Why expensive points charts are a good thing

[Patmcpsu]

I've been monitoring CFW's struggles with sales, and like lots of people here, blamed it on The Cabins being a niche concept that few people would be interested in. However, this one comment changed my mind on everything:

I completely disagree about demand. You are looking at price per night, OK, but that is just one measure. What about occupancy rate? Those cabins are all booked solid, not just the ones on points, but they are typically filled up with cash guests as well. I mean the demand is there, now does the pricing meet the demand? Well that may be a different question. From the lack of incentives that CFW has had, it seems like DVC isn't too concerned about the pace of sales.

The Cabins are one of the hardest places to book at 7 months, and that's even with resale owners being ineligible owners to book there. Why would this be the case with a niche resort than hardly anyone wants to buy at?

I think the answer is the points chart. Outside owners are drawn to CFW because the cabins are priced like studios, but they are physically halfway between a studio and a 1BR villa. For reference, here's the charts for Poly Longhouse vs the Cabins:

Time Period	Poly Longhouse (Resort View, Weekday)	CFW (Weekday)	Poly Longhouse (Resort View, Weekend)	CFW (Weekend)
September	14	15	17	18
January & Early May	17	16	20	19
Late May - June & December (non-Holiday)	19	18	22	21
Early Feb & Summer	20	20	23	24
Fall	22	22	25	25
Spring & Thanksgiving	25	24	28	28
Christmas & Easter	34	32	36	36

You may say "of course cheap points charts are good!" Not really. If you assume that the total maintenance cost for a resort is a fixed amount, and that amount is divided by the total number of points allocated, a cheap points chart results in less allocated points, and less allocated points mean a higher $/pt annual fee being required.

You may say that it doesn't matter if a Cabin costs 25 points at $12/pt, or 30 points at $10/pt... it's still $300/nt either way. But let's take it to the extreme. Would you rather have 300 points that cost $1/pt in annual fees or 1 point that costs $300/pt in annual fees? Yes, it makes no difference if you are only staying at The Cabins, but think about your ability to stay elsewhere. Your 300 points at $1/pt becomes a cheat code, whereas 1 point at $300/pt becomes useless.

And yes, there are the upfront costs. If buying direct, 300 points would be 300x more expensive than one point. This is what people fixate on when they see an expensive points chart, and it has merit if you're during direct. However, resale prices would factor this in. But there's no getting around it; upfront costs are where it hurts (but that's kind of the concept of DVC).

For example, the Poly Island Tower's point chart is notoriously expensive, but Poly's maintenance fees have gone *down* last year after the tower opened. Some of this is because a brand new steel tower requires less maintenance than 50 year old wood framed buildings. But I think the driving factor is there are a *lot* of points allocated to that tower. As more of those points get declared, they will dilute the maintenance burden and the $/pt amount will continue to go down.

In short, expensive points charts do cause sticker shock which is an unpleasant emotion. However, what they do is:

1. Lowers $/pt annual fees.
2. Gives owners a better "exchange rate" for staying elsewhere.
3. Gives outsiders a worse "exchange rate" for staying at your resort.

 

[VGCgroupie]

I think this is a stretch since CFW has hardly any declarations you cant say it's sold out just because of the low point chart. Its hard to book right now specifically because there is not many to book.

But yes as with anything in life cheaper things will always be in more demand and sell before more expensive things.

 

[Chili327]

I think this is a stretch since CFW has hardly any declarations you cant say it's sold out just because of the low point chart. Its hard to book right now specifically because there is not many to book.

But yes as with anything in life cheaper things will always be in more demand and sell before more expensive things.

AKV value rooms don’t book fast because of the view?

 

[atthebeachclub]

I’d call expensive point charts a compromise. Not exclusively good or bad.

 

[zavandor]

It really depends on how you plan to use your points.
I bought my SSR points with the intention of playing the 7 months game and staying over time at all DVC resorts. I don't have a favorite and as long as I had a WDW 11 months priority I was happy with whatever. When I bought BWV was selling resale for $58 and yet I chose SSR for length of contract and lower MF.
In a scenario like mine (buy the cheapest resort where you don't mind staying at), cheap buy in and cheap MF are the most important thing.

The opposite is true is you "buy where you want to stay". In this case, if one buys a resort with the intention of staying there most of the time, then lower point charts are more important that low MF.
Because it doesn't really matter what is higher, if you always stay at your resort, the ongoing cost per night of the room is a constant.
Forllowing your example, if the room costs 300 points per night and MF are $1, the cost per night is $300. If the room costs 1 point and MF are $300, then the cost per night is still $300.
What changes is the buy in cost. If the room costs 300 points, you need to spend $235x300 = $70,500 (before incentives). If the cost is 1 point, you need to spend $235.

So, if you want to buy SAP, then low MF are better, if you want to stay most of the time at the resort you're buying, then lower point chart are better.
(I know, not rocket science)

In the case of CFW, I think that people buying there are probably looking to stay there most of the time. The cabins appeal to a different type of public:
- they sleep 6
- they are remote (for good and bad)
- you can bring your dogs
- fewer/different amenities at the resort
- huge for the point cost

For example, a family of 6, who buys at the cabins, would need to shorten their stay from 1 week to 2-3 days to book a 2BR elsewhere.
Or, a family who likes to bring their dog have really no alternative.
Someone who likes the tranquillity of the fort would probably go crazy at the Poly....

So I would argue that for the CFW it is better to have low point charts and high MF. If you're looking for SAP, look elsewhere.

 

[airjay75]

As more of those points get declared, they will dilute the maintenance burden and the $/pt amount will continue to go down.

I don't know if you saw @Sandisw's response to this point you made on the predictions thread, but I don't think is quite how it works. I'm not the expert on this, but I believe the number of points available at any DVC Resort is set before sales begins - PIT has about 3.6M points and about 1.4M have been declared into sales (https://dvcnews.com/wdw-resorts/pol...tower-adds-12-vacation-homes-to-dvc-inventory). The proportionate amount of expenses are still allocated to those undeclared points and Disney has to pay that proportionate share (as well as any declared, but not yet sold, presumably). So, in theory, any new points declared should not have any dilutive effect on dues. Of course, dues could still go down for other reasons, but I don't think more points declared, in and of itself, should cause dues to decrease.

 

[disneylandtour]

I've been monitoring CFW's struggles with sales, and like lots of people here, blamed it on The Cabins being a niche concept that few people would be interested in. However, this one comment changed my mind on everything:

The Cabins are one of the hardest places to book at 7 months, and that's even with resale owners being ineligible owners to book there. Why would this be the case with a niche resort than hardly anyone wants to buy at?

I think the answer is the points chart. Outside owners are drawn to CFW because the cabins are priced like studios, but they are physically halfway between a studio and a 1BR villa. For reference, here's the charts for Poly Longhouse vs the Cabins:

Time Period	Poly Longhouse (Resort View, Weekday)	CFW (Weekday)	Poly Longhouse (Resort View, Weekend)	CFW (Weekend)
September	14	15	17	18
January & Early May	17	16	20	19
Late May - June & December (non-Holiday)	19	18	22	21
Early Feb & Summer	20	20	23	24
Fall	22	22	25	25
Spring & Thanksgiving	25	24	28	28
Christmas & Easter	34	32	36	36

You may say "of course cheap points charts are good!" Not really. If you assume that the total maintenance cost for a resort is a fixed amount, and that amount is divided by the total number of points allocated, a cheap points chart results in less allocated points, and less allocated points mean a higher $/pt annual fee being required.

You may say that it doesn't matter if a Cabin costs 25 points at $12/pt, or 30 points at $10/pt... it's still $300/nt either way. But let's take it to the extreme. Would you rather have 300 points that cost $1/pt in annual fees or 1 point that costs $300/pt in annual fees? Yes, it makes no difference if you are only staying at The Cabins, but think about your ability to stay elsewhere. Your 300 points at $1/pt becomes a cheat code, whereas 1 point at $300/pt becomes useless.

And yes, there are the upfront costs. If buying direct, 300 points would be 300x more expensive than one point. This is what people fixate on when they see an expensive points chart, and it has merit if you're during direct. However, resale prices would factor this in. But there's no getting around it; upfront costs are where it hurts (but that's kind of the concept of DVC).

For example, the Poly Island Tower's point chart is notoriously expensive, but Poly's maintenance fees have gone *down* last year after the tower opened. Some of this is because a brand new steel tower requires less maintenance than 50 year old wood framed buildings. But I think the driving factor is there are a *lot* of points allocated to that tower. As more of those points get declared, they will dilute the maintenance burden and the $/pt amount will continue to go down.

In short, expensive points charts do cause sticker shock which is an unpleasant emotion. However, what they do is:

1. Lowers $/pt annual fees.
2. Gives owners a better "exchange rate" for staying elsewhere.
3. Gives outsiders a worse "exchange rate" for staying at your resort.

There's a certain segment of consumers (maybe some college students?) for which low cost is more important than most any other element. But the vast majority of consumers tend to avoid costs extremes and focus on value within middle range options for most purchases. I'm at the airport right now. Could I have booked my flight on Spirit instead of Delta and saved maybe $100? Sure. But despite the low cost, that isn't a desirable option. Likewise, I could've booked a private jet for about $25k, which would've been far more convenient and likely comfortable, but the cost is far too high. This is generally how most consumers explore most purchase options--that they weigh value to cost, not just cost by itself.

 

[zavandor]

I don't know if you saw @Sandisw's response to this point you made on the predictions thread, but I don't think is quite how it works. I'm not the expert on this, but I believe the number of points available at any DVC Resort is set before sales begins - PIT has about 3.6M points and about 1.4M have been declared into sales (https://dvcnews.com/wdw-resorts/pol...tower-adds-12-vacation-homes-to-dvc-inventory). The proportionate amount of expenses are still allocated to those undeclared points and Disney has to pay that proportionate share (as well as any declared, but not yet sold, presumably). So, in theory, any new points declared should not have any dilutive effect on dues. Of course, dues could still go down for other reasons, but I don't think more points declared, in and of itself, should cause dues to decrease.

You are perfectly right.
However, it is true that lately (I think it started being evident with CCV) DVC tends to overestimate dues at resort opening and for the following few years they increase very little or even decrease a bit, while the other resorts catch up. This might give the impression that more declarations lower the dues, but it's correlation, not causation.

 

[AstroBlasters]

I don't know if you saw @Sandisw's response to this point you made on the predictions thread, but I don't think is quite how it works. I'm not the expert on this, but I believe the number of points available at any DVC Resort is set before sales begins - PIT has about 3.6M points and about 1.4M have been declared into sales (https://dvcnews.com/wdw-resorts/pol...tower-adds-12-vacation-homes-to-dvc-inventory). The proportionate amount of expenses are still allocated to those undeclared points and Disney has to pay that proportionate share (as well as any declared, but not yet sold, presumably). So, in theory, any new points declared should not have any dilutive effect on dues. Of course, dues could still go down for other reasons, but I don't think more points declared, in and of itself, should cause dues to decrease.

 

[Carouselofplanning]

I think this is a stretch since CFW has hardly any declarations you cant say it's sold out just because of the low point chart. Its hard to book right now specifically because there is not many to book.

But yes as with anything in life cheaper things will always be in more demand and sell before more expensive things.

This is spot on. It’s hard to book because much of it isn’t open to DVC use. Nothing to do with point charts.

 

[airjay75]

You are perfectly right.
However, it is true that lately (I think it started being evident with CCV) DVC tends to overestimate dues at resort opening and for the following few years they increase very little or even decrease a bit, while the other resorts catch up. This might give the impression that more declarations lower the dues, but it's correlation, not causation.

Out of curiosity, I just checked how many points to original PVB had - just a little over 4 million apparently (https://dvcnews.com/dvc-program-men...h-2016-as-incentives-begin-for-the-polynesian)

PIT adds 3.6 million, so the majority of Poly's expenses are from the older PVB, which had dues of $8.23/point prior to PIT and. Poly's compounded annual growth rate in dues prior to the tower opening was just under 4%. If one assumes the growth in expenses of PIT are going to be similar to RIV or CCV, that would probably mean Poly dues should increase by something of around 3% per year going forward (or maybe a little less). Will be interesting to see how this plays out over the long run.

Going to post this on the predictions thread too just because I think it is interesting.

 

[Chili327]

You are perfectly right.
However, it is true that lately (I think it started being evident with CCV) DVC tends to overestimate dues at resort opening and for the following few years they increase very little or even decrease a bit, while the other resorts catch up. This might give the impression that more declarations lower the dues, but it's correlation, not causation.

I would bet that is by design, to start high to make sure they are covered, then let them get lower over the next 5 years to help sell, then once it is closer to selling out they could raise them up a significant amount again now that the majority of points are locked in to dues being paid.

 

[Genie+]

AKV value rooms don’t book fast because of the view?

Very true, but 8 out of 18 have a savannah view (40%). 8 are Pool view, 2 face parking lot. All are 5th floor and very conveniently located for almost everything at Jambo. None far from lobby.

Mid season #4 point - weekday studio, which is kind of ‘average’:
9 Value
14 Standard
17 Savannah

If you luck out with savannah, you just saved almost half the points in exchange for giving up 44sq of the normally 360sq studio. Not too big a big deal - Value is still 316sf.

Confirmed reservations for Value studio are getting very close and often the same nightly price as standard view. For those who don’t mind losing a bit of space, you get:
guaranteed location,
high shot at Savannah view,
much lower odds of a ‘bad’ view/location than Standard,
and at least if you have the misfortune of getting the ‘worst’ views Value studios, it still is 5 floors up with no risk of looking at a wall, rooftops, utilities, etc.

Even when not getting the cost savings, enough demand is happening for the small inventory of Value studios that spec res is often able to charge similar price/night to Standard in the same season.