Disney's Right of First Refusal

[mickeyc]

With the resale market being so active, I wonder why Disney does not purchae more resales? For instance, there is a 1000pt contract which has not sold. Why doesn't Disney buy this contract which is located at BWV and break it into smaller units?

 

[RobDoc]

DVC doesn't really have any authority to purchase a contract other than thru right of refusal. As long as the dues are being paid, it doesn't matter what is done with the contract either. If the member defaults on the dues, DVC will eventually get the contract back anyway- so they don't really need to compete for a resale.

Doc
doc@wdwinfo.com

 

[drusba]

The other barrier is that it would likely not be profitable for Disney to do so. When Disney buys points it will eventually resell them at the $72 per which sounds like it would be a profitable deal. But how much profit for Disney would there really be: (a) it pays closing costs out of that $72; (b) it has to pay its salespersons for the sales; (c) it has to pay the lawyers for any closings; (d) it will be absorbing the dues for the points while they are held for sale. There are likely other costs (e.g., costs associated with Magical Beginnings). In other words, Disney would possibly be looking at making only $50 to $55 per point when it sells, thus buying those points for $55 per point plus closing costs is likely not viewed by Disney as a winning proposition.

 

[peshowe]

When Disney buys back resale points they buy them back not to re-sell them but to free up more space for paying guest to use the DVC resorts. When a paying guest is paying $280 a night for a room they will be making money in no time!

[http://images.ofoto.com/photos49/1/0/52/63/73/0/73635200103_0_ALB.jpg?v=0]

 

[drusba]

Most of that rental is not profit for DVD. Under the disclosure documents, in the situation described, most of that rental income goes back into the DVC dues column and it is one of the reasons that dues have not gone up for members at the same percentage as total maintenance costs have gone up.÷

 

[dianeschlicht]

Points are from DVD units and would be used as add on points etc. The units used strictly for rentals is from non declared inventory. The DVD units that are used for rental are those that are not yet reserved on points at (not sure here) I think about 2 months out.

Disneydiane

 

[mickeyc]

As explained from an accounting standpoint I guess

 

[mickeyc]

As pointed out I guess from an accounting standpoint that it does not make sense for Disney to compete in the resale market. I guess the only interest they would have is if offers on the resale fell too low. It may then be in their interest to purchase factoring in the associated cost. Anyway I appreciate the comments! My last comment was posted inadvertly. Oops!