How much is too much?

[mousehockey37]

As point values increase and owners look to rent their points, at what point do you think people who are looking to rent are going to say "that's too much"?

I understand this is a very subjective question, but it wasn't long ago that people were renting for $12/point, now it's up to $16/point for the most part. The rental sites are up to the $16-17/point range and there are some owners looking to rent here on the boards for upwards of $17/point. Now, yes, there are owners who are renting for less depending on their own factors, but do you think there will come a day where a majority of people are going to say that even renting points is too expensive?

 

[bwvBound]

I'd guess it depends on the economy. Seems plenty of experts are asking similar questions of the stock markets lately.

 

[montrealdisneylovers]

Depends how much it costs to book through Disney. As Disney rates increase, rental rates can increase as well and still be a better deal.

 

[mousehockey37]

Depends how much it costs to book through Disney. As Disney rates increase, rental rates can increase as well and still be a better deal.

That's a given, but... that said, is it still feasible that at some point, there will be the "too expensive" mark? I mean, budget depending and such, some families are already well past that point, but the market is still there for renting. So at what price point is it going to happen that even the rental market sees a decline?

 

[_auroraborealis_]

Well, and I definitely see some people with terrible expectations. $12/pp for VGF in home resort offers, $9 for Poly home points? lolno good luck with that unless you have pix.

I think the rental agencies will continue to set the standard. Private owners will charge in that range most of the time, especially if they try to get prime reservations that can be rough through agencies.

 

[mousehockey37]

Well, and I definitely see some people with terrible expectations. $12/pp for VGF in home resort offers, $9 for Poly home points? lolno good luck with that unless you have pix.

I think the rental agencies will continue to set the standard. Private owners will charge in that range most of the time, especially if they try to get prime reservations that can be rough through agencies.

I never said that point values had to ever go back to single digits. The question is will renting see a point where there is a decline due to the price point?

 

[_auroraborealis_]

I never said that point values had to ever go back to single digits. The question is will renting see a point where there is a decline due to the price point?

Maybe. Hard to say. Given price increases at Mods and even Pop, and the issues of accommodations for larger families/groups, I think the main competition for rental is off site.

 

[mousehockey37]

Maybe. Hard to say. Given price increases at Mods and even Pop, and the issues of accommodations for larger families/groups, I think the main competition for rental is off site.

I'm not talking about mods, or values or offsite. My question is a direct one. Will renting see a decline at a certain price point? Stop trying to manipulate this. I understand there will be other factors that go into pricing. However, my first, only and simple question remains. You've answered it as far as "Maybe. Hard to say."

 

[minorthr]

unless disney stops increasing the price of their rooms I dont see how there can be. When you can pay $2000 VS $4000 for the sun-fri of xmas week at AKV savanna view there is still plenty of room there. 125 point at $25 a point and still save $900 vs booking via disney at $726 a night.

obviously if per point is at a price where booking direct is cheaper then renting dvc points then thats when its to high. People like to save money. I think most people even if they saved $300-400 would still rent.

 

[_auroraborealis_]

The issue is that value is relative to the other options. If you read other boards where past renters evangelize about how great it was, common themes are "for about the price it would have cost to stay at POR" or "I saved hundreds over getting a standard room at Poly/AKL/BC!" In other cases, it very much is "I wanted to stay on property but needed room for 7." Same themes are in David's customer testimonials. "Deluxe for the price of a mod!"

So long as the price of the DVC rental maintains the prior value proposition - it's in reasonable range of what Disney is charging for CBR/CSR/POR - or offers the latter (providing an option that is hard to get otherwise on-property), demand will stay high. Will it decline? Maybe a bit, just as demand for any on-property unit is impacted by price in either direction. But given that rental demand is higher than supply, this is unlikely to be a big issue for owners, and is unlikely to be any different for renters willing to pay going rate. There remains a lot of room between most discounts at Deluxes and the cost of a DVC rental on most studios. There is less room between DVC rental and a mod, as in many cases they're near already, but some people are willing to upgrade depending on how far apart those costs are.

 

[Ben E N]

I'm not talking about mods, or values or offsite. My question is a direct one. Will renting see a decline at a certain price point? Stop trying to manipulate this. I understand there will be other factors that go into pricing. However, my first, only and simple question remains. You've answered it as far as "Maybe. Hard to say."

To answer it very simply: yes. The degree at which it declines is what matters. Everybody in the world would rent at $1 per point, 60% of people interested in Disney would rent at $10 per point, 45% at $15 per point and so on.
The way economics work is called supply and demand. As long as demand outpaces supply, people can set their prices wherever they want. If they notice they are not selling at $20/pt, they will drop to $19 and so on. It is directly related to moderate and value prices, so that commentary was essential to your understanding the answer to your question .

 

[mousehockey37]

To answer it very simply: yes. The degree at which it declines is what matters. Everybody in the world would rent at $1 per point, 60% of people interested in Disney would rent at $10 per point, 45% at $15 per point and so on.
The way economics work is called supply and demand. As long as demand outpaces supply, people can set their prices wherever they want. If they notice they are not selling at $20/pt, they will drop to $19 and so on. It is directly related to moderate and value prices, so that commentary was essential to your understanding the answer to your question .

Supply and demand... really Sherlock?

Again... will there be a point where rentals decline? What price point would it be?

 

[MooseBucks]

I was looking at this the other day....Hopefully they increase commensurate with annual dues increases. I charted out the the other day a $1 increase in rental rates every couple years and eventually that won't cover the annual dues + my amortized buy-in costs if I wanted to rent. I don't foresee us renting out points in the near future but is nice to have the option.

 

[mousehockey37]

I was looking at this the other day....Hopefully they increase commensurate with annual dues increases. I charted out the the other day a $1 increase in rental rates every couple years and eventually that won't cover the annual dues + my amortized buy-in costs if I wanted to rent. I don't foresee us renting out points in the near future but is nice to have the option.

Thank you for your input. Nice to hear something with substance from an owner.

 

[Ben E N]

Supply and demand... really Sherlock?

Again... will there be a point where rentals decline? What price point would it be?

You ask an overly simple question and refuse to acknowledge the other factors involved in the answer, and you are stuck with getting an overly simple answer. Either take other people's feedback seriously and appreciatively, or get stuck with poor feedback.

 

[MooseBucks]

I think something else worth noting is while Disney park attendance decreased 1% YOY Disney hotel occupancy increased 2% to 89% in FY2016. From 2013-2016 it increased from 79% to 89% while available rooms decreased slightly. These factors lead me to believe that Disney still will be able to steadily increase prices for resorts. They've been able to increase operating income in the resorts 48.5% off of a ~25% increase in revenue during 2013-2016 also. All good signs to say in the near term prices for rentals will increase.

 

[Ben E N]

I think something else worth noting is while Disney park attendance decreased 1% YOY Disney hotel occupancy increased 2% to 89% in FY2016. From 2013-2016 it increased from 79% to 89% while available rooms decreased slightly. These factors lead me to believe that Disney still will be able to steadily increase prices for resorts. They've been able to increase operating income in the resorts 48.5% off of a ~25% increase in revenue during 2013-2016 also. All good signs to say in the near term prices for rentals will increase.

I don't think this has a huge impact, but I wonder what percent of that 10% occupancy growth is due rooms being taken out of service for VGF, Poly, and CCV DVC rooms. It could be that essentially the same amount of rooms are being sold, just out of less total rooms.
That would still allow them to justify raising prices, or at least reducing discounts offered, a bit, but would not show an increase in demand for their rooms.

 

[MooseBucks]

I don't think this has a huge impact, but I wonder what percent of that 10% occupancy growth is due rooms being taken out of service for VGF, Poly, and CCV DVC rooms. It could be that essentially the same amount of rooms are being sold, just out of less total rooms.
That would still allow them to justify raising prices, or at least reducing discounts offered, a bit, but would not show an increase in demand for their rooms.

1.6% decrease in available room nights. There is a clear increase in demand for the rooms.

 

[Ben E N]

1.6% decrease in available room nights. There is a clear increase in demand for the rooms.

Thanks for that information. Not sure where you got it, but it sounds legitimate and follows a current narrative at Disney.
This explains why they would expand 60 day fastpass reservations to some off-site guests. If they are filling up their hotels but still losing business, then they need to hand out more incentives to get off site guests to come to the park. This is especially true considering Universal's current and anticipated future growth.

 

[Wakey]

Demand currently exceeds supply.
In that scenario the market could take further increases.
As Disney raises hotel prices, and I read they'll be targeting a 25% increase at Star Wars) rental prices follow suite. In fact rental prices, even whilst rising can appear even better value as the savings gap increases.
Only when Disney gets too expensive, will people reduce trips- readeconomic downturn.
But even then, when people have less money, if they want to do something they Scrabble around more for the best deal.