DVC plans to target commercial renters

[AnnaKristoff2013]

Does David’s also own his own points? I only thought he was the middleman?

No idea, but it doesn’t really matter. If the word gets out that confirmed reservations (or points reservations) rented from the big players are subject to cancellation, then that would decimate the market (and those players). Again, this isn’t me theorizing on how something could hypothetically happen. This is something that already happened with other timeshare systems and Disney has shown that they prefer not to reinvent the wheel when it comes to their timeshare business.

 

[muppets3d]

Does David’s also own his own points? I only thought he was the middleman?

I don't know about David's in particular but in many cases, the brokerage owns many more points than they would be allowed to - but they share the points among their employees. Employee A owns 8000 points, employee B owns 8000 points, the brokerage itself owns 8000 points, etc.

My guess is these will be the first to get a shoulder tap when DVC actually begins taking action here.

 

[Cyberc1978]

I don't know about David's in particular but in many cases, the brokerage owns many more points than they would be allowed to - but they share the points among their employees. Employee A owns 8000 points, employee B owns 8000 points, the brokerage itself owns 8000 points, etc.

My guess is these will be the first to get a shoulder tap when DVC actually begins taking action here.

If the rental companies owns THAT many points it can pose a problem.

Assuming DVC crack down on those companies, I foresee the resale market getting swamped with contracts and the price will only go south. But at some point the market will have gobbled up all the contracts or maybe DVC have if the price is low enough.

 

[Nabas]

If the DVC “system” worked as intended the points would be balanced by demand. There wouldn’t be a special rooms, BW std and boardwalk views, AK value rooms, CL. It is obvious that the points are not the correct amount and should be adjusted to make them “fair”. The usual responses are, “well there are just a few of them and that is also why they are so hard”. There are only a few bungalows as well, but they generally have availability. However they were allocated a reasonable number of points to not make them a great deal, so the supply and demand balances out. It is crazy that a standard view room is so many fewer points when they have better views than many other resorts, facing the road at the beach club or the dumpster view at BRV. The next response is, “I like those high value / low point rooms, don’t rebalance to take them away”. Yes, everyone likes those rooms and that is why they are so hard to get, but those rooms are small population in the overall ecosystem. Adjusting points better by season needs to happen as well. If you look at the calendar there are definitely months that have demand that does not match supply. The first half of December points are way too low for the demand. September is low for the demand, August is high for the demand. Adjust the calendars, they have the data.
RIV is out of whack with the number of points between std and premium views, for studios it is 4-5 points difference. I am sorry, the views are different enough to justify that big of a difference, more like 2 in my opinion. If you look the standards are always booked up before the standards. If they were set up correctly, they would both book very similar to each other. Who is at fault for the imbalance? The owners or DVC for how they set up the point charts?
The other elephant in the room is folks changing at the seven month window. I hear so many complaints about people not being able to get what they want at the 7 month window, but they want something that is in high demand. “I can’t get a full week at the beach club at 7 months like I could years ago”. Most of the year there is availability at beach club between the 7-11 months. If you want to stay at BC, buy there and plan ahead. As DVC has expanded there are more and more people trying to move to the “better in their eyes” rooms/resorts. When there are so many people saying by at SSR but don’t plan on staying there, it creates an imbalance in the system. If SSR would have come on line with point requirements that were 1/3 the requirement of a room at beach club it would be very difficult to get a room at SSR.
Bottom line: if the points requirements match demand the system works itself out, if the points requirements allocations do not match demand there are reservations that everyone wants and others that no one wants. I am not saying that they should try the lock-off grab they tried years ago, but either balance the system or realize there will be a few “gems” that will always be difficult to get and only get harder over time.

I agree but note there’s not a lot of wiggle room. As I understand it, Disney sells 98% of a resort’s points. Since there can be rooms out of service, 98% is pretty much a full hotel. And in any given year, there is probably a few percent more or less who want to go on a given week. My point is, it’s really challenging to balance point charts.

As you note, there’s a different problem as 7 months (members trying to book stays at more desirable resorts) but this is the very nature of DVC - buy where to want to stay. Don’t buy at (for example) SSR if you really want to stay at BCV. What happens at 7 months is not Disney’s problem. It’s the DVC members who don’t buy where they want problem.

The problem being discussed on this thread is what’s happening at 11 months. DVC members cannot get the rooms they want even at 11 months.

Should the point difference between (for example) an AKV-Value and AKV-Resort View shrink in order to balance demand? Probably. If there is (for example) only a 2 point difference between AKV-Value and AKV-Resort, then I’m going to be less disappointed if I end up with AKV-Resort.

But I suspect this won’t solve the problem with commercial renters. It might reduce their profit margins but they still are going to aggressively seek whatever maximizes their profits.

 

[JOLT]

Should the point difference between (for example) an AKV-Value and AKV-Resort View shrink in order to balance demand? Probably. But I suspect this won’t solve the problem with commercial renters. It might reduce their profit margins but they still are going to aggressively seek whatever maximizes their profits.

I'm not sure if Disney wants to touch the points for Value rooms. I know when I was buying they used it as a selling point you can stay at animal kingdom for xx points for a whole week.

 

[Cyberc1978]

Wow just looked up some of the owners from the rental companies and wow there are many LLC’s that owns a lot of points.

They but and sell all the time. Assuming they just strip and flip the contracts. Giving them a lot of points to rent.

 

[Brian Noble]

No idea, but it doesn’t really matter. If the word gets out that confirmed reservations (or points reservations) rented from the big players are subject to cancellation, then that would decimate the market (and those players). Again, this isn’t me theorizing on how something could hypothetically happen. This is something that already happened with other timeshare systems and Disney has shown that they prefer not to reinvent the wheel when it comes to their timeshare business.

For folks who want to understand more about this: Go back and look through the history of the "we loooooove Club Wyndham Bonnet Creek" thread on the Orlando Resorts board.

Bonnet Creek used to be the number one darling of the offsite crowd, and it was not close. It dethroned Sheraton Vistana as the previous King Of The Heap. And, for good reason! The Bonnet Creek parcel is landlocked by Disney on three sides, and I-4 on the fourth. The only way in or out is via Buena Vista Drive, with the entrance between CBR and Typhoon/Disney Springs. It is not on Disney-owned/controlled property, but it "feels like" it is inside The Bubble. It is an easier drive to many WDW destinations than SSR or OKW, and you will often drive right by it if you are staying at either of those. The units are better equipped than the typical DVC villa. For example, the freezers all have ice makers, and the dining room tables all seat six. Comfortably. Several of the buildings have great views of Epcot. The Presidential units are gorgeous.

They even used to run Stacy's Must-Dos on the resort TVs.

And, for a very long time, it was stupid cheap to rent here. And I mean STUPID CHEAP. For a variety of reasons, it was possible for large-point owners to profitably rent stays for less than a "regular" owner would pay in maintenance fees. Even regular owners could rent a stay here for very good prices. For example, my non-discounted cost to book a full week in a 2BR Villa in peak season (Easter, Christmas, etc.) is less than $1,540, and that's probably only slightly better than average for a rank-and-file owner. I can rent that out for a few bucks more than you'd pay to book a single Disney Moderate in early March---with the current promotion---and pocket a grand without sweating.

So, you can imagine how big this market was. BIG.

Wyndham took a bunch of steps to curb this. They closed the loophole that let large-point owners book ultra-cheap stays in advance. They added friction to the guest certificate process. They added the Owner Priority list. All of those things helped, but mostly they just made the stays more expensive, and people were still booking them.

That all changed almost overnight when a few renters showed up to check in to their rooms, only to find the room had been cancelled. Within months, people had stopped renting there, and more importantly DISers started recommending people NOT rent there---unless, of course, you rent from Wyndham's "official" rental arm, Extra Holidays. For example, here's one poster that @AnnaKristoff2013 was talking with just a few months ago (emphasis added):

Yes my reservation is for that week so I assumed (based on what I was reading) that it would be a priority period for them. You really did just confirm my concerns. While I feel bad for the owners who have points they can't use and want to rent them with the way Wyndham is handling things now I'm thinking I'm backing out even though I really like the property and can't get another for the same price and proximity (price wise I can go over to Marriott Royal Palms and get a 3 bedroom but the commute over is such a pain... and I can't afford a 3 bedroom stay on a Disney property even renting a DVC). Oh well, I guess it's better to give up this dream now then find out I'm homeless when I go to check in. That, by far, would be a nightmare. Again, thank you for the response back!

There is still some rental traffic here, and a few of the larger point brokers are still in business. But the volume of that business is a shadow of its former self.

 

[Brian Noble]

And if you think DVC can't do this, take a look at Section 12.1.3 of e.g. the Riviera Public Offering Statement

And then read the last few sentences of the preamble to section 12:



They absolutely can---it is explicitly written into the governing documents. Will they? Time will tell.

 

[muppets3d]

And if you think DVC can't do this, take a look at Section 12.1.3 of e.g. the Riviera Public Offering Statement
View attachment 921905
And then read the last few sentences of the preamble to section 12:

View attachment 921910

They absolutely can---it is explicitly written into the governing documents. Will they? Time will tell.

Will Disney cancel rentals though? I don't know if Disney wants to put a guest in the situation of standing at the check-in counter at the Grand Floridian and being told their reservation was cancelled because it was purchased from a commercial renter. Wyndam obviously had no problem doing that but maybe I think too much of Disney but I don't see them doing that.

 

[AnnaKristoff2013]

That all changed almost overnight when a few renters showed up to check in to their rooms, only to find the room had been cancelled. Within months, people had stopped renting there, and more importantly DISers started recommending people NOT rent there---unless, of course, you rent from Wyndham's "official" rental arm, Extra Holidays. For example, here's one poster that @AnnaKristoff2013 was talking with just a few months ago (emphasis added):

Yeah, this is literally all DVC needs to do. Some cancelled reservations and people finding themselves “homeless” (although I’m sure Disney being Disney they will offer to find them a room at rack rate), and the business models of the mega renters will be destroyed. Nobody will want to risk it. It’s effective. It doesn’t hurt the rank and file DVC owners at all, and I strongly suspect DVC will do it at some point.

 

[AnnaKristoff2013]

Will Disney cancel rentals though? I don't know if Disney wants to put a guest in the situation of standing at the check-in counter at the Grand Floridian and being told their reservation was cancelled because it was purchased from a commercial renter.

Disney doesn’t need to tell them why it was cancelled (Wyndham never did). And I’m sure they’ll try to help accommodate them with a cash booking.

 

[muppets3d]

I'm not sure if Disney wants to touch the points for Value rooms. I know when I was buying they used it as a selling point you can stay at animal kingdom for xx points for a whole week.

Value and Club rooms will always be limited no matter the point chart simply because of how many people have booking priority for those very limited rooms. AKL is a large resort.

 

[pzw90]

Disney doesn’t need to tell them why it was cancelled (Wyndham never did). And I’m sure they’ll try to help accommodate them with a cash booking.

Any chance they cancel, and book with the same room with their own Disney held points. Guest comes in - your rental was canceled because the owner is considered a commercial renter, but we just so happen to have the same room for the dates you need right here, pay up and go fight the renter

 

[xdan0920]

I think it is becoming pretty clear that there are many of us "regular" owners who would favor some much stricter rental rules. And a separate group who own many points and use those points to rent and offset costs, who are worried how these new restrictions will impact their ownership calculus. Not sure these two groups will ever see eye to eye.

For example. If you are an owner of 500 points and rent 300 a year to offset your costs, I view that as commercial renting. ESPECIALLY, if you are using a commercial middle man. So I would be in favor of any restriction that curbed that behavior.

 

[Brian Noble]

...and that is EXACTLY how this played out on TUG with Wyndham. Most Wyndham owners eventually concluded that tougher rules were great. A few were very very upset. A small handful still are.

maybe I think too much of Disney but I don't see them doing that.

Thinking of Disney as anything other than a profit-seeking company is a recipe for (eventual) disappointment.

For example, everyone was sure that Disney would never charge for Fastpass. After all, they went for more than 20 years including it with park admission, long after all the other parks were charging extra for similar things. Disney was different, right?

They were different until they weren't.

Now, I am not saying that DVC will definitely do this. Who knows? Maybe they will find less-obvious ways to curb rental activity. But, make no mistake: they are clear about their intention to curb rental activity.

 

[AnnaKristoff2013]

Any chance they cancel, and book with the same room with their own Disney held points. Guest comes in - your rental was canceled because the owner is considered a commercial renter, but we just so happen to have the same room for the dates you need right here, pay up and go fight the renter

I doubt it would be that, but I'm sure Disney would try to help a homeless renter by finding them a room somewhere on property (that they of course would have to pay Disney for).

 

[nalababybear]

I think it is becoming pretty clear that there are many of us "regular" owners who would favor some much stricter rental rules. And a separate group who own many points and use those points to rent and offset costs, who are worried how these new restrictions will impact their ownership calculus. Not sure these two groups will ever see eye to eye.

For example. If you are an owner of 500 points and rent 300 a year to offset your costs, I view that as commercial renting. ESPECIALLY, if you are using a commercial middle man. So I would be in favor of any restriction that curbed that behavior.

Agree that there's a significant number of folk in these two camps, myself in the latter. Will a dramatic change like what @AnnaKristoff2013 has been saying happens at DVC change the calculus of many, including myself? Yes, it will.

We own only at DVC, because of Disney's entire product line. They are an unique timeshare product by creating their own destination and I believe many DVC owners are like ourselves -- not owning any other timeshare product.

Will we sell a few of our contracts? Probably, as will others doing the same side gig to fund their Disney addiction. -- Will that kill the DVC golden goose that Disney enjoys right now? Who knows. Not even Disney.

The key salient driving points to Disney's decisions will be
--If Hotel bookings remain solid -- Disney would actually like rentals to the casual higher spending vacationer that would have stayed off-site and spend MORE than a DVC regular owner.
--If run of the mill DVC owners get to critical mass that affects direct sales DVC, then DVC will make internal changes to curb those variables, including commercial rentals.

Does DVC need to change rules to make these effects? No. It's pretty well outlined. It's just whether they want to define more clearly and narrowly and when/how to enforce.

Surprise cancellations has a double-edged sword for sure and they do have an out by walking and cash side if they do implement that action -- they've done more drastic moves with higher PR effects - like at DAS reform.

 

[Pluto1976]

I can’t get into Moonlight Magic or the new lounge? Aren’t my points just as good as anyone else’s? DVC is classist!”

I saw this comment way back on this thread's first page, and I know you are a frequent poster on the boards so genuinely interested in your thoughts on a counterpoint to this assertion.

The main point of the counterpoint would be whether or not an owner is direct (Disney) or indirect (i.e. resale) should not matter when it comes to DVC extras (ex. access to lounges, perks) because the on-going expense of annual dues is the same regardless of which type of owner one is. Annual dues are a post-purchase DVC ownership expense shared by all members equally, yet a class system is created by establishing non-access to various DVC extras for indirect buyers.

A resale owner is still supporting the DVC resort's upkeep and maintenance financially just the same as direct owners and they are getting less benefits in doing so.

I know this next point is a stretch so bare with me with this rhetorical question; What if there was no resale market and owners let their contracts go deliquent instead of being able to resell them? If this happened existing owners dues would increase b/c less owners would be sharing the expenses for resort upkeep; therefore, resale owners are providing a benefit and should not be categorized differently.

To wrap it up, I would say there is obvious finanical benefits to purchasing resale, but there are also benefits to buying direct from Disney. The biggest is the ease and efficiency of the purchase process which is widely known as compared to going resale which is a completely different experience from the buyer's perspective.

Both ways of purchasing have their pros and cons, but they are realized during the initial purchase period and afterwards all DVC owners should have access to the same perks and be equal because they are both equally supporting Disney as guests and contributors to annual DVC dues.

As stated, interested in your thoughts on this. Respectfully!

 

[OKW Lover]

I'm a bit late to this thread and probably don't understand what the concern is. I've been a member since 1995 and have never rented points nor have I ever rented out my points.

There seems to be general agreement (amongst the posters) that there are some owners that have huge investments in DVC and are using that power for some nefarious purposes. I'm not clear what that might be. But is there some place we can see who these big owners are?

 

[Cyberc1978]

I'm a bit late to this thread and probably don't understand what the concern is. I've been a member since 1995 and have never rented points nor have I ever rented out my points.

There seems to be general agreement (amongst the posters) that there are some owners that have huge investments in DVC and are using that power for some nefarious purposes. I'm not clear what that might be. But is there some place we can see who these big owners are?

On the Orange County comptrollers website you can look up the exec at some of the rental companies. They own either by themselves or through a bunch of LLC’.