DVC Reallocates Points for 2010

[WonderlandsMostWanted]

While I am not currently a DVC member, I VERY nearly was as of this past December. I will tell you for CERTAIN that when we sat down with our DVC rep for 4 full hours on the last full day of our vacation in December, we were told repeatedly that the “beauty of the DVC is that the points never change. A Sun-Thurs stay in the [equivalent of Value season, I forget what DVC calls it] that is 17 points per night now, will still be 17 points per night 20 years from now, and until the end of the contract. The points will never change. The exact dates of the seasons may fluctuate a bit year to year, but those Sun – Thurs nights in the [value] season will always be 11 points.” He repeated that over and over, several times during our meeting, and when I called back to ask more questions after we got home, we were given the same shtick. I remember it vividly because he kept saying it over and over. It was the incentive for us to buy.
We got engaged on that trip. We were keeping our wedding small and inexpensive, and this was going to be our wedding gift to each other: a lifetime of Disney Vacations. But, as we are in our early 30’s and didn’t have a ton of money to invest right away, he was trying to get us into a promotion they had where you could buy into AKV for 100 points to start. He encouraged the 150 or 160 points, or whatever it was, as he said we’d get more vacation value out of it, but 100 was what we could afford right NOW, and so that is what he was trying to sell us. With only 100 points to start, even a few points per night difference can have a dramatic effect on how long you can stay and how much you have to borrow and/or carryover per year. I don’t have my info packet with me, so I can’t list specific numbers, but with that 100 points we’d figured out that for our needs (a 1 bedroom so my dad could stay with us when we went) we could just barely get X number of nights, Sun – Thurs stay in per year, and with carryover and borrowing, could make a just the two of us quick trip for about 2 nights every few years to balance out the difference. We couldn’t really afford a full week, with weekends, on those points.
Well, we ran into an emergency that dipped into our down payment money too steeply, so we decided we’d just have to wait it out for a while before we bought into DVC. After reading this, which is decidedly different from what our DVC rep told us, I’m both heartsick and relieved at the same time. If we’d signed on for the 100 points and the promise we were made that those Sun – Thus points would never change, we’d find ourselves no longer being able to plan the same way. I can understand that for the majority of DVC owners, who have more than the usual minimum 160 points, and stay for full weeks at a time, this makes very little difference, and in many instances may even help. But I can’t help feeling that it’s decidedly unfair to people who were “sold” the “beauty of the DVC points is that the points per night never change” pitch to get them into the lower point sales. We were never given the opportunity to look at the full contract. When we asked for a copy of it to go over, we were told that it wasn’t available until we officially agreed ready to make the purchase, so I feel we had no chance to make a real educated decision about the DVC with all of the facts before signing the contract. I can’t help but wonder how many other people found/are finding themselves in this position now.

[Ian]

While I am not currently a DVC member, I VERY nearly was as of this past December. I will tell you for CERTAIN that when we sat down with our DVC rep for 4 full hours on the last full day of our vacation in December, we were told repeatedly that the “beauty of the DVC is that the points never change. A Sun-Thurs stay in the [equivalent of Value season, I forget what DVC calls it] that is 17 points per night now, will still be 17 points per night 20 years from now, and until the end of the contract. The points will never change. The exact dates of the seasons may fluctuate a bit year to year, but those Sun – Thurs nights in the [value] season will always be 11 points.”

That's what we were told, too. Over and over we were told that.

That's why I'm pretty surprised to find out that, essentially, they can change how many points a given stay costs in a given week.

I can't say I like that too much.

[Donald A]

That's what we were told, too. Over and over we were told that.

That's why I'm pretty surprised to find out that, essentially, they can change how many points a given stay costs in a given week.

I can't say I like that too much.

I am glad people heard the same thing I did. After hearing your story about the THV, Ian, I am beginning to put together this whole picture of how DVC has structured everything to work to their advantage. We pay to build it and maintain it (with dues) and they have figured out how to make a profit out of it. I have caught on and am not happy. Maybe, I was just being hopeful that Disney was around to make magical experiences for people, but the reality is they are here to make money. (I knew that all along anyway) I just don't like it slammed in my face like it has recently.

[Ian]

Well ... I mean I went into it knowing full well Disney was making huge profits from it. I wasn't deluded into thinking it was any sort of humanitarian effort on their part.

But I did think that it was perhaps one of those rare win/win situations where the company profited and so did the guest.

And I still think that, for the most part. But I will admit to being moderately aggravated by what I perceive as some misstatements made during our purchase transaction.

[Disoriented]

I wonder if it’s possible that the current waitlist woes may have had an impact on the recent changes.

When we bought in it was explained to us that the point structure was designed around a seven day Disney vacation and that weekly amounts could fluctuate depending upon member usage. If too many members are trying to book certain times of the year, points could be raised during those times to discourage some of those people from going at that time, but in order to do that they would also have to be lowered at a different time of the year to balance it out. The number of points to rent a room for a year can not go up or down, but the weekly and daily amounts could.

The weekend rates have been higher to discourage people from booking weekends only. If too many weekends are booked it could make it difficult for someone who wanted to stay seven nights to find a room available for those seven consecutive days.

My guess is that there now is many more people booking a Sunday through Thursday stay that there are too many available rooms on the weekends and not enough availability during the week forcing those that want a seven day stay in the same room, on to the waitlist, overloading it and making it difficult for those on it, to get their choice of room.

Just a thought.

[DizneyRox]

I have caught on and am not happy. Maybe, I was just being hopeful that Disney was around to make magical experiences for people, but the reality is they are here to make money. (I knew that all along anyway) I just don't like it slammed in my face like it has recently.

Disney is doing a fantastic job of showing their true colors these days. I have always known they are a business and profit is number one. But you usually don't advertise as much in your normal day to day operations as much as they have been of late.

As with anything they do, you must read between the lines and look at the wording. Everything released from TWDC (or any real business) has gone through what's usually a pretty capable legal team.

[DizneyRox]

My guess is that there now is many more people booking a Sunday through Thursday stay that there are too many available rooms on the weekends and not enough availability during the week forcing those that want a seven day stay in the same room, on to the waitlist, overloading it and making it difficult for those on it, to get their choice of room.

The only correction to this I would make is that they DON'T CARE if I get my choice of room. They would like to even out the stays to keep heads in the beds the entire week. Planing is easier, people would buy more food and spend more, etc. It's not about the guests, it's about profits.

[VWL Mom]

When we bought in it was explained to us that the point structure was designed around a seven day Disney vacation and that weekly amounts could fluctuate depending upon member usage. If too many members are trying to book certain times of the year, points could be raised during those times to discourage some of those people from going at that time, but in order to do that they would also have to be lowered at a different time of the year to balance it out. The number of points to rent a room for a year can not go up or down, but the weekly and daily amounts could.

This is how it was explained to us also and is why we decided to buy 7 nights instead of 6. Now if I can figure out what to do with those extra 3 points each year.....

[Ian]

When we bought in it was explained to us that the point structure was designed around a seven day Disney vacation and that weekly amounts could fluctuate depending upon member usage. If too many members are trying to book certain times of the year, points could be raised during those times to discourage some of those people from going at that time, but in order to do that they would also have to be lowered at a different time of the year to balance it out. The number of points to rent a room for a year can not go up or down, but the weekly and daily amounts could.

This is a perfect example of why you have to take everything you read on the Internet with a grain of salt ...

I was so adamant that I wasn't told points could change like this, etc. etc., but you know ... as soon as I read Disoriented's post I was like, "Oh yeah ... I do remember Ricardo telling us that!"

So ignore all my previous posts about us not being told that this could happen. We were and I just conveniently forgot about it, I guess.

[MickeyMousse]

we were told repeatedly that the “beauty of the DVC is that the points never change.

I was told the exact same thing when I became a DVC member in 4/02. Sorry, but this reallocation does not make me happy.

How would DVC like it if we all decided to reallocate our monthly dues??????

[MidnTPK]

And I still think that, for the most part. But I will admit to being moderately aggravated by what I perceive as some misstatements made during our purchase transaction.

The understatement of the millennium!

I'm not a DVC owner, but likely will be in the future. But if there is another eternal certainty, other than death and taxes, it's that somewhere along the way in the purchase of a timeshare, the buyer will be mistaken about something, if not deliberately mislead by the seller.

Mind you I also know that the seller rarely 100% lies. The whole process and transaction is just too detailed and too complex for a buyer to understand without lots and lots of research. S/he is just talking about one thing while your asking about another. Like the total number of points at a resort can NEVER change. The seller is talking about the whole resort. The buyer is talking about the week s/he intends to use in the future. Honest or dishonest seller....you make the call.

[gallicdenis]

Like most of you I was caught off guard by the change. I only found out when I visited the "News" section of the DVC Member Site. We have been able to travel to WDW twice a year now that most of our children have left the nest (we have six). Hence, we no longer require the larger accomodations. Not only have we been able to travel to WDW more often but our trips are a little longer. We've been able to average 12 days per trip. Obviously this includes at least one weekend. Under the new formula we will lose 14 points, or one day, at our home resort during our late spring/early summer visit and one point(which isn't too bad) during our Christmas visit. I does affect our banking of a very small amount of points which does translate into a loss of a few days over time. We paid off our interest so our only cost, excluding transportation, etc,. is the maintenance fees. What has been going through my mind now is would we now be better off without the membership and using the money allocated for maintenance fees to take advantage of the "stay 4 and get 3 for free" promotions with the free dining plan.

Like many of you it was our understanding that the points could be adjusted but that the cost per week would remain the same. Obviously that is not true. I did register my feeling with DVC through the "Contact" link at the member website. I received the following response:

Thank you for contacting Disney Vacation Club.

We appreciate your feedback regarding the adjustments made to the
Vacation Points Charts for 2010. Disney Vacation Club Members have
expressed that they would like to be able to use their Membership on
weekends, but felt the Vacation Points in general were too high on
Fridays and Saturdays. We understand Members will have different points
of view based on their situation. As we do with every change, we
evaluate the current booking patterns and look at future patterns to
determine what is in the best interest of our Members and the business.


The Multi-Site Public Offering Statement Text, Section 3 (2)(a) outlines
DVCMC?s right to increase or decrease the Home Resort Vacation Points
reservation requirements in order to meet Club Members? needs and
expectations. The changes also benefit our Disney Vacation Club Members
through managing expenses, and also ensure a more balanced demand
throughout the year.

As you have seen in the charts, some Vacation Points totals per week
have changed slightly up or down. Additionally, the nightly Vacation
Points have been reallocated at some Disney Vacation Club Resorts; any
increase in nightly Vacation Point requirements is offset by a
corresponding decrease. However, the total number of Vacation Points
for any particular Disney Vacation Club Resort will never change.
Section 3(2)(a) also provides a guideline by which DVCMC will adhere
when making Points Chart changes, which is the reallocation will not
exceed 20% without the express approval of at least 60% of the existing
owners.

The feedback we receive from our Members is important to us, and your
comments will be shared with our leadership team.

Thank you again for sharing your concern.

Sincerely,

Disney Vacation Club Member Services

Perhaps DVC will re-evaluate if they are inundated with comments from more DVC members. But, if like me, they found out about the points change "accidently" since DVC appears to have been keeping this one Disney's (sic) "Best Kept Secret."

[DizneyRox]

Perhaps DVC will re-evaluate if they are inundated with comments from more DVC members.

Nope... Disney doesn't work that way. Money talks, not actions...

[hubbyofadisneyholic]

I think we all have to rmember one very basic point...
DVC holds all the cards and ANY changes are going to be made for their benefit (profit) not ours.

[Donald A]

I think we all have to rmember one very basic point...
DVC holds all the cards and ANY changes are going to be made for their benefit (profit) not ours.

Yep, if it was based on member feedback why did they raise the weekend value of the Grand Villas?

[Donald A]

As we do with every change, we
evaluate the current booking patterns and look at future patterns to
determine what is in the best interest of our Members and the business.

I love this part of the email you received. The best interest of our Members AND THE BUSINESS. There you have it.

[DVC Mike]

The Multi-Site Public Offering Statement Text, Section 3 (2)(a) outlines
DVCMC's right to increase or decrease the Home Resort Vacation Points
reservation requirements in order to meet Club Members' needs and
expectations. The changes also benefit our Disney Vacation Club Members
through managing expenses, and also ensure a more balanced demand
throughout the year.

DVCMC has the right, and more importantly the responsibility, to evaluate usage patterns and reallocate the points to balance usage based upon demand.

[gallicdenis]

Several years ago, before I retired, I attended a "Keys to the Kingdom" leadership presentation by the Disney Institute. In presenting the guiding principles behind the Disney business philosophy that originated with Walt Disney there are several things I took away from it. First is the concept of plusing. This was Walt's philosophy of providing the guests what they expected and something extra and unexpected. The other is, at least at the time of the presentation, that they care about perceptions. The two presenters stated that Disney has cast members whose sole job responsibility is to read posts, forums, blogs, and discussion lists to review the comments and perceptions of the Disney products. I was left with the impression that they take the comments seriously and consider them when attempting to correct issues and negative feedback from Disney consumers.

Profit is a motive for any business. DVC has provided significant chunk of cash for the Parks and Resorts operating profits. Unfortunately the revised points chart seems to have created, if I may use rhetoric to describe taxation policies, a regressive system. For our home resort it benefits those folks that use the larger accomodations, ie. Grand Villas, with the point burden being placed on those that require the less luxurious or smaller accomodations, ie. studios and one bedroom. On the DVC member website it is stated that "the adjusted charts make accommodations more affordable during many popular Walt Disney World® events, such as Mickey's Very Merry Christmas Party and ESPN The Weekend." This is blatantly untrue for our home resort. We do Xmas at Disney and, in 2010, it will cost us more points, contrary to the news bite on the DVC member site.

A recent article in the Orlando Sentinel may shed a little more light on the idea of profit over plusing:



Loss of credit line pinches Disney time-shares' profits"Jason Garcia | Sentinel Staff Writer
February 12, 2009
The lending turmoil racking the nation's time-share industry is squeezing even the Walt Disney Co.

The company recently disclosed that its Celebration-based time-share arm, Disney Vacation Club, lost access to a long-standing line of credit it had been tapping to raise cash by selling bundles of the time-share mortgages it issues to individual buyers.

Although Disney said time-share sales rose during its fiscal first quarter, which ended Dec. 27, the subsequent sales of "mortgage receivables" plummeted: According to a recent regulatory filing, the company sold $17 million in receivables during the quarter, down from $41 million a year ago.

Packaging time-share mortgages together and selling them off to investors -- "securitizing" them -- has been a valuable profit center for Disney Vacation Club in recent years. Disney Co. Chief Financial Officer Tom Staggs said during a December conference with analysts that the practice generated about $40 million in operating profit last year for Vacation Club.



That's about 2 percent of the $1.9 billion in operating profit rung up by Disney's worldwide parks-and-resorts division in fiscal 2008.

Staggs warned at the time that the nation's frozen credit markets would likely make lending terms so unfavorable that Disney would do "less or no" securitization in 2009. He also acknowledged that being forced to carry the time-share mortgages, rather than cash them out immediately, could slow Disney Vacation Club's earnings growth.

"There is profit that we don't make," Staggs said. "We'll make it over time, as opposed to realizing it in the current year when we do the securitization."

Disney has historically helped about 75 percent of its time-share buyers finance their purchases, according to research by Morgan Stanley. Sales prices typically range between $20,000 and $30,000 for the equivalent of a one-week share in a two-bedroom unit.

Disney's credit facility, which it initially secured in December 1999, expired Dec. 4, according to company filings.

Similar problems are buffeting the rest of the time-share industry, as the market for all manner of mortgage-backed securities has fizzled. Some developers -- dependent on the capital raised from reselling time-share notes to continue growing -- have been forced to lay off hundreds of employees and slow or halt construction.

Analysts say there is little chance that Disney could be forced to take similar steps. The sprawling media-and-entertainment conglomerate is large enough that it can likely self-finance mortgages and hold the notes as long as needed without jeopardizing its construction plans.

"It probably makes the time-share division less profitable than it would have otherwise been," said Robert LaFleur, a lodging analyst with Susquehanna Financial Group. "But from a practical matter about Disney's ability to build and sell time shares, it shouldn't have an effect."


More time-shares to open

Disney plans to open three new time-share properties in Orlando this year and one in Anaheim, Calif. It is also pressing ahead with plans for 830-room resort in Hawaii, in which 480 units are to be Vacation Club villas. Construction on that resort, which is to open in 2011, began in January.

Any slip at Disney Vacation Club could have broader implications for Disney's parks-and-resorts division, where the time-share unit has become an important growth engine. The theme-park division accounts for more than a quarter of Disney Co.'s total revenue.


Club key part of profit

Morgan Stanley estimates that Vacation Club accounted for as much as 20 percent of the profit growth for Disney Parks and Resorts in fiscal 2008. Disney itself credited higher time-share sales with helping offset declines elsewhere in its parks unit during the first quarter of fiscal 2009; total revenue for Parks and Resorts fell about 4 percent during the quarter from a year earlier, less than many analysts had expected.

Vacation Club contributes about 10 percent of the parks-and-resorts unit's total profit, Staggs said during the December analyst conference.

Disney's time-share unit is a "swing factor" for the parks division overall in 2009, Morgan Stanley analyst Benjamin Swinburne wrote in a research note last month. He has forecast a "small increase" for Vacation Club in 2009, compared with an estimated 18 percent growth rate last year."

http://www.orlandosentinel.com/busin...,4931450.story

[DVC Mike]

Profit is a motive for any business.

Your posting of a seemingly unrelated article seems to be an attempt to imply that the sole motivation behind the 2010 point reallocation is profit.

I must disagree.

Many people purchased just enough points to stay only Sunday-Thursday nights. The points on Friday and Saturday night were being underutilized. It's quite easy to book Friday and Saturday nights in comparison to Sunday-Thursday. Its also obvious when Sunday is the biggest check-in date and Friday is the biggest check-out date.

The system is out of balance. The points needed to be reallocated based upon this usage pattern. The supply of available units needed to be balanced against demand.

Why argue ulterior motives when the one they gave fits so well?

[TheRustyScupper]

1) I was in a discussion regarding this.
2) There has been a major shift in non-DVC guests.
3) In the 90's there were lots of weekend trips.
4) Thus, advantageous to have fewer DVC members and more cash guests.
5) The shift no is toward full week vacations.
6) So, it is better to have weekday DVC rooms available for cash.
7) SSR and VWL already see a higher weekend DVC-member use.