Is the DVC business for sale?

brianstl

Well-Known Member
Original Poster
Does anyone have any insight on the story Testa had on his podcast today about there at least being talk about Disney selling their timeshare business?
 

nickys

Premium Member
Do you have a link to the podcast? Haven’t heard anything.

Seems odd. Why would they be thinking of selling it when they’re about to start selling again at GFV? Or was it talking about them maybe selling Vero Beach and Hilton Head properties when they expire?
 

brianstl

Well-Known Member
Original Poster
Do you have a link to the podcast? Haven’t heard anything.

Seems odd. Why would they be thinking of selling it when they’re about to start selling again at GFV? Or was it talking about them maybe selling Vero Beach and Hilton Head properties when they expire?
It sound like it would be a sale of the whole division. I think it probably is only in the discussion stage at this point. Len Testa brought it up at the 51 minute mark of today's Disney Dish podcast.
 

Disstevefan1

Well-Known Member
Hmm, could Disney sell the business while still keeping ownership to the land and lease the land to the new owners!

Maybe Disney could hold a 100 year lease or something 😀

Pure income with none of the headaches.

The ultimate time share sale 😀
 

CaptainAmerica

Premium Member
This doesn't even make sense. What would they be selling, exactly? Future new resorts? The cash flow on all of the existing resorts has already been realized.

And Jim Hill seems to think this has something to do with sports betting? What?
 

LuvtheGoof

Grill Master
Premium Member
Does anyone have any insight on the story Testa had on his podcast today about there at least being talk about Disney selling their timeshare business?
The only part they could really "sell" would be the management side. Almost all of the resorts are built with current resorts, so would be a nightmare to try and separate the two. Can you imagine 2 different owners for BWV and the Boardwalk Inn? Who mans the front desk? Who pays for Bell Services? 2 different cleaning and maintenance crews. Total nightmare.

The only thing I could see is HH and/or VB, as those can be sold as seprate properties.
 

CastAStone

5th gate? Just build a new resort Bob.
Premium Member
What do you think about this Cast? I am thinking probably just Disney option exploring at this point. That said, if a potential buyer wants a wider range of inventory to sell when they take over, that could explain the buck back letters Disney has been sending out.
Nothing would surprise me. I haven’t seen their internal data, they may feel they’ve come close to market saturation in which case, from a cold, calculated business standpoint, in a vacuum, they should unload. Certainly a previously leadership team did that with parts of Celebration.

They don’t operate in a vacuum and every decision has consequences to the brand’s image and people’s advocacy for the parks. Selling out their most loyal several hundred thousand customers to a PE firm strikes me as something only a desperate, insane person who doesn’t understand how brand equity works would do, as it will take brand advocates and turn them against them.

Anyway, Bob Chapek is in charge so 🤷‍♂️
 

brianstl

Well-Known Member
Original Poster
The only part they could really "sell" would be the management side. Almost all of the resorts are built with current resorts, so would be a nightmare to try and separate the two. Can you imagine 2 different owners for BWV and the Boardwalk Inn? Who mans the front desk? Who pays for Bell Services? 2 different cleaning and maintenance crews. Total nightmare.

The only thing I could see is HH and/or VB, as those can be sold as seprate properties.
You just sign a services contract with Disney Resorts which is exactly what happens now with the separate Disney subsidiaries.
 

LuvtheGoof

Grill Master
Premium Member
DVC/DVD/DVMC currently pays Disney Resorts for the services you described. If, they were sold I would expect the same arrangement to remain in place.
That isn't their "timeshare" business. Selling their timeshare business means selling all of the resorts as well. I did say that the only thing they could "sell" is the management portion, and that would simply look like an outsourcing. That would still be a total cluster that would destroy any goodwill left for a lot of DVC owners, as we've already seen Disney outsourcing being a total cluster (read - IT for instance). And again. Since most of the resorts are also regular Disney CRO resorts, who is going to pay for everything? Since both parts are owned by Disney, the parent - TWDC - can dictate everything, and both have to tow the line. You outsource DVD to a third party company and they can argue (and they will argue) over anything and everything that isn't spelled out to the most minuscule level in a contract. They will do even less than the current Disney does in order to make the most money on the contract.
 

brianstl

Well-Known Member
Original Poster
Nothing would surprise me. I haven’t seen their internal data, they may feel they’ve come close to market saturation in which case, from a cold, calculated business standpoint, in a vacuum, they should unload. Certainly a previously leadership team did that with parts of Celebration.

They don’t operate in a vacuum and every decision has consequences to the brand’s image and people’s advocacy for the parks. Selling out their most loyal several hundred thousand customers to a PE firm strikes me as something only a desperate, insane person who doesn’t understand how brand equity works would do, as it will take brand advocates and turn them against them.

Anyway, Bob Chapek is in charge so 🤷‍♂️
In Chapek's defense..........

Disney's revenue streams have been hammered for almost two years, his predecessor saddled the company with over $50 billion in debt and the company's credit rating has been downgraded making future borrowing more expensive. He needs to find ways to generate cash to pay down debt and pay for productions for Disney+ so it no longer suffers a new content shortage compared to Disney+'s competitors. Investors are going to accept nothing less.
 

brianstl

Well-Known Member
Original Poster
Yes but this "rumor" is being floated as an idea for Disney to raise cash. Nobody is going to front hundreds of millions of dollars for an arrangement like that.
They will if they get to sell the new Disneyland site, a future Poly tower and if Disney has stockpiled a bunch of points at existing resorts with buybacks over the last year.
 

lentesta

Premium Member

There are 3 financial firms involved in the discussions. Based on who those are, and who they've worked with in the past, I don't think the conversation is coming from inside Disney. I think it's another company with lots of real estate holdings that's interested in the DVC business.

I'm not sure how a deal would be structured. I think that in Last Vegas, MGM has sold off a lot of its physical properties and is just going to run the operations (here's a recent article about the Cosmopolitan).

My initial thought was that Disney would sell off the hotels (but not the land under them), and perhaps the contracts? And then someone(?) would run the hotels on a day-to-day basis.
 

brianstl

Well-Known Member
Original Poster
There are 3 financial firms involved in the discussions. Based on who those are, and who they've worked with in the past, I don't think the conversation is coming from inside Disney. I think it's another company with lots of real estate holdings that's interested in the DVC business.

I'm not sure how a deal would be structured. I thing that in Last Vegas, MGM has sold off a lot of its physical properties and is just going to run the operations (here's a recent article about the Cosmopolitan).

My initial thought was that Disney would sell off the hotels (but not the land under them), and perhaps the contracts? And then someone(?) would run the hotels on a day-to-day basis.
Thank you, Len.
 

Disstevefan1

Well-Known Member
There are 3 financial firms involved in the discussions. Based on who those are, and who they've worked with in the past, I don't think the conversation is coming from inside Disney. I think it's another company with lots of real estate holdings that's interested in the DVC business.

I'm not sure how a deal would be structured. I think that in Last Vegas, MGM has sold off a lot of its physical properties and is just going to run the operations (here's a recent article about the Cosmopolitan).

My initial thought was that Disney would sell off the hotels (but not the land under them), and perhaps the contracts? And then someone(?) would run the hotels on a day-to-day basis.
Disney loves to be the landlord - Maximum income with minimum costs.

Theme parks next?
 

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