DVC must stop rentals.....

[Brian Noble]

unless lots of people just let their points expire.

You'd be surprised at how often this happens.

We're pretty aggressive travelers, and have been booking extra rooms for family, and it is still hard for us to keep up with the backlog of timeshare assets.

 

[wnielsen1]

I think the glut of points is already easing. Half of the new building at VGF can be booked by members but they haven't sold anywhere near half the total points. Why did they declare half right away? They've never done that before. I think that will assist in easing some of this burden. They are already providing reasonable exceptions to the borrowing rule when people call in. They are still selling one time use points. Would they be doing any of these things if they thought there was still a large excess of points in the system?

 

[kilik64]

You'd be surprised at how often this happens.

We're pretty aggressive travelers, and have been booking extra rooms for family, and it is still hard for us to keep up with the backlog of timeshare assets.

Can I join your "family"? Wouldnt want those assets to go to waste!

 

[Huskerpaul]

You'd be surprised at how often this happens.

We're pretty aggressive travelers, and have been booking extra rooms for family, and it is still hard for us to keep up with the backlog of timeshare assets.

Still new so not exactly sure I have this right, but unused points show up as breakage and that shows up on the MF balance sheet as a credit?

I think the OP probably has a point that the rental market has sure seemed to me to have grown in visibility over the last few years and seems to be taken as more mainstream by WDW fans through changes like renting pre-booked reservations and proliferation of new rental companies and accompanying advertising.

Maybe looking at historical breakage patterns would show if members were more likely to have their points expire. Or 20 years ago before all the online rental companies did members just book rooms for family/friends so the points wouldn't go to waste? I'm guessing members have always tried to find ways to use the points they already paid for before they just go away. The question for me is has the renting option significantly decreased the percentage of points going unused.

 

[Brian Noble]

Can I join your "family"? Wouldnt want those assets to go to waste!

Well, the extra 2BR on Kauai's north shore we grabbed for family via RCI for next summer is set back from the cliff and you have to hike a little to the beach, so they might pass.

unused points show up as breakage and that shows up on the MF balance sheet as a credit?

Unused points do result in breakage. Disney is allowed to rent out inventory backed by unused points. Some is returned to the members via breakage income, but that is capped at 2.5% of the budget. Disney has always met the cap; how much more revenue they get is unknown. And, if you think about it, the cap is pretty low in terms of rental revenue, so it's probably non-trivial.

If you look at e.g. the maximum reallocation figures from the SSR documents, a studio averages 16 points per night. There are 51 weeks of "use", so each studio represents about 5,712 points per year. The total dues for that studio for the entire year runs a little less than $42,000. 2.5% of that is about $1,050. At current rack rates, that's less than 2-3 nights. Even if there is a significant revenue split, maybe it's 5 nights before they hit the 2.5% limit (and it is probably less). So, if more than 80 points out of the 5,712 go "missing" every year, Disney gets to keep the extra.

 

[Huskerpaul]

Thanks for the explanation. Sounds like we only see that breakage has always been higher than 2.5%, but we have no way of knowing how much higher because Disney does not release that information. Meaning no way to do the analysis I was thinking of to look for impact of raising rental market.

 

[Sandisw]

Thanks for the explanation. Sounds like we only see that breakage has always been higher than 2.5%, but we have no way of knowing how much higher because Disney does not release that information. Meaning no way to do the analysis I was thinking of to look for impact of raising rental market.

Correct. Since we are maxed out every year, at every resort, we are given what we are entitled to get. Since rentals are simply owners reservations anyway, the impact doesn't change things...because those points are valid points for booking each night of every year at their home resort.

Now, does it mean that some owners have to shift and book farther out than they used to? Sure...but that could also be because more owners in the system now, competing for the same number of really desirable rooms and resorts.

For example, when BWV/BCV were built, there were not as many other owners who would want to trade into those resorts at 7 months....but now, look how many new owners you have who might want it and that is going to make it much harder....which means owners need to secure rooms there earlier than before because waiting won't work.

 

[Isamar]

The effect of extra banked points during Covid has to ease over time, but it might take a few years. If the glut of banked points means more bookings, thats because members are able to use more than their annual allotment of points - ie. they’re dipping into the banked points. That means they’ll have fewer/no points to bank to the following year. So eventually the glut gets used up (and breakage will accelerate that, as others have already noted).

 

[Louis morrell]

So help me out here. I think I understand breakage and how Disney uses it. My understanding is Disney rents the rooms for cash so they still get occupied. Isn't this the same as Disney using those points therefore the points are still in the system and did not disappear. And doesent that take a room out of the reservation system removing members ability to boo? In my mind I can't see how this helps clear out excess points. Someone still cannot used their points And will likely bank them.

In my head I just cannot see how they ever get cleared out of the system.

Full disclosure: Although it appeared to be the right thing to do I was not in favor of the extensions at the time and still think it should bpnot have happened. I do not think it helped the membership as a whole. It helped some at a cost to others.

 

[Frugal Fairy Tales]

Grand Floridian currently has a lot of resort studio availability after opening them up to all DVC owners on May 13.

 

[Sandisw]

So help me out here. I think I understand breakage and how Disney uses it. My understanding is Disney rents the rooms for cash so they still get occupied. Isn't this the same as Disney using those points therefore the points are still in the system and did not disappear. And doesent that take a room out of the reservation system removing members ability to boo? In my mind I can't see how this helps clear out excess points. Someone still cannot used their points And will likely bank them.

In my head I just cannot see how they ever get cleared out of the system.

Full disclosure: Although it appeared to be the right thing to do I was not in favor of the extensions at the time and still think it should bpnot have happened. I do not think it helped the membership as a whole. It helped some at a cost to others.

The thing about the extensions was that owners actual points did not get extended. DVC gave owners points owned by them/DVD to use in place of them.

So, the extension didn’t really cause as many issues as the policy to return borrowed points as well as so many people who did extra banking because they couldn’t travel…which is why the 50% restriction was then added.

Breakage does not really change things IMO because those are rooms being booked without points. Breakage can grow if owners don’t use points and let things expire, but not sure it helps to clear out the points.

I actually think we are already seeing some movement that the glut of points isn’t what it used to be because you can still get rooms this summer.

Fall is and always has been busy. So the lack of availability is not unusual…what may have happened, though, is that more owners schedule farther out because of canceled trips in 2020 and 2021.

 

[Brian Noble]

My understanding is Disney rents the rooms for cash so they still get occupied. Isn't this the same as Disney using those points therefore the points are still in the system and did not disappear.

Breakage isn't "Points did not get used." Breakage is "Rooms did not get booked." The short version: any unbooked room at 60 days is fair game for Disney to rent out.

In a perfectly balanced year (points available == points allocated), there is a direct relationship between them: each point not used to book something results in some part of a room-night not reserved and eligible for Disney to rent. But, it's likely that each year is slightly unbalanced due to banking and borrowing. In a year when many more points were banked/borrowed in than borrowed/banked out, there will be more points chasing the same number of rooms. And, vice versa.

This is further complicated by the fact that there is a lockoff premium (or, if you will, penalty). At resorts with lock-offs, the components of the lockoff booked separately require more points than they do if booked together. Disney sells (and charges dues based on) the resort as if the lockoffs are never split. Each time a lockoff unit is split and booked separately, it creates slack in the system that generates breakage inventory by design.

I suspect most of us would be shocked at how much breakage is created this way.

So, in a "surplus" year, there are two ways that excess points can be absorbed. The first is through the lockoff premium: rather than have all of those "generated" nights go unbooked, some of them will be booked with the excess points. The second is through expired points: a Member who allows points to expire rather than using them makes room for some other Member to book that "same" unit. As long as that happens prior to 60 days, the expired points do not result in breakage. In a normal year, the "expiration" component of breakage is probably more than a few percent, because even in resorts without any lockoffs (e.g. Poly) the 2.5% breakage cap is hit every year.

 

[Louis morrell]

The thing about the extensions was that owners actual points did not get extended. DVC gave owners points owned by them/DVD to use in place of them.

Not trying to be argumentative, just trying to learn a little more.
We know the above How? Is it an assumption or is there documentation from Disney stating this is what they did? If so is there a link to that info?


Thanks all for the breakage clarification.

 

[Marionnette]

Not trying to be argumentative, just trying to learn a little more.
We know the above How? Is it an assumption or is there documentation from Disney stating this is what they did? If so is there a link to that info?


Thanks all for the breakage clarification.

Speaking from experience, my "extended" AKV points appeared in my account as RIV points back in 2020.

 

[Sandisw]

Not trying to be argumentative, just trying to learn a little more.
We know the above How? Is it an assumption or is there documentation from Disney stating this is what they did? If so is there a link to that info?


Thanks all for the breakage clarification.

Because every one who was given an extension had a temporary contract added to the membership with points from a resort they didn’t own…most of those points were RIV.

Its the reason owners had to wait until their points were actually expired before those were even available or added to the persons membership.

It avoided any situation of double banking by doing this( which may not even been allowed). , it was the same of what they did for international owners…they gave them June UY points that expire end of this month.

ETA. There were even reports of CMs mentioning the points were from RIV when helping people.

 

[Louis morrell]

So there may not be as big a glut of points as some believe.
Again just filling my head with information as I have never had a problem booking when I want but we book at 11 months.

 

[AnnaKristoff2013]

So help me out here. I think I understand breakage and how Disney uses it. My understanding is Disney rents the rooms for cash so they still get occupied

Even Disney isn’t running at 100 percent occupancy all the time. There is true breakage.

 

[KimMcGowan]

Because every one who was given an extension had a temporary contract added to the membership with points from a resort they didn’t own…most of those points were RIV.

Its the reason owners had to wait until their points were actually expired before those were even available or added to the persons membership.

It avoided any situation of double banking by doing this( which may not even been allowed). , it was the same of what they did for international owners…they gave them June UY points that expire end of this month.

ETA. There were even reports of CMs mentioning the points were from RIV when helping people.

Ahhhh. I wondered why, for a while some of our points showed up as an Aulani contract (where we do not own). I asked when booking and in the conversation with the Cast Member was told they were mine but not why. I then got distracted by another part of the conversation and forgot to ask again. I forgot that until now. That is interesting to know.
Would it have been possible to use those points to book at 11 months (at whatever resort) if you didn’t have a contract there?

 

[Madame]

Not trying to be argumentative, just trying to learn a little more.
We know the above How? Is it an assumption or is there documentation from Disney stating this is what they did? If so is there a link to that info?


Thanks all for the breakage clarification.

My 3 extended points were RIV points, which we don’t own. RIV still shows up in my list of Home resorts during a search even though the points are long gone.

As Sandi said, the bigger issue was owners points being “unborrowed” - my 90 bcv points from a reservation during shutdown were unborrowed and I subsequently used them.

 

[Brett Wyman]

10 pages when the real answer here is, don’t try to rent a studio at 6 months.