- Oct 26, 2011
Using Points for the DVC "Collections"
Because there is a wide range of opinion over the value of using DVC points to pay for something other than a stay at a DVC resort, the DVC Mods are establishing this thread as the only place to discuss this topic. Please keep your posts respectful - we do not want this thread to be a debate.
We Mods don't care how people use their points. In fact, there's nothing wrong with using points for cruising or a stay at a non-DVC resort. Depending on the circumstances it can often be a good choice. We believe good decisions start with good information.
This controversy is really over how you value your points.
For example, those who think cruising on points is a poor value generally value their points at $13.50 - $14.50/point or more. That's the amount that is supposedly easy to get by renting reservations or transferring points to another member.
Some believe that the initial cost of the points should be considered when determining the value of a point. Some include opportunity cost and the time value of money when calculating the value.
Others consider the initial buy-in as a sunk cost. (Perhaps they paid cash for the initial cost or have long since paid off the loan). These members value their points at the current cost of dues ($5.91 - $9.48 for calendar year 2019).
The above are just examples of the many ways members value their points.
It appears that DVC essentially values each point as the amount collected in maintenance fees each year - as they should since that is all they received. (The initial buy-in amount went to the Developer, not DVC). When they rent DVC rooms to cash guests, they need to recoup that maintenance fee amount plus the costs of managing the reservation thru Disney Resorts/DCL and also an amount for rooms that go unused as cash reservations. The formula for how they arrive at the credit/debit between DVC and DCL/ Disney Resorts is modified based on prior years and that is used when the point charts for the non-DVC options are negotiated and created each year with Resorts, DCL, ABD and the individual Concierge Collection options.
The Collections include:
- The Disney Collection - includes the Disney Cruise Line & non-DVC Disney resorts in WDW, DL, Paris, Tokyo & Hong Kong
- The Concierge Collection
- The Adventurer's Collection - includes Adventures by Disney
- World Passport Collection - includes trades made via RCI or the Lake Buena Vista Trading Company
Options in the World Passport Collection may be paid for with points obtained via resale or points purchased directly from Disney. The options in the Disney, Adventurer's & Concierge Collections are only available for points purchased directly from Disney or via resale contracts purchased before March 11, 2011.
Should a Member Use Points to Pay for non-DVC options?
Since cruising seems to generate the most controversy, let's use cruising to generate a list of some "pros & cons" for using points to pay for a non-DVC option. But keep in mind that the same list can easily apply to the other non-DVC options.
For cruising, we also should remember that even though food & entertainment are included in a cruise, members get the same amenities (including food, & entertainment) no matter how they choose to pay for it.
In general, if you value your points at $13.50 or more each, cruising is almost always a poor economic choice. If you value your points at $6-$9 or so, it can be a good choice.
Pros for using points to cruise:
1. It's convenient and very easy. MS acts as your Travel Agent.
2. Can be a good value. (You need to do the math for each option at the time of booking and it depends on how you value your points).
3. Renting reservations is not without risk. It can take time and effort and can be especially daunting for someone who hasn't done it before. If you go through a broker, you may not get all of your money until the renter has checked into the resort. Transferring points can also be frustrating. It may be tough to find someone who wants the number you want to sell. You are only allowed one transfer per use year per membership.
Negatives to using points to cruise:
1. Cancellation policy - Points are returned to your account, but they come back as Reservation Points. That means they expire at the end of the use year and cannot be used for a stay at a DVC resort or an exchange through RCI or the Lake Buena Vista Trading Company.
2. Fees - there's a non-refundable $95 fee to make the reservation and additional non-refundable $95 fees to make most changes.
3. DVC can (and has in the past) limited the number of cabins available to be booked for points.
4. Each year, DVC renegotiates the number of points required to cruise. In almost every case the number has increased. There is no "inflation protection" for cruising like there is for DVC resort stays.
5. The ability to use points for options other than DVC resorts is a benefit or perk that is not guaranteed by contract. At its sole discretion, DVC can stop offering it at any time. (This may not be likely or even a good decision on their part given its popularity with many members, but it is possible).
As you post your opinions, let's remember that owners are entitled to use their memberships as they choose. There is no one right or wrong answer that applies to everyone for every situation!
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