View Full Version : Why DVC?

02-12-2003, 09:35 AM
As an accountant I'm having problems seeing any pros to buying into this... so I figure you all can help.

Firefighter Mickey
02-12-2003, 09:47 AM
1) Do not look at it as an investment - look at it as a prepaid vacation.

2) Depending on your accomodation requirements, it might not be right for you. If you're happy to stay offsite in an inexpensive hotel room, then DVC might not be what you're after.

3) Consider DVC if mainly you want to stay at DVC resorts (WDW, HHI or VB) and the occasional trade or cruise. If you are looking at DVC to use primarily for trading to other resorts around the US/World, then there are many cheaper timeshares available for purchase that trade as good or better than DVC (especially since DVC limits your accessability to external trades handled thru Intervals International).

I think for us the idea of the pre-paid vacation and forcing us to vacation was what really tipped the balance. Yes, it's expensive, but the memories we have from the family vacations so far, and the memories we'll have from the vacations yet to come are priceless.

02-12-2003, 09:51 AM
You said it Firefighter Mickey, Priceless!

02-12-2003, 10:24 AM
An expansion on point #2:

If you have a family large enough to want (or require) suite type accomodations and want to stay on site, you will have very limited options outside of DVC - and most of them are expensive. Many families with children (especially teens) that routinely visit Disney love the idea of staying in a two bedroom unit - where they and their children are not on top of one another in a standard hotel room.

02-12-2003, 10:49 AM
I figure with a 6 yo DD - I'll be going to WDW on a regular basis for a while. BUT with what DVC costs... I could invest the same money and still have my vacations. That's one of the reasons I don't think DVC is for me, also the fact that I like to try different resorts... etc... I guess I was just more curious to see why others do buy in.

02-12-2003, 10:51 AM
If you've got a taste for Deluxe accomodations, but a Moderate budget, DVC makes financial sense. I just figured out that the 2 BR we are staying in for a few (week) nights in March is costing us about $180, and this is a room with a rack rate of $750. If we stayed a week and averaged the cost per night, it still would not approach the rack rate. Yes, we could stay in a couple of rooms at All Stars for less, but would we be happy? Not us! Diana

02-12-2003, 10:55 AM
We first looked at DVC in 1993, at the time we had 2 young children, we were comfortable in a moderate and couldn't see the value in paying so much for DVC when we could get great moderate rates. Our first trip with 3 children was in 1996. We realized we were not comfortable in a moderate any more and our next trip we would have to move up to a deluxe that would accommodate our now family of 5 when the youngest passed the age of 2. We bought DVC in 1997. We have taken 1 or 2 WDW vacations a year since then as well as 4 non WDW trips. We can now stay in a comfortable 2 BR, the teenagers each have their own bed, no complaints, we eat 1-2 meals a day in our room, money saved. We recouped our original investment in about 2 years, so now we travel as much as our points will allow and we are getting deluxe accommodations for the cost of annual dues. If we were to need to sell our membership, we are confident that at today's prices we would be able to sell for a considerable amount more than we paid. So to us, the value is two-fold, our money is working for us towards memories for our family and it's also increasing in value in case we needed to sell and recoup that cash. Could that money make more in other investments, maybe, but it wouldn't be as valuable towards the vacation memories for our family. Is it earning cash value where it is, we believe so.

02-12-2003, 10:57 AM
There are so many factors that one can use to justify or not justify making a decision to buy into DVC so there really isn't any one size fits all approach (as is so with so many things in our lives). As an auditor/accountant I too went through an elaborate exercise to examine the financial aspects of this purchase. But, as an accountant you know that certain assumptions must be added into the mix. One of those assumptions could be the type of accomodations you would like balanced against what you can afford. We enjoy upscale accomodations and that is one of the major factors that entered into our analysis. Other factors for us were being able to take our grown children and our grandchildren to Disney and having the flexibility to stay in various size accomodations to fit our needs at any given time.

Because we prefer upscale accomodations I easily justified our purchase by calculating per point cost taking into consideration our cash purchase price plus anticipated annual dues divided by the number of years left until 2042. If my memory serves me, it works out to around $6.00 a point for us(which would depend partly on your estimate on how much dues will rise over time). When I compare my per point cost to the rack rate at any Disney season I feel like I am getting a bargan.

But, like I said earlier, there are so many ways a person can examine a potential DVC purchase that you could literally drive yourself a bit bonkers.

Your question gets asked often and you are going to get a range of answers but the one I like the best is to view your DVC purchase as 40 years of prepaid vacations in delux accomodations.

Have fun making your decision.

02-12-2003, 11:12 AM
We became DVC members last year at this time when we were on our yearly vacation at disney. After we bought we have asked ouselves for the last year did we do the right thing. It only took our first trip home last week to answer a big yes. Now we are saying why didn't we do it sooner and it would be paid for. LOL We were a family that used to stay at the ASMo for the last 5 years. Don't get me wrong, we loved it there and always had a great time. We are thinking of it as an investment, but an investment in great family vacation memories.

Lisa F
02-12-2003, 11:15 AM
Originally posted by candleonwater
I figure with a 6 yo DD - I'll be going to WDW on a regular basis for a while. BUT with what DVC costs... I could invest the same money and still have my vacations. That's one of the reasons I don't think DVC is for me, also the fact that I like to try different resorts... etc... I guess I was just more curious to see why others do buy in.

I think most people have been more happy with the value of their DVC purchase than the performance of their investments lately!

If you do want to try various non-DVC resorts then dvc isn't the way to go. However, if you compare the per night cost for DVC accommidations to the best discount you can find on comparable deluxe rooms (which don't include the extra amenities of a fridge and microwave compared to a studio at DVC) you will find that there is a savings with DVC. Also, historically speaking, dues have risen much more slowly than the cost of hotel rooms. Right now Disney is experiencing a slowdown but I remember during the millennium celebration where people could not find a discounted room to save their lives there was a SUBSTANTIAL savings with DVC.


02-12-2003, 11:17 AM
Candlewater said ... I could invest the same money and still have my vacations.

In what ?
There hasn't been much that has returned at a rate that allows you to pay for a two week vacation at Disney. Considering my DVC points cost me $53 per point and I could sell them at a decent profit, I don't think there are many investments that would have given me as many holidays and still have had a growth in real terms.

02-12-2003, 11:19 AM
I have reached a point in my life that the accomadations for my vacations are almost as important as the destination. We have been to Disney (and many other places) several times and stayed in regular hotel rooms. It is 'ok', but I just fell in love with the idea of having a 'small apartment' within walking distance of Epcot (we bought at BCVs).

We would never just 'pay' for something like this, we would go on the 'cheap' if it weren't for DVC. But this way, I don't think about the cost so much, it is just available with my points (which will be paid off next week and then I will have is my monthly fees).

It is sort of like the difference between an internet connection and a dial up connection. We pay way too much a month to have an internet connection.....but I really enjoy it. Financially, it isn't the best value. But we get more enjoyment from the internet connection. Same with DVC, it isn't the best price for a room, but we will get a LOT more enjoyment from it than we would from an offsite low price room.

So it really is a personal choice. Ten years ago, we would not have done it. To many other bills that we needed to pay off (like college loans). It just so happens that this past year we could afford the 150 points we bought, but we can't afford anymore--so we will make the 150 points work for us, it they will bring us many wonderful memories.


02-12-2003, 11:52 AM
As has already been mentioned, there are so many factors that come into the decision it's hard to say what is right for each individual. It is not an investment and it's not really a big money saver. It is a wonderful way to enjoy Disney vacations and still have many other options as well.

Maybe you could take the money you would put into DVC, invest it, and still come away with a nice vacation. It might not be to Disney. ;)

I look at the DVC purchase more along the lines of buying a car. There are lots of different models in lots of different price ranges. You purchase what you like and what you can afford. If you like DVC and can afford it, it makes all the sense in the world.

Many of us who bought early on have also enjoyed the option of being able to sell if necessary and not lose money. In fact, it could work out that we've enjoyed 10 years worth of vacations for nothing or the cost of dues. I'm not sure whether that value will continue into the future but it has been a bonus to date.

02-12-2003, 01:34 PM
as a fellow accountant I would say look at the payback period. Also, you must assume you will want to take NICE, not CHEAP vacations for the next forty years no matter what. Don't look at it as an investment or like gee, I'll stay at Motel Six and invest the difference. You need to compare apples to apples.

02-12-2003, 02:16 PM
If you know of an investment where I could invest $40,000 and get a yearly return of $15,000, please, please, please let me in on it. It's got to be legal, though:p I have 700 pts, which is about $40,000 invested, more or less, over the years. I would need about $5000 to pay cash for my accommodations on each vacation, which works out to $15,000. Of course, those are really nice accommodations, but if Motel 6 is perfectly OK for you, then you don't want DVC. I feel constrained to point out to you, as an accountant, that in the 6 years since I've joined DVC I paid $40,000 and can get a return of $50,000 right now, today, and I STILL got 3 vacations per year for free--including my dues, those accommodations cost me about $48 per night. I'm not a whiz with figures, but I think that's a pretty good return, isn't it?

02-12-2003, 04:02 PM
all of the above posters have great things to say, i just wanted to add my thought.......and that is that DVC has to be experienced to be understood. It's not so much about comparing moderates to deluxe accomodationsl........DVC units are beautiful, comfortable and HUGE compared to even the largest single rooms at Disney, but all of the resorts(DVC and other) have something great to offer.........my advice would be for you to rent some points sometime from a member and take a week at one of the DVC resorts....then you have some grounds on which to compare.....then you can easily decide if those inexplicable extras we DVC'ers wax so eloquently about make any difference at all to you......


02-12-2003, 04:50 PM
Don't forget one of the most important advantages of DVC - your accomodation costs are locked in for 40 years! That was one major point that really helped make our decision. Right now there are lots of discounts and AP rates available, but there won't always be. Not to mention that just regular inflation will kick in and naturally room rates will go up at Disney resorts.

Do you think you'll still get an AP rate at the Contemporary for $129 - or even a rack rate of $225 - in 40 years? More likely than not, it'll be two or three times that. But not DVC. Once the investment is paid off, your dues costs are all you pay. Those, by law, can only be used for actual costs and not profit and can not rise by more than 15% a year - historically they've gone up about 3% (cumulatively, they've actually gone down some years). And since I know all that money is going to keep the resort up to Disney standards, I'm happy to pay it. It's nowhere near the cost of renting that room with cash, and as time goes on will be even more of a savings.

Now this comes from our experience of always staying in deluxe hotels (usually on an AP rate). My husband is the number cruncher and came up with a payoff of about 7 years for us. It's just the two of us, we own 550 points and always stay in one-bedroom units. As always, YMMV. But if you're payoff is less than 40 years, it's well worth doing. Even if you stay in moderates, it will allow you to afford a better stay with the same money.

02-12-2003, 05:22 PM
I can't add much to what has already been stated here except to say

Some look at DVC as an investment and ask "Why?"

I see 40 years of prepaid magical vacations and ask "Why NOT?":)

02-12-2003, 05:58 PM
I am a financial analyst and looked at my purchase from a dozen different angles before deciding it was a good idea from a financial standpoint as well as a personal one for my family.

But, since you're an accountant, maybe my viewpoint will help explain why some have seen a value in the DVC. I see you have stayed at the Beach Club the last few visits to WDW. Is it safe to assume you spent at least about $200 per night or more? That would be $180 + 11% tax.

Well, 150 points gets you about 10 nights in a studio during most of the year.

That many nights without DVC will run you $2,000 right now for a "Deluxe" on-site room, assuming you can find the $180/night rate (plus tax). And a few years from now, when the economy is doing better, etc., it will no doubt be more.

Well, you could buy 150 points for about $11,100 (my sister just took the DVC tour...for 200 points she was told she could get $2,000 off the $84/point price if she acted within 3 days and gave up her 2002 points...not sure if this offer applies to a 150 point purchase, but you would get 2002 points and could rent them for $10/point to someone). Resale seems to be a little less than $74/point, assuming all 2003 points are present.

Anyway, with DVC you pay $11,100 today, plus you'd pay $600 in main. fees this year. For your $11,100 "investment", you would save over $1,400 on a 10 day stay in a studio (a little better than the typical Beach Club room...although you would have limited housekeeping/cancel rights/etc..). When I say "save", I mean your cash outlay would be $600 instead of $2,000 because you bought the points.

The following year, while your main. fees may go up say 3% ($18/year), your hotel costs could go up even more. Assuming they increase at 3% as well, your hotel bill would be $2,060. You would save over $1,400...and even more the next year, etc.

Put together a spreadsheet showing this:

You don't buy into DVC, so you invest the $11,100 you would have spent on the DVC purchase into a "vacation account". Assume the account earns 7% AFTER-TAX (pretty good right now). In addition, every year you add to that account what your DVC main. fees would have been (e.g. $600 in 2003, $618 in 2004). But, you take out $2,000 for your 2003 trip, then $2,060 for your 2004 trip, etc. Guess what? In less than 10 years your account is out of money. You have nothing but the memories of trips.

The DVC member who paid $11,100 upfront and then paid the main. fees also had the same trips and the same out-of-pocket expenses. But still has nearly 30 years of trips to go...only paying the main. fees for the rest of the years.

Even if Disney's hotel costs never increased (and you paid $2k per year every year), your account would still run out of money after 15 years. The DVC'er would still have 20+ years to go...or could resell their investment.

Another way to look at it...

$11,100 at the start, plus the main. fees, is about equal to $1,650/year each and every year over 40 years when you use a discount rate of 7%. So for a cost of $1,650/year, you get 10 nights in a studio. Or $165/night. Pretty good right now...and no doubt incredible 15 years from now. In my example of $200/night for a room right now, increasing at 3%/year, the average cost over the next 40 years was $370.

By agreeing to spend that much on lodging each year, you will probably save 50% or more off of the room cost. And if you don't go a particular year, you can always bank points or rent your points to someone.

The last point, and it has been made many times before, is that the real reason many people join is to have the larger rooms. I just got back today from my first trip as a DVC member. My family of 4 stayed in a 1 bedroom at BCV. It was great to have over 700 square feet of space, a washer and dryer, kitchen, etc. Basically a small apartment. My sister and her family of 4 stayed in the studio attatched to the one bedroom unit (so I really had a 2-bedroom).

With 150 points, you could get 5 weeknights in a one-bedroom suite in all but 2 weeks of the year. Using $1,650 as your "average cost" per year, you'd spend about $330 per night for such a room. Many spend that much for a regular room at a Disney "deluxe" hotel, including the tax. Who knows how much that room will cost in 10 or 20 years?

And if you want to go somewhere other than Disney (as my wife and I now want to do next year after struggling with our 2 year-old for much of the trip), you can rent your points for around $1,500 (probably more later, when Disney is charging more for their rooms) and go elsewhere. A bit of a hassle, but if most of the time you want to do Disney, DVC can really lower your average cost when looked at long-term.

Maybe even when looked at short-term...I paid $70 per point less than a year ago. I could resell for more than that today and still have taken my nice trip to a one-bedroom suite.

02-12-2003, 07:08 PM
You did a great job of summing up why we all joined DVC, but I thought I should add one thing: I stayed at Beach Club over Christmas in a regular room, not in a DVC unit (no room:mad: ) and I got a great rate of $197 per night plus 11% tax. I think my bill was around $1723, and that's 1/2 price compared to the regular rate. I paid 1/7 of what your sister's 150 pts cost for her entire life!

By the way, Contemporary Resort cost $49 per night back in 1974. Any accountant should be able to figure out the rate of increase, and project it into the future until 2042. I don't know how much that would be, but I know my DVC costs less than that.:bounce: :bounce:

02-12-2003, 09:52 PM
+ 11% tax.

I was looking at the resort rates the other day and the tax has gone up .5% this year. Resort tax at Disney is now 11.5%....

02-12-2003, 10:38 PM
I never thought I'd convince my husband to join, but the second he walked into a one-bedroom model and saw the whirlpool tub, I could tell he was sold. No more Holiday Inns! We'd never fork over the cash for that kind of accommodation, but paying points, that's a different matter.

We bought in 96, so our principal is paid off and we only pay the dues. Since we live in Florida, we go about three times a year on shorter trips, and all it costs are dues of about $40 a month. We've been to all the DVC resorts except Hilton Head.

The prepaid vacation angle is awesome, especially now that we're a one-income family with a toddler.

02-12-2003, 11:02 PM
I was the one that needed convincing in our household even though I am the Disney nut. My biggest argument was that we never stayed anywhere other than a value or moderate resort and I was perfectly happy just going to Disney. Well my DH, being the manipulator that he is, said that he would give up smoking (which he did) and his cigarette money would cover the monthly note (and it does). I half-heartedly agreed and once I set foot in that one bedroom villa at BW, I never looked back.

For the last two years, we have gotten a two bedroom and had friends come with us. We rent the other bedroom to them and share the kitchen and washer/dryer for $100 per night. They are extremely happy to have those kind of accomodations for that price. Where else can you stay at Disney for that? It covers our dues for the year and we have great fun with great friends.

Oh, did I mention how much money we save by having that refrigerator and stove?

What has DVC given us? Accommodations that we otherwise could not afford, memories to last a lifetime and we are going on a cruise that we never would have taken.

Lisa P.
02-13-2003, 01:24 AM
Candleonwater, you've taken several trips during December. Were they during the lowest (Adventure or Choice) seasons (first three weeks) or during prime holiday (Premier) season? Also, you've mentioned a 6 year old. What are your vacation habits likely to look like in the coming years, with a child in school?

If you would be happy with a Disney Value room, such as the All Stars, then DVC may not be for you, IMHO, especially when buying at today's pricing. If you anticipate many Christmas holiday week vacations in your future or many long weekend stays (when points usage is highest), then DVC may not be for you.

OTOH... If you anticipate many stays at Disney Deluxe hotels (especially during low season or mostly midweek nights), take another look at DVC. That's where it can provide the best value.

Personally, I would never compare DVC costs with rack rates for renting DVC suites... because we would never pay cash to rent those costly suites. I would compare it with the onsite alternatives that we would pay to use, like a (probably discounted) room at AKL or the Contemp or two rooms at the All Stars (we're a family of 5). Or, since we do enjoy our offsite vacations, I would compare it to our costs for offsite stays in 2BR and 3BR timeshare condos. Neither of these comparisons really compare apples-to-apples in accommodations. But rather, they compare the costs of alternative vacations that our family would choose, with and/or without DVC, for the time frames that we would likely vacation.

So for us, DVC is not a good choice financially. Your situation may differ. Look at the comparisons for your family's expected usage, both ways. HTH. :)

02-13-2003, 06:57 AM
The 1 real reason for just about all of us is this:

We love Disney and all things about it..We're junkies pure and simple

02-13-2003, 11:54 AM
When I told our accountant about our purchase (which I dreaded doing) and about the free passes (incentive at that time) he congratulated me on a wise purchase. His daughter in law now owns 450 points at BWV per his advice!

02-13-2003, 06:28 PM
Something no one has brought up- It's just no fun to share a regular hotel room (and single bath!) when that little one becomes a "big one". When DH and I bought in DS was 15. We had NEVER stayed onsite. We had already gotten to the point where we were getting 2 room ressies at off site hotels, or suite-type accomodations so we could have a little privacy. We just didn't want to share our "bedroom" with a teenager for a week.

When we walked into that 1 bdrm it was all over but the signing. The quality of vacation was much better! We had privacy, we didn't have to commute in the Orlando/Kissimmee traffic snarl, and DS could go off a bit on his own because of WDW transportation. The cost of 2 rooms or a suite offsite plus 11.5% tax, plus parking fees come much closer to the DVC costs. Once my accountant husband figured in inflation increases, we figured our break even would be 5 to 6 years.