Could an increase in 'trading out' impact our annual dues?

[kerickson]

From what I've seen on the recent Travel Channel specials and Member Events, it seems that DVC is pushing non DVC trips more as a marketing tool to bring in new members.

When a member trades out to RCI but that week is not picked up by an RCI member, is there any cost exposure for DVC? Maybe a better example is when a member trades out to Adventures by Disney or a Disney Cruise, my understanding is DVC pays cash to those companies at a set price, then rents out the DVC week to recoup. Is this correct? What if the week doesn't rent, who covers the cost to pay for the Adventures by Disney trip?

Trying to understand if there is any financial implications to DVC or the membership with 'trading out' vs using your points for a DVC stay...

 

[tjkraz]

When a member trades out to RCI but that week is not picked up by an RCI member, is there any cost exposure for DVC? Maybe a better example is when a member trades out to Adventures by Disney or a Disney Cruise, my understanding is DVC pays cash to those companies at a set price, then rents out the DVC week to recoup. Is this correct? What if the week doesn't rent, who covers the cost to pay for the Adventures by Disney trip?

RCI would be different from other "trades" like DCL or ABD.

I assume RCI is pretty much self-sufficient. Member deposits a week...member withdraws a week. The RCI relationship would be funded by whatever annual fees are paid by DVC (via our dues) and the $95 transaction fee collected for each trade.

For other "trades" like DCL or ABD, I'm sure there are many nights released to CRO which go unclaimed. But the finances are viewed as an aggregate. The point charts are set such that DVC will at least break even (probably much better than that) on the transactions. Yes rooms will go unused but the rooms are ARE booked thru CRO should be enough to cover the payments made for these trades on an annual basis.

When it comes to this second bucket of reservations, I think the most damaging factor which members (collectively) can control is point renting. Demand for DVC Villas via CRO is certainly much lower than it would otherwise be if there was no point renting. As renting becomes more accessible and mainstream, CRO demand for those units (at full price!) declines. That leads to more vacant rooms, less revenue recouped from those trades and higher point charts in subsequent years.

But rentals aren't going to go away so it's just something we have to live with. Rent the points yourself and you'll get the best value for those destinations.

 

[Brian Noble]

Let's suppose that CRO demand does continue to fall, and rental proceeds no longer cover the "exchange" options. This is not likely to result in an increase in dues. Rather, it's likely to result in an increase in the points required for any of those options.

 

[drusba]

Disney in trade-outs acts as a trading company and assumes the risk that it will not be able to rent out something. Whether Disney can or cannot do so has no impact on dues.