Something is wrong with the DVC 2020 reallocation

December 31, 2018, 4:14 AM

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.

Replies (7)

Edited: January 1, 2019, 4:02 PM

I own at 3 resorts, now that I see DVC will do as they choose without regard to their own rules. I will not be adding to my ownership even through resale, which all my points are direct.

I first noticed the changes in point structure in 2018 with Animal Kingdom.

I went several years using old charts as there were no changes. Now, they are changing regularly and not to the needs of the owners.

They have a limit to how much of the rented income offsets dues??? Wow, so it really benefits DVC to have units unused by DVC owners so they can rent them.

I bet they hate the rental companies renting out DVC points because I am sure that alone reduced the rate of unused points. Now those owners and point renters even save on parking because Disney decided it needs to charge extra for parking to those renting rooms

I noticed the last time I went, the busses were terrible..
It seems they are pushing the paid transportation now.

Is there anything, we as owners can do to correct these issues? Are there any recourse?

Edited: January 1, 2019, 4:35 PM

Read your post the best that I could and while I have no idea if Disney is doing anything wrong or not, I will say as much as I love Disney Parks I completely despise the timeshare industry and just because Disney does it doesn't make it any better. They do it for the same reason every other company does it, because its a big money maker from the easiest people to make money from (people who have the worst cases of FOMO/shiny things/keeping up with the jonses syndrome).

Timeshares are a scam and anybody who thinks they have "ownership" needs to have their head examined.

January 2, 2019, 4:26 AM

@Really Is there anything, we as owners can do to correct these issues? Are there any recourse?

The first thing to do is spread the word so as many members will know about those changes. It is possible that many haven't noticed it yet and if they've seen the reallocation they haven't noticed the increase in the lockoff premium or how members who book studios have been hurt so much to promote larger units.

Then, we have to apply some pressure on the DVC managements. If you're not happy about the change, send a, email, a letter or phone to DVC and tell them so.


Using Social media to voice our concerns could also be the best way to get the answers we are looking for. I have received a phone call from a Cast Member but I didn't get any useful information. Others have reported something similar. The official position at the moment is: "Trust us, it's in your interest". I don't think we should accept that as an answer. If the reallocation benefits the membership they should explain us how.


Finally, we could start a campaign to fund a legal action against DVC. This will be the very last resort. It would be expensive and it would be against our own interest, as DVCMC would use our dues to pay for the legal expenses. However this option should be kept open.

January 3, 2019, 3:52 PM

I've read many threads and replies to this issue and you have nailed the problem. While others are questioning why, for example, did they increase points for a 1BR when they are the last to go, I believe they miss the point. The point you so eloquently document is that it seems very clear adjustments must be made WITHIN the same accommodation with no net increase or decrease, and not across different accommodations.

If you go to the DVC sales website, they project how many days you can stay in a particular accommodation based on the number of points you will buy and the season you choose. Isn't that meaningless if Disney can ultimately move points from one type of home to another?

January 11, 2019, 3:07 AM

I have created a blog to voice our concerns. I hope it might be useful to share the news with owner who don't follow the news and specialized forumcs and are not aware of the changes that might affect them.
https://www.whatswrongwithdvc.com/

January 26, 2019, 5:02 AM

VICTORY!
The changes to the point charts have just been reverted at the last minute.
This is the email I've received from DVC, after my two call with the head of regulatory affairs.

Dear Stefano,
Thank you for reaching out to our team.

Disney Vacation Club Management has revised the 2020 Vacation Points Charts originally posted on the Member website on Dec. 19, 2018.

As we have stated, the reallocation of vacation point values is outlined in the Membership Agreement and is an important part of meeting Members’ needs and expectations.

The originally posted 2020 Vacation Points Charts were consistent with the Membership Agreement. However, Disney Vacation Club Management listened to our Members’ feedback and decided to more closely align them with the 2019 Vacation Points Charts, with some adjustments for the 2020 calendar.

This will give Disney Vacation Club Management time to further analyze demand and usage patterns, along with Member feedback, and adjust Vacation Points Charts for 2021 and beyond, as appropriate.

Thank you,


Director Club Management & Regulatory Affairs

January 26, 2019, 10:48 AM

Woah...nice work!

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