(When) will DVC go “negative”?

[VGCgroupie]

Very well could be true…but when DVc is marketing to new buyers and setting point charts, etc…which was part of the discussion…I think they do consider that as well.

RIV offers easy access to IG too…not as easy as walking but it can get you in and out for good and drink nicely.

But it has the Skyliner too which get you to HS which helps it stay as a strong one for cash guests and why IMO it was given the charts it was…

I may have missed some of the posts and what some are specifically comparing. I was specifically comparing to OKW.

 

[VGCgroupie]

I may have missed some of the posts and what some are specifically comparing. I was specifically comparing to OKW.

Also wanted to add having a decided bus for RIV is pretty great too.

 

[Sandisw]

I may have missed some of the posts and what some are specifically comparing. I was specifically comparing to OKW.

It’s also possible I mixed up the threads in replying too!! lol

 

[heathpack]

I think there's also an underappreciated psychological barrier at $20. It's just a round number, so it becomes "famous" among even those who are new to renting points. It sticks in their head that $20 is a fair price, $18 is a good price, $22 is fine for Grand Cal and Animal Kingdom Value, and anything above that is a ripoff.

Whenever that dam breaks, it might break hard towards $25 rather than trickling up slowly. It'll look more like a step-function.

It used to be that renting at $10/pt was a good deal and $12/pt was an extravagance.

 

[Chili327]

You're contradicting yourself in this post.

Old Key West is the best bang for your buck by a mile if you were actually trying to get the most dollars worth for each point spent. It's not even close.

I don't have the points charts in front of me, but as a rough example...

Old Key West might have a room for 10 points that would be $450 cash rate, $45 of cash value per point spent. That same night at Beach Club might be 15 points and $600 cash rate, only $40 of cash value per point spent.

Beach Club 50% more expensive in points but only 33% more expensive in cash, making it a worse redemption of points in dollars-of-rack-rate-per-point terms.

Owning a high dues resort like Old Key West to redeem them at a points-heavy resort is quite literally the worst financial way to own DVC. You would be much better off owning more points at a lower dues resort. If you were actually maximizing your points value, you would ALWAYS stay at OKW (or Boardwalk Standard View if you can get it, as it's another outlier).

Agree, spend BLT points at OKW is part of my plans.

I think you may be underestimating this a bit. I can only speak for ourselves, and we are pretty average in all respects, but we go into the World Showcase every night of our vacation while staying at Beach Club. That's one of the many things that make BCV so awesome.

The average person only spends a little time in World Showcase. They do one single loop per trip. That's just a fact.

Fact?? I guess I don’t know what the average person does, but I’ve never stayed at BCV and I spend 1/3 to 1/2 my time in Epcot per trip and more than half of that time is in world showcase.

Lol, that's a purely made-up fact. You cannot say with any degree of certainty what the "average" person does, or doesn't do, while on vacation.

And with that, I will move along.......

Show us the data.

Just because you repeat something over and over doesn't make it 'factual'.

I would like to see said data as well.

I can say that as someone who does help cash guests and families, this is pretty spot on.

More often than not, Epcot isn’t more than a once per trip visit.

Wow, that really surprises me, like I said, I usually spend more time in Epcot than any other park per trip.

 

[heathpack]

I guess what I find interesting is seeing resorts with strong "brands" like Sheraton and Hyatt being negative, in choice locations like Key West or Orlando, it does make me wonder if this could happen with some of the less desirable resorts location-wise like OKW. But, trading into the system would probably allow you to retain value.

I suspect, if it were to happen we would see it primarily with 1 Bedrooms, which already struggle against cash rates, and where, at times discounted cash rates through disney actually beat out point rental costs. So, it isn't negative for owners yet, but it could be, especially if Disney needed to discount the rooms more heavily in a future year.

We used to own two timeshares with Hyatt Vacation Club, and I can tell you from first hand experience that Hyatt "going negative" was very much a self-inflicted wound. Its not an inevitable fate of timeshares. For Hyatt, it was the result of some very poor management decisions.

I will leave some details out, because it gets confusing but here's the gist. In the old Hyatt system, you owned a specific week (say week 18, last week of May) in a specific unit (say unit 301) at a specific resort (say Hyatt High Sierra Lodge, a resort in an upscale part of Lake Tahoe right on the lake). You could every year use that exact week, or trade it for another Hyatt timeshare, or trade it through Interval into other non-Hyatt timeshares. Trading through Interval was a blazing good value, you could trade a 2 bedroom week into 3 weeks of studios, no problemo.

Then Hyatt Vacation Club purchased the exchange company Interval International. Nothing changed.

Then Marriott Vacation Club International purchased Interval International. (Yes, the Marriott timeshare system owns the Hyatt system, despite the different brand names.) Marriott VCI also purchased the Vistana timeshare system. Which means that MVCI now owns Marriott, Westin, Sheraton, and Hyatt timeshares AND the exchange system they use, Interval International.

This as you can imagine did not turn out well for the consumer. The MVCI version of Hyatt Vacation Club decided to take the lazy route. Instead of building more timeshare units/resorts, they invented a points product called Portfolio points- which is based on NO real property. Meaning there's no real estate behind it, you don't get a deed to anything. The points are expensive. If you actually read the sales contract, you are buying almost nothing for tens of thousands of dollars- some supposed booking advantages. The "product" sounds like you're buying that forever, but the contract actually says the Hyatt Vacation Club is committed to providing the points benefits for only TWO years. The points have no resale value. You may MF forever. Its genuinely absurd.

To actually provide a product for new Portfolio owners, they needed existing owners to buy Portfolio points and become part of the system. Then Hyatt could have access to booking my very nice owned week in Tahoe, say, and let me use something in the Portfolio system. But the only weeks in the Portfolio system were junky off season weeks owned by Hyatt themselves (because they'd foreclosed on these valueless weeks at some point) or Hyatt owners that owned junky off season weeks and bought Portfolio points hoping to upgrade into nicer weeks (that weren't actually in the system).

Then Hyatt relented and let existing owners trade into the Portfolio system so at least that one year they could provide use of your nice week to a Portfolio owner- but they weirdly made it prohibitively expensive, so not enough owners availed themselves of the opportunity. So they still had no good inventory for the Portfolio owners.

Then because Marriott also owns Interval (remember they own Hyatt Vacation Club too), they took away the sweet deal for Interval exchanging (to try to force these exchanges into the Portfolio system) but that is not going too well either.

At every step of the way, Hyatt Vacation Club forced more and more existing owners out which meant that HVC themselves owned more and more weeks- many of them junky because these are the owners who bail first. Portfolio owners also walk away as they realize they cannot book desirable weeks. This increases costs to HVC (because they have to pay the maintenance fees on all of those weeks, regardless of their desirability)- this led to dramatic year-over-year increases in MF and accelerates the exodus of existing owners.

So in a relatively short period of time (5 years maybe), the majority of Hyatt weeks went "negative" but not through market forces- it was through the deliberate actions of the management company. I personally bailed early enough that Hyatt bought my Tahoe week from me and took my Carmel, CA timeshare back for free (now they charge people a fee to take a week back). So I made out ok and got back maybe a third of my original resale investment after using the heck out of my Hyatts over a decade or so.

tl/dr basically the DVC version of this would be if DVC invented a product called Malarkey Points and tried to sell it to you for $40,000 + additional annual dues. They explain that Malarkey Points give you the rights to book at ANY (available) DVC resort in the Malarkey system at the six month mark, and at 11 months you can book ANY (available) POINTS in the Malarkey System.

If you are left totally perplexed by all of this and confused why anyone would buy Portfolio/Malarkey, its not because I've failed to explain it properly. Its because it literally makes zero sense.

 

[juliebee]

tl/dr basically the DVC version of this would be if DVC invented a product called Malarkey Points and tried to sell it to you for $40,000 + additional annual dues. They explain that Malarkey Points give you the rights to book at ANY (available) DVC resort in the Malarkey system at the six month mark, and at 11 months you can book ANY (available) POINTS in the Malarkey System.

is this what the DVC Palmetto Trust would be??

 

[heathpack]

is this what the DVC Palmetto Trust would be??

I have never heard of that? Is there a thread?

 

[heathpack]

is this what the DVC Palmetto Trust would be??

I just googled it. No, the Palmetto Trust is not the same. Its backed by real estate. You just buy into a real estate trust rather than a specific portion of a property. But the trust consists of real property.

There could be advantages of buying into a real estate trust. It wouldn't be a show stopper for me, but I would need to know all the details before signing on.

 

[Sandisw]

is this what the DVC Palmetto Trust would be??

The inventory in the trust remains owned by DVD.

Instead of selling it as a leasehold condominium, it is being sold as RTU.

Inventory is added, and then activated into a plan. When new inventory is added from a different component site, it can be added to the same RTU plan or be sold under its own RTU plan.

But, because SVD retains ownership of the actual property, it gives them more control to do things that aren’t possible with the leasehold condo situation.

 

[Brian Noble]

As to the "typcial" guest, here are the TEA/AECOM attendance guesstimates for the four WDW parks;

Magic Kingdom (17.8 million, +.7%)
EPCOT (12.1 million, +1.3%)
Disney’s Hollywood Studios (10.3 million, +.3%)
Disney’s Animal Kingdom (8.8 million, +.3%)

Then throw in the water parks
Typhoon: 1.8M
Blizzard: 0.9M

Disney counts a guest based on the first park they entered that day, and these are widely believed to be not quite right, so this is all a little bit sketchy, but still, based on this Epcot (as a whole) has about 23.4% of total resort-wide park attendance. We'll call it 24% as a round number. It is roughly built in two halves--The Half Formerly Known As Future World, and World Showcase. Either side is probably not more than 2/3ds of that, so World Showcase is somewhere between 8% and 16% of any particular guest's time in a park. So, @WinterSolider's 10% is in the ballpark based on the publicly available guesstimates.

Here's where things get a little bit wonky, though: DVC owners, as a group, are probably not "typical" guests. I'm guessing that the average DVC owner comes more often and spends more money per day than an "average" guest, if only because they have the discretionary income to do it. (Note that I suspect a typical DVC owner spends less per day than a typical non-DVC guest from the same income distribution who attends less frequently, but that's a different discusison for a different time.)

Would DVC owners, who are aytpical guests, spend more time in World Showcase? Maybe.

But, maybe the real question is: Would BCV owners spend more time in World Showcase than even other DVC owners because they own and most often stay at BCV? I am almost certain the answer to this is yes. It is the destination with the lowest friction, and it is not close. Chicken, egg, etc.

Finally, I'm going to guess that our friends at TouringPlans have a *very* good idea of where people who buy their product spend their time, because they have insight into the touring plans that people put together. (They might also have access to location data, but I don't think so---at least their app does not appear in my locacation-based services list.) Now, buyers-of-TouringPlans are also probably atypical guests, but arguably less so. I don't know if @lentesta wants to share any of that insight, but perhaps...

 

[Brian Noble]

Riffing on this some more:

I also suspect that the fraction of time one spends in World Showcase is at least partly proportional to the average age of the travel party. I say this as an Empty Nester who is Of A Certain Age, so it's me, hi, I'm the problem it's me. And, I further suspect that the average travel party age of a DVC party is older than the typical guest party. Why? Becuase even if we bought when our kids were younger, we own for decades, they don't stay young, it takes them a while to have children of their own, and those children and grandchildren are probably not joining for every trip.

And not all of us bought when our kids were younger.