Rumor boards says DVC to be sold!

[Sammie]

Fantasyland is hardly a drain on resources. It's a 3-4 year project which (if I had to guess) is probably budgeted in the $300-400 million range. That's probably no different than the combined spending in recent years for things like TSM, American Idol, Nemo stage show, The Seas with Nemo, Space Mountain refurb, etc.

The Marvel deal includes a stock swap in addition to some cash payout. It isn't just $4 billion in cash. And Disney will immediately begin to receive revenues from all of Marvel's licensing agreements and operations.

In 2008 the parks unit alone turned a profit of $1.9 billion and TWDC's cash provided by operating activities was $5.4 billion. 2009 will be lower but these aren't decisions made based upon short-term results. Nor can I see them selling off DVC just for a short term gain which would be a drop in the proverbial bucket.

Thanks for that insight,

 

[TDC Nala]

So this came from a bus driver?

Here is a list of things bus drivers have announced over the years:

1) Caribbean Beach Resort to be torn down
2) The Swan and Dolphin are Disney timeshare resorts
3) The monorail is going to be extended to Studios and Downtown Disney
4) The monorail was supposed to go through the Dolphin resort
5) Get a fast pass today and it will still be good tomorrow
6) You don't need restaurant reservations, you can walk up and eat anywhere

 

[Tigger031266]

I think it is much more likely that Disney buys Mariott and combines timeshares. Disney has a market cap of $52B while Marriott has $9B. Disney could easily aquire Mariott.

Mariott Net Income (Profit) over last 3 years is $608M, $616M and $362M. While Disney made $4.4B (Billion with a B!!!!), $4.7B and $3.3B (BILLION)

• I have often heard that Disney wants a bigger stake of the vacation spend (they presnetly have like 3%).

• Disney could improved service at Mariott to Disney standards (If you think thats good ). They could grow Mariott as the highest service hotel chain.
  
• Disney could greatly expand Adventures by Disney with Mariott Hotels. Disney Packages around the world.

• They could be #1 in Time Share Game
  
• Mariot reward people could use points at Disney, dirving DIsney Business
  
• It would make Disney a more global company with location in every major company.

• Disney talked about hotels in other cities around the country before.

Now if a bus driver figured this all out ahead of all the financial people, he is one fine driver. Could be rumors spread out as Mariot people met with disney people. So their maybe truth but I think it is very likely that DIsney maybe buying Marriot.

 

[dianeschlicht]

Well, in that case they would be selling ABC or Touchstone, lol. As evidenced, Disney is into being the purchaser, ie. ESPN and most recently Marvel Comics and Entertainment. I should clarify I was looking at DVC and DCL as part of WDW (thereby the large moneymaker comment). I don't see them as being the seller...JMHO.

Oh, don't worry, I don't believe for a minute that DVC will be sold. I was merely pointing out that just because it is profitable does not mean it is safe from the trading block.

 

[dianeschlicht]

Thank you to all that posted replies. I had quite a number a good laughs. Keep em coming. By the way Ijust heard that all the disney bus transportation was being farmed out to Mears.

LOL! Old news, since it already happened two years ago!

 

[Greysword]

It would not be unheard of for Disney to outsource the management of the resorts to another firm, much like the condo association for BLT, for a fee. This would be profitable for Disney and a steady revenue stream for another firm. However, this is far from "selling DVC", and such an arrangement could be the impetus for this rumor.

Personally, I think an acquisition by Marriott would severly damage the sale of current and future DVC resorts. I would be willing to guess a significant factor for the majority of DVC owners in buying into the program is the thrill of owning a part of Disney. Although the resorts would still be on property, the emotional desire to own a piece of the magic overcomes many financial decisions, especially if they are close to or on the side of not being worth it financially. I do not believe a wholly owned Marriott resort would draw the same response, and sales would fall significantly.

Just my two cents. Please let me know what you think.

- Chris

 

[keishashadow]

Off the top of my head, there are several ways in which a "sale" could go down:

4. Farm-out management of the Disney resorts. In this case there probably wouldn't be any ownership changes but Disney would contract with another company to operate the resorts. Instead of our dues paying the salaries of Disney CMs they would pay the salaries of employees of another company. This is basically outsourcing to the max.

This would likely impact all resorts, DVC and non-DVC alike. Changes to members would be minimal (or nonexistent)...just like when valet parking was outsourced. In fact, conditions could actually improve at resorts if the new company proved to be a more effective hotel manager than Disney.

I'll add that any agreement could include components from multiple options above (i.e. sell both DVD and DVC.)

I can see both management, more likely hourly, property staff being outsourced. I don't know what the current pay scale/benefit package is (would like to think it's a living wage - happiest place on earth & all). Im all for more reasonable dues, just not at the expense of the local people.

It would be a public relations nightmare for Disney to go to mostly part-time hourly employees without any benefits, insurance, etc. Certainly easier to contract the operations out and not be the fall guy.

 

[Dean]

I could see the opposite--Disney buying a couple of Marriott timeshare properties to expand without having to build. I just don't know how they'd work out a deal with current Marriott owners.

Doubtful, overall DVC is really inept at the timeshare thing. Plus, no way to marry Marriott's system to DVC's, the reverse would be much easier but not that simple either. To go either direction you wouldn't buy the resort but the management contract. Marriott is much better at timeshare management overall than is DVC. Like a few they've run independent of their MVCI system, they'd have to do it for the management contract money, not to add it to their system (either direction).

I don't see Disney giving up ultimate control of a given resort long term but I could see it short term, say for the life of the DVC contracts. Still, very unlikely to happen IMO though all off property options are a bit more of a possibility.

But if Marriott (for example) were to take over management of the DVC program, their motivation would be to add the DVC properties to Marriott Vacation Club. As such, it stands to reason that DVC members would inherit similar rights as other MVC participants. They COULD create a system separate from MVC, but then there's little value in the acquisition for Marriott.

And it seems highly unlikely that Marriott would try to run roughshod over members as long as they want to continue to grow the program. If Disney retained control of DVD to continue building and selling new properties, they wouldn't let a new manager implement policy changes which would discourage future purchases. If Marriott acquired DVD, they would also avoid any extreme harm to current members in the interest of profiting from future sales.

Not necessarily. It would be almost impossible to combine MVCI directly as currently set up due to the max 5 day limit. They'd simply have to run it as a separate entity unless they got a 60% vote of the actual members to change the rules totally.

 

[tjkraz]

I can see both management, more likely hourly, property staff being outsourced. I don't know what the current pay scale/benefit package is (would like to think it's a living wage - happiest place on earth & all). Im all for more reasonable dues, just not at the expense of the local people.

It would be a public relations nightmare for Disney to go to mostly part-time hourly employees without any benefits, insurance, etc. Certainly easier to contract the operations out and not be the fall guy.

What I was referring to was basically turning over the resorts to another organization (Marriott, Lowes, etc.) to run as if it was their own. They would employ the staff, provide benefits, etc.

Disney has dabbled in piecemeal outsourcing (valet, business centers, etc.) but I can't see it working on a massive scale. I don't see how they could outsource management to one company, front desk employees to another, housekeeping to a third, landscaping to a fourth, and so on...if that's what you are suggesting.

It would be almost impossible to combine MVCI directly as currently set up due to the max 5 day limit. They'd simply have to run it as a separate entity unless they got a 60% vote of the actual members to change the rules totally.

I'll happily defer to your wisdom on that one.

If memory serves, Marriott was purely a hypothetical. I suspect there are systems that would be compatible with DVC...albeit with massive changes for one group of owners or another. But like others, I have my doubts as to whether another TS is in a position to make Disney an offer worth considering...and whether selling is in any way compatible with Disney's plans for growing their timeshare/hotel business away from the parks.

 

[minniemoms]

My that bus driver really started a lot of what if's....

 

[fishermouse]

dejavu all over again

 

[keishashadow]

What I was referring to was basically turning over the resorts to another organization (Marriott, Lowes, etc.) to run as if it was their own. They would employ the staff, provide benefits, etc.

Disney has dabbled in piecemeal outsourcing (valet, business centers, etc.) but I can't see it working on a massive scale. I don't see how they could outsource management to one company, front desk employees to another, housekeeping to a third, landscaping to a fourth, and so on...if that's what you are suggesting.
.

Im aware of the services u mention being outsourced. My thought was the possibility of subcontracting the entire resort staff to a single operator, who would revert to new compensation terms (as most employees would be new hires or agree to new salary structure). I wouldn't think Lowes, as they are may be tied up @ Universal contractually.

From what ive read Marriott is in well above average as to industry payscale/bene's (typically, hotels have high turnover employment rates unless they do offer more to retain the best employees/are unionized). It's been sad to read that both major park's employees have endured layoffs & reduction in hours.

imo, it'd be quite a task for an outside vendor to run things leaner without guest quality issues arising, unless they slash pay & bene's; which I don't see Disney doing directly due to risk of public opinion backlash.

 

[dizfan]

Why would Disney build Hawaii DVC (located right next to a Marriott TS) if they were looking to sell to Marriott?

 

[thepops]

The Marvel deal includes a stock swap in addition to some cash payout. It isn't just $4 billion in cash. And Disney will immediately begin to receive revenues from all of Marvel's licensing agreements and operations.

You just know they have to be laughing every time they get a deposit now from Universal for using the Marvel characters.

 

[CarolAnnC]

You just know they have to be laughing every time they get a deposit now from Universal for using the Marvel characters.

Perhaps Spiderman will be leaving Universal to reside at The Studios any day now, LOL!

Ok, now a reminder here that we have to keep this back on DVC topic...I am guilty too, lol...

 

[CR88]

I would be willing to guess a significant factor for the majority of DVC owners in buying into the program is the thrill of owning a part of Disney.
- Chris

Bingo, that's exactly why we bought. I highly doubt that we would have even considered it if we were buying Marriott properties, even if they were on Disney grounds. My wife was most excited at the idea of owning a piece of the mouse rather than a good vacation property.

 

[Mickey'sApprentice]

Why would Disney build Hawaii DVC (located right next to a Marriott TS) if they were looking to sell to Marriott?

Because things change. Disney lost its ability to carry its own paper.


You know, I can see an excellent rumor starting over this fact. Some pretty smart employee hears that Disney has to carry its own mortgages and ASSUMES that Disney doesn't want to do that anymore. He/she tells someone else, and the rumor starts. Its as simple as that.

Why Marriott? Who is the biggest competition?

 

[nuts]

This rumor is based on a historical truth. Back in the early 80's Disney was in the process of selling the existing resorts to Marriott. However, when Eisner joined the company (CEO) he quickly killed the deal (recognizing the cash cow resorts are/were). As for Disney not able to sell the mortgage paper...that is a temporary hit until wallstreet gains its feet back (which is now happening). Iger is not that short sited.

 

[Dean]

Why would Disney build Hawaii DVC (located right next to a Marriott TS) if they were looking to sell to Marriott?

The first and largest question is whey would DVC build HI at all. They've already proven they're not equipped to compete head to head in general timeshare sales and they have no experience with none resort based hotels. While I'd love more DVC choices, I'm still scratching my head at this one so far from anything else Disney is doing. While I'm sure such a move wasn't planned when the HI resort was conceived and approved, I doubt that one issue alone would affect the ability to complete any of the potential deals that have been postulated here. Heck, they could even buy everything else and farm that one out or spin it off on it's own. There are other companies that manage different segments of the timeshare market. These include Marriott managing the Renaissance in Aruba along with the MVCI and also Horizon's before they merged it all into one. The same company managing both Worldmark and Wyndham, many systems managing both a points and weeks based system and some exchange companies also managing resorts directly.

 

[dvcbrad]

Bingo, that's exactly why we bought. I highly doubt that we would have even considered it if we were buying Marriott properties, even if they were on Disney grounds. My wife was most excited at the idea of owning a piece of the mouse rather than a good vacation property.

I may be out of step with the majority of the opinion here, but as another poster said "things change". When we purchased DVC, we enjoyed taking our kids to WDW, etc. Now that they're older, they've lost interest in going to Disney every year and want different vacation experiences. It's not that we/they don't LIKE Disney & DVC anymore - we DO. BUT ... we'd love to have the flexibility to go other places and, quite honestly, the exchange process (II/RCI) for anything in a high-demand time period has been fruitless - we've tried.

That's why - for us - we'd LOVE to see an affiliation with Marriott! This would give us the best of both worlds - the variety of the different resorts that Marriott has PLUS the ability to still go to and enjoy WDW/DVC! Here's one vote FOR a merger/affiliation!