Why is renting points so "cheap"

[Jen D]

The market isn't right or wrong, it just is.

 

[k_k_100]

I’m afraid I’m going to kick myself for even posting… but, here goes. I’m renting for the second time this year – I LOVE the DVC members I’ve rented from! Last year I paid $12/point – this year I planned ahead and was able to make a reservation @ $10/point. In my personal situation I usually go for 4 nights – 2 week & 2 weekend. I’m spending $177/nt for a BWV (including paypal fee for using credit card $30). I made my reservation @ 11 months out & had it paid in full 5 months in advance. In my mind @ 11 months out I made a commitment – not when it was paid off.

Now – I decided to add on an extra night & thought it would be neat to try something different. I was able to book a concierge room at AKL for $264/nt. I would have LOVED to take advantage of the dining plan (for my family it would be a great deal). As a renter I don’t have that option – I could not change my ressie to the AKL for all nights when that great deal came around.

PLEASE – don’t get me wrong! I’m thrilled to be getting such a great rate at BWV!!!! There is a good chance I will try to rent again next year! The price was worth the trade-off for me (not having the flexibility to make any changes - and, heaven forbid, if an emergancy arose & I had to cancel - I'd be out all my money!). It is stressful making concrete vacation reservations 11 months in advance – but, nothing in life is free. If the rate was much higher I might have to take my chances w/ CRO. I’m also a HUGE fan of the Dolphin – so I think of that as a great back up.

Please, don’t put me on the “naughty renters list” . I really enjoy having the chance to enjoy your beautiful “homes”. I just wanted to share another point of view. I hope you will still rent to me

 

[SonicLogic]

Just to confuse matters further..

WAY too many people are making comparisons to rates they got (or "heard" someone got) since 9/11. That horrible event caused panic in the Tourism industry and everybody was offering deals to get people to travel.

Yes, the offsite hotels were offering $20.03 (by the way, that particular one was a short lived mistake, although the hotels stood behind it), just to get bodies in the door. Disney was offering some great discounts, although you had to have an AP, live in a particular state, etc. You also had to move pretty fast. Those discounts are fading fast now that tourism is back up.

That $20.03 rate was at an onsite hotel, the Courtyard by Marriott (now the Holiday Inn) on Hotel Plaza Blvd. and it was not a mistake. They offered that promotion for 3 years in a row. In 2001 the rooms were $20.01 and in 2002 they were $20.02 and in 2003 they were $20.03. Room discounts were prolific prior to 9/11 and they are still ubiquitous today. The entire WDW area is way overbuilt with resorts and they are 85% to 95% filled during the prime tourist seasons (about 260 days per year). However, during the off season (105 days per year) they struggle to fill those rooms. A room renting for 50% off rack rate is much better than an empty room. My wife and I have always make it a point to visit WDW during the slow visitation periods.

Read the other boards and you will see lots of folks fussing because the AP discounts are limited, because they have to book discounted rooms way ahead, etc. Also there are lots of cries and moans because the rooms desired just aren't available at any rate. Many people say "the Internet showed it, but when I tried to book it, I got a NOT AVAILABLE". You even see folks on the Rent/trade board state that they want to rent points because they "just refuse to pay rack rate and that is all that is available".

I often hear this complaint and it's rather silly IMO. Rooms are always available even during the peak season. You just have to know where to look. Disney CRO does not control all the rooms on property. Large blocks of rooms are sold to AAA and other resellers and discounters.

Yes, if you want to make a career out of looking for discounts, can move fast and be very flexible with travel dates and room desires you can do better than rack rate. Most people do not have a relationship with the travel industry or have an unlimited amount of time to spend searching.

I have found in my experience, that the biggest mistake WDW visitors make is to limit their resort selection. Some people insist that they will only stay onsite. Some say they will only stay offsite. Some will only stay in the DVC resorts. IMO this really puts them at a disadvantage. I like to explore and try out new and/or different resorts. We've even rented private houses at WDW. This flexibility has always allowed us to find great accommodations at a low price.

 

[Chuck S]

You really can't compare rates at a Holiday Inn or Courtyard to a DVC resort. While technically "onsite" it is NOT a DISNEY resort, and does not have all the perks associated with that. The bus transportation is not as good, no room charge in the parks, I don't think they get free theme park parking.

Yes, renting a house may be less expensive than staying on points in a larger DVC unit, but again, there aren't any Disney perks.

 

[SonicLogic]

You really can't compare rates at a Holiday Inn or Courtyard to a DVC resort. While technically "onsite" it is NOT a DISNEY resort, and does not have all the perks associated with that. The bus transportation is not as good, no room charge in the parks, I don't think they get free theme park parking.

Yes, renting a house may be less expensive than staying on points in a larger DVC unit, but again, there aren't any Disney perks.

I wasn't making a comparison between the Courtyard and a DVC resort. The Hotel Plaza Blvd. resorts are just some of the hotels that I can chose from when deciding to vacation at WDW. I like to check all the resorts and see who has the best deal. Sometimes I get the best deal at a DVC resort. During the past 2 years we've gotten great deals at the Gaylord Palms, AKL, OKW, POP, YBC, WL and The Hilton.

We enjoy staying at different resorts and at the same time we enjoy saving money. As for the bus transportation system at the Hotel Plaza Blvd. resorts, we actually found it to be superior to WDW bus transportation. These buses run on a schedule and in my experience they keep to their schedules. The schedule is very simple to understand. The buses pick up guests at the hotels on the half hour (i.e. 8:00, 8:30, 9:00, 9:30, 10:00, 10:30, etc.) and the buses depart from the parks a quarter after each hour and a quarter till each hour (i.e. 8:15, 8:45, 9:15, 9:45, 10:15, 10:45, etc.). Please note that these DEPARTURE time schedules are very strict. The buses depart at their appointed times with only minor (less than 2 minutes) deviation. There was a slight variation for AK but that is not germane to this discussion. People with poor time management skills will be left behind and forced to wait for the next bus. People who practice good time management will be generously rewarded.

Also, they don't allow strollers to be taken into the passenger seating area. All strollers are stored in the luggage bins at the bottom of the bus! The WDW buses don't have storage areas.

In reality the Hotel Plaza Blvd. buses have really just two routes (except for the water parks, but that's another deal). You either catch the Epcot/MGM bus or the MK/AK bus. It's that simple. We learned a long time ago (with over 20 years WDW experience and our AP's), that it doesn't really matter at which park you begin the adventure.

The departure from each park is interesting because many folks seem to misunderstand how it works and this is what causes them to miss their bus! As I stated above, the Hotel Plaza Blvd. buses always DEPART each park on a fixed schedule. However, they always arrive 10 or 15 minutes prior to their appointed departure time to leave adequate time for loading. As an example, if you decide to leave the MK at 3:15 PM it would be in your best interest to arrive at the Transportation and Ticket Center by 3:00 PM. We used this technique when we departed each park and NEVER had to wait for a bus. We simply walked out to lane #26 and got on the bus.

Also, the buses either had a movie playing on the overhead TV monitors or they had one of the local easy listening music radio stations (FM 105.1 or 107.1) playing on the sound system. So, even if you had to sit on the bus for 10 or 15 minutes before departure you got some entertainment! This was a true blessing because it really kept all the mindless chat and banter to a minimum. The bus passengers kept quiet! No matter what time of day or night, we found that a trip from the hotel to the parks took about 25 minutes and the return trip averaged the same time.

As for the Disney perks, we don't need or want them. We don't do EMH, we don't need free parking and we never use the room key to charge in the parks (that's a dangerous practice). Your credit card provides you with a lot of protection against theft, fraud and misuse. You give all that up in $500.00 chunks when you allow your room key to be used for charging purposes. My advice is, don't do it!

 

[Chuck S]

As for the Disney perks, we don't need or want them. We don't do EMH, we don't need free parking and we never use the room key to charge in the parks (that's a dangerous practice). Your credit card provides you with a lot of protection against theft, fraud and misuse. You give all that up in $500.00 chunks when you allow your room key to be used for charging purposes. My advice is, don't do it!

Not true at all. On the two occasions I "lost" my room key (actually, the CMs didn't return it after a transaction, and I didn't notice - just one of those things) the hotel simply asked my where I used it last, then canceled the account and issued a new key. Any false charges showing up at check-out can be handled then.

With a credit card, you have to wait at least 24 hours for a replacement card to arrive, and possibly dispute charges.

 

[SonicLogic]

Not true at all. On the two occasions I "lost" my room key (actually, the CMs didn't return it after a transaction, and I didn't notice - just one of those things) the hotel simply asked my where I used it last, then canceled the account and issued a new key. Any false charges showing up at check-out can be handled then.

With a credit card, you have to wait at least 24 hours for a replacement card to arrive, and possibly dispute charges.

By law, you can only be held to paying $50.00 for false charges on your credit card. Most credit card companies don't even bother to charge you the $50.00. With a Disney room key card, you are at the mercy of Disney. They make the decision as to your liability for that $500.00 you authorized on your credit card. So, you could be on the hook for the entire amount because you signed away your legal protection.

I am glad to hear that Disney was nice to you, however, if they decide to play hardball, you're on the hook for the whole amount! You need to brush up on your credit card law and policy.

 

[cgcruz]

Disney calls DVC the best kept secret. Renting points from DVC members is what's really the best kept secret!

But really, even though it seems too cheap at $10 per point, there are just too many restrictions and risks for the buyer. A lot bigger than the risk for the seller. We all know contracts between buyer and seller would not really amount to much at court. Also, Disney has a lot of great deals that come out once in a while and a seller is most likely not going refund you the reservation. Also, a seller can just drop a reservation and the renter would be Out of Luck.

I'm renting for march, and assuming the risk. Anything greater than $10 per point would be too high, especially when people are willing to rent as low $9 per point.

 

[chips]

We bought two years ago. I have not and do not intend to rent my points. However, before purchase I did a rental yield calculation. I bought bcv at 72. At ten dollars a point rental and 4 dollars for m.f.net rental was 6 dollars. The yield was 6/72=8.3 percent. This compared with 1 percent for short term treasuries. Also, the purchase price was getting 1 percent for cash return.


For bcv the prices are 85 so the yield is 7 percent. The short term money is 4 percent and soon to be 5 percent. The contract purchase money could be in cash getting 5 percent. Flipping that around the cost of carry of the purchased contract went from 1 percent to 5 percent. If a renter can rent at 9 dollars a point and the m.f. is 4.5 percent, The net rental is 4.5. this is 5.2 percent rental yield. This is break even versus holding the money in short term cash.

We've had three fantastic vacations and the contract has gone up 13 dollars. We are very pleased. At current market conditions I would look seriously at renting before buying.

There is currently an offer to rent 131 points for 7.63 dollars per point with January 31 expiration. Many people try to rent inside of three months.

For many people renting is better than buying. We have no intention of selling or renting. We are already borrowed forward into 2006. We wouldln't add on we would rent if we needed more points.

 

[RobDoc]

.... I was being sarcastic with the 6.70 point post.

Just curious why you have posted your sarcasm on the Rent/Trade Board then ??

http://www.disboards.com/showthread.php?t=953865