Davids DVC: Rental reimbursement or rescheduling?

[Grumpy by Birth]

This is my understanding and correct me if I'm wrong.

Owner's have two choices. Keep the 70% and keep the points. They can then take those points and see if they can use them personally, or try and rent them out again which means further profit. Worst case, the points expire and they lose 30%. Second choice is to allow David's to re-rent the points, and then get 100%. Overall, it's not perfect, but it's not too bad.

Renter's get one choice. They get a voucher which can be used for several different options including a future DVC stay, or a booking through his travel agency (which could include booking hotel rooms through Disney). Again, it's not a perfect solution for the renter, but it's still overall not that bad.

In order to allow the owner to keep the 70%, and then issue a 100% voucher to the renter, that requires excess cash. Doing some rough math, David's in general keeps about 24% of the funds as a commission. Now, he gives a chunk of that amount to his employees as their commission. So l assume he (the company) only keeps about 13% as gross profit (which is different than profit. He still has other expenses to cover) under normal circumstances. So far, the owner has received about 53% of the total funds (14.50 / 19 x 0.7) that the renter paid, the employee has about 10% (2 / 19) , and David has 37% (1 - 16.50 / 19). Still following me? He now has to cover a 100% voucher with only 37% of the funds to help. He is taking a 63% loss. Which means, he is taking a major financial loss on those vouchers.

In the circumstances where the owner allows their points to be re-rented, everyone is technically made whole. In the circumstance where the owner keeps the 70%, David is taking a major financial loss, the owner is taking a smaller loss, and the renter is taking zero financial loss (they are taking a qualitative loss). Yes, some of the terms are a bit different on the voucher, but these are basically the terms that everyone is saying were missing from the original agreements that lead to the mess in the first place. Again, it's not a perfect solution, but IMO it's about as much as you can ask for given the scenario. All three parties are sharing the loss, with the broker taking the the brunt of it.

Thank you for clearing this all up for us, David.

 

[cmrdgrs]

Covid also happened in your world - or do you live in somewhere that people aren't dying?

Please don't lecture me on people dying. I've had one relative and two friends die due to complications from Covid (these three people died without family by their side, and I was not allowed to go to the funerals). So, yes in my world people are dying. I'm also taking loans to make ends meet to keep paying my own bills due to lost business thanks to Covid.

You and I don't have to agree. I'm allowed to have my perspective and you are allowed to not like it.

If the owner has a way-- I personally feel that renters should be refunded. I've stated it before, I've stated again, and I still feel this way. Nothing you can say will sway me any other way.

 

[CanadaDisney05]

These are not the choices David gave me as an owner. The choices were:
1) Return the 70% received, and keep the points in whatever condition they were;
2) Keep the 70%, but agree to re-rent the points through David and receive the remaining 30% at the new reservation day of check-in.

I chose #2, but I am struggling with what happens if David is unable to re-rent the points prior to their expiration.

I guess I misinterpreted it a bit. The third option of keeping the 70% is not a choice he explicitly offered, but is of course is still an option. However, option 2 is basically the same scenario as you were in prior other than delaying the date of payment. Given the circumstance, I think that is actually pretty fair. Of course there are risks involved just like everything in life and you personally have to weigh the risks.

 

[Sandisw]

I guess I misinterpreted it a bit. The third option of keeping the 70% is not a choice he explicitly offered, but is of course is still an option. However, option 2 is basically the same scenario as you were in prior other than delaying the date of payment. Given the circumstance, I think that is actually pretty fair. Of course there are risks involved just like everything in life and you personally have to weigh the risks.

He also could have allowed an owner to reschedule the renter if they wanted To do thst,

Still comes down to Davids deciding contract terms are void, frustrated, whatever you want to say and then deciding for all 3 parties ...with them having no say,,,what was going to happen.

That is the problem I have with his actions and why I won’t do anything if something happens comes into play for my renters in August that is not explicitly stated in my contract, He has caused a lot of distrust and I won’t ever recommend to anyone to use him.

 

[Dracula]

I guess I misinterpreted it a bit. The third option of keeping the 70% is not a choice he explicitly offered, but is of course is still an option. However, option 2 is basically the same scenario as you were in prior other than delaying the date of payment. Given the circumstance, I think that is actually pretty fair. Of course there are risks involved just like everything in life and you personally have to weigh the risks.

I also thought option #2 is the most fair, this is why I chose it. The other implicit options would have been:
3) Keep the 70% and use the points elsewhere (risky, since I have other, larger reservations with David and may then not be paid on those)
4) Take David to court in Ontario for the remaining 30% (not worth it to me)
5) Insist on the 30% payment and use the other reservations as leverage (does not seem fair at this point)

 

[Dracula]

As I engage in the daily speculation on the future of David's business, a question comes to mind:
How can we tell when David is bankrupt?

All signs point toward his inability to continue as a going concern. At this time, my understanding is that he is no longer issuing the remaining 30% to owners, nor is he making new reservations for renters because the resorts are closed (reminds me of a candidate for office who would not release his tax returns because they were under audit). David is still sending emails, he is sending vouchers, and in some cases has money withdrawn as a result of credit card chargebacks. So, in this maelstrom of grief, what would be the telltale signs that David is in fact bankrupt - would it be the lack of email response? people would stop picking up the phone?

 

[Bearval]

These are not the choices David gave me as an owner. The choices were:
1) Return the 70% received, and keep the points in whatever condition they were;
2) Keep the 70%, but agree to re-rent the points through David and receive the remaining 30% at the new reservation day of check-in.

I chose #2, but I am struggling with what happens if David is unable to re-rent the points prior to their expiration.

If you chose #2 is he requiring you to sign the new version of his contract? Also is the agreement to allow him to re-rent the original points or "new" points? I would allow him to re- rent the "original " set of points if they are still good and I would make it clear to him when they expire . I would definitely NOT sign the new version of his contract.

 

[Amymouse13]

The assumption that the voucher can be used and that a valid reservation will be had is far from given. Cash reservation what if he doesn't pay more than deposit? Point reservation may not be available or the owner may cancel bc they didn't get 30%. Then you waived right to fight that you got nothing...

 

[CanadaDisney05]

He also could have allowed an owner to reschedule the renter if they wanted To do thst,

Isn't that what he's doing with the voucher system? Does it really matter to anyone who they are renting to or who they are renting from?

Still comes down to Davids deciding contract terms are void, frustrated, whatever you want to say and then deciding for all 3 parties ...with them having no say,,,what was going to happen.

I get it's not ideal, but what you are suggesting is not logistically possible. He doesn't have the manpower to mediate new contract terms for each rental individually. I think we can all agree that more clear contract terms are needed and that is what is being done.

That is the problem I have with his actions and why I won’t do anything if something happens comes into play for my renters in August that is not explicitly stated in my contract, He has caused a lot of distrust and I won’t ever recommend to anyone to use him.

Everyone is entitled to do business with who they choose. I personally think, that IF he can get through this in the short term, long term he will be fine. People forget. People are greedy. People see the savings and they will ignore the risk. It's human nature. There are always new owners and renters who weren't affected and won't care about what happened to some random person on a forum 2,5,10 years ago.

 

[cmrdgrs]

My point is that I KNOW for a fact he had the detail on points when he initially make an reservation. You can't even offer them to him to rent without completing this on his request form. Are you asking me to SPECULATE as to why he is asking for this after the fact? (You didn't need to prove to me someone posted that-I would have believed you.) My GUESS is that once the reservation is set he no longer saves the information. Or possibly he is just buying time.

You asked. That's the answer that makes the most sense to me. So there you go.

Edited to add:
I looked at my response to your post as I'm sitting here wondering why anyone would have issue with my comments.
Here are YOUR words in bold:
David doesn't even seem to have a basic understanding of what the status of points were that were used to book the various renters
Without this basic knowledge on the points renters reservations were made with finding a way out of this is a huge mess.
I think we can both agree he has made mistakes. My point is being ignorant of how the points system works isn't one of them BUT even if it was, being ignorant of the product you are offering to your clients, is not an excuse to pass the damage on to others who are abiding by your contracts. It just means you're ignorant. I personally don't believe he is ignorant at all. I think he is willing to break his contract with both sides to save his own skin.

I never ever disagreed that David collected information about an owners points at the time the contract was made. I never said David didn't understand the product that he sold or didn't understand DVC and how it works. I did say that he didn't educate renters on what they were buying related to those underlying points.

I am saying that, and it is supported by the link I gave you, that David has sent out emails asking owners about the points that owners rented to them.

All I was saying is that the details of the underlying points used for each guest reservation does not seem to be in a data base where he can produce a report. I'm saying that I think David has a software issue in helping him sort through this efficiently. That's my opinion based on his actions and I've already stated that maybe I'm incorrect, but that's how it appears to me.

Why do you take issue with what I'm saying? I'm questioning David's software. Nothing else. If you know things about David's software please share what you know.

 

[dwight16]

As I engage in the daily speculation on the future of David's business, a question comes to mind:
How can we tell when David is bankrupt?

All signs point toward his inability to continue as a going concern. At this time, my understanding is that he is no longer issuing the remaining 30% to owners, nor is he making new reservations for renters because the resorts are closed (reminds me of a candidate for office who would not release his tax returns because they were under audit). David is still sending emails, he is sending vouchers, and in some cases has money withdrawn as a result of credit card chargebacks. So, in this maelstrom of grief, what would be the telltale signs that David is in fact bankrupt - would it be the lack of email response? people would stop picking up the phone?

the CC charge backs will end him IMHO the CC will side with the customer at the start and they will take the money from davids account even if its a valid charge they shoot first and ask questions later. i am sure this already started so he will have a major negative balance i know that is the rout i am going if my july reservation gets canceled. he is going to owe hundreds of thousands to the CC companies. so even getting the 30% back will be a challenge.

 

[3babiesmom]

Has anyone finished the chargeback process from their CC company? What was the process? What was the outcome?

 

[Dracula]

If you chose #2 is he requiring you to sign the new version of his contract? Also is the agreement to allow him to re-rent the original points or "new" points? I would allow him to re- rent the "original " set of points if they are still good and I would make it clear to him when they expire . I would definitely NOT sign the new version of his contract.

David did not ask me to sign the new version of the contract. However, for the previous reservations I had two contracts - one I accepted when listing the points, and a second one issued once I made the reservation. It is quite possible he would try to sneak in a refund clause on this second contract, the one done at the time of reservation. In that case, I would probably let him know that I reject these terms and give him 24-48 hours to acknowledge, or have his reservation canceled.

I also recall some verbiage that, by accepting the PayPal payment, I as owner implicitly agree to his contract terms. This is funny because I cannot really reject an incoming PayPal payment. In this case, however, I don't expect any significant payment coming in (he may still pay an extra $1 per point since the point price has gone up since last year).

 

[Sandisw]

I never ever disagreed that David collected information about an owners points at the time the contract was made. I never said David didn't understand the product that he sold or didn't understand DVC and how it works. I did say that he didn't educate renters on what they were buying related to those underlying points.

I am saying that, and it is supported by the link I gave you, that David has sent out emails asking owners about the points that owners rented to them.

All I was saying is that the details of the underlying points used for each guest reservation does not seem to be in a data base where he can produce a report. I'm saying that I think David has a software issue in helping him sort through this efficiently. That's my opinion based on his actions and I've already stated that maybe I'm incorrect, but that's how it appears to me.

Why do you take issue with what I'm saying? I'm questioning David's software. Nothing else. If you know things about David's software please share what you know.

He didn’t have to do anything but allow an owner to reach out to the renter and book the new reservation if they wanted to. All owners have renters information..Davids has owners emails,

Even when owners said they would do the leg work for him to reschedule the original renter, he said no to most,

So, not sure what that has to do with a software issue. If he can send emails to owners telling them what not to do, or what he expects, he could have easily allowed those willing to make the new reservations for those renters,

I guess my issue is that his choices were not the only ones he could have made and IMO, had he allowed the owners and renters who could have worked together to reschedule, it would have been better for him and reduced chargebacks as we have read many posts from renters who simply wanted a chance to be rebooked and told, nope...take a voucher..,and, BTW, not even going to attempt to get you rebooked until at least the fall

But you are right,,,we don’t agree that David handled this appropriately. I am unfortunately stuck at this point unless I decide to void the contract myself...since he can..and just cancel, return the funds, and keep my points.

 

[anomamatt]

It's not 30% of the renter's money. It's 30% of the owner's portion, which is really only 22% of the renter's money. So the choice really is, do you want 22% of your money back, or a 100% credit voucher. Sure the voucher comes with some added risks, but I think by being 4.5X more value, that more than covers the risk.

That is the holdback portion that would have been paid to the owner. But there is also the significant broker fee that David's still has.

David only paid out ~51% of the total money collected from the renter.

I'm not suggesting 49% might be better than the voucher (it might be), but it's important to make it clear that David's has only paid out roughly half of what they collected.

 

[CanadaDisney05]

He didn’t have to do anything but allow an owner to reach out to the renter and book the new reservation if they wanted to. All owners have renters information..Davids has owners emails,

Due to privacy laws, he would probably have to reach out to the renter first and get them to acknowledge that they want to be reached out to by the owner directly. Owner may have that information, but they probably don't have the right to contact the renter directly.

Even when owners said they would do the leg work for him to reschedule the original renter, he said no to most,

How is this any better than the voucher system? The voucher system is essentially the same as the owner re-renting their points, and the renter re-renting points. Owner is still going to get paid when the renter checks in. What difference does it make if it's to the same person or not?

 

[CraigInPA]

This is my understanding and correct me if I'm wrong.

Owner's have two choices. Keep the 70% and keep the points. They can then take those points and see if they can use them personally, or try and rent them out again which means further profit. Worst case, the points expire and they lose 30%. Second choice is to allow David's to re-rent the points, and then get 100%. Overall, it's not perfect, but it's not too bad.

Renter's get one choice. They get a voucher which can be used for several different options including a future DVC stay, or a booking through his travel agency (which could include booking hotel rooms through Disney). Again, it's not a perfect solution for the renter, but it's still overall not that bad.

In order to allow the owner to keep the 70%, and then issue a 100% voucher to the renter, that requires excess cash. Doing some rough math, David's in general keeps about 24% of the funds as a commission. Now, he gives a chunk of that amount to his employees as their commission. So l assume he (the company) only keeps about 13% as gross profit (which is different than profit. He still has other expenses to cover) under normal circumstances. So far, the owner has received about 53% of the total funds (14.50 / 19 x 0.7) that the renter paid, the employee has about 10% (2 / 19) , and David has 37% (1 - 16.50 / 19). Still following me? He now has to cover a 100% voucher with only 37% of the funds to help. He is taking a 63% loss. Which means, he is taking a major financial loss on those vouchers.

In the circumstances where the owner allows their points to be re-rented, everyone is technically made whole. In the circumstance where the owner keeps the 70%, David is taking a major financial loss, the owner is taking a smaller loss, and the renter is taking zero financial loss (they are taking a qualitative loss). Yes, some of the terms are a bit different on the voucher, but these are basically the terms that everyone is saying were missing from the original agreements that lead to the mess in the first place. Again, it's not a perfect solution, but IMO it's about as much as you can ask for given the scenario. All three parties are sharing the loss, with the broker taking the the brunt of it.

But those aren't the only choices he's asked for.

He also asked Owners to refund the 70%, no matter what the status of the points, and stated that the money would be used for fund a voucher for his entire base of customers, since he would not issue a refund to a Renter whose Owner issued a refund (because that would require David's to give up his commission).

For a very small number of Owners early on, he accepted that they contacted the Renter and re-scheduled the trip. By doing so, he decided that he was out of the agreement, and promised to pay the 30% remaining to the Owner. This quickly stopped with David's telling Owners not to do that any more. When Renters tracked down Owners, David's admonished them for contacting the Owners directly. David's also told Renters that they would contact the Owners on their behalf about re-scheduling, but quite a number of Renters and Owners in this thread stated that David never bothered to contact the other party.

So, let's talk about the vouchers...

The voucher terms can be changed at David's sole whim, or even cancelled.

If a Renter uses the voucher and the resort is closed, the Renter does not get to re-schedule and the voucher value is lost.

The voucher is full rack rate on a cash reservation at Disney, which allows David's to pocket the agent's commission or spread (the applicable discounts offered to anyone booking through CRO versus full rack rate). Since we expect Disney to offer 30% or perhaps more of a discount in the short term, the spread gives David a considerable commission. In fact,at a Deluxe hotel, that could be as much as $200 per night at 30% off. Since his DVC rental price was likely was about $300 per night for a studio, the Renter would be paying quite a bit more to stay Deluxe, and would have to drop to moderate resorts to avoid paying more. With David's profit on the spread, his retained 30% not paid to the Owner, and his own earlier commission, he is almost entirely whole if the Renter doesn't put in additional money. If the Renter puts in money, David's could actually make a profit.

The voucher can also be used to rent another DVC reservation. David's, no doubt, has a stock of points from cancelled reservations where the Owners have agreed to re-rent the points in the hope that they will get the final payment. These DVC points in stock will be prioritized towards new cash customers, in order to build up the cash position. A few of these may go to people who lost reservations and were given a voucher. However, because only David's knows what points are in stock for what resort, he can game the voucher holders and tell them he is looking for Owners to rent to him and is unsuccessful in doing so. If he is truly unscrupulous, he would never fulfill a voucher with points unless those points are coming up on expiration. This forces customers who want to book far in advance into pricier cash reservations where he makes money on the spread. If a voucher holder gets to book a DVC stay, it is at the new higher price per point, so the Renter will be paying money out of their pocket for an equivalent stay, which goes into David's pocket (David's has stated the old points are at the old price, only new points are paid at the higher rate).

Of course, some people will never use those vouchers, so all of the money, whether it is the commission plus the 30% in holding for the Owner, or the full amount because the Owner issued a refund, goes into David's pocket.

Yes, some Owners will keep the 70% and walk away, but as I've explained earlier, the voucher scheme makes up for that. What the voucher scheme cannot prevent is chargebacks eating through David's cash reserves. If Renters don't like the terms of the voucher, they will issue a chargeback. If enough do, David's voucher system will be under-funded and David's will go into bankruptcy.

@CanadaDisney05 I find it interesting that you state that David's employees receive a commission on each booking, and even suggest an amount for that commission. While travel agents are typically commissioned, clerical employees typically are paid per hour. I haven't seen published anywhere how David's pays his employees. So, this causes me to ask you directly:

@CanadaDisney05 Are you in any way affiliated with David's? An employee, ex-employee, relative of an employee, investor, creditor, David's family member, David himself?

 

[CanadaDisney05]

That is the holdback portion that would have been paid to the owner. But there is also the significant broker fee that David's still has.

David only paid out ~51% of the total money collected from the renter.

I'm not suggesting 49% might be better than the voucher (it might be), but it's important to make it clear that David's has only paid out roughly have of what they collected.

I did the math in a previous post a few up. Remember that he also pays part of that commission to his employee. He also has other costs. It's not all profit. The extra 30% is still going to go to the owner also once the reservation eventually gets completed.

 

[WDWEPCOT]

In my case where he originally was going to let me rebook my renter and then went silent - my renter took voucher - no one told me / now is when I could have booked my renter and I contacted them to find out they took voucher
So I am doing what David last said to me.,,wait tell they contact me
What I suspect he is doing with my renter - getting a new owner to book so he has cash because I don’t believe he has any
Will my renter get booked any time soon ? Nope
Had my renter stuck with the original contracts and emails the renter would be booked - I was willing to forgo the 30% and even stated in email as I assume David’s will fold - I made myself crystal clear in writing - if that does not prove David’s is out for himself only I don’t know what does
I WOULD NOT trust that voucher at all not do I intend on accepting it if he ever gets around to sending me one for my rental that was cancelled .
I have 3 point rentals that I have rented out with him and 1 I rented myself - wishing now I never did any of them - this is a hot mess and getting hotter every day!!

 

[Sandisw]

Due to privacy laws, he would probably have to reach out to the renter first and get them to acknowledge that they want to be reached out to by the owner directly. Owner may have that information, but they probably don't have the right to contact the renter directly.


How is this any better than the voucher system? The voucher system is essentially the same as the owner re-renting their points, and the renter re-renting points. Owner is still going to get paid when the renter checks in. What difference does it make if it's to the same person or not?

Nothing in my contract prohibits me from contacting the renter directly

Why does it matter? Because the voucher depends on someone else’s points. If an owner can help the original renter, why is that a problem? Why should the renter have to accept new terms when the original owner is willing to work with them?

I thInk we are repeating same thoughts. You believe that what Davids had offered owners in this deal is fair, and I do not. No sense going around it because every argument you make for his practices I can think of just as valid as a reason why he could have allowed other things to happen,

As you stated it’s his business and if wants to pick and choose what part of his contract gets enforced and what does not, that’s on him, As an owner who has a contract with him , I will choose to do the same thing,...what is best for me.