What if the bungalows aren't that popular?

[JohnDaleswife]

Just what if the bungalows at the Poly don't keep as high of an occupancy rate as Disney thought they would, would they then have to reallocate the points charts and make the studios require more points? Just a though really.

 

[CarolMN]

Maybe. It's certainly a possibility and covered in the contracts members sign at purchase (aka POS & MSPOS).

They've certainly done reallocations to even out the demand at other resorts. But those have been rare and really haven't been totally "predictable".

IMO, they only reallocate if there are a lot of unreserved nights over time. They haven't done them just because certain times of the year or booking categories fill up faster than others. It seems to be more about a pattern of certain villas or nights/times ending up empty a disproportionate amount of the time.

Anyway, it's DVC's duty to act in the best interest of the membership, so if there is a large enough disparity in demand, they are obligated to address it. I can't imagine they would do a reallocation for the bungalows before the Poly is sold out and been running a few years. But that's JMHO. YMMV.

POS = Position Offering Statement
MSPOS = Multi-Site Position Offering Statement

 

[beer dave]

Either they will or they will allow them to remain empty to boost occupancy at all the other DVC resorts---

 

[RobDoc]

In order to lower the points needed to stay in the bungalows, they would have to raise the points to stay in the Studios as the total points at the resort cannot change. Reallocation does allow DVC to alter weekend nights, weekly nights and seasons to keep the required balance - and that has been done a few times in the past at other resorts.

The very first reallocation was in 1996 at OKW and there have been subsequent reallocations affecting OKW and other WDW DVC Resorts. There has not been a reallocation for a few years now but it is important for DVC members understand it can (and has) happened in the past.

The POS document spells out what the points would be if there were no seasonal/weekend difference and all 365 nights were the same for each type of villa at each DVC resort.

 

[beer dave]

In order to lower the points needed to stay in the bungalows, they would have to raise the points to stay in the Studios as the total points at the resort cannot change. Reallocation does allow DVC to alter weekend nights, weekly nights and seasons to keep the required balance - and that has been done a few times in the past at other resorts.

The very first reallocation was in 1996 at OKW and there have been subsequent reallocations affecting OKW and other WDW DVC Resorts. There has not been a reallocation for a few years now but it is important for DVC members understand it can (and has) happened in the past.

The POS document spells out what the points would be if there were no seasonal/weekend difference and all 365 nights were the same for each type of villa at each DVC resort.

Yup, and it is coming..... those relatively low studio prices won't hold past 2 years. How did they come up with the point cost of the bungalows anyway? They are selling real property, so they have to attach it to some sort of value..... no? ...... How are the bungalows worth 8 million each? Did they really have to justify that for the state, or do they just pick a number they like?

 

[wdrl]

DVD and DVC have some options whenever inventory is not booked with points by DVC members. DVD could use its points to book the bungalows and then rent them out at relatively high rates. The rack rate for the bungalows starts at about $2,000-$2,100 per night, but even if DVD rents them for $1,500 per night it will probably make a profit. Keep in mind that Polynesian Village already has some one-bedroom suites with rack rates over $1,000 per night, so the larger bungalows should command a much higher tariff.

Any DVC inventory that is still available 60 (see note) days before check-in is considered Breakage inventory. Breakage inventory can be booked by DVC members using points or by Disney's regular cash guests. Although the number of points required to book a villa doesn't change just because it is considered to be Breakage inventory, Disney can charge almost any price it wants for the villa.
(Note: 60 days is the typical starting point for when inventory moves into the Breakage category. However, the master declaration allows the Breakage starting point to be as little as 30 days or as many as 90 days before check-in.)

DVC could deposit some of the bungalows in an external exchange program such as RCI. I don't understand the economics of exchange programs between timeshare systems, so I don't know if DVC would find this to be an attractive option or not.

DVC could certainly reallocate the point chart, resulting in the point costs for the bungalows going down and the studios going up. Although a reallocation cannot result in an increase of 20% in any calendar year, in 2009 and 2010 DVC actually spread a reallocation of greater than 20% over two calendar years.

If DVC reallocates points, PVB's master declaration guarantees that the point chart will have at least night that be be no higher than 22 points for a Standard View studio, 26 points for a Lake View studio, and 147 points for a bungalow. In 2016, PVB's point chart has 195 days out of 366 days where the point requirements are below these guaranteed amounts. I agree with CarolMN that if there is a reallocation, it won't happen until the resort has been open for two or three years.

 

[Simba's Mom]

Just what if the bungalows at the Poly don't keep as high of an occupancy rate as Disney thought they would, would they then have to reallocate the points charts and make the studios require more points? Just a though really.

Points chart? Is there a points chart out for the bungalows and studios yet? I just went to the member website and couldn't find one. I'm curious as to what those studios will be going for, points-wise. When BCV first came on-line and I decided I loved those studios, even though the points were much higher than at OKW, I was a little bummed about "paying" more. I have a feeling that now Poly will make me feel like BCV is a real bargain.

 

[beer dave]

So... lets say the construction cost for the bungalows is 250 a square foot--- should be an acceptable number.... thats about 300 k per building. add in the cost of accessing them, walkways and landscaping...double it? that's 600 k each....... times 20 is 12 m......... where does the other 148 m come in to play? Real estate? The 20 square feet of lake bed they all sit on? Really curious how this is justified...... All the studios together cost 480 m.... that is 1.33 m per studio..... reasonable. That is 2660 a square foot if they are 500 square feet (?). The bungalows are almost 7000 /sq ft. ...... I wish I could get that....

Someone help me with this math.......

 

[beer dave]

DVD and DVC have some options whenever inventory is not booked with points by DVC members. DVD could use its points to book the bungalows and then rent them out at relatively high rates. The rack rate for the bungalows starts at about $2,000-$2,100 per night, but even if DVD rents them for $1,500 per night it will probably make a profit. Keep in mind that Polynesian Village already has some one-bedroom suites with rack rates over $1,000 per night, so the larger bungalows should command a much higher tariff.

Any DVC inventory that is still available 60 (see note) days before check-in is considered Breakage inventory. Breakage inventory can be booked by DVC members using points or by Disney's regular cash guests. Although the number of points required to book a villa doesn't change just because it is considered to be Breakage inventory, Disney can charge almost any price it wants for the villa.
(Note: 60 days is the typical starting point for when inventory moves into the Breakage category. However, the master declaration allows the Breakage starting point to be as little as 30 days or as many as 90 days before check-in.)

DVC could deposit some of the bungalows in an external exchange program such as RCI. I don't understand the economics of exchange programs between timeshare systems, so I don't know if DVC would find this to be an attractive option or not.

DVC could certainly reallocate the point chart, resulting in the point costs for the bungalows going down and the studios going up. Although a reallocation cannot result in an increase of 20% in any calendar year, in 2009 and 2010 DVC actually spread a reallocation of greater than 20% over two calendar years.

If DVC reallocates points, PVB's master declaration guarantees that the point chart will have at least night that be be no higher than 22 points for a Standard View studio, 26 points for a Lake View studio, and 147 points for a bungalow. In 2016, PVB's point chart has 195 days out of 366 days where the point requirements are below these guaranteed amounts. I agree with CarolMN that if there is a reallocation, it won't happen until the resort has been open for two or three years.

Good info. thanks.

So if the bungalows are left vacant by DVC members, DVD can rent them for cash, and some of that goes towards mf? If I remember correctly, the amount of points held by DVD is about 5%? DVD can't afford the bungalows either. So they need members to not rent them to get enough points to sell them? Getting too involved.

 

[CarolMN]

Points chart? Is there a points chart out for the bungalows and studios yet? I just went to the member website and couldn't find one. I'm curious as to what those studios will be going for, points-wise. When BCV first came on-line and I decided I loved those studios, even though the points were much higher than at OKW, I was a little bummed about "paying" more. I have a feeling that now Poly will make me feel like BCV is a real bargain.

The charts got leaked - here's one of many threads with the chart for you to examine before Monday's official release.

DVC Points Charts

 

[disBOBney]

Just what if the bungalows at the Poly don't keep as high of an occupancy rate as Disney thought they would, would they then have to reallocate the points charts and make the studios require more points? Just a though really.

I don't believe they can. Each category room is declared with a minimum number of points necessary for a stay in that category. The Bungalows, studio lake view and studio standard view categories are defined. So unless they can redefine any studios as bungalows that isn't an option. This last statement though ridiculous is made be cause sometimes rooms have been reassigned view categories. So while they could reclassify what category a particular room falls into they cannot raise the minimum required points for a particular category.

Therefore, if the bungalows aren't popular at the number of points that they require for given night, the points can be adjusted downward to make them more popular, (and at a later time should they become more popular they could be adjusted back up until that magic minimum is reached,) or they could lower the points during one season and simultaneously raise them in others as long as the avg does not increase beyond the filed minimum for the category.

 

[wdrl]

Good info. thanks.

So if the bungalows are left vacant by DVC members, DVD can rent them for cash, and some of that goes towards mf? If I remember correctly, the amount of points held by DVD is about 5%? DVD can't afford the bungalows either. So they need members to not rent them to get enough points to sell them? Getting too involved.

Part of the income from Breakage becomes a credit on the resort's budget. If you look at the annual budget for the resorts you own, you will see a budget line item for Breakage Inventory. Usually its between $0.05 and $0.12 per point.

The master declarations for all DVC resorts, including PVB, require that DVD retain at least 2% of each resort's total points. I'm sure it varies from resort to resort. At AKV, my data shows DVD holds about 3.73% of its 7.4+ million points; at BLT, it holds about 2.1% of its 5.7+ million points.

By the way, there may be a few more large point buyers than you might imagine. The largest single point deed I've seen at VGF was for 1,313 points, and there are at least a dozen more with 1,000+ points. Admittedly, that is not a lot of big deal. But I've lost track of the number of buyers who purchase multiple deeds that have 300+ points each. Once, I saw someone buy four 600-point deeds on the same day.

Edited to add: When we joined DVC in 2009, the maximum point holdings per individual was 2,000 per resort and 4,000 points DVC-wide. By 2010 or 2011, those caps were changed to 4,000 points per resort and 8,000 DVC-wide. It would not surprise me if those caps have been increased even more since the opening of VGF.

 

[beer dave]

Part of the income from Breakage becomes a credit on the resort's budget. If you look at the annual budget for the resorts you own, you will see a budget line item for Breakage Inventory. Usually its between $0.05 and $0.12 per point.

The master declarations for all DVC resorts, including PVB, require that DVD retain at least 2% of each resort's total points. I'm sure it varies from resort to resort. At AKV, my data shows DVD holds about 3.73% of its 7.4+ million points; at BLT, it holds about 2.1% of its 5.7+ million points.

By the way, there may be a few more large point buyers than you might imagine. The largest single point deed I've seen at VGF was for 1,313 points, and there are at least a dozen more with 1,000+ points. Admittedly, that is not a lot of big deal. But I've lost track of the number of buyers who purchase multiple deeds that have 300+ points each. Once, I saw someone buy four 600-point deeds on the same day.

Edited to add: When we joined DVC in 2009, the maximum point holdings per individual was 2,000 per resort and 4,000 points DVC-wide. By 2010 or 2011, those caps were changed to 4,000 points per resort and 8,000 DVC-wide. It would not surprise me if those caps have been increased even more since the opening of VGF.

I want to say I recall it being 1000 cap in 03 for total ownership.....Even if someone owned 2000 points, who would spend them all for 8 people and 1 week? Maybe once.... There would have to be about 1000 of these people to full time occupy the bungalows..... every year...... Maybe I am naive...

I also recall from 03 that they were quite adamant about not allowing commercial ownership, and if commercial activity was excessive they would reposses.

 

[CarolMN]

Just what if the bungalows at the Poly don't keep as high of an occupancy rate as Disney thought they would, would they then have to reallocate the points charts and make the studios require more points? Just a though really.

I don't believe they can. Each category room is declared with a minimum number of points necessary for a stay in that category. The Bungalows, studio lake view and studio standard view categories are defined. So unless they can redefine any studios as bungalows that isn't an option. This last statement though ridiculous is made be cause sometimes rooms have been reassigned view categories. So while they could reclassify what category a particular room falls into they cannot raise the minimum required points for a particular category.

Therefore, if the bungalows aren't popular at the number of points that they require for given night, the points can be adjusted downward to make them more popular, (and at a later time should they become more popular they could be adjusted back up until that magic minimum is reached,) or they could lower the points during one season and simultaneously raise them in others as long as the avg does not increase beyond the filed minimum for the category.

It actually depends on how the bungalows & studios were declared into the condominium.

Technically, the total number of points required to reserve every night of the year for a UNIT can't change. I don't know how the UNITS for PVB were declared. It may be that a UNIT for PVB consists of a single bungalow and no studios. Perhaps another UNIT contains only a group of studios or maybe an entire building of studios. Or perhaps a UNIT consists of a few bungalows and a group of studios. This is a question for someone who follows the declarations - perhaps wdrl will see this and reply.

If a UNIT contains studios and bungalows, then YES, a reallocation could make studios more expensive and bungalows less expensive.

If a declared UNIT only contains bungalows, then points could not go from bungalows to studios. In that case, a reallocation could only occur between seasons or days of the week for the bungalows. And a reallocation for studios could only involve studio point costs, not bungalow point costs.

I'd like to know this myself!

 

[hakepb]

I want to say I recall it being 1000 cap in 03 for total ownership.....Even if someone owned 2000 points, who would spend them all for 8 people and 1 week? Maybe once.... There would have to be about 1000 of these people to full time occupy the bungalows..... every year...... Maybe I am naive...

I also recall from 03 that they were quite adamant about not allowing commercial ownership, and if commercial activity was excessive they would reposses.

Max points allowed were increased with or by the time of VGF sales, or was that BLT. Both have GV's that take "too many" points for normal contracts.

 

[disneynutz]

Maybe. It's certainly a possibility and covered in the contracts members sign at purchase (aka POS & MSPOS).

They've certainly done reallocations to even out the demand at other resorts. But those have been rare and really haven't been totally "predictable".

IMO, they only reallocate if there are a lot of unreserved nights over time. They haven't done them just because certain times of the year or booking categories fill up faster than others. It seems to be more about a pattern of certain villas or nights/times ending up empty a disproportionate amount of the time.

Anyway, it's DVC's duty to act in the best interest of the membership, so if there is a large enough disparity in demand, they are obligated to address it. I can't imagine they would do a reallocation for the bungalows before the Poly is sold out and been running a few years. But that's JMHO. YMMV.

POS = Position Offering Statement
MSPOS = Multi-Site Position Offering Statement

I still do not understand why unreserved nights isn't in the best interest of the membership?

Bill

 

[hakepb]

It actually depends on how the bungalows & studios were declared into the condominium.

Technically, the total number of points required to reserve every night of the year for a UNIT can't change. I don't know how the UNITS for PVB were declared. It may be that a UNIT for PVB consists of a single bungalow and no studios. Perhaps another UNIT contains only a group of studios or maybe an entire building of studios. Or perhaps a UNIT consists of a few bungalows and a group of studios. This is a question for someone who follows the declarations - perhaps wdrl will see this and reply.

If a UNIT contains studios and bungalows, then YES, a reallocation could make studios more expensive and bungalows less expensive.

If a declared UNIT only contains bungalows, then points could not go from bungalows to studios. In that case, a reallocation could only occur between seasons or days of the week for the bungalows. And a reallocation for studios could only involve studio point costs, not bungalow point costs.

I'd like to know this myself!

I used to think it was a unit, but the SSR reallocation reduced some normal rooms when they increased the THV points... And those THV units weren't in anyone's thought when the other SSR units were declared.

 

[beer dave]

I still do not understand why unreserved nights isn't in the best interest of the membership?

Bill

One unreserved night in a bungalow means 6 to 12 nights possibly being reserved in a studio, making others bookings more difficult.... Ideally all the rooms need to be filled for people to not be "left out".... 1 million points a year being bled into the current availability is quite a hit.

 

[hakepb]

I was thinking there might, at least be some decent rental possibilities for cash guests (ie in conjunction with weddings or other occasional users). But, no. The CRO cash rate for a Bungalow is $2300-$2400 over July 4th. The weekend points for July 4th weekend is 187. Renting points at $15 each is $2805. No one would ever want to rent points for a Bungalow unless they were really, really anti-daily mouse keeping.

 

[Dean]

So... lets say the construction cost for the bungalows is 250 a square foot--- should be an acceptable number.... thats about 300 k per building. add in the cost of accessing them, walkways and landscaping...double it? that's 600 k each....... times 20 is 12 m......... where does the other 148 m come in to play? Real estate? The 20 square feet of lake bed they all sit on? Really curious how this is justified...... All the studios together cost 480 m.... that is 1.33 m per studio..... reasonable. That is 2660 a square foot if they are 500 square feet (?). The bungalows are almost 7000 /sq ft. ...... I wish I could get that....

Someone help me with this math.......

The construction math really is irrelevant from a member standpoint. For timeshares it's usually roughly half the total cost or less, the rest is profit and advertising related issues.

It actually depends on how the bungalows & studios were declared into the condominium.

Technically, the total number of points required to reserve every night of the year for a UNIT can't change. I don't know how the UNITS for PVB were declared. It may be that a UNIT for PVB consists of a single bungalow and no studios. Perhaps another UNIT contains only a group of studios or maybe an entire building of studios. Or perhaps a UNIT consists of a few bungalows and a group of studios. This is a question for someone who follows the declarations - perhaps wdrl will see this and reply.

If a UNIT contains studios and bungalows, then YES, a reallocation could make studios more expensive and bungalows less expensive.

If a declared UNIT only contains bungalows, then points could not go from bungalows to studios. In that case, a reallocation could only occur between seasons or days of the week for the bungalows. And a reallocation for studios could only involve studio point costs, not bungalow point costs.

I'd like to know this myself!

While that is how I read the POS's that I have (AKV, OKW, BWV), clearly this was not adhered to with the last 2 yr reallocation or the THV adjustment and it's not in the interest of the owners at a given resort as a whole. That's one of the reasons I felt the THV should have been a separate resort with a shared check in.

From a practical standpoint and if the demand is truly off for the 2 BR (I don't think they will be BTW), they can adjust between the 3 options if needed. At this point they could also adjust downward but not upward for the entire resort by altering the undeclared component. They did this at BWV after it was completed but before it was fully declared. Some think it was planned up front at BWV but I don't believe that is true personally. If they did they'd need to wait a number of years before they'd have enough info to make an informed adjustment. It's a relatively expensive accounting issue to change these things around and it tends to create ill will at times.