DVC have published the new point charts for 2020 and many members have been negatively impacted. This caused many of us to go and (re)read the POS and possibly discover that the reallocation done may not be legal in its current form.
The most contentious points are:
1) Reallocations should leave the total points needed to book one unit/vacation home unchanged
Reallocations are described in the POS document for each resort in "Exhibit G - Disney Vacation Membership Agreement for XXX RESORT"
For SSR (and as far as I know, every resort and the multi site POS as well), the reallocations are authorised as follows:
“In order to meet the Club Members’ needs and expectations as evidenced by fluctuations in Use Day demand at the Condominium experienced by DVCMC during a given calendar year, DVCMC may, in its sole discretion, increase or decrease the Home resort Vacation Point requirements of a given Use Day within a given Vacation Home during the given calendar year by any amount not to exceed twenty percent (20%) of the Home Resort Vacation Points required to reserve a Use Day during the previous calendar year; provided, however, that the total number of Home Resort Vacation points existing within a given Unit at any time may not be increased or decreased because of such reallocation. The twenty percent (20%) reallocation limitation shall not apply to increases or decreases of Home Resort Vacation Point reservation requirements relating to designated periods of high demand which do not occur on the same Use Day each year. Any increase or decrease in the Home Resort Vacation point reservation requirement for a given Use Day pursuant to DVCMC’s right to make this Home resort Vacation Point adjustment must be offset by a corresponding increase or decrease for another Use Day or Use Days.”
For a long time we have thought that Disney could do whatever they wanted with the point charts as long as the total points needed to book the whole resort for the whole year remained unchanged. Reading the POS is seems this is not the case.
The first sentence seems to restrict reallocations only to balance demand during the year, not across different vacation home sizes. If bungalows seat empty and studios fly off the shelves at 11 months, a reallocation cannot be used to balance demand
It also says points can be shifted only "within a given Vacation Home". A Vacation Home is defined as "portion of a unit designed and intended for separate use and occupancy". This allows to move points only within the same room type. They can lower points for a studio for weekends and increase week days, they cannot increase studios and 1BR and lower 2BR
Lastly itsays the total points allocated to a Unit cannot change. It seems the reallocation they did for the SSR treehouses is not legal, as all the treehouses are declared in their own units. Poly Bungalows are in different units from the studios, so the 2020 reallocation is not legal. Also, usually a unit includes different room types and different units within the same resort can have different compositions. If a unit includes 2 dedicated studios and 2 lockoffs, another might include only dedicated 2BR. Balancing units with different compositions might prove impossible if points are moved across different vacation home types.
In the first years of DVC, when a balancing act was needed to balance demand within the same room types, DVC created different booking categories with the same price point. This applied to BW view (same points as garden), and OKW HH (same points as the rest of the rooms). Those separate booking categories are a good advantage for owners, because they can book the better rooms before the 7 months window without paying a premium in points. Later DVC started moving points around balancing the points across the new booking categories. It might have been in good faith (at the beginning), but it doesn't seem to be allowed by the POS and it opened the way for strategic point allocations like the Poly bungalows: the high point cost for the bungalows allowed DVC to sell a lot of points while showing the points required by studios to potential owners.
2) The lockoff premium
The point needed to book a studio + a 1BR are greater than the points needed to book a 2BR. This has always been the case since DVC opening. It is called "lockoff premium" (and can be justified by the fact that managing two reservations can be more onerous).
For example, 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.
VGF is the only resort there there is explicit mention of the lockoff with the wording authorising DVC to modify it at will. For other resorts there is no mention of it. In the multi site POS the lockoff premium is mentioned, but there is no wording about being able to increase or decrease it.
It is not clear if the lockoff premium is even legal in the first place, but it has always been there so it probably is. However it doesn't seem right that DVC can increase it at will. This would violate the reallocation rule written above (each Vacation Home/Unit must keep the same number of points constant over the whole year).
Increase the lockoff premium seems to benefit only Disney. The extra availability generated by the lockoff premium goes into the breakage inventory which is then booked by Disney for cash which is paid back into the resorts budget to lower the dues. However there is a cap to how much is paid back (2,5% of the total budget) and that cap has been already reached every year in the past. So an increase of the lockoff premium will cause more cash income that will be kept by Disney.
3) Unbalanced rebalance
Members have strong evidence that the least popular room size is the 1BR. Studios are the first to go, then 2BR and finally after a lot of time, 1BR. Also, the most common last minute availability is for 1BR.
So it seems that a reallocation increasing both studios and 1BR in favour of 2BR doesn't make sense.
The only possible explanation is that Disney want to push members to book larger vacation homes for the benefit of selling add-ons and larger contracts. At the expense of people who bought to stay in studios.
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