How are profits from direct sales used by DVC/DVD?

[stewart715]

There are a few things that have been happening over the course of the last year: DVC announced major restrictions on new resorts, they increased direct pricing astronomically, they made a change the allowed them to modify the use year of contracts they receive via various methods, and they are taking a record number of contracts via ROFR.

Undoubtedly, DVC/DVD is turning a much larger profit these days. And with the above, I expect direct sales to continue to climb. My question is, is this a good thing for the member body? How are these profits used? Can we expect more/better refurbishments? Can this potentially plateau an increase of dues? Or is this just purely profit that will never positively affect us in any way? I am just wondering, is there a positive side to all of this?

 

[erionm]

Can we expect more/better refurbishments?

They have already announced (at the 2015 condo meeting) an accelerated refurbishment schedule. A DVC resort will now have a hard goods refurbishment every 14 years with a soft good refurbishment between each hard goods (7 years). The previous refurbishment schedule had the hard goods at a 24 year interval. According to DVC, this schedule change had a less than 1% impact on dues.

Article from DVC News: https://dvcnews.com/index.php/dvc-p...hments-highlight-an-uneventful-annual-meeting

Can this potentially plateau an increase of dues?

Dues are supposed to be tied directly to the cost of operating the resort. It's unlikely that they would use profits to reduce that cost.

 

[stewart715]

The previous refurbishment schedule had the hard goods at a 24 year interval. According to DVC, this schedule change had a less than 1% impact on dues.

Thanks. So there is something positive to come from an increase of direct sales, even if it means at a detriment to the resale market/product.

 

[_auroraborealis_]

They aren't using direct sales profit on resort maintenance.

 

[CarolMN]

They aren't using direct sales profit on resort maintenance.

Couldn't agree more! Profits belong to Disney shareholders!

 

[_auroraborealis_]

Couldn't agree more! Profits belong to Disney shareholders!

There are things they can use them on:

• reinvestment (new resort builds)
• Membership Magic events (cannot be paid from dues, so, yeah, money comes from profits)

But a major, huge point of DVC from Disney's perspective is the guaranteed income stream for maintenance via the dues. Doesn't matter if the rooms get booked or not, or by how many, the dues come in and the lawn gets mowed.

 

[FFMickey]

The profits go straight back to the mouse! Some of it goes towards the Moonlight Magic events, but most go to the company's earnings. Dues for capital improvement go towards the refurbishment.

 

[miTnosnhoJ]

If you want to feel better about the ever increasing prices, buy some Disney stock. Better yet, buy a mutual fund that indexes the S&P 500. You will get some Disney that way, and it is less risky.

 

[KAT4DISNEY]

Thanks. So there is something positive to come from an increase of direct sales, even if it means at a detriment to the resale market/product.

No.

DVD does not take that money and refurb resorts. They charge us to refurb the resorts. They just decided they need to do it more often and since we have to pay what they determine for mfs it wasn't too tough of a decision. Plus they can charge more for these rooms they rent for cash so even more money for them!

 

[DebbieB]

Points sales pay for the construction of the resort. I assume they do some time of financing to pay construction costs and then pay back as points are sold. They could be using profits to pay future resort construction. Right now they have Riviera and Reflections under construction.

 

[disneynutz]

Direct DVC sales profits goes into Disney's pocket. The more profit they make the bigger the bonus for the executives involved, that's why she made additional restrictions and raised prices.

Bill

 

[stewart715]

Well, boo

 

[Maistre Gracey]

Sorry to say, but in my experience the DVC schedule of refurbishments are always way over due.
IMO the DVC rooms constantly looked in need of repair

 

[CarolMN]

There are things they can use them on:

• reinvestment (new resort builds)
• Membership Magic events (cannot be paid from dues, so, yeah, money comes from profits)

But a major, huge point of DVC from Disney's perspective is the guaranteed income stream for maintenance via the dues. Doesn't matter if the rooms get booked or not, or by how many, the dues come in and the lawn gets mowed.

That's true, but all those are actions taken by management on behalf of shareholders to increase shareholder value. As others have said (and I know that you know this), none of the profits from DVC sales are used to reduce annual dues or pay for refurbishments.

 

[The Jackal]

I’m sure the proceeds also pay al the people working selling DVC too. All the kiosks and people selling at SSR. I’m sure Disney does make a nice profit though

 

[drusba]

I am sure some of that profit is being used as bonuses for the DVC personnel that come up with new ideas for how to make more profits by screwing resale purchasers.

 

[zavandor]

Currently all profits are used to pay an army of lawyers who are preparing to crush anyone who might attempt to sue them.

 

[Woody412]

Bonuses. Oh, and Bonuses.