New Definition of Rental Activity?

[Robbie Cottam]

To be clear my point was/ is none of this is acceptable .

To me and other older DVC members we
bought to have vacations with our families and friends. It was never meant as a business venture. That is the spirit of DVC.

I bought to use the point, but I found a way to have the point pay for themselves….

That’s staid I still used a good number of my points every year,

And now that the are long paid for, I will be using them a lot more

 

[Robbie Cottam]

To be clear my point was/ is none of this is acceptable .

To me and other older DVC members we
bought to have vacations with our families and friends. It was never meant as a business venture. That is the spirit of DVC.

I bought to use the point, but I found a way to have the point pay for themselves….

That’s staid I still used a good number of my points every year,

And now that the are long paid for, I will be using them a lot more

Disney could sell 2 different tiers of DVC points.

Tier 1 similar to direct points now, with no restrictions and full perks
Tier 2, similar to resale now, with a cheaper price, but with restrictions and no perks.

Wouldn't this allow them to profit from the resale market, whereas currently they have none?

not sure it is worth the hassle
They already sell resale points at a huge premium

 

[drusba]

All Disney has to do to stop walking is to limit the number of changes to a single reservation to say like 5. They could do that tomorrow and for the most part eliminate walking.

DVC has two ways it could greatly reduce or end walking by professional renters, as we know it, that would not require adopting any new rules that limit the number of reservations one can make, or when they could be made, or limit the number of times and ways a reservation could be modified.

A. Adopt Old Rule

Before June 2008, the reservation rule was that you could book a room 11/7 months out from date of departure from your room, e.g., today Feb 4, 2024, you could book a reservation at your home resort for a Jan 1 arrival and Jan 4 departure.

Some did a form of day-to-day walking back then but its chances of success today for any multi-day reservation for hard to get rooms at hard to get times is highly questionable. Example, someone who wanted a Jan 3 start date and Jan 8 departure, would, today, reserve the night of Jan 3 and have a departure date of Jan 4. If lucky enough to get that, tomorrow, Feb 5, the member would reserve the night of Jan 4 with a Jan 5 departure date, but in trying to get that Jan 4 night, the member would be competing with everyone else trying for a Jan 5 departure night, and thus would have to get lucky every day to get all the nights desired using that method. It would thus be a system that would greatly discourage professional renters from trying to get hard to get rooms for hard to get times of the year.

Of course, everyone using the normal 11-months out from date of departure rule for any multi-day reservation would also have a high risk of not getting a hard to get room at a hard to get time of year, and thus the only problem being reduced is one of professional renters walking.

B. Require Copy of Rental Agreement

DVC could likely eliminate or greatly reduce professional renters from walking under the current system in a way that would not impact other members having the ability to do some rentals because of the need to give up an existing reservation or to gain some income to offset some dues. The POS's require, in the Condominium Rules and Regulations, that all rental agreements be in writing and contain terms informing the lessee that the lessee has to follow the Condominium Rules and Regulations relating to occupancy and use of the room and resort. DVC could create a rule requiring, for any rental, that a copy of the written agreement be provided to DVC so it can confirm the contract has the necessary terms, and if a member does not provide the written contract, and DVC discovers that failure, it could cancel the reservation.

A professional renter would want to avoid that rule because following it would give DVC the information it needs to find a violation of the commercial purpose clause due to repeated rentals by the professional renter. But if the professional renter is actually going to try to withhold the contract from DVC, he would be legally required to tell the lessee of the obligation to submit a copy of the agreement to DVC and that his withholding a copy from DVC would create a risk that DVC could cancel the reservation if it learned of the reservation. If he failed to inform the lessee of the issue, and DVC learned it was a rental and cancelled the reservation, the lessee could potentially sue the professional renter for fraud and possibly get punitive damages. Moreover, if the professional renter actually tells the lessee about the rule and that he is not going to follow it, I doubt the professional renter would find a lot of lessees who would be willing to do the reservation by agreeing to withhold required information from DVC.

 

[Sandisw]

Disney could sell 2 different tiers of DVC points.

Tier 1 similar to direct points now, with no restrictions and full perks
Tier 2, similar to resale now, with a cheaper price, but with restrictions and no perks.

Wouldn't this allow them to profit from the resale market, whereas currently they have none?

Why would they want to alert new buyers to the resale market when most have no idea?

And restrictions are based on the DVc resort agreement for that resort and it already exists

I see no benefit for them to do anything to compete against themselves.

 

[tx911]

Why would they want to alert new buyers to the resale market when most have no idea?

And restrictions are based on the DVc resort agreement for that resort and it already exists

I see no benefit for them to do anything to compete against themselves.

I'm clearly not a business man, lol

 

[Rex1993]

My take is that if DVC wanted to wind down new construction while interest rates are high and inflation has sent building cost soaring, they could pad profits with resales. Direct sales involve huge capital outlays. You have to either build new or refurbish buildings to sell new direct points. To get into the resale game, all DVC has to do is set up a simple database and front end.

If I were running it, I’d have a page within your dashboard where you could elect to sell your contract. There would be a fixed price and once you click the button to sell you are committed for a certain amount of time. DVC would also have a corresponding page where owners could browse the listings and buy. It would only be available to existing owners. DVC takes 20% on the deal but provides unrestricted points to the buyer but no membership extras.

 

[AstroBlasters]

My take is that if DVC wanted to wind down new construction while interest rates are high and inflation has sent building cost soaring, they could pad profits with resales. Direct sales involve huge capital outlays. You have to either build new or refurbish buildings to sell new direct points. To get into the resale game, all DVC has to do is set up a simple database and front end.

If I were running it, I’d have a page within your dashboard where you could elect to sell your contract. There would be a fixed price and once you click the button to sell you are committed for a certain amount of time. DVC would also have a corresponding page where owners could browse the listings and buy. It would only be available to existing owners. DVC takes 20% on the deal but provides unrestricted points to the buyer but no membership extras.

I think they’d rather just ROFR a depressed resale market and add it to a multi-use trust. Much simpler.

 

[CWTC]

I think they’d rather just ROFR a depressed resale market and add it to a multi-use trust. Much simpler.

Agreed. And that is something potentially concerning. Other threads have outlined that to add a unit to the trust, the trust would have to own all the shares/parts of the unit. If they buy enough via ROFR it’s possible they could have full units. Depending on how they structure it, that could affect availability for “non trust” owners.

 

[Rex1993]

Buying at ROFR has two disadvantages. First is that is contingent upon intermediaries bringing the product back to DVC and those intermediaries take a cut. Second, it’s capital intensive. They have to buy out the contracts with DVD money. DVC/DVD can operate the secondary market with virtually no capital expenditures because all they are doing is essentially being a broker.

As for the talk about unit ownership and the trust structure, I have seen lots of definitive statements and conclusions without any citations of statutory authority. As much as I’d like those conclusions to be true, until I see the legal authority clearly spelled out, I remain skeptical.

 

[Grumpy by Birth]

Why couldn’t Disney get into the resale/rental business themselves?

I would think the name alone would get them the lion’s share of the business, and they could also undercut the other players in price.

And very soon Disney is the only one left standing.

Because they’d be competing against themselves via the cash side and I don’t see WDPR wanting them to do it.

That makes sense. I guess I was thinking more of the resale market than the rental market.

That would be similar then…competing against themselves to sell.

In a sense, Disney is already in the resale/rental market... not literally, but the cash side is essentially Disney "renting" their points (just not at a discounted price).

Similarly, DVC buys back points via ROFR and "resells" them. However, their version of resale is that they re-sell them as direct points at full price. Why would they want to offer a discounted price for points they are "reselling" when they already get full price for those?

 

[tx911]

In a sense, Disney is already in the resale/rental market... not literally, but the cash side is essentially Disney "renting" their points (just not at a discounted price).

Similarly, DVC buys back points via ROFR and "resells" them. However, their version of resale is that they re-sell them as direct points at full price. Why would they want to offer a discounted price for points they are "reselling" when they already get full price for those?

I understand all these points.

But I also know that there are 3rd parties making money buying and selling resale contracts, and renting points, so I'm not sure why Disney would not want a piece of that pie, if not the whole pie. I personally would feel more comfortable selling my contracts back to Disney and/or buying someone else's contract from Disney rather than involving a 3rd party.

 

[Sandisw]

I understand all these points.

But I also know that there are 3rd parties making money buying and selling resale contracts, and renting points, so I'm not sure why Disney would not want a piece of that pie, if not the whole pie. I personally would feel more comfortable selling my contracts back to Disney and/or buying someone else's contract from Disney rather than involving a 3rd party.

Those companies are not developers who are building and selling brand new timeshare contracts at new properties.

So, they have nothing to compete against. DVD does. And, DVD has spent the last 14 years changes things up to make direct have things that resale does not so that people buy their product.

Every buyer they have that would choose a less expensive contract, even for loss of perks, is a direct sale that was potentially lost.

 

[tx911]

Those companies are not developers who are building and selling brand new timeshare contracts at new properties.

So, they have nothing to compete against. DVD does. And, DVD has spent the last 14 years changes things up to make direct have things that resale does not so that people buy their product.

Every buyer they have that would choose a less expensive contract, even for loss of perks, is a direct sale that was potentially lost.

But wouldn't those be points that someone paid full price for initially? Therefore Disney would be selling points that they had already been paid for once. As long as the selling price was higher than the buy-back price, wouldn't they still be making money?

 

[Robbie Cottam]

In a sense, Disney is already in the resale/rental market... not literally, but the cash side is essentially Disney "renting" their points (just not at a discounted price).

Similarly, DVC buys back points via ROFR and "resells" them. However, their version of resale is that they re-sell them as direct points at full price. Why would they want to offer a discounted price for points they are "reselling" when they already get full price for those?

When you buy points from Disney you get introduced to the sandbox….. rule number one in the sandbox is Disney makes the rules….

Disney selling resale defeats the purpose of Disney selling new points …. It’s not like a new car v. An old car…. It s points from Disney at X or Y…

Disney has a “resale“ market if you will already they charge X plus>

it is easier for Disney to just restrict the secondary market….

as far as Disney renting points….. go back and read rule number 1…..

Disney doesn’t want their own product competing against them….

if you do a true comparison DVC rental to DVC from Disney you only have to look 2/3s of the way up the page to see the DVC rental store undercutting Disney buy 65 percent ….

now maybe the mouse cracks down on others, and open their own exchange as a benefit to members….
but to have people flipping contracts, and using the points to compete….. the mouse said no more

 

[Sandisw]

But wouldn't those be points that someone paid full price for initially? Therefore Disney would be selling points that they had already been paid for once. As long as the selling price was higher than the buy-back price, wouldn't they still be making money?

But the points sold originally has nothing to do with the new points they are trying to sell.

Of course, they’d make a very small amount of money on the resale, but every contract they sold for an owner is one less sale they potentilly give up.

Now, if DVd stops building properties? Then it could be a good thing….but, you have someone who wants to get into DVC, goes to a sales center and now a guide is offering new resorts at a premium but also a less expensive option at a sold out resort?

Also, DVD would not be able to control the price that the contract is offered….that would be up to the seller…so, who knows what price the seller would want…and no way is DVD going to want to buy a contract from a seller in hopes to sell.

To me, it’s like cutting off your nose to spite your face. And to bring it back to thread topic, rentals would not work either, as I said because of the completion for their own points…and WDW hotels.

 

[Robbie Cottam]

But wouldn't those be points that someone paid full price for initially? Therefore Disney would be selling points that they had already been paid for once. As long as the selling price was higher than the buy-back price, wouldn't they still be making money?

If you buy resale points from dvd they come with benifit …. The cost to buy used point from Disney is actually more than new points….

i have done it on smaller contracts to fill in my change in need…. But there are very few people that are going to buy 300 BLT at 275/point …. When I did it the cost was no where near that high….

it doesnt make a ton of sense for Disney either….

yes they get to sell the same product again, but DvD is in the business of selling new properties…

 

[tx911]

Color me schooled

 

[Sandisw]

In a sense, Disney is already in the resale/rental market... not literally, but the cash side is essentially Disney "renting" their points (just not at a discounted price).

Similarly, DVC buys back points via ROFR and "resells" them. However, their version of resale is that they re-sell them as direct points at full price. Why would they want to offer a discounted price for points they are "reselling" when they already get full price for those?

Just to clarify, points bought from DVD are not resale points, even if DVd takes back via foreclosure or RoFR.

They go back into the pool of points to sell, original contract voided, and are no different than what they were before anyone ever bought them.

DVD does continue to sell points at all their resorts, but that action doesn’t turn them into resale as any points you buy direct are developer points.

 

[Mirabell Rose]

Why couldn’t Disney get into the resale/rental business themselves?

I would think the name alone would get them the lion’s share of the business, and they could also undercut the other players in price.

And very soon Disney is the only one left standing.

Disney is in the resale business. When they buy ROFR and offer you closed resorts at $250 a point you are buying resale. As to changing language so they only could resale, I do not believe, since you purchase a real estate interest like other real estate condo interests, that they could prohibit sales outside of them. That would create an illegal monopoly. What they can do is eliminate perks, which they have done, and put restrictions on the right to use that interest at other resorts/exchange program, which they have done with some of the newer resorts.

 

[Mirabell Rose]

Just to clarify, points bought from DVD are not resale points, even if DVd takes back via foreclosure or RoFR.

They go back into the pool of points to sell, original contract voided, and are no different than what they were before anyone ever bought them.

DVD does continue to sell points at all their resorts, but that action doesn’t turn them into resale as any points you buy direct are developer points.

What’s your definition of ‘resale’? They are points that are resold. You don’t buy them from Disney as you buy ‘new’ points that no one has owned before.