwing things against a wall to see what sticks. He is not reliable at all. I would sooner believe a bus driver.

The opposite is true of Len Testa. He is extremely well informed and a very reliable source.

 

[Brianstl]

Folks, I believe this is a Jim Hill podcast. He is notorious for throwing things against a wall to see what sticks. He is not reliable at all. I would sooner believe a bus driver.

The report on the show actually came from Len Testa who isn't known for those things.

 

[RescueRanger]

The opposite is true of Len Testa. He is extremely well informed and a very reliable source.

Unless he got his info from Jim Hill. Just saying. I don’t believe this rumor for a second.

 

[hhisc16]

Unless he got his info from Jim Hill. Just saying. I don’t believe this rumor for a second.

Follow the money...
We know Cheapek likes money and short term gain for stocks.

 

[Westerlin]

I could see them selling but I hope they don't. How would they deal with so many of the rooms not being owned by disney on property? Seems like a logistical nightmare. Plus it does not make sense with the plans for VGF. That would mean they are really selling even more rooms at their flagship resort.

 

[hhisc16]

I could see them selling but I hope they don't. How would they deal with so many of the rooms not being owned by disney on property? Seems like a logistical nightmare. Plus it does not make sense with the plans for VGF. That would mean they are really selling even more rooms at their flagship resort.

Sounds like Plan B could be for Disney to retain ownership, but allow another company to manage DVC?

(I hope Disney keeps ownership and management of DVC. )

 

[sethschroeder]

Why would I believe anything this show that you talk about is discussing likely from complete theory? Especially as Disney is turning over a portion of 2 of their biggest hotels (Grand Floridian and Disneyland).

 

[RescueRanger]

Follow the money...
We know Cheapek likes money and short term gain for stocks.

Which is exactly why this rumor is ridiculous. They will basically be able to print money when the VGF expansion and Disneyland DVC go on sell. They will never relinquish DVC which is a cash cow. Now HHI, VB, and Aulani maybe.

 

[crisi]

I certainly believe they are exploring it, and have probably explored it in the past. DVC is a way for Disney to bring in capital. If they are running out of places to build or feel the market is getting saturated, DVC will have filled its potential from a balance sheet perspective. Running DVC isn't the profitable part for Disney. The end life of the resorts is going to be a logistical issue they might as well make someone else's.

 

[Marionnette]

Unless he got his info from Jim Hill. Just saying. I don’t believe this rumor for a second.

I don't believe it was a rumor at all. It was nothing more than a "what if...?" It's an interesting subject for discussion at this point. But rumors usually have some basis in truth and this sounds more like a sports bar discussion of if the 1975 Steelers played the 2019 Patriots, who would win?

 

[Bearval]

Folks, I believe this is a Jim Hill podcast. He is notorious for throwing things against a wall to see what sticks. He is not reliable at all. I would sooner believe a bus driver.

Rumor has it he heard it from a bus driver......................................

 

[RescueRanger]

I don't believe it was a rumor at all. It was nothing more than a "what if...?" It's an interesting subject for discussion at this point. But rumors usually have some basis in truth and this sounds more like a sports bar discussion of if the 1975 Steelers played the 2019 Patriots, who would win?

Which leads me to believe that this is nothing more than clickbait.

 

[sethschroeder]

AUL was very difficult during lockdown. It is still problematic, plus DVC is still saddled with all those unsold points with nobody paying dues anyway and a cash-strapped local government that doesn't seem to care much about the mouse. What a huge liability.

See I could buy this but not all of DVC just doesn't make sense at all.

Disney would likely need to give rights the buyer though to continue to use Disney IP through a certain date (possibly expiration). It might make sense for a more traditional travel group to pick it up like Hilton or something.

Now this is completely no founded in logic but could we see Hilton buy it (they have $1.2b cash on hand) and work a deal to allow Disney IP in other hotels as well almost like the Disney outsourcing of their Disney stores to Target?

 

[sethschroeder]

The end life of the resorts is going to be a logistical issue they might as well make someone else's.

What changes? Honest question because really nothing changes between selling or not selling IMO.

 

[_auroraborealis_]

I could see them selling but I hope they don't. How would they deal with so many of the rooms not being owned by disney on property? Seems like a logistical nightmare. Plus it does not make sense with the plans for VGF. That would mean they are really selling even more rooms at their flagship resort.

Honestly, probably easily. Resorts like SSR and OKW would be on the hook for their own transpo. Resorts like RIV and VGF would have to contract to Disney for transport, and co-located resorts (like Poly and VGF) would still have to pay their share of shared services and facility. The accounting already fundamentally exists, it mostly becomes a matter of the money transferring from a secondary entity rather than a subsidiary under the same overall corporate entity.

They already have Marriott building on propetry.

 

[Brianstl]

If this is actually going to happen, it is probably a good explanation for the buy back letters Disney sent out. A new owner would like to have a wide range of resort inventory to sell when they take over.

 

[crisi]

I could actually feel my heartrate increase as I listened to this.

Not gonna lie, this does have me thinking about selling at these crazy high rates. If I wanted major hotel timeshare points, I would have bought those. I'm scared for resale value.

This rumor is a good cure for addonitis!

And this is the other part of the problem. A lot of owners bought in not wanting to own a "timeshare" but wanting to own a "Disney Vacation Club." With each DVC expansion, it becomes harder and harder to argue that DVC isn't "major hotel timeshare points" - albeit still on a smaller scale. The issues that didn't exist or showed up rarely when it was a small club of a thousand or two thousand rooms are now every day occurrences. Booking at seven months is a headache if you want any of the near park resorts. The membership has become savvy - and threatens lawsuits over points reallocations (rightly so) - and the relationship has become more adversarial - which is partly just a numbers game. So "old timers" are progressively restless, newcomers aren't satisfied because its harder than ever to get what was implied (e.g. the ability to book BCVs or VGF or VGC).

But DVC has got to keep expanding to be valuable for Disney -otherwise there are far better places for Disney to put their money. But since there is a healthy and robust resale market, you have competition in your very own resorts for just building new units. There is some end to the appetite for DVC.

The systems change was a disaster, and I'm betting it cost Disney a LOT more than planned - with no revenue increase at all - my guess is that the cost of those upgrades and their overages is going to get passed along to us in the capital budget, but - adversarial relationship - they are probably afraid if they pass too much of it onto us, we will sue for improper management (and in a systems upgrade, it isn't hard to find).

And, in the meantime, we have increased insurance from terrorism and mass shooters, plus the impact of global warming which is also increasing their insurance rates. They pass those along to us in dues, but we gripe about it. Wage pressure is high - especially right now - again, they pass that along to us, but we gripe about it. Again, making those someone else's problems while pocketing the cash has GOT to be attractive.

 

[Westerlin]

If this is actually going to happen, it is probably a good explanation for the buy back letters Disney sent out. A new owner would like to have a wide range of resort inventory to sell when they take over.

That is true, and the change in leadership. Put someone in charge to help sell it.