Renting Points We Are Selling Too Low

[DebbieB]

That's how you feel...but that doesn't mean it's your true break-even point. Many people, esp. those in since the 90's, break-even would be in the $5-7 range.

-Joe

I'm not sure about that ($5 - $7) considering dues alone are pushing $5 per point (BWV is $4.69).

 

[mytwotinks]

The price of renting in 1999, $10 per point
The price of renting in 2000, $10 per point

The price of renting in 2006, $10 per point or even less

Now somewhere having seen the hotel prices go up and up, they, the renter scammers, are trying to become "renter" members, with all of the choice, none of the dues and only think they own DVC.

Pray to the renter we are not worthy of your money.




PS: This is tongue in cheek and for the person who thinks they can get a moderate for $108 they will have a long wait, even with AP discount it is still $122

Renter scammers?!?!?! No one is scamming anything. A renter would have to be pretty stupid to pay more than what they know they can get something for just because someone out there thinks that they are getting too good of a deal.

Check your facts. I have stayed at a mod in the last year for $79 w/ my AP discount.

 

[simpilotswife]

I'm not sure about that ($5 - $7) considering dues alone are pushing $5 per point (BWV is $4.69).

I own at BWV and I bought in 2000. My per point breakeven is $6.25

 

[yitbos96bb]

If you read the first line of that explanation - Most state statutes provide that fixing the price of a product or service in agreement with another individual or business is illegal. - it includes individuals along with businesses.

A vendor is not limited to someone licensed to provide a service or product. Anyone offering that product or service can still be held to the same standards if they try to act "like" the business whether they are licensed or not - especially when it comes to setting a price for a product or service. The license is not what determines the intent of the action - those participating in typical "business" activities may be treated the same as those legally licensed and, in fact, may also face other legal issues if they are trying to provide certain goods and services without proper license.

Individuals acting in collusion with other individuals are not exempt from anti-trust laws- licensed or not.

Individuals acting independently and setting their pricing without agreement of others are not violating anything (free market).

(I was a member of an organization deemed by the FTC to be violation of anti-trust laws. The case made it all the way to the US Supreme Court and neither side won except that a cease/desist order was enforced by the court. This issue has similar aspects to what was argued in that case.)

I did see that part. The part I was questioning was what constitued being included as an individual... whether that meant a licensed individual or not. I would guess we would have to look at all the statues to see the differences.

As I said, I am not a lawyer so I am not sure... this was more an academic discussion than anything else. I did post this same question in the forums of the legal site you linked earlier; I will be curious to see what they say as well.

The other thing I would wonder as well would be if this statute would truly be enforcable or the FTC or States attorneys would pursue. While I would say yes to the enforcable, I have my doubts to whether it would be pursued by the government, either federal or state. Kind of similiar to home poker games... technically they are illegal, but the cops aren't going after you unless you are running it like a casino... with a rake or doing tourney's and the house taking out fees. As I said before, I am pretty certain most of the people renting their points are not reporting the income earned to the IRS... while this is obviously illegal, the IRS is not targetting DIS members who rent their points.

It does seem wierd Sherman would apply to a situation like this...I can see where it would, but it seems like while this might violate the technical letter of the law, it is not really a violation of the spirit. Part of the reason Sherman was enacted (for the price fixing portion) was because price fixing hurt the consumer because it eliminated nearly all choice. That is the spirit of the law. Unless you could get all the DIS posters to choose 15 or higher (something I see as an impossibility personally), and they conspire to bury or remove the post, I am not sure that a "cartel" agreement on DIS would violate the spirit of the law, but that is more philosophical at this point. If half the renters were in the "cartel" then there is still a large enough free market as the non-cartel members could undercut at 12 or 13 pp. Thus choice still exist and the consumer is not really hurt by the "cartel". But as I said, this is more philosophical argument at this point.

BTW, My feeling on the prices is to let the market dictate itself. I have tossed this around but ultimately settled on this. The fact that DVC has added another HUGE resort, has obviously kept the price down. Getting it up to $15 will not happen as long as the number of points is available. Unless the supply is limited, then the price will remain low and rentees get an excellent bargain. The cost of other hotels is irrelevant to the price... as long as points available are larger than demand, then the price will remain low. Maybe if one or two of the monorail resorts become DVC, then the price will go up for those

The other thing is if you have a BWV, BCV or VWL, try to put your points out there WAY before premium booking seasons. IF you have your VWL points out there 13 months in advance of Christmas, you will probably get more money than if they are only 6 months. Just a thought.

Again this is just an academic, philosophical discussion, especially with the technical letter vs the spirit of the law. Personally, I think it really makes for interesting conversation... I was googling trying to find definitive answers, but so far I haven't found any from another source.

 

[browniemtb]

I own at BWV and I bought in 2000. My per point breakeven is $6.25

It all goes to show when and how you buy in. We bought in in Jan 06....last month. My break even, based that dues will hold which we know they won't and that there is no financing, would be $7.25 per point at BWV. I financed and will pay off the contract in 2 years so in reality my per point cost could reach the $7.75 to $8.00 range. So for me to rent and do all the leg work for $8 or $9 per point isn't going to happen......Owners who bought in in the 90's can do well at the $8 and $9 range....they are the pro's and they set the market.

As far as price fixing goes, I don't really think there is a problem here. We are a small group of DVC owners that talk. Each one of us is a little business in itself. So if there are 100,000 owners there would have to be 50,000 or more to say ok $15 is the price. 100 owners agreeing should not constitute price fixing.

Brownie

 

[snowbunny]

You did not calculate your monthly/annual maintenance fees. That will change your numbers.

Right, it would, but I figured that the maintenance fees on 150 points are a negligible cost of owning the contract for another 40 years versus simply dumping $6400...

 

[Plutofan]

I own at BWV and I bought in 2000. My per point breakeven is $6.25

Of course you are not factoring what you could have gotten investing the original payment in a CD etc. Remember you tied up current cash for points that go out for up to 50 years. There has to be some lost income since this is a prepaid vaction plan and not ownership. If you financed then you should factor in your mortgage interest into your calculation. The only way that your original payment will not lose value is if you happen to sell before the point cost goes down. It will go down no one just knows when.

 

[#1minnie]

I'm relatively new to DVC (almost one year), and this might be a naive comment, but I don't see us being in the position to rent points, we have 280 which I thought was a high number, but I'm "already" in the borrowing mode, having borrowed some of our '06 points for the cruise we just took. Are some of you just in the situation that you have bought or added on too many points?

Also, another question: One of the other posters said they had banked points which expired and could not be banked again. Did that mean they didn't go on a vacation that year at all? Let's say you bank points in 05, and in 06 book your vacation. I would think the first points "used" were the ones that were banked in 05, no?


I just don't see us in that situation at all. We bought into DVC to use our points. I'd rather get a larger accomodation or take a family member and use our points than to get into the renting process. As a non DVCer I did rent points once from someone on ebay for BCV in a studio and it was a pleasant experienece. Because of that trip, we became members!

 

[DrTomorrow]

I'm relatively new to DVC (almost one year), and this might be a naive comment, but I don't see us being in the position to rent points, we have 280 which I thought was a high number, but I'm "already" in the borrowing mode, having borrowed some of our '06 points for the cruise we just took. Are some of you just in the situation that you have bought or added on too many points?[...]

Well, there are three main types of renter types here on the DIS: extra-pointers, avoiding-exchange-rip-off folks and business types. You could one day end up in the extra point group: even after banking, you find yourself with 17 points you won't be able to use until they expire - and an extra $204 beats losing points.

There are others who have learned the system and realize that it is often a better deal to rent out points - even at the dreaded $10/pt rate - and pay cash for a cruise or WDW non-DVC resort stay than to use the points directly.

Then there are those who - IMHO - are primarily out to make a buck.

How each individual is classifed in these groups is tres subjective, but they serve as a basic framework.

 

[yitbos96bb]

There are others who have learned the system and realize that it is often a better deal to rent out points - even at the dreaded $10/pt rate - and pay cash for a cruise or WDW non-DVC resort stay than to use the points directly.

Credit Dis for showing this to me. I didn't even think about it until I saw a thread with people saying what a rip off doing the Cruise or others through points was. At first I was seeing it as... well they don't have the money to pay cash so using points works for them... but them I realized the rental system could give you the tickets plus a little extra and that makes a lot more sense.

 

[simpilotswife]

Of course you are not factoring what you could have gotten investing the original payment in a CD etc. Remember you tied up current cash for points that go out for up to 50 years. There has to be some lost income since this is a prepaid vaction plan and not ownership. If you financed then you should factor in your mortgage interest into your calculation. The only way that your original payment will not lose value is if you happen to sell before the point cost goes down. It will go down no one just knows when.

Actually Plutofan when you factor in the costs of the vacations that I have taken with my points, there is no future value. I had already spent that money 2 yrs ago. Remember future value only works if you are not likely to ever spend the money on vacations.

My trip this year pays for the mortgage interest BTW

 

[crisi]

Well, there are three main types of renter types here on the DIS: extra-pointers, avoiding-exchange-rip-off folks and business types. You could one day end up in the extra point group: even after banking, you find yourself with 17 points you won't be able to use until they expire - and an extra $204 beats losing points.

There are others who have learned the system and realize that it is often a better deal to rent out points - even at the dreaded $10/pt rate - and pay cash for a cruise or WDW non-DVC resort stay than to use the points directly.

Then there are those who - IMHO - are primarily out to make a buck.

How each individual is classifed in these groups is tres subjective, but they serve as a basic framework.

And each of those individuals is going to have a different price point where they consider themselves "even."

- The "exchangers" are just looking to do better than the cruise rate. Anything over that is "value" to them. That is something less than $10 a point usually.

- The "extra pointers" are basically trying not to let points expire - often for them ANYTHING is better than just letting the points expire - particularly with distressed points. Someone wanting $15 for their points is competing against someone who just doesn't want to lose the $3.50 in dues. This is especially true with longer term owners, who already feel like they've gotten their ROI on their contract through trips they've taken - at this point they see their points as costing them "dues only."

- The "profiters" want to maximize profit - but even there someone who bought for $58 a point has significantly different costs than someone who paid $90 - even with time value of money. Sure, the guy who bought at $58 and is out for a profit will take $15, but he can undercut you at $10 and still make a decent return.

Since everyone has different costs and different ideas of what is a good return, raising prices is going to be tough - there are plenty of people around to undercut high prices.

I do feel sorry for anyone buying today with the intention of renting points. I don't think its currently profitable. But a lot of owners already made their investment for much less.

 

[greenban]

And each of those individuals is going to have a different price point where they consider themselves "even."

- The "exchangers" are just looking to do better than the cruise rate. Anything over that is "value" to them. That is something less than $10 a point usually.

- The "extra pointers" are basically trying not to let points expire - often for them ANYTHING is better than just letting the points expire - particularly with distressed points. Someone wanting $15 for their points is competing against someone who just doesn't want to lose the $3.50 in dues. This is especially true with longer term owners, who already feel like they've gotten their ROI on their contract through trips they've taken - at this point they see their points as costing them "dues only."

- The "profiters" want to maximize profit - but even there someone who bought for $58 a point has significantly different costs than someone who paid $90 - even with time value of money. Sure, the guy who bought at $58 and is out for a profit will take $15, but he can undercut you at $10 and still make a decent return.

Since everyone has different costs and different ideas of what is a good return, raising prices is going to be tough - there are plenty of people around to undercut high prices.

I do feel sorry for anyone buying today with the intention of renting points. I don't think its currently profitable. But a lot of owners already made their investment for much less.

An excellent analysis of the 'types' of renters!

Thank you,

-Tony

I (of course) fall into a different category of extra pointer, I have too many points for now, but not enough yet for then (retirement). I never rent 'distressed' or 'bargin' points, I plan ahead to maximize their value.

Perhaps the 'extra pointers' who have forgotten banking deadlines, or just waited too long should be renamed 'Distressors' or 'Distressed Point Renters', and 'Extra Pointers' should be for people with an excess of points that are not distressed!

JMHO, YMMV

 

[JimMIA]

I haven't been following this thread closely, so I've probably missed something along the way. But another thread made me think and the results of that painful and unusual activity fit better here than they do on the "what's the value of points?" thread.

Over there, I said I analyzed value of points by comparing the price I could actually get for cash (as a Florida resident/AP holder) and the points costs.

To see how it worked out, I randomly selected one week -- July 8 arrival, July 15 checkout, 7 nights in a BWV preferred view studio. My Florida resident price would be $2380, or $340 per night, tax included.

The points cost for that is 134 points. If I were going to rent, I would factor in about a 1/3 savings for the renter, and I'd charge them about $1595 -- a savings of almost $800 ($113 per night savings).

If the renter wanted daily mousekeeping, they could get that for $25 per day for 4 days (they'd get one T&T and one full cleaning anyway), and still save $700, or $100 per night.

That would work out to $11.90 per point -- which in my case would be roughly $6 above my pp cost, or about $800. At $10 pp, I would only make a little over $500, and frankly I wouldn't jump through the hoops for that.

My first choice is always to use our points, and we've been doing a great job so far! My second choice would be to bank points, and I can't think of a situation where I would rent rather than bank...although there may be one out there somewhere. Renting will probably only happen if we have an unexpected cancellation, and even then I'd be looking for a fair price.

 

[sneal0821]

The price per point should also take in consideration the risk to the renter. The DVC owner is in complete control of the reservation, need to cancel before 30 days from arrival date, DVC owner may not be in good standing by the time your vacation starts.

AP rate for AKL is $155 including tax. Daily mousekeeping service, can cancel within 5 days and receive full refund, you are in control of your reservation. If you check-in on Saturday for four nights that would cost $620.

Studio at BWV for the same days is 48 points. At $11 a point that is $528. With daily mousekeeping service the total would be around $628. The BWV is a larger room and has a microwave and wet bar that the AKL doesn't.

They both cost about the same price. Both are very beautiful resorts. The BWV is a little nicer but the risk is much higher so the price per point must be low enough are the renter will not want to take the risk.

 

[Irish Wake]

double post

 

[Irish Wake]

It's all about supply and demand. Those two factors set the price.

P.S. I see your point though, if I spent all that money on DVC, I'd be disappointed at 8-10 dollars a point as well!

 

[lindanmikewolfe85]

I am in the middle of purchasing points for myself - I have rented from members for the past 5 trips to Disney World - I have always told the DVC member how thankful I was for them to be renting their points to me for a great price. I do not think we would have gone as often otherwise. I appreciate all the trouble they go through to get the DVC location & dates I have wanted. My girlfriend just book a honeymoon trip for her son & future daughter in law by renting your points - when she told them she booked at the Beach Club her daughter in law started to cry (she thought asking for a moderate was asking too much.) By renting points at a good price my friend was able to make their dream Honeymoon come true. I always report back to the renter - telling them that our room was great - and thanking them again - we have never been disapointed yet. For the benefit of all you DCV members who rent points - I do my part in telling anyone i know planning a trip to Disney how great you guys all are & i give them the web site info. So because I am a satisifed customer, you all will have the benefit of all the other non-DCV members i send your way. I think it works & thanks again.

 

[Oreo Cookie]

My biggest wonder is why does a non-member think they are entitled to a deluxe vacation at less than value prices???? I see so many posts about, "I can get two rooms at the value resorts for less than I would pay for a 2 bedroom villa at $10 or $10+ per point". Why should a member subsidize a non-member?

We take lots of family members or friends and provide the lodging for free. I'd rather have a very grateful friend or family member along on a trip than a bargain hunter.

I agree 100%.

I'm new to the boards but have been a DVC member since 2001 at VWL. We did not buy into DVC with the intention of renting, but to enjoy quality vacations. We've gone to WDW as well as traded out to go several places through interval and the concierge collection. I think managing points is quite easy, and we have never run into problems of having banked points that we will lose if we don't use them.

We paid for our points up front without financing, and in year three we broke even. So now we just have our yearly dues, and the places we have stayed would have cost us more than the yearly dues we pay, so it's a good deal for us.

I think th DVC is great, and we are having a wonderful time. I would never rent, but I would do what Deb and Bill said and that is give lodging to family and friends. If you want to rent, then the market dictates the price, and if members want to sell for $8, $9, or $10 that is their choice.

 

[LisaS]

The price per point should also take in consideration the risk to the renter. The DVC owner is in complete control of the reservation, need to cancel before 30 days from arrival date, DVC owner may not be in good standing by the time your vacation starts.

AP rate for AKL is $155 including tax. Daily mousekeeping service, can cancel within 5 days and receive full refund, you are in control of your reservation. If you check-in on Saturday for four nights that would cost $620.

Studio at BWV for the same days is 48 points. At $11 a point that is $528. With daily mousekeeping service the total would be around $628. The BWV is a larger room and has a microwave and wet bar that the AKL doesn't.

They both cost about the same price. Both are very beautiful resorts. The BWV is a little nicer but the risk is much higher so the price per point must be low enough are the renter will not want to take the risk.

Actually the AP rate for a standard view room at AKL is $149+tax=$166. But I think a more equitable comparison would be between a studio at BCV/BWV with a standard view room at YC/BC since part of what you pay for at BCV/BWV is the Epcot location.

Looking at the dates you are interested in (check in Sat Oct 7, check out Wed Oct 11th): Regular rate for a standard-view room at BC in Regular season is $345/night. Assuming a $100 AP discount becomes available for those dates, the discounted room at YC/BC would be $273.17 with tax. Your 4-night vacation would cost $1092.70.

A studio at BCV or BWV for the same days is 59 points. At $11 a point that is $649. Add in daily mousekeeping and the total would be $749. The BCV studio with daily mousekeeping works out to be $343.70 less than a standard-view room at BC/YC with a $100/night AP discount.

Even at $12/point, the cost of 4 nights in a BCV studio with daily mousekeeping is less than the cost of 3 nights in a standard-view BC/YC room with a $100 AP discount ($808 vs $1092.70, or $284.70 less for the studio). And if you avoid staying on a weekend night, the cost difference is even greater.

Yes, there is risk on both sides but even at $11-$12, it's still a great deal if you are looking to stay at an Epcot resort.