DVC plans to target commercial renters

[AstroBlasters]

I’m not looking for support. I used to be able to use my membership much easier. The last 5 years has become a huge pain in the rear. And it coincides with the explosion of the rental market. Ergo….

Not looking for support…. no sense of wanting to build a workable consensus…. you see it the way you see it and nothing will change that.

Has anything else happened in the last 5 years….. perhaps millions and millions of more points in the system competing for the same places you are trying to book? Perhaps more younger owners who are better with computers? ….. nah…. not a chance…..

 

[Brian Noble]

A big commercial renter might feel they have a case against cease and desist because:

And they might.

But they should be prepared to spend real money and time to prove it, possibly during a time when their rental business does not generate revenue. And while they may have someone in the family willing to represent them pro bono, you know what they say about a lawyer who represents themselves.

 

[Brian Noble]

Has anything else happened in the last 5 years

I think the biggest thing has been the excess of Covid-era points that were banked forward while the resorts were closed. I'm not sure how long it would take to work through that backlog, but arguably we are only now nearing the end. But from Disney's perspecitve, it does not matter what the real reason is.

What matters is what prospective buyers think the reason is.

If enough prospective buyers are talking about the rental market as a reason they are not buying---either because rentals are cheap and easy enough to make buying unattractive, or because mega-renters are the Big Bad---then Disney is going to do something to counter that perception.

 

[AstroBlasters]

I think the biggest thing has been the excess of Covid-era points that were banked forward while the resorts were closed. I'm not sure how long it would take to work through that backlog, but arguably we are only now nearing the end. But from Disney's perspecitve, it does not matter what the real reason is.

What matters is what prospective buyers think the reason is.

If enough prospective buyers are talking about the rental market as a reason they are not buying---either because rentals are cheap and easy enough to make buying unattractive, or because mega-renters are the Big Bad---then Disney is going to do something to counter that perception.

Agreed.

In addition, people who have been owners for a LONG time should understand and accept that even if Disney could waive a magic wand and get rid of renting and walking tomorrow (which they aren’t) that owners still aren’t going to have the same 7m non-home resort availability that they are used to because of how many more points have flooded the system and how many more members are competing for the same rooms and most desired times of year.

I specifically purchased a war chest of points at resorts that I want to stay at to be able to completely avoid the studio and SAP battlefields…. the same way that I now try to pre-purchase seating at Aulani 90-days in advance.

 

[Sykes]

In consideration of the timeline, trying to keep with simplicity and stages of impact, it makes sense. They can’t easily change the other contracts, but they can be more precise with new ones. The spirit of all the contracts from day 1 have prohibited commercial use though.

When I worked in B2B contracting, over time we'd accumulate a laundry list of things that we'd like to address the next time we did a major rewrite of our master agreement, and about once every year or two we'd update that agreement to address them. Usually the changes weren't material--just tweaking language to address common objections, or adding clarifying language. If we had any changes that were material and important to us then we'd undertake the non-trivial work to get existing customers onto the new agreement as soon as practical (usually at the next annual renewal). If the changes were just clarifying or explaining the terms that we already had in earlier agreements then we wouldn't bother migrating the customers to the new agreements because it wasn't worth our time or the customer's time.

There are a lot of people in this thread who are certain they know how various points in the contract will ultimately be litigated. Some of them (a) are lawyers who (b) have different opinions. Be careful about listening to only the ones with opinions you agree with, because Disney's lawyers will also have both opinions and very deep pockets. The only question is whether or not they have the will to go to the mattresses on any particular point. Other timeshare developers have done so in similar situations, and Disney has done so in many other settings. It is not hard to see the intersection between those two.

One of the few things that I'd actually bet cash money on is that, at least for the foreseeable future, if Disney chooses to attack rentals, it'll only go after owners whose activity is unquestionably commercial by pretty much every definition we're considering here. I don't think they're interested in wading into the middle ground where the question of how much they can restrict probably lies in how deferential a court would be to a consumer vs. the large corporation when interpreting the contract.

 

[xdan0920]

Not looking for support…. no sense of wanting to build a workable consensus…. you see it the way you see it and nothing will change that.

Has anything else happened in the last 5 years….. perhaps millions and millions of more points in the system competing for the same places you are trying to book? Perhaps more younger owners who are better with computers? ….. nah…. not a chance…..

I’m genuinely not interested in the perspective of DVC landlords. I don’t feel bad that they own more points then they can afford and rely on rental income to make up the difference.

 

[Brian Noble]

One of the few things that I'd actually bet cash money on is that, at least for the foreseeable future, if Disney chooses to attack rentals, it'll only go after owners whose activity is unquestionably commercial by pretty much every definition we're considering here.

Strongly agreed. I think it makes the most sense to stick to the most egregious cases, and depend on the chilling effect from there.

If they are serious about a "chilling effect", there will be some last-minute cancellations of rented reservations. That was the most effective thing Wyndham ever did, because it reduced demand for rentals. In the grand scheme of things, they only cancelled a handful, but once word got out it was possible, a lot of people suddenly decided that was a risk they didn't want to take.

This is already happening with DVC, and they haven't done anything other than talk about it.

 

[Tatebeck]

See, in your example it’s not the listing of it alone is the trigger, it’s the volume of the listing.

Apply that to an owner like me who currently has 14 reservations across all three of my memberships and my name is on every single one.

Some now have other guests with me, some are split stays, and some are bookings for trips I might take…but not one will be a rental.

Plus, my comment about listing alone not being enough was in reference to enforcement and the potential canceling of reservations on an owner.

Until that name change happens, DVC would be hard pressed to say they had the right to cancel any reservation in an owner’s name.

Unless they decide that somebody booking a large amount of rooms at 11 months at rooms/time periods that are known to be highly profitable and immediately posting them for rent on a rental site counts as a pattern of commercial rental activity. They don't HAVE to wait until the room is rented and changed, they can see if rentals were attempted if they are on publicly viewable sites and act if they wish.

I think the biggest thing has been the excess of Covid-era points that were banked forward while the resorts were closed. I'm not sure how long it would take to work through that backlog, but arguably we are only now nearing the end. But from Disney's perspecitve, it does not matter what the real reason is.

What matters is what prospective buyers think the reason is.

If enough prospective buyers are talking about the rental market as a reason they are not buying---either because rentals are cheap and easy enough to make buying unattractive, or because mega-renters are the Big Bad---then Disney is going to do something to counter that perception.

They kind of did it to themselves by letting resale prices drop while not ROFRing and simultaneously increasing the direct point cost. Most people are steered towards resale or renting now.

Maybe they could... lower the cost of direct points and start ROFRing to increase the value of resale contracts pushing people to buy direct?

Doubtful, as that would cost them more money. They are most likely just gonna shut down the egregious renters running afoul of their policies. They are the only ones allowed to milk the cash cow

 

[AstroBlasters]

I’m genuinely not interested in the perspective of DVC landlords. I don’t feel bad that they own more points then they can afford and rely on rental income to make up the difference.

That doesn’t have anything to do with what I wrote about.

 

[JackosinDIS]

That doesn’t have anything to do with what I wrote about.

Well… you can’t use reason to convince anyone out of an argument that they didn't use reason to get into.

 

[Brian Noble]

There's a wide spectrum of opinion about what is (and is not) allowed based on The Rules. There is an even wider spectrum of opinion regarding what should (not) be allowed. Reasonable people can hold very different positions on the latter, largely informed by their own needs.

 

[crisi]

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They kind of did it to themselves by letting resale prices drop while not ROFRing and simultaneously increasing the direct point cost. Most people are steered towards resale or renting now.
.

Disney, like every publicly traded company, is at the mercy of their shareholders, their short term profits, and their cash flow statement. Covid was not a good time for Disney's balance sheet. They didn't "let resale prices drop" as much as they made hard choices on how to best meet their financial goals during a period when one of their major money makers was shut down or operating at limited capacity, when people didn't go to movies. A not so hard choice during a period like that is for them not to spend money buying back DVC contracts. Hard choices are laying off people, shuttering entire businesses, canceling contracts for new capital investments.

 

[Ralph&Pam]

Of course…but until DVC decides that there is a better booking option, people can do it or not..I choose not and hope for the best. And yesterday, karma shined down.

But, if they go back to the old rules and we now need to book by check out day to stop walking, how much of a pain will it be if you have to book daily?

Would you personally rather see that?

Booking by check out day is easier than walking, even it one must add one day at a time to complete their booking. That only requires as many logins to add a day as the length of stay. Walking can require daily logins for many more days depending on how far in advance you initiate the walk.

 

[Tatebeck]

Disney, like every publicly traded company, is at the mercy of their shareholders, their short term profits, and their cash flow statement. Covid was not a good time for Disney's balance sheet. They didn't "let resale prices drop" as much as they made hard choices on how to best meet their financial goals during a period when one of their major money makers was shut down or operating at limited capacity, when people didn't go to movies. A not so hard choice during a period like that is for them not to spend money buying back DVC contracts. Hard choices are laying off people, shuttering entire businesses, canceling contracts for new capital investments.

Very true, but they need to adjust now that the prices have been driven down. Offering the new Poly Tower with very few incentives and once again raising the direct price is not going to help them sell direct points and reduce rentals or resale purchases.

 

[crisi]

Very true, but they need to adjust now that the prices have been driven down. Offering the new Poly Tower with very few incentives and once again raising the direct price is not going to help them sell direct points and reduce rentals or resale purchases.

Construction costs are still high. I doubt they are are interested in selling the Poly Towers quickly or cheaply. Inflation is high - inflation at Disney has ALWAYS outpaced inflation in the real world. I don't see anything other than business as usual for Disney.

 

[AstroBlasters]

Very true, but they need to adjust now that the prices have been driven down. Offering the new Poly Tower with very few incentives and once again raising the direct price is not going to help them sell direct points and reduce rentals or resale purchases.

More volume at a lower price doesn’t necessarily add up to a net positive outcome.

If they can rent out the rooms for high cash prices then they do not have a strong incentive to discount the points.

 

[Tatebeck]

More volume at a lower price doesn’t necessarily add up to a net positive outcome.

If they can rent out the rooms for high cash prices then they do not have a strong incentive to discount the points.

Aren't they having trouble filling high cost hotel rooms and thus the increase in their DVC strategy?

That might work short term for the Poly tower. I don't think it will work long term for CFW, LL, and whatever comes next.

DVCs design tries to make sure the rooms are almost always full, which means more guests at their parks, restaurants, etc.

 

[AstroBlasters]

Aren't they having trouble filling high cost hotel rooms and thus the increase in their DVC strategy?

DVCs design tries to make sure the rooms are almost always full.

I don’t think they are having issues filling the beautiful new Poly Tower at the moment, but we’ll see how things progress.

 

[Tatebeck]

I don’t think they are having issues filling the beautiful new Poly Tower at the moment, but we’ll see how things progress.

Yeah, I was already editing my response lol. At the Poly Tower it may work for a while. But they are increasing the cost of the other resorts/lowered their incentives along with Poly. I don't think it will work long term for most DVC resorts

 

[crisi]

Aren't they having trouble filling high cost hotel rooms and thus the increase in their DVC strategy?

That might work short term for the Poly tower. I don't think it will work long term for CFW, LL, and whatever comes next.

DVCs design tries to make sure the rooms are almost always full, which means more guests at their parks, restaurants, etc.

Anytime Disney wants to rent out their hotel rooms they can discount them or offer packages. Most of the resorts were depreciated long ago, so renting them - other than maintenance costs and staffing - is really mostly profit margin. I suspect the Ivy League MBAs who run Disney are aware of this whole idea of profit on the margins and how to make the most use of their existing capital assets and can run the analysis taught in undergrad management accounting to find the sweet spot of price and profit.

The thing to keep in mind is that they are rewarded for short term profit and decisions. Where Disney is in ten years isn't where their interests lie.