The Vilification Of Renting?

[Robo-Daddy 3000]

I'm not sure if this has been commented on yet. I've read a lot of this thread and much of it has been focused on the 20 rentals per year restriction.

But, I was struck by the line about not being allowed to maintain a website for rentals. If this is truly the case, why hasn't DVC sought to shut down these websites when they are clearly in violation of these new restrictions? Or perhaps it is just a matter of time before they do.

 

[Chuck S]

Shutting down websites, especially those not based in the US, may not be easy or even possible.

But what MS can do is refuse to make reservations for the owners of those websites based on the criteria specified...a simple and less expensive solution.

 

[JimMIA]

Shutting down websites, especially those not based in the US, may not be easy or even possible.

I would guess not possible. Disney's internal policies are no justification for shutting down someone else's business...especially a competitive business. If that were possible GM would have shut down Ford long ago.

But what MS can do is refuse to make reservations for the owners of those websites based on the criteria specified...a simple and less expensive solution.

They could probably use a variety of methods of dealing with websites...if they choose to address them at all. There are a number of different business models out there -- some renting their own points directly, others brokering rentals between owners and renters -- and you would probably have to address those differently.

I think the brokerage sites would be the easiest to stop, if DVC wanted to. The first step would be to identify all of the accounts where a broker is an associate (a 30 minute task). Then, they could send a letter to the account holders advising them their accounts had been identified as being used for commercial purposes because they have a commercial broker listed as an associate on their account. They could go further and advise that reservations by that broker would not be accepted, and because of the commercial use of the account, reservations would be accepted from the account owner, but name changes of the primary guest would not be allowed.

The other sites would be more difficult, and would require more work by DVC. A more cost-effective method would probably be to have the auditors identify all accounts which looked like they were involved in commercial activity and address them on a case-by-case basis.

 

[drusba]

As noted above, the only portion of breakage income that goes to offset dues is the amount that equals a maximum of 2.5% of the operating budget. After that, a portion goes to offset costs of operating the Disney entity that is MS. Anything left goes essentially to DVC for its own use.

By law, the developer which owns units can choose to either pay dues for the units or do the noted guarantee of the annual estimated operating budget which means that if costs exceed the budget it covers the excess and doesn't charge a special assessment for excess perating costs. DVC has chosen annually to go that route. (Note it still has to pay its share of property taxes.)

There is a mangement fee in each budget that is a set percentage (about 12% of the operating budget without the management fee) for which the percentage cannot change, but the total amount of the fee can obviously increase annually if the budget increases annually. That is, besides breakage income a second way management can essentially profit from DVC. However, there is an interplay of several provisions. The MS budget is covered by what might come back from breakage income, that management fee, a charge of $1per member annually for a reservation fee, and the $95 trading out fee charged, which fee is not part of the actual annual budget but is paid by those who trade. The combination of all those things most likely well exceeds (probably by a multiple, and some might believe, possibly incorrectly, by an order of magnitude) the actual cost of operating all of member services, with the result of a profit built into the program (perfectly legally one revealed in the offical documents). It is one reason why Disney looks at DVC so favorably -- it gets the sale amount and then profits continuously thereafter -- and one reason it is unlikely ever to consider torpedoing any resort like VB.

As to websites that just offer an arena where others can post offers to rent, they are unlikely to do anything. As to shutting down websites that the owner is using to promote his own rentals, you would be raising First Amendment Issues that likely prevent shutting down the site. They can of course act to prevent one from using any Disney trademark. They could pursue the owner for possible remedies for violating the commercial purpose restriction but would not be able to get an order shutting down the web-site based on that. If they did anything, it would likely be to find a way as noted above to cease taking ressies because the member is engaging in a commercial purpose.

 

[crisi]

If DVC wants to eliminate renting, why couldn't they require proof of membership at check in (I'm a new member and haven't stayed yet so they probably already do this) - member card and another form of ID (driver's license). If you are not the member, you cannot stay.

What happens when you want your sister and her husband to use your points and you won't be traveling with her?

Disney doesn't have any way to tell a "guest of a member" from a "customer of a member." There are things Disney might do to make you more likely to be careful about renting - like aggressively charging for room damage, or insisting that all room charges be on a member credit card - you can true up with your guest later - but those steps have issues of their own. Therefore, they will never be able to address (nor do I think they should address) "casual renting." However, in the aggregate, there are steps they can take looking for patterns of reservations and names, using fraud search services to look for connections, running audit programs against reservations looking for patterns, watching the internet, to find people who are making lots of rentals.

A simple one to reduce the value of rentals would be to remove perks like extra magic hours, magical express, and the availability of the dining plan from anyone staying at DVC on points who isn't able to produce a blue member card with their name on it for the party (i.e. if I'm traveling WITH my sister, they can use EMH and ME, but if they are guests of mine traveling alone, they lose those perks). That would likely cause at least a few renters to review the value equation of renting. It would also cause some gnashing of teeth by members, but may be a reasonable compromise.

To one of drusba's points - sometimes "Disney's interests" and "member's interests" overlap. If we are correct in the rental supply driving down the price Disney can get for DVC CRO rentals, and that in turn increases the price per point of options outside the system, its both in Disney's interests and member interests to change that supply. Disney getting more for breakage rooms and traded rooms is better for the membership - dues and out of system costs are both cheaper. Course, that lack of supply of cheap points would also mean that POR gets booked fuller - which doesn't do members any good, but is good for Disney. To her point, expect any justification from Disney to not mention that at all.

 

[Chuck S]

What happens when you want your sister and her husband to use your points and you won't be traveling with her?

Disney doesn't have any way to tell a "guest of a member" from a "customer of a member."

According to my old POS, members are supposed to inform MS if they are making a reservation for a renter vs. a personal guest. I guess it depends upon the honesty of the owner.

 

[crisi]

According to my old POS, members are supposed to inform MS if they are making a reservation for a renter vs. a personal guest. I guess it depends upon the honesty of the owner.

I wonder how many do - and I wonder, if they start penalizing members who rent - if that number is likely to stay the same?

 

[rinkwide]

If renting is allowed and an owner has points that she must rent, is it inappropriate of her to try and maximize her return on those points via a speculative rental?

If she does pre-book with intent to rent, does this mean she is renting for "commercial purpose"?

Is she outside the boundary of "personal use"?

Is it appropriate for another to say she should take less money and rent "to order" because that is more fair to the owners who don't book early?

 

[Deb & Bill]

If renting is allowed and an owner has points that she must rent, is it inappropriate of her to try and maximize her return on those points via a speculative rental?

If she does pre-book with intent to rent, does this mean she is renting for "commercial purpose"?

Is she outside the boundary of "personal use"?

Is it appropriate for another to say she should take less money and rent "to order" because that is more fair to the owners who don't book early?

1 - Yes, it is inappropriate. Spec rental is commercial. The member has no intent to use that reservation for herself.
2 - Yes, spec rental is commercial. Ditto 1.
3 - Yes, she is not using it for herself or her family.
4 - Fairness has nothing to do with what is written in the rules. Rules say no commercial activity. If she currently has a reservation that she intends to use, but cannot, she can cancel and rebook. There is nothing to even state that she must rent out the reservation. That said, by changing banking rules, we just lost an additional two months to bank at least a portion of the points.

 

[Y-ASK]

If renting is allowed and an owner has points that she must rent, is it inappropriate of her to try and maximize her return on those points via a speculative rental?

Personal opinion only; yes it is inappropriate, but it is within the rules as currently written.

If she does pre-book with intent to rent, does this mean she is renting for "commercial purpose"?

Only if this is her 21st rental (then it's TBD) or if she uses a website to advertise her rental.

Is she outside the boundary of "personal use"?

Under 20 rentals in a year; no she is not outside the boundary of "personal use" which is my interpretation of the current rule change.

Is it appropriate for another to say she should take less money and rent "to order" because that is more fair to the owners who don't book early?

No, because she is working within the system as currently written, but some people will still voice thier personal opinion on the matter.

My feelings are that she purchased the points, just like everyone else. As long as she is not renting more than 20 reservations in a 12 month period or has a website, she is working within the rules. She is no different than any other owner and no better or worse for that matter. She can call to make reservations at the same time as every other owner and she has no advantage to that end what so ever.

Personally I don't speculative rent reservations, I do the "to order" type.

Y-ASK

 

[Dean]

Personal opinion only; yes it is inappropriate, but it is within the rules as currently written.

Why is it inappropriate if it's within the rules. All a member owes any other member is to play within the rules. This is one of the issues I was referring to earlier where it's emotion and feelings and as pointed out, selfishness in many cases. I can understand one saying they don't like it but I don't see it as inappropriate.

1 - Yes, it is inappropriate. Spec rental is commercial. The member has no intent to use that reservation for herself.
2 - Yes, spec rental is commercial. Ditto 1.
3 - Yes, she is not using it for herself or her family.
4 - Fairness has nothing to do with what is written in the rules.

See above. How does spec renting make it commercial under DVC's eyes? This is not a legal or textbook definition of commercial situation.

 

[childsplay]

I would tend to agree with Bill's response to Rinkwide's questions.

Additionally, I would ask though, if it says in the POS you can't accept money for any rental or transfer transaction then how can you ever rent without being in violation ofthe POS

 

[Dean]

I would tend to agree with Bill's response to Rinkwide's questions.

Additionally, I would ask though, if it says in the POS you can't accept money for any rental or transfer transaction then how can you ever rent without being in violation ofthe POS

It says you can't take money for transfers but specifically says renting is OK.

 

[childsplay]

Thanks for the clarification

 

[Y-ASK]

Why is it inappropriate if it's within the rules. All a member owes any other member is to play within the rules. This is one of the issues I was referring to earlier where it's emotion and feelings and as pointed out, selfishness in many cases. I can understand one saying they don't like it but I don't see it as inappropriate.

That's why I put the first part where I said it was only personal opinion and I am certainly not going to pass judgement on anyone that chooses to speculative rent, because with the current rules in place speculative renting is fine. Maybe I should have said it was inappropriate for me so I don't do it.

I disagree with Deb & Bill's interpretation of what constitutes a commercial renter. And that's why this new wording is really great for those of us who rent some of our points and are tired of feeling like a vilian for it. The rules are there for all to see and no where is there any written word that discusses speculative renting but they define what commercial renting is.

Y-ASK

 

[childsplay]

Would it make you feel any better if I said this trip cost us less than a week at the redneck riviera would?

BTW, nice score on your Maui accomodations...I swear I'd like to do a "Volcan Mind-Meld" (when Spock used to transfer information from other poeples brain into his own by touching them on the temple) on you about timeshares..

 

[DVC Mike]

If she does pre-book with intent to rent, does this mean she is renting for "commercial purpose"?

Is she outside the boundary of "personal use"?

The DVC Public Offering Statement makes it clear that DVC memberships are intended for personal vacation use. The Declaration of Condominium and the Membership Agreement for the Resort expressly limits the use of Ownership Interests to personal use.

The new POS amendment has a definition of "personal use":

for the use of accommodations by the DVC Member, the DVC Member’s family and/or the DVC Member’s friends (collectively, “Personal Use”)

Just reading this definition of "personal use", and it's the only definition we have, it would seem to mean that speculative booking would not fall within the "personal use" definition.

 

[crisi]

What if Rinkwide's owner is a widowed woman with kids who recently got laid off and needs to make ends meet while she finds another job? - she is trying to maximize all her assets - she figures speculative rentals over Christmas on eBay, followed by a sale of a stripped DVC contract will tie her over without the foreclosure notice arriving.

I think that if I were in dire circumstances, I'd want to be able to use my own existing assets however I need to in order to keep me afloat. If that means calling day by day at eleven months out to secure that Boardwalk Villas Standard View room - just like any other BWV owner - and then selling it for as much as I can - I'm not sure I see that as unethical under those circumstances. Certainly, some other owner can't get that room for their Christmas vacation, but why is their vacation any more or less important than my financial stability?

 

[Robo-Daddy 3000]

I would guess not possible. Disney's internal policies are no justification for shutting down someone else's business...especially a competitive business. If that were possible GM would have shut down Ford long ago.

They could probably use a variety of methods of dealing with websites...if they choose to address them at all. There are a number of different business models out there -- some renting their own points directly, others brokering rentals between owners and renters -- and you would probably have to address those differently.

I think the brokerage sites would be the easiest to stop, if DVC wanted to. The first step would be to identify all of the accounts where a broker is an associate (a 30 minute task). Then, they could send a letter to the account holders advising them their accounts had been identified as being used for commercial purposes because they have a commercial broker listed as an associate on their account. They could go further and advise that reservations by that broker would not be accepted, and because of the commercial use of the account, reservations would be accepted from the account owner, but name changes of the primary guest would not be allowed.

The other sites would be more difficult, and would require more work by DVC. A more cost-effective method would probably be to have the auditors identify all accounts which looked like they were involved in commercial activity and address them on a case-by-case basis.

I'm not sure if I follow your reasoning here regarding websites. First, Disney has addresssed the website issue. In the planner, it states that maintaining a website is clearly for commercial purposes.

With regard as to whether or not, Disney could bring pressure to bear on the website operators, I believe that they can. The Ford and GM analogy doesn't really fit here. Ford sells their own cars and GM sells their own cars. But in this case, these website operators are renting space on Disney property. It's not like they are off-site hotel operators trying to lure people to their property. And who knows, a year from now Disney might start sending out letters to some owners (in the way that you outlined) stating that their accounts have been flagged for irregular behavior and will be subject to booking and reservatiopn restrictions. It could happen.

I believe that now that some rules have been put in place that Disney and DVC might be building up a case for shutting down these operations.

 

[Y-ASK]

Yep! I "Personally" choose to rent some of my points as my "Use" .

Y-ASK

Now who wants to be my friend?

(Just joking, I've no more points to rent this year)...