Fixed weeks and the resale market

[SFlaDisneyfans]

Just curious. When VGF contracts start hitting the resale market, will the fixed week (if it has one) still be attached to it?

 

[dmunsil]

Just curious. When VGF contracts start hitting the resale market, will the fixed week (if it has one) still be attached to it?

Yes, it's part of the deed. It transfers to the next owner.

 

[Dean]

Just curious. When VGF contracts start hitting the resale market, will the fixed week (if it has one) still be attached to it?

The real question in my mind is whether the best weeks will fetch a premium over the same number of points otherwise.

 

[DVC Dude]

The real question in my mind is whether the best weeks will fetch a premium over the same number of points otherwise.

I think so, but it will probably only be 4-6 super demand weeks or so.

Rumor has it that the GV for Christmas and New Year sold out pretty quickly as there were only 2 GV for sale those weeks.

 

[dmunsil]

I think so, but it will probably only be 4-6 super demand weeks or so.

Rumor has it that the GV for Christmas and New Year sold out pretty quickly as there were only 2 GV for sale those weeks.

They can sell 2, but so far they seem to have chosen to sell 1. They sold one GV in each week, but are telling people those GV fixed weeks are sold out. The same is true across the board for each week - they're selling less than they potentially could. For example, they can sell 10 standard studios in each week, but they've sold 4 and are telling people they're sold out.

Of course, they may really only intend to sell 4 standard studios and 1 Grand Villa for each fixed week. The declaration allows them to sell more, but there's no requirement that they have to. Or they may want to parcel out the fixed weeks slowly, so at some point in the future they can have a big promotion and tell people, "We have more fixed weeks!"

 

[dmunsil]

FWIW, they've sold 8 fixed weeks for VGF Grand Villas: weeks 11, 22, 26, 33, 47, 49, 51, and 52.

I'm kind of amazed no one's taken 48 and 50; those are super popular weeks for the other room types.

 

[dianeschlicht]

FWIW, they've sold 8 fixed weeks for VGF Grand Villas: weeks 11, 22, 26, 33, 47, 49, 51, and 52.

I'm kind of amazed no one's taken 48 and 50; those are super popular weeks for the other room types.

True, BUT...They are popular because of the lower points. That's not an issue with the fixed week.

 

[dmunsil]

True, BUT...They are popular because of the lower points. That's not an issue with the fixed week.

I'm not following you; they're cheaper as fixed weeks as well. The fixed weeks are cheaper in lower-point weeks and more expensive in higher-point weeks.

 

[Deb & Bill]

You think they are keeping the other 51 and 52 GV weeks for Disney Execs to use or give away as they like?

 

[dmunsil]

You think they are keeping the other 51 and 52 GV weeks for Disney Execs to use or give away as they like?

That would not be a crazy answer, I suppose. Though it would be trivial for them to just keep a GV booked over Christmas until they're sure no exec wants it for something, anyway. They control the reservation system. They don't need to use a fixed week. So if I were a betting man, I'd say they're just holding back fixed weeks so they can release them later with a big fanfare.

Something tells me that when a big exec wants a DVC room, they find a way to make it available. If they have to bump someone with an existing reservation, they just say they're having a "maintenance issue" and bump them up to a GF concierge suite or something like that. And a free lithograph. Can't forget the free lithograph...

 

[wdrl]

That would not be a crazy answer, I suppose. Though it would be trivial for them to just keep a GV booked over Christmas until they're sure no exec wants it for something, anyway. They control the reservation system. They don't need to use a fixed week. So if I were a betting man, I'd say they're just holding back fixed weeks so they can release them later with a big fanfare.

Something tells me that when a big exec wants a DVC room, they find a way to make it available. If they have to bump someone with an existing reservation, they just say they're having a "maintenance issue" and bump them up to a GF concierge suite or something like that. And a free lithograph. Can't forget the free lithograph...

I agree with an earlier comment you posted: Although the VGF Master Declaration permits DVD to sell up to 35% of the accommodation types as Fixed Week deeds, it may choose to sell less. That is probably the easiest explanation for what is going on.

I guess people can believe what they want to believe, but there is no objective evidence to show that DVCMC has ever bumped a DVC member from a reservation to satisfy the request of a TWDC executive. Remember that DVCMC has fiduciary responsibilities and obligations to the DVC, not to TWDC.

There are probably several factors that enter into play when DVD wants to sell a Fixed Week. Since only 75% of VGF has been declared for the DVC inventory, its possible that DVD is applying the 35% Fixed Week cap to the declared inventory base rather than the total resort base. Another factor may be that members using traditional points are booking accommodations that are eating up some of the Fixed Weeks. For example, if members with traditional points booked all accommodations for at least one day in Week 11 in 2014, then a potential Fixed Week buyer who wants Week 11 would not be able to buy that Fixed Week at this time.

 

[dmunsil]

I agree with an earlier comment you posted: Although the VGF Master Declaration permits DVD to sell up to 35% of the accommodation types as Fixed Week deeds, it may choose to sell less. That is probably the easiest explanation for what is going on.

I certainly agree, but it's not much of an answer. Why would they choose not to sell all the fixed weeks they can? Obviously they have a reason, but it's fun to speculate about why.

I guess people can believe what they want to believe, but there is no objective evidence to show that DVCMC has ever bumped a DVC member from a reservation to satisfy the request of a TWDC executive. Remember that DVCMC has fiduciary responsibilities and obligations to the DVC, not to TWDC.

I'm not trying to imply that this is some sort of underhanded thing they're doing all the time. I don't have any idea whether this has ever happened, but I don't see why this is even a controversial statement. People do get bumped from time to time, they generally get upgraded to something nicer or get something else in compensation, and that's pretty standard for the hospitality industry. If a Hilton exec really wants to stay in a booked-up room category in a Hilton, I bet they get very creative with finding ways to make room for them. How often does this happen? Has it ever happened? I have no earthly idea. I'm just saying that if DVC or TWDC execs want to have a DVC room, they have tons of ways of making that happen without needing to hang on to a fixed week. Bumping existing guests would surely be a last resort, but I can certainly imagine that it could happen.

Frankly, I'd expect a VIP to want a concierge cash room rather than a DVC room, but who knows?

As for fiduciary duty to DVC vs. TWDC, they're the same thing. DVC is a wholly-owned subsidiary of TWDC.

There are probably several factors that enter into play when DVD wants to sell a Fixed Week. Since only 75% of VGF has been declared for the DVC inventory, its possible that DVD is applying the 35% Fixed Week cap to the declared inventory base rather than the total resort base.

I can believe that for the Grand Villas, but there were reports on another board that the standard view studios are "sold out" after selling 4, when they can sell 10 according to the 35% rule. If they were pro-rating fixed weeks at 75%, they could sell 7 standard view studios before they hit the cap.

Another factor may be that members using traditional points are booking accommodations that are eating up some of the Fixed Weeks. For example, if members with traditional points booked all accommodations for at least one day in Week 11 in 2014, then a potential Fixed Week buyer who wants Week 11 would not be able to buy that Fixed Week at this time.

That's a really interesting point. I would guess that could become an issue in the future when buying a fixed week that's popular and where the first instance is less than 11 months away. They might not have it for that year.

Hmmm.... That would actually be a great reason to hold back and only sell a smallish number of them at a time; they'd need to hold that week open until the week sold or they got tired of holding it open and retract the fixed week for that sales year. Once they've sold that week, they could decide to hold open another one and sell it.

If that's true, I'd expect December weeks to come available again sometime after that week has passed. They'd have one month to sell it with no repercussions. After that month, if they want to keep it for sale, they have to hold that week out of the booking pool just in case it sells. So if you want a fixed December week, it might be good to check the week after that particular week has come and gone, just in case.

 

[wdrl]

Another factor that may come into play in counting the number of Fixed Weeks sold is the delay between a buyer's commitment and the deed being recorded by Orange County Comptroller. DVD might have a few Fixed Weeks "sold" and its waiting for the buyer to return the paperwork.

Most deeds are sold and recorded within 10-20 days, but I have seen delays of over three months. If I recall correctly, there was a Fixed Week deed for a Grand Villa that was sold in early June (as evidenced by the Master Contract number and the day signed by the buyer) but the deed wasn't recorded until September or October.

I imagine that some buyers put down a deposit for deed but then delay in making the final payment. My sister committed to buying DVC points in December 2009, but waited until early March 2010 before she sent back the paperwork.

 

[Dean]

It is possible for them to sell with the first occupancy for the fixed week the next year or even the next after that if they so chose to do so. One would just get the points year one.

 

[dmunsil]

Another factor that may come into play in counting the number of Fixed Weeks sold is the delay between a buyer's commitment and the deed being recorded by Orange County Comptroller. DVD might have a few Fixed Weeks "sold" and its waiting for the buyer to return the paperwork.

Very true. Though on that week 48 (or was it 49?) standard view studio, I just checked a few weeks ago, and there were still only 4 sold. I can't find any room/week that has sold more than 4, though I don't have your comprehensive data. Do you know of any fixed week with more than 4 sales at this point?

 

[dmunsil]

It is possible for them to sell with the first occupancy for the fixed week the next year or even the next after that if they so chose to do so. One would just get the points year one.

Absolutely. But they might choose to hold the week open while they're trying to sell the week so they don't have to do that. If they do routinely do this, it would explain why they're not selling the full amount of fixed weeks right away. And it could partially explain why they declared 75% of the building when they're not going to be 75% sold for another year or so. If they are holding back weeks for sales as fixed weeks, that uses up a big chunk of points that members can't book. But if there are enough points available to cover all the sold interests, there's no real harm done.

 

[wdrl]

Do you know of any fixed week with more than 4 sales at this point?

Based on the sales data through November 7, 2013, DVD has not sold more than four Fixed Weeks deeds for any accommodation type for any week. The accommodation types that have sold four Fixed Week deeds are

Lake View Studio: Weeks 47, 49, 52

Lake View One Bedroom: Week 51

Lake View Two Bedroom: Weeks 47, 49

DVD has also sold four Fixed Week deeds for Standard View Two-Bedroom for week 52, and Standard View Studio for weeks 41, 47, 49, 50, and 51. If I estimate correctly, DVD should be able to sell a maximum of 10 each of these Standard View accommodation types.

 

[Dean]

Absolutely. But they might choose to hold the week open while they're trying to sell the week so they don't have to do that. If they do routinely do this, it would explain why they're not selling the full amount of fixed weeks right away. And it could partially explain why they declared 75% of the building when they're not going to be 75% sold for another year or so. If they are holding back weeks for sales as fixed weeks, that uses up a big chunk of points that members can't book. But if there are enough points available to cover all the sold interests, there's no real harm done.

There's no reason to hold them back other than simple arbitrary choice, assuming they have interest/demand. They lose nothing by selling every fixed week they can assuming it means they'll sell the same # of points, they gain if it causes them to sell more. My guess is they're simply not particularly comfortable (overall) with the fixed week situation and simply having cold feet. We'll likely never know for sure the why.

 

[dmunsil]

There's no reason to hold them back other than simple arbitrary choice, assuming they have interest/demand. They lose nothing by selling every fixed week they can assuming it means they'll sell the same # of points, they gain if it causes them to sell more. My guess is they're simply not particularly comfortable (overall) with the fixed week situation and simply having cold feet. We'll likely never know for sure the why.

I suppose one reason they might not want to sell fixed weeks is that they'll never have breakage revenue on those. The way the system works (as far as I can tell) you get the room reserved and you don't have to confirm it or anything. You can just show up on the arrival day. You have a built-in reservation every year.

So if people don't show up for their fixed week, that room remains empty. With the regular points system, if a room isn't reserved at 60 days, they can start renting those rooms for cash and get revenue that offsets the dues (and eventually goes into Disney's pockets once it goes over 2.5%).

 

[Dean]

I suppose one reason they might not want to sell fixed weeks is that they'll never have breakage revenue on those. The way the system works (as far as I can tell) you get the room reserved and you don't have to confirm it or anything. You can just show up on the arrival day. You have a built-in reservation every year.

So if people don't show up for their fixed week, that room remains empty. With the regular points system, if a room isn't reserved at 60 days, they can start renting those rooms for cash and get revenue that offsets the dues (and eventually goes into Disney's pockets once it goes over 2.5%).

But that's true for all fixed weeks plus it isn't the same. With non fixed weeks those points may be used for other times, that's not possible for fixed week options that go empty but reserved. If they're canceled in the interim (after 60 days out) then it'd also work the same as it does now.