DVC Trust Based Ownership Article

[AstroBlasters]

https://dvcfan.com/2023/12/14/rumor...ploring-a-new-trust-based-ownership-interest/

 

[lorie13]

Now the survey that came out a couple of weeks ago makes sense, as one of the questions was about the ability to book all resorts at the 11 month window.

 

[CraigInPA]

This would considerably change the whole "buy where you want to stay" direct sale model.

It could also become a source of significant complaints, based upon what resorts are in a single trust. Using current original 14 resorts as an example, if you put only SSR and VGF into one trust, and then sold points in the trust with the sales people saying "You're buying into a trust that includes SSR and VGF, so you can book either at 11 months", you're going to have zero availability at VGF at 10 months and 30 days because everyone will book VGF the first day of availability. The gazillion points at SSR, compared to the small number of points at VGF, create a significant imbalance between where the supply is and where the demand is.

 

[AstroBlasters]

This would considerably change the whole "buy where you want to stay" direct sale model.

It could also become a source of significant complaints, based upon what resorts are in a single trust. Using current original 14 resorts as an example, if you put only SSR and VGF into one trust, and then sold points in the trust with the sales people saying "You're buying into a trust that includes SSR and VGF, so you can book either at 11 months", you're going to have zero availability at VGF at 10 months and 30 days because everyone will book VGF the first day of availability. The gazillion points at SSR, compared to the small number of points at VGF, create a significant imbalance between where the supply is and where the demand is.

I wonder if they would start to throw ROFR’d contracts into the Trust to increase the inventory at the original resorts…. Or allow people with resale points to “exchange” into the Trust for a fee like I’ve read other timeshares do…

 

[PrincessKL]

Are they allowed to turn already sold-out resorts to this? Or is it just for the active sale resorts like the article suggested? I don’t want this to affect my home resort. But now I see this is a way DVC can keep increasing the price per point in this economy.

Also how does the resale restriction being applied to this scenario? If the trust includes resort both with resale restriction and without, what happens to people buying resale contracts of this? How does the differences in the number of years left on the deed of each resort come into play? I have so many questions.

 

[NorCalFanatic]

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[gisele2]

This would considerably change the whole "buy where you want to stay" direct sale model.

It could also become a source of significant complaints, based upon what resorts are in a single trust. Using current original 14 resorts as an example, if you put only SSR and VGF into one trust, and then sold points in the trust with the sales people saying "You're buying into a trust that includes SSR and VGF, so you can book either at 11 months", you're going to have zero availability at VGF at 10 months and 30 days because everyone will book VGF the first day of availability. The gazillion points at SSR, compared to the small number of points at VGF, create a significant imbalance between where the supply is and where the demand is.

So owner of bigger resort are in a sense protected ?

 

[BeachClub2014]

There's about a gazillion posts discussing the topic here: https://www.disboards.com/threads/dvc-club-level-and-home-resort-survey.3935147/

Interesting stuff.

 

[DanCali]

This would considerably change the whole "buy where you want to stay" direct sale model.

It could also become a source of significant complaints, based upon what resorts are in a single trust. Using current original 14 resorts as an example, if you put only SSR and VGF into one trust, and then sold points in the trust with the sales people saying "You're buying into a trust that includes SSR and VGF, so you can book either at 11 months", you're going to have zero availability at VGF at 10 months and 30 days because everyone will book VGF the first day of availability. The gazillion points at SSR, compared to the small number of points at VGF, create a significant imbalance between where the supply is and where the demand is.

This should not happen. Owners of the Trust can book only what is held by the trust at 11 months out. If the trust holds 2% of VGF points, the most that trust point owners should be able to book is 2% of the VGF inventory as a "home resort" (I put 2% which is about 1/50, for reasons I that should hopefully be apparent below).

For simplicity, I will ignore that the cost to book a stay varies by date. Where I think the "gray areas" are (and where I have experienced adverse consequences in the Marriott ecosystem as a "legacy weeks" owner competing against points "owners") is how that inventory gets allocated. For example - what is "2% of the inventory"? Does the trust get 2% of the available inventory for each calendar day, and if it fills up that's it? Or could trust owners in theory all reserve Easter week (1 week out of 52) and nothing else for the rest of the year, and traditional points owners get shut out of that week completely?

With Marriott, where legacy deeded weeks owners book a full week and can usually check in only on Friday, Saturday or Sunday, I have noticed that since the points system was launched it 2010, it has become increasingly difficult to get Saturday checkins, which happen to be the most preferred. And, as a multiple week owner, I can book some weeks at 14+ months out, and yet still get the "no Saturday available" answer. There is zero transparency on how the trust gets inventory (i) when points owners try to book stays, or (ii) when legacy weeks owners elect to use points via the points exchange system.

 

[AstroBlasters]

How would this impact current owners? Or only for new owners? Outside of VDH and AUL (we own both) absolutely zero interest in any of the other resorts.

I would think they could put undeclared inventory into a trust, ROFR’d points, and allow for some sort of swap program where people put their current contract in exchange for trust points….

I could see this being popular for West Coasters who want 11m at VGC, VDH, and AUL….(they could put remaining 30% of AUL inventory, a large amount of VDH, and then ROFR VGC as needed…)

I think current home resort owners wouldn’t be impacted as much, but resale owners at less in demand resorts might have a harder time finding 7m availability if more people can get 11m priority.

I wouldn’t exchange my VGC into it… but my Aulani resale… dues might go down because it’s spread them out over more non-beach resorts…. access to VDH…. maybe the EPCOT 2042s after expiration…I’d be tempted…. it’s almost another way to “point wash”….

I would think they would ROFR a lot more AUL subsidized to get lower dues across the Trust system…)

 

[hhisc16]

I wonder if some of the CFW points will be put into the Palmetto Trust?
Then they could add some AUL,VDH and RIV into over time.

 

[Genie+]

There is zero transparency on how the trust gets inventory (i) when points owners try to book stays, or (ii) when legacy weeks owners elect to use points via the points exchange system.

This was my first concern after hearing about the Trust. How can it interact with deeded DVC in a fair way?

We’ll need more details to see how it may impact us as individual owners of different resorts. Transparency is key and there’s already breakage and exchanges clouding the picture. I hope they clearly explain how inventory is accessed especially if bank/borrow and resorts with a mix of deeded/trust are involved.

 

[reddog21]

I don't hate the idea but I would need info before making an opinion.

 

[Sandisw]

Are they allowed to turn already sold-out resorts to this? Or is it just for the active sale resorts like the article suggested? I don’t want this to affect my home resort. But now I see this is a way DVC can keep increasing the price per point in this economy.

Also how does the resale restriction being applied to this scenario? If the trust includes resort both with resale restriction and without, what happens to people buying resale contracts of this? How does the differences in the number of years left on the deed of each resort come into play? I have so many questions.

They have to transfer their ownership of units into the trust. Since the sold out resorts are owned by others, those units can not be part of the trust property.

In terms of resale restrictions, it’s based on how the resort agreements were written as well as how the trust POS is written and there already seems to be some indication that they may put some level of them on transfers of memberships from owner to owner.

 

[bbeagle]

This was my first concern after hearing about the Trust. How can it interact with deeded DVC in a fair way?

When a new resort open, every other DVC resort gets access to it at 7 months. Disney can simply keep this model for all the new resorts.

Wilderness Cabins, then Polynesian Towers get a 11 month booking window at each other's resorts.

On resale, you get the same resorts in the 'Trust' at 11 months, but no other resorts.

Then they can try to get owners of Riviera and Disneyland Villas to agree to move to the new Trust system. It would be a win-win for owners of Riveria and Disneyland Villas to move to this system as their resale now has more value, and their contracts have more value at 11 months.

Maybe they can pull Aulani in.

At this point, new points would open up only when a new resort opens. I think this would create a system where when a new resort comes out, there is pent up demand, and it sells out in a month or so. Then it would be hard to get points, only when Disney buys back points through ROFR could new points be made available until a new resort is out. The 'dream' Disney has is that it would be like annual passes. They go on sale, sell out, then people wait and wait and get put on a waiting list, and the next one sells out, etc. They wouldn't have an issue with selling multiple resorts at the same time, or some not selling out.

Eventually what it would mean after 2042, Disney would convert the expiring resorts into the new Trust system. Someone with Saratoga, for example, would have very few resorts they can book at. Since everyone in the Trust has access at 11 months to all the Trust resorts, Saratoga would be left over with what's available at 7 months, which would be less.

And resale is less and less of a good thing. Disney would like that.

 

[tom1944]

When I read the article my first thought was, they would move Riviera, Aulani and Disneyland Hotel unsold deeds into the trust and then add new resorts like POLY2 and the Cabins.

In 2042 they could add the expiring resorts.

I figured they would leave all the unrestricted resorts as they currently exist.

 

[MyDogTink]

So, if they ROFR sold out resorts (ex- VGF) and put those in the trust, the trust owner may get 11m booking bumping deeded SSR owner who can book VGF at 7m?

I’m trying to understand the booking priority and how it would affect current deeded owners.

 

[MyDogTink]

And is the point population static or fluid? If the trust puts 100 VGF points in today, can they replace them with SSR points later on? Even for trust participants, the balance of resort points could change this impacting your booking ability.

 

[AstroBlasters]

So, if they ROFR sold out resorts (ex- VGF) and put those in the trust, the trust owner may get 11m booking bumping deeded SSR owner who can book VGF at 7m?

I’m trying to understand the booking priority and how it would affect current deeded owners.

Everything is just speculation l, but in theory you would have the priority with points in the trust…. but the trust would only have limited inventory based on the amount of points owned.

The people on TUGGS seem to not be a huge fan….

 

[Genie+]

In terms of resale restrictions, it’s based on how the resort agreements were written as well as how the trust POS is written and there already seems to be some indication that they may put some level of them on transfers of memberships from owner to owner.

I’m starting to expect this. Really not much reason for them not to do this. The impact on sales would be dwarfed by the benefit to DVD. They just lean on the intriguing aspects of direct Trust Ownership. Whatever resale restrictions they apply end up in the fine print, of little concern to direct buyers using their contract, and DVD opens an avenue to profit during transfer of ownership.

At this point won’t even feel like a curveball. We’re yet to know the real curveball here but I see them winding up