Examining Validity of 2020 DVC Points Reallocation, Part 1

For the 2020 calendar year, Disney Vacation Club made some pretty dramatic changes to the points charts. How are they able to do this and what are the implications of these changes? 

Grand Floridian Deluxe Studio

"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, absolute and unfettered discretion, increase or decrease the Home Resort Vacation Point requirements for reservation of a given Use Day within a given Vacation Home...however, that the total number of Home Resort Vacation Points existing within a given Unit (i.e., the amount of Home Resort Vacation Points representing 100% of the Ownership Interests in a given Unit) at any time may not be increased or decreased because of any such reallocation."

The above language is taken from the Public Offering Statement for the Villas at Disney's Grand Floridian Resort & Spa. Similar language exists within the POS' of other Disney Vacation Club properties. 

Put more simply, Disney Vacation Club Management Company--the entity which oversees day-to-day operations of the timeshare program--may raise the point cost for any given day, season or room type as long as there is a corresponding reduction elsewhere on the points chart.  

These increases and decreases not necessarly made on a one-to-one basis, rather they are evaluated across the entire year. An increase in costs for one villa type in one season may not be completely offset by a single reduction elsewhere because of differences in the number of days in each season and the number of rooms of each type (Deluxe Studio, One Bedroom, etc.)

Additionally, in performing any comparison, the point values should be compared to the same "Base Year."

"The Home Resort Vacation Point values established by DVCMC that are symbolic of all Ownership Interests will be based upon the 365 Use Day calendar year containing the minimum number of Fridays and Saturdays distributed through high demand periods (the "Base Year"). During the Base Year the total number of Home Resort Vacation Points required to reserve all Vacation Homes during all Use Days in the Condominium must always equal, and be symbolic of, the total number of Ownership Interests owned by Club Members in the Condominium."

Due to annual fluctuations in the calendar (number of weekdays and weekends in each season, location of Easter holiday, leap years), we are not actually comparing the 2019 year to the 2020 year, rather the accurate comparison is to look at how the 2019 and 2020 point values compare when applied to the same calendar.  

In such a comparison, the number of points required to book ALL villas for ALL nights should remain largely unchanged from one year to the next. 

Beach Club 2019 2020 Comparison

The chart above contains one such comparison for Disney's Beach Club Villas. In this comparison, we used 2018 as our "Base Year."  The Days Per Season column lists the number of weekday and weekend nights for each of the five DVC seasons during 2018. This is followed by the number of villas in each classification: 36 Dedicated Studio Villas, 20 Dedicated One Bedroom Villas and 152 Two Bedroom Villas. 

The group of columns lists the points per night for both 2019 and 2020, and the total for each grouping for the two years (e.g. 54 weekdays in Adventure season X 36 Studio villas X 15 points in 2019 = 29160 points.)

Annual point total for the 2019 chart comes to 3,027,324 points to book all villas for all nights. 

Applying the same data to 2020, we came up with 3,027,928 points for the year. 

While this represents a difference 604 points for the year, this is unlikely to be regarded as a material variance. Additionally, we chose 2018 as our Base Year, but it is very likely Disney Vacation Club used some other year in its official comparison. A different Base Year would yield slightly different results. 

Grand Floridian is a bit more complex due to the presence of both Standard View and Lake View room categories. Still, the same comparison for the Grand Floridian balances the 2019 and 2020 rates to within 260 points for the two years. 

Grand Floridian 2019 2020 Comparison

It is important to note that Lockoff Two Bedroom Villas should all be priced at the Two Bedroom rate in these comparisons, despite the fact that they can also be booked separately by members as Deluxe Studio and One Bedroom Villas. 

A cursory comparison of a resort's points charts for 2019 and 2020 may give the impression that costs have increased for more seasons / room types than the number of decreases. However, variations in room counts, days in each season and even the size of the cost changes (1 point increase vs 3 point decrease elsewhere.) 

This reallocation appears to comply with guidelines laid out in the Public Offering Statement. However, members may still end up paying more points per night for many stays, due to something called a "lockoff premium." We will take a look at that phemonenon in Part 2 of our analysis.