Article about DVC bundling loans to Citibank..

[rikkis_playpen Diamond Club Contributor Find all posts View Profile Close rikkis_playpen]

Orlando Sentinel - Disney takes on more risk to preserve time-share bank deal on Tourism Central Florida


Story about Disney amending securitization agreement with Citibank and accepting a higher percentage of the default risk.

[chriskre Super Moderator Find all posts View Profile Close chriskre]

Well this is interesting because when I bought my DVC the guide told me that Disney did private loans that would not appear on your credit but obviously that was not true. Glad I paid it off. I guess even DVC tells a fib or two to get you to buy.

[bnoble Senior Member Find all posts View Profile Close bnoble]

No, it's still a private loan, but those loans are then re-sold. That's not the same as having them serviced by someone else.

I've always found DVC's "won't be on your credit" sales claim to be a head-scratcher. It seems designed to appeal to people with scores that are already marginal. I would imagine most of DVC's target market have scores that would barely blip at a 20K loan.

[Jya-Ning Silver Contributor Find all posts View Profile Close Jya-Ning]

Interesting on the higher up. Is citi using the resale value? If so, a lot of companies will basically need to cover 100% or more I did see Wyndham and Bluegreen's yearly report and discuss the coverage. Does not seem that high.

Jya-Ning

[rikkis_playpen Diamond Club Contributor Find all posts View Profile Close rikkis_playpen]

I also thought the percentage was pretty telling as for the most part that corresponds pretty closely with the ROFR numbers when they are averaged for the entire program. I think that is great news for the projected health and overall value for the brand, and to me signals that Disney expects to hold values for resales at about that level.

I also take this to mean that DVC considers only 30% of the retail price to be based solely on marketing and other incidental costs- which is far superior to most other brands- who have always considered their marketing costs to range from 50% to 80% of the retail value. The latest example of this was the admission by Consolidated attorneys in the bankruptcy proceeding that their marketing costs accounted for 50% of the sale prices (which means a 100% upcharge over real value simply to cover advertising and tour generation)..

[Lisa P Senior Member Find all posts View Profile Close Lisa P]

I also take this to mean that DVC considers only 30% of the retail price to be based solely on marketing and other incidental costs- which is far superior to most other brands- who have always considered their marketing costs to range from 50% to 80% of the retail value.

DVC has historically carried extremely low marketing expenses because they only offered freebies that cost them next to nothing.... a free ice cream sundae, a few cookies or a fastpass line-bypass for a theme park attraction. These don't cost DVC anything near the theme park and water park admission tickets, dinner shows or free hotel nights offered by most timeshare developers. They've had the advantage of having their kiosks and schedulers in all the Disney hotels and parks rather than dispersed through storefront tourism offices and restaurant lobbies, hoping to lure people in from their cars and needing to offer serious freebies to do so.

Just this year, DVC has begun to offer discounted hotel stays for tour incentives. Would be interesting to see if they'll still say they only need 30% of the retail value to cover marketing and sales in the next few years. My guess is that they will, since they only need to cover housekeeping expenses for the rooms booked on a tour promo - again, unless they begin to sweeten the deal with actual theme park tix or free sitdown restaurant meals, there's little cost to Disney.