Corona Virus long lasting impact on booking availability

[DaveNan]

First I want to stress I am happy to see Disney is letting members cancel reservations with minimal penalty. Relaxing the holding, banking, and borrowing rules is the right thing to do.

Second, I do not know exactly how Disney handles the booking priority of points they own and exactly how this is going to play out long term.

But with all threads we see about how booking villas is getting more difficult, I expect the relaxed point use rules will have an impact on availability. My guess we could see the impacts of this for 1-2 years for every month that the villas sit mostly empty and point use/booking rules are relaxed.

If you look at it 1 month is 8% of the points the impact could be long lasting. The four weeks of late March and early April are even more than 8% of the points based on seasons. If points are recovered (lost to booking rules/availability) at a 3-5% rate per year, that would mean the lasting impact on availability would be 1-2 years for every month the villas sit empty and points are not charged and borrowing/banking rules are relaxed in members favors. Again, I am totally in favor of Disney’s actions, but as a planner, I am expecting availability to be “worse” for at least the next couple of years.

The biggest uncertainty on how long we will see the impact is that recovery rate of 3-5% per year. Since all availability is assigned to the owners (members or Disney), I am basing my guess breakage at 2% and the LO premium at 3-5%. If the points for the recovery come from those sources, that would mean Disney would be "funding" the recovery out of decreased cash reservations. If Disney has reservation rules in place that gives them access to the villas and they set them aside at 11 and 7 months, it could take even longer. That would mean members "losing" points due to no availability would have to make up the difference.

Disney has points available for cash reservation from several sources:
Trades for cruises, ABD, and hotel rooms
Owners behind on mortgage or MF payment to Disney
Points they own (ROFR buy backs)
The 2% breakage (also points they own)
Points that come from the lock-off premium (3-5% of a resorts points).

We don’t know exactly when and how Disney chooses to take rooms from inventory and make them available for cash reservations, but there is no doubt the first 4 sources should have the same 11 and 7 month booking rights. I suspect they have found a way to have the LO premium points have the same booking privileges, but that 3-5% might be a good guess at what rate things will go back to “normal”.

In the simplest terms, if short term availability is better/villas are empty, then long term availability will be worse.

So I expect in 4 months when things are back to "normal" we will see an increased number of threads about availability and the beloved skier Pete charts actually do reflect better availability than we see on the RAT.

Our best hope is Disney claims the lost points on an insurance loss or writes off the points on the balance sheet. Short of those, the impact will be long lasting.

 

[Spridell]

Well, just from looking at availablity going forward....I think those who book their home resort at 11 months and change at 7 probably wont happen for a while.

 

[Novakm]

I think there is more flexibility in the point system than people think.

Availability will be better than normal for a while as many people will be reluctant to travel until covid is completely gone. That’s likely to be a year or more.

Then, the excess points can be rolled over into next year for quite a few years, spreading the problem so it’s not so noticeable.

I’m guessing that if it’s less than 6 months, the system will work it out without much problem. Yes, it’s going to be hard to get a studio for Christmas at GFV for a few years. Not sure that’s anything new.

Hope everyone bought where they want To stay

 

[sethschroeder]

I’m guessing that if it’s less than 6 months, the system will work it out without much problem.

If its 6 months we would be getting close to gridlock except in exceptionally slow periods I think. What is going to happen is you will have people who have points for a very set period 7 days at a certain time of year. Now they have extra points and can even book 1br or 2br which is going to fill up a resort where in the past those people would need to wait for a studio or go to another resort.

Also the next 6 months are the most expensive times of year (outside of Christmas/Thanksgiving weeks) meaning its a ton of points impacted.

I guess we can throw out all the rationale behind the points charts though moving forward.

 

[heapmaster]

Im sure there will be some people moving vacations to other times causing more impact, but then there are others that the vacations that are cancelled could be points that will expire and could not be used later, thus not causing an impact. For our Apr-May trip, I would either use them when we go in Sept to upgrade to a larger room (if available) or bank them.

 

[Sandisw]

Honestly, I think if the only thing they did is to waive holding but not allow borrowed points to be put back, or people to bank outside the window, this wouldn’t be a big deal,

But, the only points that are going to be lost potentially will be those points that were already banked and cant be used,

It will be interesting!

 

[Cyberc1978]

Honestly, I think if the only thing they did is to waive holding but not allow borrowed points to be put back, or people to bank outside the window, this wouldn’t be a big deal,

But, the only points that are going to be lost potentially will be those points that were already banked and cant be used,

It will be interesting!

Im in that boat, I have a renter for which the reservation will be impacted in March due to the closing. Those points have already been banked once and they will expire EOM if not used, so even without the holding there is not much I can do with them or for my renter.

I really hope that much renters or travelers have an insurance that will cover them. I know I do.

 

[bookwormde]

With a typical 200K per day and allowing for some usage we are looking at 2.5 to 3 million points rolling forward from just this month. If the closure continues we are looking at 5 million or so each month. While depending on how long this lasts this wave of excess points will hit at some point, leaving more points than there are accommodations. Disney could certainly accommodate those points if they chose by allowing points to be used for undbooked cash rooms, declared but unsold rooms and cruises. While the waiver of holding would have a significant impact if the closure was relatively short, with a longer closure the percent impact diminishes quickly

Bottom line is that a lot of points will end up being unusable if this continues, with the caveat being that point expiration is not extended

 

[Cyberc1978]

With a typical 200K per day and allowing for some usage we are looking at 2.5 to 3 million points rolling forward from just this month. If the closure continues we are looking at 5 million or so each month. While depending on how long this lasts this wave of excess points will hit at some point, leaving more points than there are accommodations. Disney could certainly accommodate those points if they chose by allowing points to be used for undbooked cash rooms, declared but unsold rooms and cruises. While the waiver of holding would have a significant impact if the closure was relatively short, with a longer closure the percent impact diminishes quickly

Bottom line is that a lot of points will end up being unusable if this continues, with the caveat being that point expiration is not extended

IMO with the risk of all these issues to happen Disney should only allow you to cancel and points shouldn’t go into holding. They shouldn’t allow for the unborrow option basically they should allow the points to expire if the owner can’t find another vacation to use them on.

This is what a travelers insurance is for.

 

[Yinn]

It’s tough to say. I spoke to MS to modify my reservation (AKL to BWV) and asked if people are calling to cancel or capitalize. And he said it was a pretty even split.

A month or two out, resorts are still being waitlisted. I’m seeing things pop up that are hard to get - like Riviera, and disappear in the same day.

At the same time, this week is wide open. I can book any resort, any room combination I want.

A lot of it will depend on what the park does. If it stays open, I think there’s enough demand to avoid long term stress despite of Coronavirus. If it closes, then I think you’re on point.

But I think the speculated impact vs actual impact is quite low by itself without a park closure.

 

[CarolMN]

With a typical 200K per day and allowing for some usage we are looking at 2.5 to 3 million points rolling forward from just this month. If the closure continues we are looking at 5 million or so each month. While depending on how long this lasts this wave of excess points will hit at some point, leaving more points than there are accommodations. Disney could certainly accommodate those points if they chose by allowing points to be used for undbooked cash rooms, declared but unsold rooms and cruises. While the waiver of holding would have a significant impact if the closure was relatively short, with a longer closure the percent impact diminishes quickly

Bottom line is that a lot of points will end up being unusable if this continues, with the caveat being that point expiration is not extended

Does anyone really expect Disney to absorb the impact of all those extra points? I sure don't. They have no legal obligation to do so.

My advice for the foreseeable future (after the crisis subsided and travel returns to a more normal pattern) is to book your home resort during the priority period and plan to say there. Opportunities to move will become even more limited than they have been.

As an owner who doesn't rent, it won't upset me if rental demand takes a significant dive and doesn't recover for awhile. ( I realize that rental demand doesn't add or subtract points from the system, but IMHO, it does have a large affect on the speed that the resorts fill up). Availability lasts longer if owners who use points for their own stays don't have to compete with owners who sell reservations to the general public.

 

[bookwormde]

expect no, but after cancelling holding and some other flexibility in banking I am rethinking my no way. Perhaps the need to keep DVC's reputation to maintain sales rate is stronger than I thought, and since using unbooked rooms or cabins has little cost and has the potential to generate revenue from food, tickets and other items I am keeping an open mind

If there is a chance of selling it for cash then I am still no way

 

[miTnosnhoJ]

If (big if) the resorts the resorts were to stay empty for 3 months, say, in this system that is designed for 100% occupancy, I wonder if Disney would have to shift the expiration dates of the 2042 resorts out by 3 months? It seems that either the members would eat the loss or Disney would eat the loss. Legally, it's probably on us, but PR-wise and marketing-wise, it would be a smart move on Disney's part. If people fill up the resorts with resorts only stays in this period, this would be a moot point.

 

[zavandor]

At all resorts, Disney gets enough breakage inventory to reach the cap that is reimboursed to members via a reduction of the MS and get more to pocket. This is true even for sought after resorts like BCV or VGF. I think is due in great part to the lockoff premium: every time someone books a lockoff unit as a studio and a 1BR separately, extra points are used. This means millions or points are generated yearly. I wouldn't be worried to much of the effect of two weeks of cancellations. I am worried because I don't think it'll be just two weeks. The situation in the US now reminds me how things were in Italy a month ago and the whole country is now in lockdown.
Infections you see appearing now have been contracted 1-2 weeks ago: the situation is going to get worst. I cannot see the parks to reopen all April and probably not even May. It can take months to go back to normal.

 

[Sandisw]

If (big if) the resorts the resorts were to stay empty for 3 months, say, in this system that is designed for 100% occupancy, I wonder if Disney would have to shift the expiration dates of the 2042 resorts out by 3 months? It seems that either the members would eat the loss or Disney would eat the loss. Legally, it's probably on us, but PR-wise and marketing-wise, it would be a smart move on Disney's part. If people fill up the resorts with resorts only stays in this period, this would be a moot point.

They have the ability to suspend banking and borrowing so if this turn out to overload the system, if it last longer, I cant imagine this wouldn’t be the first step.

 

[zavandor]

They have the ability to suspend banking and borrowing so if this turn out to overload the system, if it last longer, I cant imagine this wouldn’t be the first step.

Suspending banking would make things worst, because they would force everyone to use the points in the next year together with all people who have banked points this year. Allowing people to bank the points if they cannot get the reservation, allows points to spread in the future years and be reabsorbed slowly by the lockoff premium and points that just go unused normally.

 

[GoingSince1990]

Suspending banking would make things worst, because they would force everyone to use the points in the next year together with all people who have banked points this year. Allowing people to bank the points if they cannot get the reservation, allows points to spread in the future years and be reabsorbed slowly by the lockoff premium and points that just go unused normally.

Good point. And just idly pondering this, I was thinking that if they were to relax the restrictions a bit more and do something like allow half of the points that have been banked into 2020 to be banked into 2021, and maybe a third, or a quarter, of the points that have been banked into 2021 to then be banked into 2022, that might be a way to spread the pain more evenly over the next couple of years or so.

 

[Sandisw]

Suspending banking would make things worst, because they would force everyone to use the points in the next year together with all people who have banked points this year. Allowing people to bank the points if they cannot get the reservation, allows points to spread in the future years and be reabsorbed slowly by the lockoff premium and points that just go unused normally.

The point is that the suspension in a year or so Would help and it’s within the power to do so. That’s all I am saying, Those things are not guaranteed which means, yes, people could end up losing points.

But, if they don’t allow either, then for that year, the points in the system match what is available,

I am not saying they will or will even need to, but it would be the first go to option, IMO, for them if things are way out of whack.

Otherwise, what would be the reason they ever needed to include that.

 

[Yinn]

If (big if) the resorts the resorts were to stay empty for 3 months, say, in this system that is designed for 100% occupancy, I wonder if Disney would have to shift the expiration dates of the 2042 resorts out by 3 months? It seems that either the members would eat the loss or Disney would eat the loss. Legally, it's probably on us, but PR-wise and marketing-wise, it would be a smart move on Disney's part. If people fill up the resorts with resorts only stays in this period, this would be a moot point.

I don’t see them shifting the expirations. The whole point of a timeshare for the seller (Disney) is to shift the risks / costs associated with a hotel management to the owners. That includes initial outlay/break even as well as the unexpected expenses.

Sure they’ll want to do enough as to ensure there’s sufficient demand for future DVC and profits and curb negative reputation, but leaving the expiration date where it is, isn’t going to deter future buyers. Another words Riviera buyers aren’t looking at it and going -gee Disney didn’t extend Boardwalk by 3 months during Coronavirus. Not sure I want to sign this 50 year contract.

 

[Grumpy by Birth]

Interesting to note: I'm still getting multiple e-mails a day containing "rental offers" from one of the rental companies.

This is purely anecdotal, but I suppose it's at least one indication that the rental market has not completely dried up as a result of this virus.