Today’s blog post originated when a friend of me rented points, had a reservation through a third-party vendor, and then lost his reservation when Disney discovered that the member who sold his points to be rented was behind in his dues payments. The third-party vendor washed his hands of the old reservation and offered my friend a new reservation by at an increased cost which my friend declined. However, today’s post isn’t going to argue who was wrong and who was right in this situation but to discuss should Disney run their own “Stub Hub/Points Exchange” program instead of letting this service be run completely by third-party vendors.
PRO FOR DISNEY ADDING A STUB-HUB SERVICE
1) Disney has more control over the reservation
Disney, in my friend’s case, just cancelled the reservation because it was made as a normal DVC reservation with the member, through a third-party, making the reservation for someone else. Disney treats this as a points-made reservation not a simple cash reservation. If Disney was the middle-man so to speak, it could have more control over the reservation especially in a situation where the DVC member has fallen behind on his/her dues payments. Disney should the member fall behind in his/her dues payments and the reservation needs to go from a points reservation to a cash reservation as a result, this increased cost either gets eaten by Disney as “good-will” or passed along to the defaulting DVC member as extra costs associated with the transaction. The person who is renting the points does not get punished because they entered into a good-faith agreement with the member and Disney and should not get punished for another person’s actions or in-actions.
2) Allows non-members to enjoy DVC accommodations at lower prices
Disney could offer this service so non-members could enjoy DVC-level accommodations at lower prices than the cash rate. This could entice some guests who currently stay at villa-style, off-site accommodations to move back on-site into DVC properties. These people could enjoy the level of service that comes with being part of the Disney Vacation Club and may want to join the Disney Vacation Club to continue to enjoy this level of accommodation and service. Disney could lose some money in the short-term by offering these rooms at “discount” but make they money up in new memberships.
3) Has the trustworthy Disney name behind it
A lot of these DVC middle men have the first name of the person who founded the company as the lead name for the company. So, the trust of the general public has to be built up over time and can go away in an instant if a mistake or series of mistakes happens. Disney, on the other hand, already has the trust built up behind its name. A mistake or a series of mistakes is going to slightly erode some of that trust but Disney will still have “trust capital” in reserve to bounce-back from. Plus, going back to point 1, Disney can control the reservation and penalize the DVC member not the renter for any foul-ups or payments in arrears.
1) Disney loses money by renting DVC rooms that it could sell as cash rooms
Each DVC resorts sells 98% of the available points before the resort is considered to be “sold-out.” The other 2% is held for transfers from other timeshare programs and more importantly cash sales. Disney charges a lot more for the DVC villas than it does for a standard Disney resort room. This is where my friend at the Washington Post got the mythical $2100-$3400 per night price tag for the Bora Bora bungalows at the Polynesian. Even a more standard one-bedroom villa at Bay Lake Tower goes for $500-$600/nights. Over the course of a year, that is a lot of money left on the table if Disney rents out rooms instead of sells them as cash rooms. Of course, some would argue that those rooms would just sit empty anyway. But there is always someone looking to switch resorts via the waitlist and there are a lot of DVC members so it is unlikely that DVC rooms would just sit empty. Disney would just be leaving money on the table by renting rooms instead of selling rooms for cash reservations.
2) It could impact occupancy rates at other Disney resorts
While occupancy rates at DVC resorts may not be impacted heavily, the impact would be felt “downstream” at Walt Disney World’s moderate and value level resorts. People would attempt to move out of these resorts and into the DVC-level resorts because the costs, for one trip, would be similar. This would cause a drop in occupancy rates at these moderate and value resorts. How would Disney fill those rooms? Discounts. Either room discounts (percentage or stay 4 get 3 free, etc). or, of course, free dining. These discounts help get people to the resort but it does not help Disney bottom line since they are doubling discounting their resorts: 1) Renting DVC rooms instead getting cash reservations and 2) Discounting moderate and value rooms to make up for the loss of occupancy.
These two cons, in my opinion, outweigh the three pros from Disney’s point of view. The renter, however, needs to have more protection of their reservation that they made with a DVC member through a third-party vendor. The easiest way is for Disney, once they notice that member is behind on payments, is to convert the reservation from a points reservation to a cash reservation. Then, charge the extra cost of converting the reservation to the member and inform the renter that they, now, have a cash reservation and are eligible for the “perks” of a cash reservation (daily housekeeping, etc.). Disney should not get into the “Stub Hub/Points Exchange” business. It would be too much of a money drain for them.
Thanks for reading!