Thanks. I wonder how much we pay in dues for the "service"?
The answer is complex but indicates a reason why the site is lousy: the less money spent on it, the more money Disney makes. Here is the explanation:
A. DVCMC and BVTC
The online site functions as the Members' reservation system along with MS phone system. On paper, there are two key entities involved in the reservation system, the Disney Vacation Club Management Co. (DVCMC) and the Buena Vista Trading Co. (BVTC). Though two separate legal entities, they have essentially the same operations and employees. DVCMC is the designated managment entity for each resort. One of its duties is to provide all services needed for members to make reservations at their home resort. BVTC is the exchange entity whose function is to provide all exchange reservation services which includes both trading out to non-
DVC resorts and members using home resort points to reserve other DVC resorts beginning 7 months out.
B. Dues Sources
By three year agreement which continuously automatically renews, BVTC provides its exchange services and is paid as follows. There is a line item in dues called the DVC Reservation Component under which the members are charged $1 per member per year, which goes to BVTC. Then there is the division of breakage income, meaning income received from renting available rooms starting at 60 days out from arrival. Breakage income goes first to offset member dues up to 2.5% of the annual budget excluding taxes. After that set-off is reached, breakage income goes to BVTC until all of its annual costs are covered plus 5% of such costs. BVTC can also provide a charge, currently $95, for trade-outs other than those to DVC resorts.
DVCMC, under a separate, continuously renewing contract, has two sources of income to cover its management services including its costs of providing MS services and a reservation system for home resort reservations. Any breakage income over and above the amount of the set-off for membership dues, and the amount that goes to BVTC, goes to DVCMC. Also, there is a dues item called the Management Fee, which equals 12.5% of the annual operating budget, excluding a few items. The total amount of the feeincreases annually as the operaing budget increases but the percentage never changes.
C. The Result
Thus, the sources to pay costs for MS and the online systems are the annual $1 per member fee, the management fee, the $95 trade-out fee for non-DVC resorts, and the breakage income above the dues set-off. DVC has mentioned that its breakage income is above the dues set-off, and likely it is by a large amount. The "dues" portion of those costs are all set costs that do not vary according to the actual costs of MS and online services, i.e., the $1 member fee and the 12.5% management fee remain the same for the year regardless of how much is spent on MS and online services. The breakage income and what is collected in $95 trade-out fees are amounts that likely vary annually but are not actually dues being paid by members. The net effect: (a) for MS phone and online services, members pay the same dues regardless of how much is spent on those -- in other words, contrary to what many members may believe, excess use of those servcies will not result in higher dues, and lowering the costs for those services won't result in lower dues; and (b) the less actually spent on those services, the more money the Disney entities get to keep as profit, i.e., the Disney entities have a incentive to go "cheap" on MS and online services provided.