DVC restricting booking only to home resort?

[theguda]

I've seen this suggested a few times. I haven't seen a copy of the agreement between the DVC and owners but I suspect it states points can be used at any DVC resort. I imagine it would be nearly impossible for Disney to remove that language from the contract (if, in fact, the contract is worded that way).

I would think a more viable option for Disney would be to put that restriction on contracts that were sold after a particular date. Is there anyone out there that can speak to the contractual language of these agreements?

 

[bman388]

I've seen this suggested a few times. I haven't seen a copy of the agreement between the DVC and owners but I suspect it states points can be used at any DVC resort. I imagine it would be nearly impossible for Disney to remove that language from the contract (if, in fact, the contract is worded that way).

I would think a more viable option for Disney would be to put that restriction on contracts that were sold after a particular date. Is there anyone out there that can speak to the contractual language of these agreements?

IF Disney did do that, I'm sure it would be for future sales, not past, just looking at past history. Can you imagine the uproar if they did that to current contracts!!

 

[RobDoc]

There is language in the POS explaining that under certain (and very specific) circumstances, owners would only be able to use their Home Resort and would not have access to other DVC resorts using points.

As Dean has noted numerous times over the years, the POS otherwise pretty clearly states that as long as a resort is a component of the Disney Vacation Club, points from any resort may be used at any other resort by making a reservation at 7 months (based on availability). There is no suggestion that this would apply only to certain members. Any of the non-DVC components can (and have) been open to modification/deletion based on the type of ownership (resale/direct).

The circumstances referenced above would be things like if a resort were to be damaged to the point where it could not be used, owners at that resort could not use their points at other resorts either. In the event that owners at a resort decide to replace DVCMC as the operating entity, they would no longer be part of DVC and could only use their points at their Home Resort (and any other negotiated alliances) - but they would no longer be part of the Disney Vacation Club.

Some have used this portion of the POS to insist that DVC could restrict resale purchasers to only their Home Resort but I agree with Dean, that based on the POS document, this is not something open to change.

 

[dmoore22]

I've seen this suggested a few times. I haven't seen a copy of the agreement between the DVC and owners but I suspect it states points can be used at any DVC resort. I imagine it would be nearly impossible for Disney to remove that language from the contract (if, in fact, the contract is worded that way).

I would think a more viable option for Disney would be to put that restriction on contracts that were sold after a particular date. Is there anyone out there that can speak to the contractual language of these agreements?

Reservation point charts, booking windows and cancellation guidelines are available on dvcmember.com, in the current Vacation Planner Reservation Tools guidebook and through Member Services. Reservation point requirements are determined by DVD in its sole discretion. DVD reserves the right to revise or adjust any or all Disney Travel Program reservation point charts at any time and without notice.

That being said, this rumor has already been addressed in previous threads. The home resort/non-home resort status has to do with the booking window. You may book your home resort 11 months before the check-in date or a non-home resort 7 months before the check-in date. Most DVC owners will make a reservation at their home resort to be assured of accommodations then, at the 7 month window, attempt to make a reservation at a non-home resort. Depending upon the resort, the time of year, and/or park event at that time, it can be very difficult to get a reservation at a non-home resort since the accommodations may have already obligated 4 months prior. By the very nature of the process it is skewed towards DVC owners staying at their home resort. Add to that a significant number of DVC owners bought where they plan to stay anyway. This is just another silly rumor.

 

[RobDoc]

...You may book your home resort 11 months before the check-in date or a non-home resort 7 months before the check-in date. ... By the very nature of the process it is skewed towards DVC owners staying at their home resort. Add to that a significant number of DVC owners bought where they plan to stay anyway. This is just another silly rumor.

The POS guarantees owners a one month reservation priority at their Home Resort. That is currently set at 4 months (11 months vs 7 months) but DVC (without any input from members) could change that to 10 months for non-Home reservations - 1 month for non-Home reservations - or any number in between.
I know that DVC, at one time, had considered changing the priority to 10 months but eventually dropped the plan.

 

[dmoore22]

The POS guarantees owners a one month reservation priority at their Home Resort. That is currently set at 4 months (11 months vs 7 months) but DVC (without any input from members) could change that to 10 months for non-Home reservations - 1 month for non-Home reservations - or any number in between.
I know that DVC, at one time, had considered changing the priority to 10 months but eventually dropped the plan.

The infamous "its sole discretion."

 

[Dean]

I've seen this suggested a few times. I haven't seen a copy of the agreement between the DVC and owners but I suspect it states points can be used at any DVC resort. I imagine it would be nearly impossible for Disney to remove that language from the contract (if, in fact, the contract is worded that way).

I would think a more viable option for Disney would be to put that restriction on contracts that were sold after a particular date. Is there anyone out there that can speak to the contractual language of these agreements?

It is my opinion that DVC cannot restrict booking on the basis of qualified vs non qualified status. The way such legal issues work in this arena as I understand them is that future changes must be allowed in some way under the current guidelines and that the absence of an rule preventing something is not needed. That's true whether it be the FL statutes or the POS. When I was on the Midwives council for the State of FL where we wrote the rules to the brand new law and we were looking at writing rules or making changes, the first thing the lawyer assigned to that council would address was whether there was language in the statute that would allow such a change. If not, we did not have the authority to make the change or create the rule. Basically if the contract doesn't have wording that allows certain changes (it can be rather obtuse though), they can't. Further, there is wording that suggests that a change negatively affects a large % of owners, changes can't be made without a member vote. That doesn't mean they couldn't try to be the 600# gorilla but I believe if they did in this area they would both guarantee and lose the lawsuit and they do not want to open that can of worms. Legal action is often threatened or suggested here and this is one of VERY few situations where I think it would happen and Disney would lose, most people are just blowing smoke when they suggest it (valet, reallocations, even the original restrictions).

Legally they could go back retroactively and restrict all resale contracts but this is not how things are generally done for such changes, they usually grandfather to a certain point as DVD did. However, they could not restrict contractually allowed issues outside what the POS allows or in such an uneven way, only peripheral issues like perks.

 

[ELMC]

Legally they could go back retroactively and restrict all resale contracts but this is not how things are generally done for such changes, they usually grandfather to a certain point as DVD did. However, they could not restrict contractually allowed issues outside what the POS allows or in such an uneven way, only peripheral issues like perks.

In your opinion have they lost the ability to do this because they have set a precedent by grandfathering resale contracts for the first round of restrictions? Or do you think that no precedent has been set?

 

[Dean]

In your opinion have they lost the ability to do this because they have set a precedent by grandfathering resale contracts for the first round of restrictions? Or do you think that no precedent has been set?

I do not think they've lost the ability to put restrictions on current DVC owners legally based on this but I do think they've made it more difficult. And I do realize that the legalities and what happens once you get involved in a court case can be different, esp when you've established an almost 20 year history. My personal expectation is there will be other restrictions and they will backdate to the current date of restrictions and resale owners before that will not be touched.

 

[theguda]

When Disney announced the restrictions in 2011, the announcement was made before the restrictions went into effect. Essentially they gave everyone a warning that the restrictions would be enforced on contracts that were sold after a date in the future (on or after 3/21/2011)

I seriously doubt any future restrictions would backdate to contracts purchased on or after 3/21/2011. It would seem far more likely that Disney would make future restrictions begin with contracts that were sold resale with a date after the announcement was made.

If they try to backdate restrictions I assume there would be some sort of legal battle. But maybe more importantly, it would be a public relations nightmare.

 

[lodge]

With more villas built, limitations seem to occur with simply more people in the system.

 

[Dean]

When Disney announced the restrictions in 2011, the announcement was made before the restrictions went into effect. Essentially they gave everyone a warning that the restrictions would be enforced on contracts that were sold after a date in the future (on or after 3/21/2011)

I seriously doubt any future restrictions would backdate to contracts purchased on or after 3/21/2011. It would seem far more likely that Disney would make future restrictions begin with contracts that were sold resale with a date after the announcement was made.

If they try to backdate restrictions I assume there would be some sort of legal battle. But maybe more importantly, it would be a public relations nightmare.

I don't see it as a public relations nightmare and I'm willing to bet that any restrictions going forward will be backdated. They will not end up with multiple versions and classes. Want to be a dinner for 2 at a Signature or even V&A?

 

[Nabas]

Any future restriction has to make financial sense for Disney.

Resales continue to represent only of a small fraction of the business. For example, April was one of the worst ROFR months in years yet the ROFR total added up to about 15,000 points. The month before, it was about 6,000 points. By comparison, Disney sold over 181,000 points in direct sales in April alone.

In recent years, Disney repeatedly has shown it would rather invest heavily in building DVCs than squabbling in the relatively tiny resale market, where margins are considerably smaller than direct sales. (Cost of building DVC is under $30/point.) Does ROFR occur? Of course but it represents only a fraction of the business.

Ultimately, what does Disney gain financially by adding restrictions?

 

[nd43]

Not that anyone at Disney is calling me for my input, but I hope Disney would put more energy into on how to ADD benefits to buying direct vs. spending time on how to remove benefits from others. The later, to me, is not good for people who buy direct or resale because people who buy direct eventually will most likely sell their interest. It is a lose lose for everyone in the system IMO.

However, adding some perks for buying direct would support their business interest while preserving a reasonable resale environment which does help the overall system.

- larger park ticket discounts
- priority dining reservations
- free parking
- priority purchase rights to new resorts
- free room upgrades if available
- free special tours
- free access to concierge services in the main hotel

They could decide if you need to purchase a min. number of points direct to qualify (I.e. 160 or something) to handle people that buy both direct and resale.

There are countless "perks" they could explore to continue to promote direct why preserving a very reasonable resale environment IMO.

 

[Dean]

Any future restriction has to make financial sense for Disney.

Resales continue to represent only of a small fraction of the business. For example, April was one of the worst ROFR months in years yet the ROFR total added up to about 15,000 points. The month before, it was about 6,000 points. By comparison, Disney sold over 181,000 points in direct sales in April alone.

In recent years, Disney repeatedly has shown it would rather invest heavily in building DVCs than squabbling in the relatively tiny resale market, where margins are considerably smaller than direct sales. (Cost of building DVC is under $30/point.) Does ROFR occur? Of course but it represents only a fraction of the business.

Ultimately, what does Disney gain financially by adding restrictions?

The other piece of the puzzle is the volume of points resold over time, such as those months. That is lost potential business to DVD. That some will say they wouldn't have bought had it not been for the resale has little to no bearing on that fact.

Not that anyone at Disney is calling me for my input, but I hope Disney would put more energy into on how to ADD benefits to buying direct vs. spending time on how to remove benefits from others. The later, to me, is not good for people who buy direct or resale because people who buy direct eventually will most likely sell their interest. It is a lose lose for everyone in the system IMO.

However, adding some perks for buying direct would support their business interest while preserving a reasonable resale environment which does help the overall system.

- larger park ticket discounts
- priority dining reservations
- free parking
- priority purchase rights to new resorts
- free room upgrades if available
- free special tours
- free access to concierge services in the main hotel

They could decide if you need to purchase a min. number of points direct to qualify (I.e. 160 or something) to handle people that buy both direct and resale.

There are countless "perks" they could explore to continue to promote direct why preserving a very reasonable resale environment IMO.

DVD does not care if you can ever sell after you buy. Their intent is for every sale to be one they make. That they once got money for that contract in question is ancient history and means nothing.

Perks are basically no cost items that DVD/DVC negotiates and passes on to the members. The items you list all have real costs associated to them with a couple of possible exceptions. IMO there is no way for DVD to move the needle on resales by adding perks, only by a combination of additions here and there, plus reduction of options/perks for resale buyers and by a cost difference such as pay to play charges for resale buyers will they every make a dent. Basically if we're not seeing long heated threads along with threat's of lawsuits, selling and bad publicity will DVD have made enough of a dent to change the landscape. If a lot of people aren't ticked off, they won't have done their job in this area.

IMO there are many things they could do but generally members aren't going to like them. The idea they'll benevolently sweeten the deal and hurt no one is far more than unrealistic. We've gone through thread's where we've listed possibilities before.

 

[nd43]

DVD does not care if you can ever sell after you buy. Their intent is for every sale to be one they make. That they once got money for that contract in question is ancient history and means nothing.

That is just flat wrong. Lets say there was no resale market for DVC, so after you purchased, it was worth $0.00 and you could not sell it. Do you think this would have ZERO impact on sales? A healthy resale market actually does benefit direct sales as long as it does not tip the balance too far away from direct sales. Do you think no one ever asks the question, "boy, what if I have to sell" while buying DVC? If you crater the resale market, it WILL affect the direct sale market. Will direct sales go to zero? Of course not, but they would decrease and I suspect Disney knows what a "healthy" resale market looks like to help optimize direct sales. If they truly did not care, they would never have placed ROFR in their base agreements. Of course they care. It is a crazy statement to say they don't.

The idea they'll benevolently sweeten the deal and hurt no one is far more than unrealistic.

Boy, did everyone take their condescending pill this evening or what? The concept of adding value to your product is neither an act of pure benevolence or temporary insanity, it is sound business done by virtually every successful company in the world (including Disney). When you want to start jacking your price to $200 per point, you need to start asking how you can add more value to your target customer or you might hit some problems. To say I will get there by simply cutting off resale benefits would appear to be a very poor business strategy (and most likely might make direct sales even harder if they cratered resale prices).

 

[ELMC]

DVD does not care if you can ever sell after you buy. Their intent is for every sale to be one they make. That they once got money for that contract in question is ancient history and means nothing.

That is just flat wrong. Lets say there was no resale market for DVC, so after you purchased, it was worth $0.00 and you could not sell it. Do you think this would have ZERO impact on sales? A healthy resale market actually does benefit direct sales as long as it does not tip the balance too far away from direct sales. Do you think no one ever asks the question, "boy, what if I have to sell" while buying DVC? If you crater the resale market, it WILL affect the direct sale market. Will direct sales go to zero? Of course not, but they would decrease and I suspect Disney knows what a "healthy" resale market looks like to help optimize direct sales. If they truly did not care, they would never have placed ROFR in their base agreements. Of course they care. It is a crazy statement to say they don't.

Sorry, but I believe it is you that is wrong in this case, not Dean. I wouldn't say that anything has "zero" impact on sales, but I do think the absence of a resale market would have very little, or even a positive impact on direct sales.

DVC is unique in the timeshare industry in that they have a resale market at all. Most timeshare system contracts have little to no resale value as soon as you sign the contract. Yet Marriott, Wyndham, Hilton, etc. have no problem selling their timeshares year after year. The value of any timeshare is in its use, and this is what the salespeople will tell you. Timeshares are an emotional purchase and the vast majority of purchasers are uneducated with regards to what it is they are actually getting. If they are not taking the time to truly learn about what they are buying, it is safe to say that they are not thinking about exit strategies either.

DVD does not need the resale market to sell their timeshares. They have magic and pixie dust and incentives and trained salespeople to do that. Almost every person who buys resale is a lost sale for DVD.

To answer your question, I think that the percentage of people who think about exit strategies when buying DVC is infinitesimally small. Think about it this way. The last three on property DVC resorts that were (are) currently marketed are BLT, SSR and AKV. Right now each one of them is going for roughly 50% of their direct purchase price on the resale market. By your argument, people are paying $145 per point for AKV and saying to themselves, "well, if I have to sell next year, at least I'll get 40% of my money back". Does that make sense to you? It seems like a very poor rationale in my book, and I don't think that people who buy direct are thinking like this.

 

[nd43]

Sorry, but I believe it is you that is wrong in this case, not Dean. I wouldn't say that anything has "zero" impact on sales, but I do think the absence of a resale market would have very little, or even a positive impact on direct sales.

DVC is unique in the timeshare industry in that they have a resale market at all. Most timeshare system contracts have little to no resale value as soon as you sign the contract. Yet Marriott, Wyndham, Hilton, etc. have no problem selling their timeshares year after year. The value of any timeshare is in its use, and this is what the salespeople will tell you. Timeshares are an emotional purchase and the vast majority of purchasers are uneducated with regards to what it is they are actually getting. If they are not taking the time to truly learn about what they are buying, it is safe to say that they are not thinking about exit strategies either.

DVD does not need the resale market to sell their timeshares. They have magic and pixie dust and incentives and trained salespeople to do that. Almost every person who buys resale is a lost sale for DVD.

To answer your question, I think that the percentage of people who think about exit strategies when buying DVC is infinitesimally small. Think about it this way. The last three on property DVC resorts that were (are) currently marketed are BLT, SSR and AKV. Right now each one of them is going for roughly 50% of their direct purchase price on the resale market. By your argument, people are paying $145 per point for AKV and saying to themselves, "well, if I have to sell next year, at least I'll get 40% of my money back". Does that make sense to you? It seems like a very poor rationale in my book, and I don't think that people who buy direct are thinking like this.

I appreciate your approach and points (I really do). However, it runs on the premise that everyone else is just a naive emotion driven buyer. While such buyers absolutely exist, they cannot sustain DVC by themselves.

And yes, people saying my "downside risk" is a 50% loss does enter into the equation for many buyers. Measuring downside risk why spending $30 to $40k is not a unique, superior skill.

People on this board seem very quick to sell the average DVC buyer short.

If Disney does not care about resales because all of their customers just buy on emotion anyway, why bother having a ROFR clause? Why would your guide have a prepared response to resale questions? Why would they have changed resale benefits at all (it obviously had zero affect on their emotion driven business)? Do they just want to spite the few, superior thinkers on this board knowing it has no real affect on their business? Sounds like a lot of effort for something that has no meaning to them.

DVC actually refers people to Fidelity that need to sell yet they have no need for a resale market? Why would they bother?

 

[ELMC]

I appreciate your approach and points (I really do). However, it runs on the premise that everyone else is just a naive emotion driven buyer. While such buyers absolutely exist, they cannot sustain DVC by themselves.

See, this is where you and I disagree. I believe that this type of buyer is the super majority of DVC owners.

And yes, people saying my "downside risk" is a 50% loss does enter into the equation for many buyers. Measuring downside risk why spending $30 to $40k is not a unique, superior skill.

People on this board seem very quick to sell the average DVC buyer short.

Again, I think you and I disagree on who the "average" DVC buyer is. If you look at the numbers, less than 2% of DVC owners are on this forum. Simply being on here potentially puts you in the top 2-5% of DVC buyers with regards to education about the product.

I believe that the average DVC buyer is someone who is in full on vacation mode, walks up to the DVC kiosk and before they know it they are in the red van, touring the model rooms, signing a contract and eating their free ice cream. That's how the timeshare business works, and it works well. Rare is the buyer like myself who sits through the entire presentation and tells their salesperson that they're going to take a month or two to think it over and research their options.

If Disney does not care about resales because all of their customers just buy on emotion anyway, why bother having a ROFR clause?

Great questions. First, there is a difference between embracing an active resale market and wanting control over your product. Disney is one of the most control oriented companies on the planet. It stands to reason that they would want complete say over what happens to a contract, even after they sell it to you.

Why would your guide have a prepared response to resale questions?

Salespeople have prepared responses to every possible objection known to man. It's part of sales. Their response is to dismiss the resale market entirely and to focus on the value of the product...making you think you'd be crazy to ever even consider selling it.

Why would they have changed resale benefits at all (it obviously had zero affect on their emotion driven business)? Do they just want to spite the few, superior thinkers on this board knowing it has no real affect on their business? Sounds like a lot of effort for something that has no meaning to them.

I think you're making my argument for me. My opinion is that Disney enacted the restrictions to weaken the value of resales and to increase the perceived value of direct purchases. I never said that Disney doesn't acknowledge the existence of the resale market, I said that they don't benefit from a healthy, active resale market.

DVC actually refers people to Fidelity that need to sell yet they have no need for a resale market? Why would they bother?

I'll flip this question back to you...if resale points were such a hot commodity, why wouldn't Disney just buy them back from the owner instead of referring them to Fidelity? At that point Disney can either refer the seller to Fidelity in the hopes of getting the contract in the hands of someone who will reliably pay the maintenance fees, or engage in a drawn out legal proceeding to foreclose on the contract for lack of payment of said fees. Either way they win, it's just a matter of how quickly, how easily, and how much. In my opinion, the referral is simply a courtesy. But make no mistake, DVD's main objective is the sale of direct points...period.

 

[cush1]

I don't see any reason why they would want to restrict us like that.