DVC plans to target commercial renters

[AstroBlasters]

So what constitutes a pattern?

If I need to rent my points because college tuition doesn’t allow for much of a travel budget for 8 years (over 2 kids)…. over a 40-50 year contract that means that ~80% of the time it was for personal use.

 

[tx911]

Right, but turning points into money is different than running a for profit business.

No disagreement there.
There’s no question that running a for-profit business is expressly against the rules.

My view is that turning your points into money, if done consistently and repeatedly and with most of your points, is also counter to the intended use of the membership.

 

[chicagodisneyguy]

I am not sure what intent means because everyone who rents is doing so with that purpose. They have no use for those points that year.

I think the person who rents x% of their points every single year is pretty easy to define. If that person rents 50% of their points every single year to cover dues/make a profit they could easily be labelled commercial. But I don't think that labeling that person as commercial means the person that rents occasionally for what ever reason is commercial. There's been a lot of examples and hypothetical situations presented....and i think most would not be labelled as commercial by DVC.

I think the key variable Disney will look at, if they chose to go after the smaller fish, is the pattern of continued points usage not for personal use. And even then I think they will take into account all the details. Someone that uses 200 points a year to gift to family is different than the person that rents out 200 points/year to complete strangers.

I don't actually think Disney will go after someone on that small a scale. But i think they could if they wanted to.

 

[tx911]

So what constitutes a pattern?

If I need to rent my points because college tuition doesn’t allow for much of a travel budget for 8 years (over 2 kids)…. over a 40-50 year contract that means that ~80% of the time it was for personal use.

So you’d get a letter from DVC and you would have the opportunity to explain the situation.

 

[chicagodisneyguy]

So what constitutes a pattern?

If I need to rent my points because college tuition doesn’t allow for much of a travel budget for 8 years (over 2 kids)…. over a 40-50 year contract that means that ~80% of the time it was for personal use.

I would say renting a majority of your points out 8 years in a row would constitute a pattern....especially due to a situation you know is coming. But if explained that you have kids in college for 8 years and can't travel to WDW I could see them being okay with that. But I could also see them NOT being okay with renting your points out that many years in a row.

 

[AstroBlasters]

So you’d get a letter from DVC and you would have the opportunity to explain the situation.

I get where you are coming from, but they don’t have the staff to be dealing with thousands of letters that need to go to “renting court” each year.

It’s an increased expense and potential litigation that Disney doesn’t need to assume.

 

[JackosinDIS]

I get where you are coming from, but they don’t have the staff to be dealing with thousands of letters that need to go to “renting court” each year.

It’s an increased expense and potential litigation that Disney doesn’t need to assume.

And think of the costs of running those “renting jails”

 

[AstroBlasters]

I would say renting a majority of your points out 8 years in a row would constitute a pattern....especially due to a situation you know is coming.

So the solution is to force families who purchased contracts when their kids are little to sell and pay heavy fees and commissions to sell a contract at a time where the liquidity and price may be awful (2010-2015)?

Why would anyone sign up for such a contract? I surely would not.

The flexibility and liquidity are features and not bugs in the system.

 

[xdan0920]

I actually never said this, and don't believe it. I'd rather have some ability to rent when needed. If I had to choose all or nothing, though, mark me down for nothing.

That’s where I’m starting to come down. They want every little thing carved out to say it’s okay to rent consistently. So at this point, I’d prefer renting to completely disappear

 

[JOLT]

So the solution is to force families who purchased contracts when their kids are little to sell and pay heavy fees and commissions to sell a contract at a time where the liquidity and price may be awful (2010-2015)?

Why would anyone sign up for such a contract? I surely would not.

The flexibility and liquidity are features and not bugs in the system.

I don't think its thousands of people renting a majority of their points every year.

I dont think anyone said you had to sell your contract if you dont use it in 8 years.

 

[chicagodisneyguy]

So the solution is to force families who purchased contracts when their kids are little to sell and pay heavy fees and commissions to sell a contract at a time where the liquidity and price may be awful (2010-2015)?

Why would anyone sign up for such a contract? I surely would not.

The flexibility and liquidity are features and not bugs in the system.

If someone buys in without the intent of using the points for personal usage...then yes. Even if you use 50% of your points per year for personal use....renting out 50% of your points EVERY YEAR would constitute commercial. I think someone renting out points for 8 years in a row would be a commercial.

I get that lots of people buy more points than they want/need and use the rest to finance dues/park tickets etc. But as I said before, I think DVC COULD label that behavior commercial....and don't think they'd be wrong for doing so.

All I know is if I was in the 1000pt club and doing this at scale I'd hope DVC stops at the large LLC's

 

[Sykes]

I get where you are coming from, but they don’t have the staff to be dealing with thousands of letters that need to go to “renting court” each year.

It’s an increased expense and potential litigation that Disney doesn’t need to assume.

IMO, that's likely exactly how it will work, except the number of letters won't be that significant--probably less than 100.

I think that Disney will hold its cards tight to the chest and choose not to provide specific guidelines for what constitutes a pattern of commercial activity. (At best they would provide some vague statements about the criteria they use.) They will use some guideline internally and issue letters to the biggest offenders giving them a chance to respond, then cancel all non-personal reservations if there isn't a reasonable response. The T&Cs give Disney sole discretion as to what what constitutes a pattern of commercial activity, and this gives them the flexibility to adapt the definition to respond to the changing environment. If we're lucky we might get to see what criteria Disney uses in an ensuing court battle, but I'll be surprised if Disney discloses it directly.

IMO, they only need to go after the top handful of owners engaged in commercial activity. A small number of owners certainly represent an outsized percentage of the problem and they can address them with a manual process similar to what they used to go after people who used APs and DAS/GAC for commercial purposes. This would also significantly impact the stability of the rental market in general--a bunch of vacations canceled with fairly little warning would shake confidence in the entire rental market. I'm reasonably sure that Disney already knows who to go after in the first round.

I also won't be surprised if they pursue legal remedies to prevent brokers from using the DVC booking system and availability data from that system for commercial purposes.

 

[Grumpy by Birth]

but if you have a bot why wait till 5 minutes before the same issues can happen with the bot.

Because the seller is waiting last minute to see if anyone wants the dates they already have booked.

Waiting last minute to walk gives the commercial renter more flexibility.

But for the personal walking, it makes sense to walk as soon as possible.

I haven't expended a lot of brain power on thinking about this, so maybe there's a catch I'm missing, but it seems to me that using this method, a commercial renter theoretically can fulfill ANY desired reservation date.

If someone is looking for the specific dates you currently have booked, stop walking and rent it to them. If no one is looking for those dates, walk it forward a day and then check again. Repeat ad nauseum.

That being said, I suspect some (many?) commercial renters might not take the "bird in the hand" approach and rent the reservation UNTIL it gets to a high demand date where they can increase profit. The risk of passing up renting for earlier dates is probably outweighed by the reward of commanding higher prices for harder-to-get reservation dates.

 

[lowlight]

So what constitutes a pattern?

If I need to rent my points because college tuition doesn’t allow for much of a travel budget for 8 years (over 2 kids)…. over a 40-50 year contract that means that ~80% of the time it was for personal use.

The product can’t support every Silver Surfer what if scenario.

 

[AstroBlasters]

I don't think its thousands of people renting a majority of their points every year.

I dont think anyone said you had to sell your contract if you dont use it in 8 years.

If there are 180k owners then 2k people are ~1% of the owners.

 

[theMoreDisneytheBetter]

Would Disney be able to charge a fee for every reservation not made under the member’s name, or perhaps every reservation where the lead guest changed, as a way of finding whatever investigations they need to do? Is that permitted under current rules?

I think that everyone agrees that if a parent uses their points for their adult children that is totally fair game, whether or not the parents are there as well so maybe name changes would be the better way to go?

ETA that would also cover a friends scenario, and even those who rent points off a site like this. But make it high enough and it would strongly crack down on spec rentals.

 

[AstroBlasters]

The product can’t support every Silver Surfer what if scenario.

Parents of young children buying DVC and then having to live a bit more frugally or scrounge up some extra cash their college years is a Silver Surfer scenario?

The answer is simple. Lean more towards flexibility and simplicity.

If you don’t like it, then sell your contract.

 

[Cyberc1978]

Someone that uses 200 points a year to gift to family is different than the person that rents out 200 points/year to complete strangers.

I don't actually think Disney will go after someone on that small a scale. But i think they could if they wanted to.

How would Disney know if you are renting to friends and family or complete strangers?

Certainly not by using the last name. Me and my wife we don’t share the same last name. Only some of my children do.

 

[tx911]

If there are 180k owners then 2k people are ~1% of the owners.

It could be as simple as an automatically triggered email if more than half your reservations are not in your name 2 years in a row. Then the onus would be on you to respond with an explanation.

 

[nalababybear]

I agree with everything you’re saying here.

Where we might disagree is an owner that rents 50% or more of their points year after year after year. I would argue that this constitutes a pattern of non-personal use for monetary gain.

The issue is that the line varies and thresholds vary...then throw in enforcement. As anyone in management knows, what rules and process say and what are done tend to be very different.

Again at the end, it's Disney's call to define and enforce. People will adjust to that new normal and see if it changes anything

I simply don't know if you get exit all the large point holders that will satisfy the vocal folk wanting more rules and restrictions.

It may actually RAISE the going rental rates thus encouraging.more moms and pops to enter the occasional rental market while improving the bottom line of Disney to fill t hi one moderate hotels as the rental prices will have increased .

I doubt walking will go away nor availability of scarce rooms improve if only the large players exit.

If Disney does make new rules, it'll have to live those choices too and be restrictive like other timeshare companies.