I've just had a call with DVC, with YC, head of Regulatory Affairs and a team leader who has been involved in the point reallocation.
Fasten seat belts.
They told me the Base Year doesn't exist. Or better, it is used only when the resort is created and the total number of points available for sale is calculated. Then the Base year is not used anymore for point reallocations. So the question if the Base Year has changed over time is meaningless, it hasn't changed because it's used only when the resort goes for sale. (this is also compatible with the fact that OKW and BWV don't have a BY mentioned in the POS).
They told me that when they do a reallocation they project the new point charts over the years, in order to find a minimum year and a maximum year, i.e. the years when the total number of points needed to book the resort is the lowest and highest. They have to ensure that the points for minimum year are not lower than the points sold (otherwise it would go against the Florida law) and that the points for the maximum year are not too much higher than the points sold. They said something about the difference being in the 0.2 - 0.4% range. [We know it's higher and I've told them]
I was speachless for a bit, because they've talked about a Base Year with a lot of people, of course some have reported here as well. They've admitted they've used the term improperly in the past and they now prefer to use the term "minimum year".
After the initial shock, I realized this didn't change much what was my thesys, actually it made it stronger.
What I told them is:
- DVC management company has a fiduciary duty toward the members, it must do their best interest
- the members have bought points that represent a reale estate interest and those points are used to book rooms. Point inflation is without a doubt against the interests of the members, so the DVCMC should do their best to minimize point inflation
- the DVCMC has all the rights to do point reallocations to balance demand; actually, they have to do it
- according to what they told me, the DVCMC is not bind by keeping a certain Base Year in doing the reallocations and they must just ensure the minimum year doesn't go lower than points sold and maximum year is not to much higher than point sold
THEN
- the DVCMC is allowed to do the reallocation using the current year as the minimum year. Every year they can recalculate the point charts to offset the change in weekends and holidays and have the points as close as possible to the points sold. This is the best way to both guarantee a demand balance and avoid point inflation.
If they're not bind in any other way (by law or by contract) to a certain Base year, then they can reallocate every year to guarantee zero or just a very little amount of point inflation.
I told them in 2022 SSR has over 35k extra points. Those are enough for a thousands or more nights that members won't be able to book. It's not enormous but it's not negligible. And those extra points do not benefit the members in any way, because the breakage created generates extra revenue for DVD, since the brekage income limit is already hit every year.
I don't think they were expecting this, their reply was (IMHO) weak.
The told me that they try to limit the amount of changes to the charts, because it might upset people if with a certain number of points someone can book 5 nights and then the next year it's 4 nights.
I replied that:
- because of point inflation people already can book fewer nights than before
- if they transparently explain why the point charts are adjusted every year (to offset calendar change) people would understand and not complain
I have also told them I think the current reallocation goes against the POS. Because the POS says they can increase the points required in a unit in a certain day, but it has to be balanced by a decrease in another day for the same unit. Because of point inflation for 2022 they had a point increase that was not balanced by a decrease. That was excusable if the concept of Base Year exists and is enforced by law. But if it doesn't then the way they've done the reallocation doesn't comply with the rules.
[this is essentially Drusdba's point, made a few posts back. Unfortunately I didn't read the latest message before the call otherwise I would have told them that as well]
Minor thing: I told them I understand why they have rebalanced Fall and Summer, but I still don't understand why they haven't touched the first two weeks of December. But I've told them I didn't want to go that route because it was not really the topic of the call and time is always short.
Not sure I've convinced them, but I've read some doubt in their voice. They told me they'll report my feedback to the team and they'll come back to me.
As usual, I have appreciated the opportunity to talk with DVC leadership and it's great they made themselves available to listen to my complaint.
P.S. They've confirmed they've read this thread
