Home resort booking window - a right or a privilege?

[MountainMouse]

I think they could, but it would still create consequences because those resale buyers would book home resort and not be switching.

That's a good angle to consider, so I guess you're thinking there would be no rooms for the top tier owners to switch into if the resale buyers are booking their rooms at their home resort. I can't say this wouldn't happen, but I would think the resale buyers would still switch when their time opens up which would open up the rooms. Effectively, I think a tier system would just be a way for top tier owners to jump lower tier members for hard to get 7 month reservations. I don't think there would be much of an effect on rooms where there is good availability now at 7 months, the pressure on those comes from new less desirable resorts being built. Luckily, resorts for sale now are pretty desirable locations so that should help with availability.

 

[dsnydaddy]

Like Bill said, bottom line is that Disney wants to make money. Right now, they demand $170+ per point for their product. And that is with a robust resale environment. The reason for this is that they have a product with a great deal of perceived value. Monkeying around with that value too much and you run the risk of de-valuing the product. People see the near worthless value of most timeshares after they are sold. Disney has built a timeshare that in many cases has appreciated in value. Nearly unheard of.

Picture this scenario: Disney changes booking rules to seriously restrict resale contracts. Resale owners find that they are nearly completely limited to home resorts. As someone mentioned before, when you limit owners to home resorts, there's little trading to be done for the direct owners and now direct owners are limited in their selections too. (essentially if one is to trade into a resort that means that someone else is trading out) Now, you have many owners upset over the limited use of their timeshare and they start selling off. The price crashes as Disney cannot buy every contract that comes available. Potential Direct buyers see an even bigger incentive to not buy Direct. Currently DVC can be easily had on the resale market for about $100 pp or less. Making about a $70 pp or more discount for buying resale. But once the resale prices crash and people are start seeing $100 to $120 per point discount or perhaps even more, Disney would have no other recourse but to drop their own price to compete.

Could they change the rules? Perhaps with a great deal of doing.
Would they change the rules? I seriously doubt it.

 

[_auroraborealis_]

I think the "resale limited to home resorts" would also have its greatest impacts at a few of the high-demand 2042 resorts, namely BWV and BCV. People already buy those in resale for home resort and don't often switch if they do.

 

[michelleiada]

Keep in mind that Disney doesn't want to destroy the resale market. If the resale market dies it will hurt direct sales. The fact that the resale market is strong is in and of itself a selling point for DVC. I would not want to spend a large sum of money on something that would have no value if I had to sell.

 

[Dean]

Keep in mind that Disney doesn't want to destroy the resale market. If the resale market dies it will hurt direct sales. The fact that the resale market is strong is in and of itself a selling point for DVC. I would not want to spend a large sum of money on something that would have no value if I had to sell.

Most retail buyers aren't going to consider this portion and of those that do, it won't make much difference in them buying. What it might do is siphon off some of those that might buy retail and that figure out the reality to buy resale instead.

 

[Minniesgal]

Ultimately anything they do to hurt resale buyers will hurt direct sales. I think they are acutely aware of this which is why they have only been tinkering around the edges of changing terms for resale buyers.

 

[Dean]

Ultimately anything they do to hurt resale buyers will hurt direct sales. I think they are acutely aware of this which is why they have only been tinkering around the edges of changing terms for resale buyers.

Why is that? Most new retail buyers aren't educated about resales and of those that are, they generally have a reason to buy retail over resale even if it's a poor one. Most don't go in planning to sell later and NO ONE should do so thus ultimately the resale value wouldn't matter much. If it caused one who likely shouldn't buy anyway, like those that can't truly afford it, to think about what they're doing because they'd be throwing the money away in a sense, all the better IMO.

Certainly if there is a larger spread between resale and retail, some that are educated on resale would jump to that option that might buy retail at the current spread. The value of owning a timeshare, any timeshare, is the value of it's usage including rental and exchanging. Since DVC is a poor exchange venue, the usage and rental dominate for DVC. Frankly, I'm not inclined to believe most of those even here that say they wouldn't have bought DVC if they thought the resale prices would decrease due to these issues unless they went in planning to sell later which I feel is a poor choice anyway. Realistically if DVC becomes a timeshare that can be had for pennies, like some, then there are other major issues, rather than the retail vs resale issue, as the main cause. Certainly there would be a FEW that wouldn't buy if there were a major shift in this area and there would be some that would buy retail because of such changes. DVC's goal is the sweet spot and they get to determine that, not us. Certainly DVC wants to continue to be seen as professional but most of the things they can do would still put them in that light to reasonable people.

 

[Wakey]

We keep discussing this. I have looked at it, not in every aspect, but looked at it. Buying the interest in the property gives you membership of the club, it is not in the deed, but it gives you membership of the club as per the club rules. When you are a member of a members club, the club must act in the interest of it's members. It cannot discriminate or act against anyone unless it is in the interest of the members as a whole. Direct and resale is not differentiated- they are all equal members of the DVC club. Not only that but the entity employed by the members to run the member's club (DVCMC) is paid for by the dues which are paid equally by resale members. Also we have Florida Statute 721. If Disney tried to change the rules of the members club to the detriment of its legitimate members in resale, via the company in charge of running the club, paid by member's dues, it would run into a veritable storm if legal issues, and I imagine class action lawsuits.
What it can do is an entirely separate legal entity (I know entwined but it is a separate corporation that builds and sells the timeshare) DVD can give away marketing freebies to sell more timeshare such as lounges, Moonlight Magic and (via agreements with other companies in the group) and discounts. This does not form any part of membership, or the Club, which is why they can give it to whoever they choose. It is only in this respect that there are two classes of buyers- those who can participate in DVD marketing until such time DVD decide to pull the plug as it is entirely ex gratia, and those who cannot. There is no other difference at all between members- for good reason, it is not legally possible to be different in other respects.
Similarly if DVC built a new resort and tried to restrict it to Direct buyers only from other resorts, I think they would find it equally impossible. The club would have to agree to this- to the detriment of a large proportion of its members. Many members would be paying dues at their home resort to fund facilities now been enjoyed by the new resort buyer, with no hope of reciprocation. The courts would not allow this and it would also seem to contradict statute.
Finally the resale price would tank, thus dissuading many people from buying direct, the ones who do at least some due dil will know DVC holds its value much better than 99.9% of other timeshares and that will feature heavily in the purchase decision.

 

[Wakey]

I think important words are 'as a whole', Florida Statute 721:
(6) Prior to offering the multisite timeshare plan, the developer shall create the reservation system and shall establish rules and regulations for its operation. In establishing these rules and regulations, the developer shall take into account the location and anticipated relative use demand of each component site that he or she intends to offer as a part of the plan and shall use his or her best efforts, in good faith and based upon all reasonably available evidence under the circumstances, to further the best interests of the purchasers of the plan as a whole with respect to their opportunity to use and enjoy the accommodations and facilities of the plan. The rules and regulations shall also provide for periodic adjustment or amendment of the reservation system by the managing entity from time to time in order to respond to actual purchaser use patterns and changes in purchaser use demand for the accommodations and facilities existing at that time within the plan. The person authorized to make additions and substitutions during the term of the multisite timeshare plan shall also comply with the requirements of this subsection in ascertaining the desirability of the proposed addition, substitution, adjustment, or amendment and the impact of same upon the demand for and availability of existing plan accommodations and facilities.

 

[NewEngland47]

It's very interesting to hear people's thoughts on this. Thanks to all who reply!

I still think there is enough wiggle room in the agreement that may allow DVC to tier the home booking window - example - home booking direct owners at 11 months, resale owners at 10 months and then open at 7 months as now - which certainly wouldn't crush the resale market but would add much more value to buying direct. If you look at the membership home resort section - for Vero it's under section IV 4.2b it states "... DVCMC reserves the right to extend or decrease the home resort booking priority period...provided...in no event shall the home resort priority period be for a period of less than one (1) month... in addition DVCMC reserves the right to establish a continental or other preference periods..."

In addition Disney also reserved the right to amend the agreement in their sole discretion somewhere else.

So this may only apply to future international resorts, but it was when reading this that my initial question arose. Frankly I don't see why Disney wouldn't add preference for the home resort booking window to direct owners if the resale market becomes so much less that it begins to really hurt direct sales. As long as there is still a home resort privilege for resale owners too - say 10 months instead of 11 for direct owners - I don't think it would damage the value at all for direct owners or resale owners - it would make direct slightly more appealing and resale slightly less - but wouldn't destroy the value. But that's just my take of course!

 

[Wakey]

It's very interesting to hear people's thoughts on this. Thanks to all who reply!

I still think there is enough wiggle room in the agreement that may allow DVC to tier the home booking window - example - home booking direct owners at 11 months, resale owners at 10 months and then open at 7 months as now - which certainly wouldn't crush the resale market but would add much more value to buying direct. If you look at the membership home resort section - for Vero it's under section IV 4.2b it states "... DVCMC reserves the right to extend or decrease the home resort booking priority period...provided...in no event shall the home resort priority period be for a period of less than one (1) month... in addition DVCMC reserves the right to establish a continental or other preference periods..."

In addition Disney also reserved the right to amend the agreement in their sole discretion somewhere else.

So this may only apply to future international resorts, but it was when reading this that my initial question arose. Frankly I don't see why Disney wouldn't add preference for the home resort booking window to direct owners if the resale market becomes so much less that it begins to really hurt direct sales. As long as there is still a home resort privilege for resale owners too - say 10 months instead of 7 - I don't think it would damage the value at all for direct owners or resale owners - it would make direct slightly more appealing and resale slightly less - but wouldn't destroy the value. But that's just my take of course!

Yes they have to have a provision in the agreement to amend it- as per the Statute- to balance it, in fact they have to have it. This does not give them the right to discriminate against all the resale buyers by appropriating a different booking window- only amend it for everyone as they must treat all members the same. Agree it is all shady and not properly defined anywhere really though so maybe, one day I will be proven wrong and they will try it on. Ultimately the deed gives you part ownership of a unit, and the unit gives you membership of the club by (in Disney's own words I think they use) 'Appurtenance'. Once you are in the Club, I cannot see how they can discriminate against you.

 

[Wakey]

Here we go, from DVC's own pre contractual documentation:

1. INFORMATION ABOUT THE RIGHTS ACQUIRED
DVC is a specific interest multi-site time-share plan. To become a Member you must purchase a real estate interest (“Ownership Interest”) at a DVC Resort. Each of the DVC Resorts is a timeshare condominium created under applicable law. Purchasers may choose to buy an Ownership Interest at any of the DVC Resorts, subject to availability of inventory.

When you purchase an Ownership Interest, you are buying an undivided interest in a particular Unit (along with the Unit’s undivided interest in the Common Areas/Elements) within the DVC Resort. This Ownership Interest will be conveyed to you by means of a deed. The term “undivided” in this context means that, although you are buying an interest in a particular Unit, you are not buying a particular piece or portion of the Unit; rather, you are buying a percentage interest in the Unit as a whole, making you a co-owner of that Unit along with DVD and other purchasers. Your relationship with the other co-owners of the Unit in which you own an Ownership Interest is governed by a Master Cotenancy Agreement, which provides that DVD will act as the representative of all of the co-owners of each Unit at meetings of the condominium or owners association for each DVC Resort. A “Unit” corresponds to all or a portion of a building in a DVC Resort and a “Vacation Home” refers to an accommodation within a Unit.

Membership in the Club is an “appurtenance” to each Ownership Interest in accordance with the governing documents for each DVC Resort. Therefore, when you purchase your Ownership Interest in a DVC Resort, you automatically become a Member of the Club. Your membership in the Club follows your Ownership Interest and cannot be separated from it. For example, if your Ownership Interest is sold or otherwise transferred, the new Owner of your Ownership Interest will become the Member. Thus, there is no way to become a Member without owning an Ownership Interest in a DVC Resort.

 

[Dean]

I think important words are 'as a whole', Florida Statute 721:
(6) Prior to offering the multisite timeshare plan, the developer shall create the reservation system and shall establish rules and regulations for its operation. In establishing these rules and regulations, the developer shall take into account the location and anticipated relative use demand of each component site that he or she intends to offer as a part of the plan and shall use his or her best efforts, in good faith and based upon all reasonably available evidence under the circumstances, to further the best interests of the purchasers of the plan as a whole with respect to their opportunity to use and enjoy the accommodations and facilities of the plan. The rules and regulations shall also provide for periodic adjustment or amendment of the reservation system by the managing entity from time to time in order to respond to actual purchaser use patterns and changes in purchaser use demand for the accommodations and facilities existing at that time within the plan. The person authorized to make additions and substitutions during the term of the multisite timeshare plan shall also comply with the requirements of this subsection in ascertaining the desirability of the proposed addition, substitution, adjustment, or amendment and the impact of same upon the demand for and availability of existing plan accommodations and facilities.

Yes they have to have a provision in the agreement to amend it- as per the Statute- to balance it, in fact they have to have it. This does not give them the right to discriminate against all the resale buyers by appropriating a different booking window- only amend it for everyone as they must treat all members the same. Agree it is all shady and not properly defined anywhere really though so maybe, one day I will be proven wrong and they will try it on. Ultimately the deed gives you part ownership of a unit, and the unit gives you membership of the club by (in Disney's own words I think they use) 'Appurtenance'. Once you are in the Club, I cannot see how they can discriminate against you.

The POS gives them unilateral control of the reservation system without input plus other timeshares that are set up with similar documents have made changes along these lines. As for value, as long as the underlying product makes sense to own, I think it's unreasonable to expect prices to tank but they might adjust slightly. I doubt this will make much difference for those buying new but might for those adding on or buying back in. IMO thinking they can't is a false sense of security.

 

[jarestel]

I'm inclined to agree with Wakey's point that a member is a member, regardless of how the real estate interest was acquired. The likelihood of creating differing membership rules for various memberships under the current system would be highly unlikely as the rules of the "club" are quite well defined. Sales incentives on the other hand are certainly another thing. As the spread between resale and direct prices approaches (and exceeds in some cases) $100 per point, it's a given that DVD needs to offer ticket discounts and other bonuses in order to convince direct purchasers they are acquiring value not available through the resale market. And it makes perfect sense to do this.

 

[Matty B13]

So, what would they do with all the people who have multiple contracts both direct and resale??? You would have people trying to make reservations at 11 month and 10 month windows??? Talk about a pain in the ***. We like DVC because it seems to be a lot easier to understand how to use your points, than the other timeshares with all the confusing seasons and thousands of points needed for stays.

I also think DVC would take a PR hit, because I'm not sure if I would recommend joining the "Club" if they keep changing the rules on the owners. I have had several family members and friends interested in buying in, but if they keep changing the rules and benefits would you recommend buying points?

 

[Minniesgal]

Why is that? Most new retail buyers aren't educated about resales and of those that are, they generally have a reason to buy retail over resale even if it's a poor one. Most don't go in planning to sell later and NO ONE should do so thus ultimately the resale value wouldn't matter much. If it caused one who likely shouldn't buy anyway, like those that can't truly afford it, to think about what they're doing because they'd be throwing the money away in a sense, all the better IMO.

Certainly if there is a larger spread between resale and retail, some that are educated on resale would jump to that option that might buy retail at the current spread. The value of owning a timeshare, any timeshare, is the value of it's usage including rental and exchanging. Since DVC is a poor exchange venue, the usage and rental dominate for DVC. Frankly, I'm not inclined to believe most of those even here that say they wouldn't have bought DVC if they thought the resale prices would decrease due to these issues unless they went in planning to sell later which I feel is a poor choice anyway. Realistically if DVC becomes a timeshare that can be had for pennies, like some, then there are other major issues, rather than the retail vs resale issue, as the main cause. Certainly there would be a FEW that wouldn't buy if there were a major shift in this area and there would be some that would buy retail because of such changes. DVC's goal is the sweet spot and they get to determine that, not us. Certainly DVC wants to continue to be seen as professional but most of the things they can do would still put them in that light to reasonable people.

When we bought one of the selling points was if our plans changed in 10 years time we could sell our points resale. We didn't buy thinking it fits our needs for 40 years of holidays we bought thinking it fits our needs for now and if later that changes we can sell. If selling wasn't an option we wouldn't have bought. Selling also is a good disaster plan if our life hits skid row later I kinda assumed all buyers would need an out clause.

 

[Dean]

When we bought one of the selling points was if our plans changed in 10 years time we could sell our points resale. We didn't buy thinking it fits our needs for 40 years of holidays we bought thinking it fits our needs for now and if later that changes we can sell. If selling wasn't an option we wouldn't have bought. Selling also is a good disaster plan if our life hits skid row later I kinda assumed all buyers would need an out clause.

I don't disagree it's good to think about it but they would have used a different plan to sell had the circumstances been different or they might have used the same plan even if not as true as it has been. That might be true for you but for most who would say that, it really isn't and they would have bought anyway plus one should know that long term it might change. Hopefully people buy because owning makes sense, not to sell later.

 

[Wakey]

The POS gives them unilateral control of the reservation system without input plus other timeshares that are set up with similar documents have made changes along these lines. As for value, as long as the underlying product makes sense to own, I think it's unreasonable to expect prices to tank but they might adjust slightly. I doubt this will make much difference for those buying new but might for those adding on or buying back in. IMO thinking they can't is a false sense of security.

I don't think other timeshares based on a points based club system (and not ownership of say a fixed week in a particular resort) stopped anyone using their points to book other resorts did they? I know some that work on the basis you have your single resort, then have to join an exchange system prevented resale joining an exchange system, or others had a tiered membership, but I think they are different. However maybe you can point to one specifically where it was the same and they retrospectively changed it? In the case of DVC it's a multi site vacation club, and the club is already established. This set up even has its own legislation. I'm struggling to see how they can just change all the club rules. They induced people to buy based on the rules and even set it all out in pre contract disclosure. If they suddenly changed it retrospectively they'd have real issues, not least for the suppressed contract prices. If they tried to do it on new properties, it would seriously disadvantage the owners of the old properties, create all sorts of issues and imbalances in the system. People complain it is hard to book Beach Club now- imagine if all the resale buyers could not trade out, but all Riviera buyers could trade in, and that continues with every new resort thereafter. Those direct as well as resale buyers at all pre change resorts would be up in arms.
As stated, it's all a bit woolley on the contract side of things and not satisfactory at all in my opinion, but even if that is the case, there are checks and balances in the legal system and duties owed to all members equally from the condo association and Club, even if they are controlled by DVD.

 

[Dean]

I don't think other timeshares based on a points based club system (and not ownership of say a fixed week in a particular resort) stopped anyone using their points to book other resorts did they? I know some that work on the basis you have your single resort, then have to join an exchange system prevented resale joining an exchange system, or others had a tiered membership, but I think they are different. However maybe you can point to one specifically where it was the same and they retrospectively changed it? In the case of DVC it's a multi site vacation club, and the club is already established. This set up even has its own legislation. I'm struggling to see how they can just change all the club rules. They induced people to buy based on the rules and even set it all out in pre contract disclosure. If they suddenly changed it retrospectively they'd have real issues, not least for the suppressed contract prices. If they tried to do it on new properties, it would seriously disadvantage the owners of the old properties, create all sorts of issues and imbalances in the system. People complain it is hard to book Beach Club now- imagine if all the resale buyers could not trade out, but all Riviera buyers could trade in, and that continues with every new resort thereafter. Those direct as well as resale buyers at all pre change resorts would be up in arms.
As stated, it's all a bit woolley on the contract side of things and not satisfactory at all in my opinion, but even if that is the case, there are checks and balances in the legal system and duties owed to all members equally from the condo association and Club, even if they are controlled by DVD.

Bluegreen set up a VIP system that gave priority to those in different levels, it is based in FL and has a similar POS structure to DVC. Marriott gave priority a 1 month priority to those booking multiple weeks concurrently or consecutively, again after the fact and based in FL. The Marriott trust points system started out with a VIP system but they added levels later further giving benefits to the highest levels. I don't think anyone is saying they'll stop members from booking other member resorts, the question is whether they can give preference to one over the other and while I don't think they will, I think it's possible they could. For any new resort, including Riviera, they could make it a new system and restrict access though I doubt they will. I don't give much credence to the members will complain, members will be upset or threatened lawsuit angles; I think they're essentially always over stated unless there would be a legal basis for such a complaint. The problem with any challenges in this area is that the POS gives them total control without input.

 

[Wakey]

Bluegreen set up a VIP system that gave priority to those in different levels, it is based in FL and has a similar POS structure to DVC. Marriott gave priority a 1 month priority to those booking multiple weeks concurrently or consecutively, again after the fact and based in FL. The Marriott trust points system started out with a VIP system but they added levels later further giving benefits to the highest levels. I don't think anyone is saying they'll stop members from booking other member resorts, the question is whether they can give preference to one over the other and while I don't think they will, I think it's possible they could. For any new resort, including Riviera, they could make it a new system and restrict access though I doubt they will. I don't give much credence to the members will complain, members will be upset or threatened lawsuit angles; I think they're essentially always over stated unless there would be a legal basis for such a complaint. The problem with any challenges in this area is that the POS gives them total control without input.

Just looked at Bluegreen and they say VIP status doesn't form part of the contract and can be taken away at any time. I still think it's different. The contract with DVC gives membership to the club, DVD do not say it isn't part of the contract and can be taken away. Agree it's all woolly, but I still can't see that DVC could differentiate between owners. Anyway let's wait and see. If in 5 years they haven't done it, I'll say it's because they cannot. I've placed a date in the diary to reopen this thread.