Why Do They Have "Use Years"?

[Iceman93]

I've tried to logically reason this one out, and am probably missing something blindingly obvious, but I can't for the life of me figure out the benefit to either Disney or the owners to "use years" and the "rule of four". There's obviously a lot of overhead to having to track and enforce it, though, so there must be some benefit to somebody.

Can someone clue me in?

 

[dmunsil]

I've tried to logically reason this one out, and am probably missing something blindingly obvious, but I can't for the life of me figure out the benefit to either Disney or the owners to "use years" and the "rule of four". There's obviously a lot of overhead to having to track and enforce it, though, so there must be some benefit to somebody.

Can someone clue me in?

The rule of four is pretty easy - Disney needs some amount of time to rent out the room.

For simplicity, let's imagine there are no "use years" and everyone's points are good during that calendar year. When someone trades out of DVC, Disney (specifically the Buena Vista Trading Company (BVTC) ) gets their points, and uses those points to rent DVC rooms for cash. The cash covers the cost of paying for whatever the person traded for, be it a cruise, Disneyland Hotel stay, etc. But those points need to be used before the end of the year, because the next year's room-nights are already spoken for. Similarly, when people bank points, that leaves potentially unused room nights, which Disney rents out. Again those points need to be used during that year. So if people suddenly banked or traded out two weeks before the end of the year, Disney could be on the hook to move a lot of room nights for cash with very little time to do so.

The bottom line is if you do anything with your points that doesn't involve staying in a DVC resort during those points' normal year, Disney may end up having to rent out the room-nights that weren't used (though not always, since borrowed points might balance out banked points). Since they have to do so before the next year is up, they want enough time to get that done.

If in fact there were no use years, that would mean there would be a flurry of activity where everyone was trying to snag last minute bookings in December. In addition, some people's standard vacation period might not work well with the calendar year, because they'd be constantly traveling inside that 4-month period near the end of the year, and would be in trouble if they had to cancel. So Disney created the "use year" concept to spread the demand across the whole year and allow people to position their 4-month "no-bank no-trade" zone across the part of the year that they're least likely to travel.

It's not essential that there be an even number of use years, or that there be one for every month. Disney decided on eight as a reasonable number, and aligned their start points with the 1st day of eight different months. But they could have had 6 or 9 or 10, and could have had them start on any date.

 

[hakepb]

If everyone's annual points expired at the same time, there would be unbalanced usage, fewer people would go at the end of a global use year. A variety of use years helps spread out usage and even out demand. (Not on just booking but also MS if everyone called to bank on the same day)

 

[Deb & Bill]

If we had fixed weeks, there wouldn't be a need for UYs. Since we don't have fixed weeks, we get UYs.

 

[Iceman93]

Couldn't your "use year" just start on the day you purchase your contract? So you get your first year's points the day you sign the dotted line, and they expire 364 days later. I'm certainly not suggesting putting everyone on a calendar year, expire on Dec 31 kind of schedule.

And thanks for the discussion on the Rule of 4, dmunsil. But I still think your main argument assumes if they don't have artificial use years that they'd fall back to a Jan-Dec "use year". Why not just everyone's year starts and ends on their purchase anniversary, and you can book and use anytime in that window? Once you trade out points or they expire, then they go back to DVD for cash use?

 

[Nanajo1]

If we had fixed weeks, there wouldn't be a need for UYs. Since we don't have fixed weeks, we get UYs.

One of the things I like about DVC is no fixed weeks!

 

[Deb & Bill]

...Why not just everyone's year starts and ends on their purchase anniversary, and you can book and use anytime in that window? Once you trade out points or they expire, then they go back to DVD for cash use?

Probably because there are a lot of new purchasers when a new resort opens up. And if a member buys at a new resort during a different month than they first bought, you get confusion.

 

[dvc_john]

Just for comparison to some other timeshare systems:

HGVC - calendar year

Marriott (weeks that joined new points program) - calendar year

Marriott (points purchased directly) - based on purchase date

Hyatt (fixed week converted to points) - based on underlying date of week owned

 

[dmunsil]

Couldn't your "use year" just start on the day you purchase your contract? So you get your first year's points the day you sign the dotted line, and they expire 364 days later. I'm certainly not suggesting putting everyone on a calendar year, expire on Dec 31 kind of schedule.

And thanks for the discussion on the Rule of 4, dmunsil. But I still think your main argument assumes if they don't have artificial use years that they'd fall back to a Jan-Dec "use year". Why not just everyone's year starts and ends on their purchase anniversary, and you can book and use anytime in that window? Once you trade out points or they expire, then they go back to DVD for cash use?

I don't know that what you're describing is impossible, but it would make the accounting somewhat more complicated. The way DVC does it now, each Unit (which is an arbitrary chunk of a resort, typically 2-4 rooms) has one use year. If they started everyone's use year when they signed up, they'd have to track points on a daily basis; every day of the year could conceivably have different availability for sales. By limiting their use years to eight, they have effectively only eight buckets of points to keep track of.

It's also possible that DVC believed that having the same use year for each unit was a requirement of Florida timeshare law, or made it easier for them to show that they are complying with Florida timeshare law. Everyone who owns a chunk of that unit has the same use year, which means they can show easily that they haven't oversold that unit, because they can show that they've only sold X number of points out of the Y points that are available for that unit. And since all of those points have the same use year, there can't be any funny business where they're technically oversold for some portion of the year.

Florida timeshare law is really clear that a developer can only sell shares up to 98% of the room-nights available for each unit. I don't know how other timeshare systems with different point expiration policies handle that issue.

 

[wdrl]

Florida timeshare law is really clear that a developer can only sell shares up to 98% of the room-nights available for each unit.

The 98% cap on sales is based on total points for a resort. It is not applied to individual Units or Phases. According to the data I have accumulated on BLT, 70 of the 223 Units at BLT have more than 98% of their points sold to the general public. Overall, 97.7% of BLT's 5,733,530 points is owned by the general public.

 

[dmunsil]

The 98% cap on sales is based on total points for a resort. It is not applied to individual Units or Phases.

Thanks; I stand corrected. Anyway the point remains, by having eight different use years it simplifies their accounting over having use years start on any day of the year. It certainly complicates accounting over just using calendar years. Maybe they just figured it was a happy medium.

It is interesting that the various points based timeshare systems have all these different ways of accounting for their points. I wonder if DVC was to start all over again would they do the eight use years again. It's certainly a source of confusion for the members. Would they do calendar years? Four use years? One use year that isn't aligned with the calendar year?