Do you think renting DVC points bothers Disney?

[Master Yoda]

But they're getting that anyway. Whether I decided to rent points from an owner or not, they've already paid (and are continuing to pay) Disney. Me renting points doesn't give Disney extra money.

In that scenario renting points prevents them from loosing money outside of the resort.

The DVC member renting the points can obviously not go to WDW for whatever reason. If they loose the points Disney still makes money from DVC but looses money on tickets, merchandise, food, etc if they can't sell the room for cash. As you might have guessed selling a 1BR DVC room or something similar is much harder to do then standard room at the Poly or anywhere else. By letting the DVC member rent the points they have the room filled with a guest that is statistically more likely to spend more money because of the great room deal they got. To add a little icing onto that cake, the person renting might like the DVC accommodations so much more than a standard room that they buy into the DVC.

Like in Vegas, the house, or to be more correct, the Mouse, always wins.

 

[Annielkd]

That's actually my exact point.

I know... I've been agreeing with you. (I know that sounds incredible that I would agree... but, I was!)

 

[captainkidd]

In that scenario renting points prevents them from loosing money outside of the resort.

The DVC member renting the points can obviously not go to WDW for whatever reason. If they loose the points Disney still makes money from DVC but looses money on tickets, merchandise, food, etc if they can't sell the room for cash. As you might have guessed selling a 1BR DVC room or something similar is much harder to do then standard room at the Poly or anywhere else. By letting the DVC member rent the points they have the room filled with a guest that is statistically more likely to spend more money because of the great room deal they got. To add a little icing onto that cake, the person renting might like the DVC accommodations so much more than a standard room that they buy into the DVC.

Like in Vegas, the house, or to be more correct, the Mouse, always wins.

True.

However, what would Disney prefer? DVC Owner going to Disney and spending their money at the parks, and non DVC owner paying $5,000 to stay at the Polynesian plus $5,000 at the parks - or - DVC owner not going to Disney, non DVC owner renting those points from the DVC owner, and then spending $5,000 at the parks?

 

[Master Yoda]

Then how can you say demand is greater than supply?

If a resort is booked solid and people still want to rent and are turned away at any time the demand exceeds the supply. It does not matter if this happens at 2 months out or at 11:59 PM the day before.

Apparently not. Right now, for next week, I can get a room at the following:

Animal Kingdom Lodge, Polynesian, Saratoga Springs, Beach Club, Yacht Club, Grand Floridian, Boardwalk Inn, Boardwalk Villas, Contemporary, Bay Lake Towers, Wilderness Lodge, Fort Wilderness, Caribbean Beach Resort, Riverside, French Quarter, Coronado Springs, All Star Movies, Pop Century, All Star Music, All Star Sports, and Old Key West.

Next week is also regular season. Give that same thing a try around 12/18/2012 for a booking between 12/24/2012 and 12/28/2012.

We also do not know how many rooms are available. For all we know each resort has only 10 rooms open. If that was the case, less than 1% of WDW's room inventory is available for booking. Even if you were to increase that number to 100 per resort the resorts would still be at 90% occupancy.

 

[Master Yoda]

True.

However, what would Disney prefer? DVC Owner going to Disney and spending their money at the parks, and non DVC owner paying $5,000 to stay at the Polynesian plus $5,000 at the parks - or - DVC owner not going to Disney, non DVC owner renting those points from the DVC owner, and then spending $5,000 at the parks?

Disney would prefer every room to be filled with guests paying full price and maxing out a $10k Disney Visa while they are there, but they are content with less. It is much better to have a guest that will eat and buy tickets than an empty room with no food and tickets.

 

[captainkidd]

Next week is also regular season. Give that same thing a try around 12/18/2012 for a booking between 12/24/2012 and 12/28/2012.

Well, yeah - Obviously.

We also do not know how many rooms are available. For all we know each resort has only 10 rooms open. If that was the case, less than 1% of WDW's room inventory is available for booking. Even if you were to increase that number to 100 per resort the resorts would still be at 90% occupancy.

This isn't a question of "Is Disney hurting?" I'm simply stating an opinion that if there are ANY empty rooms open to the public, I don't see how Disney wouldn't care whether that room is filled, or a DVC room that has already been paid for is filled.

 

[Master Yoda]

Next week is also regular season. Give that same thing a try around 12/18/2012 for a booking between 12/24/2012 and 12/28/2012.

Well, yeah - Obviously.

We also do not know how many rooms are available. For all we know each resort has only 10 rooms open. If that was the case, less than 1% of WDW's room inventory is available for booking. Even if you were to increase that number to 100 per resort the resorts would still be at 90% occupancy.

This isn't a question of "Is Disney hurting?" I'm simply stating an opinion that if there are ANY empty rooms open to the public, I don't see how Disney wouldn't care whether that room is filled, or a DVC room that has already been paid for is filled.

The point is they do not want any room empty and will go down multiple avenues to achieve that goal. Allowing DVC owners to rent their points is merely one such avenue.

 

[Annielkd]

Next week is still "magic season" the second highest price. I wish it were "normal" season... I think that is one day in January.

 

[MichWolv]

No matter how you look at, they still lost money. Unless every resort on property is running at 100% capacity, which we know they're not, they're losing out. And as of right now, for our dates in July, there are open rooms at every resort on property. Granted, many of those will be booked by July, but clearly, not all of them will be.

I think you have to look at the bigger picture. The more restrictions Disney puts on DVC owners, the lower the value of ownership, and the less it can charge owners in purchase price and annual dues.

Lucky has the biggest point here. Disney wants to sell DVCs. That means they have to make the product they are selling attractive to the people they want to buy it. Logically, that ability to rent points does 2 important things in that regard.

First, it convinces some people to buy who may otherwise be nervous about it. More potential buyers means DVC points can be sold by Disney for more than otherwise.

Second, it causes some who might sell their points through resale not to do so, therefore relieving what might otherwise my oversupply that tanks the price of resale points. Lower prices available for resales would put downward pressure on the price of new DVC points as well.

By allowing renting, Disney can, therefore, charge more for the points it sells, and seems to have determined that the "lost" revenue from your hotel nights is more than made for in the increased sales price/volume of DVC points (and ancillary revenues, etc.).

Mystery (or lack thereof) solved.

 

[DVCOwner]

I am sure that the few people renting points compared to the total number of points used each year is very small. This said, I am sure that the renting of points to non-members generates a lot of sales and than profits for Disney. This is providing cheap marketing for DVC. Also as other have said, even when renting points, the rents send bucks on tickets, dining, gifts, etc.

I know that I send more in the parks per day stay now that I am a DVC member.

 

[Master Yoda]

Next week is still "magic season" the second highest price. I wish it were "normal" season... I think that is one day in January.

Regular season for the non DVC resorts is 4/15/12-5/31/12.

 

[Tiggerish]

Next week is still "magic season" the second highest price. I wish it were "normal" season... I think that is one day in January.

Regular season for the non DVC resorts is 4/15/12-5/31/12.

I think that Annie meant "normal" as in "lower-priced" season, and specifically for DVC owners.

Generally, Annie, DVC's "Adventure" season can be compared to "value" season for the other resorts--Adventure season is usually the entire MONTH of January, the entire month of September, and the first half of December. Choice season, where the points step up slightly, is the entire month of October, all of November except for Thanksgiving week, and the second half of December.

Dream season, being right in the middle of the lower and higher-priced times of year, could be considered "normal" (Regular) season for DVC owners, and that encompasses the entire month of May, the first half of February (pre-spring break, I guess!), the first half of June, and the second half of August.

Just like with non-DVC rooms, the periods of high demand are going to be more "expensive", and lower-occupancy times are going to cost less in order to fill up some rooms.

If you can only travel during peak seasons, it's going to be more points and maybe DVC doesn't work as well. It's unfortunate that you seem to be so unhappy with your DVC membership. :wave:

 

[Annielkd]

I think that Annie meant "normal" as in "lower-priced" season, and specifically for DVC owners.

Generally, Annie, DVC's "Adventure" season can be compared to "value" season for the other resorts--Adventure season is usually the entire MONTH of January, the entire month of September, and the first half of December. Choice season, where the points step up slightly, is the entire month of October, all of November except for Thanksgiving week, and the second half of December.

Dream season, being right in the middle of the lower and higher-priced times of year, could be considered "normal" (Regular) season for DVC owners, and that encompasses the entire month of May, the first half of February (pre-spring break, I guess!), the first half of June, and the second half of August.

Just like with non-DVC rooms, the periods of high demand are going to be more "expensive", and lower-occupancy times are going to cost less in order to fill up some rooms.

If you can only travel during peak seasons, it's going to be more points and maybe DVC doesn't work as well. It's unfortunate that you seem to be so unhappy with your DVC membership. :wave:

I'm only unhappy some of the time. Right now is a downer since things we were looking forward to are not going to happen... issues with our reservations, and a host of other issues. I'm sure at some point we will be happy with it. I can only travel during peak seasons... but, we had figured that into the cost of ownership. The biggest issue lately with us is that Disney keeps offering promotions to entice people into the park (which I get) but it makes the value of what we purchased fall. I did'nt mean to give you the impression that I'm unhappy!

 

[slappy magoo]

True.

However, what would Disney prefer? DVC Owner going to Disney and spending their money at the parks, and non DVC owner paying $5,000 to stay at the Polynesian plus $5,000 at the parks - or - DVC owner not going to Disney, non DVC owner renting those points from the DVC owner, and then spending $5,000 at the parks?

I think, were a potential Disney guest to cancel a room booked with Disney to rent points from a DVC member instead, then the money saved by not renting a room through Disney will be spent a bunch of other different ways - more dining, drinks with dinner, boat rentals, arcade games, and so on and so on...or maybe even EXTRA DAYS spent at Disney, which would also mean more time to spend money on all those things. Perhaps (I honestly don't know) at a higher profit margin.

Going back to your $5,000 =/- $5,000 analogy...

A DVC member who is renting their points to someone else is not going to Disney that year, so Disney will not make any tourism money that year from that family. So right away, Disney's starting at a negative dollar amount, as they can't count on that family to buy t-shirts or Dole Whips. Meanwhile, a certain lack of occupancy in resort rooms is built into their fiscal strategy, they know at some times of the year rooms will go unoccupied (which is why they have Value & Regular seasons and so on), so at least for now, it doesn't feel as much of a "loss" for them as long as those people are still coming to Disney to spend money, perhaps more money than they would have spent had they had to pay for a room.

None of this is to say they won't one day try to put the kibosh on it. But at this point I'd suspect renting DVC points is the OTHER "best kept Disney secret." I suspect a lot of people outside of these forums know anything about it. As it becomes better known, it may be more of an issue. But I'd also suspect that most of the time, people who know about renting points aren't booking rooms for cash in the first place, then canceling reservations. It happens, but I suspect more often than that, those people who rent points are renting points right off the bat. So Disney didn't see that $5,000 for a room at the Poly arrive and then go away, they saw someone coming to a DVC resort using a member's points.

 

[MaxsDad]

It's simple math:

If Bob buys DVC for $25,000, then Disney has $25,000.
If Bill decides to stay at the Polynesian for $5,000, then Disney has $5,000 plus the $25,000 from Bob. So, Disney has $30,000.
If Bob rents his points out to Bill for $5,000, then Disney only has $25,000.

I see what your thinking was in your original question. But I think you realize you're looking at it in a micro-economic way.

If the non owner rents from the owner and theoretically forgoes a WDWTC stay at the Poly, yes the WDWTC does not get the room $ from the points renter. ($5000 in you example). However, the DVC owner may very well have rented his points to help pay for a free dining package at the GF, Club Level at the YC, a Disney cruise, etc.

 

[flynnibus]

I think all these 'zero sum' budgets and assumptions over contention over rooms is muddying up the question.

The best case someone made was when they said if the DVC member doesn't rent.. and the points go unused.. that would be one less group visiting the parks.

As for the renters staying at DVC vs a hotel property... maybe there is some loss there, and you assume the DVC renter was coming to property anyways.. so Disney didn't gain a group. But the room the renter 'left behind' when they opt'd to rent.. is now open for Disney to sell to new propspective clients.

So...
Party 1 (DVC Owner) - wasn't going anyways..
Party 2 (DVC renter) - was going either way
Party 3 (market Disney sells to) - can now be accomodated or marketed to to fill the room

Disney is able to have Party #2 come.. without taking up space.. and offsetting some of loss of Party #1.. and still has a chance to find Party #3 and get them to the parks.

Sure Disney isn't getting the revenue for the room garunteed... but Party #2 isn't costing Disney any money to put them up somewhere (dues are paying for that).. and if Disney manages to find Party #3... then Disney is ahead and has both Party #2 and Party #3 spending in the parks.

Where it would suck for Disney is if they can't find Party #3 to fill the room.. and that's where discounting comes in to avoid that situation as best they can.

The upside in making it easier for people to actually buy DVC probably outweighs the potential risk of not finding Party #3 or lower revenues if Party #3 is only found with steep discounts.

 

[captainkidd]

Where it would suck for Disney is if they can't find Party #3 to fill the room.. and that's where discounting comes in to avoid that situation as best they can.

This is the point I can't seem to get across.

Whether or not 1 party goes to Disney or not, has absolutely no bearing on whether another party does. Sure, that room that I cancelled at the Polynesian may very well be rented out to someone else. However, as I said, unless the resort is running at 100% capacity, then there IS some loss there. Simply put, there is no party that "took my room" if the resort isn't full.

Now, if all the resorts are full, THEN I think Disney would be ecstatic to have members renting points out. That's a win-win for Disney.

Regardless, my question was actually answered a while back when someone said there is a limit to how many points an owner can rent out in a year. That right there tells me, that it is at least on Disney's mind that people are renting points as opposed to paying Disney. If they didn't care, they wouldn't limit them.

 

[tjkraz]

Disney has a love-hate relationship with rentals. Sure they like to sell the DVC points in the first place but every rental represents a guest who did not give their money to Disney for a hotel room.

If memory serves, annual reports have shown the WDW resorts running around 90% occupancy. So every night there are hundreds of empty rooms which could house people who are otherwise staying in DVC rental units. Low occupancy is also what drives the need for cash incentives like "free dining" and free vacation nights. The DVC rental volume is nothing that would drive the need for such incentives (they wouldn't be charging full price if rentals were eliminated), but it's still hotel business lost.

Still rentals are also good marketing for DVC.

IMO, members have collectively paid a price for the explosion of rentals. The economics of DVC trading programs (using points for DCL, Disneyland Hotel, etc.) relies heavily on Disney's ability to sell villas to cash guests. When I spend 500 points for a Disney cruise, 500 points worth of villas are made available to cash guests with the proceeds covering the cost of my trip. But I suspect there are fewer and fewer people paying Disney prices for villa accommodations. Thus it gets harder and harder for Disney to turn villas into cash, and the point requirements for non-DVC destinations continues to climb.

I don't see how Disney could ever completely eliminate the rental market simply because Disney itself is the single biggest renter of villa accommodations. They own points and sell villas for cash; that's the textbook definition of renting.

Legally I doubt Disney could mount much of a challenge against renters. I don't think the courts would fall for the argument that "DVC was created for personal use only and we (Disney) don't want private individuals renting for profit...but we intend to continue renting for a profit." The fact that Disney is the developer / leaseholder is irrelevant. What's good for the goose...

DVC has made threats over the years and set a threshold of 20+ reservations as being a checkpoint for "commercial renting." But it's no great mystery there are a handful of members who each own thousands of points each and rent on a regular basis. And I'm not aware of Disney ever taking action against those individuals.

Disney has made it more difficult to rent over the years. They used to openly communicate with renters. A non-member could call and add requests to the reservation, schedule DME, add the dining plan, etc. That ended about 3-4 years ago. More recent changes now require pre-payment of the DDP, which adds another challenge to the rental process (getting member, renter and Member Services on the phone together.)

Overall I think Disney is content to wave a big stick and try to discourage more renters from entering the marketplace by issuing empty threats.

 

[captainkidd]

Disney has a love-hate relationship with rentals. Sure they like to sell the DVC points in the first place but every rental represents a guest who did not give their money to Disney for a hotel room.

If memory serves, annual reports have shown the WDW resorts running around 90% occupancy. So every night there are hundreds of empty rooms which could house people who are otherwise staying in DVC rental units. Low occupancy is also what drives the need for cash incentives like "free dining" and free vacation nights. The DVC rental volume is nothing that would drive the need for such incentives (they wouldn't be charging full price if rentals were eliminated), but it's still hotel business lost.

Thank you. Thank you. Thank you. This is what I am saying.

 

[tjkraz]

The best case someone made was when they said if the DVC member doesn't rent.. and the points go unused.. that would be one less group visiting the parks.

If a non-member pays cash for a Disney hotel room, Disney receives the hotel revenue plus the theme park revenue (including dining, souvenirs, etc.)

If a non-member rents points, all they get is the theme park revenue.

Given a choice between the two, Disney would much rather see a DVC villa sit vacant.