Did DVC "Create" points at PVB?

[dismedvc]

I do not know how DVC comes up with the total number of points at a particular resort. Do they:

1. Come up with the total points they want, and then spread that total down to the individual rooms based on the categories/views of those rooms?
2. Assign points to individual rooms based on the room's initial category/view classification and then add up all those individual room points to get the total for the resort?

If they do number 2 above, they would end up with a higher number of points to sell if initially they "mistakenly" put rooms into a higher view category than they deserve. If after the resort sells out, they reclassify those rooms into a lower view category, the extra "created" points remain at the resort.

 

[supersnoop]

If they do number 2 above, they would end up with a higher number of points to sell if initially they "mistakenly" put rooms into a higher view category than they deserve. If after the resort sells out, they reclassify those rooms into a lower view category, the extra "created" points remain at the resort.

But they can't "make that mistake." They can't simply reduce the total number of bookable points per room. In order to change the view category for some rooms, they'd have to move points from one category to another. So, if they move from a higher point category to a lower point category, then the point requirement for one of those room types will increase.

 

[dismedvc]

But they can't "make that mistake." They can't simply reduce the total number of bookable points per room. In order to change the view category for some rooms, they'd have to move points from one category to another. So, if they move from a higher point category to a lower point category, then the point requirement for one of those room types will increase.

That was my point. I used the term "mistakenly" sarcastically.
By "purposely" initially assigning higher categories than the rooms deserve, they end up with more points to sell compared to what they would have had if they properly categorized the rooms initially. Effectively, they created extra points to sell, and those points will remain with the resort, just reassigned to other rooms, if they later reclassify the over-classified rooms.

 

[KAT4DISNEY]

I don't know that it really matters how they do it since DVD can make the point totals whatever they want. Point creep has been happening which gives higher sales profit and I believe that is the only concern of DVD. The fact they have more points per room most definitely is on purpose. And because they can do what they want there really isn't any "wrong" as long as it sells.

I've read the argument more than once that they can't or shouldn't make studios more points at Poly than VGF because GF/VGF is the flagship resort. I disagree and don't think DVD/DVD cares about that, just about profits on a property.

 

[dismedvc]

I don't know that it really matters how they do it since DVD can make the point totals whatever they want. Point creep has been happening which gives higher sales profit and I believe that is the only concern of DVD. The fact they have more points per room most definitely is on purpose. And because they can do what they want there really isn't any "wrong" as long as it sells.

I've read the argument more than once that they can't or shouldn't make studios more points at Poly than VGF because GF/VGF is the flagship resort. I disagree and don't think DVD/DVD cares about that, just about profits on a property.

Totally agree. DVD/DVC should try to maximize profit. My concern is that they are maximizing short run profit at the expense of long run profit.
If they sell you a Lake view room at PVB, and you buy based on the sales material, but when you book you actually get a first floor obstructed view room, you are going to be disappointed. That will lead to a reduction of add-on sales, and a reduced likelihood that existing owners will recommend to their freinds that they should buy DVC. It might not matter to the current resort as long as it does eventually sell out, but what about the sales of future resorts once buyers understand this is the way DVD/DVC does business.

 

[supersnoop]

That was my point. I used the term "mistakenly" sarcastically.

Me, too.

The number of points issued at the resort must always match the number of points required for reserving every room every day of the year. They can't create phantom points. They can reallocate the points, but they cannot change the total number of points.

So, they could re-categorize the first floor "lake view" rooms to "standard view," but in doing so, they'd have to make one category more expensive.

 

[dismedvc]

They can't create phantom points. They can reallocate the points, but they cannot change the total number of points.

I think we are in agreement. They can't create phantom points after the fact, but they can create more points than there should be initially by misclassifying views.

P.S thanks for the detailed explanation of how to change a reservation without losing your previous reservation

 

[disneynutz]

Totally agree. DVD/DVC should try to maximize profit. My concern is that they are maximizing short run profit at the expense of long run profit.
If they sell you a Lake view room at PVB, and you buy based on the sales material, but when you book you actually get a first floor obstructed view room, you are going to be disappointed. That will lead to a reduction of add-on sales, and a reduced likelihood that existing owners will recommend to their freinds that they should buy DVC. It might not matter to the current resort as long as it does eventually sell out, but what about the sales of future resorts once buyers understand this is the way DVD/DVC does business.

I don't think that they care about long term profit just making sales today. Most executives only care about making their mark, moving up the ladder, getting their bonus, and golden parachute.

People have a hard time understanding that what goes on back stage is much different than what happens on stage. We seems to think that they have meetings to improve our experience when in fact the meetings are about increasing profit while reducing expenses. Apparently what happens after the sale doesn't really matter or they would fix the website, clean the rooms, schedule rehabs better. We want to think that they are not aware of the negative issues when in fact they know, they either choose not to deal with it or DVC has zero power to make change because they are the middle man between us and resorts or IT.

Bill

 

[Dean]

I do not know how DVC comes up with the total number of points at a particular resort. Do they:

1. Come up with the total points they want, and then spread that total down to the individual rooms based on the categories/views of those rooms?
2. Assign points to individual rooms based on the room's initial category/view classification and then add up all those individual room points to get the total for the resort?

If they do number 2 above, they would end up with a higher number of points to sell if initially they "mistakenly" put rooms into a higher view category than they deserve. If after the resort sells out, they reclassify those rooms into a lower view category, the extra "created" points remain at the resort.

My understanding is, and really the only way they can do it, is to take the maximum reallocation chart (villa same amount all year) and that determines the amount of points for the resort. Then do do an initial allocation (basically reallocation) to the different seasons. Since a "unit" is not usually not a single villa unless it's a 3 BR or similar (bungalow), they would simply assign the applicable points to that unit and sell them. Then go on to the next unit. They would then sell the total points for the resort. Since they hold back a small %, I'm not totally sure if they hold back that % out of each unit (my guess) or at the end. For most resorts there are ways to each points and give an additional cushion because a lockoff costs more to reserve the components individually. For fixed week resorts it does give the possibility of some potential overselling. I'm not sure how they handle that or if they just assume that it'll work out. Maybe someone else knows for sure but my guess is they still sell each unit based on points rather than weeks and simply sell the same # of points as if they did not have fixed weeks. If so, this creates an additional cushion.

 

[DougEMG]

It certainly looks like at the poly by classifying those first floor grooms as lake view rather than standard view they managed to increase the overall point total available to sell.

When they sold the Treehouses though didn't the opposite happen and they ended up increasing the point requirement for the Treehouse after sales ended. So they ended up losing here.

Maybe they are just incompetent at setting point requirements per room.

 

[DougEMG]

I'm dying to see what the point cost for VWL II will be. Are they going to be the same as the current VWL rooms or is there going to be some point creep. And personally I don't really see a lot of point creep happening right now, although I do think POLY should have been a point or so lower than VGF and SSR should be a point or so lower a night for studios.

 

[Dean]

It certainly looks like at the poly by classifying those first floor grooms as lake view rather than standard view they managed to increase the overall point total available to sell.

When they sold the Treehouses though didn't the opposite happen and they ended up increasing the point requirement for the Treehouse after sales ended. So they ended up losing here.

Maybe they are just incompetent at setting point requirements per room.

They could have made them all the same and had even more points but clearly they haven't been stellar in this area. For the THV I think it's unlikely they made them lower with the intend of raising them later. The THV was somewhat of a new concept so hard to know. Personally I think they're lightweights when it comes to timeshares in general and are making mistakes that I don't see with other systems.

I'm dying to see what the point cost for VWL II will be. Are they going to be the same as the current VWL rooms or is there going to be some point creep. And personally I don't really see a lot of point creep happening right now, although I do think POLY should have been a point or so lower than VGF and SSR should be a point or so lower a night for studios.

I'd be willing to bet they're more in line with BLT or even close to Poly and far away from the current resort there and at a higher price as well.

 

[Don Duck]

Totally agree. DVD/DVC should try to maximize profit. My concern is that they are maximizing short run profit at the expense of long run profit.
If they sell you a Lake view room at PVB, and you buy based on the sales material, but when you book you actually get a first floor obstructed view room, you are going to be disappointed. That will lead to a reduction of add-on sales, and a reduced likelihood that existing owners will recommend to their freinds that they should buy DVC. It might not matter to the current resort as long as it does eventually sell out, but what about the sales of future resorts once buyers understand this is the way DVD/DVC does business.

Any allocation of points must be "revenue neutral."

 

[DenLo]

DVD does look at the cost for purchasing the property, the cost of remodeling and building the new bungalows and then determines how many points they would need to sell and at what price to recoup that cost and make a profit. That is pretty standard business practice. The Poly did not give about the PVB property and the 3 longhouses to DVD, they wanted to be paid a goodly amount too. So all of that had to be taken into consideration when selling PVB for a certain price. Plus DVD had already set the minimum price with VGF. It has been pretty standard since 2009 that with each new property that DVD charges more for the newest property.

 

[dizfan]

Since they hold back a small %, I'm not totally sure if they hold back that % out of each unit (my guess) or at the end. For most resorts there are ways to each points and give an additional cushion because a lockoff costs more to reserve the components individually. For fixed week resorts it does give the possibility of some potential overselling. I'm not sure how they handle that or if they just assume that it'll work out. Maybe someone else knows for sure but my guess is they still sell each unit based on points rather than weeks and simply sell the same # of points as if they did not have fixed weeks. If so, this creates an additional cushion.

Based on something Wil (wdrl) noticed, they must retain 2% of each unit, which is what you guessed.
Additionally, fixed week deeds are still points sold for a specific unit. I find it ironic that a fixed week costs more, but the extra cushion may allow them to use the spare points for cash bookings.

 

[DougEMG]

They could have made them all the same and had even more points but clearly they haven't been stellar in this area. For the THV I think it's unlikely they made them lower with the intend of raising them later. The THV was somewhat of a new concept so hard to know. Personally I think they're lightweights when it comes to timeshares in general and are making mistakes that I don't see with other systems.

I'd be willing to bet they're more in line with BLT or even close to Poly and far away from the current resort there and at a higher price as well.

If the VWL II rooms do come in with a point cost similar to BLT or even close to the POLY/VGF then I think we can safely say that Disney is creating huge point creep. The VWL is not worth the same number of points as the monorail resorts.

 

[Dean]

Based on something Wil (wdrl) noticed, they must retain 2% of each unit, which is what you guessed.
Additionally, fixed week deeds are still points sold for a specific unit. I find it ironic that a fixed week costs more, but the extra cushion may allow them to use the spare points for cash bookings.

I'm not where I can check now but IIRC, the POS's I've seen say something to the effect they will retain some points. I think the wording is something like "generally 2-4%" but not a specific legal amount. This is standard in the timeshare industry where normally they retain enough to deal with out of service units and for refurbishment. For weeks properties it's normally 1/2 to one week a week per year. They can do 1/2 of a week for properties that have EOY options. The question is how they figure what to sell and hold back for fixed week properties. My guess is they do it based on total points rather than fixed weeks plus the rest of the points because the other way could put them as possibly being oversold if they sold the full 35% as fixed weeks. Certainly if this is the method, they have both less admin costs AND a few rooms freed up for rental, etc. Of course it would also allow them to cut the hold % to the bare minimum as well. To a degree, lockoff's do the same thing at other resorts. If they do it simply on points, as I assume they do, it's also to the owners advantage because it creates a small surplus of villas over the number of points. And since this was be declared but unsold inventory, anything after maint/refurb requirements would be open to members to reserve at 11 months. DVD would be directly competing with those owners to reserve anything they wanted to rent.

In reality the fixed weeks likely don't have any real effect so this is more of a philosophical discussion than anything else. If they sold 10% as fixed weeks and half of the time owners took the points rather than their week, that's 5% of those points that are now in play and roughly half of 1% difference in total points for the resort trying to reserve with points. If DVC wanted to make more money on that scenario they have a couple of options. They can simply raise the price on the fixed weeks themselves which doesn't fit in very well to their current approach or they can simply shave the reserve points from say 2.5% to 2% and just sell a few more points AND collect fees to add to the DVCMC profit long term as well. At the 35% max fixed week scenario it does have some impact. Mathematically it means that it could have a larger effect, as much as around 3.5%, realistically more in the 2% range. Even then they've just got to widen their withholding to the higher % of the stated range of 4%.

If the VWL II rooms do come in with a point cost similar to BLT or even close to the POLY/VGF then I think we can safely say that Disney is creating huge point creep. The VWL is not worth the same number of points as the monorail resorts.

IMO they did that with VGF and gain with the Poly. My best guess is it'll be around BLT roughly adjusted for the allocation limitations. A little lower because it's a quasi MK location and a little higher because it's new and because they can. So I averaged it the same as BLT for comparable units. Now I think the 2 BR will be more than BLT so overall it might be a little higher. As long as people are willing to pay it, that's their option. IMO if they sold SSR at that much higher than OKW, they can sell VLW II at current prices and close to Poly points.

 

[erionm]

I'm not where I can check now but IIRC, the POS's I've seen say something to the effect they will retain some points. I think the wording is something like "generally 2-4%" but not a specific legal amount.

The Annual Condo Association Meetings notices contain the following:

DVD retains no less than 2 percent of the total ownership interests in each unit declared in the
Condominium and is responsible for annual dues with respect to its retained or unsold ownership
interests.

This can be found under 'Additional Budget Notes', item #4. It also states the approx. number of points that DVD owns and dues paid. Each notice contains the numbers specific to that resort.

AKV: http://advc.disney.go.com/media/dvc...association-notices/2015/2015CAN_AKVFinal.pdf
BLT: http://advc.disney.go.com/media/dvc...association-notices/2015/2015CAN_BLTFinal.pdf

 

[Dean]

The Annual Condo Association Meetings notices contain the following:

This can be found under 'Additional Budget Notes', item #4. It also states the approx. number of points that DVD owns and dues paid. Each notice contains the numbers specific to that resort.

AKV: http://advc.disney.go.com/media/dvc...association-notices/2015/2015CAN_AKVFinal.pdf
BLT: http://advc.disney.go.com/media/dvc...association-notices/2015/2015CAN_BLTFinal.pdf

Thanks, as I acknowledged, it's been a while since I'd looked at it. Past information has suggested it's a little higher than the minimum. I've had DVC management quote the 2-4% on a couple of occasions.

 

[freediverdude]

They could have made them all the same and had even more points but clearly they haven't been stellar in this area. For the THV I think it's unlikely they made them lower with the intend of raising them later. The THV was somewhat of a new concept so hard to know. Personally I think they're lightweights when it comes to timeshares in general and are making mistakes that I don't see with other systems.

I'd be willing to bet they're more in line with BLT or even close to Poly and far away from the current resort there and at a higher price as well.

I think the initial price will be higher of course. But I still don't know how they think they would get away with charging more points per night for VWL II than VGF or the Poly, or even BLT. Wilderness Lodge is inherently a less expensive resort than the monorail resorts, so I just can't see that happening. I'm sure those individual cabins will be fairly high points almost to the level of the bungalows, but the refurbed hotel rooms I can't see those going for the same points as a monorail studio.