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walkitoutThere have been sooooooo many DVC rule changes since the inception of DVC. So many benefit changes. So many dues increases.
A little bit of background, if you are new to this particular game.
DVC is a deeded, points based timeshare system. There is one resort at DisneyLand (in California), one in Hawaii, 2 along the Florida Coast, and the balance are located in the Walt Disney World complex. The deeded points are not in perpetuity — they have an expiration date. Each resort has a certain number of points associated with it, however, Disney can modify how many points a given room type will “cost” to book at various times of year. Currently, they differentiate between 4 “seasons”, between day of the week, and between view types, as well as room types. But they can conceivably reduce or increase variation at will, as long as the number of points total for a given resort is the same for the calendar year. Points charts for various years are available pretty widely.
Because it is a deeded system, Disney can’t really prevent resales of the contracts. And there is a really active resale market. While resale points have always gone for less than retail points (points bought directly from DVC developers, “Disney” for my purposes), as retail has gone up, so has resale. This is, as far as I know, (close to) unique in the world of timeshare systems.
Owning points in a resort gives the owner the right to try to book a room (if they have enough points available in that use year, or by banking from the previous use year’s unused points or borrowing from the subsequent use year’s points or some combination there of) up to 11 months before the start of the scheduled stay.
Historically, a benefit of owning DVC points was the ability to use points in one resort within the system to book a stay at a different resort within the system up to 7 months before the start of the scheduled stay.
The recent announcement basically modified that benefit. Going forward, points purchased via resale at any of the existing 14 resorts can continue to do what they have always been able to do (11 month at home resort; 7 months at the other resorts) at those 14 resorts. But they won’t be able to use their resale points to book at Riviera (a new DVC resort) or Reflections (another new DVC resort). It’s a little bit uncertain, but it also looks like maybe buying resale points at Riviera and/or Reflections on some future date might only let you book at each of those resorts? But not sure — and that’s two hypotheticals piled on top of each other.
Basically, no more buying at SSR and then booking at 7 months at the Latest and Greatest DVC resort.
Why would Disney do this?
There is a ton of speculation out there about why Disney would do this, that can be loosely summarized as, Disney hates the resale marketplace. However, I think that this is all basically a bunch of bullshit. DVC points sell like gangbusters at ever-escalating (faster than inflation and I mean by a lot) prices in part _because_ of the resale marketplace. All points sold resale have to go through a Right of First Refusal process, so if Disney thinks the price is too low, they’ll just buy it and resell it themselves (with all the benefits you can only get by buying direct), thus supporting their own market and reassuring a lot of people like me who would otherwise be too worried about the open ended financial commitment to buy points in the first place.
Any explanation for this rule change that amounts to: Disney wants to punish resellers, Disney wants resale to go away, etc. just does not satisfy me. It may satisfy you. Bye!
I suspect an arbitrage problem. Many, many, many people strategize which resort they buy resale in order to keep their initial outlay to buy the points to a minimum AND to minimize their ongoing financial commitment in the form of homeowners dues (really involved story here, but basically, if you hang on for 10 or so years, you can probably get all your money — if you didn’t borrow to buy points — back when you sell your points, but you won’t get your dues back. The actual cost of your hotel stays on the vacations you take using your points is basically the cost of the dues). Then they rely upon the 7 month booking window to stay nearly anywhere _other_ than their home resort.
Really.
I mean, people will assemble bizarre, 6 night vacations with 2 nights each in three resorts. And weirder. They use waitlists. Etc.
Hey, planners — no harm, no foul, amirite? But for all that Disney wants to retain the optics of Middle Class Family Utopia Vacation, Disney hates to watch ludicrously spendy people who do not plan their vacations a year in advance walk away and spend their money somewhere else because some extremely clever person filled all the luxe slots — someone who is not going to eat out or buy any souvenirs during their stay. Someone who paid for their stay on points that they paid very, very little for — to someone who bought those points long, long ago from Disney for even less money.
Disney’s recent DVC additions have tended to be comparatively small resorts (BLT, Poly, Grand Floridian), cost a ton of points to book, and/or have included components that cost a Metric Fuck Ton of points to book (I am looking at the 20 Bora Bora Bungalows, the even fewer in number Copper Creek Cabins, etc.). This suggests that Disney is actively looking to preserve a tiny slice of inventory for a global elite that is perfectly happy to drop a truly insane amount of money to have a really luxe but home like (for them) experience while going to the parks.
Letting someone cobble together rental points, resale points, borrowed and banked points to stay in these things would seem to be a little counter-productive, unless the person staying could be relied upon to take extensive video and photographs and then write a really detailed review that convinced the global elite that, actually, sure, kids we’ll take you to Disney I could probably suffer if I had my own plunge pool.
My theory is that Disney has changed the resale rule because of this kind of points arbitrage, and a desire to protect inventory for people who didn’t plan years in advance to scam an awesome hotel room for a tiny amount of money. You know, people who will actually drop a commensurate amount of money on VIP tour guides and souvenirs, and dinner at Victoria and Albert’s.
But I’m open to alternative theories.
ETA: In the meantime, I’m going to call this the Taylor Swift Concert Pricing Theory of the DVC Rules Change
A little bit of background, if you are new to this particular game.
DVC is a deeded, points based timeshare system. There is one resort at DisneyLand (in California), one in Hawaii, 2 along the Florida Coast, and the balance are located in the Walt Disney World complex. The deeded points are not in perpetuity — they have an expiration date. Each resort has a certain number of points associated with it, however, Disney can modify how many points a given room type will “cost” to book at various times of year. Currently, they differentiate between 4 “seasons”, between day of the week, and between view types, as well as room types. But they can conceivably reduce or increase variation at will, as long as the number of points total for a given resort is the same for the calendar year. Points charts for various years are available pretty widely.
Because it is a deeded system, Disney can’t really prevent resales of the contracts. And there is a really active resale market. While resale points have always gone for less than retail points (points bought directly from DVC developers, “Disney” for my purposes), as retail has gone up, so has resale. This is, as far as I know, (close to) unique in the world of timeshare systems.
Owning points in a resort gives the owner the right to try to book a room (if they have enough points available in that use year, or by banking from the previous use year’s unused points or borrowing from the subsequent use year’s points or some combination there of) up to 11 months before the start of the scheduled stay.
Historically, a benefit of owning DVC points was the ability to use points in one resort within the system to book a stay at a different resort within the system up to 7 months before the start of the scheduled stay.
The recent announcement basically modified that benefit. Going forward, points purchased via resale at any of the existing 14 resorts can continue to do what they have always been able to do (11 month at home resort; 7 months at the other resorts) at those 14 resorts. But they won’t be able to use their resale points to book at Riviera (a new DVC resort) or Reflections (another new DVC resort). It’s a little bit uncertain, but it also looks like maybe buying resale points at Riviera and/or Reflections on some future date might only let you book at each of those resorts? But not sure — and that’s two hypotheticals piled on top of each other.
Basically, no more buying at SSR and then booking at 7 months at the Latest and Greatest DVC resort.
Why would Disney do this?
There is a ton of speculation out there about why Disney would do this, that can be loosely summarized as, Disney hates the resale marketplace. However, I think that this is all basically a bunch of bullshit. DVC points sell like gangbusters at ever-escalating (faster than inflation and I mean by a lot) prices in part _because_ of the resale marketplace. All points sold resale have to go through a Right of First Refusal process, so if Disney thinks the price is too low, they’ll just buy it and resell it themselves (with all the benefits you can only get by buying direct), thus supporting their own market and reassuring a lot of people like me who would otherwise be too worried about the open ended financial commitment to buy points in the first place.
Any explanation for this rule change that amounts to: Disney wants to punish resellers, Disney wants resale to go away, etc. just does not satisfy me. It may satisfy you. Bye!
I suspect an arbitrage problem. Many, many, many people strategize which resort they buy resale in order to keep their initial outlay to buy the points to a minimum AND to minimize their ongoing financial commitment in the form of homeowners dues (really involved story here, but basically, if you hang on for 10 or so years, you can probably get all your money — if you didn’t borrow to buy points — back when you sell your points, but you won’t get your dues back. The actual cost of your hotel stays on the vacations you take using your points is basically the cost of the dues). Then they rely upon the 7 month booking window to stay nearly anywhere _other_ than their home resort.
Really.
I mean, people will assemble bizarre, 6 night vacations with 2 nights each in three resorts. And weirder. They use waitlists. Etc.
Hey, planners — no harm, no foul, amirite? But for all that Disney wants to retain the optics of Middle Class Family Utopia Vacation, Disney hates to watch ludicrously spendy people who do not plan their vacations a year in advance walk away and spend their money somewhere else because some extremely clever person filled all the luxe slots — someone who is not going to eat out or buy any souvenirs during their stay. Someone who paid for their stay on points that they paid very, very little for — to someone who bought those points long, long ago from Disney for even less money.
Disney’s recent DVC additions have tended to be comparatively small resorts (BLT, Poly, Grand Floridian), cost a ton of points to book, and/or have included components that cost a Metric Fuck Ton of points to book (I am looking at the 20 Bora Bora Bungalows, the even fewer in number Copper Creek Cabins, etc.). This suggests that Disney is actively looking to preserve a tiny slice of inventory for a global elite that is perfectly happy to drop a truly insane amount of money to have a really luxe but home like (for them) experience while going to the parks.
Letting someone cobble together rental points, resale points, borrowed and banked points to stay in these things would seem to be a little counter-productive, unless the person staying could be relied upon to take extensive video and photographs and then write a really detailed review that convinced the global elite that, actually, sure, kids we’ll take you to Disney I could probably suffer if I had my own plunge pool.
My theory is that Disney has changed the resale rule because of this kind of points arbitrage, and a desire to protect inventory for people who didn’t plan years in advance to scam an awesome hotel room for a tiny amount of money. You know, people who will actually drop a commensurate amount of money on VIP tour guides and souvenirs, and dinner at Victoria and Albert’s.
But I’m open to alternative theories.
ETA: In the meantime, I’m going to call this the Taylor Swift Concert Pricing Theory of the DVC Rules Change