Two-Tier DVC coming??

[BUDDYBEAR]

I AM NOT SURE WHAT IS GO ON WITH DVC LETS WAT AND SEE

 

[JimMIA]

Whenever there is a discussion of this sort, there always seems to be one component that is not even mentioned. We talk about how a tiering system might work, whether that would be good or bad for owners, etc.

But nobody talks about the most important factor: What benefit would tiering provide for DVD? Forget the effects on the owners (they don't care about that anyway), what's in it for DVD?

I frankly don't see any benefit at all to DVD in creating a second tier of resorts. I think they can accomplish far more by keeping everything in the same "Club," and just raising their selling prices and points-cost per night. The ability to use DVC points at any DVC resort is a big sales feature of the system, and if they lose or modify that, I think that would hurt their sales.

 

[Brian Noble]

I can think of a pretty good model---the Wyndham Presidential Reserve strategy. The Wyndham Access product does this as well, though to a lesser extent. The idea is to create a "new" product that is "backward compatible", but provides at least the impression that going the other way is harder. The new product is either a brand new resort, or special inventory at new resorts. In the Presidential Reserve case, PR inventory is usually a subset of the rooms at new resorts, typically either larger or better furnished, etc. PR owners can book "regular" inventory according to the regular rules, at which time "equivalent" PR inventory is released to non-PR people. But, otherwise, PR inventory is *reserved* for PR owners until relatively short notice (from memory, about the 3 month mark). There are other subtleties, but you get the idea. Effectively, PR is a "new" timeshare system that happens to have exchange privileges with the "old" system on a point-for-point basis.

This works because one of the big hooks of timeshare is selling exclusivity and preying on the fear of "missing out". This strategy allows you to create an upsell opportunity for existing owners, and it is surprisingly effective.

That said, I don't think DVC is likely to go that direction, at least not anytime soon. They don't really need to yet---there are plenty of less drastic measures they can take to help tamp down the perception of resale as a value proposition. What's more, I'm not sure DVC is big enough that a fractioned strategy will pay off. At least, not yet.

 

[DMKEDM]

...anyone who bought at one resort expecting to use their points regularly at another resort didn't understand the system.

And I wonder how many of us really did understand the system at the time we bought? I know I didn't. And I knew at the time that I didn't. I figured it out as I went along. It's not so hard to understand once you start using your points--but until you plug in what you want to do, the many variations are extremely confusing. And I not only do not know, I do not care, how other timeshares work. I didn't buy "a timeshare" (altho of course I did). I bought DISNEY. Specifically Walt Disney World. Even more specifically, SSR and BCV.

I suspect Disney would sell a whole lot fewer contracts if fully understanding (and reading the deeds, and understanding all that legal gobbledygook in the legal documents) is a prerequesite to purchase. And I'm a lawyer. I know how to read legal gobbledygook. (I read it all the time!) And I know how to understand it, too. I just chose to read only enough to assure myself of "what was what" with respect to the issues I cared about.

And I think that's a real issue. "Caveat emptor" may be a valid legal argument. But it's not so good for a robust sales situation, or a happy (or even less than so unhappy that wholesale bailing out occurs) membership. Most of us don't parsce out the legalities -- especially the future possible legalities -- of our purchases, even big ones like DVC.

I am troubled by the "it was in the document and if you didn't read it/understand it before you bought it's your problem" philosophy. It just doesn't account for the real world in which we all live.

Last point: I wonder how many DVC owner (like me) would under no circumstances consider buying "a time share." What they (I) bought was lodging at Walt Disney World, perhaps with the potential for trading out to other vacation spots some time(s) in the future. Timeshare users/owners seem to be much more committed to a standard of knowing all the legalities and possible complications.

Just a thought...

 

[bobbiwoz]

The high point cost of the Disney thngs that resale points can't buy is often mentioned as a reason for not caring about the exclusion. If Disney only lets direct bought points book these things, can the number of points needed to do these things come down for some reason? If doing the Disney collection was less expensive, those options would really be missed.

 

[jade1]

I vote in order:

1) stay at your home resort only (BLT/BCV will have much less wear and not be 105% full all the time)

2) 2 tier as discussed

3) the way it is

 

[Chuck S]

I think it is doubtful they will go to a two tier system using existing resorts. It is possible, as new reosrts are built, that a tiered system could be implements, in essence creating a set of resorts separate from the current resorts.

Imagine, though if those in the "upper tier" wanted a last minute reservation, and SSR or OKW were not available to them because of the weren't considered "tier-one" resorts. Or the outcry if OKW and SSR owners were not allowed to trade into the "tier-one" resort,but those owners could trade into SSR and OKW. Plus, would it evenbe legal, under timeshare laws, to not allow a trade system that favors non-reosrt owners a chance to trade-into resort without allowing the owners of the second resort equal trade opportunity into the first resort, other than using the number of ponts required per night?

For instance, if owners of Resort A were allowed to trade into Resort B, but Resort B could not trade into Resost A, would that be legal?

 

[jana]

I think Brian makes a very good point, BLT is offered first because it sells the most.

One of the basics of sales is "don't give the customer too many choices" because people get confused and then want "time to think it over" . Timeshares has ( although previously not Disney) always been ALL about closing the sale on the first meeting. If the salesman does too good a job giving the benefits of each of the 3 or 4 options , then the customer will want to weigh up those choices. If the salesman makes one option sound a considerably better fit for that customer he hopes that he is making it an easy ( and quick decision). In a perfect world the salesman would listen to the customers preferences and needs BEFORE launching into which of the offers is the best fit , however some sales people don't have the patience or ability to listen to AND UNDERSTAND the customers needs. Unless someone professes a love of animals ( or tree houses) IMHO BLT is the easier emotional sell phrases like " can u imagine waking up and looking at Cinderella's castle/ how will the kids feel having cinders castle as their nightlight/ can you imagine watching wishes fireworks from you very own balcony etc etc" are easy "buzz phrases" that are likely to connect with the customer. With families that are visiting WDW, the MK is the #1 attraction and it is the place that most families have the biggest emotional attachment to and EMOTION SELLS TIMESHARE.

I can't see a "two tier system" because I don't think there is any tangible financial benefit to Disney, certainly for the already constructed resorts. It would be a headache to administer and wouldn't necessarily drive extra business. For new resorts , I can see where for other companies it may work, but for Disney , one of the major benefits of DVC is the ability to use it at other Disney resorts. Anything that restricts that ability could lose them more sales than are gained from any perceived "cache" of " I bought an exclusive offering" . Unless there is a VERY obvious financial gain to Disney, I can't see them moving down that route.

 

[BeesKnees]

For instance, if owners of Resort A were allowed to trade into Resort B, but Resort B could not trade into Resost A, would that be legal?

Can any RCI owner trade to Disney? If so, we cannot trade for all RCI resorts.

Until I can figure out what is to be gained financially by restricting access I am not going to worry about a tier system that could make it harder for people to plan vacations. Last time I checked they still want us down there spending money.

 

[Brian Noble]

For instance, if owners of Resort A were allowed to trade into Resort B, but Resort B could not trade into Resost A, would that be legal?

Possibly, depending on what you mean by "could not trade into", and the details of how it works. The Wyndham Presidential Reserve case can illustrate one possible way. If a PR owner books a "non-PR" unit, then some "equivalent" PR inventory must be made available to non-PR owners. But, until the PR owner makes that decision, the inventory is not made available. What's more, Wyndham chooses which PR inventory to "demote". So, the PR owner has significantly more choice going into non-PR inventory than vice versa.

It's very much like the Disney-owned exchange options in DVC---once a DVC owner decides to, say, use points for a cruise, inventory equivalent to that number of points is made available to CRO to rent out. Until that happens, CRO doesn't have access to that inventory, and DVC chooses which inventory to give up. This is why e.g. Boardwalk View rooms are rarely (never?) available through CRO. Essentially, the *only* way to get a Boardwalk View is to own, or rent from an owner.

 

[Brian Noble]

For new resorts , I can see where for other companies it may work, but for Disney , one of the major benefits of DVC is the ability to use it at other Disney resorts. Anything that restricts that ability could lose them more sales than are gained from any perceived "cache" of " I bought an exclusive offering" .

See my prior post---it is possible to make the arrangement favor one direction. The new buyers are not restricted in any meaningful way, but the old owners have the impression of restriction, though not necessarily *actual* restrictions. For example, there is PR inventory at Bonnet Creek, but I always seem to see good availability for it even though I am not PR. Presumably, enough PR owners book "regular" inventory to keep a steady supply of PR inventory available. So, more smoke and mirrors than actual restrictions. But, smoke and mirrors is the basis on which timeshare is sold---even DVC---so that's enough to make it fly.

Again, though, I do not think it is likely at this time. The only thing that *might* make it likely is if Aulani has trouble selling. If so, any future "outside-the-berm" resorts might be formed this way, creating the impression of scarcity to get more current owners to add on. Even this strikes me as unlikely though---if they are not fundamentally as attractive, it won't matter if they are "scarce". No one will care.

 

[JimMIA]

Can any RCI owner trade to Disney?

Yes, providing they have enough trading power to get DVC.

If so, we cannot trade for all RCI resorts.

The ability to trade into DVC from RCI has nothing to do with it. For whatever reason, DVC and RCI agreed to limit the RCI choices available to DVC owners exchanging out.

DVC timeshare salespeople will tell you that was done to ensure that the RCI resorts were "Disney standards," but I doubt that's true. I have the strong feeling that DVC did not want to offer FULL RCI benefits because it would offer too many non-Disney vacation choices -- especially the RCI Extra Vacations, Last Calls, and cruises .

 

[Chuck S]

Can any RCI owner trade to Disney? If so, we cannot trade for all RCI resorts.

Until I can figure out what is to be gained financially by restricting access I am not going to worry about a tier system that could make it harder for people to plan vacations. Last time I checked they still want us down there spending money.

Actually, RCI trades into DVC do require a certain trading power. So no, not all RCI owners have the ability to trade week for week into DVC.

 

[rentayenta]

BLT may be on the sales peoples hot list, but SSR is getting the attention of the DVC bean counters.
SSR has been blessed with the tree house villas. Members debated how the tree houses could have gone into OKW instead of SSR.
Now DVC digs up a leisure pool and turns it into a themed pool. How often has that happened at the other DVC resorts?
I would not like to see a two tier system, but if I have to pick one resort, SSR is looking pretty good. If the rumored DTD major expansion comes to fruition, SSR is going to look even better to me.


Kevin

I totally agree with this.

 

[BeesKnees]

See my prior post---it is possible to make the arrangement favor one direction. The new buyers are not restricted in any meaningful way, but the old owners have the impression of restriction, though not necessarily *actual* restrictions. For example, there is PR inventory at Bonnet Creek, but I always seem to see good availability for it even though I am not PR. Presumably, enough PR owners book "regular" inventory to keep a steady supply of PR inventory available. So, more smoke and mirrors than actual restrictions. But, smoke and mirrors is the basis on which timeshare is sold---even DVC---so that's enough to make it fly.

From the number of people I see on here that are worried about booking a non-home resort at 7 months it seems we already have a two-tiered system.

I think what really fuels the true tiered system concern is the ever increasing PPP. New owners are paying so much I guess it is hard to imagine we will continue to have access to their properties having paid so much less. Maybe it will affect sales in the future if you have new owners upset that they have to share their property with people who may have paid less than half of what they did.

 

[Brian Noble]

I think what really fuels the true tiered system concern is the ever increasing PPP. New owners are paying so much I guess it is hard to imagine we will continue to have access to their properties having paid so much less.

This isn't the problem. DVD doesn't care about "fairness" in any abstract sense. They care only about current-quarter sales. Prospective owners typically know next to nothing about what *current* owners think---if they did, they would be buying resale. Instead, most prospective owners who become owners are the very definition of the impulse buyer. So, ever-growing price points are unlikely to matter, because the tour guests don't know the pricing history until the ink is dry on the contract, at which time it is too late.

 

[BeesKnees]

This isn't the problem. DVD doesn't care about "fairness" in any abstract sense. They care only about current-quarter sales. Prospective owners typically know next to nothing about what *current* owners think---if they did, they would be buying resale. Instead, most prospective owners who become owners are the very definition of the impulse buyer. So, ever-growing price points are unlikely to matter, because the tour guests don't know the pricing history until the ink is dry on the contract, at which time it is too late.

I never imagined DVD cared about fairness I am guessing at why current owners keep this tiered idea alive and it seems to be pointed at what the BLT costs and what a GF DVC might cost.

I see no financial benefit to it so unless it affects sales in some manner. Why stop one of the best perks that cost them practically nothing to offer? If DVC did build some presidential level rooms on new properties I imagine it would be some sort of exchange system.

 

[Breyean]

There's also the flip side to the new resorts requiring a bigger investment due to higher prices per point and higher points per night.

Once they learn the system, and become as "thrifty" as most current DVC owners here, they will realize they can translate those higher point totals in their contracts into longer or more frequent stays at the older resorts which have lower point per night requirements.

True, they'd have to trade off having the 11 month window at their own resort, but if they are shooting for OKW or SSR, which are quite large, they might see the value in getting more vacation for their buck.

 

[jennypenny]

Last point: I wonder how many DVC owner (like me) would under no circumstances consider buying "a time share." What they (I) bought was lodging at Walt Disney World, perhaps with the potential for trading out to other vacation spots some time(s) in the future. Timeshare users/owners seem to be much more committed to a standard of knowing all the legalities and possible complications.

Just a thought...

I think this bothers me the most. What Disney is selling is a timeshare, but many people don't feel the need to do their homework just because it's Disney. Disney puts on a great show, but they are a business and are out to get as much of your money as they can. They deliver a quality product, but they do it at a premium cost.

RE: any benefits to DVD for a two tier system, I think they could make more money overall. If an owner of SSR wants a week in a 2bd at BCV now during mid-season it's around 350 points. If SSR was in a different tier, they could charge say, 600 points and then have that many to rent out through CRO. Also, they could charge higher fees at the first tier resorts and give "benefits" as compensation. I could see giving first tier resort owners a better booking window, or priority for trading out to DCL or similar. I also wonder how many waitlists are for people trying to get into BCV and BLT. I'll bet it's a large percentage. It would unclog the system a bit.

I hope they don't split (I own at BCV and SSR and it would complicate my bookings), but I still think there are more (significant) changes to come. I didn't mean to start any kind of heated debate. I'm just trying to figure out what Disney can and might do. I have a lot of money tied up in my points and maintenance fees so I watch what they are doing.

 

[BeesKnees]

There's also the flip side to the new resorts requiring a bigger investment due to higher prices per point and higher points per night.

Once they learn the system, and become as "thrifty" as most current DVC owners here, they will realize they can translate those higher point totals in their contracts into longer or more frequent stays at the older resorts which have lower point per night requirements.

True, they'd have to trade off having the 11 month window at their own resort, but if they are shooting for OKW or SSR, which are quite large, they might see the value in getting more vacation for their buck.

While those of us that bought more points than we really needed because they were cheaper can easily afford the extra points to stay at the new resorts.

Of course even if OKW was a higher point value I would still want to stay there.