Point Charts - Call with Disney Management Tomorrow (12/16)

[sethschroeder]

Updated with meeting review for Post 3

 

[Sandisw]

This responds to a number of posts above and sets out why I believe it is improper for DVC to shift points from one room category to another. I have made these points before. Most of this refers to BWV documents but other resort POS dcouments have the same or similar provisions, including Riviera.

Many assume that because DVC has made some changes in the last 8 years to raise points for a room category while lowering for a different room category, e.g. the treehouses, therefore DVC must have a right to do it. That is an incorrect assumption. The reason DVC has gotten away with such changes is not because they were necessarily legally proper. The fact is no one challenged them, and thus no decision was made as to whether they were legally proper changes. Noteworthy is that when DVC tried to raise studios and 1BRs year-round, while lowering other rooms in the initially issued 2020 point charts, members mounted a challenge, and DVC caved in and withdrew those point charts.

The modern DVD/DVC, with its attempt to change the 2020 point charts, its repeated actions to take away the rights and privileges of resale purchasers, and its sales program that has effectively resulted in the oversell of studios, has shown itself to be anti-member. It would be a mistake for members to support DVC’s belief that it can move points from one room size to another, because what the modern DVC would likely do is make changes like those set out in the initial 2020 points charts. If members assert DVC should focus on differences in room size demand rather than seasonal demand for making changes, what you are likely to get from the modern DVC is a lowering of points for bungalows at Poly, cabins and GVs at CCV, GV’s and 2BRs at SSR, GV’s and 2BRs at AKV, and 2BRs at BRV and VGF, which will be offset by significant increases in points needed for studios, i.e., yes, the modern DVC will likely make the 1BRs more in line with the studios, but not by lowering the points needed for 1BRs but instead by raising the points needed for studios.

Many assume that DVC can do whatever it wants unless there is a clear and unequivocal provision in the POS that prohibits it. That is not how legal cases usually work in such situations. “Big company” Disney drafted all the POS documents and, when purchasing, the “little guy” members had no ability to negotiate different language. In subsequent legal disputes depending on the meaning of terms in the POS, that would usually mean Disney wins if its alleged meaning of the POS terms is the only reasonable one, but if there is any ambiguity in the language, and the argument for applicable meaning made by the members is also reasonable, the members should win. Moreover, the applicable rules are even worse for DVC if the DVC entity authorized to do something on an issue is deemed by law to be a fiduciary when deciding it, which is applicable to DVCM, the management company authorized to make home resort point chart changes. In cases involving a fiduciary as the defendant, the burden of proving that the plaintiff-members position on the issues is wrong, and of accepting DVCM’s argument that its interpretation is the only reasonable one, would be shifted to DVCM, requiring it to essentially disprove the plaintiff’s case to win.

DVCM's power to change point charts is set out in the DVC Membership Agreement. Nowhere in that document is it stated that changes can be made based on room-size demand differences. That Agreement initially provides the general rule that total points required to reserve all rooms during all days of the use year must always be equal. The agreement then provides:

1. DVCM has the power to raise or lower the points needed for “any given Use Day in a Vacation Home” ( a term defined as a room such as a studio) due to “fluctuations in Use Day demand.” Note how it says nothing about a power to change points to correct fluctuations in room-size demand among different-sized Vacation Homes.

2. It then states that “any increase or decrease in the Home Resort Vacation Point reservation requirement for a given Use Day pursuant to DVCM’s right to make this Home Resort Vacation Point adjustment must be offset by a corresponding decrease or increase for another Use Day or Days.” (Emphais added.) That must be referring to the same Vacation Home (such as a studio) as the prior paragraph. If moving points from one room size to another was contemplated, that “another Use Day” phrase would not be in the document.

3.The agreement also provides total the total number of points applicable to a unit (usually a combination of rooms) cannot be changed due to such reallocations, which also shows that the total annual applicable to a particular sized room must remain the same, e.g., BWV has units that actually consist of only dedicated studios.

4. Then there are the maximum reallocation provisions, which state that a maximum reallocation of points could potentially occur, meaning every day of the year for a particular room size could cost the same points, but it provides a guaranteed number for reserving each given room size for a night if such occurred, e.g., in BWV 15 points for a standard view studio, 18 for a preferred view, etc. higher numbers for larger rooms. Moreover, to participate in an external exchange program, which requires a member to provide a week to get a week in return, the agreement provides weekly totals of points needed to be paid for every week of the year if there is a maximum reallocation, e.g., 210 points for a BWV standard view 1BR. Those total weekly points are stated to be 7 times the guaranteed daily number provided in the prior paragraph for a maximum reallocation. Thus, total points for the year of a given vacation home, such as a standard view 1BR, need to remain the same. Otherwise, all the maximum reallocation provisions would be incorrect, e.g., raise or lower total annual points applicable to a !BR would result in making that 210 point per week requirement for a BWV standard view 1BR upon a maximum reallocation, false, and one should not assume DVD intended to provide false information in the maximum reallocation provisions in the agreement.

Also of importance is Exhibit A to the Master Cotenancy Agreement, entitled Real Estate Interest and Point Formulation, which describes the method to be used by DVCM to determine total points for the year applicable to a Vacation Home, and , in particular, points out that a major factor for determining how many total points apply to a Vacation home for the year depends on its square footage, meaning total points for the year for any particular vacation home had to vary from those for a larger vacation home by a constant factor that is consistent with the different sizes of those rooms. Thus, it is another provision that indicates DVCM cannot be moving points from one-sized vacation home to another.

Added to the above are: (a) oral statements made at time of sale, particularly involving the earlier resorts, that point changes would occur only to meet changes in seasonal demand and if points were raised for one season they would be lowered by an equal amount for the same room in another season; (b) written representations provided at the time of sale, called a Product Understanding Checklist (or similar) which give DVD’s own summary of the major terms of the POS. Particularly during the sales of earlier resorts, such as BWV, that checklist clearly limited such point-shifting to doing those that address changes in “seasonal demand,” not room-size demand. A copy of one such document is attached.

The above points also reflect how DVC cannot raise the studio and 1BR premium. That clearly cannot be done when the resort also has dedicated studios and 1BRs, but even absent that, the provisions of the membership agreement, including on maximum reallocation, should prevent it.

Thank you so much. I appreciate the info regarding lock off premium too!

As I said, my rough calculations last night, using that max chart against the 2021 and 2022 charts, came out pretty much on target when averaging each rooms size and view against it.

Not sure if that is an accurate way, but seems to me that for RIV, things are balanced and points were not shifted from room sizes with all things being equal.

I am going to do BLT and SSR as well as those are my home resorts.

 

[KAT4DISNEY]

Notes from discussion:

(Sorry will not share who I talked with for their privacy)

• Studio vs 1BR Point
  • DVC did not purposely shift points between categories, it was a result of the changes that happened
  • They clearly heard feedback regarding the point shift between categories (they will generally try to avoid if possible)
  • They do believe they have the right to move points between categories
• Seasons
  • Specific this year they recognized the F&W/Fall Demand while Summer was less so in demand (not new knowledge)
  • They look at each room category differently when balancing (Studios during F&W while 1BR during summer may be separate peak seasons)
  • They did outline they have the right to change a day by 20% but try to keep it down to more like 5% or 10% as they do see a spike in member feedback when its a large change
  • They have both short and long term views of how they want to balance seasons (I did not push for more information)
  • Early December they said was "difficult" to balance based on when Thanksgiving/Christmas falls
• Demand
  • While it is secret exactly how they look at things they did share a couple things
  • DVC Demand is part of the balance
  • WDW as a whole is also part of the balance
  • Each resort is also review separately
  • If new land, ride, or election occur they understand demand will change based on such events
  • They made sure to call out they are not looking to change point requirements to help with the cash rental side of the business
• Base Year
  • There is a specific number of points and that is the number of points to book 100% of the rooms in the base year
  • Each resort has possibly a different base year, it was not a singular base year but they know what the base year is for x, y, z resorts
• Riviera
  • Way to early to get a good idea of demand
  • It will take a couple years for them to get a good idea on resort specific demand
  • They recognized that views have been added previously but there has been zero discussion about view changes
    • Provided feedback of Lake, Epcot/Skyliner/Fireworks, and Standard View
    • Asked that in the future they possibly check in with a survey to RIV owners regarding views
    • If large amount of requests occur on specific rooms with front desk those are noted and reviewed for view changes

A point of context to this is that I was happy to have the call and did not confront them on things but more so asked clarifying questions. One thing I didn't push harder on was the Studio vs 1BR shift in points at Riviera I plan on instead to continue to monitor the next couple years and see if it self corrects or not.

The answer to early December makes zero sense. They don't have to shift the points to dates surrounding the holidays and I have no idea what those 2 holidays really have to do with it at all. It is a very nice low point on the charts for marketing though to show a potential buyer they can still enjoy all the Christmas displays and events for a much lower point requirement than during the actual high point holidays themselves.

Essentially not much to the call that would be unexpected. They would never say they didn't have the right to do anything they have done even if it's probable they don't.

Hope you got the answers you were looking for.

 

[BWV Dreamin]

No Disney does not have Cart Blanche rights. That was their attitude a couple of points charts ago and the threat of lawsuits made them “ re-evaluate”. New people in place now that apparently didn’t learn from the past. A HUGE thank you to all questioning these changes.

 

[sethschroeder]

The answer to early December makes zero sense. They don't have to shift the points to dates surrounding the holidays and I have no idea what those 2 holidays really have to do with it at all. It is a very nice low point on the charts for marketing though to show a potential buyer they can still enjoy all the Christmas displays and events for a much lower point requirement than during the actual high point holidays themselves.

Essentially not much to the call that would be unexpected. They would never say they didn't have the right to do anything they have done even if it's probable they don't.

Hope you got the answers you were looking for.

I think the topic of early December mixed the DVC vs WDW demand. That's where I had asked how they look at demand and they outlined the point about its not just DVC demand but also WDW as a whole.

It would seem early December keeps a discount based on WDW as whole being slower. Fall gets a bump because of DVC demand being so high. I could be wrong but the way I interpreted the follow up question answers (my outline is a little out of order as I tried to group by category)

 

[sethschroeder]

No Disney does not have Cart Blanche rights. That was their attitude a couple of points charts ago and the threat of lawsuits made them “ re-evaluate”. New people in place now that apparently didn’t learn from the past. A HUGE thank you to all questioning these changes.

Yup I viewed my discussion more as questioning to get things answered directly by the team who actually does the work on the point charts.

 

[i<3riviera]

͏

 

[sethschroeder]

thanks, this helps! I still can't get it to match up exactly to the declared points for RVA; I very well may have the room view counts wrong ...

View attachment 544243

So if you missed what I was told during the meeting but the baseline year is an actual year that will occur during the life of the contract and is different for each resort possibly.

So you would need to run it 2019 until 2070 years to see if any perfectly align.

I am not exactly following what you are trying to figure out though.

 

[KAT4DISNEY]

I think the topic of early December mixed the DVC vs WDW demand. That's where I had asked how they look at demand and they outlined the point about its not just DVC demand but also WDW as a whole.

It would seem early December keeps a discount based on WDW as whole being slower. Fall gets a bump because of DVC demand being so high. I could be wrong but the way I interpreted the follow up question answers (my outline is a little out of order as I tried to group by category)

I've missed the part in the POS that they need to consider The Walt Disney Corporations parks and hotels when looking DVC point charts. <being sarcastic about that rational> They shouldn't be. Besides, like their statements of 1BR's being higher in demand than anyone here believes if a person has been going to WDW during early December it is no longer low demand. January following the Christmas breaks and marathon? Sure although really there aren't any slow times anymore, just some "slower" times. I'd have pressed on why they felt they needed to take park attendance into consideration at all. When DVC started early December was a very low park time and all they had to base initial charts on were what the hotels saw which corresponded a lot to park attendance. They are way past the point of basing on that.

 

[bookwormde]

First thanks for doing this.

The most stunning thing I see is an admission that they consider cash demand when balancing DVC.

From my perspective I think this may violate doing what is in the best interest of the members (by considering Disney's interest) and the overall statutory intent of the requirement to rebalance.

While I know it is not popular with many members, I think they leave themselves open for a formal complaint by not rebalancing for unit size with the only possible defense being if they have clear evidence that it would not be in the best interest of the majority of members

it would have been nice of they coughed up the base year for each resort

 

[sethschroeder]

The most stunning thing I see is an admission that they consider cash demand when balancing DVC.

To clarify they didn't specify they look at cash demand regarding being able to rent out a room. Instead it was referenced about WDW as a whole. Be that hotel rooms filled, total guests in park, or something else I can't say. They seemed to want to keep that piece somewhat vague.

From my perspective I think this may violate doing what is in the best interest of the members (by considering Disney's interest) and the overall statutory intent of the requirement to rebalance.

So its hard to say without them really going in depth based on what they said. You could also say that if no one from DVC wanted to travel over Christmas it still shouldn't be cheap because then people would just rent out the rooms and get the lower rates.

 

[bookwormde]

To clarify they don't look at cash demand regarding being able to rent out a room. Instead it was referenced about WDW as a whole. Be that hotel rooms filled, total guests in park, or something else I can't say. They seemed to want to keep that piece somewhat vague.

I am sure they did want to keep it vague, as I am pretty sure they know that they are on shaky ground on this one

 

[bookwormde]

Not that we are at that point but in case anyone gets there:

http://www.myfloridalicense.com/dbp...eComplaintForm-090914-HANDWRITTEN-REVISED.pdf

 

[BWV Dreamin]

Not that we are at that point but in case anyone gets there:

http://www.myfloridalicense.com/dbp...eComplaintForm-090914-HANDWRITTEN-REVISED.pdf

Awesome!! I am hoping there is more interest in these changes. The fact that there were any points chart changes at all ,during a pandemic, where the parks were and still are closed, is unbelievable. There is an agenda, and it should be made to be revealed.

 

[Sandisw]

First thanks for doing this.

The most stunning thing I see is an admission that they consider cash demand when balancing DVC.

From my perspective I think this may violate doing what is in the best interest of the members (by considering Disney's interest) and the overall statutory intent of the requirement to rebalance.

While I know it is not popular with many members, I think they leave themselves open for a formal complaint by not rebalancing for unit size with the only possible defense being if they have clear evidence that it would not be in the best interest of the majority of members

it would have been nice of they coughed up the base year for each resort

I didn’t interpret the comment regarding early December and WDW demand as in for their rooms, but rather the demand of owners who may not travel during that time if it is much higher.

So, balancing DVC owners wanting to visit year round vs. just specific. I personally think that makes sense...to consider both when members are actually booking and making sure there is year round interest for DVC members to want to go.

Sounds like some good info to clarify their positions and I don’t really see anything in the answers that red flags it for me, but I am also happy to see they recognize that they do pay attention...to a degree...to members who contact and ask questions.

 

[KAT4DISNEY]

I didn’t interpret the comment regarding early December and WDW demand as in for their rooms, but rather the demand of owners who may not travel during that time if it is much higher.

Because they asked all of us what we thought? Or they are indicating they know what members will do before they even do it so they don't have to bother doing it? They could never know what you interpret they are using as a basis for no change but I actually did not garner that as their reasoning for that time. "Difficult to balance based on when Thanksgiving and Christmas fall". We all can figure out for decades when those dates are and neither are going to be during Dec 1-14th or even Dec 1-21st. That specific response is a bit non-sensical without further clarification. I'd guess they misspoke on the reason or it's a choice they are making and so were being extremely vague because that choice doesn't align with the reasons that point shifts are being done for other times.

 

[drusba]

There may be a simple explanation for why Dec 1-14 does not have a seasonal change in 2022 from 2021. Based on the structure of the point charts, it may have been too difficult to find a way to move Dec 1-14 to any other season other than the one it was in.

Other than usual date changes due to floating Easter and Thanksgiving dates, the reallocation consisted of moving 66 days from Oct to Dec up one season, and moving 66 days from June 11-August 15 down one season. The decrease in points for the June to Aug 66 days was more than than the increase for the Oct to Dec 66 days, resulting in some increases spread out elsewhere. If DVC had also attempted a seasonal move with Dec 1-14, it would have been required to make other major changes elsewhere such as moving 15 days down a season from Feb 16 through April, which it likely believed should not have any significant changes.

 

[KAT4DISNEY]

There may be a simple explanation for why Dec 1-14 does not have a seasonal change in 2022 from 2021. Based on the structure of the point charts, it may have been too difficult to find a way to move Dec 1-14 to any other season other than the one it was in.

Other than usual date changes due to floating Easter and Thanksgiving dates, the reallocation consisted of moving 66 days from Oct to Dec up one season, and moving 66 days from June 11-August 15 down one season. The decrease in points for the June to Aug 66 days was more than than the increase for the Oct to Dec 66 days, resulting in some increases spread out elsewhere. If DVC had also attempted a seasonal move with Dec 1-14, it would have been required to make other major changes elsewhere such as moving 15 days down a season from Feb 16 through April, which it likely believed should not have any significant changes.

Is that looking only at BWV?

We go to WDW both in the Oct-NYE time and then another trip usually in April with sprinklings during other times. I know that booking in April (non-easter) is far easier than early December for all room types athough I know I'm not telling you anything you don't know from your availability tracking. Still I can almost always book with non-home resort points. I cannot say the same about December unless it happens to be picking up a cancellation. The seasons also seem to be up for change since DVC added two new ones so that wouldn't seem to restrict them from doing so again to fix an imbalance.

 

[sethschroeder]

I'd guess they misspoke on the reason

They very much were vague to the specific question regarding that early December date. They specifically called out that date as difficult (or hard to predict or something like that) and then listed off a couple reasons why. There likely was more to it but I could tell they did not want to get in to much detail.

The goal of the call was make sure I touched on the topics as a baseline of what they are thinking directly from the horses mouth and not spun through marketing like you would get at the annual meetings or in press releases/guides. What I will track is the Studio vs 1BR change at Rivera (which is why I wanted the call to start with) they say it was not intentional and if thats true I would suspect a correction in the opposite direction in the next year or two.

 

[BWV Dreamin]

Is that looking only at BWV?

We go to WDW both in the Oct-NYE time and then another trip usually in April with sprinklings during other times. I know that booking in April (non-easter) is far easier than early December for all room types athough I know I'm not telling you anything you don't know from your availability tracking. Still I can almost always book with non-home resort points. I cannot say the same about December unless it happens to be picking up a cancellation. The seasons also seem to be up for change since DVC added two new ones so that wouldn't seem to restrict them from doing so again to fix an imbalance.

Actually that may be their long term goal....to add more seasons.