Points pricing for rentals

[ToyStory Fan]

Not to start any more trouble than there already has been on this subject, but I was thinking. If as a DVC member you are able to get a 25% discount vs. rack rate for the same DVC resort rooms you would receive using points. One can make an assumption (that's the big leap here) that Disney in an attempt to keep the DVC member "whole" is saying that the true value of the points is the rack rate less 25%. If that is the case and I'm sure I'll see more arguments against than for, but the perceived point value is really closer to $13 and not $10.

I know this has been discussed, but I don't recall this point being made.

Personally, I don't follow the $10 per point rule if and when I decide to rent my points out. I offer up a discount vs rack rate and usually tell people you can absolutely find a better rate elsewhere, but I am the one with all of the risk...i.e initial outlay of $$, annual dues, giving up my vacation points and ultimately cancellation points loss. Do any of the frequent members who rent out their points consider that as part of rental agreements? i.e. cancellation in time to get your points back, but past a banking window.

I'm not trying to start a debate about renting I'm honestly just curious how much thought people have put into or not put into the grander scheme of renting out points. Thanks for your time.

 

[tjkraz]

Originally posted by ToyStory Fan
I am the one with all of the risk...i.e initial outlay of $$, annual dues, giving up my vacation points and ultimately cancellation points loss.

The two individuals from which I rented both asked for a down-payment before making the reservation and the balance of the rental fee due after the reservation had been made. So there was really very little risk on their part. They had the money in hand long before the points were ever in jeopardy.

My assumption would be that they were well within their banking window, such that if I didn't come through with the final payment, they could easily cancel the reservation and re-sell without jeopardizing the points.

 

[ToyStory Fan]

Originally posted by tjkraz
The two individuals from which I rented both asked for a down-payment before making the reservation and the balance of the rental fee due after the reservation had been made. So there was really very little risk on their part. They had the money in hand long before the points were ever in jeopardy.

My assumption would be that they were well within their banking window, such that if I didn't come through with the final payment, they could easily cancel the reservation and re-sell without jeopardizing the points.

True, but I think you would find - if it came down to it a judge in small claims court would want you to prove your loss or you will have to refund the money. Also if it was done via the DIS, would you want to take the chance that someone who has a very legitiamte reason for cancelling (i.e. death in the family) and you get painted as the "bad guy/gal" for not refunding. I know these are extreme examples, which is why I would probably never rent to a stranger (no offense fellow DIS'ers, but you know what I mean)

 

[jaysue]

Interesting view on determining rental values and where people would be in the "comfort zone" of renting their points or renting points

As a former renter, I was taking a risk that the person I rented from would cancel the reservations out from under me and I would be looking at a court fight for a small amount of money

Personally, I think the lessee is taking more risk than the lessor since the lessor holds all the cards in these deals

thanks
jaysue

 

[tjkraz]

Originally posted by ToyStory Fan
I would probably never rent to a stranger (no offense fellow DIS'ers, but you know what I mean)

I would never rent to a stranger simply because I'm not giving up my points.

Seriously though, I don't mean to trivialize your concerns, but I think jaysue has a very good point as well. Having been on the other side of the equation, there was a great deal of concern on my part right up to the point when I had those keys in my hands. Forget the issue of trying to get your money back if the deal goes south, my concern was "what happens if I get to the desk and they have no reservations for me???" The prospect of paying rack rates for a DVC room, or spending the first few hours of your trip scouting out a cheaper alternative are not very appealing options.

But, I felt that I did my homework, had a good dialog with the renters, and was as comfortable as I could be that everything would work out.

All things considered, having bought into DVC I'm glad I won't have to go through that again.

 

[Jimbo]

I'm not a frequent renter-outer, but I did do it recently. I split my points up across 5 renters, and in every case I offered to use a contract. But only one of them went the contract route.

The rest paid me upfront, and I sent them the confirmation after I got the money. Some of them were a little anxious about the whole thing, and rightfully so. Those are still my points, and I would be allowed to cancel any time before their trips. I've got the money so I'm not anxious at all.

If someone did need to cancel because of a death in the family, I'd probably refund their money. If it was a week before the trip, though, I'd have a dilemma. If I would lose the points I'd probably refund at least some of the money, but it would depend on the particulars.

That's one of the reasons it's actually better to rent to a stranger, IMHO. You can make a decision about something like a refund based on the facts, not because you'll have to face your renter at family reunions, block parties, etc.

 

[docbrown]

"True, but I think you would find - if it came down to it a judge in small claims court would want you to prove your loss or you will have to refund the money. Also if it was done via the DIS, would you want to take the chance that someone who has a very legitiamte reason for cancelling (i.e. death in the family) and you get painted as the "bad guy/gal" for not refunding. I know these are extreme examples, which is why I would probably never rent to a stranger (no offense fellow DIS'ers, but you know what I mean)"

You could agree on giving him the option of postdating his reservation in the 60 days of the holding account, which would give the renter a chance of using them
( maybe including the availabily to change the name on the reservation, for let's say a friend of him).

 

[HumphreyBear]

in my opinion your points are worth what someone will pay for them, basically. The Mickey Monitor has a big add for old key west rooms for $159 a night, for what its worth - personally, I don't think that matters much. Some people have a philosophy that something is worth a certain amount, I always figure something is worth what somebody is willing to pay for it. I talked to a car salesman about that for a good while one time It is like a gallon of milk. He said that if a store paid 2 dollars for the gallon of milk, they would have to sell the gallon of milk for more than that. I said that if nobody would pay for it, the milk wasn't worth more than two dollars - and wait a couple of weeks and it will be worth even less. It all depends on what your point of view is for how you look at it. But to me, that is how supply and demand works. Nobody cares what you have invested in something, it is worth what people are willing to pay for it. If someone will give you 13 for them, they are worth 13.

 

[CarolMN]

Originally posted by ToyStory Fan
........ If as a DVC member you are able to get a 25% discount vs. rack rate for the same DVC resort rooms you would receive using points. One can make an assumption (that's the big leap here) that Disney in an attempt to keep the DVC member "whole" is saying that the true value of the points is the rack rate less 25%. If that is the case and I'm sure I'll see more arguments against than for, but the perceived point value is really closer to $13 and not $10..........

Just wanted to point out that IMHO, your assumption is faulty.

No member is ever guaranteed a cash discount. Member discounts are only available if DVC determines that it is unlikely that all of the rooms will be reserved for points. This happens much less frequently than you might believe.

DVC discounts its occasional "excess supply" because "some $$ are better than no $$." (And even with that philosophy, DVC either lets the room remain vacant if no member wants it for the discount or it lets CRO have a shot at the inventory if it's less than 60 days until the date). A hotel room night has zero value after the date passes.

To me, it is analogous to receiving a discounted concert ticket if you are willing to stand in line at the last minute and risk not getting in at all. Measuring the value of the concert ticket by the "rush" price would be quite misleading!

Anyway - I don't think you can use the member discounted rate to set the value of a rental point. It really does come down to supply and demand. There are lots of reasons why the demand is what it is and the supply is what it is. Most have already been mentioned by other posters.

 

[Dean]

Unless it's someone who knows you, most renters are going to want a pretty big discount to take the risk of a private rental. Somewhere in the 60-70% of rack rates overall seems about right.

If someone rents, there are other potential risks besides just having to bank later or resell, this is a big misconception that many have both members and renters alike. If they are past the banking window, using banked or borrowed points, or late in the use year; the points could be at great risk. You also mised out on the potential to rent them to someone else. The times I've rented, I've made it very clear that the transaction was final and non refundable. Under normal circumstances, I ask for 25% when they see the confirmation in their name and the rest at 90 days out.

 

[ToyStory Fan]

Originally posted by CarolMN
Just wanted to point out that IMHO, your assumption is faulty.

No member is ever guaranteed a cash discount. Member discounts are only available if DVC determines that it is unlikely that all of the rooms will be reserved for points. This happens much less frequently than you might believe.

DVC discounts its occasional "excess supply" because "some $$ are better than no $$." (And even with that philosophy, DVC either lets the room remain vacant if no member wants it for the discount or it lets CRO have a shot at the inventory if it's less than 60 days until the date). A hotel room night has zero value after the date passes.

To me, it is analogous to receiving a discounted concert ticket if you are willing to stand in line at the last minute and risk not getting in at all. Measuring the value of the concert ticket by the "rush" price would be quite misleading!

Anyway - I don't think you can use the member discounted rate to set the value of a rental point. It really does come down to supply and demand. There are lots of reasons why the demand is what it is and the supply is what it is. Most have already been mentioned by other posters.

OHHH that changes things....that was not my understanding from my conversation with MS. They made it seem like it was NO PROBLEM...i.e. no stipulations.