COVID induced point loss – future supply & demand solutions

[DVC BLT]

Some ideas on how Disney could correct this difficult situation. Lets stick to ideas that both benefit Disney and the DVC owners, as these have the highest chance at success.

The backdrop is basically a lost year in 2020 for Disney parks. Even if they are able to open in the 2nd half of the year, lets assume traffic will be at record lows as people try to avoid flying, hotels, buses, rental cars, and packed restaurants. Even previously booked trips in the 2nd half will see high cancellation rates even if the parks are open.

DVC owners have a real challenge. A lost year themselves as real estate holders. Although its obvious that Disney could tell owners “I’m really sorry” and the owners take the brunt of the loss, lets see possible solutions where both parties stand to gain. Afterall, DVC members are hardcore Disney fans and should be included in the pool of customers most likely to visit the parks given the backdrop above.

Basic issue: with each month passing by, more DVC points go unused. Disney has graciously allowed owners to cancel reservations and move the points back to the original use year from which they originated with no holding account impact, thank you Disney. That leaves owners with a difficult situation of too many points chasing too few rooms over the course of the next year. In the below, lets assume that Disney will have a difficult time filling the parks and rooms, and therefore lower ticket sales, restaurants sales, and other parks revenue (parking, merch, parties, etc).

Lets discuss some possible solutions where DVC owners could benefit (as we can go on and on about how we could get screwed and well, as humans, we like to project the worst, so….lets not go there) :

• Obviously, refund a portion of MF or owners who could not find a home for their points. (I guess some portion is fixed, such as insurance, property tax, utilities, etc).
• A stretch and unlikely, but for those who could not use their points, allow a certain $ value discount on the purchase of a new DVC contract ($30 per point?)
• Make RIV exclusively DVC use only, no more renting rooms through CRO. This will add capacity of a DVC resort with plenty of “unsold” points available to be used by existing owners and possibly increase selling of the resort as more members visit.
• Extend the ability to bank only use year points impacted by the COVID shut down over 2 (or more) years, spreading the impact over multiple years.
• Make open hotel rooms not booked by CRO available to DVC members to book at studio rates. This will bring park revenues into the company that would not have otherwise been earned when points are left to expire and other customers refuse to travel to Disney at this point.
• Maybe allow these to be booked only inside a certain period of time (maybe 3 or 4 months)?

 

[Sandisw]

Ideas DVCM could do without involving TWDC:

Refund of MFs and added to 2021 dues for all resort owners as a special assessment

Access to OTU points. for owners who lost banked points...matching amount...to be used within 6 months of opening.

Given those owners with points beyond banking window 6 months to use points from resort opening

Assuming that TWDC will help:

Offering those with lost points a chance to book Disney collection, even if they don’t own qualified points, with a fee charged to DVCM less than the retail cost of the room,

Allowing those with lost points to have a travel voucher worth the MFs paid on those points to be applied to a discounted room at a Disney hotel.

 

[montreid]

I like the Riviera idea - it makes sense to open that up for use as a pop off -- plus a chance to get some conversions.

 

[Grumpy by Birth]

If they offer rooms at Riviera to make up for points lost due to closures, do you suppose they will temporarily lift resale restrictions for those members? If not, then that solution might not help a significant number of those affected by closures.

 

[Sandisw]

If they offer rooms at Riviera to make up for points lost due to closures, do you suppose they will temporarily lift resale restrictions for those members? If not, then that solution might not help a significant number of those affected by closures.

What they might have to do is use their own OTU points to cover Stays there for those with lost points because that would not go over well with other resale buyers with restricted points.

No way I see them lifting something that is a temporary fix

 

[sethschroeder]

Lets stick to ideas that both benefit Disney and the DVC owners, as these have the highest chance at success.

I don't see how any of your suggestions benefit both parties. Someone has to take a hit.

Most of your suggestions are Disney giving up money. The one about extended banking though just spreads out the pain but doesn't eliminate the more points than can be used math.

About the only thing that could possibly happen is for Disney to allow for last minute trips based on rooms Disney would not be able to rent via cash. That window likely is only a couple days to a week out though and likely not helpful to the majority of DVC members who do 1 or 2 trips a year at specific times (aka Spring Break/Easter).

 

[bookwormde]

A couple of new ones I thought of

Stop sending breakage to Disney

Make sure lock off premium points/rooms are directed to those who lost points (max 2 to 6% of total DVC points)

Both of these would reduce supplemental income from DVC and would raise next year dues, as does almost anything DVC does alone

If DVC is not paying Disney for CMs at the resorts during the closure the surplus carryover could help offset this

 

[CarolMN]

Assuming that DVC allows Members who had cancelled reservations during the closure to bank past the deadline (not bank twice, though):

Perhaps they could suspend borrowing from 2022 use years for everyone. That should help absorb some amount of the excess points chasing 2021 reservations and would apply to all Members and not require any bailout from the Disney Co. Banking to 2022 from 2021 would still be allowed for the same reason.

Along with that, perhaps all Members could forfeit a percentage of their 2021 or 2022 points depending on their use year) to absorb the remainder. OTU points would not be available during that use year. Again, such a move shares the pain with all Members and does not expect Disney or anyone else to bail them out.

No idea what the percentage would need to be or how much the above would help. Perhaps the Developer would chip in as a gesture of goodwill and marketing strategy.

 

[Lewisc]

Some ideas which don't require $$$ from Disney.
Increase inventory by reducing number of units being renovated. Creative booking. A one week vacation might become one night at an over water unit at POLY and a 6 night cash reservation. A one week vacation might require a split stay between 3 resorts.

Many of the suggested solutions require $$$ from Disney. I don't think owners with expired points would be satisfied with a 50% room discount. Assume Disney can't fill their rooms. After 9-11 one resort, and sections of other resorts, were closed. Free hotel rooms to DVC members? Offering free rooms to medical professionals, who risked their lives and worked long hours, makes as much (maybe more) sense then giving them to DVC owners.

Declare Riviera. That will increase inventory. Charge members who use expired points something something like $3-$5 per point. I don't know how the books have to be juggled but that should cover some of the increased costs associated with Riviera being made available before sold.

JMO, Disney will only be motivated to spend $$$ if they think the situation will have a significant impact on new DVC sales.

 

[tjkraz]

Stop sending breakage to Disney

Breakage doesn’t actually get “sent” to Disney until 60 days prior to arrival. It‘s the byproduct of lack of demand, which should be organically reduced due to all of the lost capacity. More points in the system = more people booking.

I guess they could get rid of the 60 day rule entirely, but demand should be such that most rooms will be gone before 60 days anyway.

Make sure lock off premium points/rooms are directed to those who lost points (max 2 to 6% of total DVC points)

Similarly the lock off premium doesn’t create points. It helps create the excess capacity.

Undoubtedly DVC is performing some complex calculations looking at the impact of the lock off premium, number of points that typically go unused each year, making additional declarations at Riviera, slowing refurb cycles and other small moves to try and absorb all of the points.

The hope is that they can come away relatively confident that the system has enough capacity to offset the closure without having to take extraordinary measures. Perhaps even returning all of these points that are currently at risk. But you can’t make that call until you know if the closure will be 2.5 months...4 months...6 months, etc.

 

[bookwormde]

Breakage doesn’t actually get “sent” to Disney until 60 days prior to arrival. It‘s the byproduct of lack of demand, which should be organically reduced due to all of the lost capacity. More points in the system = more people booking.

I guess they could get rid of the 60 day rule entirely, but demand should be such that most rooms will be gone before 60 days anyway.

There is a lot of availability at the 60 day mark currently

 

[Sandisw]

There is a lot of availability at the 60 day mark currently

From lots of cancelations because it wasn’t like that a month ago.

But, maybe, given this, it would provide an opportunity for those with expiring points to be given the extension for booking in a June...though I read somewhere that it is timeshare law that prevents more than 2 years of life..so it might not work for bsnked points.

 

[dvc_john]

It may only help a little, but they can complete refurbs already under construction, but suspend further refurbs for a year or more. An un-refurbed room is better than no room at all.

 

[Frogman88]

I think everyone here needs to realize that it will be a few years before it’s business as usual. So solutions can’t be presented until the initial problem is mitigated. Disney has taken a huge loss and the higher ups are making exit strategies not DVC point strategies. Use this time to pray instead

 

[Frederic Civish]

Why would Disney get rid of Breakage? And why would they voluntarily give up the cash flow they get from renting out Riviera and just let the DVC owners use it? This is a money loser for them for no benefit. I think a lot of DVC owners will just have to eat a lot of points. I will tell you this, at the 11 month window, for the times that we usually travel, I am going to be booking some rooms.