New rules about transferring points question?

[DisneyTarheel]

Originally Posted by Dean

IMO, it does harm the average member far more than the renters.

I am that "average member." Never done a transfer either way before, but have been looking to add about 70 points into my 06 UY and have had 2 potential transferors turned away by MS b/c of the 1-and-done policy

[keishashadow]

lisas - thanx for the explanation...so confusing?

[Dean]

Originally Posted by DisneyTarheel

I am that "average member." Never done a transfer either way before, but have been looking to add about 70 points into my 06 UY and have had 2 potential transferors turned away by MS b/c of the 1-and-done policy

It's actually worse than that. This move devalues points not directly used for DVC stays and including exchange options. Here's why. Many people who were never comfortable renting, were comfortable transferring due to the clean method and the fact that once you had completed the transfer, you were done and had nothing to think or worry about. And many of those that were comfortable renting on a limited basis previously, will likely not be willing to do so now. Thus they are more likely to trade them to DVD for DCL, DC, CC. Then DVD has more rooms to rent out (reserved on points and some at high demand times) and likely will not get nearly as much $$$ per point with those extra rooms/points in the mix. So the points options will likely go up in the next 2-3 yeas if things continue to look like they do now. It's really a double whammy and affects every member who would rent, transfer or exchange in any way except II or a direct private timeshare exchange. So the points go from a value of $6-7 per point for exchanges to $5-6 per point.

And since a large portion of the points for rent or transfer are those situational (? one time) renters, there will likely be a lot less points for rent/transfer. The price will actually go up for those willing to proceed. And since this forces less transfers for those that were doing a number of them, they will be more likely to reserve and rent high demand times. I can think of a number of ways for those who DIS feel are "commercial renters" to actually take advantage of this situation and do better, not worse, under the new rules.

And the only people this will actually help are those who own at the more difficult to reserve resorts after the 11 month window but up to the 7 month window opens. And those people with distress points will lose out on options they had previously and likely will lose their points totally in many cases.

[mochabean]

Dean,
I agree with most of your logic, except this part:

Originally Posted by Dean

And many of those that were comfortable renting on a limited basis previously, will likely not be willing to do so now.

If I was willing to rent on a limited basis before, I wouldn't think DVC would consider me a commerical renter, and so I would feel comfortable continuing to rent on a limited basis.

As I said, I agree with your logic here, so let's predict what will happen a little further into the future.

Originally Posted by Dean

Thus they are more likely to trade them to DVD for DCL, DC, CC. Then DVD has more rooms to rent out (reserved on points and some at high demand times) and likely will not get nearly as much $$$ per point with those extra rooms/points in the mix. So the points options will likely go up in the next 2-3 yeas if things continue to look like they do now. It's really a double whammy and affects every member who would rent, transfer or exchange in any way except II or a direct private timeshare exchange. So the points go from a value of $6-7 per point for exchanges to $5-6 per point.

This may be a good thing in the long run. Here's why. Disney reserving high demand times with exchanged points makes them as much of a commerical renter as the commercial renters they are trying to stop. Even if point morphing and commercial renting ceased, Disney itself still has an impact on availability of high demand times due to the points it rents out at these times. If a higher point cost for exchanges significantly reduced the number of people willing to exchange, then Disney would have less points available to rent and would thus reserve less high demand time than it does now.

Originally Posted by Dean

And since a large portion of the points for rent or transfer are those situational (? one time) renters, there will likely be a lot less points for rent/transfer. The price will actually go up for those willing to proceed.

And then if this does happen, the higher price points fetch on the rental market coupled with the lower value for exchanging may persuade those people who previously weren't willing to rent to rethink their decision.

Originally Posted by Dean

I can think of a number of ways for those who DIS feel are "commercial renters" to actually take advantage of this situation and do better, not worse, under the new rules.

Sure, if the rental market is tighter, anyone renting out points will make more money. One way to reduce the profit of the commerical renters is to make them pay more for their supply. The one transfer rule may do this by tightening the transfer market for everything except distressed points, and eliminating morphing via software upgrade will also make many distressed points less attractive to commercial renters.

So yes this will certainly hurt those with distressed points. But the whole notion behind distressed points is that they should be worth less than non-distressed points. Until morphing is eliminated that's not always the case.

[mello]

Originally Posted by LisaS

Disney can break up an existing contract and sell you part of it, but I don't think they can combine contracts to make a larger one. So I think a 10-point contract might occur in the following scenario. Let's say you want to buy a 110-point add-on from Disney. They have two 100-point contracts in your use year that they got via ROFR. They sell you one of the 100-point contract and they break up the other 100-pointer and sell you 10 points from that contract. Now if you asked to buy a 10-point add-on, the answer would be "no", but I believe I read a post here where Disney sold someone an N-point add-on that consisted of 3 contracts in total, so I think it's possible to end up with a contract that is smaller than 25 points as part of a larger add-on.

I wondered that as well. We did see Disney become more aggressive about buying up small contracts via ROFR during the months leading up to this announcement. I don't know if it was one of the goals of the enforcement or just a beneficial (for Disney) side effect.

We did a 60 point add on through Disney. We really wanted one contract, but wound up with a 35 and a 25 point contract. So I believe you're right that the same thing could happen with smaller amts of points too. We did specifically ask to be sure they could be combined for a single night, though. I was envisioning being a few points short with the small contract and not being able to book anything, but they assured us that when it's the same resort & use year and same umbrella contract you don't have to worry about transfers, the points are pooled, which is a very good thing, especially now.

[Dean]

Originally Posted by mochabean

Dean,
I agree with most of your logic, except this part:


If I was willing to rent on a limited basis before, I wouldn't think DVC would consider me a commerical renter, and so I would feel comfortable continuing to rent on a limited basis.

The reason I say this is many were very timid about it. And this situation creates and air of uncertainty and perceived risk that was not there previously. I agree I would look at it the way you are but I think many would just not fool with it no that might have been willing to reluctantly give it a try before. We shall see.

This may be a good thing in the long run. Here's why. Disney reserving high demand times with exchanged points makes them as much of a commerical renter as the commercial renters they are trying to stop. Even if point morphing and commercial renting ceased, Disney itself still has an impact on availability of high demand times due to the points it rents out at these times. If a higher point cost for exchanges significantly reduced the number of people willing to exchange, then Disney would have less points available to rent and would thus reserve less high demand time than it does now.

Maybe over time, but it would limit members choices.

ETA: A subset of members has shown no reason to think that the value, or lack of, of these cash equivalent exchange options has any bearing on their decisions and I think that group will grow under the current situation. Maybe you're giving many of them too much credit.

[Dean]

Originally Posted by mello

We did a 60 point add on through Disney. We really wanted one contract, but wound up with a 35 and a 25 point contract. So I believe you're right that the same thing could happen with smaller amts of points too. We did specifically ask to be sure they could be combined for a single night, though. I was envisioning being a few points short with the small contract and not being able to book anything, but they assured us that when it's the same resort & use year and same umbrella contract you don't have to worry about transfers, the points are pooled, which is a very good thing, especially now.

Other than in a sale situation, points form a single home resort under one master contract, act s though they were one contract. Same for all points under one master at the 7 month window.

DVC can't combine points for resale into one UNLESS they are tied to the same unit and use year. But, as noted, they can break them up if they want.