DVC Trust Based Ownership Article

[Genie+]

I don't hate the idea but I would need info before making an opinion.

Yeah I have to admit not to hate the idea. Just hope that doesn’t change with the implementation.

Does make me more wary of DVC’s future though. Same way RIV announcing restrictions did. We were very cautious and deliberate about purchasing DVC. At some point the pendulum may swing from where most owners fared very well no matter how they entered DVC or exited.

 

[ClaraOswald]

Seriously....I only JUST figured out how the current DVC stuff works earlier this year and there's a chance I may have to figure out a whole new system? Good times, ha!

At this point - I mostly just care about my ability to book at my home resort at 11 months. I would assume none of this would effect that since I own at VGC? If I suddenly had trouble booking at 11 months, I would be super upset.

I guess I also wonder if this would effect me down the road if I want to buy more points at VGC.

 

[PrincessKL]

Wilderness Cabins, then Polynesian Towers get a 11 month booking window at each other's resorts.

On resale, you get the same resorts in the 'Trust' at 11 months, but no other resorts.

This does not seem to be fair to owners at Polynesian Tower though, because if they buy there as a deeded contract, they would not have resale restriction when their contracts are sold later. But they would possibly have to pay a higher price to buy into a trust including both the Cabins and Poly Tower, and then their contracts have resale restriction once sold.

 

[bbeagle]

This does not seem to be fair to owners at Polynesian Tower though, because if they buy there as a deeded contract, they would not have resale restriction when their contracts are sold later. But they would possibly have to pay a higher price to buy into a trust including both the Cabins and Poly Tower, and then their contracts have resale restriction once sold.

I'm basing this on a Poly Tower resort NOT being part of the Polynesian.

If the Poly Tower ends up being part of the Polynesian, of course it won't move over to the new Trust. It would be the last of the 'original DVC'.

There's no way I'd buy a Poly Tower which is restricted like Riviera or Disneyland Villas. I'd buy additional points, however, as part of a trust which would give me the Tower, along with others.

 

[maui22]

This should not happen. Owners of the Trust can book only what is held by the trust at 11 months out. If the trust holds 2% of VGF points, the most that trust point owners should be able to book is 2% of the VGF inventory as a "home resort" (I put 2% which is about 1/50, for reasons I that should hopefully be apparent below).

For simplicity, I will ignore that the cost to book a stay varies by date. Where I think the "gray areas" are (and where I have experienced adverse consequences in the Marriott ecosystem as a "legacy weeks" owner competing against points "owners") is how that inventory gets allocated. For example - what is "2% of the inventory"? Does the trust get 2% of the available inventory for each calendar day, and if it fills up that's it? Or could trust owners in theory all reserve Easter week (1 week out of 52) and nothing else for the rest of the year, and traditional points owners get shut out of that week completely?

With Marriott, where legacy deeded weeks owners book a full week and can usually check in only on Friday, Saturday or Sunday, I have noticed that since the points system was launched it 2010, it has become increasingly difficult to get Saturday checkins, which happen to be the most preferred. And, as a multiple week owner, I can book some weeks at 14+ months out, and yet still get the "no Saturday available" answer. There is zero transparency on how the trust gets inventory (i) when points owners try to book stays, or (ii) when legacy weeks owners elect to use points via the points exchange system.

For Marriott's system do they use a point chart system like DVC?

Example, in DVC system Easter/Christmas are the most expensive weeks for points. Wouldn't Disney trust have to own more than roughly 2% ... 1/52) if they want the trust to be able to have first dibs on rooms at that time of year?

 

[DanCali]

For Marriott's system do they use a point chart system like DVC?

Example, in DVC system Easter/Christmas are the most expensive weeks for points. Wouldn't Disney trust have to own more than roughly 2% ... 1/52) if they want the trust to be able to have first dibs on rooms at that time of year?

In my post you are referring to I did preface by saying I will ignore that the cost to book a stay varies by date precisely to bypass the problem you raise. It was more for illustrative purposes.

The Marriott points system does use a points chart, similar to DVC. The underlying deeded weeks comprising the trust all have point allocations based on their deeded "seasons" so a prime season week is worth more points than an off-season week. When they add weeks to the trust (unsold, rofr, foreclosures), they can sell those weeks as points - they use chunks of 250 points.

Unlike the owners who still own deeded weeks, those buying points do not have any voting power, which is retained by Marriott, so the points system has also been a way to solidify control over the various BODs as they added more weeks to the trust over the years via rofr and foreclosures.

One other issue with the Marriott point product is the high maintenance fees per point. This can also impact a potential DVC product because they can load it with unsold Aulani (high dues), HHI and VB points (cheap for them to buy via rofr, but expensive dues), and various foreclosures/deedbacks they get for near-free which probably also have higher dues on average. This would not impact the price they sell the points product at, so it's very tempting to do to increase gross margins. As long as they add a bit from all the other resorts they can still sell a points product with "access to all resorts". Very few buyers will bother to check what's actually in the trust...

 

[AstroBlasters]

Seriously....I only JUST figured out how the current DVC stuff works earlier this year and there's a chance I may have to figure out a whole new system? Good times, ha!

At this point - I mostly just care about my ability to book at my home resort at 11 months. I would assume none of this would effect that since I own at VGC? If I suddenly had trouble booking at 11 months, I would be super upset.

I guess I also wonder if this would affect me down the road if I want to buy more points at VGC.

I would never trade my VGC contract into a Trust system…. it COULD impact your ability to buy future contracts if DVC gets active with ROFR to build up the points in the trust for Grand Cal availability…. but this is all just message board speculation…

 

[Jlo85]

Not to be doomsday, but removing the expiration dates and potentially adding the 2042 resorts to the trust sounds risky to me. It sounds like the trust could run into a situation where dues are unsustainable because of the beach resorts. And the contracts don’t expire, so owners would be stuck.

 

[tom1944]

I would never trade my VGC contract into a Trust system…. it COULD impact your ability to buy future contracts if DVC gets active with ROFR to build up the points in the trust for Grand Cal availability…. but this is all just message board speculation…

I was thinking the trust system might be a way to have access to resorts my current resale contracts does not provide.


But I would only be interested in having access on a limited basis -once every other or every third year. And only for a few days (3 or 4) at that.

 

[TheDailyMoo]

If it ain't broke don't fix it

 

[drjulianof]

To me this really locks up any new purchases on DVC (resale or direct) at this time until is is clear how and if this will change the rules of the game.

 

[Sandisw]

And is the point population static or fluid? If the trust puts 100 VGF points in today, can they replace them with SSR points later on? Even for trust participants, the balance of resort points could change this impacting your booking ability.

They don’t put in points…they put in property at the resorts, which determines the points that go with it.

For example, when you buy 150 points, it’s representative of your % in the unit you are deeded to but it isn’t the same for everyone.

For example, say a unit is made up of three two bedrooms but another unit has one one 2 bedroom, 150 points would represent a different % of the unit.

So, DVd transfers its ownership into the trust which is how it will know how many points it has for use.

 

[Sandisw]

I'm basing this on a Poly Tower resort NOT being part of the Polynesian.

If the Poly Tower ends up being part of the Polynesian, of course it won't move over to the new Trust. It would be the last of the 'original DVC'.

There's no way I'd buy a Poly Tower which is restricted like Riviera or Disneyland Villas. I'd buy additional points, however, as part of a trust which would give me the Tower, along with others.

I think they can be creative, even with the Poly tower units. Since these would be new to PVB, I believe they can add new rules on how they enter for those that would go to the trust.

 

[HyperspaceMountainPilot]

What Disney analysts and shareholders want to see is more buyers being more excited (or at least willing) to pay more per point for direct DVC points. They hoped resale restrictions would do it, but are realizing that a huge chunk of their customers are reluctant to pay more for the new resorts when RIV resale is going for less than BCV and PVB and BLT. VDH may be running into the same problem now that initial enthusiastic buyers have all bought.

I think the trust idea is the next effort to find a way to convince experienced owners (repeat buyers like us) to consider ponying up for direct at future resorts. Knowing nothing about it, I’m more likely to buy into the trust than RIV, VDH, CFW, or Poly Tower (restricted) direct…so good work, Bob. Being able to have choice at 11mo is attractive but the downside is having almost no flexibility to plan 7-10 months out at the nicer resorts. I wonder if this is why they are slowly ROFRing VGF— so they can add their flagship resort into the trust collection marketing materials? The more of the top tier properties they can include, the more they can charge for points. I wonder how many they are sitting on that haven’t been resold in flash sales.

The one huge downside I see is that it’s going to create another insane stress inducing hurdle at midnight/3AM/6AM the day booking opens…and what are the odds Disney will invest in IT to manage it properly?

 

[ClaraOswald]

I'm definitely going to keep my eye on this because it seriously could effect if/when we purchase more VGC points. We have 160 just purchased this year and suspect it should sustain us for several years, at least. But this might force me to buy extra points sooner rather than later. OR it might make me have to wait even longer than I want if they start messing this up a lot. I kinda hate this.

 

[Royal Consort]

DVC just declaring another 32 rooms into Riviera inventory makes me question whether the trust would even include this resort/if it will happen at all.

 

[dioxide45]

This allows them to more easily sell AUL and VDH with the ability to book anywhere at 11 months. They can load the trust with unsold AUL points and sell those to people at WDW all while touting how they have 11 month priority at all the resorts in the trust (even if the trust only owns a few points at many of the resorts). Sales doesn't actually care about availability, just the optics of being able to sell it as 11 month priority at all these resorts when in reality making reservations with trust points will be much harder. Very few people read the disclosures...

 

[kanerf]

I think the only way this would work is to charge a super premium on both the initial purchase and on the maintenance fees going forward.

 

[AstroBlasters]

I think the only way this would work is to charge a super premium on both the initial purchase and on the maintenance fees going forward.

My understanding is that the maintenance fees have to reflect actual expenses… so it would be a weighted average of the points in the trust and would be the same per point as deed based owners.

 

[dioxide45]

My understanding is that the maintenance fees have to reflect actual expenses… so it would be a weighted average of the points in the trust and would be the same per point as deed based owners.

This is correct, except that there is also an added layer of trust expenses in order to operate the trust. Perhaps about a 10% premium over and above the actual maintenance fees the trust pays.