Will a Rental Crackdown Reset DVC Resale Prices?

[eandt]

Here’s what I observe whether it be by Disney or any other entity … the ‘fix’ turns out to be worse than the ‘problem’ … don’t like walkers then learn to beat them at their own game ….

 

[Sandisw]

Here’s what I observe whether it be by Disney or any other entity … the ‘fix’ turns out to be worse than the ‘problem’ … don’t like walkers then learn to beat them at their own game ….

Agreed and I think people are intertwining walking and spec renting together as though they are the same.

I still see this entire move as a way for DVD to crack down on the large scale renting by brokers. I’ll even go farther to say it’s the flipping of contracts more so than renting itself that is more important.

I just hope that we just don’t see any changes to the flexibility of the program.

 

[Stargazer65]

Agreed and I think people are intertwining walking and spec renting together as though they are the same.

I still see this entire move as a way for DVD to crack down on the large scale renting by brokers. I’ll even go farther to say it’s the flipping of contracts more so than renting itself that is more important.

I just hope that we just don’t see any changes to the flexibility of the program.

I haven't driven a bus lately, so I'm out of the rumor mill loop. What change is this thread referencing?

 

[Tatebeck]

You don't think the spec renters are walking their reservations to get their preferred dates that will sell well? If I was a spec renter that's what I would do. If there's a way to stop a walking+renting combo without stopping a member walking and then using their own reservation, then why not?

 

[CarolMN]

To stop spec renting, limit the number of changes to lead guest (perhaps 2 per use year per membership), and require the lead guest to actually check in for a reservation made prior to 7 months that had a lead guest name change.

 

[Grumpy by Birth]

I feel bad for the people this affects, but I don't think it is a great number of people. I however think that the spec reservation problem has become an issue that needs to be addressed, it is on almost every facebook page now, and the rental companies are openly breaking the "no commercial use" part of the contract.

IMO, this is the biggest issue. I hope "rank & file" owners don't get caught up in any crackdown, but I think ending the blatant commercial renting would improve availability for the rest of us.

Also, as others have pointed out, those companies would likely end up having to sell a bunch of contracts, which might provide some of us with some good deals (assuming DVC doesn't snatch them all up via ROFR).

 

[DVC Newb '23]

You don't think the spec renters are walking their reservations to get their preferred dates that will sell well? If I was a spec renter that's what I would do. If there's a way to stop a walking+renting combo without stopping a member walking and then using their own reservation, then why not?

Exactly. If they get rid of spec renters in general then there would be no more walking done by spec renters, allowing owners booking for personal use to keep walking/modifying like they do today, albeit with much less competition for popular dates.

There’s no need to limit modifications if they force out those using their contracts for commercial purposes.

 

[CarolynFH]

I haven't driven a bus lately, so I'm out of the rumor mill loop. What change is this thread referencing?

This thread might be a good place to start - there are discussions in other CFW threads too:
Thread 'New Definition of Rental Activity?'
https://www.disboards.com/threads/new-definition-of-rental-activity.3939178/

 

[Sandisw]

You don't think the spec renters are walking their reservations to get their preferred dates that will sell well? If I was a spec renter that's what I would do. If there's a way to stop a walking+renting combo without stopping a member walking and then using their own reservation, then why not?

Some, yes, but I am sure there are plenty of confirmed rentals out there that were not walked at all And that the bulk of the walkers are owners, not those renting.

That’s why I said they are two different topics…even if some of the spec rentals were secured through walking

Plus, a confirmed reservation doesn’t become a rental until a gust name is changed…so, how would DVC go about knowing if the walked room is a renters if the owners name stays on it until later in the game?

If the issue is that too many DVC memberships are being used against the rental rules for personal use, then implement rules, like they have to combat that.

By doing That, it doesn’t matter if it was walked or not, because it’s based on the totality of what the owner is doing and not a specific trip.

If you have an owner who decides to walk and rent the same week every year during the holidays, but that is their only rental, it would be very hard for DVc to say one rental per year is going to constitute a breach.

 

[HyperspaceMountainPilot]

Trying to nudge this back on topic— I was originally thinking that all all resorts would slide a bit once Disney starts to take action (and I actually think that prices will slide a bit now as savvy owner-renters decide to get out before the crackdown)— someone upthread speculated that AKVOKW/SSR points will fall most as they are the biggest inventory—but now I’m wondering if it will be BWV and AKV (along with anywhere else owning gets you huge point per value discounts) that are most at risk. Maybe AUL as well?

 

[JackosinDIS]

Trying to nudge this back on topic— I was originally thinking that all all resorts would slide a bit once Disney starts to take action (and I actually think that prices will slide a bit now as savvy owner-renters decide to get out before the crackdown)— someone upthread speculated that AKVOKW/SSR points will fall most as they are the biggest inventory—but now I’m wondering if it will be BWV and AKV (along with anywhere else owning gets you huge point per value discounts) that are most at risk. Maybe AUL as well?

I think it will only be a very small % of owners that are aware of this new language, and/or paying any attention to it. So I don’t think it will have any impact for the time being… remember it has been around since the declarations were filed (Dec 22 from memory?).

It’s a big ‘IF’ Disney takes any action. We don’t know what they will do or when they will do it… all we know is that the new wording appears to give them a much easier path to determine that an owner is using points for a commercial purpose- in relation to CFW at least.

So although some (likely very few) owners may decide to get out now, my view is that this would have little to no impact on resale prices in the short term.

 

[Sandisw]

Trying to nudge this back on topic— I was originally thinking that all all resorts would slide a bit once Disney starts to take action (and I actually think that prices will slide a bit now as savvy owner-renters decide to get out before the crackdown)— someone upthread speculated that AKVOKW/SSR points will fall most as they are the biggest inventory—but now I’m wondering if it will be BWV and AKV (along with anywhere else owning gets you huge point per value discounts) that are most at risk. Maybe AUL as well?

It really is going to depend on what resorts all of these brokers own the contracts they are using to rent their own points.

I do think we could very well see the instant sale program go away. That alone will reduce the number of contracts a broker owns that they have to sell.

Now, where it could get interesting is in the pricing because a broker might want to dump, price really low, and thus, force o5er sellers to do the same…

So, the potential is there for a drop…but I don’t think we are going to see brokers dump things too fast. However, we may see a shift in them not taking as many confirmed reservations and get back to more having owners book based on request.

 

[Cfabar1]

I think the fact that Disney changed the language in the new documents might mean they don't feel they have the tools to enforce any crackdown with the current language.

All in all I'm not fond of the mega renters, but on the other hand, why would I want to have flexibility taken out of the program?

 

[HyperspaceMountainPilot]

I think it will only be a very small % of owners that are aware of this new language, and/or paying any attention to it. So I don’t think it will have any impact for the time being… remember it has been around since the declarations were filed (Dec 22 from memory?).

It’s a big ‘IF’ Disney takes any action. We don’t know what they will do or when they will do it… all we know is that the new wording appears to give them a much easier path to determine that an owner is using points for a commercial purpose- in relation to CFW at least.

So although some (likely very few) owners may decide to get out now, my view is that this would have little to no impact on resale prices in the short term.

I think your analysis makes sense. I should start a separate poll of “what happens first? Rental crackdown or Disneyland forward?” I would love to see both but would happily settle for one of them starting by the end of 2024.

I actually started this thread because I have more UY than I want and would like to shift some points from one home resort to another (in a better UY), I don’t know if I want to make the change enough to pay broker fees on both ends, but if I knew that 1000 contracts were going to hit the market in the next 6-12 months, I would definitely sell now and buy after the great rental exodus.

I also think there’s a non-zero chance that DVC makes at least some of the brokers “an offer they can’t refuse” to mass purchase points at prevailing market value instead of forcing them to fire sale on the open market. With the possible exception of VGF, I think Disney can easily resell all points as direct at at least $30/pt above where they go on the resale market…potentially more if they are willing to be patient.

 

[Sandisw]

I think the fact that Disney changed the language in the new documents might mean they don't feel they have the tools to enforce any crackdown with the current language.

All in all I'm not fond of the mega renters, but on the other hand, why would I want to have flexibility taken out of the program?

I certainly don’t. I personally dont care about rentals and also think some believe that if popular spec renting is reduced, then popular rooms will be easy to get….they won’t..

I think this language change just supports my thought that this trust is going to be the way forward and we are going to see more property added and sold this way…

Plus, if they do begin to crack down on the rental market, even if it is flagging more memberships, it will eventually be enforcing these without having to worry about now the other language is written.

 

[miTnosnhoJ]

Commercial Owners is not something I'm worried about. Disney cracked down on this years ago. Today, rental companies are Brokers who serve as the middleman between members and renters. They are not owners.

 

[HyperspaceMountainPilot]

Commercial Owners is not something I'm worried about. Disney cracked down on this years ago. Today, rental companies are Brokers who serve as the middleman between members and renters. They are not owners.

There is at least one major broker that has been buying contracts, stripping them out as rentals, and then trying to sell them stripped of multiple years of points. However, it doesn’t even sound like they are the biggest problem, the other thread (under the Member Services topic) has examples of how one single rental site is offering more than 50% of the total number of almost impossible to get AKV value rooms for certain high value periods.

 

[MarkNC2Disney]

the biggest problem, the other thread (under the Member Services topic) has examples of how one single rental site is offering more than 50% of the total number of almost impossible to get AKV value rooms for certain high value periods.

Completely obnoxious behavior.

 

[miTnosnhoJ]

There is at least one major broker that has been buying contracts, stripping them out as rentals, and then trying to sell them stripped of multiple years of points. However, it doesn’t even sound like they are the biggest problem, the other thread (under the Member Services topic) has examples of how one single rental site is offering more than 50% of the total number of almost impossible to get AKV value rooms for certain high value periods.

The key word is "selling". They are selling the units, not holding them as in investment. And did you know that if a broker strips 3 years of points, they cannot sell the contract to another buyer until all the trips based on those points have been taken. If they close before the trip has been taken, those reservations are canceled.

 

[Anthony Vito]

A lot of ifs, but if there is a crack down on renting, and there are a lot of points tied up with some of these brokers, then it's probably more of a question of how much of a problem it is having the money tied up in those contracts. In other words, if they can wait, I wouldn't expect them to dump those points very quickly. If they can wait it out, dropping the contracts by more than $10/point simply doesn't make that much sense. Yes, they have capital tied up in those points, but it's only really "costing" them the ~$8/point in dues. If they're spread too thin or have loans to pay for contracts, then it would be more problematic, but otherwise they'd be better served spreading out the sales in a way as to not lose too much money on them.