DVC holds back inventory for cash rentals?

[mndisfam]

Hi all. This may be something everyone knows but us, but I wanted to put it out there...Due to some very stressful family events this year, my DH has said he really wants to get to the world asap.

We can go 11/8-13...We know its short notice and were saddened, but not too surprised when they said there was absolutely no inventory anywhere...Its the last week of F&W and the first week of the art show.

Poor DH said he still really wanted to go so I went to the Disney World Web site and thought I would look into how much $ it would cost for a moderate.

I was surprised when the web site showed every single DVC property was available for $ rental during that time. I called member services and they said yes - since Disney owes 2% of DVC they can hold back inventory from points customers in hopes they can rent it out.

Maybe this was something you all know? Is this another case of us not reading the fine print? I can totally understand if we can't go bcs we waited too long to plan something - but it irks me that the units are available, but only if we pay.

Trust me, this was a time my family really really needs some Disney magic - been a horrible year...
Believ

 

[dianeschlicht]

(SNIP)I was surprised when the web site showed every single DVC property was available for $ rental during that time. I called member services and they said yes - since Disney owes 2% of DVC they can hold back inventory from points customers in hopes they can rent it out.

Maybe this was something you all know? Is this another case of us not reading the fine print? I can totally understand if we can't go bcs we waited too long to plan something - but it irks me that the units are available, but only if we pay.

Trust me, this was a time my family really really needs some Disney magic - been a horrible year...
Believ

Inventory for DVC that has been exchanged for the Disney Collection or for a cruise becomes WDW inventory instead of DVC inventory. That's why you can rent one from CRO but not with points.

 

[BirdsOfPreyDave]

I thought it was higher than 2%, actually. Disney Resorts is a major owner and has a significant investment in each DVC property. If you want to think about it this way, they buy points at each DVC property to be rented out to cash customers.

Also, whenever a member exchanges points out of DVC, cash rentals is how those stays are paid for.

While it may be disappointing not to be able to get a points reservation for a period when there are cash reservations available, there's a perfectly reasonable explanation for it.

 

[JimMIA]

I was surprised when the web site showed every single DVC property was available for $ rental during that time. I called member services and they said yes - since Disney owes 2% of DVC they can hold back inventory from points customers in hopes they can rent it out.

They're not actually "holding back" anything. It's their inventory. The portion which DVC owns is used for rehab, and rented out if it's available. The points inventory they have has been traded in by DVC members for non-DVC accommodations, as Diane said, so that's theirs too.

In addition, if there is any unencumbered points inventory 60 days out, CRO can rent that as well, but Disney doesn't get that money. That goes to DVC as "breakage income," and reduces our maintenance fees. For that week, for the reasons you outlined, I doubt if there are any "breakage" points.

 

[icydog]

They're not actually "holding back" anything. It's their inventory. The portion which DVC owns is used for rehab, and rented out if it's available. The points inventory they have has been traded in by DVC members for non-DVC accommodations, as Diane said, so that's theirs too.

If by this statement you are thinking that the Disney Co is not making money on the rental of vacation club property, you are wrong. Disney makes a profit on all their rentals. That's one of the reasons there is the new crack down on point renters on ebay. Why should a non member rent from Disney when they can get the same room for less from this ebay renter. That is a lot of lost revenue for Disney and the only reason they are interested in cracking down on mass renting of Disney points.

 

[JimMIA]

If by this statement you are thinking that the Disney Co is not making money on the rental of vacation club property, you are wrong. Disney makes a profit on all their rentals. That's one of the reasons there is the new crack down on point renters on ebay. Why should a non member rent from Disney when they can get the same room for less from this ebay renter. That is a lot of lost revenue for Disney and the only reason they are interested in cracking down on mass renting of Disney points.

Of course they make a profit -- I didn't say they didn't.

What I'm saying is they are not depriving us of availability. They're renting inventory that was either theirs from the start, or that they purchased from us via non-DVC exchanges. I thought I was pretty clear.

 

[JimMIA]

That's one of the reasons there is the new crack down on point renters on ebay. Why should a non member rent from Disney when they can get the same room for less from this ebay renter. That is a lot of lost revenue for Disney and the only reason they are interested in cracking down on mass renting of Disney points.

That may be one consideration for Disney, but I'd bet it's not the primary reason. Some other reasons probably include:

• Complaints from owners about overloading MS with non-member calls, which uses our dues to underwrite commercial businesses
• Problems arising from renters screwing up their customers' ressies
• Complaints from owners that they can't get ressies in the seven-month windows at certain resorts
• Complaints from owners that they can't get prime-time ressies, even within their eleven month windows, because of speculative bookings by eBay renters
• Potential liability to Disney if their timeshare is used other than intended by the POS (e.g. for commercial rental)
• The need for Disney to enforce what the POS says about commercial renting, or face legal liability

None of us will ever know for sure, of course, but there were probably more important issues at stake for Disney than a little bit of rental income.

 

[erikthewise]

As I understand it, 4% of each DVC resort is not sold, but "held back" for various purposes such as rolling room refurbishment and other temporary downtime. Of course whenever possible this inventory is made available for cash reservations. I would guess that another 5%-10% becomes available from the various exchange programs as mentioned by dianeschlicht. Also I think at 60 days any remaining inventory not reserved on points are made available for cash.

I'm pretty sure inventory in the first two categories cannot be reserved for points, so it's not unusual to see cash availability when there is no point availability. Since cash rack rates are pretty steep and many guests don't consider DVC resorts as an option, demand may be limited.

 

[Dean]

DVC holds back at least 2% but mainly for rehab and the like. They do at times rent out their time but not that much from what I'm told. Breakage inventory and member exchange points turned into rentals are by far the largest groups of rentals. Breakage rentals account for 2.5% of the budget. I'm sue CRO (whatever company component they come under) makes a percentage but otherwise it's a zero sum system for the exchange related rentals. Unsold units such as at SSR are also available for rental.

 

[sagwanamu]

If you decide to make cash ressie for one of DVC resorts, don't forget to call MS and ask if a member discount is available. I think it's about 25%, or you may get better using AAA discount for most of disney hotels, if you are a AAA member.

Good luck...

 

[castleri]

As I understand it, 4% of each DVC resort is not sold, but "held back" for various purposes such as rolling room refurbishment and other temporary downtime. Of course whenever possible this inventory is made available for cash reservations. I would guess that another 5%-10% becomes available from the various exchange programs as mentioned by dianeschlicht. Also I think at 60 days any remaining inventory not reserved on points are made available for cash.

I'm pretty sure inventory in the first two categories cannot be reserved for points, so it's not unusual to see cash availability when there is no point availability. Since cash rack rates are pretty steep and many guests don't consider DVC resorts as an option, demand may be limited.

This is exactly how it was explained to me when I purchased my first contract in 1997 - guess some guides aren't as thorough as others in taking the time to explain some of the things that can factor into getting a reservation when you want it and on short notice. Mine was excellent in going over all the finer points of how the system works.

Hope the OP is able to get something for the time frame wanted - have you put your name on the wait list? You still have some time that there may be some cancellations just before the 31 day period. Good luck

 

[CarolMN]

That may be one consideration for Disney, but I'd bet it's not the primary reason. Some other reasons probably include:

• Complaints from owners about overloading MS with non-member calls, which uses our dues to underwrite commercial businesses
• Problems arising from renters screwing up their customers' ressies
• Complaints from owners that they can't get ressies in the seven-month windows at certain resorts
• Complaints from owners that they can't get prime-time ressies, even within their eleven month windows, because of speculative bookings by eBay renters
• Potential liability to Disney if their timeshare is used other than intended by the POS (e.g. for commercial rental)
• The need for Disney to enforce what the POS says about commercial renting, or face legal liability

None of us will ever know for sure, of course, but there were probably more important issues at stake for Disney than a little bit of rental income.

I also think an increasing concern is DVC/Disney's potential liability for collecting the county/state taxes on lodging rentals (according to an article in the Orland Sentinel). Members may not have to pay the lodging/sales taxes on personal use, but they should be paying it on their rentals.

It wouldn't surprise me if one or more of the governmental units involved is looking at either making Disney report on the "commercial" renters or actually requiring them to collect the taxes. Since that is likely to be a costly proposition for Disney (or maybe us members), Disney may want to decrease the amount of renting so they can say the amount collected would be negligible and not worth doing.

JMHO. I am not a lawyer or tax collector, but I do occasionally read the Orlando Sentinel articles on increasing the lodging tax and collection "problems". Orange County is looking for more money to fund some capital improvements.

Best wishes -

 

[Longhairbear]

. Members may not have to pay the lodging/sales taxes on personal use, but they should be paying it on their rentals.

.

That's an interesting thought. That might mean they may also have to report the rent as income on tax returns.

 

[crisi]

That's an interesting thought. That might mean they may also have to report the rent as income on tax returns.

I doubt that is a might. The question is "what writeoffs would be allowed against it by the IRS."

 

[JimMIA]

I also think an increasing concern is DVC/Disney's potential liability for collecting the county/state taxes on lodging rentals (according to an article in the Orland Sentinel). Members may not have to pay the lodging/sales taxes on personal use, but they should be paying it on their rentals.

Yep, that's another possibility. It's certainly not a trivial amount of money for Orange County - the tax rate is 11 1/2% I believe.

As far as revenue from rentals being reported to the IRS, of course that's supposed to be reported.

The problem with both concepts is that it would be pretty difficult for Disney to identify specific transactions as rentals. They'd have no problem identifying accounts used for commercial rentals, but identifying an individual stay as taxable would be very difficult.