Changes to DVC Bookings - effective June 2nd

[Tony the Tigger]

Maybe look at it through a straight "member satisfaction" lens. My friends who own DVC will frequently complain that getting a reservation, even at their home resort, is difficult (this is true of other timeshare companies as well, FWIW). It's more of an issue of longer reservations.

Maybe Disney believes that commercial point renters are a big part of that problem.

But why does anyone think that would change?

DVC is too expensive for most people to just skip a year, pay the maintenance fee, and not go. So instead of renting out their points, they force themselves to go, which still = the same number of rooms being booked, and just as hard to book your choice. That’s an inventory problem, not a customer problem.

And if they don’t force themselves to go for whatever reason, then their experience as an owner takes a hit.

 

[DisneyDreamer08]

This makes DVC instantly worth less, IMO.

What about people who don’t want to spend every year vacationing at Disney?

If you don’t want to spend at least a week a year in Disney, you shouldn’t be buying DVC. My family has looked into buying several times. I have always wanted to purchase but my husband always says he doesn’t want to be tied down to a big Disney trip every year. So that’s why we never purchased.

 

[Sirwalterraleigh]

This makes DVC instantly worth less, IMO.

What about people who don’t want to spend every year vacationing at Disney? The, “Oh, you can just rent your points out every other year” thing is off the table. Enjoy Aulani!

Watch for a point dump - further devaluing them.

Makes no sense to me, but every time they change something, I’m more relieved I didn’t buy.

It would take a half price deal on the Cabins at this point.

That was the point of dvc from day one…it was for those that wanted Disney…and a steady dose of it

Sure they dressed it up as “you can use it anywhere!”…but that was never where the value lay…

 

[Sirwalterraleigh]

Maybe look at it through a straight "member satisfaction" lens. My friends who own DVC will frequently complain that getting a reservation, even at their home resort, is difficult (this is true of other timeshare companies as well, FWIW). It's more of an issue of longer reservations.

Maybe Disney believes that commercial point renters are a big part of that problem.

The problem is more the ridiculous expansion/dumping of more points into it to feed the beast…there’s just too many people for every slot

 

[Sirwalterraleigh]

Does the availability of DVC rentals cut into the sale of contracts? Folks who rent don't buy?

Does the availability of DVC rentals cut into the regular deluxe room stays? Folks rent DVC rooms instead of paying for the regular deluxe rooms?

One thing I think we can agree on is, its about MONEY somehow, NOT the guest experience.

The answer to all your questions is “yes”…

They never chose to crack down on it…it remains to be seen if this is real…or a bluff?

 

[Trueblood]

The math is honestly beyond me, but asking an AI...

Given a hotel with 100 rooms, guests can book rooms up to six months in advance for vacations between one and ten days. How would you calculate the chance that a room will be available for a new reservation at a particular time? The goal is to find one room that is available for the entire trip (between one and ten days) for a specific trip.

It came up with a formula based on "booking rate." I interpret the booking rate to be the that is turned by reducing the number of commercial renters. I asked a follow-up:

Using that answer, what is the impact on availability between a given booking rate and half of that booking rate?

By cutting the booking rate in half, the availability of a 5-day stay jumps from 3.2% with the base booking rate to basically 100% (with 80% occupancy).

With 90% occupancy, it goes from "yeah, dream on" to an over 99% chance that a room is available.

I'm not qualified to check the math, but intuitively that seems about right.

 

[Sirwalterraleigh]

It's ultimately one group of families replacing another, right?

With all due respect…their strategy has gone so far off course from the eisnerian “get them there and get em back”…that it’s hard to gauge if there’s any thought behind what they’re doing whatsoever.

They truly seem to believe that they are irresistible at any price…decision makers are being paid at high rate to to actually push that. Which is contrary to the science of economics

 

[Trueblood]

The problem is more the ridiculous expansion/dumping of more points into it to feed the beast…there’s just too many people for every slot

You're describing "oversubscription." Hilton Grand Vacations has an oversubscription of something like 5x, Marriott is oversubscribed by over 3x.

It wouldn't surprise me if DVC is in that range.

 

[Sirwalterraleigh]

You're describing "oversubscription." Hilton Grand Vacations has an oversubscription of something like 5x, Marriott is oversubscribed by over 3x.

It wouldn't surprise me if DVC is in that range.

The original dvc was based off the Marriott model…

I did work with one of the original dvc bigwigs…many, many moons ago

 

[lentesta]

If you’re spending $300/night to occupy a DVC room, Disney would rather you pay them that $300/night to occupy a cash inventory room AND have a DVC member occupy the DVC room.

That might make sense. Let me see if I understand the scenario:

• An individual DVC owner wants to rent for the week of August 1
• Amalgamated Evil has a customer who wants to rent for the same week
• That individual DVC owner will not pay cash if DVC isn't available (because they've already bought DVC
• The Amalgamated Evil customer would pay cash if nothing is available
• The Amalgamated Evil customer gets the DVC room
• The individual DVC owner doesn't make the trip and complains to Disney
• Disney loses out on the trip revenue from the individual DVC owner

A couple of follow-up questions:

- Can DVC sell more points than are available in a given year? I thought they couldn't.

Thanks for walking me through this!

 

[lentesta]

@lentesta - DVC and Disney are different entities, right? So if DVC is hearing lots of complaints they might want to cut back on the rentals even if Disney doesn’t care?

They're different legal entities, but the revenue rolls up under the Parks part of DPEP, right?

 

[nickys]

The problem is more the ridiculous expansion/dumping of more points into it to feed the beast…there’s just too many people for every slot

Errr no.

The number of points per resort equates to the number of points required to book every room for every night of the year.

They cannot sell too many points.

Now whether everyone can book the room they want at the time they want is another matter.

Some room types are too expensive for the majority of owners, which increases demand for studios. And that skews availability.

But there literally cannot be “too many people for every slot”.

 

[Sirwalterraleigh]

They're different legal entities, but the revenue rolls up under the Parks part of DPEP, right?

I don’t know how they parse DDC these days…especially since chappie pushed everything together…

But at the end of the day…it’s parsing. Disney needs money…and they seem to be struggling with how to best achieve that…across the board

 

[nickys]

That might make sense. Let me see if I understand the scenario:

• An individual DVC owner wants to rent for the week of August 1
• Amalgamated Evil has a customer who wants to rent for the same week
• That individual DVC owner will not pay cash if DVC isn't available (because they've already bought DVC
• The Amalgamated Evil customer would pay cash if nothing is available
• The Amalgamated Evil customer gets the DVC room
• The individual DVC owner doesn't make the trip and complains to Disney
• Disney loses out on the trip revenue from the individual DVC owner

A couple of follow-up questions:

- Can DVC sell more points than are available in a given year? I thought they couldn't.

Thanks for walking me through this!

No DVC cannot sell more points at a resort than the number of points required to book every room every night.

 

[Sirwalterraleigh]

Errr no.

The number of points per resort equates to the number of points required to book every room for every night of the year.

They cannot sell too many points.

Now whether everyone can book the room they want at the time they want is another matter.

Some room types are too expensive for the majority of owners, which increases demand for studios. And that skews availability.

But there literally cannot be “too many people for every slot”.

I didn’t say they oversold points…just that the way they sell contracts and the amount of flood into a growing pool with no required exchange rate creates scarcity that is frustrating…by design

For instance…those overwater cabins at poly and wilderness lodge had a huge amount of points sold…and they aren’t required to be exchanged 1:1.
So in theory one cabin could have multiples of contracts in smaller amounts going after studios.

It stinks…it’s both the blessing and the curse of dvc to have freedom of use/selection.

 

[Disstevefan1]

They never chose to crack down on it…it remains to be seen if this is real…or a bluff?

True, its easy/cheap to add the checkbox, it may scare off owners from renting out points with no other effort from Disney.

 

[ehh]

That might make sense. Let me see if I understand the scenario:

• An individual DVC owner wants to rent for the week of August 1
• Amalgamated Evil has a customer who wants to rent for the same week
• That individual DVC owner will not pay cash if DVC isn't available (because they've already bought DVC
• The Amalgamated Evil customer would pay cash if nothing is available
• The Amalgamated Evil customer gets the DVC room
• The individual DVC owner doesn't make the trip and complains to Disney
• Disney loses out on the trip revenue from the individual DVC owner

A couple of follow-up questions:

- Can DVC sell more points than are available in a given year? I thought they couldn't.

Thanks for walking me through this!

Close. You’re adding in unnecessary ‘competitive booking’ complexity.

I’ll first answer your ‘Can DVC sell more points…’ question as it’s the pretext to the situation as I see it:

• DVC can only sell 98% of a resort’s points, and the number of points at a resort is fixed.
  • If a resort has 4mil points, DVC can only sell 3.92mil to owners.
  • This means only 3.92mil points are available to use by owners at this resort.
• Points charts are such that if there were 100% occupancy, the stays would cost owners ~4mil per year (there’s some complexity here with lockoffs).
• Banking, borrowing, and trading at 7m mean there’s some slack in the system about which points get used each year, but the net-net is that it’s effectively zero sum. 4mil points at a resort, 98% of which end up in the hands of owners and can be used each year, and full usage equates to ~100% occupancy.

I’d sum it up more like this:

• Amalgamated Evil owns/operates/facilitates rental of X number of points (per year)
• Amalgamated Evil has customers who want to rent using those points
• AE’s customers pay AE to stay at Disney
• AE’s customers would pay Disney if nothing is available through AE
• Those X number of points per year are not used/owned/etc. by DVC-staying DVC members
• DVC-staying DVC members would use those X points to stay at DVC resorts if they owned those points*

A version that’s specific to a single stay:

• Amalgamated Evil has a customer who wants to rent points for the week of August 1
• Amalgamated Evil owns/operates/facilitates enough points to rent this, let’s say 200 points that will rent at $4,000 total
• Amalgamated Evil’s customer would have paid Disney $4,000 if nothing was available through AE
• 200 points of the resort’s 4mil points are now used by a non-member
• A DVC member would have used those 200 points to stay at DVC if they owned them*
• Disney loses out on some mix of the $4,000 from the renter and the trip revenue from the DVC owner that doesn’t exist/get to use those points (maybe not wholly both, but at least one of these)

* The asterisks here are the ‘what if the DVC Member doesn’t want to or can’t use their points that year?’ And, good news, Disney has an answer for that: exchanges!

I think these exchanges are a secondary factor here, where members can give their points back to Disney in exchange for a DCL cruise, an ABD, or into a broader timeshare exchange. The exchange rates for DVC members are bad (~$11/pt) and then Disney can take the points themselves and rent them out at full rack rate (typically closer to $40/pt, well above what rental agencies can get). These exchanges are money makers for Disney.

 

[lentesta]

For instance…those overwater cabins at poly and wilderness lodge had a huge amount of points sold…and they aren’t required to be exchanged 1:1.
So in theory one cabin could have multiples of contracts in smaller amounts going after studios.

Ah, right. Good point. I didn't realize how much the high-end room points affected the market.

Let's say Disney decides their next DVC is Chapek Gardens It has exactly 100 rooms:

• 99 Three-bedroom Grand Villas at 500 points per night
• One (1) Resort View Studio at 100 points per night

Then Disney can sell 49,600 points per night in contracts.

Let's say they sell 200 contracts at 248 points each, so the entire night is sold out.

Only 1 of the 200 people can rent that Studio per night. The other 199 people can't use their points.

Does that capture the other part of the problem? Thanks for the help.

 

[networkpro]

IMHO Disney would rather bring those point "rentals" in house or not allow them at all (they still have their overhead covered by the maintenance fees). It would financially be better for Disney if any timeshare purchaser used fewer or none of the points they own and also contribute to the customer experience ratings with lower amenity utilization availability. I can attest to how awful an experience the grounds of the Polliday Inn were this Spring with full occupancy.

 

[Sirwalterraleigh]

Ah, right. Good point. I didn't realize how much the high-end room points affected the market.

Let's say Disney decides their next DVC is Chapek Gardens It has exactly 100 rooms:

• 99 Three-bedroom Grand Villas at 500 points per night
• One (1) Resort View Studio at 100 points per night

Then Disney can sell 49,600 points per night in contracts.

Let's say they sell 200 contracts at 248 points each, so the entire night is sold out.

Only 1 of the 200 people can rent that Studio per night. The other 199 people can't use their points.

Does that capture the other part of the problem? Thanks for the help.

There’s been a lot of debate amongst dvc owners over the years how much this matters…

I’m of the opinion it really does. Some rooms drag the system - one bedrooms in particular - and displace the demand onto the other slots