Cash availability but no DVC availability

[squirk]

Other than possibly the breakage inventory, they'll let them sit empty rather than use them for points. It's really the same thing from their standpoint.

But isn't there some benefit to the property (and the WDW resort as a whole) in terms of the ancillary revenue an occupied room will generate - dining, ticket sales, souvenirs, alcohol, etc. - vs. an empty room?

 

[tjkraz]

But isn't there some benefit to the property (and the WDW resort as a whole) in terms of the ancillary revenue an occupied room will generate - dining, ticket sales, souvenirs, alcohol, etc. - vs. an empty room?

Even during the best of times, Disney's hotel business averages 85-90% occupancy. (Industry standard is around 50%). With 25000+ hotel rooms on property, WDW has 2500-3500 sitting empty most nights of the year.

So to answer your question with a question, why doesn't Disney put people in those hotel rooms? Why not offer last-minute deals of 50% off...75% off...90% off just to get the ancillary revenue? In the hotel world, it's part of the cost of doing business.

In your case, Disney really isn't losing any revenue. You will find a way to use those points. It may not be for this desired February stay, but chances are you'll use them somehow (later trip, banked for next year, rented, etc.) Or, worst-case the points expire unused, you've basically created breakage inventory which Disney can rent for cash.

Cash reservations aren't typically booked 11+ months in advance. Some of those February villas sitting empty today WILL be booked by cash-paying guests in the coming weeks. Disney appears content to let those rooms sit available, waiting for the late bookings which are a large part of their business.

 

[squirk]

So to answer your question with a question, why doesn't Disney put people in those hotel rooms? Why not offer last-minute deals of 50% off...75% off...90% off just to get the ancillary revenue? In the hotel world, it's part of the cost of doing business.

To answer your question - I rather thought they avoided last-minute "fire-sales" more to discourage people from waiting until the last minute to book rooms. Maybe I am wrong on this, but my thinking is:

If they were in the custom of offering drastic discounts at the last minute to "top off" their occupancy rate, nobody would book months in advance. Everyone would sit tight, planning to go to WDW, but waiting until a few weeks out to book in order to get the anticipated 90% discount.

Granted, such guests are taking the risk that either a.) the discount will not materialize; or b.) high occupancy will leave them with limited options in terms of where they can book. But a 75%-90% discount is hard to pass up.

That would put WDW in the undesirable position of "coming down to the wire" with (relatively) very low occupancy, with very little margin for error if the last-minute bookers don't actually show up.

Obviously, the revenue and profit on the hotel rooms would be wiped out. Also, how does a resort allocate budget and staff in that case? How do you set park hours? How do you know how many CMs to schedule to work? How much food do you order?

 

[kristenrice]

When DVD turns points over to CRO to rent out, the point is that these are NOT members' points...they are OWNED by DVD. Whether they obtained them via foreclosures, cruises, ABD or whatever, they no longer belong to the member. DVD needs to rent out those points themselves if they want to make money off of them which they do via CRO. DVC members can make reservations with those points...they just have to "rent" them from DVD with CRO as their "broker".

When an exchange is made (ABD, DCL, etc), DVD uses CRO as their rental broker. Just like here, when folks recommend using David's to rent out your points and use the cash to pay for a cruise....same thing. Those rooms available for cash bookings are simply the cash-equivalent of points that DVD owns. DVD is not going to let you pay for their "points" by using your points.

 

[Dean]

But isn't there some benefit to the property (and the WDW resort as a whole) in terms of the ancillary revenue an occupied room will generate - dining, ticket sales, souvenirs, alcohol, etc. - vs. an empty room?

No benefit to DVC or DVC resort, actually some costs.

 

[tjkraz]

If they were in the custom of offering drastic discounts at the last minute to "top off" their occupancy rate, nobody would book months in advance. Everyone would sit tight, planning to go to WDW, but waiting until a few weeks out to book in order to get the anticipated 90% discount.

Fair enough. But imperfect analogies aside, it's pretty clear Disney isn't willing to do anything and everything to put bodies in rooms.

And it brings us back to the fact that most members in your position will find SOME way to use those same points. Disney isn't losing your theme park and dining revenue...it's merely being shifted to another time period when resort availability remains. On the off chance that points cannot be used and expire, it creates breakage vacancies which could produce revenue for both DVC owners (dues offset) and Disney.

 

[squirk]

Fair enough. But imperfect analogies aside, it's pretty clear Disney isn't willing to do anything and everything to put bodies in rooms.

And it brings us back to the fact that most members in your position will find SOME way to use those same points. Disney isn't losing your theme park and dining revenue...it's merely being shifted to another time period when resort availability remains. On the off chance that points cannot be used and expire, it creates breakage vacancies which could produce revenue for both DVC owners (dues offset) and Disney.

Sorry - I didn't mean to suggest your analogy was imperfect. Your rhetorical question was spot-on - if 100% occupancy was their goal, then, yeah, they'd probably slash prices at the last minute just to get "heads in beds".

But if they find 85% is a number they can live with, why not leave some rooms empty and give them breathing room for maintenance/cleaning/refurbishment/etc.? I totally get it.

Thanks for taking the time to lay it out for me.

 

[Dean Marino]

I actually get all this. The issue? WHO OWNS THE POINTS?

ANY DVC property - if one OWNS POINTS - the owner may rent them. It's in the contract. PRIVATE parties do this on a regular basis.

So - if WDW gets stuck with POINTS, not owned by a private party? Yup, they can RENT them - just like anyone else.

So - this occurred because WDW OWNS POINTS at the affected DVC property. Just like any owner? They can RENT them - to anyone they choose.

But there is good news....

WDW does not WANT to own those points. They want to SELL them. This scenerio tells us that WDW has points available at the Classic Villas at Wilderness Lodge, or other "sold out" site
"Sold out" is BOGUS -they have points, they want to SELL them.

This is EXACTLY how my dear wife, and I, bought INTO VWL (OK -Bolder Ridge). WDW had points. They did not WANT those points. We negotiated. Oh yes, they TRIED to sell us something else.... our answer was NO. And we reached an accommodation.

 

[Dean]

I actually get all this. The issue? WHO OWNS THE POINTS?

ANY DVC property - if one OWNS POINTS - the owner may rent them. It's in the contract. PRIVATE parties do this on a regular basis.

So - if WDW gets stuck with POINTS, not owned by a private party? Yup, they can RENT them - just like anyone else.

So - this occurred because WDW OWNS POINTS at the affected DVC property. Just like any owner? They can RENT them - to anyone they choose.

But there is good news....

WDW does not WANT to own those points. They want to SELL them. This scenerio tells us that WDW has points available at the Classic Villas at Wilderness Lodge, or other "sold out" site
"Sold out" is BOGUS -they have points, they want to SELL them.

This is EXACTLY how my dear wife, and I, bought INTO VWL (OK -Bolder Ridge). WDW had points. They did not WANT those points. We negotiated. Oh yes, they TRIED to sell us something else.... our answer was NO. And we reached an accommodation.

It's even a little more complicated than that, there are several buckets besides owners points to use (or rent) and DVD's points to use (or rent). There are points that were given to RCI (or BVTC), there are points given up for cash exchanges, these are owned by DVD now and they must turn those into cash to pay for the cash exchange item. There's breakage that technically is owned by DVCMC and the proceeds are returned to members to offset dues up to a certain level then the rest is profit for DVCMC. Even with the DVD owned points they are not all the same. There are points not intended to be sold but used in part for maintenance, there are unsold points they plan to sell, there is undeclared inventory not yet in points and there are ROFR points.

However, if one wants to divide things another way, there are rooms available to be reserved on member points and rooms that are not available to members due to one of the reasons above. Understanding and being comfortable with that process simply means understanding what we all bought into and agreed to.

 

[crisi]

There are also some accounting regulations that make it difficult to transfer assets between subsidaries without paying for them.

So lets say I cruise on points. DCL sells DVC a cruise. To pay for it, DVC gives rooms to CRO (who then likely gives DCL "cash") Everything meets GAAP because everyone is getting fair market value for their assets.

Lets say Dean wants to take a last minute trip, but DVC doesn't have a room available on points. CRO does because they haven't booked my cruise room. If they pull it back, what does DVC pay for it with on the books? A room sometime later is going to be a problem as the can keeps getting kicked forward every time this happens, so that isn't a solution.

 

[bumbershoot]

My question was about what happened after that - when, how and how quickly DVC can sell off those returned points to CRO, and whether that process was always equitable to the members.

I would just figure that it's immediate.

I don't see what's inequitable about it.

Frustrating sure. But timeshares have lots of rules and regulations and this seems to be part of it.

 

[squirk]

I would just figure that it's immediate.

I don't see what's inequitable about it.

Frustrating sure. But timeshares have lots of rules and regulations and this seems to be part of it.

Now knowing that trading in points for a cruise, for example, is effectively the same thing as booking a unit at the resorts, I don't see it as inequitable as I originally thought. Again, educating myself was the entire reason I started the thread.

I still have questions, though. Like, how does DVC sell those points back to CRO? For example, if I trade in 100 points from my Saratoga Springs contract, must DVC sell the points back to CRO as Saratoga Springs availability, or do they have the ability to "repackage" the points or move them to a more attractive location, like, GF?

Also, are there any limitations on what types of units they sell back to CRO? So, again, with the 100 Saratoga Springs points - do they have complete latitude to sell back a bunch of low-point studio units, or a few high-point grand villa at their discretion?

 

[tjkraz]

I still have questions, though. Like, how does DVC sell those points back to CRO? For example, if I trade in 100 points from my Saratoga Springs contract, must DVC sell the points back to CRO as Saratoga Springs availability, or do they have the ability to "repackage" the points or move them to a more attractive location, like, GF?

Also, are there any limitations on what types of units they sell back to CRO? So, again, with the 100 Saratoga Springs points - do they have complete latitude to sell back a bunch of low-point studio units, or a few high-point grand villa at their discretion?

Disney has never provided clarity on that.

We do know that Disney pulls this inventory before the 11 month window. CRO does not just get the leftovers after members have had weeks or months to book.

In the past, random searches of Disney's online booking system suggest that it's a pretty fair representation of all DVC resorts, room types and dates. I would propose that if they were targeting specific dates and accommodations which would maximize return, a SSR 2B in February wouldn't be on the list. (I doubt SSR has much demand at all among cash guests.)

 

[squirk]

We do know that Disney pulls this inventory before the 11 month window. CRO does not just get the leftovers after members have had weeks or months to book.

Well, that gets back to my original point. If DVC is pulling inventory before the 11-month mark, then they have the ability to scoop up any rooms in any combination that they think they can sell to CRO to make DVC "whole again" on the initial point trade.

So, hypothetically, a member could call/log into DVC immediately after their 11-month window opens and already find limited availability for their desired room type at their home resort. Is that accurate?

 

[_auroraborealis_]

If DVC is pulling inventory before the 11-month mark, then they have the ability to scoop up any rooms in any combination that they think they can sell to CRO to make DVC "whole again" on the initial point trade.

But it also makes sense that they can pull points before the 11 month mark. If a user borrows from next year for their cruise-point trade, they know that set of home resort points is gone for the next year.

So, hypothetically, a member could call/log into DVC immediately after their 11-month window opens and already find limited availability for their desired room type at their home resort. Is that accurate?

That's true even without accounting for trades. Just ask BWV owners about fall Standard studios, or AKV owners about Value/Club, or VGF owners about December studio booking. That can be as much a factor of total inventory as it is of traded inventory.

 

[chicagodisneyguy]

I've had mixed luck with them pulling inventory back. Last September I booked a studio at SS for 4 nights over Labor Day weekend. The morning of my check in, I saw that there were cash reservations available for Polynesian Villas. I called member services and got a great CM. I asked him if there was anyway to pull that cash inventory back & use points. He said to hold and he would call the resort. His tone and demeanor made it sound like he'd done this before and understood exactly what I was asking. 5 minutes later my SS points room was changed to the Polynesian Villas for a few extra points.

Fast forward to last week and I had a points ressie at BLT and saw that BWV had cash availability for the days I was going. I called the day before my check in and the CM sounded like I was asking to book the Castle Suite on points. She said that they NEVER do that. She then transferred me to a supervisor and she also said it NEVER happens. I told that it does happen, as I had it happened to me 4 months ago. She then looked at my reservation from September and was baffled by what she saw. She kept giving me different theories like I paid cash (ah, no) or that there must have been points availability (again, No). She was extremely nice and I never even remotely got angry or tried to seem like I was entitled to anything, I was just trying to understand the policy.....which she reiterated is it NEVER happens.

It's something in the future if there was a more desirable resort available for cash on my check-in date I would probably call in again and see if they could work some magic, but my expectations of it being successful would be pretty low.

 

[squirk]

But it also makes sense that they can pull points before the 11 month mark. If a user borrows from next year for their cruise-point trade, they know that set of home resort points is gone for the next year.

In doing so, let's say for example, borrowing 2018 points to pay for a 2017 cruise, does Disney remove the inventory from 2017 or 2018? Or can they do either, at their discretion?

If they are pulling inventory from 2018, then aren't they possibly letting that member (who traded points for the cruise) access and remove inventory (by Disney selling the room to CRO) for a year where the member could not yet actually book a room themselves?

 

[_auroraborealis_]

In doing so, let's say for example, borrowing 2018 points to pay for a 2017 cruise, does Disney remove the inventory from 2017 or 2018? Or can they do either, at their discretion?

If they are pulling inventory from 2018, then aren't they possibly letting that member (who traded points for the cruise) access and remove inventory (by Disney selling the room to CRO) for a year where the member could not yet actually book a room themselves?

It is a mystery on if they can pull from 2018, but if the points trade included 2018 points, it would not be unreasonable to believe they could do that, and thus before 11 months. The process is not transparent. The contracts we hold with DVD gives them considerable leeway on management.

 

[squirk]

It is a mystery on if they can pull from 2018, but if the points trade included 2018 points, it would not be unreasonable to believe they could do that, and thus before 11 months. The process is not transparent. The contracts we hold with DVD gives them considerable leeway on management.

I guess that's where I was going originally. Given this leeway and lack of transparency, does DVC have the ability to use/sell returned points in ways and for dates that are not available to members?

If so, it is what it is. I'm not going to sell my contracts or chain myself to doors of DVC HQ in Celebration over it. But it is interesting to see how the membership works out in practice vs. the pitch we get on the DVD or the DVC channel on WDW resort TV.

 

[_auroraborealis_]

does DVC have the ability to use/sell returned points in ways and for dates that are not available to members?

Pretty much yeah.

At the end of the day, DVC isn't a "club." It is a timeshare. It is operated like a timeshare. It is managed for occupancy and cashflow.