Most Economical Resort

[DVCDisneyRunner]

DVC Resale Market has a ranking of the most economical resorts on their website, however I never thought their methodology made any sense. It uses a very simplistic approach that doesn't take into consideration Time Value of Money. This leads to over valuing resorts that have high purchase prices, but low maintenance fees. I went back and used the same methodology, except I factored in things like expected US inflation, and increases to maintenance fees. Here are my results:

Assumptions Used:

Maintenance Fees increase on average by 4% annually.
US Inflation Rate is 2%
Purchase Price used is DVC Resale Market's average resale purchase price for April 2019.
Initial Maintenance Fees are the 2019 amounts.

Resort	Cost Per Point (My Calculation)	Ranking (My Calculation)	Cost Per Point (DVC Resale Market)	Ranking (DVC Resale Market)
Saratoga Springs	11.89	1	9.31	1
Boulder Ridge	12.98	2	11.58	10
Old Key West	12.99	3	11.75	11
Bay Lake Tower	13.06	4	9.94	2
Grand Floridian	13.45	5	9.97	3
Animal Kingdom	13.65	6	10.33	6/7
Grand Californian	13.94	7	11.10	9
Hilton Head	14.01	8/9	11.99	12
Polynesian	14.01	8/9	10.02	4

Boardwalk	14.25	10	12.91	14
Beach Club	14.42	11/12	12.98	15
Aulani	14.42	11/12	10.33	6/7
Vero Beach	14.69	13	12.52	13
Copper Creek	15.09	14	10.37	7

It's important to note that these results don't factor in things like point charts, or any non-quantitative measures of desirability. It is strictly an average cost per point available over the duration of the contract.

Edit: I can't figure out how to fix the second table to match the first.

How long one intends to hold onto the contract will be yet another factor to consider when calculating cost per point.

Lets say you purchase resort A with 25 years for 100 and 5 dollar MF's and I purchase resort B for 150 with 47 years and 5 dollar MF's at the end of 25 years you have no value left and I sell for cost plus inflation.

Or we both purchase resort C and you hold for the life of the contract (25+ years) but I sell at 10 years for the cost plus inflation.

In both these situations I would come out paying less per point than you based on your analysis. However, In the first example resort A would appear to have been the better buy over resort B and in the second example your cost per point and my cost per point would not be the same because we have different exit points.

It is all these unknowns that leads places like the one you referenced to go with the simplest comparison. Once you start trying to predict inflation vs MF increases, how long one may or may not remain a member... you start to create the out come you are looking for which many of us have done to come to the conclusions we have when purchasing DVC. No real right or wrong approach just very individualized.

 

[mustinjourney]

Riviera = 17.39 per point.

Obviously the biggest difference is we are using direct pricing at $188 per point. I used $8.31 per point for maintenance fees as well as I believe this is what I saw on the DVC website.

MFs at CCV and riviera will not increase much the next few years like the other older resorts.

 

[CanadaDisney05]

How long one intends to hold onto the contract will be yet another factor to consider when calculating cost per point.

Lets say you purchase resort A with 25 years for 100 and 5 dollar MF's and I purchase resort B for 150 with 47 years and 5 dollar MF's at the end of 25 years you have no value left and I sell for cost plus inflation.

Or we both purchase resort C and you hold for the life of the contract (25+ years) but I sell at 10 years for the cost plus inflation.

In both these situations I would come out paying less per point than you based on your analysis. However, In the first example resort A would appear to have been the better buy over resort B and in the second example your cost per point and my cost per point would not be the same because we have different exit points.

It is all these unknowns that leads places like the one you referenced to go with the simplest comparison. Once you start trying to predict inflation vs MF increases, how long one may or may not remain a member... you start to create the out come you are looking for which many of us have done to come to the conclusions we have when purchasing DVC. No real right or wrong approach just very individualized.

In the scenario's you are describing, the economic output of the contract hasn't changed. The contract will still cost what it costs. The above calculation does not consider the amounts you save on cash rates because if your booking at the 7 month window, that amount will be identical for all contracts.

What you are describing is a change in demand for the contract (likely driven by Disney raising their cash rates by more than was originally built in to the price).

So yes, if you decide to sell before the contract ends, the residual will depend on future demand which is much harder to predict.

The above calculation is not meant to be a ranking of which resort you should by. It is just a ranking of the long term cost of each.

Just because the compact car is the cheapest doesn't mean you should buy it. Buy the car that best fits your family's style. Cost is only one component of that decision.

 

[KAT4DISNEY]

MFs at CCV and riviera will not increase much the next few years like the other older resorts.

I know the theory is that Riviera will not change for 2020 because it is calculated for opening at the end of the year and it has the wage increases built in. What is the reason you think CCV would not increase in a manner similar to other resorts?

 

[mustinjourney]

I know the theory is that Riviera will not change for 2020 because it is calculated for opening at the end of the year and it has the wage increases built in. What is the reason you think CCV would not increase in a manner similar to other resorts?

You're right in that CCV should see more movement than DRR...but copper creek was already pretty high (compared to previous resorts) and newer resorts tend to stay fairly stable in the first few years.

 

[CanadaDisney05]

MFs at CCV and riviera will not increase much the next few years like the other older resorts.

I used an average of 4% for maintenance fees over 50 years for Riviera. Some years will be higher, some will be lower or non-existant

 

[anomamatt]

Great analysis. Thanks for sharing this @CanadaDisney05 !

Taking things a step in a different direction, it would be instructive to use these $/point numbers to calculate (a) studio cost, and (b) average room cost and then average those. That would tell the "buy where you are going to stay" crowd what the most cost-effective resort is. SSR will still be #1, but BWV will make a big jump (and BLT/VGF will jump downward).

That's been one of my issues with DVC Resale Market's analyses. BLT is always top-3 (and I love the resort), but the point chart is NOT economical. And in today's market / booking climate, I want to know the value of the points booking at 11 months.

 

[Katie L]

I used an average of 4% for maintenance fees over 50 years for Riviera. Some years will be higher, some will be lower or non-existant

Right, but this assumption when dealing with compounding makes dramatic differences. If you assume dues increase 4% in 2020 at Riviera you end up with a $60 pp difference over assuming dues don't increase at all. Dues are really what matter over the life of a contract. And you can only project those. So might as well throw the spreadsheet away.

 

[crvetter]

Right, but this assumption when dealing with compounding makes dramatic differences. If you assume dues increase 4% in 2020 at Riviera you end up with a $60 pp difference over assuming dues don't increase at all. Dues are really what matter over the life of a contract. And you can only project those. So might as well throw the spreadsheet away.

The cumulative present values of all expected dues to be paid on Riviera assuming 4% for 50 years is $717.13 per point and 4% for 49 years (1st year flat) it's 689.87. But the assumption of 4% is built on how all the other resorts have behaved (thus some had minimal increases their first year others didn't) but it is an average and the best guess. But you could factor in the fact the assumption that dues won't increase the first year but overall it effects the average annual dues paid per year (taking the numbers above and dividing by 50) by $0.55 per point (14.34 per point under assumption 1 and 13.80 under assumption 2).

Though like @CanadaDisney05 stated overall on average it will work out because the average MF was scraped from prior resorts that had some of the behaviors of large and non-existent increases over the years.

 

[crvetter]

Great analysis. Thanks for sharing this @CanadaDisney05 !

Taking things a step in a different direction, it would be instructive to use these $/point numbers to calculate (a) studio cost, and (b) average room cost and then average those. That would tell the "buy where you are going to stay" crowd what the most cost-effective resort is. SSR will still be #1, but BWV will make a big jump (and BLT/VGF will jump downward).

That's been one of my issues with DVC Resale Market's analyses. BLT is always top-3 (and I love the resort), but the point chart is NOT economical. And in today's market / booking climate, I want to know the value of the points booking at 11 months.

The analysis was done based on assuming you would be using the 7 month window, which was stated I believe. I have the numbers on some other thread that provide this exactly (I believe under a Riviera thread). But you are right if you plan on using the 11 months BLT, PVB, VGF become some of the less economical (VGF and PVB some of the most expensive even for cheap views). Also the other assumption in the calcs is the contracts are held to maturity and thus BWV numbers are averages held to 2042 and CCV are averages held to 2068 (thus this makes the longer dated contracts cost more because you are holding them longer). If you wanted to "normalize" for contract length you have to assume some "reinvest" risk to buy back into DVC to get everything to the same extension date.

Here is the numbers for studios using @CanadaDisney05 assumptions

Resort	Room Type	View	Average Points per Day	Average Cost per Day
Animal Kingdom	Deluxe Studio	Value	10.94	$ 149.29
Saratoga Springs	Deluxe Studio	Standard	14.28	$ 169.82
Old Key West	Deluxe Studio	Standard	13.82	$ 179.58
Animal Kingdom	Deluxe Studio	Standard	14.47	$ 197.57
Boardwalk	Deluxe Studio	Standard	13.94	$ 198.68
Saratoga Springs	Deluxe Studio	Preferred	16.78	$ 199.56
Hilton Head	Deluxe Studio	Standard	14.33	$ 200.75
Vero Beach	Inn	Garden	15.21	$ 223.37
Boulder Ridge	Deluxe Studio	Standard	17.27	$ 224.11
Bay Lake Tower	Deluxe Studio	Standard	17.91	$ 233.86
Animal Kingdom	Deluxe Studio	Savannah	18.07	$ 246.71
Vero Beach	Deluxe Studio	Standard	17.04	$ 250.25
Boardwalk	Deluxe Studio	Preferred	17.76	$ 253.06
Beach Club	Deluxe Studio	Standard	17.66	$ 254.70
Copper Creek	Deluxe Studio	Standard	17.27	$ 260.54
Aulani	Hotel	Standard	18.08	$ 260.67
Bay Lake Tower	Deluxe Studio	Lake	20.39	$ 266.25
Riviera	Tower Studio	Standard	15.86	$ 275.86
Vero Beach	Inn	Ocean	18.79	$ 276.05
Aulani	Deluxe Studio	Standard	20.13	$ 290.30
Grand Floridian	Deluxe Studio	Standard	21.74	$ 292.40
Polynesian	Deluxe Studio	Standard	21.67	$ 303.54
Animal Kingdom	Deluxe Studio	Club	22.78	$ 310.96
Bay Lake Tower	Deluxe Studio	Theme Park	24.31	$ 317.45
Aulani	Deluxe Studio	Island Garden	22.57	$ 325.50
Grand Californian	Deluxe Studio	Standard	23.76	$ 331.28
Riviera	Deluxe Studio	Standard	19.79	$ 344.08
Grand Floridian	Deluxe Studio	Lake	25.89	$ 348.19
Polynesian	Deluxe Studio	Lake	25.87	$ 362.46
Aulani	Deluxe Studio	Poolside Garden	25.27	$ 364.45
Aulani	Deluxe Studio	Ocean	27.47	$ 396.14
Riviera	Deluxe Studio	Preferred	24.06	$ 418.41

 

[CanadaDisney05]

Great analysis. Thanks for sharing this @CanadaDisney05 !

Taking things a step in a different direction, it would be instructive to use these $/point numbers to calculate (a) studio cost, and (b) average room cost and then average those. That would tell the "buy where you are going to stay" crowd what the most cost-effective resort is. SSR will still be #1, but BWV will make a big jump (and BLT/VGF will jump downward).

That's been one of my issues with DVC Resale Market's analyses. BLT is always top-3 (and I love the resort), but the point chart is NOT economical. And in today's market / booking climate, I want to know the value of the points booking at 11 months.

Thanks. I was thinking about something like this, but it seems like a lot more work considering the amount of room categories and different seasons. If you have a specific preference for room category and season I recommend you taking my numbers and multiplying by the point chart.

 

[CanadaDisney05]

The analysis was done based on assuming you would be using the 7 month window, which was stated I believe. I have the numbers on some other thread that provide this exactly (I believe under a Riviera thread). But you are right if you plan on using the 11 months BLT, PVB, VGF become some of the less economical (VGF and PVB some of the most expensive even for cheap views). Also the other assumption in the calcs is the contracts are held to maturity and thus BWV numbers are averages held to 2042 and CCV are averages held to 2068 (thus this makes the longer dated contracts cost more because you are holding them longer). If you wanted to "normalize" for contract length you have to assume some "reinvest" risk to buy back into DVC to get everything to the same extension date.

Here is the numbers for studios using @CanadaDisney05 assumptions

Resort	Room Type	View	Average Points per Day	Average Cost per Day
Animal Kingdom	Deluxe Studio	Value	10.94	$ 149.29
Saratoga Springs	Deluxe Studio	Standard	14.28	$ 169.82
Old Key West	Deluxe Studio	Standard	13.82	$ 179.58
Animal Kingdom	Deluxe Studio	Standard	14.47	$ 197.57
Boardwalk	Deluxe Studio	Standard	13.94	$ 198.68
Saratoga Springs	Deluxe Studio	Preferred	16.78	$ 199.56
Hilton Head	Deluxe Studio	Standard	14.33	$ 200.75
Vero Beach	Inn	Garden	15.21	$ 223.37
Boulder Ridge	Deluxe Studio	Standard	17.27	$ 224.11
Bay Lake Tower	Deluxe Studio	Standard	17.91	$ 233.86
Animal Kingdom	Deluxe Studio	Savannah	18.07	$ 246.71
Vero Beach	Deluxe Studio	Standard	17.04	$ 250.25
Boardwalk	Deluxe Studio	Preferred	17.76	$ 253.06
Beach Club	Deluxe Studio	Standard	17.66	$ 254.70
Copper Creek	Deluxe Studio	Standard	17.27	$ 260.54
Aulani	Hotel	Standard	18.08	$ 260.67
Bay Lake Tower	Deluxe Studio	Lake	20.39	$ 266.25
Riviera	Tower Studio	Standard	15.86	$ 275.86
Vero Beach	Inn	Ocean	18.79	$ 276.05
Aulani	Deluxe Studio	Standard	20.13	$ 290.30
Grand Floridian	Deluxe Studio	Standard	21.74	$ 292.40
Polynesian	Deluxe Studio	Standard	21.67	$ 303.54
Animal Kingdom	Deluxe Studio	Club	22.78	$ 310.96
Bay Lake Tower	Deluxe Studio	Theme Park	24.31	$ 317.45
Aulani	Deluxe Studio	Island Garden	22.57	$ 325.50
Grand Californian	Deluxe Studio	Standard	23.76	$ 331.28
Riviera	Deluxe Studio	Standard	19.79	$ 344.08
Grand Floridian	Deluxe Studio	Lake	25.89	$ 348.19
Polynesian	Deluxe Studio	Lake	25.87	$ 362.46
Aulani	Deluxe Studio	Poolside Garden	25.27	$ 364.45
Aulani	Deluxe Studio	Ocean	27.47	$ 396.14
Riviera	Deluxe Studio	Preferred	24.06	$ 418.41

This is awsome! For Average points per day, did you use a particular season? Or averaged weekly rates across seasons?

 

[crvetter]

This is awsome! For Average points per day, did you use a particular season? Or averaged weekly rates across seasons?

I did if seasons didn't exist, if that makes sense. Since most resorts have similar seasonal structures I wouldn't expect the rankings to change too much.

 

[CanadaDisney05]

I did if seasons didn't exist, if that makes sense. Since most resorts have similar seasonal structures I wouldn't expect the rankings to change too much.

Makes sense!

 

[DVCDisneyRunner]

Mentioned it in several other posts, but this method eliminates the resort/room preference. It is simply a comparison of points at the 7 month booking window when all points become equal. But for sure, things like point charts, room availability, resort preference should all be factored in to your personal decision making process. This is not an all encompassing decision making chart.

Just because the compact car is the cheapest doesn't mean you should buy it. Buy the car that best fits your family's style. Cost is only one component of that decision.

Now I am confused. I thought we were discussing a commodity (points at 7 months). If we are looking at it from the perspective of which home resort do you prefer then we are having a completely different conversation.

So yes, if you decide to sell before the contract ends, the residual will depend on future demand which is much harder to predict

I am not sure why you would say it would be "much harder to predict" resale value versus the spread between inflation and MF's? Maybe I am wrong, but I would imagine you used historical data to decide 2% was a reasonable spread between inflation and MF's. Using the same logic one can then come up with a reasonable prediction for the value at time of exit.

I am not disputing your numbers just trying to point out that depending on the variables you want to predict/assume a lot can change. The simple approach done by the resale company uses no assumption or variables, yours adds in a predicted/assumed spread between inflation and MF's as a factor, but you leave out other things. Again, No real right or wrong approach just very individualized.

 

[CanadaDisney05]

Now I am confused. I thought we were discussing a commodity (points at 7 months). If we are looking at it from the perspective of which home resort do you prefer then we are having a completely different conversation.

The analysis was done based on using points as a commodity at 7 months. The analysis was meant as a tool for decision making, but is not intended to make the final decision for you. Personal preference still comes into play.

 

[Katie L]

The cumulative present values of all expected dues to be paid on Riviera assuming 4% for 50 years is $717.13 per point and 4% for 49 years (1st year flat) it's 689.87.

Interesting. These are not the numbers I come up with. Doing a straight-line of 4% YOY my numbers are significantly higher. $1269.00 and $1319.75. I know you are quite the spreadsheet guru, so I'm probably doing something wrong. In which case. I should REALLY throw out my spreadsheets.

 

[crvetter]

Interesting. These are not the numbers I come up with. Doing a straight-line of 4% YOY my numbers are significantly higher. $1269.00 and $1319.75. I know you are quite the spreadsheet guru, so I'm probably doing something wrong. In which case. I should REALLY throw out my spreadsheets.

Did you discount back to 2019 dollars by 2% a year? That is likely our difference I bet.

 

[CanadaDisney05]

Interesting. These are not the numbers I come up with. Doing a straight-line of 4% YOY my numbers are significantly higher. $1269.00 and $1319.75. I know you are quite the spreadsheet guru, so I'm probably doing something wrong. In which case. I should REALLY throw out my spreadsheets.

crvetter is discounting everything back to present day dollars

 

[Katie L]

Did you discount back to 2019 dollars by 2% a year? That is likely our difference I bet.

Yes, you factored inflation. That's fair and definitely makes sense. $60 in 2070 isn't the same as $60 today.