DVC Club Level and Home Resort Survey

[AnnaKristoff2013]

There doesn’t seem to be an advantage for them to sell un-expirable points.

The advantage is if they think that they, like every other timeshare in existence, will have contracts that are eventually worthless, because the annual dues get to a point where they exceed the cash booking rates. Perpetual-ownership deeds end up being a liability for owners, not an asset. Resorts like VB & HHI are very nearly at this point. Dues can only exceed inflation for so long until they make the underlying interest worthless.

 

[Genie+]

The advantage is if they think that they, like every other timeshare in existence, will have contracts that are eventually worthless, because the annual dues get to a point where they exceed the cash booking rates. Perpetual-ownership deeds end up being a liability for owners, not an asset. Resorts like VB & HHI are very nearly at this point. Dues can only exceed inflation for so long until they make the underlying interest worthless.

Ooh that would be sad.

 

[Genie+]

Why would it have to declare non-owned points? In the poly example 4 million would be owned by the trust, and 4 million would be owned by current deeded owners.

I like to think of it this way. Suppose that Poly two goes on sale and is part of the original Polynesian Association. There are now all of the sudden 4 million more Polynesian points available to buy. Suppose Elon Musk buys all 4 million points Elon Musk is now your trust.

Upthread the possibility of declaring all 8m Poly points into the Trust came up. I don’t think that could legally happen.

“Right, but if DVC doesn't declare the 4M points into the association but declares all 8M into the Trust, then there are no points for DVC 1.0 owners to reserve.”

 

[tidefan]

Upthread the possibility of declaring all 8m Poly points into the Trust came up. I don’t think that could legally happen.

“Right, but if DVC doesn't declare the 4M points into the association but declares all 8M into the Trust, then there are no points for DVC 1.0 owners to reserve.”

You are correct. This wasn't me, but the point is that PVB will have 8 million points TOTAL. Currently, PVB1 has around 4 million points. It is approximated that the Tower would add an additional 4 million points, so the most they could convey into the trust would be that 4 million, because the other 4 million already have owners.

I would think that DVD may not sell all 4 million new points as trust points, but rather maybe a combination of trust and traditional to sell "flexibility". Or, maybe they do go trust only. It will be interesting to see what their strategy is. I know that in a lot of other systems that have done this that sometimes the developer can get aggressive into acquiring more "desirable" points into the trust. For instance, what it they acquire 125 SSR points and offer me that in the "trust" for my deeded 100 VGF1 points? Could happen. The downside to me is that you are now risking dues sharing with properties such as HHI and VB, which could mean you have higher dues. On the plus side, I'd have a chance to get into Aulani in June perhaps at 11 months...

 

[tidefan]

Actually just thought of something that I think I know the answer to, but am not sure, so I'd defer to someone with more knowledge, perhaps @Sandisw ...

I know that single owners are capped at 4,000 points, but I don't believe the developer is, otherwise, they couldn't maintain their 2% ownership, I would think. Just wanted to verify that.

 

[dioxide45]

Why would it have to declare non-owned points? In the poly example 4 million would be owned by the trust, and 4 million would be owned by current deeded owners.

I like to think of it this way. Suppose that Poly two goes on sale and is part of the original Polynesian Association. There are now all of the sudden 4 million more Polynesian points available to buy. Suppose Elon Musk buys all 4 million points Elon Musk is now your trust.

But Elon Musk wouldn't be able to just book Poly Tower, he would also be able to book Poly1 and if he is slow, he could lose out on booking Poly Tower if he doesn't do so at 11 months and other Poly owners come in and book them instead. The only way he would be guaranteed Poly Tower would be if he somehow bought a fixed unit.

 

[Sandisw]

Actually just thought of something that I think I know the answer to, but am not sure, so I'd defer to someone with more knowledge, perhaps @Sandisw ...

I know that single owners are capped at 4,000 points, but I don't believe the developer is, otherwise, they couldn't maintain their 2% ownership, I would think. Just wanted to verify that.

Correct. DVD isn’t bound by the same rules for membership limits with the exception of for booking.

DVD must follow the same booking rules as owners to use their points per the current POS.

 

[dioxide45]

You are correct. This wasn't me, but the point is that PVB will have 8 million points TOTAL. Currently, PVB1 has around 4 million points. It is approximated that the Tower would add an additional 4 million points, so the most they could convey into the trust would be that 4 million, because the other 4 million already have owners.

I would think that DVD may not sell all 4 million new points as trust points, but rather maybe a combination of trust and traditional to sell "flexibility". Or, maybe they do go trust only. It will be interesting to see what their strategy is. I know that in a lot of other systems that have done this that sometimes the developer can get aggressive into acquiring more "desirable" points into the trust. For instance, what it they acquire 125 SSR points and offer me that in the "trust" for my deeded 100 VGF1 points? Could happen. The downside to me is that you are now risking dues sharing with properties such as HHI and VB, which could mean you have higher dues. On the plus side, I'd have a chance to get into Aulani in June perhaps at 11 months...

"Upgrading" is a big pitch when a timeshare developer creates some kind of trust program. Sheraton & Westin Vacation Club (Vistana) convinced many people to "trade in" their deeded weeks at individual resorts to buy their trust based Flex product. The pitch was to be able to book 9 resorts at 12 months instead of just the one you own. A lot of people fell for it and lost true home resort priority. They find that the resorts they want to book at 12 months may not have a lot of inventory in the Flex trust program. DVC could easily do the same. DVC will sell you 150 points in the trust and you can unload your other points. You now have access to more resorts at 11 months. It just requires $10,000 in new money (more points). This way the trust can then add those points they bring in to the trust to provide more inventory for trust owners to reserve at 11 months. Over time the trust gobbles up more and more inventory.

 

[Sandisw]

But Elon Musk wouldn't be able to just book Poly Tower, he would also be able to book Poly1 and if he is slow, he could lose out on booking Poly Tower if he doesn't do so at 11 months and other Poly owners come in and book them instead. The only way he would be guaranteed Poly Tower would be if he somehow bought a fixed unit.

This is why I could see them moving to a trust situation vs deeded ownership for all new units and leave the current resorts alone and out of the trust until such time that they have a good amount of points to impact fewer deeded owners.

The piece is that DVD can’t just add points to a trust…they must add properties so any properties that currently exist have to have units deeded to them.

And ROFR and foreuse is a way to get them…or convince an owner to agree to swap out their current deed to a new unit for ownership so that DVD can get themselves whole units? Seems like a lot of work though.

 

[tidefan]

Correct. DVD isn’t bound by the same rules for membership limits with the exception of for booking.

DVD must follow the same booking rules as owners to use their points per the current POS.

Thanks @Sandisw! That brings up another thought. Could they take their number of trust points divided by the number of owners to determine how much/when a trust owner could book?

 

[Sandisw]

Thanks @Sandisw! That brings up another thought. Could they take their number of trust points divided by the number of owners to determine how much/when a trust owner could book?

No. FL timeshare law says all owners of a resort have to be given the same rules.

The POS is set up as a first come, first serve system which means, outside of them defining the special period for booking the contract includes, all declared units have to be open to any and all owners.

So, DVD can’t parcel off rooms for their trust members based on % if points. Yes, they can only book rooms until the points are gone, but they still can’t take rooms.

That is why I said, to play nice with the current system, they could set the trust up to allow deeded owners a one month advantage and hold back their points until say 10 months.

They wouldn’t have to but I think if they don’t do something similar you will have owners, like me, who will question it and want proof there is no violation

 

[dioxide45]

And ROFR and foreuse is a way to get them…or convince an owner to agree to swap out their current deed to a new unit for ownership so that DVD can get themselves whole units? Seems like a lot of work though.

It is work and it is a slow process. Even after 12 years of a Marriott timeshare land trust, some resorts are only at 10-15% of ownership as part of the trust. The whole system still comes together with the trading company though. So actual resort ownership in the trust doesn't matter. They can sell trust points with the dream that you can book any resort at 7 months. The uniformed buyer won't know that some resorts are hard to book at 7 months and they will still happily buy. The same booking availability that exists today isn't cured with a trust.

 

[tidefan]

No. FL timeshare law says all owners of a resort have to be given the same rules.

The POS is set up as a first come, first serve system which means, outside of them defining the special period for booking the contract includes, all declared units have to be open to any and all owners.

So, DVD can’t parcel off rooms for their trust members based on % if points. Yes, they can only book rooms until the points are gone, but they still can’t take rooms.

That is why I said, to play nice with the current system, they would set the trust up to allow deeded owners a one month advantage and hold back their points until say 10 months.

Got it. This even makes me think more that they could sell "trust" parallel with "traditional". Buy into PVB as a traditional owner, get 11 month access. However, if you don't care about 11 month access, then buy into the "trust" (which is across multiple associations) and "maybe" you could get into things at 10 months, but you can get whatever at 7 months.

Am I close?

 

[Sandisw]

It is work and it is a slow process. Even after 12 years of a Marriott timeshare land trust, some resorts are only at 10-15% of ownership as part of the trust. The whole system still comes together with the trading company though. So actual resort ownership in the trust doesn't matter. They can sell trust points with the dream that you can book any resort at 7 months. The uniformed buyer won't know that some resorts are hard to book at 7 months and they will still happily buy. The same booking availability that exists today isn't cured with a trust.

And, as a deeded owner, anything offered to trust members after my one month guaranteed booking woiuld be fine with me,,

Let trust members have 10 to 7 months for all trust points, and 7 months for all resorts.

Just give me a one month advantage! Any deeded owner who doesn’t take that one month it’s on them!! Lol

 

[dioxide45]

Got it. This even makes me think more that they could sell "trust" parallel with "traditional". Buy into PVB as a traditional owner, get 11 month access. However, if you don't care about 11 month access, then buy into the "trust" (which is across multiple associations) and "maybe" you could get into things at 10 months, but you can get whatever at 7 months.

Am I close?

Since the trust would have the same reservation rights to the deeds it owns, trust could (or should) still be able to reserve at 11 months up to the amount of points the trust owns. Why should trust owners be kneecapped from booking certain resorts and times that book up at the 11 month mark. Do those exist?

 

[Sandisw]

Got it. This even makes me think more that they could sell "trust" parallel with "traditional". Buy into PVB as a traditional owner, get 11 month access. However, if you don't care about 11 month access, then buy into the "trust" (which is across multiple associations) and "maybe" you could get into things at 10 months, but you can get whatever at 7 months.

Am I close?

That is my thinking on how it could work with current resorts and not make a deeded owner question things.

With new units that ar not actually declared yet to the current condo association, all bets are off.

Take RIV.. at least 40% of units are not yet declared. They make them diffeeent, add them to a trust and those rooms can be given to trust owners at whatever window they want.

To me, it’s like a shared resort with DVC and cash rooms but you make it DVC 1 and DVC 2 for rooms that mix at 7 months.

And, you just have to wonder if they won’t move this way forward??? What a great way to declare CFW…part of a non specific timeshare plan so that people get to buy and have that and others like Poly tower, AUL, VDH abd RIV at once!

 

[Sandisw]

Since the trust would have the same reservation rights to the deeds it owns, trust could (or should) still be able to reserve at 11 months up to the amount of points the trust owns. Why should trust owners be kneecapped from booking certain resorts and times that book up at the 11 month mark. Do those exist?

For current resorts, thst are sold out and all units declared, the reason is to prevent a potential conflict in booking against what deeded owners have been guaranteed.

Yes, trust points can be used, but they are then giving access to their points to a lot more people than I am allowed to give at 11
Months. To me, that could be a big conflict.

Put another way, why should a trust membership be allowed to have multiple accounts created to give access to the points it owns when I, as an owner, am limited to four?

POS does say I can expect DVD to have to follow the same rules when it comes to booking. And, giving one owner…the trust…different rules is an issue for me.

And why I said if DVD held back using their points until say 10 months, then I have less of a issue that contract is violated.

To add, the trust association is not technically DVD any longer so the PoS that waives certain things for them would no longer apply.

 

[tidefan]

And ROFR and foreuse is a way to get them…or convince an owner to agree to swap out their current deed to a new unit for ownership so that DVD can get themselves whole units? Seems like a lot of work though.

If they were to get aggressive at reacquiring properties, I would think ROFR would be the main tool to do so. In fact, it could solve any "resale" issue they perceive as well.

Thinking back, I go to the SSR renovations. Quite honestly, they were way better than I had expected them to be and has made SSR a much more desirable location (IMHO) compared to before. Could they have known? There is always a lot of SSR on the market and scooping up $80-$100 pp SSR and putting them back out in a $175 pp trust would be a moneymaker... But, you would have to make sure people were OK with being at SSR. The renovations went a long way towards that...

 

[maui22]

Take RIV.. at least 40% of units are not yet declared.

Based on DVCNews article over a month ago, "The declared inventory accounts for about 4,458,999 points, or 66.2% of the resort’s total points."

https://dvcnews.com/dvc-program-men...in-october-2023-as-grand-floridian-winds-down

 

[JackosinDIS]

Yes, trust points can be used, but they are then giving access to their points to a lot more people than I am allowed to give at 11
Months. To me, that could be a big conflict

Exactly this. It is the only real issue.

If a trust acquires ownership of units in existing associations (or for that matter, new associations where there will be a mixture of original deeded points and trust points), then the odds of booking that highly coveted room on desirable dates would be massively in favour of the Trust if all of its members were allowed to compete in the ‘fastest finger first’ booking system which currently exists.

As @Sandisw points out, it is not possible to split the pool of declared rooms in to separate booking pools for trust / non trust. All owners have access to all rooms at the 11 month mark.

There would need to be a creative solution (such as the 1 month head-start suggested). Another way would be to only allow a certain % of the members of the trust to be allowed to use the booking system at any one time - though I’m not sure how transparent that process would be for other non-trust members.