Purchasing a Guaranteed Week

[pangyal]

I don't expect it would have caused problems either, but my main point (however murkily made) was that GW are so rare that even the experienced brokers don't understand the whole process completely.

So if VGF is sold out, and guaranteed weeks are only at 4% right now, I guess that means they will look at it as a failed idea going forward, or maybe just a failed marketing situation?

 

[disneynutz]

I don't expect it would have caused problems either, but my main point (however murkily made) was that GW are so rare that even the experienced brokers don't understand the whole process completely.

So if VGF is sold out, and guaranteed weeks are only at 4% right now, I guess that means they will look at it as a failed idea going forward, or maybe just a failed marketing situation?

GW was offered at Aulani at first because Disney felt that the Asian buyers are used to fixed weeks and it would increase sales. After the Aulani offering Disney decided to continue the option for all new resorts to increase the possibility of attracting buyers who only want a GW/FW.

Bill

 

[pangyal]

GW was offered at Aulani at first because Disney felt that the Asian buyers are used to fixed weeks and it would increase sales. After the Aulani offering Disney decided to continue the option for all new resorts to increase the possibility of attracting buyers who only want a GW/FW.

Bill

That's an interesting tidbit, thanks!

I for one am incredibly excited about not ever having to stress about booking at VGF again. I super duper wish they would somehow work this option into any possible extensions for the 2042 resorts if those come into being...but I'm sure that just wishful thinking and I'm not even sure they could legally do it.

 

[DougEMG]

Here's what confuses me about the GW. Someone buys a GW which costs 110 points, but is normally worth just 100 points. They then don't use their GW but instead use their 110 points to trade out to another resort, but they've only freed up 100 points in their own resort. Isn't Disney selling more points than are actually available.

The only what this makes sense is that if you opt out of your fixed week you only get 100 points, not the 110. So what am I missing here?

 

[ziravan]

Here's what confuses me about the GW. Someone buys a GW which costs 110 points, but is normally worth just 100 points. They then don't use their GW but instead use their 110 points to trade out to another resort, but they've only freed up 100 points in their own resort. Isn't Disney selling more points than are actually available.

The only what this makes sense is that if you opt out of your fixed week you only get 100 points, not the 110. So what am I missing here?

I think it's the opposite. You free up 110 when you opt out because that 110 pt contract is worth 110 pts. But, when you use your 110 inside the fixed week, DVC gets a 10 pt breakage because that's only costing DVC 100 points to deliver.

 

[wdrl]

Here's what confuses me about the GW. Someone buys a GW which costs 110 points, but is normally worth just 100 points. They then don't use their GW but instead use their 110 points to trade out to another resort, but they've only freed up 100 points in their own resort. Isn't Disney selling more points than are actually available.

The only what this makes sense is that if you opt out of your fixed week you only get 100 points, not the 110. So what am I missing here?

No, DVD is not overselling a resort because of the Guaranteed Week option.

Using your example, someone who buys a Guaranteed Week deed gets a deed entitling them to 110 points. If the GW owner chooses to use their week, then 100 of their 110 points are applied to their week-long stay. The remaining 10 points are absorbed by the DVC system, which means that other DVC members and, ultimately, Disney will have 10 points worth of accommodations to use somewhere in the DVC system.

When an owner opts out of their Guaranteed Week, he or she gets their full allotment of points; in your example, the GW owner gets 110 points that can be used in the DVC system. There are no excess points in this situation.

At VGF, 277 Guaranteed Week deeds containing 99,149 points have been sold so far. Those 99,149 points make up 3.93% of VGF's 2,520,800 total points. If every GW owner opts out of their guaranteed week and turns around and books that same week using their points, the GW owners would still have about 9,915 points (roughly 10%) to use somewhere at VGF or elsewhere in the system. If the GW owners all decide to use their guaranteed week, they won't have any extra points to use. However, VGF will have about 9,915 points worth of accommodations still available for other DVC members to book.

 

[BWV Dreamin]

It will be interesting to see if GW's are offered on all future DVC sales. If extensions were offered ( say at VWL) would the option to convert to a fixed week also be available? If this option came to fruition that may be the only reason I would extend my VWL contracts.

 

[wdrl]

It will be interesting to see if GW's are offered on all future DVC sales. If extensions were offered ( say at VWL) would the option to convert to a fixed week also be available? If this option came to fruition that may be the only reason I would extend my VWL contracts.

Given how DVD has structured the Guaranteed Week deeds at Aulani, VGF, and PVB, it would be next to impossible to convert existing deeds to GW deeds at a "sold out" resort.

First, the total number of points at a resort has to remain constant. Thus, if DVD continues charging a 10% premium for the GW option, then an existing owner would have to have sufficient points to cover the GW cost. For example, a VWL one-bedroom villa during the Adventure costs 204 points, so a GW week for that accommodation type would cost 224 or 225 points. If an owner doesn't own that many points, then they won't be able to get a GW deed.

Second, unless an existing owner has the exact number of points in a single deed required to cover the cost of the GW deed, then DVD would probably require that the existing deed(s) be taken back and reissued as a GW deed and, if necessary, a traditional point deed to reflect any excess points. Using the prior example, a current VWL owner who has two 150-point deeds would have to turn them in and have DVD reissue one GW week deed for 224 points and one traditional point deed for 76 points. The administrative costs associated would probably make these deed conversions relatively expensive.

 

[ziravan]

Given how DVD has structured the Guaranteed Week deeds at Aulani, VGF, and PVB, it would be next to impossible to convert existing deeds to GW deeds at a "sold out" resort.

First, the total number of points at a resort has to remain constant. Thus, if DVD continues charging a 10% premium for the GW option, then an existing owner would have to have sufficient points to cover the GW cost. For example, a VWL one-bedroom villa during the Adventure costs 204 points, so a GW week for that accommodation type would cost 224 or 225 points. If an owner doesn't own that many points, then they won't be able to get a GW deed.

Second, unless an existing owner has the exact number of points in a single deed required to cover the cost of the GW deed, then DVD would probably require that the existing deed(s) be taken back and reissued as a GW deed and, if necessary, a traditional point deed to reflect any excess points. Using the prior example, a current VWL owner who has two 150-point deeds would have to turn them in and have DVD reissue one GW week deed for 224 points and one traditional point deed for 76 points. The administrative costs associated would probably make these deed conversions relatively expensive.

If the 11/7 month booking windows for the whole resort hold for both existing and new associations, then this would be technically doable in a much easier way: instead of extending, trade in old points for new points with GW.

If the booking windows were the same, this would be the only case where it was necessary to do so, so it wouldn't cause a slippery slope.

The biggest issues would be:

1. cost assuming extensions would be at a significant discount for current owners. If a current contract could be extended for $50/point, and new points are $175/point, then DVC would have to give a trade in value of $125/point to make this so. It probably wouldn't be such a large number of transactions for this to bother DVC, but there certainly wouldn't be any profit on the table to make it a likely outcome.

2. MFs. Even IF both associations share booking windows, and that's a big if, they almost certainly cannot legally share the same MFs. The new resort will likely have larger fees (cabins). So, agreeing to swap into new points for a GW will mean the owner is not only agreeing to a 10% point premium, but also agreeing to higher MFs. I don't think many owners would want that, that would make for far fewer willing swaps, and that again makes it less likely that DVC would bend over backwards to cater such a small owner base.

 

[Disn3yVision]

Do you have to buy the exact amount of points to purchase a fixed week? Or can you buy more? For instance, I bought my 150 points at Poly. Is there any incentive not to make that a fixed week contract for standard view in the cheapest week category (130 Points)? Other than if I want to travel that exact week I will be paying more? If I don't travel that week the other weeks cost the same amount of points as they always would, is that correct? Seems like there would be absolutely no downside to purchasing a 130 point fixed week if you were going to buy a 150 point contract anyway... Am I wrong in this thinking?

 

[disneynutz]

Do you have to buy the exact amount of points to purchase a fixed week? Or can you buy more? For instance, I bought my 150 points at Poly. Is there any incentive not to make that a fixed week contract for standard view in the cheapest week category (130 Points)? Other than if I want to travel that exact week I will be paying more? If I don't travel that week the other weeks cost the same amount of points as they always would, is that correct? Seems like there would be absolutely no downside to purchasing a 130 point fixed week if you were going to buy a 150 point contract anyway... Am I wrong in this thinking?

The fixed weeks are a set amount of points. You can always buy a second contract if you need more points.

Bill

 

[miTnosnhoJ]

The fixed weeks tend to be more than just buying enough points from the points chart. You must buy 7 days, starting Sunday. And you pay a premium. The good news is that by paying this premium, you are always good for this week, even if points are reallocated, and even if some years, this week is in a more expensive season. Also, the 7 day reservation is automatically made. But you cannot go back later and cancel 2 of the days (for example). If you don't want all seven days, the only way is to cancel the whole week, and then book the days you want using normal home resort privileges.

While the fixed weeks cost more, if you think you may want to travel in a high demand season (like Food&Wine, Christmas, etc.) then I would consider getting the fixed week. But you must have the flexibility to come for 7 days starting Sunday.

There is no downside to owning a fixed week, because you can always cancel the fixed week and use the points for home resort booking. On the other hand, if you were to sell the points on the resale market, you may not be able to recoup the premium you paid for a couple of reasons.

1) The person who is buying your contract may just want the points, and they will not assign any value to having the fixed week. When Disney sells, they can understand your needs and target a fixed week that you value. But in resale, there are a limited pool of buyers who will care about that particular week - unless it is in a very high demand period.

2) Some buyers and brokers are confused by fixed weeks and may avoid them.

I just bought a resale fixed week at VGF, but I will probably never use it as a 7 day standard view studio. I will, instead, use the points for 2BR reservations, along with some points I already had. But I got a great deal.

 

[Disn3yVision]

The fixed weeks tend to be more than just buying enough points from the points chart. You must buy 7 days, starting Sunday. And you pay a premium.

But if you were planning on buying 130 points anyway, and never plan on actually staying during the fixed week you purchase, are you still paying a premium? I always thought the premium one pays is that the room cost about 10% more points to book FOR THAT WEEK than it usually would. If you didn't stay that week though you wouldn't be paying that premium, right? Or does DVC actually charge you more than $169 a point to purchase that fixed week?

 

[Disn3yVision]

The fixed weeks are a set amount of points. You can always buy a second contract if you need more points.

Bill

Thats what I thought. Otherwise anybody buying a contract of 130 points or more would just make it a fixed week for the heck of it, why not? As long as you don't stay that week it wouldn't cost you anything extra. This way if you want to buy, say 150 points, you would actually have to buy two contracts, get the same use year, pay separate closing costs, and add on 25 points since you can't add on 20, etc. Not unreasonable but does make it possibly not worth the effort for the average buyer.

 

[disneynutz]

We have a December fixed week at VGF, if I remember correctly we had to buy 10% more points than what the week would require. We use the fixed as a fall back and usually cancel the reservation and book our normal dates arriving on Tuesday.

Bill

 

[BWV Dreamin]

If the 11/7 month booking windows for the whole resort hold for both existing and new associations, then this would be technically doable in a much easier way: instead of extending, trade in old points for new points with GW.

If the booking windows were the same, this would be the only case where it was necessary to do so, so it wouldn't cause a slippery slope.

The biggest issues would be:

1. cost assuming extensions would be at a significant discount for current owners. If a current contract could be extended for $50/point, and new points are $175/point, then DVC would have to give a trade in value of $125/point to make this so. It probably wouldn't be such a large number of transactions for this to bother DVC, but there certainly wouldn't be any profit on the table to make it a likely outcome.

2. MFs. Even IF both associations share booking windows, and that's a big if, they almost certainly cannot legally share the same MFs. The new resort will likely have larger fees (cabins). So, agreeing to swap into new points for a GW will mean the owner is not only agreeing to a 10% point premium, but also agreeing to higher MFs. I don't think many owners would want that, that would make for far fewer willing swaps, and that again makes it less likely that DVC would bend over backwards to cater such a small owner base.

IMO, referencing VWL2, I don't think a guaranteed week is necessary. The only DVC resort I feel a guaranteed week is necessary is at VGF for studios.

 

[ziravan]

IMO, referencing VWL2, I don't think a guaranteed week is necessary. The only DVC resort I feel a guaranteed week is necessary is at VGF for studios.

Do you know why there are so few VGF guaranteed weeks (4% when 35% was allowed)?

Because it wasn't until VGF sold out that it became evident that you'd need a fixed week or a long walk at the 11 month window to consistently get studios in Dec.

Poly and VWL2 are 50 year resorts.

Who knows when and how a fixed week will be necessary. If it's needed, great to have.

If not, no big loss.

But. Consider this. Poly is currently 30% sold and 60% avail, and Dec booked out at 9 months. That's with twice as much availability as owners.

Certainly, the last two years have proven that Poly rentals in the 11 month window are almost exclusively going to early Dec.

And Poly is oversold on studios.

It would not surprise me to see Poly studios being difficult in early Dec at 11 months.

 

[Disn3yVision]

Do you know why there are so few VGF guaranteed weeks (4% when 35% was allowed)?

Because it wasn't until VGF sold out that it became evident that you'd need a fixed week or a long walk at the 11 month window to consistently get studios in Dec.

Poly and VWL2 are 50 year resorts.

Who knows when and how a fixed week will be necessary. If it's needed, great to have.

If not, no big loss.

But. Consider this. Poly is currently 30% sold and 60% avail, and Dec booked out at 9 months. That's with twice as much availability as owners.

Certainly, the last two years have proven that Poly rentals in the 11 month window are almost exclusively going to early Dec.

And Poly is oversold on studios.

It would not surprise me to see Poly studios being difficult in early Dec at 11 months.

This is very true however I think its significant to note that only roughly 1/3 of VGF is studios (47), with an equal number of two bedrooms and 1 bedrooms (47 each). That means VGF is also oversold on studios and it could be argued that it is to an even higher degree. Like Poly, many people bought only enough VGF points for a studio once a year in adventure season (150-160 points). This means few people planned on booking 2 bedrooms or even one bedrooms (hence their higher availability). Sure more people book 1-2 bedrooms at VGF than the bungalows at PVB using their points but there are way less bungalows to studios so I think evens out, or even leans in the Poly's favor. From my perspective, I can definitely see it being hard to book a Lake View at PVB in early December 11 months out but I think a standard view should be doable consistently without a long walk. Ultimately though, I see no downside in buying a fixed week if the point number of the contract and additional cost works for you.

 

[STA]

To add to the VGF GW info, while the POS indicates a maximum of 35%, it was explained to me that internally they capped at 25% of rooms. While only 4% of points ended up being on GW, it should be noted that all the studios for December Adventure season (4 or so of each view type) were already taken as GW. So even if VGF were on active sale, people would not be able to get the December Adventure season studios that are the seemingly most coveted reservations to make for that resort. The sheer number of studios at PVB allow for so many more GW contracts for the coveted DVC high demand, low point, season though perhaps the high buy-in price and lack of active salesmanship from the Guides is what is holding them back (not to mention the annoying policy to exclude GW from any of the promotional pricing they've been touting as of late).

And while GWs don't appear to be selling like hot cakes at PVB, I am a huge believer that those who have one (or more ) will be very pleased after all is said and done.

 

[disneynutz]

The reason that fixed weeks don't sell is because the public and the guides don't understand them. Also the subject of fixed weeks isn't discussed during the sales meeting.

Disney added the fixed weeks to sell Aulani to the Asian market who is accustomed to fixed weeks. They decided to add the option to all new projects, just in case.

Bill