who makes the money?

[dwight16]

when a person off the street books a room in the villas and pays the rack rates? does Disney just make that money as pure profit since we the "owners" pay the maintenance? how does that effect the properties if at all?

 

[Minniesgal]

As I understand it generally the money paid will pay for those members who have traded out to DCL or concierge collection etc.

 

[RobDoc]

If the points used for the reservation were from DVC members trading to another option (Cruise, other WDW resort, ABD trip, Concierge Collection, etc.) the money received is used to "repay" the cost of the exchange.

If the points were points owned by the developer (DVD), the money received goes to the developer.

If the points used were from "Breakage" inventory (DVC dates unreserved 60 days prior), the money received is returned to the owners at that resort to reduce their maintenance fees. This is found in the annual budget as income under "Breakage Income". There is a limit on how much is returned to owners, but it is a pretty substantial amount each year.

 

[Caren90]

If the points used for the reservation were from DVC members trading to another option (Cruise, other WDW resort, ABD trip, Concierge Collection, etc.) the money received is used to "repay" the cost of the exchange.

If the points were points owned by the developer (DVD), the money received goes to the developer.

If the points used were from "Breakage" inventory (DVC dates unreserved 60 days prior), the money received is returned to the owners at that resort to reduce their maintenance fees. This is found in the annual budget as income under "Breakage Income". There is a limit on how much is returned to owners, but it is a pretty substantial amount each year.

Does the developer (DVD) have to purchase its points similar to a "regular" owner or does the development receive a discount?

Thanks,
Stephen

 

[rcchello]

Does the developer (DVD) have to purchase its points similar to a "regular" owner or does the development receive a discount?

Thanks,
Stephen

The developer owns all the points in the beginning and then sells them to us - the owners. The developer then can reaquire points because an owner cannot pay off their loan or dues. The other way is via their right of first refusal - any time an owner want to sell they have to give the developer the chance to buy with the same conditions as whatever purchaser they lined up.

 

[taaren]

Does the developer (DVD) have to purchase its points similar to a "regular" owner or does the development receive a discount?

Thanks,
Stephen

In addition to rcchello's reply, I believe it is also written into timeshare law in most states that the developer must retain a certain percentage of each resort in their own inventory, usually less than 5%. This is written so that the developer is "on the hook" for maintenance and can't just sell people a bad product and walk away. When I asked about it when I bought years ago I want to say that DVD's minimum share of the various DVC resorts is 3%?

Dean would know more about this. I may have the percentages completely wrong.

 

[Dean]

In addition to rcchello's reply, I believe it is also written into timeshare law in most states that the developer must retain a certain percentage of each resort in their own inventory, usually less than 5%. This is written so that the developer is "on the hook" for maintenance and can't just sell people a bad product and walk away. When I asked about it when I bought years ago I want to say that DVD's minimum share of the various DVC resorts is 3%?

Dean would know more about this. I may have the percentages completely wrong.

I'm not sure if there's statue that would require the % but there is statute that would attempt to prevent overselling. The POS says generally 2-4% is held back IIRC.

As for who gets the money, it depends on who owned the underlying portion or points. Generally CRO gets a % and then the rest goes to the underlying entity which would usually be DVD. I think the only time DVC would get money directly would be the portion after commissions for breakage inventory. Cash type exchanges flow through DVD. .