DVC Club Level and Home Resort Survey

[AnnaKristoff2013]

the dreaded transient tax

And suddenly, the decision not to include the transient tax in the annual dues makes so much more sense! This way, trust maintenance fees (which are a weighted average of all the maintenance fees owned by the trust) won’t include the transient tax.

 

[Genie+]

The trust does put the transient tax in a different light. When most owners are under 500pts it has small impact to their trading. Big deal if I own BW and my taxes are paid within dues and once in a while I trade out to AUL or VDH and effectively pay taxes twice. Or vice versa. Not a big enough deal for somebody to go buy VDH so they can trade into WDW and avoid that type of tax altogether. But now talking about the trading power of a trust, what percent of its ownership does not include these taxes and what imbalance is created when trading. Might mean nothing once the trust details are shared, might be worth keeping an eye on.

 

[TheDailyMoo]

So if things pan out like people have been speculating, specifically adding everything into a trust from ROFR and foreclosures etc, then this may be what prevents the 2042 bubble from bursting like we've been talking about. And by that I mean specifically BC and BW. Because I assume even if Disney went to this model us legacy owners at BC and BW would still be able to sell on the resale market. However considering how few points the trust would have of BW and BC that would increase the worth of said contracts. No? Disney would look to ROFR those contracts and anytime you wanted to get out there would be a "Disney wants it bad enough" premium you can add to your asking price. Perhaps Disney doesn't take it at a certain price and an actual buyer gets it. Obviously with only 18 years to go the price would still have to make sense for both an individual buyer and Disney. But I feel like specifically for these two resorts it would at least artificially keep the resale value higher than it would've been without a trust system. Wow look at DVC giving us something to talk about besides Murphy beds!

 

[maui22]

Could a trust be Disney’s way of going after the rental companies? At 7 months, they know the popular resorts/rooms. Could they legally have the trust grab available rooms using their allotment of total points? Then, as members of the trust want a room there they give them the room?

Just guessing Disney’s big issue is the large rental companies stripping contracts.

 

[Genie+]

Wow look at DVC giving us something to talk about besides Murphy beds!

Infinite ways to speculate about Poly

 

[Cfabar1]

All I know is, if I were in a position to do so, I'd be buying about 800-2000 VGF points right now... I think current owners will do fine with the switch, but switching to a trust system makes me loathe to buy more points.

 

[Sandisw]

I don’t think they could do that, legally. The only “restrictions” I could see them having the ability to put on the trust points to punish resale purchasers would be to add significant junk fees like Marriott does. If they do that, I think that’s not a huge deal, it’ll lower the resale value accordingly and direct more money to DVC, so it’s win win for DVC, since they either collect junk fees, or get to cheaply ROFR the resale contract.

Why don’t you think that DVD can set rules on how they give access to the trust points if that is how the write the POS for the trust?

I have found nothing in my reading so far that would prohibit it…since there is no ownership for the members of the trust in actual deeded interests, they no longer need to have the same legal rights as those who do own a deeded interest…in this case, the trust itself.

Not saying they will, but I can’t imagine them not making transferring membership in the trust restricted in some way. Just because others do it differently, doesn’t mean DVD will and I do think the small size of DVC resorts in comparison to others will make a difference.

To me, it’s like DVD giving themselves ROFR….they set parameters for selling so I can’t imagine they can’t out conditions on selling ownership in a trust based system.

ETA: it appears they have already decided to give themselves the right to impose restrictions to transfer…found in the document that was filed:

 

[CarolynFH]

Here's something I found on TUG - this is an excerpt from the booking reservations timeline for Wyndham, which has both owners of home resorts and owners of Club Wyndham Access (CWA) which is the trust. Presidential Reserve (PR), Margaritaville, VIP, Platinum and Founders are specific ownerships and ownership levels, some based on number of points owned and some based on home resorts owned (e.g., Margaritaville is sort of a mini-system within Wyndham). CWA members own a specific number of points, but they're not tied to any home resort.

Note that between 13-10 months, everyone who has a home resort can book it, and CWA members can book the CWA units but only the CWA units. The number of CWA units varies by resort and sometimes is very few, sometimes very many, depending on how many units Wyndham has acquired by whatever means. At 10 months, most Wyndham resorts can be booked by any owner. IOW, the home resort priority period is 3 months long (13 to 10 months).

I'm posting this just as an example of how a trust might integrate into DVC - at 11 months, owners like us could book home resorts up to the number of points they own at that resort, and trust owners could book trust resorts, up to the number of points they own and the trust owns at that resort (if the trust owns only 300 points at BWV, those points wouldn't go any farther than my 300 BWV points). At 7 months, booking would open to all, and both deeded owners and trust owners would be limited to the number of points they own. Again, this is just an example of how it might work!

Booking Reservations Timeline
14 Months
Margaritaville owners book home resort
PR owners can book home resort

13-10 Months
Everyone can book their home resorts
CWA can book CWA units in resorts

12 Months
PR owners can book all PR units

11 Months
Margaritaville owners can book other
Margaritaville resorts in system

10 Months
Everyone can book most Wyndham resorts
Platinum & Founders VIP can book
Margaritavilles

 

[TheDailyMoo]

 

[accm]

I feel like one of the big selling points of DVC is that it's not like a traditional timeshare. I would hope that DVD keeps that mentality while setting up whatever this trust is going to be. I don't blame anyone for immediately jumping to the worse conclusions, but I really hope that DVD isn't devaluing what they have by becoming more like traditional timeshares.

I also still can't wrap my head around how this could possibly work without significantly changing the way DVC operates. I can't imagine how this system could work with the current UY system. And now, people may also be inclined to walk a reservation not to get a coveted day, but to make sure they have access to the points at a certain resort.

 

[AnnaKristoff2013]

I can't imagine how this system could work with the current UY system.

Club Wyndham Access has use years just like DVC does. Over time they’ve realigned most to January (I think just for simplicity sake), but there are plenty of other use years as well.

And now, people may also be inclined to walk a reservation not to get a coveted day, but to make sure they have access to the points at a certain resort.

Walking wouldn’t work for a Trust Owner, because it’s not just about 11 month availability, it’s also about how much the trust has left in that UY for that resort.

 

[Sandisw]

Here's something I found on TUG - this is an excerpt from the booking reservations timeline for Wyndham, which has both owners of home resorts and owners of Club Wyndham Access (CWA) which is the trust. Presidential Reserve (PR), Margaritaville, VIP, Platinum and Founders are specific ownerships and ownership levels, some based on number of points owned and some based on home resorts owned (e.g., Margaritaville is sort of a mini-system within Wyndham). CWA members own a specific number of points, but they're not tied to any home resort.

Note that between 13-10 months, everyone who has a home resort can book it, and CWA members can book the CWA units but only the CWA units. The number of CWA units varies by resort and sometimes is very few, sometimes very many, depending on how many units Wyndham has acquired by whatever means. At 10 months, most Wyndham resorts can be booked by any owner. IOW, the home resort priority period is 3 months long (13 to 10 months).

I'm posting this just as an example of how a trust might integrate into DVC - at 11 months, owners like us could book home resorts up to the number of points they own at that resort, and trust owners could book trust resorts, up to the number of points they own and the trust owns at that resort (if the trust owns only 300 points at BWV, those points wouldn't go any farther than my 300 BWV points). At 7 months, booking would open to all, and both deeded owners and trust owners would be limited to the number of points they own. Again, this is just an example of how it might work!

Booking Reservations Timeline
14 Months
Margaritaville owners book home resort
PR owners can book home resort

13-10 Months
Everyone can book their home resorts
CWA can book CWA units in resorts

12 Months
PR owners can book all PR units

11 Months
Margaritaville owners can book other
Margaritaville resorts in system

10 Months
Everyone can book most Wyndham resorts
Platinum & Founders VIP can book
Margaritavilles

Since they use the words units, how does that apply to DVC when the points owned by the trust would not necessarily be tied to a full unit in resorts sold out?

I get the whole the trust members can’t book more than the number of points that are owned, but how do they decide when those points can be used and for which units??

That’s what I am having a hard time wrapping my head around for the current sold out resorts.

Now, one thought I just had that could work is the deeded owners of current resorts are given only the one month advantage we are guaranteed and then everyone, including the trust members get access?

 

[Paul Stupin]

I really don’t think Disney will blow up the entire current system with an unproven strategy that makes life for all 100% of current owners potentially more difficult, and undermines the value of their ownership. It’s just too risky. If they do experiment with something like this, wouldn’t they do it slowly, in some kind of incremental steps?

And at this point, I don’t think I’d be interested in a grab bag of left overs when I’ve already bought the resorts in which I’m most interested in staying.

 

[Frugal Fairy Tales]

I have been saying that this change is a serious possibility for a long time. It is great for the developer, but less ideal for the consumer. Additionally, it would be a very convenient way to handle the 2042 problem in one fell swoop. Separately, and sooner, it would be a convenient way to solve the "how are we going to sell 4-5 resorts at once, including some that are on pace to continue to be sold for years?" conundrum.

Many have questioned me about this or called me crazy when I have suggested this idea before. But I think it will be seriously explored by Disney, and for all we know has been explored seriously many times over the years.

Disney would be foolish to not explore this. I would be shocked if DVC would not be able to do what Hyatt does, and operate the two systems (the old system with fixed weeks and home resorts) and the new system (a points "trust") simultaneously as they come into ownership of more points over time. Hyatt additionally has properties that were theirs and (arguably inferior) properties that joined their system complete with separate points valuations. My point in mentioning this is just to say, these systems do change over the years, and typically the developer has tremendous leeway.

Likely for existing owners, your home resort window and policies would stay the same. There are even ways to do it where the new system and old system can exchange between each other.

They may decide the pushback from owners is too strong. I know we would not be interested in buying generic points, we like knowing we own a specific resort, and I would not be interested in buying more weeks in a points system, and it would possibly cause us to sell our existing contracts. I think many owners would consider this, and sadly, that helps make a migration for Disney to a points trust easier as sellers leave the old system if Disney were to buy those points in ROFR and have a way to convert them from the old to the new. (once again, depends on what exactly is written in the deeds).

My advice, if you value having "your deeded resort" and want that to be the program you are in, buy more points now while you know you can. Also make clear to anyone at Disney who will listen you are not interested in a "points trust", but want deeded access to a specific resort.

How do we make sure this trust doesn’t affect us? I don’t want to be in a trust!! This seems awful.

 

[AnnaKristoff2013]

How do we make sure this trust doesn’t affect us? I don’t want to be in a trust!! This seems awful.

You’re not going to be in a trust (unless you buy points), and it really won’t affect you. I honestly think the impact on availability will be much less than the impact you feel right now due to mega-renting resale brokers who are spec-renting in-demand rooms.

 

[Frugal Fairy Tales]

You’re not going to be in a trust (unless you buy points), and it really won’t affect you. I honestly think the impact on availability will be much less than the impact you feel right now due to mega-renting resale brokers who are spec-renting in-demand rooms.

What if I want to buy more points later? Can I buy non-trust points?

 

[AnnaKristoff2013]

What if I want to buy more points later? Can I buy non-trust points?

I’m sure you will still be able to. I can’t imagine they would stop selling legacy points. They’ll sell whatever people are willing to buy. The developers who sell trust products (like Club Wyndham) still sell deeded interests as well.

 

[CarolMN]

From the point of view of the current reservation system, the trust just looks like a bunch of people who own a bunch of points, just like any other owners who own points. All 110 people might try to reserve 100 points worth of BCV in October, but only ten of them will be successful. That might give them a teeny tiny advantage at the 11-month mark due to additional concurrency, but it's very much at the margins.

And if those 10 are successful, then no one else can book a Beach Club room for the rest of the use year because all the beach club points have been used, right?

 

[AnnaKristoff2013]

And if those 10 are successful, then no one else can book a Beach Club room for the rest of the use year because all the beach club points have been used, right?

Correct, during the owner priority period anyway. At the 7 month mark they can.

Edit: The trust could impose it’s own additional internal restrictions as well. Ie: if they have 12,000 points in a given use year, they could allocate that to 1k points per month to spread them out so that members don’t always use it all up in the first month of the UY.

 

[CarolynFH]

Since they use the words units, how does that apply to DVC when the points owned by the trust would not necessarily be tied to a full unit in resorts sold out?

I get the whole the trust members can’t book more than the number of points that are owned, but how do they decide when those points can be used and for which units??

That’s what I am having a hard time wrapping my head around for the current sold out resorts.

Now, one thought I just had that could work is the deeded owners of current resorts are given only the one month advantage we are guaranteed and then everyone, including the trust members get access?

I’m not sure how it would work. Swirling around in my head are various thoughts, but try as I might to put them into words, they don’t make so much sense. I’LL try anyway, but please no one think this is true! But just like you only have a certain number of points to use on a RIV booking, the trust would only have a certain number of points it could use. The trust participant would be logged in through a special portal, and the system would know how many points the trust itself had available to spend at the resort the participant was trying to book. So the trust participant might have 300 trust points to spend, but say the trust itself only had 200 points available at that resort. The trust participant could check availability for a stay that cost 300 points, but the system would say Not Available because the trust didn’t have enough points at that resort. Does that make sense?

It’s actually because of that complexity that I like your idea that DVC might start its trust with new resorts like Poly tower and not yet sold out resorts like RIV. That would give them a large number of points at each resort for trust participants to book, and they’d just have to figure out how to let us old legacy owners book that nice new Poly tower and peaceful Ft. Wilderness cabin. As time goes on they could build up their inventory of the older resorts via ROFR, foreclosures, maybe even outright buy-backs from some of us old owners whose families don’t want our 2042 resorts. And in 2042 they’d be able to fund the renovations needed to make those resorts new again via dues.

I’m looking forward to finding out what really happens!