Relationship Between Disney and DVC

[Entropy]

Frequently on these boards I see references to The Disney Corporation's stock and profit.


Quote:
Originally Posted by keishashadow
honestly, don't know if DVC is a sep entity or under the Disney stock umbrella?



I was told by my Guide when buying that the DVC is a non-profit organization. These seem inconsistent to me so I dug out my Public Offering Statement (POS, Thick little green and white book)

Here's how I understand it * :

Our membership in the DVC isn't a legal ownership in any real estate. The DVC membership is a casual membership in an organization of condominium owners. The DVC membership concept is an umbrella that brings all of the numerous other legal organizations together. The condominium associations use the concept of DVC membership because it's easy to understand. They call themselves collectively the DVC Resorts.

Each resort is a separate non-profit corporation incorporated as a condominium owner's association. You own an interst in one condominium only. Your ability to go to other resorts is a result of a mutual agreement between the resorts and managed by the DVC...

The DVCMC is the Disney Vacation Club Management Corp. that is hired by the multiple condominium associations to manage the home resort reservation systems.

The Buena Vista Trading Corp (BVTC) is the company hired by the condominium associations to process the buying and selling of the condominium interests and to manage the reservation system between the various condominium associations.

Disney Vacation Development (DVD) is the developer of the resorts and is affliliates of Disney but the prospectus calls them a separate and distinct entity as well as the DVCMC.

As far as I can tell, the Walt Disney Company does not have any interest in or control of any of the condominium associations other than an ownership in the units similar to what we own. The POS does explain that TWDC has nothing to do with the "DVC" and if anything goes wrong, they are not at all responsible.

* Note: I'm not a lawyer. I barely understand this stuff so don't rely on the above. In fact, that's pretty much excellent advice for everything posted on the internet.
__________________

 

[Horace Horsecollar]

Each resort is a separate non-profit corporation incorporated as a condominium owner's association. You own an interst in one condominium only. Your ability to go to other resorts is a result of a mutual agreement between the resorts and managed by the DVC...

"Not-for-profit" only refers to the condominium associations themselves, not to Disney Vacation Development (DVD) or Disney Vacation Club Management (DVCMC).

The DVCMC is the Disney Vacation Club Management Corp. that is hired by the multiple condominium associations to manage the home resort reservation systems.

... and to manage the resorts themselves. Our annual fees not only cover the actual expenses of running our home resort, but they also include a management fee (profit) for DVCMC. That profit is ultimately income for The Walt Disney Company.

Disney Vacation Development (DVD) is the developer of the resorts and is affliliates of Disney but the prospectus calls them a separate and distinct entity as well as the DVCMC.

Although DVD is a separate legal entity, DVD is ultimately fully owned by and controlled by The Walt Disney Company. DVD does not have any other shareholders or ownership partners.

As far as I can tell, the Walt Disney Company does not have any interest in or control of any of the condominium associations other than an ownership in the units similar to what we own. The POS does explain that TWDC has nothing to do with the "DVC" and if anything goes wrong, they are not at all responsible.

Although the surplus funds held by the condominium associations do not flow to The Walt Disney Company as profit, the condominium boards are fully controlled by Disney. As DVC members, we don't vote for condominium board members. They are all chosen by Disney. (For my other timeshares, I have to vote every year for condominium association board members.) Actually, we DVC members are entitled to kick out Disney as the management company, but I can't see this ever happening.

 

[cdmickey]

If's, and's, or but's; glad someone put it together. And it seems they, whoever they may be, did it right.

 

[Granny]

I was told by my Guide when buying that the DVC is a non-profit organization.

Oh those guides!

 

[ralphd]

Chairman - Jay Rasulo
.President, Operations - Al Weiss
....President, Disneyland Resort - Ed Grier
....President, Walt Disney World Resort - Meg Crofton
....Chairman and CEO, Euro Disney SCA (Disneyland Resort Paris) - Karl Holz
....Executive Vice President and Group Managing Director, Hong Kong Disneyland Resort - Bill Ernest
....President, Disney Cruise Line - Tom McAlpin
.Human Resources, Diversity & Inclusion - Philippe Gas
.International Development and Walt Disney Attractions Japan - Nick Franklin
.Walt Disney Imagineering, Walt Disney Creative Entertainment, Adventures by Disney, Disney Regional Entertainment - Don Goodman
.Public Affairs - Leslie Goodman
.Finance and IT & Research - Jim Hunt
.Global Marketing - Michael Mendenhall

DVC falls under Al Weiss on the org chart and is headquartered in Orlando.

 

[ralphd]

Oh those guides!

DVC itself may be a non-profit organization. Think the money goes thru DVD.

 

[DisDaydreamer]

Ok... According to the POS the DVC is a share developed by the DVD, sold by the BVTC, managed by the DVMC, including at this time OKW, VBR, HHI, BWV, SSR, BCV, & AKL. The only thing that matters to me is that the one thing that links all these together is the M O U S E... LOL

 

[bom_noite]

I was told by my Guide when buying that the DVC is a non-profit organization.

Walt Disney originally purchased the 43 sq miles that makes up WDW for a little over 5 Million.

If you decided you wanted to purchase enough points to stay in a BWV 1-Bedroom for a year (Preferred View), it would cost approximately $1.7 million to buy the points you need (assuming you bought from DVC). In addition it would cost about $80K in yearly dues.

I am thinking somewhere along the way someone made a profit!

 

[Plutofan]

Walt Disney originally purchased the 43 sq miles that makes up WDW for a little over 5 Million.

If you decided you wanted to purchase enough points to stay in a BWV 1-Bedroom for a year (Preferred View), it would cost approximately $1.7 million to buy the points you need (assuming you bought from DVC). In addition it would cost about $80K in yearly dues.

I am thinking somewhere along the way someone made a profit!

To top it off Disney still owns the land. The DVC only leases the land from Disney.

 

[bom_noite]

To top it off Disney still owns the land. The DVC only leases the land from Disney.

I am now convinced it is a profit motivated venture!

 

[Granny]

DVC itself may be a non-profit organization. Think the money goes thru DVD.

It very well might be that the entity DVC is non-profit...I always thought DVD was the actual organization and DVC was the "name" of the timeshare resorts collectively.

I just thought it was a funny statement for a Guide to make. It makes it sound like Disney has created this charity thing called DVC and we are all the beneficiaries!

 

[spiceycat]

the lines between DVC and Disney are strange.

otherwise disney would not be able to sell land that DVC was going to use and they do.

 

[ralphd]

I am now convinced it is a profit motivated venture!

Didn't say Disney did not make a profit, only that DVC may be a break even operation.

' http://travel.howstuffworks.com/timeshare2.htm '

' http://www.hotelinteractive.com/index.asp?page_id=5000&article_id=1387 '

 

[Horace Horsecollar]

Didn't say Disney did not make a profit, only that DVC may be a break even operation.

' http://travel.howstuffworks.com/timeshare2.htm '

' http://www.hotelinteractive.com/index.asp?page_id=5000&article_id=1387 '

Disney Vacation Club — DVC — is a brand for Disney's points-based timeshare vacation ownership. DVC is not a business entity. Instead, DVC is implemented through a variety of business entities, as outlined by Entropy in post #1 (and expended upon in my post #2) of this thread.

Although Disney does not break out the numbers for Disney Vacation Development (DVD) from the overall Disney Parks and Resorts business segment numbers, all indications are that DVD s highly profitable. DVD charges more than other timeshare developers for comparable usage, without the high land costs and the high marketing costs that other profitable timeshare companies have to deal with.

As I wrote in post #2 in this thread, "'Not-for-profit' only refers to the condominium associations themselves, not to Disney Vacation Development (DVD) or Disney Vacation Club Management (DVCMC)."

 

[bom_noite]

If you were WDW why would you invest any money in building another Deluxe and / or moderate hotel?

As someone pointed out DVC is selling the points higer or even to other Timeshare entities, despite the fact that they already own the land!

In addition, they get almost a guaranteed customer that will most likely be coming to Orlando yearly! I know that in 4 years we have made 4 trips! If we did own DVC we may not have gone over the last 4 years?

The next thing that will be happening, IMHO, is that DVC will give us all the option to add on a certain amount of years (at a cost of course). They will have to do this! Can you imagine a few 1000 rooms opening up in 2042?

I would think the better strategy is to try and bump folks up another 10 or 20 years and then take that windfall now! Found Money! In fact, I predict that in future resorts they may say: "It is $110 per point through 2042, $120 per point through 2052, etc.".

 

[Mickmse2002]

If you were WDW why would you invest any money in building another Deluxe and / or moderate hotel?

As someone pointed out DVC is selling the points higer or even to other Timeshare entities, despite the fact that they already own the land!

In addition, they get almost a guaranteed customer that will most likely be coming to Orlando yearly! I know that in 4 years we have made 4 trips! If we did own DVC we may not have gone over the last 4 years?

The next thing that will be happening, IMHO, is that DVC will give us all the option to add on a certain amount of years (at a cost of course). They will have to do this! Can you imagine a few 1000 rooms opening up in 2042?

I would think the better strategy is to try and bump folks up another 10 or 20 years and then take that windfall now! Found Money! In fact, I predict that in future resorts they may say: "It is $110 per point through 2042, $120 per point through 2052, etc.".

I'm sure there are a few executives and marketing experts already laying out plans to separate us from more of our money prior to 2042. It would only make sense to come up with some sort of extension plan.

 

[OneMoreTry]

Ok... According to the POS the DVC is a share developed by the DVD, sold by the BVTC, managed by the DVMC, including at this time OKW, VBR, HHI, BWV, SSR, BCV, & AKL. The only thing that matters to me is that the one thing that links all these together is the M O U S E... LOL

Is AKL actually in there?

 

[Caskbill]

If DVC (or whatever name you want to use), wasn't profitable, Disney never would have built another resort after OKW.

Considering that all the construction costs are paid for by members who buy in, but never get to keep the buildings, that's a pretty good incentive right there. Then consider that it doesn't cost them a penny for the maintenance, staff salaries, etc for running the resorts.

But for the bigger picture, how much money do the 100,000 DVC members spend at WDW while staying there on points. I know for ourselves, with DVC we have spent a lot more time at Disney than we did before we purchased. We also find ourselves eating more in the restaurants, etc, since we don't do command park days anymore since with DVC we know we're coming back.

If I had some land, and someone came to me and said they'd like to build a $100 million house on it, they would pay for all construction, taxes and maintenance/upkeep, and use it for 40 years after which they'd walk away and it all belongs to me (or my heirs), I would consider that a pretty good deal.

 

[Horace Horsecollar]

Is AKL actually in there?

I think DisDaydreamer meant SSR

The POS is specific to each DVC resort, and clearly no DVC resort has a POS that lists "AKL" but does not list SSR.

Also, BVTC is not the entity that sells DVC points. BVTC is involved with exchanges.

If DVC (or whatever name you want to use), wasn't profitable, Disney never would have built another resort after OKW.

Well put!

I think that some people on this board have misunderstood what their DVC Guides said. The Guides were probably explaining that the annual fees cover actual operating, tax, and reserve expenses of each DVC resort's condominium association. Disney can't increase the profit of the Walt Disney Company by suddenly increasing the annual fees 50%.

Disney clearly makes a direct and indirect profit from selling and managing the DVC resorts — and having members (and their wallets) return to WDW year after year.

 

[Plutofan]

If I had some land, and someone came to me and said they'd like to build a $100 million house on it, they would pay for all construction, taxes and maintenance/upkeep, and use it for 40 years after which they'd walk away and it all belongs to me (or my heirs), I would consider that a pretty good deal.

Especially since they have sold these units for at least $1.7 billion dollars and Disney still owns all the land. Here is a conservation recap on sales without Vero (I could not find information)
..........#.of points....Original..........Estimated.........# of.......Points/
..........................price per pt......selling price....members.....members
BW.......4,888,860......$62.75.......$306,775,965. ..19,421..........252
BCV.....3,027,053.........80.00........242,164,240 ....10,796.........280
HHI......1,368,967........62.75..........85,902,67 9.....4,889.........280
VWL.....1,961,985........72.00..........141,262,92 0...7,690.........255
OKW....7,674,838.........51.00........391,416,738. ...26,709........287
SSR.....7,129,332.........84.00........598,863,888 ....13,535.........?
Vero.........?.................62.75.............? ............. 4,968.........?

Total.....................................$1,766,3 86,430....88,008