DVC Point Inflation?

[Woozle]

Hi all. I am very new in learning about DVC and have started poking around at some details.

My question is if prices for non-DVC resort rooms continue to increase does this also reflect in a DVC resort visit (ie the number of points required to stay at a DVC resort also increases). If this is true, then doesn't that force the DVC owner to keep purchasing points in the future to keep up with the increase? I guess I am missing the long term value concept. Any insight would be greatly appreciated!

 

[DisneyPhD]

Good question! The total number of points at a resort cannot change. What can be altered is the allocation of those points for various room types (studio vs. 1BR), seasons (Jan vs July) or weekday vs weekend days. So if DVC increases the cost for one night, season or category, then they must decrease the point cost for a different night, season or category.

This is necessary to compensate for increases or decreases in demand. Most recently, DVC adjusted the number of points required for weekday vs weekend nights. Previously, weeknights were much less in points than weekends and many people were using their DVC points just for Su-Th nights then paying cash, moving off site or just not staying on weekend nights when the points were nearly doubled. So DVC adjusted by adding a few points per night for weekday stays and lowering the weekend point cost a few points per night. In most cases the total points for the week stay stayed the same (perhaps one or two points different).

Point costs for non-DVC resort stays (like staying at the Poly on points) are connected to the cash cost of those rooms so as the cost of the room is inflated, the number of points that must be traded to pay for the room will be higher.

What does increase for the DVC member is the dues per point which go to pay for the operation of the resort.

 

[Woozle]

Thanks for the reply! Very helpful!

 

[DisneyJoe]

So DVC adjusted by adding a few points per night for weekday stays and lowering the weekend point cost a few points per night. In most cases the total points for the week stay stayed the same (perhaps one or two points different).

This is your answer.

In general, purchase the number of points you need upfront for the vacation you expect to take over the course of your membership; the number of points needed each year should roughly be the same.

 

[Cubs Brian]

What does increase is the $ per point it would cost you up front to pay for contract. Example say in 2005 you paid $90.00 per point to purchase at let's say Old Key West and you bought 100 pionts. you initial cost was $9000.00. Now I want to buy at same resort (for the sake of argument) in 2011. The cost per point is now up to 105.00 per point so my initial purchase is 10500.00.
As was said before your dues does go up each year but is generally only a few dollers per month. Hope this helps.

 

[becanya]

What a great thread! Useful information. Thanks everyone.

 

[Yanks07]

Just pulled out the 2002 point chart for BCV when we added on there. Our normal stays are Oct. in a studio which was 106 pts/wk in 02 and 107 pts now in 2011. For the same period, the 1bed rm went down from 214 to 211 and 2 bed from 282 to 278. Our other normal stay would be in Feb. in a 2 bed rm. In 2002 it used 314 pts for early feb. and now uses 313. Pres. week uses 350 then and 350 now. Like was mentioned, some went up, some down, averages out to be about the same over our 9 years there. My wife pays the dues so can't comment there . Not sure if it helps but I got curious and figured I'd check.

 

[mousefan1972]

Just pulled out the 2002 point chart for BCV when we added on there. Our normal stays are Oct. in a studio which was 106 pts/wk in 02 and 107 pts now in 2011. For the same period, the 1bed rm went down from 214 to 211 and 2 bed from 282 to 278. Our other normal stay would be in Feb. in a 2 bed rm. In 2002 it used 314 pts for early feb. and now uses 313. Pres. week uses 350 then and 350 now. Like was mentioned, some went up, some down, averages out to be about the same over our 9 years there. My wife pays the dues so can't comment there . Not sure if it helps but I got curious and figured I'd check.

Awesome stuff, Mike. I'd love to know what the rack rate increase was during the same time frame.

 

[Yanks07]

Awesome stuff, Mike. I'd love to know what the rack rate increase was during the same time frame.

Those I know went up every year, but discounts and freebies are more available now than back then me thinks. Nice to see ya Kristin my bud and fellow Dvc'r :sohappy: :kiss:

 

[mousefan1972]

Those I know went up every year, but discounts and freebies are more available now than back then me thinks. Nice to see ya Kristin my bud and fellow Dvc'r :sohappy: :kiss:

True, but the discounts won't be around forever. Last April we got 45% off our stay at the GF and this year it is only 30%. I'm very happy with our DVC. Right back atchya! :kiss: :wave:

 

[Woozle]

Thanks for all the responses guys. Very helpful!

 

[tjkraz]

Point costs for non-DVC resort stays (like staying at the Poly on points) are connected to the cash cost of those rooms so as the cost of the room is inflated, the number of points that must be traded to pay for the room will be higher.

I don't think you can even make this assumption. When it comes to non-DVC options INCLUDING DISNEY CRUISES, the reality is that there is absolutely no ceiling on prices. DVC can set those rates wherever they wish.

Using points for non-DVC resorts isn't as commonplace these days since DVC has expanded into so many existing hotels. But many people still plan to use points for cruises. This is one reason why it's hard to recommend cruising on points. If DVC / DCL decide they need to bump-up the cruise point costs by 30% next year, it is well within their rights and members have zero recourse.

 

[slappy magoo]

The best way I've found to explain it is this: Even though a DVC membership is represented by "points," those "points" actually represent a percentage of the DVC resort that you own, just like a share of stock represents a tiny percentage of ownership in a company. Granted, your DVC ownership has an expiration date unlike most (all?) other timeshare interests, but until the day expires you're technically not just a DVC member, but an owner. Your maintenance fees cover not just gardening and pool chlorine but taxes and utilities and any sort of expense you would expect to pay in your own home, divided up amongst all the other owners of that home resort.

Now, as I said, your points represent a teeny-tiny percentage of ownership in your home resort. If DVC were to try to increase, across the board, the amount of points it would take to stay in a DVC room or villa, then what they're essentially telling you that, as of that moment, you own LESS of a percentage than you did before.

Imagine if a friend opened up a pizzeria and you became a partner with him, and you gave him enough money to be a 10% owner in his company. Then, at the end of the year, when it came time to divvy up any profits, he gives you enough profits for a 5% owner and says "uh, yeah, you bought a 10% ownership, but I decided you now only own 5%." That legally can't happen, and DVC can't legally decide that more points are necessary across the board to stay in DVC rooms. Similar deal.

The only thing I THINK they can do, legally, is make the point values for new resorts as high as they want them to be, which would make it cost (or point) prohibitive to stay in them unless you buy points there. They've already done this to a certain degree, rooms in BLT are more points than similarly appointed rooms in OKW, for example. You're paying for the "real estate." And the point values for staying at Grand Californian at DL is much higher still. When/if they ever add a DVC wing to Grand Floridian, there's no reason why they can't insist that a studio in value season go for 200 points a week, and insist on a 250 point minimum purchase. I'm not saying they will. Just saying I believe they could.