Releasing points back to DVD for rental through CRO

[Tinker Bell]

I am interested in your thoughts about a feature where members could receive rental income on unused points that would be rented through CRO to cash paying customers. I am curious if this has ever been considered in the past and what the rationale (from DVD's perspective) for not offering it.

I believe this is fairly common with other time-shares. From my perspective, it would be nice to know that there would be a "no fuss" method of generating a return on DVC points in a year where I couldn't use them all (without having to rent them myself). It seems to me that the marginal cost to Disney would be low as they already have the entire infrastructure in place to handle cash reservations. Disney is dealing with thousands of people a day that are looking to rent rooms. As a result, they can naturally generate a much higher price on average than members working on their own.

Disney, of course, would keep most of this excess value for themselves but would also be providing a valuable service to members by putting a floor on the rental value of points. I believe in other time-share programs the "rental value" when returning points are returned for rental is around 1/2 the going full cash rate. I think this would work out to be in the $9/pt neighborhood. Members could still work on their own to get higher rates but it would remove the glut of points offered in the $8 to $10 range.

I may be missing something, but I think members and DVD would be better off with this option.

What do you think?

 

[Chuck S]

You are free to rent point to another party on your own, the only advantage to renting them through CRO would be an increase in possible customer base, but CRO would have to get a "cut" and MS would have to get a "cut". It would be a lot of bookkeeping for Disney, and probably not worth their time.

 

[CarolMN]

I don't see enough value for Disney to be interested.

 

[Tinker Bell]

I agree it wouldn't be a big money maker for Disney but it would increase the efficiency of the market, which would benefit everyone. Disney would remove the competition to their cash ressies from people that rent at low prices and it would increase the value of the DVC program by providing a cash floor annual value on points - much the same way their ROFR does on secondary point sales.

Right now you can have situations where people expend effort to rent points and only end up with $8 to $10 per point for their effort while CRO is turning away people that might effectively be willing to pay $20+ per point. This is a dead weight economic loss.

Chuck - I think the book keeping process is largely in place as our points are already turned into CRO inventory for a variety of reasons. Although I agree this would be a new wrinkle.

 

[Chuck S]

Remeber too, that at a fully sold DVC resort like OKW, rooms are only turned over to CRO at the 60 day window, or if a member uses points for the cruise, WDW resort or other "trade out", the money then goes to re-imburse DVC for the outside reservation and the costs involved in doing so. While the "bookkeeping system" may be in-place for accepting private transactions, for Disney, as a corporate enitity, it costs MONEY for them to write a check and mail...and if ANY individual receives a check over $500 they must be issued a 1099-Misc. form at tax time (More bookkeeping and expense). I doubt CRO could book rooms at the equivalent for $20 per point on weekends or high point seasons, people would go for much cheaper on-site rooms during those periods. If we as members can't get $20 per point, why do you think CRO could? Since we aren't getting it in private transactions, it's obvious the renters don't perceive $20 per point as a value.