The Vilification Of Renting?

[PKS44]

I think a huge number of owners have no idea how to bank, borrow or rent out their points and they let points go to waste all the time...I have even met some of these people...They are not here on this website-but this website is a small fraction of the total and comprises the savviest, most DVC-aware owners around...just reading posts here gives you a distorted sense of the "average" owner.

 

[childsplay]

I'm not home to review the documents and won't be for over a week (Oahu/Maui).

OK, now I'm officially jealous...it was -11 (that's minus eleven!!) when I left for work this morning!
Hope you enjoy your time in the tropics!!

 

[Dean]

OK, now I'm officially jealous...it was -11 (that's minus eleven!!) when I left for work this morning!
Hope you enjoy your time in the tropics!!

LOL, it was cold and rainy in North FL when we left. Would it make you feel any better if I said this trip cost us less than a week at the redneck riviera would?

 

[Tinkerdreams]

If DVC wants to eliminate renting, why couldn't they require proof of membership at check in (I'm a new member and haven't stayed yet so they probably already do this) - member card and another form of ID (driver's license). If you are not the member, you cannot stay.

Also, if they want to entice people to become members, they could always upgrade visitors that are staying at their resorts, especially those that have visited several times within a couple of years. I believe they have done this in the past.

 

[SSRFred]

It wants to control renting. Just my opinion.
Disney's bottom line is heavily affected by occupancy rates. Successful renting improves that. Canceled rentals hurt that. For example; if a commercial renter rents 4 out of 6 weeks, good for the renter but not so good for Disney. Corporate cares more about the money spent while on vacation rather than unused dues.
It's in Disney's best interest to tailor the program to produce more quality rentals (How they do that is beyond my expertise).
It is also in Disney's best interest to maintain the goodwill of the DVC brand (read - Keep the members/guests happy). Rental curbs can improve quality while decreasing the viability for commercial enterprises.
My suggestions would include 1) Limiting name changes and require those changes to be in writing (there's nothing quite like a paper trail...) 2)Multiple room reservations during Holiday/Peak periods would require the member to stay.

All I know is that, I don't want to have to pay a scalper to see my home(team) when I've already purchased season tickets.

 

[WDWorld2003]

We have rented or transferred excess points at least 4 times. If Disney prohibits renting or transferring we would sell our membership. Life can take unexpected turns financially, medically or for other reasons and we want those options.

As another poster stated, the people on this board are more versed than 90% of the DVC membership on how to bank, rent, borrow points, etc. so points do not go unused. I doubt the rest of the membership is as knowledgable. Twenty percent of all gift cards go unused and retailers count on it so maybe that's what Disney was banking on and the internet changed that percentage to 10%.

However, if this board and the internet did not exist, we would not have purchased our membership. I would not have been able to research, compare with other members, etc. to determine if it it right for our family. The internet has cost us a lot of money!

 

[nunzia]

IMO, the day by day reservations are the big ticket item for MS work load.

I agree there.

 

[Deb & Bill]

It wants to control renting. Just my opinion.
Disney's bottom line is heavily affected by occupancy rates. Successful renting improves that. Canceled rentals hurt that. ....

This puzzles me. If you are talking about the income generated from food sales, shopping, etc, I agree that higher occupancy equals more income for Disney. But if you are talking about hotel income, these rooms have already been paid for by points. No extra income there.

Some people who wind up saving on their lodging just might spend more on food, etc. But some who save on their lodging, are looking for savings all the way.

 

[SSRFred]

.... income generated from food sales, shopping, etc, I agree that higher occupancy equals more income for Disney. But if you are talking about hotel income, these rooms have already been paid for by points. No extra income there...

That's precisely what I mean. It's all about getting people to Disney. The room is already included in next years income report as well as the projected spending per occupant. Disney loses when the room remains empty, even though it's been paid for already.
DVC is a great way to maintain higher occupancy rates at the resorts, especially during slower times. For this reason, Disney has a vested interest in maintaining the membership - current and future. If they need to curb renting in order to increase member satisfaction & attendance, you can bet they will try to do so. Unused points equals lost income for Disney.

 

[Brian Noble]

If you watch Disney's marketing efforts carefully, they have lately been using the parks to fill the resorts, not the other way around.

The parks are going to be full no matter what---people are going to come to Central Florida to visit the Mouse. Getting people to stay in one of the (more expensive) rooms that Disney owns rather than one of the teeming horde of offsite locations is the key.

 

[JimMIA]

Well, Jim, just take a look at Redweek. You'll find single members with reservations at every single DVC resort for rent.

I did, and here's what I found:

BCV - 2 listings, with the furthest out listing being March 2008
VWL - 3 listings, furthest out May 2008
OKW - 6 listings, furthest out June 2008
SSR - 4 listings, furthest out June 2008
BWV - 2 listings, furthest out July 2008
AKV - 2 listings, furthest out March 2008

That's a total of 19 DVC rental listings -- hardly anything that would make DVC shake in their boots. [ETA: Keep in mind that there are more than 100,000 DVC accounts. I actually expected to find many more than this.]

And the furthest out any of them are booked is July -- all within the 7 month window, and certainly nothing that looks speculative.

I'm sure there are a lot more rentals which take place on Redweek, and I'm sure there are some speculative bookings there from time to time, but it really doesn't look like much activity right now.

 

[OhioDVC]

I view with concern Disney's actions to modify the use of my membership after I have purchased points. Except for this year, I have rented points out 4 times in 14 years out of 1500+ points. A very small percentage. If Disney is free to restrict rentals what else can they change after the sale

On the members cruise, Oct 2007, I purchased another 500 points and was very open with the sales person that I could not use all of the points over the next year and would need to rent some out. He stated that there would be no problem with renting points and discussed how several of his customers are making a good side income renting out points.

Disney can not restrict renting points but promote renting points when it is to their advantage to make a sale. They need a consistent policy towards renting even if that means it may reduce their sales.

 

[JimMIA]

Disney can not restrict renting points but promote renting points when it is to their advantage to make a sale. They need a consistent policy towards renting even if that means it may reduce their sales.

Their policy is VERY consistent. They consistently do what is in their best interest -- either to protect their revenue streams or to increase sales.

 

[SSRFred]

If you watch Disney's marketing efforts carefully, they have lately been using the parks to fill the resorts, not the other way around.

The parks are going to be full no matter what---people are going to come to Central Florida to visit the Mouse. Getting people to stay in one of the (more expensive) rooms that Disney owns rather than one of the teeming horde of offsite locations is the key.

You are absolutely correct. I tend to group the parks and resorts as one category, its all extended vacation to me. I've corrected my post so as reduce the confusion.
Disney wants more food and merchandise sales and overnight guests spend more on these.
With the tough times up ahead, they do need those ads if they expect to maintain 89% occupancy like in 2007.

 

[JimMIA]

I think it's a mistake to view Disney as one monolithic company moving in lock-step toward one common goal of producing maximum income for the parent company. In reality, the non-DVC resorts, food and beverage, theme parks, DVC, and many other components are separate business units with their own business models and financial objectives. That's not to say the component parts don't work together -- they obviously do. They obviously cooperate, and they compromise with each other, but they also have their own interests.

A perfect example of that is the Disney Dining Plan. Originally, DDP was a hotel promotion, not a plan to increase restaurant traffic. And originally -- because we're coming anyway -- we were excluded from DDP. We later got it, and DDP and other marketing initiatives filled the Disney resorts and the restaurants. But the F&B folks said, "Hey! We're getting killed over here! Everybody is making money on this but us. Give us a piece of the pie." So this year, Disney made radical changes in DDP which will make staying onsite slightly less attractive, but which will greatly increase F&B revenue.

I think renting is a similar issue. DVC has a vested interest in keeping current owners happy and increasing sales -- so a reasonable level of private rental serves those purposes. I think DVC's main concern with renting is the calls to MS, the complaints from DVC owners who don't like renting, and the rare situation of a renter showing up whose ressie has been cancelled. Renting is NOT competition to DVC itself.

OTOH, renting is most definitely competition to Disney Resorts. The Resort management has a responsibility to rent as many rooms as they can and one of their inventories is unused DVC points inventory. Resort management will push for anything that increases their ability to generate revenue. For the same reason, the managements of Disney Resort hotels have recently showed an increasing tendency to "walk" DVC points guests with confirmed reservations in order to accommodate cash customers. They're not working for the greater good of the overall organization, and they're working against DVC; they're looking after their own P&L.

 

[Blahnde]

It's all about getting people to Disney. The room is already included in next years income report as well as the projected spending per occupant. Disney loses when the room remains empty, even though it's been paid for already.

While I agree that Disney's income stream is not all about rooms, if you agree that MOST people have a budget when they travel, then Disney loses when owners rent their points.

Both scenarios below assume a travel budget of $2,000 spent on lodging, meals, and souviniers; other travel expenses like airfare or rental car that Disney would never see are not included. It really doesn't matter if the amount is $2,000 or $20,000, just that they are the same "budgeted" amount.

Scenario 1) Rent points for lodging: $800; Meals/souviniers at WDW: $1,200.

Scenario 2) CRO reservation: $800; Meals/souviniers at WDW: $1,200.

In Scenario 1 Disney only makes $1,200, but in Scenario 2 Disney makes all $2,000. Is it possible/probable that people go over budget? Of course, especially if they feel the got a "deal" on lodging! Do people stay "off property?" Sure! But that doesn't change the basic premise that any money paid for lodging outside CRO is money that does not go into Disney's pocket. And Disney cannot control "off property" bookings, but they can (or at least they are trying to) control point renting!

And while you are correct that having high vacancy rates is bad for Disney's finances overall, do not confuse that with optimum point usage. They do not want (and did not project!) for owners to "waste" over 15% of our points which would lead to occupancy under 85%. But 3-8% "waste" is good for the bottom line.

If I've learned nothing else from this board it is that booking through DVC has become increasingly difficult due to availability. Long time DVC owners bemoan the days when they could call a week or two out and get a reservation; while it can happen today, it is less and less common. People keep asking why and blaming big resort build-up at SSR, but that isn't the problem. The problem is that DVC's point occupancy is much higher than the 89% reported average (and higher than DVC projected in their original financial plan!) because people are more effectively using their points. And at least some of this more effective usage is due to renting points.

Based upon DVC v. CRO availability recently, I would guess (and it is only a GUESS!) that DVC point occupancy is in the mid-90% range which when averaged with CRO's occupancy rate of the mid-80% range, makes the 89% average. And with 95% DVC point occupancy (again, just a GUESS!), that is 5% "waste." Okay, maybe they could have sold a few more t-shirts and MM ice cream bars if it were even possible to have 100% DVC point occupancy. But more importantly, if the average contract amount is 200 points and there are 100,000+ owners, 5% "waste" is 1,000,000+ unused points! That makes for a very healthy addition to Disney's bottom line!

But if the 89% average occupancy was more equal between DVC and CRO, that would mean more money in Disney's pocket on BOTH sides! They would get money for the room through CRO (instead of losing it to renters!) AND have a higher percentage of "wasted" points to go to the bottom line. Without changing the average occupancy rate, they would put more money in the Disney coffers (and make members happier with increased availability!) if they simply shifted the vacancy percentages from DVC to CRO. And this shift would have no influence on selling food or soviniers! Can you see why Disney is focusing on eliminating commercial renters?!?

I want to say one final thing about this and that is I AM NOT AGAINST RENTING OR RENTERS! I have rented my own points ... shhhh! But the question posed in this thread was not do you approve or disapprove of renting; the question was why is Disney cracking down on renting. And the simple answer is MONEY!

Blahnde

 

[DVC Mike]

If I've learned nothing else from this board it is that booking through DVC has become increasingly difficult due to availability... The problem is that DVC's point occupancy is much higher than the 89% reported average (and higher than DVC projected in their original financial plan!) because people are more effectively using their points. And at least some of this more effective usage is due to renting points.

So you're saying one reason it has been getting harder to book a DVC reservation is because of owner's renting their points?

 

[rogerram]

the problem isn't renting, but the renter who constantly grabs prime weeks and tries to rent them out and if no one rents that week, then at the last minute without serious penalty ,cancels that reservation and grabs another prime time to try to do the same thing over and over again until he sells it. Many people can't plan for such a short notice for that prime week when the renter cancels these reservations. The members that at 4-5 months out often will never get a chance to get these weeks because many are doing speculative renting. The commercial renter is tying up reservations that they are not personally using and are only out to make a profit. THAT is what the rental issue is. Not a regular member occasionally renting points that they can not use before the expire. I'm sure there is a history that shows what the commercial renter is doing and if they lose the reservation, then so be it. I think more than likely, Disney can make it very difficult for this type of reservation by the commercial renter by changing the resort ,room type or generally making it a problem for the renter,other than canceling the reservation because they do not want to hurt the people who are renting the room, but ruining the reputation of the renter is fine. When they can't get what was promised to the guest who rented from them ,it makes the commercial renter look bad when things change from what was agreed upon by the renter and rentee.

 

[jarestel]

I would think that the number of members with small add-ons (less than 150 points) has more to do with availability difficulties during popular times than renting does. A member with enough points to book 2 or 3 nights at the 11 month window and who then waitlists for the rest of their nights at the 7 month window or books another resort for the rest of the nights, effectively prevents other members booking at 11 months from getting their entire week. It's a loophole that definitely affects availability and as I said, probably to a greater extent than renting does.

 

[disneynutz]

So you're saying one reason it has been getting harder to book a DVC reservation is because of owner's renting their points?

I think that renters make a good excuse and fall guy for members not getting their reservation when and where they want. Somebody has to be at fault for a member not getting their wish at 7 months. In their mind, the fact that they don't own points at their favorite resort shouldn't matter. We bought points at our favorite resorts and unless I book at 11 months I still have trouble getting what I want. Is it because of members renting their points, it could be, but it could also be that I forgot to play the DVC game and call at 11 months.