walkitout | Entries tagged with dvc

https://disneyparks.disney.go.com/blog/2019/01/all-new-disneys-riviera-resort-now-accepting-guest-reservations/

That’s a trimmed link, so I don’t know if it will work.

Two levels of studios, so the suspicion that this was built to accommodate increasing demand for studios seems to have been accurate. One type of studio sleeps _2_ — the other is more typical of DVC, and sleeps 5. The Grand Villa says 12. Must be huge! 1 and 2 bedrooms also.

It won’t open for points reservations until later, but DVC says there is some inventory protected for points reservations. I’ll be wasting a ton of time on DVC forums for the next few days, clearly.

ETA:

The description of the top floo restaurant sounds like — between fireworks, food and wine descriptions — they are trying to reproduce the California Grill experience from the Contemporary, on in an explicitly DVC context. Not sure what they mean by first all new stand alone DVC at Disney World since 2004? I mean, BLT, Poly, and all the stuff they have done in the Wilderness complex are connected to other hotels.

There 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 while back, I posted numerous times about DVC, Disney Vacation Club, which is sort of a timeshare altho not really. I was attempting to figure out why anyone would buy into it, and whether it made any sense at all. Essentially, the argument for DVC is that if you are going to pay godawful amounts of money to stay on property every (other) year, you may be able to save some interesting fraction of that amount by buying "points" and paying dues every year. The argument against DVC is that the math does not work out if you don't go at least every (other) year (and honestly, the other is kinda dodgy), and it's insanely cheaper to stay off property. You really don't save any meaningful amount of money if you finance the points; it's a huge hassle to rent unused points; and you are committing to spending a chunk of your precious vacation time in one place for decades to come. About the best news out of the whole thing is that there is a resale market.

Once upon a time, if you wanted to go somewhere, you got there via muscle power: your own, someone else's, an animal's. Needless to say, getting anywhere was slow and, in a world in which everything is done with muscle power and food was not cheap, expensive. In that world, walking was expensive, which is why cities were so compact.

Then there was a world in which you could go somewhere on a train. Still pretty expensive, but much, much cheaper than any other option to date. So much cheaper, that it more or less wiped out all other long distance travel in a matter of a few decades. (You might be thinking, well, no one was walking across the country before that. And then you probably went, dur, never mind.)

The bicycle and, in short order, its evil spawn, the automobile, presented this country (since we had the most oil at the time) with a conundrum: continue to pay for each ride, which was basically pretty cheap, or spend a lot of money (possibly financed) to buy something that you could then travel around on or in for free, subject to fuel costs, maintenance costs, replacement costs, etc. While there have not necessarily been a lot of people spreadsheeting the costs as experienced at the time, the main perspective I've seen is a little odd. People from our car-world looking back at train fare try to figure out how ordinary, middling sorts of folk could afford to take vacations by train (which we know they did) -- the fare was an interesting chunk of money. But that's not really the right question. The question is why anyone would have financed a car, back in the day.

And I think all one really has to do is take a look at DVC to answer that question. Most people buying DVC don't really factor the ongoing dues into the cost calculation. Which is, in part, why there is a thriving resale market. But the draw, I think, then and now, is the Dream.

There's a lot of parenting and management theory that revolves around token economies. Think gold stars, demerits, "earning" a class trip or other privileges. There's a fair amount of commentary on why tokenization is a bad idea (as parenting, as management), in that when people are focused on "extrinsic" motivators, it tends to destroy their "intrinsic" motivation, and "intrinsic" motivators are far more powerful than "extrinsic" motivators and blah blah blah.

Basically, my sister D. would spend _hours_ on calculus proofs that weren't even assigned because she got a huge payoff for figuring one out (as in, felt really good). Theory says that if you paid her for each proof, she'd decide at some point that it wasn't worth the money and it would stop feeling really good. This is the same basic argument against turning hobbies into careers and paying your kid to do chores around the house that they "should" do as a member of the household. It's also part of the argument against certain kinds of clauses in prenups.

Of course, there is sort of the whole thing about money.

Disney is about "magic", and if ever there was a company that existed on creating and/or exploiting "intrinsic" motivators (do this because it makes you feel good), Disney would be that company. Dollars definitely have an impact on "intrinsic" motivators. What I'm about to say is not entirely true, but it's true a lot of the time.

Let's say you find something really amazingly cool (great house, awesome car, chocolate cake, private school for the kiddies, a Bugaboo, whatever) that does something really nifty (stores your stuff, goes real fast, tastes awesome, promises a perfect life, converts 9 ways from Sunday, whatever). You're like, all right! Wait, it costs _how_ much? There _are_ people who just ignore cost, but they are actually fairly rare, _even with people who could afford to_. This is (part of) where buyer's remorse comes from (the dang, I'm done shopping and it was so much fun accounts for a bit more) -- you have it, it's not quite what you thought it would be, you don't have that money, and you're not totally certain the trade was worth it.

There are several ways around this particular problem if you want to sell something that people aren't quite sure is worth what you are asking. (1) Ask less for the same good. (2) Offer less for less and hope that trade is perceived differently. (3) Make a strong case that your good is REALLY REALLY GOOD. (4) Make it really hard to compare the two.

If you can take a trade out of dollars (because we're saturated in dollars, we all have a pretty rock solid assessment of what a dollar is), you can have all kinds of fun with (4), and potentially exploit the hell out of (2) as well. Ideally, you can do a combination of (4) and (2) and make it look like (1). Financing is a really common way to get around things. While legions of advisors say you shouldn't shop by payment nevertheless, there's a group of consumers who _will_ shop by payment anyway. Fuck around with the term enough and you can get that group to pay an arbitrary amount for an arbitrary "good" -- at least for a while.

A slightly less common way to get around this is to tokenize. And the entire travel industry is built upon tokenization: "floating week(s)" in a timeshare, DVC points, frequent flyer miles, XX% off if you listen to our sales pitch, discounts for members of organization Y and/or individuals above or below certain age limits, some of which are combinable and others of which are not, and all of which have mysterious small print about deposits and cancellations and refundability that will only begin to make sense in the distant future under unpleasant circumstances.

My first husband was a huge believer in frequent flyer miles (his family, at the time, were commercial fishermen who were back and forth to Alaska a couple times a year) and "credit card miles". I tend to be suspicious of anything I can't understand or suspect isn't worth the trouble of figuring out -- especially if the rules can be changed unilaterally at any time by the other player. When I saw the expectable outcome of believing in "credit card miles", I ran away. Fast.

DVC is tokenization taken to a breathtaking level. You buy points (possibly with incentives). The points chart is changed annually (and has become finer and finer grained by date every year). Privileges associated with DVC appear and disappear periodically (like: discounts on annual passes, member-only activities, whether you can buy the Disney Dining Plan). If used, some discounts, like buying an Annual Pass, lead to further, variable privileges: dining card, free parking, etc. You cannot devise any kind of analysis based on this stuff, because while there is some history (percentage increase in cost of points, dues), a lot of the additional privileges, while _clearly_ worth a chunk, are specifically not to be relied upon in the future.

Like marriage -- or just having sex with someone -- DVC provides no reasonable basis for assessment. Is it worth it? You won't know until you've committed to it for a while (unless you decide this is _clearly_ undesirable_), and by that point, you'll be working so hard to convince yourself it was a good deal to justify it to yourself, you'll never really know whether it was (monetarily) worth it or not.

Married to the Mouse indeed! DVC is perhaps the most brilliant marketing scheme I've ever encountered. But then it should be: it is the current, ultimate form of Florida Real Estate.