Current owners: Do you feel that renters are impacting resort availability?

[tx911]

Does anyone think DVC is worried if they clamped down on commercial renters too hard that they would all try to resell their contracts at once, seeing no more value it in, and thereby causing a big disruption to the resale market by driving prices even lower? With so many trying to offload contracts at once that have lost their value if they were only a commercial renter, DVC may be worried this would further devalue their product. It raises the question of what percentage of points are owned by owners who (1) use them exclusively for personal trips, (2) use them for a mix of personal trips & rent occasionally when they can't make a trip, and (3) exclusively use their points for commercial rental enterprises. If that 3rd bucket is larger than we realize and DVC knows this. they may be scared of what the impact would be of that many points trying to get out of the market all at once.

Seems like that would lead to an armed and fully operational ROFR monster

 

[Bearval]

Does anyone think DVC is worried if they clamped down on commercial renters too hard that they would all try to resell their contracts at once, seeing no more value it in, and thereby causing a big disruption to the resale market by driving prices even lower? With so many trying to offload contracts at once that have lost their value if they were only a commercial renter, DVC may be worried this would further devalue their product. It raises the question of what percentage of points are owned by owners who (1) use them exclusively for personal trips, (2) use them for a mix of personal trips & rent occasionally when they can't make a trip, and (3) exclusively use their points for commercial rental enterprises. If that 3rd bucket is larger than we realize and DVC knows this. they may be scared of what the impact would be of that many points trying to get out of the market all at once.

I don't think they would even care. The majority of timeshares resell for pennies on the dollar but those same companies keep building and selling out. Disney would just use it as an opportunity to very cheaply turn those points into unrestricted direct points.

 

[aammtt20]

I don't think they would even care. The majority of timeshares resell for pennies on the dollar but those same companies keep building and selling out. Disney would just use it as an opportunity to very cheaply turn those points into unrestricted direct points.

True, but I always thought that DVC used the fact they had high resale prices as a point of pride and selling point for owners "buy this for your family, use for 18 years of trips and then sell it for a great price when your kids go off for college." Just trying to think of reasons why DVC seems to do very little against commercial renters, and that was one that made sense to me. I guess in the end, Disney probably doesn't care as long as the money is flowing in one way or another

 

[Bearval]

True, but I always thought that DVC used the fact they had high resale prices as a point of pride and selling point for owners "buy this for your family, use for 18 years of trips and then sell it for a great price when your kids go off for college." Just trying to think of reasons why DVC seems to do very little against commercial renters, and that was one that made sense to me. I guess in the end, Disney probably doesn't care as long as the money is flowing in one way or another

Well if a DVC sales rep told you you can use it for 18 years and then resale it for a great price I think they would have broken some real estate sales laws there. DVC won't do anything until it impacts them directly since it would cost them time and money to do so.

 

[Grumpy by Birth]

Does anyone think DVC is worried if they clamped down on commercial renters too hard that they would all try to resell their contracts at once, seeing no more value it in, and thereby causing a big disruption to the resale market by driving prices even lower? With so many trying to offload contracts at once that have lost their value if they were only a commercial renter, DVC may be worried this would further devalue their product. It raises the question of what percentage of points are owned by owners who (1) use them exclusively for personal trips, (2) use them for a mix of personal trips & rent occasionally when they can't make a trip, and (3) exclusively use their points for commercial rental enterprises. If that 3rd bucket is larger than we realize and DVC knows this. they may be scared of what the impact would be of that many points trying to get out of the market all at once.

Seems like that would lead to an armed and fully operational ROFR monster

If the commercial rental companies (let's be honest... that's what they are) all dump their contracts, prices may drop drastically, but I agree that Disney wouldn't see that as necessarily a bad thing. They'd be able to acquire a boatload of points cheap through ROFR and sell those points direct for even more profit. After the initial unloading by the commercial renters, resale prices would likely see a correction and return to normal levels since the average owner would not be desperate to dump contracts they are actually using for themselves vs. holding dozens of contracts that they only purchased in order to rent commercially in violation of the POS.

 

[Sandisw]

Does anyone think DVC is worried if they clamped down on commercial renters too hard that they would all try to resell their contracts at once, seeing no more value it in, and thereby causing a big disruption to the resale market by driving prices even lower? With so many trying to offload contracts at once that have lost their value if they were only a commercial renter, DVC may be worried this would further devalue their product. It raises the question of what percentage of points are owned by owners who (1) use them exclusively for personal trips, (2) use them for a mix of personal trips & rent occasionally when they can't make a trip, and (3) exclusively use their points for commercial rental enterprises. If that 3rd bucket is larger than we realize and DVC knows this. they may be scared of what the impact would be of that many points trying to get out of the market all at once.

While I have no data to back this up, I am just not sure that you have as many memberships and owners renting in such high numbers that DVC wants to be bothered with shutting them down.

And yes, I know you can find a ton of rentals out there, and I know that some sites, by the nature of what is there, imply there is one or a few people renting a lot...not going to say that isn't possible, but the fact is, we have no idea who the owner of those reservations are...just that many brokers have now added an arm of their busines to allow owners to offer rentals in addition to selling contracts.

I have read there are over 200K owners out there, and some of those owners have multiple memberships (like me). What % of membershps or owners is DVC concerned about that would make them take a hard line on things? I don't know but if I were DVC and 99% of all memberships are within the rules and maybe 1% are not, how much effort do I put into that? If the cost to enforce worth it?

Since they have access to all the memberships and how many reservations are being booked every year, they must also have a way to generally deciding how much those who seem to be renting outside the norm are earning....could they decide its just not worth it? I don't know...especially since we really don't know what DVC has done behind the scenes with memberships that are in violation....

But, I don't think DVC cares about resale value and the POS is filled with that language. While DVC will always have some value as long as the parks exist, DVD doesn't make decisions to influence the market unless they have a reason to do so to increase sales...IMO, that is what we are now seeing with PVB ROFR....they need the floor higher, if they can get it up, to make the difference between resale and direct much less, now that we now resale PVB points, as well as all other resale points, will be good there for bookings.

 

[DonMacGregor]

In the case of rentals and the POS, it’s not an actual rental until it’s in the name of someone else.

So, your analogy doesn’t make any sense. As long as an owner has their name on a reservation it is not considered rented.

Some may not like it but that is the reality of the situation.

And, DVC can’t, nor should they count those as anything but for the owners use until that happens.

Of course, they can keep a closer watch on those memberships, and for all we know, they do.

But, in the end, if an owner books and advertises a lot but ends up only actually renting under the limit, then they are not in violation of what DVC uses to define it.

Yes, I know others don’t agree.

It makes perfect sense. If a reservation is listed on a rental site, YouTube, here, wherever, the owner is actively engaged in the process of renting that reservation, regardless of whether they are successful or not. You're not going to say your local Toyota dealer isn't a commercial enterprise because they didn't sell any cars today. They are engaging in a commercial enterprise when they take steps to advertise their intention to rent those points/reservations for profit. Their ability (or inability) to do so does not determine whether the enterprise is commercial or not.

As to the number of rentals, these prolific renters (the ones we are discussing, not the casual renters that there seems to be a desperate attempt to conflate) aren't listing several dozen confirmed reservations at a time on a rolling basis, and then ultimately renting only a handful (to stay under the mythical limit). Prolific renters aren't listing dozens of confirmed reservations over and over because they don't rent. They list them because they do rent, with a high level of certainty and with high profit.

 

[Chuck S]

It makes perfect sense. If a reservation is listed on a rental site, YouTube, here, wherever, the owner is actively engaged in the process of renting that reservation, regardless of whether they are successful or not. You're not going to say your local Toyota dealer isn't a commercial enterprise because they didn't sell any cars today. They are engaging in a commercial enterprise when they take steps to advertise their intention to rent those points/reservations for profit. Their ability (or inability) to do so does not determine whether the enterprise is commercial or not.

As to the number of rentals, these prolific renters (the ones we are discussing, not the casual renters that there seems to be a desperate attempt to conflate) aren't listing several dozen confirmed reservations at a time on a rolling basis, and then ultimately renting only a handful (to stay under the mythical limit). Prolific renters aren't listing dozens of confirmed reservations over and over because they don't rent. They list them because they do rent, with a high level of certainty and with high profit.

But it does make sense to not call it a rental until it is rented when the criteria of "20 reservations per year where the DVC Memebership owner is nit the primary name on the reservation." And with that limit being per Membership when an individual or group of individuals can have several different memberships, that would be how it MUST be counted, once the owner transfers the name of the primary, then it becomes a rental for the legal purpose of the currently understood DVC Definition of Commercial Renting.

 

[lowlight]

But it does make sense to not call it a rental until it is rented when the criteria of "20 reservations per year where the DVC Memebership owner is nit the primary name on the reservation." And with that limit being per Membership when an individual or group of individuals can have several different memberships, that would be how it MUST be counted, once the owner transfers the name of the primary, then it becomes a rental for the legal purpose of the currently understood DVC Definition of Commercial Renting.

If I’m a private tour guide, is Disney ok with me advertising my private tour guide service on Disney property, or do they wait until I’ve got a tour group to kick me out? Is an attempted violation of terms of contract only dependent on whether it was successful? That’s not the way criminal law works, but I have no idea about contract law.

 

[DonMacGregor]

But it does make sense to not call it a rental until it is rented when the criteria of "20 reservations per year where the DVC Memebership owner is nit the primary name on the reservation." And with that limit being per Membership when an individual or group of individuals can have several different memberships, that would be how it MUST be counted, once the owner transfers the name of the primary, then it becomes a rental for the legal purpose of the currently understood DVC Definition of Commercial Renting.

Obviously, if the rental agreement hasn't been signed and the reservation it's still in the owner's name then it hasn't been "rented" for purposes of Disney keeping tabs (although practically speaking, once a contract has been signed and funds exchanged for goods, it's been rented regardless of who's name is on the reservation). I don't think anyone is going to dispute that. I'm reasonably certain no one has suggested that simply listing several dozen confirmed reservations is, in and of itself, actual rental activity for the purpose of meeting some rental limit in, or assumed to be in, the POS.

Having said that, the premise that it's not a rental until it's rented, and the suggestion that some number of those rentals will never happen and the owner may never actually hit the magic number, is naive if not disingenuous at best. Those confirmed reservations will all rent, or the points will be converted to reservations that will rent. No one is listing 30 or 40 confirmed reservations, with the hundreds or thousands of points those reservations represent, without extremely high confidence that they all will rent. That the same entities are engaged in the exercise repeatedly and on an ongoing basis, leads to no other conclusion than that the model is successful (and profitable).

The point I am making is that the act of listing the confirmed reservations on a public site, with the explicit intent to rent those points/reservations for profit is, in and of itself, a commercial enterprise. How Disney interprets that activity, or how it may be addressed in the POS can certainly be debated, but there is no doubt those owners are engaged in a commercial enterprise.

 

[Chuck S]

If I’m a private tour guide, is Disney ok with me advertising my private tour guide service on Disney property, or do they wait until I’ve got a tour group to kick me out? Is an attempted violation of terms of contract only dependent on whether it was successful? That’s not the way criminal law works, but I have no idea about contract law.

Except, the 'Commercial Renters" are not actually advertising on Disney Property, are they? Are they wearing shirts advertisingg their services? I have never seen any. And DVC Does allow scooter companies to put their name and number on the scooters, inthe same sort of direct competiton with Disney park scooter rentals.

 

[crisi]

If the commercial rental companies (let's be honest... that's what they are) all dump their contracts, prices may drop drastically, but I agree that Disney wouldn't see that as necessarily a bad thing. They'd be able to acquire a boatload of points cheap through ROFR and sell those points direct for even more profit. After the initial unloading by the commercial renters, resale prices would likely see a correction and return to normal levels since the average owner would not be desperate to dump contracts they are actually using for themselves vs. holding dozens of contracts that they only purchased in order to rent commercially in violation of the POS.

Moreover, they can start getting points for the 2042 resorts - its probably a little early, but they aren't that far out from wanting to flip those, and it will be easier if they can start to resell "New BWV/BCV!" with bookings in 2042 because they've revamped half the resort already by using points they own.

 

[lowlight]

Except, the 'Commercial Renters" are not actually advertising on Disney Property, are they?

The commercial renter is using Disney servers to secure a rental on the DVC website, taking it from a non commercial renter. The harm is already caused whether money has transferred hands. A better analogy would be if the rental sites were advertising a rental, but they hadn’t secured a specific room yet. It would be hard to prove intent or harm in that instance.

 

[Sandisw]

It makes perfect sense. If a reservation is listed on a rental site, YouTube, here, wherever, the owner is actively engaged in the process of renting that reservation, regardless of whether they are successful or not. You're not going to say your local Toyota dealer isn't a commercial enterprise because they didn't sell any cars today. They are engaging in a commercial enterprise when they take steps to advertise their intention to rent those points/reservations for profit. Their ability (or inability) to do so does not determine whether the enterprise is commercial or not.

As to the number of rentals, these prolific renters (the ones we are discussing, not the casual renters that there seems to be a desperate attempt to conflate) aren't listing several dozen confirmed reservations at a time on a rolling basis, and then ultimately renting only a handful (to stay under the mythical limit). Prolific renters aren't listing dozens of confirmed reservations over and over because they don't rent. They list them because they do rent, with a high level of certainty and with high profit.

Where in the POS does it say that advertising a reservation is against the rules? We are allowed to rent reservations, are we not? The point I was making is that until the name on the reservation is changed in the owner's account, DVC has NO right to consider that reservation anything but the owners and can not cancel it or act on it because legally, adverstised or not, it has not actually been rented until it is the name of a guest.

The POS contract is also between the owner and DVC and not the business that is used to advertise rentals. So, while some may be in the business of connecting owners and renters, that action is not a violation of the contract, regardless of whether it is a commercial enterprise or not....

And, its not a mythical limit. DVC has been quite clear that its 20 reservations per membership. Some don't like that is the current rules. As I said, I have 7 adults in my family that could all decide to buy contracts, keep them in our names only, and rent them out as a "group" and still be under the current limit and none of those memberships would "flag" as a violation.

I have never said that some of the brokers might not be owners, and that some of the reservations being offered on their sites might not be owned by them, but no one, including you, have any idea who owns those reservations. The assumption is that it is alll the same owner....maybe it is, and maybe it isn't.

In terms of what rents, I currently see across several websites confirmed reservations out there that are in the next 30 days...that means, those did not rent yet, some which are new, and if they don't, those points become holding.

Obviously, those owners, whomeever they are, will end up having to book something later on within 60 days or lose the points. We have no idea how many points are lost or how many don't end up canceled to avoid holding, which has nothing to do with it being profitable or not.

We can go round and round and we won't agree. Are there owners out there pushing the limits of renting for commercial purposes? Sure, I bet there are. Has the rental market changed that those who do rent have found a way to maximzie whatever rentals they are doing by snagging hard to get rooms? Seems like it. Are there so many out there that its impacting reservations in a meaninful way? I don't believe that to be the case as we know for sure...I know personally...people who don't rent and get the AKV CL and Value rooms on a regular basis....since they travel outside of the busy Fall/holiday time.

DVC has rules in the POS to limit someone from making renting DVC into a commercial enterprise and that is the 8000 point limit. They have the 20 reservations per 12 month period to trigger a review. Just because some think it is being ignored, doesn't mean it is and maybe, just maybe, all those ongoing reservations on websites are actually owned by a lot of owners, connected, who as individuals, are following the rules of the POS.

With that, I think its clear I am not concerned, as an owner, that there are a lot of owners out there violating the POS. I actually think you have more and more owners who have bought extra points to rent more often and that is why we see the market having increased as much as it has....

ETA: I will add that the new language of CFW does seem to strengthen the language moving forward about the use of third party sites for a pattern of repeated renting, so that very well could be the start of DVC's way of dealing with the world of the internet.

 

[samsp99]

But I'm not sure it would be a benefit to Disney/DVC, since they already rent out their own points, any unsold points in the pool, any unrented rooms that there may be (called breakage rooms in the POS) and basically any points people allow to expire every year by either not using them or not banking them...and I'm sure there are far more expired points. every year than we can imagine.

Whenever I look at booking a DVC villa with Disney, they seem to have a lack of inventory. I suspect the equation is different for the resorts that are still for sale compared to thr original 14 that were sold a while ago.

 

[WilsonFlyer]

And yet here we are.

{Seemed like as good of a time as any to just set that out there.}

 

[BeachClub2014]

With that, I think its clear I am not concerned, as an owner, that there are a lot of owners out there violating the POS. I actually think you have more and more owners who have bought extra points to rent more often and that is why we see the market having increased as much as it has....

It's perfectly fine that you aren't concerned, as an owner, that there are a lot of other owners violating the POS. It bothers me.

I agree with you that more and more owners, including commercial rental entities, have likely purchased points to either solely rent or to rent more often, which is a violation of the POS and detracts from the availability for owners who intend on using their points, oddly enough, for a family vacation.

 

[lowlight]

The mods of a board whose official sponsor is a commercial renting enterprise sure seem to not have a problem with commercial renting.

 

[BuzzLightyr]

I wonder if the commercial renters are paying state tax on their rentals...

The number of short term rentals available makes me scratch my head. Were these all speculative bookings with the market softening and fewer renters?

This could lead to some commercial renters wanting to downsize their portfolios. Not necessarily a fire sale but could keep resale prices at commonly rented locations cheap.

 

[DougEMG]

It's perfectly fine that you aren't concerned, as an owner, that there are a lot of other owners violating the POS. It bothers me.

I agree with you that more and more owners, including commercial rental entities, have likely purchased points to either solely rent or to rent more often, which is a violation of the POS and detracts from the availability for owners who intend on using their points, oddly enough, for a family vacation.

If there were lots of owners violating the POS then Disney would do something about it and it seems to me that they changed the POS for the trust/CFW to control any type of usage of points other than owners making booking for themselves. This to me indicates that they do not have that same legal ability on the original POS.

I totally see your point that there are indeed owners buying points just for the purpose of renting them out and you feel that is a violation of the POS, but I (and I think Disney as well otherwise they would do something about it) don't see it that way. At best, I think it is a violation of the spirit of the original POS but not of the contract/law.

Are rental sites effecting availability, sure, but so is:

• Disney selling small point contracts
• People buying resale at their favorite resort to use only at that resort
• Disney selling cabin/bungalow points at resorts where most owners don't own enough to ever stay in those rooms
• Owners trading out for cruises and Disney using those points to hold rooms that they might want
• Less points being wasted now as owners can more easily rent instead of them going to waste
• Online system making it easier to book and walk rooms
• More owners buying points to rent out to cover off their dues
• People buying Alauni/HH/VB to use mostly at WDW