Major Policy Change in DVC/DCL Trade Policy UPDATE ON POST #193

[cseca]

...
I really feel bad now since one of the exciting reasons they bought DVC was to give a honeymoon trip to their children one day. Her son got engaged on Sunday and said he wanted to go on a cruise for his honeymoon. My sister was happy that she could book a cruise for him for next year (aug 2011) but I had to tell her now she can't. Guess I am a bit emotional about it, but I have Personally witness half truths at various presentations by DVC guides.

Heck, I would feel bad for your sister too.
But if that's the only time she MUST have a DCL ressie then I think she still could do it by renting points. If she doesn't want the headache, go with David's rental (never use his service, but read on the board that he's a good option).

Plus it's "cheaper" to rent points and book by cash for DCL. She might be able to give them a better category with the cash she gets from renting. Or use the extra for on board credit of some sort.
There's a way... don't despair...

 

[SuzanneSLO]

Stay tuned for the 2012 DCL Point Charts to be off the charts!!

If we keep the option at all, it is not going to be pretty

DVD does not like to lose money and they have proven that time and time again.

I don't understand your logic. Why would DVD/DVC want the price of tradeouts such as cruises to go up? For the management company, this means less inventory on points and more members unable to book reservations at DVC resorts. For the sales arm, this means a less attractive option and fewer people influenced to buy in order to use this trade.

From DCL's point of view, higher points does seem like a benefit. Either fewer members use the option or when they do, it is easier for DCL to make up the cash price even if they need to discount the DVC resort rental rates.

Am I missing something? -- Suzanne

 

[SuzanneSLO]

Stay tuned for the 2012 DCL Point Charts to be off the charts!!

If we keep the option at all, it is not going to be pretty

DVD does not like to lose money and they have proven that time and time again.

I don't understand your logic. Why would DVD/DVC want the price of tradeouts such as cruises to go up? For the management company, this means less inventory on points and more members unable to book reservations at DVC resorts. For the sales arm, this means a less attractive option and fewer people influenced to buy in order to use this trade.

From DCL's point of view, higher points does seem like a benefit. Either fewer members use the option or when they do, it is easier for DCL to make up the cash price even if they need to discount the DVC resort rental rates.

Am I missing something? -- Suzanne

 

[Brian Noble]

I don't think it's a matter of "want" so much as "will happen". If the problem is that it has gotten harder and harder to generate room rental revenue to cover cruises, one way to solve that problem is to raise the point requirements. That (a) discourges people from trading out (reducing inventory that must be rented) and (b) allocates more room-nights to any particular cruise (increasing potential revenue).

But, (again, if the problem is as we suspect), continuing to allow cruise exchanges at the current point level is unsustainable unless and until rental rates for DVC units recover.

 

[tjkraz]

I have a theory.

As we all know, there are limits to the number of cabins made available for points bookings on each cruise. The number 10% has been thrown out--as in, 10% of all cabins on all cruises are available for DVC points reservations.

But in addition to that, it's certainly possible that there is an overall limit on the number of staterooms DCL will release to DVC in a given year. They may make 10% of all rooms available on each cruise, but with a cap of 5% (speculative) of all staterooms booked on points for the entire year.

In other words, any given sailing can be booked up to 10% full of DVC members on points before it is blocked out. But there may also be a cap on total reservations across the fleet for the entire year.

If that's true, it would explain why reservations were cut off entirely as of last Friday. Once that annual cap is reached, all bookings would have to cease regardless of what is left under the 10% per-sailing limit.

Why would the cut off-extend through September 2011, a seemingly arbitrary date? Because that's the end of Disney's fiscal year which runs from October to September. Any agreement between DCL and DVC could easily mirror the FY.

Why would this cap suddenly come into play for 2011 and not in prior years? Increased member demand for sailings on the Disney Dream, Alaska itineraries and other unique experiences planned for the next few months could easily have pushed the volume of points sailings above prior levels.

 

[JimMIA]

I don't understand your logic. Why would DVD/DVC want the price of tradeouts such as cruises to go up? For the management company, this means less inventory on points and more members unable to book reservations at DVC resorts. For the sales arm, this means a less attractive option and fewer people influenced to buy in order to use this trade.

From DCL's point of view, higher points does seem like a benefit. Either fewer members use the option or when they do, it is easier for DCL to make up the cash price even if they need to discount the DVC resort rental rates.

Am I missing something? -- Suzanne

I think Liferbabe is right, but I think it is just a simple question of supply and demand - not DVD greed. If there is more demand for points cruises than they have availability, the points cost should be expected to go up. I assume those costs are negotiated between DVC and DCL, and DCL certainly does have a vested interest in increasing the points costs.

I'm not sure it makes any difference to the sales people. I'm sure very few of their prospective customers have a clue what the cruise availability is. And if the sales folks say "subject to availability" and the consumer doesn't know to come here and educate themselves...whose fault is that?

 

[JimMIA]

I'm wondering if anyone has received any "official" answers to their emails, as opposed to anecdotal info from MS -- which, as we know, will change with the next call.

I emailed Member Satisfaction Saturday morning and have not even received the supposedly automatic "Received your email and we'll respond in 3 days" reply yet.

Anybody heard back?

I'm starting to believe that there has been no policy change -- that either all the individual cruises just filled up or some kind of threshhold like Tim mentioned was reached. Everything so far points much more to an availability issue (especially the "call list") than a policy change.

Whatever the reason, DVC needs to get off the seat and let members know officially.

 

[dzorn]

I don't understand your logic. Why would DVD/DVC want the price of tradeouts such as cruises to go up? For the management company, this means less inventory on points and more members unable to book reservations at DVC resorts. For the sales arm, this means a less attractive option and fewer people influenced to buy in order to use this trade.

From DCL's point of view, higher points does seem like a benefit. Either fewer members use the option or when they do, it is easier for DCL to make up the cash price even if they need to discount the DVC resort rental rates.

Am I missing something? -- Suzanne

Well if points go up enought it could discourage members and they will look at other options. It would also allow them to still market that cruises are a possability without going into detail.

Denise in MI

 

[Brian Noble]

Whatever the reason, DVC needs to get off the seat and let members know officially.

I wouldn't hold my breath on this one.


Edited to add:

As we all know, there are limits to the number of cabins made available for points bookings on each cruise.

Do we know this, or do we "know" it?

Stepping back a bit, caps don't necessarily pass the sniff test. After all, DVC's money is just as green as anyone else's---if they can generate the revenue from rentals to pay to fill a ship at the negotiated rate, DCL should be happy. Thrilled, even, because filling ships with DVCers at what appears to be a better than average fare means less availability---and higher fares---for cash guests. Win all around!

Granted, I suspect there are some limits, but those limits are probably a function of DVC's expectation of monetizing points through rentals, not DCL's willingness to sell cabins at what appears to be a higher-than-average fare. I suppose the real open question is how much of the take DVC skims before paying DCL. It is possible that DCL sees a lower amount per DVC cruiser than it first appears.

Edited one more time: I have a sneaking suspicion that the "cap" isn't a hard number. Rather, it's a cash-fare trigger level. In other words, DCL will sell cabins to DVC at the negotiated rate until it thinks it can get more on the open market.

 

[Mineu]

Not sure where this comes into play with all of the various theories-but I have come across 11C's on both the Dream and Alaska cruises that I have booked for next year-these lower cabins were not available a few weeks ago. DCL is not completely full if they are offering these lower categories again.

 

[tfc3rid]

Just jumping into this issue, back a few years ago, a date for a cruise I wanted was not available to DVC members even though there was plenty of DCL availability... There is a very limited number of rooms in each category for point usage... Again, it seems like the only was to really guarantee your cruise is to book as early as possible.

 

[Anjelica]

Not sure if this has been asked/answered - but does anyone know the percentage of DVC members who use their points to cruise? Or even rent out their points to pay for a cruise? If for some reason they are either severly scaling back the allocation for DVC or enforcing an existing allocation limit do you think DVC members will then vacation differently?

 

[tjkraz]

As we all know, there are limits to the number of cabins made available for points bookings on each cruise.

Do we know this, or do we "know" it?

We "know" it to the extent that it's pretty commonplace to find specific cabin classes available for cash bookings while they are no longer available to members on points.

Stepping back a bit, caps don't necessarily pass the sniff test. After all, DVC's money is just as green as anyone else's---if they can generate the revenue from rentals to pay to fill a ship at the negotiated rate, DCL should be happy. Thrilled, even, because filling ships with DVCers at what appears to be a better than average fare means less availability---and higher fares---for cash guests. Win all around!

Depends upon the terms of the deal between DCL and DVC. Both parties could view the agreement as mutually beneficial. DCL is looking at it from the perspective of "there is a cap of 'x' staterooms that we are giving to DVC at reduced rates each year." Meanwhile DVC knows that it faces an upper limit of 'y' points that it will have to convert into CRO rooms annually.

DVC is likely charged with calculating the number of points charged for specific cruises. A DVC/DCL compensation rate would have to be agreed-upon first and then DVC would determine the number of points necessary to recoup that compensation.

Personally I'm somewhat mystified that DVC can charge as few points as they do for some trade-out options and still make them work. But with DVC having control of the rates, they could easily have charged more points to overcome low demand or CRO discounts. We're going on two years now of wrestling with this economy so the 2011 cruises and resort stays should have certainly taken that into consideration.

This may not be a case of either DVC OR DCL putting an end to bookings, rather it's part and parcel of their contract. In any agreement, it would seem reasonable for both parties to want to know their maximum exposure. For DCL that exposure is discounted cabins and for DVC it is points moved into Reservation Status.

Either party could be harmed by exceeding certain levels. As you point out, DCL charges more for cabins as their occupancy increases. But if they are giving more and more cabins to DVC at pre-arranged (low) rates, they lose the ability to charge some of those higher fares. Meanwhile DVC finds itself with far more points than CRO can rent. DVC knows going in that CRO will only be successful in renting a percentage of the rooms they are given, but it seems likey that percentage would only fall as room availability increases. Demand will not necessarily increase along with an unanticipated upswing in availability.

The method of calculating this cap could take many forms. The primary point I was trying to make is that we may have been wrong to assume that plentiful availability on specific cruises meant unfettered access to those cabins for members booking on points. In addition to the per-sailing cap, I suspect there is some form of annual cap which was has been met for the first time in the history of the DVC/DCL relationship.

 

[Petraman]

Not sure where this comes into play with all of the various theories-but I have come across 11C's on both the Dream and Alaska cruises that I have booked for next year-these lower cabins were not available a few weeks ago. DCL is not completely full if they are offering these lower categories again.

Did you pay cash for these rooms or use points? There is definitely still plenty of cash rooms available on most of the cruises for next year. When I looked about a wee ago or so, there still were rooms on the inaugural voyage of the Dream.

 

[jodifla]

And, as of two weeks ago, there were plenty of DVC cabins on the May cruise I was looking at. It is simply not possible that everything got booked up through September of next year, unless they went through and took all the DVC cabins away.

And if the issue is that they can't book all those DVC reservation points with DVC rooms because no one is biting, then how long will we be able to use other perks like the concierge????

 

[snackyx]

If you read post 193 you will see that Carol was able to get her situation fixed. I am glad they helped her but again this is not "just availability". The probablility of two rooms totalling 1500 points opening up on the exact Alaska Disney cruise she wanted the very next day seems too outrageous to believe. If thats the case I would call each hour to check for availability for my Dream cruise. I think they needed to help Carol, she made it very clear who she was and that she would be posting this new policy on the DIS. I don't know, but I haven't heard of anyone else getting a call back on the Call list. I have heard of people being told they can't even be on the list. So who knows. Again, I am very glad that Carol was able to switch, but I am saddenend for those who can't get their situation fixed.

I think the old addage "the squeaky wheel gets the grease" came into play here. Carol made it very clear "who she was" and that this information would be reported publicly. Disney "magically" found a way to resolve her situation, because it was in their best interests to do so. My guess is that most others on the "call list" who are waiting for their problem to be rectified may not be so fortunate.

 

[tjkraz]

And, as of two weeks ago, there were plenty of DVC cabins on the May cruise I was looking at. It is simply not possible that everything got booked up through September of next year, unless they went through and took all the DVC cabins away.

But what I'm suggesting is that there is not only a per-cruise limit but also a cumulative annual limit for all cruises.

Just to throw out a number, let's say that DVC members are allowed to have 5% of all cabins over an entire year.

Rather than releasing 5% of all dates / cabin classes, they may make a higher percentage available on each sailing. That gives members greatest flexibility. On one cruise with particularly high demand perhaps 8% of all cabins will go to members while another sailing may have only 2% of cabins taken by members.

But the annual limit would still apply.

It's like having two caps--a cap on the number of rooms available for each cruise and a cap for the year. They may not have met the cap for the cruise you were looking at but if they met the annual cap, all bookings would end.

And if the issue is that they can't book all those DVC reservation points with DVC rooms because no one is biting, then how long will we be able to use other perks like the concierge????

It's not so much that they can't book any rooms with the Reservation Points, it's the reality that Reservation points have a diminishing return.

Let's say that DVC projects it will have 500,000 Reservation Points to give to CRO in a given year. All of their pricing and projections will be based upon historical ability to rent those 500K Reservation Points.

But if the total was allowed to grow to 1,000,000 Reservation Points, the numbers will be dramatically different.

Simply put, DVC would never get the same return--have the same CRO booking success--with the second 500K Reservation Points as they do with the first 500K.

 

[danandnan]

And, as of two weeks ago, there were plenty of DVC cabins on the May cruise I was looking at. It is simply not possible that everything got booked up through September of next year, unless they went through and took all the DVC cabins away.

And if the issue is that they can't book all those DVC reservation points with DVC rooms because no one is biting, then how long will we be able to use other perks like the concierge????

As I was told last night by our club rep as of now its all cash until 2012 no points

 

[LIFERBABE]

Just jumping into this issue, back a few years ago, a date for a cruise I wanted was not available to DVC members even though there was plenty of DCL availability... There is a very limited number of rooms in each category for point usage... Again, it seems like the only was to really guarantee your cruise is to book as early as possible.

Exactly, we never had wide open access to cruises. I also agree with Brian, DCL was discounting cruises to DVC and now that those sailings have reached a certain level of profitability and cash demand is still there, they have cut DVC off at that price. And they are reduced prices. I was surprised at how cheap my cruise fare was for the "free cruise from DVC" on my documents.

If I was renting points for $9 and all of a sudden I had a buyer that wanted to give me $12, I would rent all future points to the $12 buyer. The $9 buyer may be upset, but that's business.

 

[Mineu]

Did you pay cash for these rooms or use points? There is definitely still plenty of cash rooms available on most of the cruises for next year. When I looked about a wee ago or so, there still were rooms on the inaugural voyage of the Dream.

I was on the phone with DVC booking my Alaska cruise when I mentioned having 4 cabins booked on the Dream for my back-to-back-the very helpful agent (and she was) said I should look into freeing up two of those cabins for my Alaska sailing as it would use less points. Once I had this accomplished, I called back to make the switch and they could not get the
11B onboard offer loaded in the system and they said that they needed a confirmation from the travel agency releasing the cabin back to me. Then the news broke Friday-neither DVC or DCL knows whether they got the letter or not and said it doesn't matter as it is considered a new point reservation-even though you can see the reservation in their system when they pull up my member name... So, I will have to cancel my three day to pay for the Alaska cabin I thought I was going to have on points...I know there is still availability for both cruises-it's frustrating to see discounted rates pop up so they can fill the boat-but yet I can't book with points...