DVC point balancing 2022 vs 2021

[Sandisw]

They are being untruthful then. They can employee DVCM as a contractor but referencing them as independent - it cannot be when they also are employees of other Disney divisions and owned by the same parent company. In their corporate info they do properly list DVD as a related company and even ABC as a related company so it's just that agreement that implies something that isn't correct.

Actually, as I'll take that back. The associations are not Disney owned although they do have a land lease with them. So yes, technically DVCM is independent of the association. But it's all far to inter-mixed to declare independent beyond a technicality.

I agree but legally that contract makes them one and IMO, certainly muddies waters.

I was certainly surprised which is why I have things I want to discuss with management.

 

[BWV Dreamin]

I agree but legally that contract makes them one and IMO, certainly muddies waters.

I was certainly surprised which is why I have things I want to discuss with management.

Thank you and the others for staying on top of this.

 

[ford91exploder]

Come on, this is high school level math. The delay is very curious at this point.

Doing it honestly is high school math, Figuring out a way to keep the increase in points going without the members being able to easily detect it is differential calculus... at the grad school level now watch electrical closets and the like being declared into the resorts. Hey they are part of the building right...

 

[drusba]

Having contracts among Disney-related entities that define the relationship as independent contractor has lititle bearing on the issue of possible conflicts of Interest and whether one entity has an incentive to act in favor of the other in opposition to those it is supposed to serve. Independent contractor establishes a relationship where one entity hires a second entity and that second entity is assigned things it must do (in DVCM's case everything the association is responsible for doing) and the second entity mainly controls how it gets done. It is like when an homeowner hires a company to do his lawn. The company hired determines the when and how and employees that do it. Usually there is no other special relationship, but possible conflicts and favoritism could arise if, for example, the company you hire is owned by your son.

DVCM is a Disney-owned entity, as is DVD, and BVTC. As the managing entity of the resorts, DVCM is, under statute, a fiduciary of the members, meaning its primary loyalty belongs to the members and it should not act against their interests in favor of other Disney entities such as DVD or the main Disney company. DVCM can do acts that might favor DVD as long as the same acts do not do harm to members. BVTC likewise is, by statute, a fiduciary in relation to the members because it is the designated entity that is in charge of the reservation system, the DVC Reservation Component, that is used in relation to multi-site reservations where owners of a resort can reserve other resorts.

But the companies are still related as Disney entities. Moreover, the officers of one company are the same as the others, e.g., Terri Schultz, Yvonne Chang and several others are, according to the applicable Secretary of State corporation records, officers of all three companies. As a result, the clarity of separation that is supposed to be provided by the concept of fiduciary, where two of those companies, DVCM and BVTC, are supposed to act in in the best interests of the members, rather than DVD or other Disney companies, can become murky, as we have seen with the activities done to take away rights and privileges of resale purchasers, by the adding of Riviera as a DVC Resort that could use the DVC Reservation Component despite that the POS documents of all the prior resorts provide that resale purchasers have a right to use the DVC Reservation Component in relation to any DVC Resort, including one added to the system, and by the attempted changes in the 2020 point charts and now the switch to the 7- season point charts. As a fiduciary, DVCM should have obeyed its dictate that it do no act to increase total points needed to reserve all rooms in any calendar year to a level greater than those in a base year, because to do otherwise, though it may serve the interests of DVD and Disney's and DVCM's profits overall, improperly does harm to the members' interests.

 

[KAT4DISNEY]

I agree but legally that contract makes them one and IMO, certainly muddies waters.

I was certainly surprised which is why I have things I want to discuss with management.

Actually let me go back again - sorry had a few other things also on my mind and it's slightly different than what was being discussed regarding the associations being arm length and able to find someone new for management etc. In a business terms independent contractor means they are a completely separate business entity hired by another entity to perform certain work. They have their own business license, tax id, their employees are not employed by the company they work for (in this case the associations) but are employed by the contractor. It often is a business that isn't intertwined like DVCM is but also independent in the terms of ownership and management. The contract between DVCM and the associations just mean they are a separate business from the association and in being hired to manage the associations both parties agree that the contractor (DVCM) is given full control in that management. DVD or DVCM legal would have written the contract and wanted that language. Technically it means the associations could find another management company but since the association boards are filled with DVCM/DVD employees the likelihood is next to none. Their being independent goes nowhere beyond them being a separate business with their own employees they pay.

 

[Sandisw]

Actually let me go back again - sorry had a few other things also on my mind and it's slightly different than what was being discussed regarding the associations being arm length and able to find someone new for management etc. In a business terms independent contractor means they are a completely separate business entity hired by another entity to perform certain work. They have their own business license, tax id, their employees are not employed by the company they work for (in this case the associations) but are employed by the contractor. It often is a business that isn't intertwined like DVCM is but also independent in the terms of ownership and management. The contract between DVCM and the associations just mean they are a separate business from the association and in being hired to manage the associations both parties agree that the contractor (DVCM) is given full control in that management. DVD or DVCM legal would have written the contract and wanted that language. Technically it means the associations could find another management company but since the association boards are filled with DVCM/DVD employees the likelihood is next to none. Their being independent goes nowhere beyond them being a separate business with their own employees they pay.

Again, I agree but someone asked about the relationship and I thought it was a unique piece that I had no idea was there and thought others would too,

As drusba explained what it means, it does raise questions for me as to the conflict, especially when it relates to the employees hired to provide the services MS provides.

 

[Heather07438]

as we have seen with the activities done to take away rights and privileges of resale purchasers, by the adding of Riviera as a DVC Resort that could use the DVC Reservation Component despite that the POS documents of all the prior resorts provide that resale purchasers have a right to use the DVC Reservation Component in relation to any DVC Resort, including one added to the system

This part never sat right with me.

If I own a resale contract bought after the change, I cannot ever use Riviera but they could use my resort all they like? Could the math put resale owners at a significant disadvantage... like at the 7 month mark there is an influx of Riviera booking L14’s but significantly less owners having ability to book into Riviera. Won’t that also set up Riviera for an even higher percentage of breakage than historic averages at other resorts?

Basically Riviera would be increasing the competition at 7 months while not having enough allowance into Riviera to help offset that. As a new resale buyer I get less options at 7 months in exchange for... nothing?

 

[KAT4DISNEY]

This part never sat right with me.

If I own a resale contract bought after the change, I cannot ever use Riviera but they could use my resort all they like? Could the math put resale owners at a significant disadvantage... like at the 7 month mark there is an influx of Riviera booking L14’s but significantly less owners having ability to book into Riviera. Won’t that also set up Riviera for an even higher percentage of breakage than historic averages at other resorts?

Basically Riviera would be increasing the competition at 7 months while not having enough allowance into Riviera to help offset that. As a new resale buyer I get less options at 7 months in exchange for... nothing?

I don't think the POS actually allowed them to enter Riviera in under the different terms that they did. To have the exchange differences that they do it should have been the 1st resort in it's own system. However I'm not going to go as far as a legal challenge which is what it would take.

 

[Heather07438]

I don't think the POS actually allowed them to enter Riviera in under the different terms that they did. To have the exchange differences that they do it should have been the 1st resort in it's own system. However I'm not going to go as far as a legal challenge which is what it would take.

Yes at this point it’s not making much of a difference I imagine. Wonder more about the future when other new resorts come online and if less people resell those types of contracts.

 

[lovethesun12]

This part never sat right with me.

If I own a resale contract bought after the change, I cannot ever use Riviera but they could use my resort all they like? Could the math put resale owners at a significant disadvantage... like at the 7 month mark there is an influx of Riviera booking L14’s but significantly less owners having ability to book into Riviera. Won’t that also set up Riviera for an even higher percentage of breakage than historic averages at other resorts?

Basically Riviera would be increasing the competition at 7 months while not having enough allowance into Riviera to help offset that. As a new resale buyer I get less options at 7 months in exchange for... nothing?

Yeah this doesn't sit right with me either. It's possible there is something I'm interpreting incorrectly, but it seems like the issue isn't just that you can only stay at Riv, it's the fact that in a pinch, your only option to use your points (that may still have a life of 0-7 months) could quite possibly be an already fully booked RIV.

How will booking 0-7 months look there when the resort is sold out?

How will the ability to use points that are in holding look?

It seems like the actual lifespan of the points could be reduced significantly.

 

[Heather07438]

Yeah this doesn't sit right with me either. It's possible there is something I'm interpreting incorrectly, but it seems like the issue isn't just that you can only stay at Riv, it's the fact that in a pinch, your only option to use your points (that may still have a life of 0-7 months) could quite possibly be an already fully booked RIV.

How will booking 0-7 months look there when the resort is sold out?

How will the ability to use points that are in holding look?

It seems like the actual lifespan of the points could be reduced significantly.

There definitely seems to be potential issues with the new changes around the trading system.

 

[Grumpy by Birth]

Perhaps this is the subject for a different thread, but with Points-gate 2.0 looking like there will be a reversal of charts again because they figured out that they're not on solid legal ground, it will be interesting to see if the Riviera resale restrictions eventually meet a similar fate (i.e., resale owners being able to exchange into and out of Riviera).

I'd be pretty happy if they figure out that the resale restrictions are on equally shaky legal ground and that results in being able to use my resale points at Riviera and future resorts.

 

[New Mouse]

Doing it honestly is high school math, Figuring out a way to keep the increase in points going without the members being able to easily detect it is differential calculus... at the grad school level now watch electrical closets and the like being declared into the resorts. Hey they are part of the building right...

The person in charge of the point chart scheme is obviously an Office Space fan.


Peter Gibbons: [Explaining the plan] Alright so when the sub routine compounds the interest it uses all these extra decimal places that just get rounded off. So we simplified the whole thing, we rounded them all down, and drop the remainder into an account we opened.Joanna: [Confused] So you're stealing?Peter Gibbons: Ah no, you don't understand. It's very complicated. It's uh it's aggregate, so I'm talking about fractions of a penny here. And over time they add up to a lot.Joanna: Oh okay. So you're gonna be making a lot of money, right?Peter Gibbons: Yeah.Joanna: Right. It's not yours?Peter Gibbons: Well it becomes ours.Joanna: How is that not stealing?Peter Gibbons: [pauses] I don't think I'm explaining this very well.Joanna: Okay.Peter Gibbons: Um... the 7-11. You take a penny from the tray, right?Joanna: From the cripple children?Peter Gibbons: No, that's the jar. I'm talking about the tray. You know the pennies that are for everybody?Joanna: Oh, for everybody. Okay.Peter Gibbons: Well those are whole pennies, right? I'm just talking about fractions of a penny here, but we do it from a much bigger tray and we do it a couple a million times.

 

[BWV Dreamin]

The person in charge of the point chart scheme is obviously an Office Space fan.


Peter Gibbons: [Explaining the plan] Alright so when the sub routine compounds the interest it uses all these extra decimal places that just get rounded off. So we simplified the whole thing, we rounded them all down, and drop the remainder into an account we opened.Joanna: [Confused] So you're stealing?Peter Gibbons: Ah no, you don't understand. It's very complicated. It's uh it's aggregate, so I'm talking about fractions of a penny here. And over time they add up to a lot.Joanna: Oh okay. So you're gonna be making a lot of money, right?Peter Gibbons: Yeah.Joanna: Right. It's not yours?Peter Gibbons: Well it becomes ours.Joanna: How is that not stealing?Peter Gibbons: [pauses] I don't think I'm explaining this very well.Joanna: Okay.Peter Gibbons: Um... the 7-11. You take a penny from the tray, right?Joanna: From the cripple children?Peter Gibbons: No, that's the jar. I'm talking about the tray. You know the pennies that are for everybody?Joanna: Oh, for everybody. Okay.Peter Gibbons: Well those are whole pennies, right? I'm just talking about fractions of a penny here, but we do it from a much bigger tray and we do it a couple a million times.

Love Office Space!!!!!!! How about those TPS reports? Riiiigggghhhhtttt!

 

[ford91exploder]

The person in charge of the point chart scheme is obviously an Office Space fan.


Peter Gibbons: [Explaining the plan] Alright so when the sub routine compounds the interest it uses all these extra decimal places that just get rounded off. So we simplified the whole thing, we rounded them all down, and drop the remainder into an account we opened.Joanna: [Confused] So you're stealing?Peter Gibbons: Ah no, you don't understand. It's very complicated. It's uh it's aggregate, so I'm talking about fractions of a penny here. And over time they add up to a lot.Joanna: Oh okay. So you're gonna be making a lot of money, right?Peter Gibbons: Yeah.Joanna: Right. It's not yours?Peter Gibbons: Well it becomes ours.Joanna: How is that not stealing?Peter Gibbons: [pauses] I don't think I'm explaining this very well.Joanna: Okay.Peter Gibbons: Um... the 7-11. You take a penny from the tray, right?Joanna: From the cripple children?Peter Gibbons: No, that's the jar. I'm talking about the tray. You know the pennies that are for everybody?Joanna: Oh, for everybody. Okay.Peter Gibbons: Well those are whole pennies, right? I'm just talking about fractions of a penny here, but we do it from a much bigger tray and we do it a couple a million times.

That does describe the psychology of whats going on at DVC because its fiddling with the margins its not ‘theft’

 

[CSLucas]

Perhaps this is the subject for a different thread, but with Points-gate 2.0 looking like there will be a reversal of charts again because they figured out that they're not on solid legal ground, it will be interesting to see if the Riviera resale restrictions eventually meet a similar fate (i.e., resale owners being able to exchange into and out of Riviera).

I'd be pretty happy if they figure out that the resale restrictions are on equally shaky legal ground and that results in being able to use my resale points at Riviera and future resorts.

I definitely think the RIV restrictions are on shaky ground (why should a VGF (or any other) resale owner now have to compete at 7 months with a bunch of new people without getting any sort of compensation/benefit? That isn't "best interests" of a large class of ownership and the POS doesn't provide for multiple ownership classes), but I doubt any meaningful challenge would ever be brought. I think the only people who are currently hurt by it are sellers (and honestly most of them probably are making a profit on their sale right now and so why would they bother since it isn't hurting resale prices yet), and owners won't be hurt until 2042 when tons of resorts expire and that 7 month competition starts getting tough. By that time the restrictions will have been in place so long (and so much membership will have turned over) that I would imagine people just consider them "normal" and won't even think twice about them.

 

[Grumpy by Birth]

In other news, DVC will soon be replacing backpacks as a premium for new owners with this...

 

[tjkraz]

I definitely think the RIV restrictions are on shaky ground (why should a VGF (or any other) resale owner now have to compete at 7 months with a bunch of new people without getting any sort of compensation/benefit?

The idea that buyers at new resorts can also book the older ones is a concept that has been with DVC for the duration. While the restrictions are a self-serving move on DVC's part, they actually should help boost Home resort availability...albeit to a very modest degree.

To use the resorts from your example, a resale buyer of RIV can no longer book VGF. Purely from an availability standpoint, that helps the VGF owner as there's less competition for rooms. And a resale buyer at VGF cannot book Riviera.

The threat of reduced resale values is real, but it actually does more to help than harm 7 month availability.

 

[Grumpy by Birth]

The idea that buyers at new resorts can also book the older ones is a concept that has been with DVC for the duration. While the restrictions are a self-serving move on DVC's part, they actually should help boost Home resort availability...albeit to a very modest degree.

To use the resorts from your example, a resale buyer of RIV can no longer book VGF. Purely from an availability standpoint, that helps the VGF owner as there's less competition for rooms. And a resale buyer at VGF cannot book Riviera.

The threat of reduced resale values is real, but it actually does more to help than harm 7 month availability.

The difference is that, previously, owners of the old resorts could also trade into the new ones.

Things might balance out more once there are a healthy number of resale owners at Riviera. But, presumably, most Riviera owners will be direct for the foreseeable future. That means they can trade into the original 14, reducing availability at those resorts, until those contracts are resold.

But a large percentage of original 14 owners (resale) cannot trade into Riviera. So, theoretically, you have Riviera owners trading and getting the last available rooms at the original 14. Even though there's availability at Riviera because those owners traded to other resorts, resale owners who might have gotten blocked from booking original 14 can't book those available rooms at Riviera. So more breakage for DVC.

 

[tjkraz]

But a large percentage of original 14 owners (resale) cannot trade into Riviera. So, theoretically, you have Riviera owners trading and getting the last available rooms at the original 14. Even though there's availability at Riviera because those owners traded to other resorts, resale owners who might have gotten blocked from booking original 14 can't book those available rooms at Riviera. So more breakage for DVC.

Only resale owners who purchased after January 2019 are ineligible to book Riviera.

Personally, I think you're vastly overstating the impact on the system. Tens of millions of points will be usable at Riviera: those purchased resale before the January '19 deadline and every point ever purchased direct. If you're suggesting that the imbalance will be significant enough for Riviera rooms to routinely go unbooked by all eligible members, such that it increases DVC's breakage revenue, we'll have to agree to disagree on that point.

Yes, there are scenarios where a Riviera (direct) buyer could book VGF at 7 months while a VGF (resale) owner could not book Riviera at 7 mos. However, it's also true that the VGF owner could book their Home resort at 11 months. So the Riviera owner isn't taking a room away from the VGF owner.

Every resort that DVC builds shifts demand to subtle degrees. Are the restrictions entirely "fair" to all owners? No, not really. But I would propose that Riviera is attractive enough to routinely fill with a combination of owners and non-owners who have the rights to book.