Disney TPU's gone up!

[AgelessTravel]

A few hours ago I checked DVC listings in RCI and studio was 22 TPU. I just checked again and it's gone up to 39 TPU and a one bedroom is 43 TPU. What's going on? I really hope this is a glitch in the system.

 

[ScubaKat]

I saw that too! 2 bedroom SSR in May is 47 and a 1 bedroom in June is 48 TPUs! That is crazy.. it almost doubled...

 

[trinaqueen]

Yeah--crazy High!!!

I am in shock

 

[Margariet]

Well, remember how NY Manhattan Club doubled in TPU's? These things might happen if there is enough demand.

 

[marmite]

I saw that too! 2 bedroom SSR in May is 47 and a 1 bedroom in June is 48 TPUs! That is crazy.. it almost doubled...

I don't know anything about the RCI system, just Disney... but that price/points jump makes total sense to me. In Disney, the point values change per season. In the low season, it costs much less points for any unit, than it does during times the kids are out of school.

If you do a google search on "Disney Vacation Club Point Charts", you can see what the key dates are for price changes. Maybe it matches up with the point fluctuation you are seeing?

 

[JudyS]

Maybe BNoble will see this thread and comment on the TPU increases. I know he watches DVC deposits very closely.

Also, BNoble recently said (on another forum, www.DISboards.com) that members of "minisystems" (Bluegreen, HGVC, Wyndham, etc), don't pay a premium for DVC units; they just pay the same as they would for a standard Orlando area resort. That could cause a real problem for RCI members who don't own in one of those minisystems. Minisystem members could "snatch up" many of the DVC units at low cost, and the few DVCS that were left would be very expensive for "regular" RCI members!

BNoble, are you reading this thread? Are DVC weeks much cheaper for people who book through the "minisystems"?

 

[sfwilshire]

If enought RCI members "vote with their feet" the TPUs may go down again. In other words, we'd be crazy to pay those high rates to stay at Disney when there are so many other nice resorts in the area.

I think the Points rates have been high all along. It will be interesting to see if they go up as well.

Sheila

 

[6scoops]

Not good!

I just noticed and this is not good! I've noticed the TPU seems higher at other places as well. I wish I booked something yesterday! And now all I see is Studios for 39TPU!

 

[jdunn1]

As the owner of WM points, I'm happy with the high TPU cost. Let's face it, the best, most sought after RCI inventory comes from the mini systems (i.e. WM, Hilton, DVC and Wyndham). Why shouldn't the mini system resorts cost the most to trade into? Demand for DVC is crazy high and I think the 2 bedroom prime weeks (whenever kids are out of school) should cost 60 TPU, because of the demand for those weeks.

My hope is that with higher TPU costs, the DVC inventory becomes easier to get for EVERYONE.

...and sure mini systems pay a set price for DVC weeks no matter what the TPU cost is but that means we can never exchange into these resorts for a discount (outside of flex, which hardly ever happens). We don't get change back from exchanges and we can't combine a bunch of cheap trader weeks to get whatever we want in RCI. We have to pay the premium price for any exchange we make through RCI, so it is a pretty fair system. For the year and a half or so RCI has been a TPU system, I've read countless posts from tuggers who were very happy to post about how many DVC weeks they booked and how cheap it is for them to do so. I do not think the higher TPU cost will change any of that for the die hard DVC exchangers but something had to be done becuase it was just so cheap to exchange into those resorts. There is also that big issue with DVC RCI weeks being sold on EBAY. I wonder if the high TPU cost is a means to curb that activity -- though I think the TPU change has everything to do with demand. People will pay whatever price they have to for DVC.

 

[rickandcindy23]

As the owner of WM points, I'm happy with the high TPU cost.

Yes, I am sure you are happy with that cost. I am thinking of WorldMark and those low fees right this minute. How many points does it take for a 2 bedroom exchange into RCI? I think the MF"s are the lowest around. I keep forgetting about WM, but I shouldn't.

 

[bnoble]

There's a lot going on here. Here are my first impressions.

First, not only did they go up, but they are now also seasonally different---June and July are more than May at resorts with inventory in both months. This makes sense, May is very slow in Orlando, and peak summer is high demand for the Mouse in particular, because that's when the kiddos are off of school.

Second, the "premium" is now approaching a factor of 4. In May, they are 39/43/47. In June/July, they look like 43/48/??. Compare that to the rest of the Orlando area. In May, most values are 14 or less, the majority at 10 or less, with just a few larger Orange Lake units at 20.

Will this be enough to drive the RCI membership at large to "other" Orlando area resorts? Hard to say. The Disney mania is a powerful pull. On one side, you'll have the "only Disney will do folks", along with people with a surplus of TPU to burn. On the other side, you have a growing disparity of valuations; a lot of people go to Orlando to "go to Florida". For those folks, it will be increasingly hard to justify the premium unless they are spending the entire week in the Disney parks.

Finally, the mini-system behaviors seem to be the same, at least for Wyndham. The entire Orlando area is averaged, with the same Wyndham point values for a particular size and season for all resorts. When I get some time later today, I will try to post some examples, but the portals use the new Points-style search tool, and getting full listings is a royal pain in the patootie.

Ultimately, this isn't *that* surprising. Over time, you have to expect that TPU valuations will get closer and closer to open-market rental rates. And, a 2BR in summer, rented from an owner, will cost you around $3,000-$4,000 depending. Even at 50 TPU, with an "average" ownership that runs about $30/TPU, an exchange is still only about $1800 including exchange fee and Disney extortion fee. Is it the same great deal that it was before? No. Is it better than renting from an owner? Yes.

 

[bnoble]

One more thought does come to mind though: for some people, renting smaller units from an owner will be a much better deal. Even larger units in offseason time might be more affordable renting from an owner.

Once again, this just proves the rule: owning a *particular* thing with an expectation of exchanging into a *particular* resort is a fool's errand. A portfolio approach always wins, and exchangers are best served by being flexible.

 

[MichaelColey]

It looks a little more reasonable to me, although I would still like to see more variation in TPU from a Studio to a 2BR. With every increase, we get closer and closer to having a balance between supply and demand. I think this one might finally hit it. It would be great to see inventory lasting longer and more readily available. With the smaller variation between Studio, 1BR and 2BR, I expect 2BRs to go quick (as they always have), 1BR to go almost as quick (unlike the previous levels) and Studios to sit around for quite a while. Who wants to pay 39 TPU for a Studio (essentially a small step up from a hotel room)?

With the variation in TPU levels even within the same unit size, it looks like they've moved from a simple FLOOR to something a bit more complex. Perhaps adjustments to the base demand calculations, or maybe even a multiplier. They're still applying a floor (because most of the units are the same TPU and none are lower), but there's more going on now.

I'm going to have to review my ongoing searches and make sure I have enough TPU. Hmmm, one does but the other doesn't. Gonna have to make some changes.

 

[JudyS]

A...For the year and a half or so RCI has been a TPU system....

The TPU system actually started one year ago today! It doesn't even feel like a full year to me.

Jdunn1, would you be willing to tell us how many WM credits DVC resorts cost to book (a range of values or a few examples would be great), and how much your WM credits cost in annual fees? Maybe it's time for me to finally buy Worldmark!

 

[Sandy VDH]

I just noticed and this is not good! I've noticed the TPU seems higher at other places as well. I wish I booked something yesterday! And now all I see is Studios for 39TPU!

Ditto. I too looked at them yesterday and decided to wait for something in the fall. Not a good idea I guess.

Not willing to go at the TPU price.

 

[janej]

Yes, I am sure you are happy with that cost. I am thinking of WorldMark and those low fees right this minute. How many points does it take for a 2 bedroom exchange into RCI? I think the MF"s are the lowest around. I keep forgetting about WM, but I shouldn't.

Cindy,

I recently purchased a WM contract. It takes 10,000 points for a 2 bedroom. The cost for MF should be $608 per year. I am still learning how to use the system. I purchased this contract mostly to use for II.

Jane

 

[schiff1997]

Well that's it for me, I'm out. I got two great exchanges into Disney first one 1 bedroom Animal Kingdom Savanah view at Easter break, some of the best pictures I have ever taken and secondly we have a 2 bedroom coming up in March at BCV. Our daughter turns 18 this year, so I think it is time to move on from Orlando anyway. Good luck everyone with this, but those increases with all the fees are just not worth it to me.

 

[bnoble]

Here are two cost comparison points: owner, renter, and exchange make/break value.

First a few assumptions. Owners amortize their purchase price over the entire contract horizon, with a 3% opportunity cost, using recently reported ROFR prices as the resale cost. Renters pay $10.50/point.

BLT. Purchase price $85/point on secondary market. Expires in 48 years. So, annual cost allocated to purchase price is 3%*$85 + $85/48, or $2.55 + $1.77, or $4.32. Maintenance this year is $3.89. Total cost per point for a resale owner: $8.21.

Mid-may studio, assuming Lake View (the largest view category, and the last to book): 139 points. Owner's cost: $1,140. Renter's cost: $1,460. Assuming $180 exchange fee and $95 extortion fee, residual value is $865 and $1,185. So owners must have a $/TPU cost less than $22 for exchange to "cost less". Renters must have a $/TPU cost less than $30 and change for exchange to "cost less".

That's not as bad as I thought it would be, honestly. I suspect $30/TPU is about average, system-wide. Maybe even a little bit lower. In other words, these TPU values look like they've accurately captured the rental market value. Larger units will do even better, because DVC point charts are about 2x from a studio to a 1BR, and about 2.7x from a studio to a 2BR, but TPU values do not grow nearly as fast.

As another example: OKW May 2BR. Resale price $50/pt. Expires in 30 years, so annual cost is 3%*$50 + $50/30 or $3.17. MFs this year are $4.98, or total cost per point of $8.15. A 2BR in May requires 269 points. Cost to owner: $2,190. Cost to renter: $2,825. Residual value after exchange fees: $1,915 and $2,550. 47 TPU for exchange. Owner must have $/TPU cost less than $40 for exchange to be favorable. Renter must have $/TPU cost less than $54.

I'm sure I can find situations where even good $/TPU ratios are under water if I look hard enough. But, on the face of it, these valuations do not look so awful if you assume (as I do) that over time, TPU values have to adjust to open-market prices. I suspect that for most of us, exchange will continue to be the least expensive way to obtain these units.

 

[elaine]

I am as big a Disney nut as anyone. But, no way am I using 45+ TPUs for DVC vs. the 22 TPUs I used for a 2BR @ HGVC-SW for Easter week. We also had a good roll, OKW 1BR for Easter 2010 and 2BR DVC-HHI end of June 2011.
In fact, we almost added onto our 50 point DVC contract before DVC went to RCI--but saved the $ as we got our RCI-DVC trades. We now have been using our DVc points to accompany our RCI trades to get our DVC fix and when we need a few nights of extra space for overflow family. Glad I did not hold out for DVC for Easter. Bummer. Elaine

 

[barond]

Here's a HGVC calculation. I booked a 2 bedroom BLT in january (lake view)

Jan BLT 2 Bedroom (lake view) 296 points
HGVC points 4800
my mf per point 0.25 (a bit high) = $1200 + $295 fees + $830 acquisition costs ($8300 / (40 years/4 once every 4 years)) = $2325
renting would cost $2960 ( at $10/pp)
owning via disney would of cost $2430.16 (at resale)


Though I have dreams of reaching the holy grail of 0.10 cents per point (the real value) via HGVC. It is only a dream so far. I paid retail so my acquisition costs comparison is probably not too fair as the actual value of my contract resale is probably $1200.

Baron

 

[jdunn1]

Hi everyone, I just posted a long post on the sightings board in response to the Worldmark questions Cindy and someone else asked.

-Jim

 

[ScubaKat]

Here's a Wyndham calculation:

March AKV 1 Bedroom (Savannah View) 272 points
Wyndham points: 143,000
my mf per point $4.6/k = $658 + $295 fees + $0 acquisition costs = $952.80
renting would cost $2720 ( at $10/pp)
owning via disney would of cost $2216.80 (at resale)

Here's a HGVC calculation. I booked a 2 bedroom BLT in january (lake view)
Baron

 

[MichaelColey]

When you compare with off-site choices, the difference is pretty astounding. Many off-peak timeshares, at TOP NOTCH resorts (HGVCs, Wyndham Bonnet Creek, Marriotts, etc.) in larger units (2BR and even 3BR) can be exchange into for 10 TPU. Is it worth 4 times as many points to get into DVC?

The same dichotomy exists in Disney hotels, though. What is essentially a themed motel (Disney Value resorts) ranges from $100-$150/night. What is essentially a low- to mid-end hotel (Disney Moderate) ranges from $150-250 per night. What is essentially a borderline high-end hotel (Disney Deluxe) ranges from $300-$500 per night. You can find comparable lodging off-site for $30-50/night, $75-$100/night or $150-$200/night.

With a low enough TPU cost, it's still a great deal, though. My costs to exchange into a DVC (even with the increases) are comparable to what it would cost for me to rent a Disney Value resort. Sure, I can get into one of the offsite locations for less than half that price, but that's not a huge difference for the onsite perks.

 

[presley]

Disney is all about the money. If they finally realized, after reading so many complaints by DVC members on various boards, that people who trade into DVC can do so for such a low rate, they have no hopes of selling DVC to those visitors. They want people to trade in so that they will BUY. They aren't trying to do you any favors by letting you trade in.

I wouldn't be too upset with RCI about this. I suspect that they are just trying to make DVC happy.

Anyhow, for now, you can get killer deals through WM. Who knows how long that will last, but for now, I see nothing close to those prices.

 

[paxsarah]

The value is definitely in what you're comparing it to - I think Michael has it spot-on. For perspective I think back to what we spent for a week at the Polynesian during the week of the marathon last January, and while it was exactly where and when I wanted to stay at the time (I contend there is no more convenient lodging if you're running or spectating that weekend), there is greater value to be had elsewhere (either on- or offsite) if you're more flexible with what you'll take. (This year for the same weekend I'll be at WBC.)

I'll also mention that the better deals that seem to be available through the mini-portals are somewhat dependent on a good degree of flexibility. At least via Wyndham, there are no deviations from the points grid - so if you are very particular about your week or resort or unit size and an acceptable DVC unit doesn't arise, the fallback options via RCI might be exchanges you could have gotten for 10-15 TPUs if you were in that system. If you're stuck doing that, suddenly the great Wyndham value is not so great.