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WHAT'S WRONG WITH DVC

Has the 2020 reallocation gone too far?

Points have been created out of thin air, studios are paying for the failure of bungalows and cabins with the reallocations that fails to address real demand distribution.

Why has DVCMC violated members trust and why should they be stopped?

 
 
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What is the lockoff premium and why it matters (a lot!)

Updated: Jan 13, 2019

We have seen that a points reallocation should balance demand over the year.


For example in 2010 and 2011 a reallocation was done to re-balance demand between weekdays and weekends. Originally weekend nights were much more expensive that weekdays. So much so that members started exploiting this booking only week days and booking cash resorts for week ends. This allowed them to stretch their point over much longer stays, but caused many weekend night to sit empty while weekdays were much more difficult to book.

The 2010-2011 reallocation re-balanced the charts to the current form, where weekends are a bit more expensive but with a lower difference.

After the reallocation, a few members lost vacation time, because they used to book only week days, while other gained, because they booked mostly weekends. For members who booked one full week nothing changed. Someone gained - someone lost.

This is fully within DVCMC rights.


Since DVC opening day, the point needed to book a studio + a 1 bedroom room (1BR) have been greater than the points needed to book a 2 bedroom (2BR). The difference is called "lockoff premium" and can be justified by the fact that managing two reservations can be more onerous.


For example, at Saratoga Springs Resort (SSR) in 2019, in Adventure season:

- studio standard: 11 points

- 1BR standard: 22 points

- 2BR standard: 30 points (and not 11+22)

The lockoff premium is 3 points.


In 2020 the lockoff premium has increased, as both studios and 1BR have increased while the 2BR has decreased:

- studio standard: 12 points

- 1BR standard: 24 points

- 2BR standard: 28 points

The lockoff premium will be 8 points, nearly trebled!


What is very important to understand is that the point charts are balanced only for the cost of the 2BR for lockoff units.

This means that the extra points needed to book the smallest (and more popular) rooms are not balanced by a decrease anywhere else in the system. Overall, members have to spend more points to book their resorts, causing more rooms to sit empty.

This will create some extra availability, but at the expense of the members vacation time!


A user on the DISboards have done the calculation of how many more points are needed to book beach Club and Saratoga Springs Resort over the year, if all 2BR lockoff are booked as studios + 1BR.

According to those calculations, at the Beach Club (BCV), to book the whole resort up to 63,060 more points are needed. At SSR, the resort went up from 14.994 million points in 2019 to 15.526 in 2020, that's nearly half a million more points!

The situation is aggravated at SSR because there are no dedicated studios or 1BR. When reallocating the charts, the dedicated units are counted, so a resort like Beach Club is somehow a bit protected against the increase in the lockoff premium. At SSR there is no such protection, they can increase the lockoff premium as much as they want.


It has to be said that the 450k more points needed to book SSR are theoretical: it would require that all lock-off units are booked as studio+1BR instead of as 2BR. However studios are the most popular category and SSR has dedicated 2BR, so we can reasonably assume that between 70% and 90% of lockoff are booked separately. That makes about 400,000 points created out of thin air at SSR.


To read how the lockoff premium affects the Villas and the Grand Floridian Resort, click here.


How can this be seen as beneficial for the membership? We cannot find a single advantage for this, but we can certainly find many for DVD:

  • the extra nights that members cannot book because of the increase in the lockoff premium go into "breakage inventory". It includes the rooms that, because of lack of demand, are not booked by members. DVCMC can sell those rooms for cash and use the proceedings to offset part of the dues. So it is partly beneficial to the members, who see their dues decrease. However there is a cap on how much DVCMC pays back to members: 2.5% of the resort budget. Any excess goes to DVCMC and then DVD. Currently all resorts already receive the full maximum contribution, any extra room booked thanks to the lockoff premium goes straight into DVD pockets!

  • Members will now have to either shorten their vacations or buy more points. Small contracts are difficult to find on the resale market, so those members needing just 25-50 more points will probably buy more points direct from DVD. More sales, more money for Disney!

  • Members are being pushed forward booking larger units. But again, the average members haven't booked 2BR until now because they don't have enough points. If members see the new 2BR cost as good value, they might want to add-on, again increasing DVD sales.

  • Disney has just announced new resale restrictions and the introduction of a new exchange program between resorts. It is possible that the extra availability created by the lockoff premium will be needed by DVCMC to enable the new exchange system to work. Stay tuned for more details in the future.

Villas at the Grand Floridian (VGF) is the only resort where, in the POS, there is explicit mention of the lockoff premium with the wording authorizing DVCMC to modify it at will. For other resorts there is no mention of it. Why has it been added and later removed?Does DVCMC has doubts of it being legal too?


There are a number of things that let us think it shouldn't permissible:

  • Increasing the lockoff premium damages members and a reallocation has to be done in the members interest

  • in a reallocation, every increase has to be balanced by a decrease

  • a vacation home requiring more points to book all year around than the amount of ownership it represents, may be illegal in any case

 

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