Something, I've been thinking about: DVC has somewhere around 66,601,014 points in it's system (not counting Riviera) - With DVC being closed from March 20th to June 22nd, you have about 3 months of closure or about 16,650,253 points in "breakage" due to this closure period. Then, with availability being as high as ever; every day that goes by with empty rooms compounds to the problem of points being banked with the intent of future use.
There is somewhere in the neighborhood of 2.5% of points for cash, and another 2.5% or so in breakage resulting in somewhere in the neighborhood of 95% sustained occupancy (various sources). The only way these 16.6+ million in unused points can go away are either through spending, or expiration. Unfortunately, you can't get back lost time.
The easiest way that I can think of Disney handling this is that after all resorts are up to above maybe 50-75% occupancy, to take the difference in end of year 2019 banked points compared to potentially end of year 2020/2021 banked points and repurchase them, prorated per contract (and maybe even resort). Instead of issuing a potential credit for "reduced dues" due to the closure - apply the credit to a loan the DVC program will draw on (much as it has with insurance deductibles, like the repairs at Hilton Head in the past) for the repurchase, then spread the membership payback over the life of the loan.
If we forget the dues cost at any specific resort, the average 2020 dues across all of them was $7.62. If we assume all 16,650,253 points are dead, that's $126,874,927. Over 10 years at 4% interest that's $154,145,635 total which results in a $15,414,563 yearly payment, or a $0.23 yearly assessment per point over 10 years - when not adjusted for the original resorts dues. There will probably be more banked points than this, I would guess.
The result is that the total "booking power" is reduced to 2019 levels without having to wait years for the points to either be spent (banking year, after year, after year and stuffing rooms to the max) - or having excessive breakage charged to any one individual. At the end of the day, I think buying into avacation home DVC is like buying into a house. Just because the roof was ripped off during a storm, doesn't mean you still aren't paying property taxes and other expenses on it even though you can't use it. The loss of use here, in my opinion, is one of the risks that was intentionally shifted to the membership by creation of the program - in exchange for a discount over the cash rate.
Does anyone have any opinions for the upcoming competitive booking season(s)?
There is somewhere in the neighborhood of 2.5% of points for cash, and another 2.5% or so in breakage resulting in somewhere in the neighborhood of 95% sustained occupancy (various sources). The only way these 16.6+ million in unused points can go away are either through spending, or expiration. Unfortunately, you can't get back lost time.
The easiest way that I can think of Disney handling this is that after all resorts are up to above maybe 50-75% occupancy, to take the difference in end of year 2019 banked points compared to potentially end of year 2020/2021 banked points and repurchase them, prorated per contract (and maybe even resort). Instead of issuing a potential credit for "reduced dues" due to the closure - apply the credit to a loan the DVC program will draw on (much as it has with insurance deductibles, like the repairs at Hilton Head in the past) for the repurchase, then spread the membership payback over the life of the loan.
If we forget the dues cost at any specific resort, the average 2020 dues across all of them was $7.62. If we assume all 16,650,253 points are dead, that's $126,874,927. Over 10 years at 4% interest that's $154,145,635 total which results in a $15,414,563 yearly payment, or a $0.23 yearly assessment per point over 10 years - when not adjusted for the original resorts dues. There will probably be more banked points than this, I would guess.
The result is that the total "booking power" is reduced to 2019 levels without having to wait years for the points to either be spent (banking year, after year, after year and stuffing rooms to the max) - or having excessive breakage charged to any one individual. At the end of the day, I think buying into a
Does anyone have any opinions for the upcoming competitive booking season(s)?
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