Not fully getting the "lock off premium"

[we"reofftoneverland]

I get the concept that a lock off as a 2 bedroom costs less than the studio and one bedroom individually, but I do not understand how Disney can add points because of the lock off so that overall point counts are higher? Confused.

 

[_auroraborealis_]

I get the concept that a lock off as a 2 bedroom costs less than the studio and one bedroom individually, but I do not understand how Disney can add points because of the lock off so that overall point counts are higher? Confused.

Points sold are based on the 2BR cost at inception, but they can charge a premium to divide the lock-off, meaning that the cost to book to max unit count (i.e., splitting up every lock off) for 365 days can be greater than the total points sold for the resort.

 

[hakepb]

If a resort only had dedicated studios, 1BR and 2BR, then an increase in studios and 1BR would require a decrease in 2BR+

But a resort like SSR only has lockoff 2BR, Dedicated 2BR, GV and THV as declared units. Those declared units are the only units that legally matter to Disney when computing the total points in a resort by a points chart.....thus Disney thinks they can increase SSR’s studio and 1BR without a comparable decrease in 2BR+ units.

 

[DougEMG]

A lock-off room counts as a 2 bedroom for determining total points. The point costs of the studio and 1 bedroom in a lock off have no effect on a resorts total points. By increasing the point cost of those lock-off studios and 1 bedrooms, DVC can created new points that only they have access to.


Here is a simple example. A resort has 1 room only, a 2 bedroom lock-off. The 2 bedroom costs 30 points, say DVC sold 20 points to one person and 10 points to another person. The resort is now sold out and has a point total of 30 points. Lets pretend the studio originally cost 10 points (want to keep that original cost low to attract buyers) and 20 points for the 1 bedroom. So one person can book the studio and the other the 1 bedroom. Rooms are fully booked up by owners.


Now lets have DVC change the point cost and we will use an extreme example to make the point. 2 bedroom stays at 30 points, so no change to the total points at the resort. 1 bedroom is increased to 29 points and studio is increased to 28 points. It now takes 57 points to book the studio and 1 bedroom separately, but the resort only sold 30 points. This leaves 27 points created out of thin air that only DVC has access to. Plus neither of our original owners have enough points to book either the studio or the 1 bedroom.


So the lock-off premium is a big deal because it doesn't count towards the resort totals allowing DVC to make it impossible for owners to fully book their own resort and giving DVC access to free points at sold out resorts.


And the reason I believe this was done on purpose is that there is no way in a million years that 1 bedrooms should have increased in price anywhere. Every single owner knows those are the last to book up. They should have gone down in price.

 

[_auroraborealis_]

that there is no way in a million years that 1 bedrooms should have increased in price anywhere

With an understanding that this was point-in-time, there are a fair number of 1BRs that go before 7 months open, and by "go" I mean that at the very least on your 7 month date there are holes are a week booking and you're waitlisting at least one day. And I'll ignore a few unicorn categories, like AKV Value/Club: https://www.disboards.com/threads/p...-studios-1-bedrooms-june-2018-update.3689931/

• Jambo 1BR Standard, Savannah (Fall)
• Kidani 1BR Standard, Savannah (Fall)
• BCV 1BR (Fall)
• BLT 1BR Standard, LV, TPV (Fall)
• BWV 1BR Standard, Pool, BW (Fall)
• OKW 1BR (later fall, post-Jersey Week)
• VGF 1BR LV, Standard (fall again, see the pattern yet?)
• BWV 1BR (Fall)

If you look at those, which isn't a full population dataset like Disney has, what it suggests to me is that in Adventure and Choice seasons, along with those special slivers of Magic & Premier we call "Thanksgiving" and "Christmas," the demand for studios books up many within home resort, and home resort bookings then upgrade to the 1BR during those same dates. Possibly a shorter stay, possibly bank and borrow. But even though there is absolutely a higher expense to the booking, if a family cannot get the studio, they know the 7 month opportunity elsewhere is stinky too, and just deal with it via a 1BR.

So I well believe that the studio pressure is creating upward pressure. Not sure the impact of 2BR dedicated in the mix, but 1BRs absolutely get taken in home resort in fall. And not just where we know there's a supply/demand issue, like VGF and BCV, but also at OKW and Kidani.

 

[Madame]

With an understanding that this was point-in-time, there are a fair number of 1BRs that go before 7 months open, and by "go" I mean that at the very least on your 7 month date there are holes are a week booking and you're waitlisting at least one day. And I'll ignore a few unicorn categories, like AKV Value/Club: https://www.disboards.com/threads/p...-studios-1-bedrooms-june-2018-update.3689931/

• Jambo 1BR Standard, Savannah (Fall)
• Kidani 1BR Standard, Savannah (Fall)
• BCV 1BR (Fall)
• BLT 1BR Standard, LV, TPV (Fall)
• BWV 1BR Standard, Pool, BW (Fall)
• OKW 1BR (later fall, post-Jersey Week)
• VGF 1BR LV, Standard (fall again, see the pattern yet?)
• BWV 1BR (Fall)

If you look at those, which isn't a full population dataset like Disney has, what it suggests to me is that in Adventure and Choice seasons, along with those special slivers of Magic & Premier we call "Thanksgiving" and "Christmas," the demand for studios books up many within home resort, and home resort bookings then upgrade to the 1BR during those same dates. Possibly a shorter stay, possibly bank and borrow. But even though there is absolutely a higher expense to the booking, if a family cannot get the studio, they know the 7 month opportunity elsewhere is stinky too, and just deal with it via a 1BR.

So I well believe that the studio pressure is creating upward pressure. Not sure the impact of 2BR dedicated in the mix, but 1BRs absolutely get taken in home resort in fall. And not just where we know there's a supply/demand issue, like VGF and BCV, but also at OKW and Kidani.

This does not explain why they increased 1bd at SSR and elsewhere across many seasons. Also, if they were so concerned, why not just change the season that fall is assigned to?

 

[we"reofftoneverland]

A lock-off room counts as a 2 bedroom for determining total points. The point costs of the studio and 1 bedroom in a lock off have no effect on a resorts total points. By increasing the point cost of those lock-off studios and 1 bedrooms, DVC can created new points that only they have access to.


Here is a simple example. A resort has 1 room only, a 2 bedroom lock-off. The 2 bedroom costs 30 points, say DVC sold 20 points to one person and 10 points to another person. The resort is now sold out and has a point total of 30 points. Lets pretend the studio originally cost 10 points (want to keep that original cost low to attract buyers) and 20 points for the 1 bedroom. So one person can book the studio and the other the 1 bedroom. Rooms are fully booked up by owners.


Now lets have DVC change the point cost and we will use an extreme example to make the point. 2 bedroom stays at 30 points, so no change to the total points at the resort. 1 bedroom is increased to 29 points and studio is increased to 28 points. It now takes 57 points to book the studio and 1 bedroom separately, but the resort only sold 30 points. This leaves 27 points created out of thin air that only DVC has access to. Plus neither of our original owners have enough points to book either the studio or the 1 bedroom.


So the lock-off premium is a big deal because it doesn't count towards the resort totals allowing DVC to make it impossible for owners to fully book their own resort and giving DVC access to free points at sold out resorts.


And the reason I believe this was done on purpose is that there is no way in a million years that 1 bedrooms should have increased in price anywhere. Every single owner knows those are the last to book up. They should have gone down in price.

Thanks to everyone for the clarification.

I am floored. This is what I thought people were saying in other threads, but it did not make sense to me because it seemed unbelievable. Basically Disney can raise studio and 1 bedroom point costs way beyond the original points sold in perpetuity? This is so different from what their salespeople told us. They specifically tell potential customers that purchasing dvc locks in costs and that Disney may adjust points but never add new points to the system.

I am not an attorney but almost everyone in my family is. I would think that this would not stand up in court in the way that many prenups do not stand up in court. That this "loophole" violates the spirit of the agreement and contradicts other statements within the contract.

I am really shocked by this.

 

[_auroraborealis_]

This does not explain why they increased 1bd at SSR and elsewhere across many seasons. Also, if they were so concerned, why not just change the season that fall is assigned to?

They really need to do a full season shift, but if you think people are outraged at this, a season change? Holy frijoles.

 

[Madame]

They really need to do a full season shift, but if you think people are outraged at this, a season change? Holy frijoles.

Maybe 2021...

 

[_auroraborealis_]

Maybe 2021...

Hide it in 50th Anniversary excitement?

 

[Madame]

Hide it in 50th Anniversary excitement?

Oh yes. & right before Christmas break again while we’re all fat with food and sedated...

 

[_auroraborealis_]

Oh yes. & right before Christmas break again while we’re all fat with food and sedated...

DYK: Cheese is addictive? I read it on the internet.

They will send everyone special Mickey Cheese then shift seasons.

 

[hakepb]

This does not explain why they increased 1bd at SSR and elsewhere across many seasons. Also, if they were so concerned, why not just change the season that fall is assigned to?

It’s not scientific, but the current DVCMember search for availability in the next 60 days is mostly 2BR and bigger (THV, GV, Bungalow) units, with a few SSR and HHI 1BR’s

 

[Madame]

It’s not scientific, but the current DVCMember search for availability in the next 60 days is mostly 2BR and bigger (THV, GV, Bungalow) units, with a few SSR and HHI 1BR’s

That could very well be. In general the larger resorts with only lockoffs for 1 bds / studios the 1 bds are left over from studio demand.

I’m sure there is some variation, but 1 bds (most of which only sleep 4 naturally) are not an efficient use of points. Now even less so.

 

[Madame]

It’s not scientific, but the current DVCMember search for availability in the next 60 days is mostly 2BR and bigger (THV, GV, Bungalow) units, with a few SSR and HHI 1BR’s

I just had a thought too. When we look at those charts we don’t know how many are actually left in each category which also makes it difficult to tell. I wish there was a way to not just see availability easily, but how many rooms in each category are available. That would be helpful to know for sure!

 

[SpaceMountain77]

So the lock-off premium is a big deal because it doesn't count towards the resort totals allowing DVC to make it impossible for owners to fully book their own resort and giving DVC access to free points at sold out resorts.

How can the additional points be used by Disney Vacation Development? I am assuming that DVD cannot sell additional contracts with the surplus, but could sell them as one-time-use points. Is this an option?

 

[_auroraborealis_]

How can the additional points be used by Disney Vacation Development? I am assuming that DVD cannot sell additional contracts with the surplus, but could sell them as one-time-use points. Is this an option?

No.

Basically, since at max utilization, all declared points will be inadequate to book all declared units, some units will become breakage. Breakage can be sold as cash rooms.

 

[SpaceMountain77]

No.

Basically, since at max utilization, all declared points will be inadequate to book all declared units, some units will become breakage. Breakage can be sold as cash rooms.

Thank you for the quick response. So, the potential advantage is with additional inventory for cash reservations.

 

[LBHouse]

One thing to keep in mind, and no one is talking about it. If a member books a studio from a lock off unit they just created an”orphan” one bedroom. So it’s logical that studios book first and create an enormous number of “orphan” one bedrooms and reduce the availability of 2br. So it makes sense to charge a premium because these “orphan” rooms need to be sold or rented as well.

 

[_auroraborealis_]

I did pull it elsewhere, and there's not 2BR data to back it up, but 1BRs have been tending to book before 7 months during frenzy at exactly the places you suspect they would - Jambo, BLT, BWV, BCV and VGF. Slightly less tendency at OKW and BRV. I'd expect similar tendency at CCV over time, given that getting a studio right now for anything in October or November 2019 is already waitlist-o-rama (although the 1BRs remain open right now).

Of course, that's a fall frenzy tendency, and your average spring break trip, a 1BR will be available at 7 months, although not always in the lowest points categories.