confused on the draw to DVC

[SecondEventuality]

When I am at a deluxe resort I am at the pool, in the lounge, enjoying the resort itself.

I think that is precisely why we are looking at DVC - our last trip (which was a trial, in value resort and a short stay), was both during summertime and with a child, clued us in that our WDW trips are going to be WILDLY different from what they used to be as a solo couple going during the offseason. We get it! It means more resort time. It means less focus on parks solely. It means comfort and a slower pace.

Thanks for all of you helping us to come around to that fact!

 

[CanadaDisney05]

This, and cash flow. I bought my points 23 years ago for a fraction of what they go for now. So I just have the dues. I don't understand working the numbers over the whole life of the contract. Even the cost of the cups of coffee you buy are going to seem astronomical if you do it over a lifetime.

I think the idea is to figure out the total cost over the life of the contract, but then divide it over the expected amount of nights over the life of the contract. This should give you within reason what the room is really costing you per night. Allows a bit more of an apples to apples comparison

 

[AdamsMum]

Ok, now I understand, so it's due to the family size that you guys basically are forced to book deluxe, gotcha! thank you!!!!

For me it was location. Not having to wait for a bus with hundreds of other tired people, sleeping/crying babies etc. after nighttime spectactulars on the days I go to Epcot and Studios is priceless.
Then again I often end my day at World Showcase.

 

[igrsod]

I think the idea is to figure out the total cost over the life of the contract, but then divide it over the expected amount of nights over the life of the contract. This should give you within reason what the room is really costing you per night. Allows a bit more of an apples to apples comparison

Sort of.... it means those rooms will cost that amount per night in 20 years too. Who knows what kind of deal that will be?

 

[CanadaDisney05]

Sort of.... it means those rooms will cost that amount per night in 20 years too. Who knows what kind of deal that will be?

I did my calculation in two ways

1) Figured out how much DVC was going to cost me per night in today's dollars. I discounted future year's by 2% for inflation. I go for 10 nights per year during magic season and own at SSR, and my calculation came out to about $260 per night.

2) Assumed cash rates would go up by 4% annually, and figured out what cash rate today would give me a NPV over the life of the contract of zero (basically the break even cash rate). This number was $161 per night.

Although it will end up costing me $260 per night (today's dollars), buying DVC will cost me the same amount as staying the same amount of nights at a hotel that costs $161 per night today. This is due to the fact that hotel prices have historically outpaced inflation over the long run.

The second calculation really gives me a better idea of what kind of value I am getting out of DVC, but the first calculation gives me a better idea of long term affordability. I felt both were important.

 

[skier_pete]

So you've gotten a ton of answers - and I haven't read the whole thread. The truth is that DVC isn't for everyone. We were a moderate family (with occasional value stay) that could never justify a direct DVC purchase even though we went once a year. We would normally travel with free dining as well.

At the time we bought (2014) we saw an opportunity to "value proof" our trips a bit with a DVC contract. We bought at AKV - and we can typically get a standard view studio room at our home resort which run us typically $120-150 per night, which is averaging the buy-in across the life of the contract, plus maintenance fees. Buying Riviera Direct hits a MUCH higher price point with the point charts - more like $250-300 / night for a studio - but there are still bargains on the resale market.

The difference is it has made our vacations MUCH more relaxed and now having stayed at Deluxe resorts for the last 5 years at what I would call moderate prices we feel the investment was well worth it. Not everyone would consider it. It IS a luxury decision. But for a $15,000 buy-in at Saratoga resale you can get 150 points for the next 35 years which would typically give you a week each year with a MF around $900. The opportunity there is to not just stay at SSR but other deluxes. If in 10 years you don't want to do it anymore - you can likely sell your contract for around the price you paid.

Suggest watching some episodes of the DVC show on the DISunplugged, which talks about the pros and cons of DVC resale and direct. I'm not going to tell you DVC is right for you, only you can decide that. If you are looking for cheap Disney stays you are better off staying value or if you want a bigger room you can stay off-site and save a LOT of money. DVC isn't really a money saver unless you look at versus Moderate and Deluxe stays and even then it is a long-term savings, not a short term savings.

In my view it's similar to saying: "I can live in an apartment for $1600 a month, why would I buy a house where I have to put $20,000 down and then pay $1200 a month for a mortgage." Not an exact analogy as there's a lot of other arguments for a home, and we are talking about a vacation versus a necessity - but still that's a way to think.

 

[igrsod]

So you've gotten a ton of answers - and I haven't read the whole thread. The truth is that DVC isn't for everyone. We were a moderate family (with occasional value stay) that could never justify a direct DVC purchase even though we went once a year. We would normally travel with free dining as well.

At the time we bought (2014) we saw an opportunity to "value proof" our trips a bit with a DVC contract. We bought at AKV - and we can typically get a standard view studio room at our home resort which run us typically $120-150 per night, which is averaging the buy-in across the life of the contract, plus maintenance fees. Buying Riviera Direct hits a MUCH higher price point with the point charts - more like $250-300 / night for a studio - but there are still bargains on the resale market.

The difference is it has made our vacations MUCH more relaxed and now having stayed at Deluxe resorts for the last 5 years at what I would call moderate prices we feel the investment was well worth it. Not everyone would consider it. It IS a luxury decision. But for a $15,000 buy-in at Saratoga resale you can get 150 points for the next 35 years which would typically give you a week each year with a MF around $900. The opportunity there is to not just stay at SSR but other deluxes. If in 10 years you don't want to do it anymore - you can likely sell your contract for around the price you paid.

Suggest watching some episodes of the DVC show on the DISunplugged, which talks about the pros and cons of DVC resale and direct. I'm not going to tell you DVC is right for you, only you can decide that. If you are looking for cheap Disney stays you are better off staying value or if you want a bigger room you can stay off-site and save a LOT of money. DVC isn't really a money saver unless you look at versus Moderate and Deluxe stays and even then it is a long-term savings, not a short term savings.

In my view it's similar to saying: "I can live in an apartment for $1600 a month, why would I buy a house where I have to put $20,000 down and then pay $1200 a month for a mortgage." Not an exact analogy as there's a lot of other arguments for a home, and we are talking about a vacation versus a necessity - but still that's a way to think.

Interestingly enough, last time we paid out of pocket for our friends in a value... it was $150 per night. Last time I paid out of pocket for my daughter and I for a last minute girls weekend at a moderate it was $185 per night (I believe it's more like over $200 per night now). DVC has given us not only discounts on Deluxe resort stays, but as I see it discounts on moderate and in some cases value resort stays.

Honestly, if you don't mind staying at value resorts, DVC isn't a great use of money. BUT... if you like staying at moderate or deluxe, it is a great deal. I do not regret our DVC purchase.

 

[SecondEventuality]

For clarification, we do mind staying at value...all our stays prior to the first value stay this past June were at moderate resorts...my original post, however, was coming from a POV where I was completely clueless on what DVC was, what it provided (in terms of different rooms) and such. At that time, I was thinking that the rooms and resort itself were just nicer and I couldn't wrap my mind around why 400+ a night justified nicer decorations in the same type of room. Now I see it's more than that and not a true apples to apples comparison - you get more space, room amenities (such as a couch, balcony, etc) as well as a focus on enjoying the resort itself, pools, and not focused on parks any longer. I honestly had no idea there were DVC "villas" (special rooms) at all or what that meant.

I hope that helps and again, thank you for helping me (us) understand what it means!

 

[Fred M]

The hallmark of DVC is that it’s prepaying your lodging. So the real question is how much are you paying for lodging, what level of resort are you staying at, and how important is it to be on property? I read a post back when I bought in 2015 and it had a couple of general guidelines for folks looking to buy DVC. One was that if you stay less than 11 nights every year or two, DVC probably won’t make financial sense. If you generally stay at Values and Moderates, then DVC probably won’t make financial sense. The post brought everything back to what are you paying now and what would you pay for DVC, and which is a better value.

My wife and I are here in California and we have DVC for two reasons. The first is that when we do go to WDW or Aulani, we‘re staying 10-14 nights. That was the reason we initially bought (plus a bad experience staying off property). The second is that because we are staying so long, having a full kitchen makes our trips more affordable and relaxing.

We go to WDW once every 2-3 years. Aulani is once every 12-18 months. A Disney trip is generally our big annual vacation. If we went less, or stayed fewer nights, we probably wouldn’t do DVC.

 

[EYL]

I'm really, really trying to get to this beautiful number, but all my calculations aren't adding up...clearly, I'm missing something.

Take Saratoga Springs...With an average of 4% annual increase on the maint. fees + the life of the contract (until 2053 since you can't count the year it expires) is 33 years, we are looking at a total of ~$54,000 in fees. Combine that with a 120 point contract for a base price of ~14000. Take an 8-day vacation during Magic season on a yearly basis until 2053 (120 points for studio, annually) is a total of 264 days.

$53,650.87 + $14,000 = $67,650.87 / 264 =

$256 per night?

Where am I looking at this wrong? I'm guessing the only way to do it is in perhaps Adventure season, needing only ~100 pts for 8 days?

I bought into DVC in January 2019 and I did all my calculations and my research just as you did. What really made a difference to me was knowing that DVC has a refurbishment "schedule" to upkeep its resorts and that if I ever need to sell, it holds some value.

I know that some people on this board don't agree with this valuation - that the costs associated to purchase DVC should be treated as a sunken cost. But the fact that it will hold a bit of value was a bonus to me. We've all heard of fleabag timeshares where people need to beg someone else to take it over by selling it for $1 plus all closing costs. I have 200 points at PVB. If I go every year and had to sell it for $40/point less 10 years later, I would have had my moneys worth. The memories alone would be priceless.

We all look at the numbers display before placing a bet in Roulette, even though the odds are the same every single turn. To me, buying DVC was the same mentality: Gamble, but gamble as wisely as you can.

 

[Bing Showei]

The funny thing about all this math, and I’m not disputing the value of understanding it when deciding to buy in, is that it is only of utmost, critical importance before you buy.

What’s not often said enough in these conversations is that in practice, very little of it matters to most owners. It comes to be treated as a utility that comes up annually (or monthly) which you budget for like anything else, not the luxury that it is, and certainly not the financial commitment that it will be.

I’m pretty confident most owners in this board did the spreadsheets and worked out the average cost per stay; questionably divining variables like continued interest in Disney over RTU personally, rack rates over time, Disney popularity over time, etc.; what gets lost is as an owner, Disney effectively removes the cost element from your experience of “the magic.”

For better or worse, most of us don’t think at all about our ADs, the long term commitment/risks of owning a timeshare, or dereliction of fiduciary duties with point reallocations when we’re at the park. Instead, we suspend disbelief for the sake of enjoying our ownership, and we are conveniently reminded how smart we are for deciding to buy in when we receive that magical $0 room bill.

For my family of three, we don’t have to pay discounted rack rates for 1BR+ suites, so the math works out however way you choose to work it, but for us, it’s more about the convenience of knowing we’ll be staying close to the parks once a year and not hunting for the best prices to do it. For others, this may matter little.

When it comes to Disney, human behavior is if you can “afford” it, whether that’s paying cash up front, or 10% interest compounded over 10 years paid monthly, you’ll own it, and ownership will morph into “Do we want to invite your sister’s family this year?” “Do we want to try to trade into BCV for Flower and Garden?” “Do we want to splurge for a 1BR?” And much less about “this trip is only costing us $250/night for a deluxe accommodation.”

 

[skier_pete]

I can't speak for everyone else - but I look at the financial cost every single time. I have a value set for my points. (Buy-in calculated at cost per point/#years of contract + MF) and I look at that cost for the room.

My 3 night stay coming up at BWV is costing me $411 and this is how I calculate it:
2019 points cost me $4.92 for buy-in + $7.17 for dues = $12.09 / point.
34 points for 3 nights = 34 * $12.09 = $411.14.
That's $137.05 per night at the Boardwalk - and there's no tax on that.

Not sure what it would have cost at Pop Century or CBR, but I doubt it's less.

 

[Marionnette]

If you don’t smoke, drink, or go out to eat, how can you possibly accumulate enough cash back on credit cards?

Groceries, gas and clothes???

Or own a small business and place all of the overhead on a rewards credit card. 16K-25K per month in points is nothing to sneeze at.

 

[Sanwich]

For us it has nothing to do with family size, because it’s usually just two of us.

Our first several trips to WDW were always at values on-site (I hate to drive and like “the bubble” so off-site isn’t an option for us). We were honestly fine staying at those resorts and our only complaints were the sometimes unruly teenage crowds. Even now I occasionally get nostalgic for a Pop Century stay.

That said, eventually one day we got a good discount on a deluxe hotel room (AKL), and have been hooked on deluxe ever since... deluxes in general seem to have more “quiet” areas when we want to escape the chaos of the parks, better transportation options, more restaurant variety, slightly nicer room decor, etc. Our first DVC purchase was a resale contract and we got a good deal, so with those points we can literally stay at a deluxe for a price somewhere between value and moderate.

What it really comes down to is how much you value your hotel on any given vacation. If you’re like us and spend a lot of time relaxing in the room or enjoying resort amenities, you will probably be drawn to deluxe and possibly DVC. If you literally sleep and shower in your room and don’t care if it’s just four walls and a bed, you probably won’t see the appeal of DVC.

 

[DougEMG]

I can't speak for everyone else - but I look at the financial cost every single time. I have a value set for my points. (Buy-in calculated at cost per point/#years of contract + MF) and I look at that cost for the room.

My 3 night stay coming up at BWV is costing me $411 and this is how I calculate it:
2019 points cost me $4.92 for buy-in + $7.17 for dues = $12.09 / point.
34 points for 3 nights = 34 * $12.09 = $411.14.
That's $137.05 per night at the Boardwalk - and there's no tax on that.

Not sure what it would have cost at Pop Century or CBR, but I doubt it's less.

Same here. I'm always looking at what the financial and point costs are of the room I'm booking and determining if it is worth it to me. DVC is about saving money on room costs, if I'm not doing that, why bother owning?

 

[Bing Showei]

Same here. I'm always looking at what the financial and point costs are of the room I'm booking and determining if it is worth it to me. DVC is about saving money on room costs, if I'm not doing that, why bother owning?

Given how you’re one of those folks that managed to buy-in at $12/pt during the Great Recession, what calculation could possibly suggest that you are not saving money?

I can't speak for everyone else - but I look at the financial cost every single time. I have a value set for my points. (Buy-in calculated at cost per point/#years of contract + MF) and I look at that cost for the room.

My 3 night stay coming up at BWV is costing me $411 and this is how I calculate it:
2019 points cost me $4.92 for buy-in + $7.17 for dues = $12.09 / point.
34 points for 3 nights = 34 * $12.09 = $411.14.
That's $137.05 per night at the Boardwalk - and there's no tax on that.

Not sure what it would have cost at Pop Century or CBR, but I doubt it's less.

Perhaps I shouldn’t have generalized so much, but I guess for me, the money is spent and I’m definitely saving money staying on my points over the alternative. So while I understand enjoying seeing how cheap the effective cost of my room is, what sort of new information about the cost effectiveness of having bought in will an owner glean by running those calculations year after year after the initial purchase has been made? I’m honestly wondering.

I can imagine that if rack rates plummet and the cost effectiveness of a Disney timeshare is negated that information would be helpful to re-evaluate the viability of owning, but what options would an owner have at that point? It’s not like you could sell at that point. If paying rack is cheaper, then owning is going to be a losing proposition no matter what you’re paying per night.

What is the purpose of doing this cost analysis every time you book a room on points? Have you ever found, or do you foresee ever finding that it would be more cost effective to do otherwise?

 

[montreid]

We're points people for nice hotels. It's hard to see the benefit of studio stays over examples of stay at Swan/Dolphin on points --especially the flexibility of the stays on points.

That said, I can see family stays in 1-2-3BR suites to really come into play especially when desiring close by experience. We're staying at AirBNB for large family 5BR stay this coming xmas, but it's a 30min+ haul/parking to get on site.

 

[eMoneyBug]

In real life, most of the time I'm really cost conscience, but I'm getting older, kids are almost done with HS and starting college, so I'm in DVC and will stay in DVC for the fun of the legacy. Started in SSR 2012 so now that Blue Card Contract isn't going anywhere! Resale AUL 2019 closing soon. Hope to amass enough points to retire part time in DVC rooms. Sounds like fun to us, so that's why I'm in DVC, love Disney and the Disney community.

 

[Wakey]

If you buy yourself a resale contract at say Saratoga it will cost you around $100 a point.

You can currently sell it any time and it will sell fairly quickly. That may one day change, but currently if you decide to sell it you would not lose much money (maybe 10% in commissions etc ). Sometimes you make money, one contract I bought for a steal in 2016 would now make me $25 a point profit if I sold today, after costs.

Once you have that contract you just pay dues. So say if you have 100 points you could stay in a lot of standard rooms for under $100 a night for around a week in dues cost. No taxes, no parking.

So you get to stay in deluxe hotels for less than value money, but of course you had to put the capital in ( in this case 10 grand). But if you have the cash to spare, knowing you can sell anytime and likely get most of it back, that’s really where the value comes in.

You can also rent it incredibly easily and basically make $700 a year on it after dues, so around a 7% return.

It makes less sense buying new resorts direct at say $180 a point but still can make sense.

If that’s not worth it to you and you are happy with the value, then you already ruled yourself out of DVC, it’s a luxury purchase.

We actually bought for the 1 beds which we now secure for around $200 a night dues cost. I am going at Christmas and New Year and the cash price of those at Beach Club and Bay Lake Tower where I’m staying, is over $700 a night, I think Bay Lake pushes $1000 some nights.

When the kids are grown up and I retire, I’m going down to Florida for around a month every year in Jan, Feb, or March staying in deluxe hotel for (currently) about $90 a night (have 400 points).

 

[igrsod]

I can't speak for everyone else - but I look at the financial cost every single time. I have a value set for my points. (Buy-in calculated at cost per point/#years of contract + MF) and I look at that cost for the room.

My 3 night stay coming up at BWV is costing me $411 and this is how I calculate it:
2019 points cost me $4.92 for buy-in + $7.17 for dues = $12.09 / point.
34 points for 3 nights = 34 * $12.09 = $411.14.
That's $137.05 per night at the Boardwalk - and there's no tax on that.

Not sure what it would have cost at Pop Century or CBR, but I doubt it's less.

That's exactly what I do. It always comes out to a better price than I would pay out of pocket.... and a much nicer room / resort.
I love my DVC points.