Surprising facts about DC 2002 point charts

[morphi]

There's been a lot of concern about the point charts for the Disney Collection for 2002. I did some number crunching and found some interesting facts. I thought you guys would like to know this stuff as well.

I wanted to find out how much the point price for the different DC resorts increased from 2001 levels. The 2002 point charts use different season dates than before, so it made comparisons a little difficult. I decided to average the points required per night for one room across one whole year taking into account the number of days in each season for both 2001 and 2002. I then calculated the percentage change of points required from 2001 to 2002. Here are the point inflation numbers for most of the DC resorts for 2002:

Grand Floridian - Garden View = 6.87%
Grand Floridian - Lagoon View = 26.11%
Polynesian - Garden View = 9.51%
Polynesian - Lagoon View = 38.52%
Contemporary, Wing Room - Standard View = -10.41%
Contemporary, Wing Room - Garden View = 1.94%
Contemporarey, Tower Room = 20.08%
Animal Kingdom - Water/Pool View = -2.84%
Animal Kingdom - Savannah View = 3.21%
Fort Wilderness - Cabins = -9.65%
Port Orleans - Standard & Water Views = -13.75%
Caribbean Beach - Standard & Water Views = -13.75%
Coronado Springs - Standard & Water Views = -13.75%

Surprisingly, the Polynesian and not the Grand Floridian had the largest increases. Also, the moderates went down pretty significantly.

My method to calculate these numbers was this: For each year, 2001 and 2002, determine the number of days in each season. (The season dates and definitions have changed for 2002.) Then, for each resort's room type for each season, determine the average points required per night based on a one week stay. Then for each resort / room-type, I multiplied the average nightly point cost times the number of days in that season. Then I summed all of the seasonal points together for the year. This gave me the number of points needed to stay in each resort / room-type for a whole year for 2001 vs. 2002. I then calculated the above numbers.

One caution though. This approach ignores the fact that for one resort / room type, DVC may have made the value season more expensive and the regular season less expensive. (This happened with the Fort Wilderness cabins with a one week stay in early December going up by 17% while a one week stay in late July going down by 24%. For the year as whole, the price went down 9.65%.)

This type of averaging and analysis is useful to determine if DVC is trying to punish DVC members for renting too many points or trying to limit the use of the DC program in any way. Overall, I think the above numbers show that the increases are an honest attempt to overcome the disparity between inflation rates between the DVC and DC resorts. (More on this later.)

[JonHM]

Great job, morphi! Really interesting (and very in depth) analysis!

[Pluto4President]

coincidental that GF and Poly just did major pool upgrades?

[JonHM]

that they're trying to 'drive us' to stay in the rooms they want us to stay in - the resorts that don't fill up as easily, or the ones they can't make as much profit on with a cash rental.

This seems pretty similar to me to DVC weekdays being SO many fewer points than weekends. While the analogy doesn't hold up, because they don't have to lower another area the same amount they raise one with DC, it still seems like the same concept, that they're trying to put in incentives and disincentives to get us to stay where they want us to stay. Not wonderfully friendly, but Disney IS a business...

[PamOKW]

I'm confused. If you do actual day for day increases, using the GF Lagoon View as an example, the increases are far greater than 26%. The entire months of January and of September are up 58% weekdays and 64% weekends. Garden View for those months is up 35% and 40% respectively.

[Johnnie Fedora]

Thank's for the analysis, I did the same type of averaging for the Poly last weekend and came out with an anerage overall point increase of 10% or so (for the Poly only).

What's missing from the 2002 DC is a low season. This removes the ability from DVCers to try an old favorite resort, or a new one, such as the AKL without losing all your points for the year. I don't understand why we have to get gouged like this for staying on WDW property. If DVC has to pay cash to WDW for our DC room, don't they get the cash back when they rent our DVC room, or are DVC rooms difficult to rent out for cash?? And again, I don't understand why there appears to be zero negotiation of room rates between WDW and DVC. I realize that they want to discourage you from staying non-DVC, but I really didn't need much more than what was printed on the 2001 point chart.

Maybe DVC could offer DC specials at certain times of the year, for some of the resorts, in the same way they offer certain cruises at a discount. ;)

[DebbieB]

The dates I was thinking of in October of next year at GF went from 173 to 226, about a 30% increase (garden view, Sat - Wed nights).

[sgtdisney]

I got the impression when I saw the points chart that they are trying to deter DVC members from selecting the GF or the Poly. Perhaps those are the most popular selections for members not using the DVC properties and they are applying the rules of supply and demand to adjust the usage around the entire property. I was really surprised that YC and BC were less points than the Polynesian.

[Laurajean1014]

Nice job morphi! FYI - hotels (all) have an average of 9-12% increase a year! With the 100 year celebration, I guess Disney got a little too tipsy!

[prplcrzy]

Johnny,

I would think that the rooms at the DVC resorst are more difficlut to rent out. I am taking some friends with me to the world in October. The quote I got for a package from the CM was $9500 for one week at the Boardwalk including a car, air, passes and the room. I asked how much the room was and he told me $670 per night. I realize that they run specials and discount the rooms sometimes but that seems kinda steep to me. I certainly couldn't afford that and neither could they. I bought more points and rented them to them so they could stay with us and they saved a ton of cash. I didn't rent to them for $10 point cause they are friends and I didn't just buy these points to do that. I was planning to buy them anyway and I just bought a larger contract because they were helping me pay for it. Still the cash price was kinda steep and I can't see them being able to rent those rooms at those prices. Maybe that's why they discount them, when they can't get rid of them.

[PamOKW]

I just looked at actual increases at the GF -- If the points had stayed the same it would cost "X", with the new charts it costs "Y" -- and the difference. For Lagoon View, over 30% of the year has increased 50% or more -- not 6%.

Using this method, the average increase for a Lagoon View room is 31% and for a Garden View room it's 11%. Here's some other figures to consider:

Lagoon View
30.68% of the year (112 days) increased 50% or more
38.90% of the year (142 days) increased between 20%-40%
15.62% of the year (56 days) increased between 6%-19%
14.79% of the year (54 days) were even or down 5%
(11 of the even/decrease days are during Easter and Thanksgiving)


Garden View
30.68% of the year (112 days) up 30% or more
43.29% of the year (158 days) up 2%-19%
26.03% of the year (95 days) down 10%-19%

GRAND FLORIDIAN RACK RATES INCREASED 2-4% from 2001 to 2002....70% of our year increased 20%-104%

[morphi]

PamOKW, Here is how I calculated the +26.11% point increase for Grand Floridian Lagoon view:

2001:
============================================
# of days in each season:
Adventure: 75
Choice: 67
Dream: 72
Magic: 129
Premier: 22

Average nightly points per season (based on a 1 week stay):
Adventure: 26 weekdays / 45 weekends = ((26*5)+(45*2))/7 = 31.43
Choice: 36.57
Dream: 42
Magic: 53
Premier: 67.71

# of points required to stay in one room for all days in each season:
Adventure: 75 days * 31.43 pts/day = 2,357.14
Choice: 2,450.29
Dream: 3024
Magic: 6837
Premier: 1,489.71

# of points to stay in one room for all of 2001 = 16,158.14


2002:
============================================
# of days in each season:
Value: 182 days
Regular: 105
Peak: 66
Holiday: 12

Average nightly points per season (based on a 1 week stay):
Value: 41 weekdays / 74 weekends = ((41*5)+(74*2))/7 = 50.43
Regular: 56.57
Peak: 66.29
Holiday: 73.71

# of points required to stay in one room for all days in each season:
Value: 182 days * 50.43 pts/day = 9,178
Regular: 5,940
Peak: 4,374.86
Holiday: 884.57

# of points to stay in one room for all of 2002 = 20,377.43


OVERALL POINT INFLATION FOR GRAND FLORIDIAN LAGOON VIEW = (20,377.43 - 16,158.14) / 16,158.14 = 26.11%


Let me know if you see any errors in this approach. Of course the biggest simplifying estimation was to make an average points per night cost based on a one week stay. To not do this, I would have needed to look at the calendar for 2001 and 2002 and count how many weekdays vs. weekend days fell into each season. I didn't want to take the time to do that. I think my simplifying assumption still yields a pretty accurate analysis.

[PamOKW]

I'm not doubting how you came up with the number. I just went beserk and actually looked up each day, what the increase was, and then went through and calculated out each day of the year. 26% and 31% as an average increase are pretty close. It's just using the average is a little misleading when assessing the damage -- every weekday in January and September increased 15 points or 58%; Fri-Sa went up 29 points per day or 64%. Dec. 20-23 went up 100% weekdays or 30 points and the Fri-Sat up 104% from 53 to 108 points.

The decreases are 2-4 points per night......for Lagoon View.

[morphi]

In theory, the points required for the DC program should only change when there is a difference between the inflation of room rates between a DVC resort (say OKW) and a DC resort (say GF). If GF rates increase while the DVC cash rates remain the same, we should expect the points required to stay at GF to increase. However, I think it's pretty unrealistic to believe that the variance between the GF and OKW inflation rates was so high during 2001 that DVC needed to jack-up the DC point charges as high as they did. However, I think the problem lies with DVC's negotiations with DC resorts.

GF set their rack rates for 2001 and then DVC negotiated a certain FIXED discount with them (say the discount was 10% off of rack rates). They then set-up the 2001 DC point charts based on how much cash they could get for renting out vacant DVC villas to the public.

I think the problem came during 2001 when the economy softened and Disney had to offer deep discounts to the public to try to fill rooms. DVC had to do the same thing to try to rent DVC villas to the public for cash. So GF and OKW cash prices both declined and probably experienced somewhat similiar levels of deflation. So why did the 2002 DC points increase if the inflation (or deflation in this case) rates between the DVC and DC resorts were roughly similar?

The answer is that the cash that DVC had to pay to GF DID NOT DECREASE along with the cash rates GF was charging the general public because they had a locked-in contractual rate. So DVC was paying high rates to GF (that did not reflect the realities of the soft economy) while their only source of cash (renting vacant DVC rooms for cash to the public) had to face the cold hard free-market by reducing income. This led to a loss for 2001 that they have to make-up for in 2002 by charging more points for the DC program.

It seems that in order to avoid this problem in the future, DVC should flex its negotiating muscle with the DC resorts. I guarantee you that DVC is the largest single source of customers for the DC resorts. They need to flex their muscles. They should not lock-in a certain fixed discount from the rack-rate for the year. Instead, the cash that DVC pays the DC resorts should be based on the average cash rate that each resort is getting for their rooms during that stay.

We should all write or call our DVC contacts and let them know we want DVC to negotiate more flexible terms with the DC resorts in order to avoid these wild fluctuations.

[Dean]

Originally posted by morphi
It seems that in order to avoid this problem in the future, DVC should flex its negotiating muscle with the DC resorts. Or with Universal resorts, LOL.

[morphi]

OK, PamOKW made me doubt my approach so I took the plunge and actually calculated how many points (weekday-by-weekday, weekend day by weekend day) was required to stay in a GF Lagoon View room in 2001 vs. 2002. I actually mapped out the 365 days in each year and keyed in the number of points required based on the season and the day of week. This approach does not rely on any averaging or simplifying assumptions. What I found lines up VERY closely with what I reported on the original post of this thread.

To stay in a GF Lagoon View room for all of 2001 would require 16,150 points. (My estimate based on one simplifying assumption was originally 16,158.14.) To stay in that same room for all of 2002 would require 20,388 points. (My original estimate was 20,377.43.) So the increase for 2002 for this type of room for the whole year is (20,388 - 16,150) / 16,150 = 26.24%. (My original estimate was 26.11%.)

I'm not going to do this for the rest of the room types since it is a lot of work and my original approach was VERY close.

I'm not sure why PamOKW's numbers and mine are a little different. It seems she did it by day as well.

[Dean]

Remember that in theory you are comparing a run of the house to an automatic lower room type. Also, it really only matters what the numbers are for when you want to go, not the overall price. And since the program was already overpriced, any increase seems exponential. Members still have a choice, give away a bunch of points or stay at a DVC resort.

[morphi]

The above analysis was for a Lagoon room which is what I thought was the typical room given to DVC members who stayed at GF in 2001. The lesser rooms (garden views) had smaller increases than the lagoon view (6.87% vs. 26.11%). I didn't do the analysis for the concierge rooms because I heard that DVC members could not use points to stay in those rooms in 2001. So isn't using the Lagoon Room rates for 2002 a fair comparison to the run-of-the-house 2001 rates?

[Dean]

True, was more pointing out that the numbers varied with the view but since we don't know what room is usually given to DVC members, it's hard to compare exactly.

[PamOKW]

I agree that the Lagoon View is the room most comparable to what DVC members have gotten in the past.

When you did the day-by-day comparison did you adjust for the slight changes in DVC seasons by date? It really doesn't matter....we don't need to get so specific. Bottom-line, there are major increases in the program unlike anything in the history of DVC.

The idea that the rate DVC rented a room decreased (as did all WDW resort rooms) in 2001 but DVC still paid an agreed to higher rate to Disney for their rooms makes sense. At first....

If that is true, then why didn't the Concierge Collection change drastically? There are some fluctuations and changes of seasons, views, etc. but there are no 30%, 40%, 100% jumps. In some cases, the rates remain exactly the same.

Why is DVC able to keep a relative status quo with outside vendors but has tremendous increases within their own family of companies? I'm beginning to feel less like the black sheep I mentioned and more like a pigeon....:smooth:

[morphi]

PamOKW brings up some great questions about why the Conceirge Collection (CC) has stable rates while the DC program does not. I have no idea why that would be. Perhaps DVC negotiated flexible terms with CC resorts so the cash that DVC had to pay would reflect the free market and occupancy rates. If they did that with CC resorts, why wouldn't they do that with the DC resorts? Maybe they do not know how important the DC program is to the DVC program and so didn't think it as important to get flexible rates from DC resorts. Afterall, if DVC members want to stay at WDW, why not just stay at the DVC resort (might be their thinking).

Like I said, I would love to see DVC flex their muscle with the DC resorts to negotiate better, more flexible rates. Imagine if the GF wasn't making DVC a good offer. I'd love to see DVC take GF off the DC chart for a year just to increase their bargaining position for the next year. DVC is the largest single source of resort guests for the DC resorts. It'll never happen though.

Anybody else have a theory about why the CC rates are stable, but the DC rates are not?

[Johnnie Fedora]

I have the same thoughts about the Concierge Collection not increasing! Why not??? It's being speculated that the larger 2002 point costs are being used to make up some 2001 cash deficit due to a poorly negotiatied rate between the DVC and the DC. Of course, we can only guess the reason as DVC didn't bother to give any official explanation for the drastic change. The rates DVC pays to the DC should be variable based on the going rate for the DC rooms, or at the least, DVC should pay a rate that is substantially less than the rack rate (30-40%).

As Prplcrzy indicated, DVC rooms are very expensive as a cash rental. Does anyone know if DVC rooms go unrented because they are too expensive?? therefore making it difficult to replace the cash paid to DC resorts??

Dean, I posted last week or so with my idea of DVC offering an OC "Orlando Collection". It would give DVC a negotiating edge with the DC hotels ( if there are any real negotiations that go on between these two sister companies :rolleyes: ). I'm sure they are considering this idea......NOT.

I am going to send a letter to MS about these point increases.

And PamOKW...I'm not really feeling like a black sheep.......more like a lamb on the way to the meat market. :eek: :eek:

[morphi]

Johnnie Fedora asked if anyone knows whether or not DVC had problems renting all of the rooms made vacant by DVC members using the DC (or CC) programs. A few days ago, I spoke to a person in the Finance department of DVC who helps to make the point charts for the DC program and is close to the negotiation of rates for the DC resorts. This person explained that DVC did indeed have some trouble filling the vacant villas. This was offered as part of the reason for the 2002 point increases.

For a non-DVC resort like GF, they need a certain occupancy rate to break-even. They may be able to break-even with 80% occupancy (depending on the average rate received). So they won't necessarily go into a loss if they do not rent all of their rooms.

However, when DVC has a vacant villa due to a DVCer's use of the DC program, they will definitely lose money if they cannot rent that room. This is because they paid cash to GF and didn't receive any cash from other sources to cover it. It's not an operating loss per se because the DVC resort itself was already paid for by DVCers buying into the program. Also, maintenance, taxes, and other overhead costs are covered by the annual dues that they get to keep even when a DVC member uses the DC program. The only other expense they need to cover is the cash paid to the DC resort. But in order to do this they MUST rent that villa. It sounds like they did not always do that in 2001 and so experienced some losses.

So DVC can experience a financial loss via the DC program by not being able to charge a rent high enough to cover the cash they paid to the DC resort AND by not being able to rent the vacant villas at all. The first problem should be able to be solved by negotiating a flexible contract with the DC resorts to pay the going rate for rooms. I do not know how to solve the second problem. Perhaps they should really cut rates drastically to rent those vacant villas in order to get people to stay there. If they charged $150/night for the 1-bedrooms, I'm sure they would be filled. But then this would make all of our DVC memberships seem like less of a good deal.

[DVCDAVE]

Would it be in OUR interest to have DVC NOT renew its contract with Disney for the resorts next year, and suspend the DC collection ??? This could send a clear message to Disney that DVC won't tollerate being Disney's sole profit center and wipping boy.

Just a thought......

[Pluto4President]

I don't like that idea Dave, sure they're more points but I still like staying at them....

[morphi]

I LOVE that idea Dave! Now I like having the option of staying at the DC resorts, but I would give up the option for one year just to insure that these ridiculous price hikes don't happen again. One alternative is to only take one of the DC resorts out of the DC program. Then DVC members can still use DC, but all the DC resorts would see the power of DVC. I'd suggest the Poly or GF since the price increases with them were the highest implying that DVC got the worst deals with them.

[DVCDAVE]

Pluto4President;

I didn't mean for the idea to be permenant, just a 1 year non-renewal if the DVC negotiating team couldn't get better terms for DC for its members. The point being, let Disney feel the 'power' of DVC members, and the impact we can have on their bottom line of their resorts.

I too enjoy DC and don't want to go away either, but I will forfeit one year, to gain down the road.

[Pluto4President]

sorry, my misunderstanding. Ok, I guess, a year will work, maybe :) Would definately need the 11 month window in that case!

[PamOKW]

Maybe next time they survey members to see what we find to be valuable parts of the program we should lie....seems like letting them know we like DC backfired. :rolleyes:

[CarolMN]

IMHO, we don't need DVC to "NOT renew" the contract with the DC resorts to prove the theory that DVC members are a significant source of revenue to the non-DVC resorts. DVC members have only to stop using points to stay at the DC resorts. No need to eliminate the option. If DVC members continue to use the DC option at or near the same rate as in past years, the non-DVC resorts will have no reason to offer a better deal to DVC members.

If the theory is true and the DC resorts also actually track revenue from DVC members, I would expect that reduced usage of the DC option will provide the same result as eliminating the option altogether. From reading the posts lately, it appears that very few (if any) members plan to stay at a DC resort using points.

It will be interesting to see what happens. If bookings are down for the DC resorts, then most probably, DVC will also have problems renting DVC rooms. Glad I'm not the one who has to figure out how to make it work so that both DVC and DC resorts make a profit!

[morphi]

I think that when they survey us again for our opinions we need to state more adamantly than ever that DC is VERY important to us. The DVCers who use the DC program like to occasionally stay at the DC resorts, and the DVCers who do not use DC directly still benefit by having greater flexibility in getting the room they want, when they want it. We all need to tell DVC that DC is critical to DVC and tell them that they must do whatever they can to get better, more flexible contracts with the DC resorts. (Mainly, DVC should only pay the DC resorts the average rate they are getting for the rooms rented to the general public.)

[Dean]

I would suspect that the more you tell them you want it, the higher the costs will be. Those that find this an important issue should demand DVC negotiate better deals and drop the locations they can't ge a value at least $8-10 per point based on usual discounts, not rack rates.

[DVCDAVE]

DEAN; Can you elaborate a little bit more, I am not getting the full meaning of what you are trying to say.

[Dean]

Dave, basically I'm saying that the more you tell DVC you want to stay at GF, etc; the more difficult it will be for them to get a good rate at that resort. The more the other side thinks they won't get DVC money, the more likely they are to give a good deal. So instead of saying to DVC, get us a good deal at GF (or whatever); we should tell DVC to get a great deal or drop them. And this year may be the best time ever to do this with the slower economic times. I, for one, don't think that simply voting with our feet will be enough.

Personally I'd love to use points to stay at other WDW resorts, it would just have to be a good deal. When I say a good deal, I mean compared to the points it would cost to stay at a comparable DVC room. I'm less interested in what the cost in points is compared to the quoted rack rate. For example, if a GF room costs $400 per night total cost and I can stay there fore 40 points but a studio at WL or BW is only 12 points (or OKW for 8 pts), the value is not there for me. Even though in theory it's $10 pp. In this scenario, I'd put the cutoff at around 20 points per night for GF, AKL, YC/BC and the Poly for most nights. A quick comparision would be Moderates the same points as a studio at DVC, Contemporaty about 20-50% more, deluxe resorts about 60-100% more and concierge an additional 5 points per day. Obviously this is way off the previous or new versions listed but does give a fairly accurate protrayal of my level of interest (or lack of) in the DC.

Same principals could be applied to the CC, DCL, etc. For DCL, I'd have to get at least $8-10 pp (minimum) value compared not only the the DCL cost but similar cabins on similarly rated cruises (HA, RCCL, Premier) for the highest discount available routinely.

[DVCDAVE]

Well put, and I understend now. I agree with you. Except I would, and have stayed at DC on the prior schedule, at the FW Cabins. Now though I would urge members to not use the DC out of principle, further I would urge DVC powers to be, NOT to renew any contract with Disney Resorts until we get a better deal with them. I say, bring Disney to its knees until we get a fair shake as you described. The best weapon we have is not to let this issue die, and let all potential purchasers aware of this issue. The more they know, the better informed they will be prior to purchase. Th less attractive this exchange is, the less sales DVC will attract.

[vernon]

I agree with you Dean. DC needs to be in place BUT it needs to be at a sensible price. If one hotel in a catagory (i.e. delux,mod etc) gets too pricey, drop it in favour of one of the others. I'm certain if for example the Contempory were to get ALL of the DVC bookings for monorail resorts it would impact their profitability in a positive manner and the others would lose not only $$ for room rentals but also lose restaurant, services and shop business as well.

While I think bringing Disney to their knees is hopeful IMHO it would be possible for DVC to make some of the hotels squeek a bit if they were dropped.

[morphi]

I don't think it would be counter-productive to tell DVC how important the DC program is to DVC. In general, I agree with Dean that when you state that a certain product is very important to you, it allows the seller of that product to raise prices. However, I do not think that applies in this case.

Several people who work for DVC (including one in the finance department) have told me that they do not operate the DC program for a profit. Assuming this is true, then us explaining how important DC is to us should NOT cause increased rates. The rates are simply determined by the variance in the cash that DVC pays DC resorts and the cash DVC takes in by renting vacant DVC villas. DVC tries to make the cash outlay and intake equal so they breakeven. They do not try to maximize their cash intake by increasing the points required to use the DC program.

By telling DVC that DC is important to us, we would be encouraging them to negotiate better, more flexible contracts with the DC resorts so that DVC's cash outlays to the DC resorts will more closely follow the cash intake of DVC (because both will fluctuate with the free market instead of just one).

As long as we do not demand one particular DC resort, DVC should be able to negotiate those flexible rates with DC resorts by pitting them against one another with the threat that one of them may be dropped from the DC program for a year if they do not offer flexible rates to DVC.

[JonHM]

either through us telling DVC to either get better rates or drop DC, OR through us all boycotting DC, what if either of those two things simply convinces DVC that we really don't want it, and they make it go away... Permanently. None of you see that as a possibility if we follow one of those two courses of action?

I completely understand Dean's point that the more we tell them we want it, we want it, we want it, the worse off we will be, BUT there has to be some sort of middle ground, non?

[morphi]

On the topic of how the points charged by DVC for DC rooms ought to be calculated, I think their current approach is correct. I do not think that they should try to set the points so a GF room is comparable to a BWV 1-bedroom or where one point is equivalent to $10. Instead, they should simply set the number of points in a way that the cash DVC pays to the DC resort equals the cash DVC gets for renting out the vacant DVC villa. This is how they currently do it. I think it is the most fair.

Say one night in a GF Lagoon View room is $400 and an OKW 1-bedroom costs $300 to non DVC members. (This is not the rack rate, but the average rate they are getting for each room type on that night.) Also assume that that OKW room costs DVC members 20 points. The point cost for the GF room should be = 400 / 300 * 20 = 26.67 or about 27 points. This makes sense since the DVC member would give-up 27 points to stay at GF so DVC would have to pay $400 to GF. Those 27 points going to the DC program would free-up an OKW 1-bedroom for 1.35 (=27/20) nights. At $300/night, this will yield DVC cash income of $405 (=1.35*$300). This basically matches the $400 they paid to GF so the DC program would break-even. This is how it should be. (Actually, the GF night should cost a little more than 27 points to cover the probability that DVC will not be able to rent the OKW villa at all.)

While I agree that the current approach to setting points for the DC program is correct, I think the problem lies with them not negotiating rates with the DC resorts that reflect the free market (as explained in earlier posts). But trying to match cash outlays with cash income is the fairest way to set-up the DC program.

[morphi]

JonHM, perhaps my earlier suggestion is that good middle ground. I suggested that instead of urging DVC to drop the DC program altogether (even for just a year) or in boycotting the whole DC program as individual DVC members, that we should urge DVC to threaten to drop one resort in each class of resorts if they do not offer rates that are based on the free market. That way, DVC members scan still use the DC program at most resorts AND DVC will be showcasing its economic power so that ALL DC resorts will offer more flexible rates during the next year's negotiations.

[PamOKW]

I know that this year has low discounts, but predictions are this will continue next year as well. I just tested out Morphi's formula (in a rough fashion).

A current discount rates for a 1 bedroom at OKW is $244. The Poly Waterview is $229. Weekday point cost is 18. Point cost should be 17. (This is not factoring in the higher point costs for Fri-Sa). Next year in October (when these discounts are available) the DC asks 44 points for this room. (The current DC cost is 25 points).

Some thing is very wrong with the way DVC has established this schedule.

[morphi]

PamOKW, is that Poly Water View rate of $229 their actual discounted rate or their rack rate? To understand their 2002 point charts, the comparison to OKW's $244 should be based on a 10% discount (I think) of Poly's RACK RATE. That's actually my theory about what is wrong: DVC pays DC resorts based on fixed (and small) discounts off of rack rates.

Also, I think two more factors need to be added to the point cost of the Poly rate:

1. The cost of the probability that DVC will not be able to rent out that OKW 1 bedroom.

2. A premium that DVC is charging for the DC program in 2002 to try to recover DC losses from 2001.

Unfortunately, I do not know how to value these two items.

And I agree with you that something is very wrong with the DC schedule.

[JonHM]

I agree that that would be a good approach: definitely get the message out there, but without the extreme risk of losing the program altogether. Who knows what goes on behind the scenes there, though?

[Dean]

I understand how DVC values the points on a break even standpoint and I think they should continue to do so. My point is that they must negotiate a better rate up front and do a better job utilizing the points they have to rent out. My reference to a point comparision was what I think is a reasonable trade off for me. If it's not in that range, I won't utilize the program unless there's other items thrown in like park admission, free breakfast, etc. Since I'd prefer not to have daily maid service, this doesn't add to the value to me though I understand it adds to the cost.

Frankly, I'd personally rather see the program evaportate than have DVC present an insulting option. I must say I was insulted everytime I looked at the old program so guess how I feel now. So if putting the preasure on DVC to make it better or dump it has the latter affect, I am prepared for that and would not look back. I do realize that not everyone feels as I do and they must vote their conscience.

[PamOKW]

Morphi -- I did that kind of rushed earlier. I had been trying to think about how to do a comparison and when I saw your formula at the same time I just started plugging in numbers. I realize discount to discount isn't the correct way to do it but it shows the incredible premium they are asking us to cover. The AKL rate is a discounted rate. If I have time I'm going to see what other numbers I can find to think about.

It looks like 45% discounts are not uncommon so having DVC cover a difference of 35% is pretty extreme.

[PamOKW]

I've played around with the numbers. There are so many variables it's hard to tell what they have in mind. However, using Regular Season for the resorts and Choice season for the points needed for a one-bedroom and then using variations on rack rate to rack rate; discount to rack rate, etc. there is nothing that even comes close to the amount of points being asked for on next year's charts.