Do you think renting DVC points bothers Disney?

[toolsnspools]

Goodwill

Here's a link to the Annual report for a thing called "goodwill" -

http://www.stock-analysis-on.net/NYSE/Company/Walt-Disney-Co/Analysis/Goodwill-and-Intangible-Assets

According to their report, Disney has about $29B-b-b-billion worth of it. It basically comes down to this. Doing things to make happy customers builds goodwill and irritating your customers diminishes it.

Constantly pulling people out of the ticket line because they bought their tickets from the cheap-tickets dealer out on the corner. Seeing families with kids being denied entrance to the park (picture loudly crying kids here) would not be a magical start to my Disney day. Goodwill would decline.

Renting is a way to ease the minds of someone who's about to drop a significant amount of money on 50 years worth of vacations. Even if they don't think they'll ever use it, renting is a way to get out of using their points if something comes up, and over 50 years, that's a good way to ease customers minds. Goodwill increases.

CaptainKidd,
In strictly technical terms, you are probably right. There is a small amount of money lost if/when someone drops a reservation to move over to rented points. On the other hand, if they lost the goodwill associated with those customers, it could potentially cost them much more. If they lost DVC sales because customers were concerned about getting stuck with points they couldn't use, they would lose money. If I couldn't rent my DVC points, and I was going to lose them, I would reserve a week and leave the room empty. After all, why would I let them make a profit on the room I already paid for with points? That leaves them with potentially (if they did rent the vacated room) one less paying customer in the parks during that period, and they would lose even more money.

Disney could probably put an end to all point renting. If they did, they would probably get sued by many DVC owners that thought this was part of the deal. Generally when people sue you, they are not very happy with you. It's hard to get people to keep coming back to "magical WDW" when it reminds them of a heated lawsuit. If Disney's most loyal customers, DVC owners, stop coming back, the $29B of goodwill will disappear rather quickly.

 

[tjkraz]

Disney can't arbitrarily charge you for someone else's purchases. If a guest puts down a card on the room for charging privileges, and it bounces, that's now between Disney and the guest's bank. And if a guest DOESN'T put down a card on the room, nothing can be charged to the room anyway, so it's a moot point.

A rental is like a sublet. The contract is between the owner and his renter--not between the landlord (Disney) and the renter. This ties-in nicely with the earlier discussion--in a rental transaction Disney didn't sell a room to the renter. Disney entered into a contract with the DVC owner, who then made a separate agreement with the non-member renting the points.

I believe there is a statement in the POS which indemnifies owners for any issues which occur during a stay on their points.

And I assure you that I've read of multiple instances over the last 8-10 years where members' DVC ownership was put on hold until the owner made-good on an outstanding renter debt. The one that I most vividly recall involved over $1000 worth of items charged to the room. When the credit card was declined Disney turned to the point owner for compensation. Until the debt was satisfied, the member's account was frozen.

Another involved charges that were somehow applied to the room when the renter chose to not provide a credit card at check-in. I believe this one was the deep-cleaning fee charged when someone smokes in a Disney guest room.

These were not situations where a phone call to a manager got the charges written off. Disney was very firm in holding the member liable for the charges. Members were informed that they would not be able to make any future reservations or utilize existing reservations until the debt was settled.

And when a DVC owner books a stay for a renter, the DVC owner has to put in the renter's names. Disney knows when it's not the Owner staying in the room. As such, they're not going to allow the room occupant to simply add nights to the room and use your points. If that's happened, it was because of an uneducated CM.

That's the exact point I made in my comments. No disagreement there. However DVC may or may not disagree with that position and it would undoubtedly require some time and energy to untangle the situation.

I will add that these situations to appear to be very remote. Again we're talking about a small handful of reports over as much as a decade. (At least, reports that I have personally read about.) I suspect the overall odds of being defrauded similarly on any given rental transaction are extremely low but it is still a risk borne by the member.

 

[Pioneer Hall]

Here's a link to the Annual report for a thing called "goodwill" -

http://www.stock-analysis-on.net/NYSE/Company/Walt-Disney-Co/Analysis/Goodwill-and-Intangible-Assets

According to their report, Disney has about $29B-b-b-billion worth of it. It basically comes down to this. Doing things to make happy customers builds goodwill and irritating your customers diminishes it.

Constantly pulling people out of the ticket line because they bought their tickets from the cheap-tickets dealer out on the corner. Seeing families with kids being denied entrance to the park (picture loudly crying kids here) would not be a magical start to my Disney day. Goodwill would decline.

Renting is a way to ease the minds of someone who's about to drop a significant amount of money on 50 years worth of vacations. Even if they don't think they'll ever use it, renting is a way to get out of using their points if something comes up, and over 50 years, that's a good way to ease customers minds. Goodwill increases.

CaptainKidd,
In strictly technical terms, you are probably right. There is a small amount of money lost if/when someone drops a reservation to move over to rented points. On the other hand, if they lost the goodwill associated with those customers, it could potentially cost them much more. If they lost DVC sales because customers were concerned about getting stuck with points they couldn't use, they would lose money. If I couldn't rent my DVC points, and I was going to lose them, I would reserve a week and leave the room empty. After all, why would I let them make a profit on the room I already paid for with points? That leaves them with potentially (if they did rent the vacated room) one less paying customer in the parks during that period, and they would lose even more money.

Disney could probably put an end to all point renting. If they did, they would probably get sued by many DVC owners that thought this was part of the deal. Generally when people sue you, they are not very happy with you. It's hard to get people to keep coming back to "magical WDW" when it reminds them of a heated lawsuit. If Disney's most loyal customers, DVC owners, stop coming back, the $29B of goodwill will disappear rather quickly.

Sorry, but accounting goodwill that you see on those financial statements has nothing to do with making people feel good. It has to do with a way of valuing certain assets and is usually done to create tax benefits for the company. I'm no accounting expert (I've only taken a couple of classes that deal with this stuff), but I can assure you that number has nothing to do with guest satisfaction.

 

[tjkraz]

Here's a link to the Annual report for a thing called "goodwill" -

http://www.stock-analysis-on.net/NYSE/Company/Walt-Disney-Co/Analysis/Goodwill-and-Intangible-Assets

According to their report, Disney has about $29B-b-b-billion worth of it. It basically comes down to this. Doing things to make happy customers builds goodwill and irritating your customers diminishes it.

Balance Sheet "goodwill" isn't really the sort of "good will" you are talking about here. It's a financial vehicle used to balance premiums paid during an acquisition.

Imagine Disney pays $1 billion to buy another company. The tangible assets of the company (equipment, inventory, etc.) are worth $750 million. The other $250M would be booked as Goodwill. Financial "Goodwill" is the additional $250M that the buyer spends beyond the paper value of the acquisition. That's the money paid for the company's name, reputation, etc.

Disney doesn't earn $95 worth of "Goodwill" every time it gives away a free park ticket.

Constantly pulling people out of the ticket line because they bought their tickets from the cheap-tickets dealer out on the corner. Seeing families with kids being denied entrance to the park (picture loudly crying kids here) would not be a magical start to my Disney day.

But that hasn't stopped Disney from implementing finger scanners to curtail the secondary market for park tickets. Disney is actively involved in finding and prosecuting vendors who violate their ticket policies.

Similarly, DVC has adopted policies in recent years which have made it more difficult to rent points.

Disney could probably put an end to all point renting.

Again, no they couldn't. Renting is expressly ALLOWED in DVC ownership docs--although "commercial renting" is prohibited.

With Disney being the single largest point renter (they use their own DVC point holdings to sell rooms to cash guests), they could never defend holding other owners to a different standard.

 

[toolsnspools]

Although I didn't make the point very well last night, I understand that goodwill isn't a $ per transaction value on the books. Here's a good definition -

Investopedia explains 'Goodwill'
Goodwill is seen as an intangible asset on the balance sheet because it is not a physical asset such as buildings and equipment. Goodwill typically reflects the value of intangible assets such as a strong brand name, good customer relations, good employee relations and any patents or proprietary technology.


Good customer relations and strong brand name being the operative part of what I was referring to. Going after a ticket retailer won't hurt goodwill because they aren't customers. Unless Disney is making the news all the time for being a hawk on those companies, it won't impact them from a goodwill perspective. Similar issue with finger scanners. There is very little negative impact from having people scan their fingers, and it is a huge deterrent for anyone considering entering the park with a ticket that isn't theirs. (I've personally passed on getting those tickets for that very reason) If they were to enforce the technology, and block people from entering the parks, it would have a negative impact. Not just for the people trying to use cheap tickets, but also for the people around them who would also experience the negativity of that practice.

Blocking renting (legal or not) would have a similar negative effect on DVC owners, so that has to be taken into account from an overall financial perspective. Allowing renting has a positive effect for the person who rents the nice room at a good price, and the DVC owner who might have to lose their points. Allowing it adds value from this perspective.

 

[Pioneer Hall]

Although I didn't make the point very well last night, I understand that goodwill isn't a $ per transaction value on the books. Here's a good definition -

Investopedia explains 'Goodwill'
Goodwill is seen as an intangible asset on the balance sheet because it is not a physical asset such as buildings and equipment. Goodwill typically reflects the value of intangible assets such as a strong brand name, good customer relations, good employee relations and any patents or proprietary technology.


Good customer relations and strong brand name being the operative part of what I was referring to. Going after a ticket retailer won't hurt goodwill because they aren't customers. Unless Disney is making the news all the time for being a hawk on those companies, it won't impact them from a goodwill perspective. Similar issue with finger scanners. There is very little negative impact from having people scan their fingers, and it is a huge deterrent for anyone considering entering the park with a ticket that isn't theirs. (I've personally passed on getting those tickets for that very reason) If they were to enforce the technology, and block people from entering the parks, it would have a negative impact. Not just for the people trying to use cheap tickets, but also for the people around them who would also experience the negativity of that practice.

Blocking renting (legal or not) would have a similar negative effect on DVC owners, so that has to be taken into account from an overall financial perspective. Allowing renting has a positive effect for the person who rents the nice room at a good price, and the DVC owner who might have to lose their points. Allowing it adds value from this perspective.

I still think that you are looking at goodwill the wrong way from a financial perspective. It has to do with acquisitions and valuation as Tim said.

 

[flynnibus]

While such things may hurt a company's image.. and ultimately bring down the PERCEIVED value of the company.. (which in turn would lead to goodwill write downs to fluff the books up) - this really has nothing to do with this micro-level of transactions like the poster infers.

Goodwill is not customer service write-offs. It's value above and beyond the tangilble value a company paid for something. They carry the value in their books as goodwill, and generally dump it like a hot potato as part of the write-off when the asset tanks... making it appear as an offsetting loss in the accounting.

 

[Lucky]

Imagine Disney pays $1 billion to buy another company. The tangible assets of the company (equipment, inventory, etc.) are worth $750 million. The other $250M would be booked as Goodwill. Financial "Goodwill" is the additional $250M that the buyer spends beyond the paper value of the acquisition. That's the money paid for the company's name, reputation, etc.

Although I didn't make the point very well last night, I understand that goodwill isn't a $ per transaction value on the books. Here's a good definition -

Investopedia explains 'Goodwill'
Goodwill is seen as an intangible asset on the balance sheet because it is not a physical asset such as buildings and equipment. Goodwill typically reflects the value of intangible assets such as a strong brand name, good customer relations, good employee relations and any patents or proprietary technology.


Good customer relations and strong brand name being the operative part of what I was referring to.

I still think that you are looking at goodwill the wrong way from a financial perspective. It has to do with acquisitions and valuation as Tim said.

:veryconfuSounds to me like they were in agreement.

 

[toolsnspools]

:veryconfuSounds to me like they were in agreement.

But then we wouldn't have anything to argue about. :shrug:

:lol:

 

[MichWolv]

Ay yi yi. An actual discussion of an accounting topic, sorta.

The definition of goodwill that tools posted is the correct definition. However, goodwill does not generally get recorded on the balance sheet. Indeed, generally accepted accounting principles specifically prohibit the recording of so-called "internally-generated goodwill" -- the goodwill that is built up simply by running your business in a way that generates such goodwill. This is not because GAAP doubts the existence of goodwill, but because there is no generally accepted way to measure either its cost or its value on an ongoing basis.

Goodwill is only recorded as an asset when a company acquires another business, and that acquired business has goodwill in it. Even then, it is not identifiable (and for accounting purposes is considered an unidentifiable intangible asset) itself. Rather, the amount and existence of goodwill is determined by subtracting the fair values of all of the identifiable assets (like cash, inventory, buildings, licenses, patents, customer contracts and relationships, and zillion more) acquired from the purchase price. This leftover amount is labeled "Goodwill" for lack of a better explanation. It may very well be due to the things in the definition tools posted, but could be due to a bunch of other things as well, including "You overpaid".

What this means is that the goodwill on Disney's books wasn't generated by Disney doing good things. Rather, it was generated, at best, by the good things done by the companies that Disney bought BEFORE DISNEY BOUGHT THEM. At worst, the goodwill on Disney's books is due to Disney overpaying for the companies that Disney bought.

 

[Master Yoda]

Ay yi yi. An actual discussion of an accounting topic, sorta.

The definition of goodwill that tools posted is the correct definition. However, goodwill does not generally get recorded on the balance sheet. Indeed, generally accepted accounting principles specifically prohibit the recording of so-called "internally-generated goodwill" -- the goodwill that is built up simply by running your business in a way that generates such goodwill.

Goodwill is only recorded as an asset when a company acquires another business, and that acquired business has goodwill in it. Even then, it is not identifiable (and for accounting purposes is considered an unidentifiable intangible asset) itself. Rather, the amount and existence of goodwill is determined by subtracting the fair values of all of the identifiable assets (like cash, inventory, buildings, licenses, patents, customer contracts and relationships, and zillion more) acquired from the purchase price. This leftover amount is labeled "Goodwill" for lack of a better explanation. It may very well be due to the things in the definition tools posted, but could be due to a bunch of other things as well, including "You overpaid".

What this means is that the goodwill on Disney's books wasn't generated by Disney doing good things. Rather, it was generated, at best, by the good things done by the companies that Disney bought BEFORE DISNEY BOUGHT THEM. At worst, the goodwill on Disney's books is due to Disney overpaying for the companies that Disney bought.

I think you are the one person on the planet that makes accounting interesting, and this is coming from a guy raised by accountants (mom and grandfather).:lol:

 

[MichWolv]

I think you are the one person on the planet that makes accounting interesting, and this is coming from a guy raised by accountants (mom and grandfather).:lol:

Thank you, sir! :king:

 

[Hakunamatata]

Ay yi yi. An actual discussion of an accounting topic, sorta.

The definition of goodwill that tools posted is the correct definition. However, goodwill does not generally get recorded on the balance sheet. Indeed, generally accepted accounting principles specifically prohibit the recording of so-called "internally-generated goodwill" -- the goodwill that is built up simply by running your business in a way that generates such goodwill. This is not because GAAP doubts the existence of goodwill, but because there is no generally accepted way to measure either its cost or its value on an ongoing basis.

Goodwill is only recorded as an asset when a company acquires another business, and that acquired business has goodwill in it. Even then, it is not identifiable (and for accounting purposes is considered an unidentifiable intangible asset) itself. Rather, the amount and existence of goodwill is determined by subtracting the fair values of all of the identifiable assets (like cash, inventory, buildings, licenses, patents, customer contracts and relationships, and zillion more) acquired from the purchase price. This leftover amount is labeled "Goodwill" for lack of a better explanation. It may very well be due to the things in the definition tools posted, but could be due to a bunch of other things as well, including "You overpaid".

What this means is that the goodwill on Disney's books wasn't generated by Disney doing good things. Rather, it was generated, at best, by the good things done by the companies that Disney bought BEFORE DISNEY BOUGHT THEM. At worst, the goodwill on Disney's books is due to Disney overpaying for the companies that Disney bought.

Are the terms goodwill and "brand value" synonymous?

 

[MichWolv]

Are the terms goodwill and "brand value" synonymous?

Sometimes. In accounting for an acquisition, the value of the brand name (e.g., the trademark and related rights) would be considered an idenfiable intangible asset separate from goodwill, because a brand name can be sold separately from the whole business if so desired. To the extent that the brand has value only in conjunction with the rest of the business, that value would be captured as part of goodwill.

So think of it this way. Pretend that Disney decided to no longer do anything itself with, let's say, the Muppets. Instead, Disney will license the Muppets name, rights, etc. to somebody else to use as they see fit, but Disney will have nothing to do with it. The value that Disney could capture from that kind of licensing is, theoretically, the value of the Muppets brand name and related rights. To the extent that Disney can make more off the Muppets by actively using the Muppets itself rather than licensing them out, that excess value is, conceptually, part of goodwill.

Of course, as I mentioned, the fact that the brand and goodwill are both intangible assets does not necessarily mean that they are recorded on the balance sheet, because internally-generated stuff is often not recorded. In this case, Disney probably has some value on the balance sheet related to the Muppets brand and to the goodwill that was in the business when Disney purchased it.

 

[dreamfinder]

I currently own at SSR and in the past BWV now we are in the process of adding on at AKV but I am finding it difficult to rent points. I have references and in the past never took more than a day or two to rent points we were not going to use. We want to own two resorts so some day we can leave one for each of our children and grandchildren to vacation in Disney. I have owned BWV in the past and never had any trouble renting. Does anyone else feel the individuals operating a business selling DVC points are hurting the market. As an individual owner we rent our points when we cruise on the Disney ships or years we do not go to help offset the price of the considerable dues and the mortgage that we carry on the properties. Buying at DVC and maintaining are not inexpensive propositions.
I think Disney should put a stop to anyone blatantly making a business out of selling the points. This was never the intention of the Disney Vacation Club membership. I feel it will make it even more difficult for us individual owners who are not using the DVC to make an income but for the purpose it was intended family vacations. I also have noticed checking reservations recently it is more difficult to get anything in the next few months and I am wondering if the business of selling points is making it more difficult for the actual owners to rent or make reservations for themselves. I am finding availability 9, 10 and 11 months out but nothing in the near months. I have found at least two individuals/businesses selling DVC points and at least one is advertising on this site. The going rate for them to purchase our points is $8 to $10 and they are resold for $13 currently by at least one of the individuals. I think as DVC owners we should be outspoken about this to member services I have been told Disney does listen to members and I do feel in the future this will impact on the availability of reservations for all Disney Vacation Club owners.

I believe that they have put limits in place to keep people from making a "business" out of renting their points. They have a limit on the number of people who can be listed on a contract and the number of changes made to it. There is also a limit on how many points you can own.

The people that do make money from renting points are typically brokers. They don't own the points, but do the legwork of connecting the owner and renter, and providing a legal recourse in case either backs out. There are a few that try to "sell" weeks on eBay and the like, but I can't see the risk of that method netting very much profit.

I'm not totally clear on how you are referring to the purchasing for 8 and selling for 13. That sounds more like the rates for renting. If you truly know who is selling contracts that are passing ROFR for $13 a point, let me know I'd love to get some more at that price.

 

[Phonedave]

I currently own at SSR and in the past BWV now we are in the process of adding on at AKV but I am finding it difficult to rent points. I have references and in the past never took more than a day or two to rent points we were not going to use. We want to own two resorts so some day we can leave one for each of our children and grandchildren to vacation in Disney. I have owned BWV in the past and never had any trouble renting. Does anyone else feel the individuals operating a business selling DVC points are hurting the market. As an individual owner we rent our points when we cruise on the Disney ships or years we do not go to help offset the price of the considerable dues and the mortgage that we carry on the properties. Buying at DVC and maintaining are not inexpensive propositions.
I think Disney should put a stop to anyone blatantly making a business out of selling the points. This was never the intention of the Disney Vacation Club membership. I feel it will make it even more difficult for us individual owners who are not using the DVC to make an income but for the purpose it was intended family vacations. I also have noticed checking reservations recently it is more difficult to get anything in the next few months and I am wondering if the business of selling points is making it more difficult for the actual owners to rent or make reservations for themselves. I am finding availability 9, 10 and 11 months out but nothing in the near months. I have found at least two individuals/businesses selling DVC points and at least one is advertising on this site. The going rate for them to purchase our points is $8 to $10 and they are resold for $13 currently by at least one of the individuals. I think as DVC owners we should be outspoken about this to member services I have been told Disney does listen to members and I do feel in the future this will impact on the availability of reservations for all Disney Vacation Club owners.

There are two seperate issues here.

There are people who make a business out of selling THEIR points. They own say 800 points and have not gone to WDW on points a day in their life. Every year they rent the point out at a profit. This is what DVC does not allow.

There there are people who make a business out of being a points broker. They rent OTHER peoples points. There is nothing wrong with this (according to DVC and in my opinion as well). The $3 difference per point that person charges is for the SERVICE he provides. He advertises, runs a web site, books the reservations, holds money in escrow, and makes sure you get paid and the person renting gets the room. If you wanted to do all of that youself, you are welcome to try, and rent your points out for $13 each. Points he brokers rent for a premimum because of the security and ease of renting he provides.

It also has no impact on the availability of reservations. The number of points that are sold is finite. In a simplistic sense there are enough points "out there" to book every room in a give resort every night of the year. In reality there are even less out there because of breakage requirements, but that is the general picture.

-dave

 

[tjkraz]

I guess I should be more clear the brokers are buying points from members for $8 and $10 then they turn around and sell them to renters for a profit that ranges I have seen points rented as high as $15 per point by these brokers. Yes they have expenses and run a business but I do not think that the means justifies the end result. As they are offering the to have the renter deal with a business not the orginal owner and suggesting more insurance in renting from them as they broker the points. As a matter of fact the orginal member still must make the reservation and has control of the reservation but as far as I can see has no control over how it is used or by whom how safe is this for the member. I try to develop a personal relationship with my renters and help them every step of the way and I like to think I know who is using my points and my home away from home that I am still responsible for in the end.

Seems to me that you are glossing-over some of the most important aspects of using a broker. I'm most familiar with DVCRequest.com so I will specifically speak to their services.

First, they've developed a name in the marketplace. If you are having trouble renting your points, then you should understand how important this can be. They've used advertising (which is not free), a professional web presence and high customer satisfaction to build a reputation.

They also offer protection to both parties via the terms of their agreements. Regardless of who holds the reservation, DVCRequest guarantees that a room will be available to every single renter or they will take steps to rectify the situation. If an owner happens to go rogue and cause a reservation to be cancelled, DVCRequest will fix the problem even if it means paying full cash price for the villa. Then they will take it up with the owner.

A portion of the funds remain in escrow until the reservation has been completed to encourage all parties to fulfill their obligations.

These are terms an independent renter would have trouble matching. It's just the nature of a free market system. Buying an iPod from Target or Walmart is going to offer the buyer more protections than buying the same item from a stranger on eBay.

As for pricing, my understanding is that the typical fees are $13 per point with $10 of it going back to the owner. Lower rates will sometimes apply if the points are close to expiration and need to be rented immediately.

As an independent, you have the advantages of being able to ask less than $13 and perhaps appeal to bargain-seekers. If buyers are willing to pay more money for increased protections and the possibility of more professional servicing, that's their prerogative. The onus is on YOU to prove that you can provide equal or better services for equal or lower rates.

I think in general DVC owners do not ask enough for thier points. Another issue is that the average renter does not understand the complexity of the DVC for instance points that will expire soon are not as valuable as points that are not going to expire for a year. Also we all know points that have limits on them are also not as valuable so they are sold for less. Uneducated renters see these bargan points and get the impression we should all be selling points for less. We purchased our properties for our family at times we choose a different vacation and renting our points affords that luxury. However I do resent someone making a business out of renting points to DVC as a broker or not. I think members should complain and ask DVC to put a stop to this blatent disregard for the original values intended and expressed to us and other members who purchased DVC properties for family vacations not a business.

That's a different topic altogether and the problem is you cannot control the marketplace.

There are a finite number of renters and every day there may be more and more members looking to get rid of their points. Supply and demand will influence prices.

You are competing with owners who paid $54 per point for Old Key West over 20 years ago...and people buying Vero Beach resale points today for $35 each. If they want to rent for $8 (or $9, or $10) per point just to ensure a fast and painless transaction, they have every right to do so.

Reality is you either need to adapt to a changing marketplace or adjust your profit expectations. There is absolutely nothing you can do to either compel other owners to charge more or discourage owners from using rental services.

 

[GoofGoof]

This got pulled out of the past, but I'll throw in my 2 cents.

Disney is probably not very concerned with people renting DVC points. From the DVC side they could care less. They make money selling the points. Makes no difference to the Disney bottom line if you use them or rent them out. Fees are still paid either way to cover expenses at the resorts. Do they care that they lost a cash sale since someone is now renting points? I don't really think they do. The volume is not nearly high enough. Less than 10% of all rooms at WDW are DVC units. Of them the number rented out is probably pretty small. For arguments sake lets say 10% of DVC points are rented out in a year. That means around 1% of the people staying on Disney property are renting DVC points. Not significant on room occupancy rates. Plus, they still get you to buy food and park tickets. When you rent the points you don't get discounted APs or access to DVC food and merchandise discounts like TIW so your food and park tickets are at full price. If DVC expands significantly and the number of people renting points dramatically increased they start to notice. If they do they could probably attempt to shut down the brokers who facilitate point rentals. Based on the contracts they have limited ability to stop individuals from renting to other individuals directly.

I also enjoyed the discussion of accounting goodwill. It was pretty funny. The Walt Disney Company has a lot of goodwill on the books from Marvel, Pixar and probably ABC.

 

[Phonedave]

This got pulled out of the past, but I'll throw in my 2 cents.

Disney is probably not very concerned with people renting DVC points. From the DVC side they could care less. They make money selling the points. Makes no difference to the Disney bottom line if you use them or rent them out. Fees are still paid either way to cover expenses at the resorts. Do they care that they lost a cash sale since someone is now renting points? I don't really think they do. The volume is not nearly high enough. Less than 10% of all rooms at WDW are DVC units. Of them the number rented out is probably pretty small. For arguments sake lets say 10% of DVC points are rented out in a year. That means around 1% of the people staying on Disney property are renting DVC points. Not significant on room occupancy rates. Plus, they still get you to buy food and park tickets. When you rent the points you don't get discounted APs or access to DVC food and merchandise discounts like TIW so your food and park tickets are at full price. If DVC expands significantly and the number of people renting points dramatically increased they start to notice. If they do they could probably attempt to shut down the brokers who facilitate point rentals. Based on the contracts they have limited ability to stop individuals from renting to other individuals directly.

I also enjoyed the discussion of accounting goodwill. It was pretty funny. The Walt Disney Company has a lot of goodwill on the books from Marvel, Pixar and probably ABC.

According to the contract you sign with DVC, you are allowed to rent your points out, but you are not allowed to do so on a regular basis as a money making business. I am not clear why this provision is in there, but I suspect it is for a number of reasons including both comeptition and then potential PR nightmate and hassle it can create. Any rental agreements are between the owner and the renter (unless through a broker, and then they are involved as well because you sign a contract with them) - Disney is NOT involved. IF you rent points, show up, and have no reservation, DVC will pretty much say "sorry, that is not our problem. Now would you like to pay cash?" In addition there is the hassle of if somone renting points causes damage, then DVC has to charge it back to the owner. Another hassle.

However, as was said, going through a broker eliminates a lot of these problem. If you want to go through a broker you sign a contact with them - both parties do. Brokers most likely make the job easier for DVC. If there is a problem, a person renting points can call the broker and arrange something. If they rented privately, they are trying to contact a person, who may be who knows where.

-dave

 

[GoofGoof]

According to the contract you sign with DVC, you are allowed to rent your points out, but you are not allowed to do so on a regular basis as a money making business. I am not clear why this provision is in there, but I suspect it is for a number of reasons including both comeptition and then potential PR nightmate and hassle it can create. Any rental agreements are between the owner and the renter (unless through a broker, and then they are involved as well because you sign a contract with them) - Disney is NOT involved. IF you rent points, show up, and have no reservation, DVC will pretty much say "sorry, that is not our problem. Now would you like to pay cash?" In addition there is the hassle of if somone renting points causes damage, then DVC has to charge it back to the owner. Another hassle.

However, as was said, going through a broker eliminates a lot of these problem. If you want to go through a broker you sign a contact with them - both parties do. Brokers most likely make the job easier for DVC. If there is a problem, a person renting points can call the broker and arrange something. If they rented privately, they are trying to contact a person, who may be who knows where.

-dave

For the reasons you state I will probably never rent my points to an individual. If I had to rent them for some reason I would use a broker.