Tiered Benefits

[Sammie]

It is not about loyality its about money.

 

[calypso726]

I saw this on one of the other boards and did not see anything here on the DIS. I know there are a number of us that have been trying to follow the rumors and that something along the lines of Tiered Benefits was discussed at the annual meeting. I figured I'd copy and post here to keep everyone up to speed on what is being said regarding this topic. FYI I am not th OP on the following and have no inside info.

DVC resale purchasing considerations
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Well, sorry for the delay folks but trying to double check the info which is developing.

First, this info is accurate as of today... it can always change...and it may change drastically.. so don't give me the "but you said"...

The thing that people don't realize is that DVC/Disney, takes a long time in studying and vetting things before they finally put it into action... and during that time, bits and pieces can leak out. When people like Greenban and I and other hear things which later turn out not to come to fruition, it is not that that item is not true... rather, it is true at the time, but DVC later decides not to give it a greenlight at the very end.

About Greenban's OP, it was actually pretty accurate (as usual) AT THAT TIME.. but a few events occurred which resulted in the plug being pulled at the very last microsecond. Some would have you believe that a benevalent diety, overseer, etc. looked at the proposal and thought that it was too cruel... bah, humbug, I say!! Nor was it some beneficent higher up that felt that it was the wrong way to treat members... DVC considers members sheep requiring frequent financial shearings. Nor was it some fear of legal action, etc.... DVC ain't 'fraid of nuttin... look at the POS you signed..

People forget the cardinal rule of DVC/Disney... it is a For Profit organization...

Anything that intereferes with the bottom line must be dealt with.. and there is where the midnight reprieve came from...

It seems that the number of cancellations of add-ons, and new purchases dropped dramatically once word got out about re-sales being treated differently... NOBODY expected that new sales would be slammed as hard by the current sheep... I mean members, that told their guides they were a) cancelling an add-on or b) cancelling purchases at the new resorts (BLT and AKV). This took admin by complete surprise!!

Unlike many other timeshares, the current member purchases, both of add-ons at resorts they own or new resorts, is a significant source of steady income for DVC!! Referrals are also signicant sources of new sales. And these people usually are very savvy to developments that may result in a huge drop in resale values. It is one of a number of features of DVC which distinguishes DVC from "other" timeshares.

So, where does that leave DVC with the future handling of New vs Resale?

This is somewhat of a complex issue, which... if I have the time and energy, I will examine in more detail later...DVC has to deal with. But briefly,

People seem to forget that DVC has always managed to make direct/new sales different and more attractive, in some manner shape or form than resales. (Surprise, surprise, surprise). For example, when DVC offered Cruises if you bought a new contract..not available to resales, DVC offered developer points.. not offered to resales... DVC including closing costs... etc, etc. etc.

So the notion of differentiating new/direct sales from resales is neither a new or novel concept.. it has happened frequently in the past, it is just that nobody seemed to take notice.

In fact, several years ago when they had the 270 developer point, extra UY points, and $500 credit (only for Visa holders), it undercut resale prices significantly.... nobody shed a tear for resales then...

I was with some surprise that DVC admin got the huge backlash that developed with new/direct sales.. and why it was pulled at the very last second.

Now, they still need to do something about resales... they are just about the only timeshare company that still treats old the same as new. Right now, the CM's are really piss*d at iPhones... it seems that there is always some kid who has one and pulls it out during the tour, shows it to the CM and asks the classic question "how come these people sell the same thing for so much less"... New sales are down in the dumpster, except for BLT...

In fact, they are tens of millions behind their own projections for DVC sales.. a first for Jerry Lewis and his crew... it seems he went from Hero to Zero, real fast. So now they are going back to the drawing board on how to boost new sales.

There are a number of proposals that are actively being studied... It would be difficult to cover all of the them, so I am going to cover the one that seems to give DVC the biggest bang for the buck... ie, costs them the least but gives them the biggest "differentiator" of new vs resale.. that is --- messing with the booking windows.

The variations at the top of the list.

1) A preference system given to individuals with more points.. consisting of a longer booking window depending on number of points. The only points that would be eligible are the ones purchased directly from Disney or "grandfathered" in
2) Longer booking windows on the home resort that is bought directly from DVC
3) Longer booking windows in the non-home resorts when points are bought directly.
4) "Locking" the older resorts so that they cannot book in the "new" resorts at all or only with the last 60 days. ie.. people who bought resale in OKW could not book at BLT, SSR-THV, AKV and Aulani and all future resorts except in the last 60 days.

There could be combinations of the above.

However, an interesting twist to all this is that DVC may allow people to pay DVC some amount to get the same benefit as the direct purchasers. One thing that was brought, but is considered unlikely, is to let resale purchasers pay the difference between resale and direct sales to DVC to "upgrade" the purchase!!!

Why do the booking windows top the list of changes, you ask? Well, it costs them nothing to do it. That is the main reason. All the other things, ie, annual passes, free meal plans, tickets, etc. would cost them on the bottom line. That was the reason for the proposal that was pulled.

Now, these are not exhaustive and there are other things being looked at.. but all of them involve giving something more to direct sales. In my view, no matter what they do, resales will suffer in the end.

I will try to add a lot of other backround and more interesting tidbits, but this has been delayed too long already, so I wanted to get this out ASAP.

Sorry about the length of this..

 

[vicki_c]

Interesting, but definitely along the lines of what the most practical / DVC-savvy posters here (in my opinion anyway) have surmised.

 

[dianeschlicht]

Interesting! I'm not surprised that DVC is taking the easy way out, but I'm also disappointed that it's the booking window taking the hit. I wonder if that last point referring to "older resorts" means that even those of us who purchased direct from Disney "YEARS" ago will be out on that one too? Not that I really care, but I like to combine my OKW points with my meager AKV points to complete reservations sometimes.

 

[calypso726]

Interesting! I'm not surprised that DVC is taking the easy way out, but I'm also disappointed that it's the booking window taking the hit. I wonder if that last point referring to "older resorts" means that even those of us who purchased direct from Disney "YEARS" ago will be out on that one too? Not that I really care, but I like to combine my OKW points with my meager AKV points to complete reservations sometimes.

I took it to mean those that buy OKW resale could only stay at OKW until 60 days out and then they could try for the resorts built after OKW.

 

[calypso726]

Interesting, but definitely along the lines of what the most practical / DVC-savvy posters here (in my opinion anyway) have surmised.

Yes, it is. However, I can't believe that they still aren't getting the fact that messing with the booking windows will devalues any direct purchase. One of the reasons people buy DVC over other timeshares is that it holds its value much better than others. If they want to encourage direct purchases. I don't think this is the way to do it. They are better off leaving well enough alone and concentrating on benefits and perks for direct purchases. Give people a good reason to buy direct that doesn't devalue their asset at the same time.

 

[marynvince]

Speculation spinned like t is coming from someone in the know. Ridiculous to think this has any merit. Or any more merit than "A busdriver told me....."

 

[RobPickles]

Tiered perks based on points owned and where purchased would benefit both the purchaser of more points and Disney.

That is my point. IMO - benefits should be about member vs. non-member, not member with 100 points vs. member with 1000 points.

 

[RobPickles]

I'm with you Rob...

Thank you. I am glad someone gets it.

 

[calypso726]

Speculation spinned like t is coming from someone in the know. Ridiculous to think this has any merit. Or any more merit than "A busdriver told me....."

...and a lovely and cheerful good morning to you too

If you would take a gander at the subject line which admittedly I typed rather hastily thus the typo in Latest. You will see the word RUMOR. No where did I state anything was factual and thus never had an expectation of credence for what I am sharing with this forum. I do not know the OP of the post but like Greenban. supposedly was in touch with someone in the know and would share what he was told, this person also has someone in the know, supposedly. Sheesh, next time I see something interesting on another board I will keep it to myself.

I hope everyone else is having a wonderful Wednesday and is in the spirit of the holiday season and just bursting with good cheer!

 

[wdrl]

It seems that the number of cancellations of add-ons, and new purchases dropped dramatically once word got out about re-sales being treated differently... NOBODY expected that new sales would be slammed as hard by the current sheep... I mean members, that told their guides they were a) cancelling an add-on or b) cancelling purchases at the new resorts (BLT and AKV). This took admin by complete surprise!!

This allegation of a dramatic drop in direct sales seems inconsistent with the rate of current sales. For the period 12/1/2010 through 12/17/2010, DVD has sold 140,920 points at BLT, based on deeds recorded with the Orange County Comptroller. Even though the month is not finished, December 2010 is already the second best month for sales since October 2009. If BLT maintains its current pace, it will sell about 216,800 points, which would be the best monthly sales figure since August 2009. See http://www.disboards.com/showthread.php?t=2212548 for more information about BLT sales.

There is some lag time between purchases and the date a deed is recorded at OCC. However, the vast majority of deeds are recorded within 14-21 days after they were dated and signed by the buyers.

Perhaps DVD is losing sales because of these "direct vs. resale" rumors. But it seems it is retaining a rather large number of sales.

Instead of a downturn in direct sales, I could understand how the "direct vs. resale" rumors could cause a spike in direct sales. Buyers who are deciding between a direct buy versus a resale might opt for the former because they want to be on the "safe" side and lock in future benefits or advantages. I'd be curious whether resale agents such as the Timeshare Store have seen a drop in sales. I would imagine resale agents would be more negatively impacted by these rumors than DVD.

 

[DVCGeek]

For myself, I wouldn't feel like a second class citizen if they took ALL exchange options away and then added them back to a given VIP level but I bet many would. As long as I have the same reservation rights for my home resorts and other club resorts.

I'm with you. I bought into DVC to stay @ Disney resorts. If/when I want to try an ABD or cruise, I'll most likely do it on cash and look for some kind of discount for it. As for non-Disney resorts- I like the flexibility of using cash and picking where I want to go w/o extra fees or booking limitations! I bought the # of points I wanted to use AT DVC RESORTS on average, not more than I wanted to use on Mouse trips...

 

[DVCGeek]

First, this info is accurate as of today...

When was that info. you quoted posted at the 'other site'?

 

[vicki_c]

When was that info. you quoted posted at the 'other site'?

Yesterday at 2:16 AM per the post there. But it does say "yesterday" and since the most recent 2:16 AM would be "today", I'm guessing that means about 30 hours ago.

As to the validity -- it's a rumor, as stated, but from a relatively credible source and someone else in that thread confirmed they heard something similar from a DVC source (now whether it's all coming from the same DVC source, who knows?).

I think it's all interesting to speculate on. Right now, I don't care because it is all rumor and speculation. When something official is announced, then I'll make a decision on how much I care.

 

[OhioDVC]

I have always thought a tiered discount on APs was appropriate. I never thought a 25 point family of six should get the same AP discount as a two person family with 1500 points.

MG

I agree that would be nice, but shouldn't they charge more? Since the more points you have the more you will visit so you will use your AP more.

 

[TisBit]

Yes, it is. However, I can't believe that they still aren't getting the fact that messing with the booking windows will devalues any direct purchase. One of the reasons people buy DVC over other timeshares is that it holds its value much better than others. If they want to encourage direct purchases. I don't think this is the way to do it. They are better off leaving well enough alone and concentrating on benefits and perks for direct purchases. Give people a good reason to buy direct that doesn't devalue their asset at the same time.

Quite Honestly, I don't think a "slight" booking advantage after home booking window is that devaluing to the DVC brand (the 8 vs 7 month booking window for non home resort), it could really push people to buy extra points, but would not really negatively impact the population as a whole.

The reason why I say it would not negatively impact the whole population is that if 20 people wanted to book at 7 months and there were 18 rooms at 5 different resorts...say only the top 5 have that booking advantage, the remaining 15 will still be competing with a selection of resorts. The whole point of the tiers is that only a "select few" would get that advanatage.

No, I am not a high point owner and don't plan on being one, but I also understand the point of tiers and in all actuallity it doesn't impact my membership. I will still book my trips at my home resort 11 months out and if I want to change I will try at 7 months, if I can't change, its not the end of the world. The only way this would hurt the brand is if they gave these members an advantage over other owners at their own home resort (say a 12 month advantage vs 11 month).

That is my point. IMO - benefits should be about member vs. non-member, not member with 100 points vs. member with 1000 points.

Not to be snide, but that is useless, it is a membership system...you already get benefits for being a member.

I think many people are missing the point about why DVC feels they need a tiered system. It has gotten too big. All the complaints about the loss of perks is because the system is too big to support anything meaningful, but if they paired it down to tiers, they could reintroduce and renegotiate some of those perks back into the system. So while members would get perks like you see now, higher tiers might get slightly different perks or certain advantages. Tie this into the falling resale prices and you could reinvigorate the system, bringing prices back up (if direct sales pick up, resales will come up as well, benefiting all members) and stimulating more growth in DVC.

DVC is growing and will not be what it was when it started at OKW, it has changed and will forever change...that is a given. As for people that feel length of ownership matters, it doesn't....we have all agreed to own for a certain length of time. Your mortgage company doesn't care when you bought your house, as long as you keep making your payment, same with your DVC.....there is only two real differences in members, how many points they own and where they bought. Until about 6 months ago, the second one didn't even matter until the rumors started about resale points being "stripped", which may or may not happen.....that is probably the biggest if of it all. Any other tiered program will strictly be on number of points.

 

[psac]

Tie this into the falling resale prices and you could reinvigorate the system, bringing prices back up (if direct sales pick up, resales will come up as well, benefiting all members) and stimulating more growth in DVC.

You could say the opposite as well. If the amount of resales go up, supply and demand could push the resale prices up, and if the resale prices went up, more people might buy direct if the resale difference wasn't as big as it is now. (Looking at BLT resale prices right now, I'm sure most people are just buying direct.) Obviously that could then push resale prices down again, but it's all about reaching the proper balance.

 

[Brian Noble]

Quite Honestly, I don't think a "slight" booking advantage after home booking window is that devaluing to the DVC brand (the 8 vs 7 month booking window for non home resort), it could really push people to buy extra points, but would not really negatively impact the population as a whole.

This is probably true, though there will be a few things that are already hard to get at 7 months (or 6.5) that might get a little harder. Wyndham has these differential booking windows (with some limits) and as far as I can tell, their impact is marginal. It's only open to "perky" owners in both sense of the word---they have to have the perk, *and* they have to be planning in advance. Some will, but most won't.

However, an 8-month window for the "in-crowd" might stimulate a lot of new purchases so that people could be "in". Especially those who own at older resorts but want to stay in rare-category rooms in the newer ones.

Mickey is one Clever Rat.

 

[dizfan]

If it's more difficult to book non-home resort, it may make timeshare swapping or renting even more common.

One door closes, another one opens.

 

[dianeschlicht]

If it's more difficult to book non-home resort, it may make timeshare swapping or renting even more common.

One door closes, another one opens.

That is my thought as well. If you can't get there by normal means, you have to get creative.