Disney’s travel club cannot sell in Hawaii

A resort on Oahu is set, but the firm needs an OK to offer time shares

The Walt Disney Co., which announced plans this week to develop a hotel and time-share resort at Ko Olina, cannot sell memberships in its own time-share club here.

The snag is the unintended consequence of a corporate decision years ago not to complete the state paperwork required to conduct local sales.

Hawaii residents legally may buy memberships in the Disney Vacation Club, but -- for now at least -- must fly to the mainland to do so. Residents from all other states, except Nebraska, can make those purchases from the convenience of home.

Disney spokeswoman Lisa Haines told the Star-Bulletin yesterday the company will complete the necessary application well before sales start on its Ko Olina project, which is expected to break ground next year and open in 2011.

"Clearly the game has changed," she said.

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North Shore resident Lindsey Pierce said that she has always wanted to own a Disney Vacation Club membership but was ignored every time she tried.

"They wouldn't even respond to my phone calls or messages once they knew that I was from Hawaii," she said.

The lack of response was actually the result of a years-old Disney decision not to register the company's time-share vacation club for sales in Hawaii.

"We have not in the past registered to sell time shares in Hawaii," said Lisa Haines, vice president of public affairs for Walt Disney Parks and Resorts. The Disney Vacation Club currently markets and sells its memberships in all states except Hawaii and Nebraska.

That has taken on new significance in light of Disney's announcement on Wednesday of plans to build an 800-unit resort hotel and Disney Vacation Club at Ko Olina Resort & Marina.

Disney, which paid $144 million for a 21-acre tract of oceanfront property for the project, said that it chose Hawaii as its first stand-alone hotel destination because Disney Vacation Club members showed strong demand for the islands.

But Disney will need to register with the state to sell memberships in that project, which is expected to break ground next year and is slated for a 2011 opening.

Hawaii, a top time-share destination along with California and Florida, enacted stringent restrictions on product marketing in the early 1980s that required companies to register and pay fees before doing business in the state. Inexplicably, Disney never did so.

Lori Beth Van Cantfort, the time-share administrator for the state of Hawaii's Department of Commerce and Consumer Affairs, said yesterday that although Disney has been registered in Hawaii since 1993 and can advertise its time-share plan here, it does not have a Hawaii escrow agreement on file with the department and therefore cannot conduct any sales activity in the state.

"As Disney is already registered in Hawaii, it will not have to pay the registration fee of $1,650 plus $200 per-unit fee, which was already paid," Van Cantfort said. "However, it will have to annex the Hawaii time-share units into its time-share plan. The registration fee for an annexation application in this case will be $350."

Haines said yesterday that Disney will be filing the paperwork.

"Clearly the game has changed. We'll complete the requirements in plenty of time for Hawaii residents to take advantage of this offer," Haines said.

As it turns out, Hawaii residents actually may buy memberships in Disney Vacation Club legally, even now -- but only if they fly to the mainland to make the purchase. Haines said many have done just that.

But Pierce said no one at Disney ever told her.

"I didn't know that I had the option to go speak to them while in California, or I might have tried," she said. "Most of my inquiries were for the info DVD or through e-mail. It was never mentioned to stop in and speak to them while on a trip there."

Pierce said she was pleased about Disney's decision to open up sales to Hawaii residents, and plans to look into the purchase of a membership there. But, while Pierce's interest in the project is high, she wants more information before making a decision.

"I would love to be able to order the informational DVD to learn more about the club and how it works first," she said.

However, Disney will not be able to send Hawaii residents any information about the project -- until it completes the state application.