How Long To Recoup Your Initial DVC Cost?

[ELMC]

None of this has anything to do with what we are talking about. I don't care how many years of experience you have, I'm persuaded by sound logical arguments and reasoning, not by unsupported assertions. If you've learned so much from your vast timeshare experience, that should be reflected in your explanations and reasoning. I'm open to the idea that DVC rental points resist the laws of supply and demand, but the burden of proof is on those who make that claim.

What Dean posted above has everything to do with what we are talking about, assuming that you understand what it is he (and I) are trying to say. [I'm not saying this to be insulting or demeaning, but some of your replies indicate that either I have not made myself clear or you are not understanding what I'm trying to say]. Nobody is saying that point rental prices don't follow the laws of supply and demand. What I am saying is that they follow the laws of supply and demand within the DVC point rental market. An example of that would be the recent shortage of rental points available to point rental brokers, which led to them offering to pay more in an effort to attract more points. My interpretation of what Dean is trying to say is that even within that market, point rental prices have remained fairly static for a prolonged period of time and that it doesn't operate as efficiently as you suggest.

Where you and I differ in our thinking (and again, not to be insulting but I'm not sure you've heard this point) is that I believe there is little to no established connection between the direct booking market and the DVC point rental market. I don't believe that direct booking prices influence point rental prices at all for two distinct reasons. First, the majority of Disney guests are completely unaware of Disney Vacation Club. Within that community that is aware of its existence, there is only a small percentage that is aware that point rental is even an option. They're can't be a demand if people don't know something exists. I don't believe that direct booking guests are creating any demand for rentals at all.

On the other side, people who are aware of point rentals are trying to get the best price per point based on what is available, either by trying to take advantage of distressed points or negotiating with posters advertising points. In my experience, they are not going on the Disney site, checking to see what the cost of a direct booking is, and then comparing that to renting points. They are only functioning within boundaries of the point rental market.

I simply don't believe that there is any connection between direct booking prices and point rental prices. They are two completely separate products operating in two completely separate markets with two completely separate customer bases. I am curious to hear why you think otherwise.

 

[Sur]

Hmm. Maybe it is the pixie dust that allows them to ignore logic and laws of economics.

Sometimes, when people don't understand something, they assume it means it can't be understood by anyone.

I don't understand Keynesian economics!

 

[ELMC]

I don't understand Keynesian economics!

For the record, I wasn't comparing the DVC market to Keynesian economics, as I don't believe the two are related. My point, which was clearly missed, is that in most aspects of economics you have established, credible, intelligent economists believing in the truth of two diametrically opposite theories.

 

[Sur]

,To be honest, I haven't actually read through the last several pages of this thread, was skimming, it seemed a little heated, I came across a phrase I haven't seen since college, then the post I qouted, and it mademe laugh. Tension breaker.

 

[ELMC]

,To be honest, I haven't actually read through the last several pages of this thread, was skimming, it seemed a little heated, I came across a phrase I haven't seen since college, then the post I qouted, and it mademe laugh. Tension breaker.

I appreciate the attempt. I do agree that the thread seems to be getting a bit heated, but not on my end. People respond in different ways, and it's hard to tell how someone intends their comments to be interpreted on a message board. If no offense was intended, then none was taken. And if posters intend to be a bit insulting, well that doesn't bother me either. After all, it's just a message board.

 

[Sur]

 

[Dean]

None of this has anything to do with what we are talking about. I don't care how many years of experience you have, I'm persuaded by sound logical arguments and reasoning, not by unsupported assertions. If you've learned so much from your vast timeshare experience, that should be reflected in your explanations and reasoning. I'm open to the idea that DVC rental points resist the laws of supply and demand, but the burden of proof is on those who make that claim.

History doesn't support that the economics have as large an impact as the fact it's a TIMESHARE though there clearly is some impact from both directions. What the other components indicate is the fact that emotions and fear are often the overwhelming factor over those of economics so I totally disagree they are not applicable here. That's the thing about experience, it goes beyond just the book knowledge. I'm having a flashback to a classroom scene from the movie Cocktail.

Frankly I'm not trying to persuade you nor do I have any requirement to do so. I'm adding my opinion and experience and suggesting you haven't made your argument to prove your opinion as it applies to DVC. Thus you haven't met your own requirement.

 

[Chuck S]

Hi All,

Just a general reminder that these discussion boards are open to all opinions. That does not include being argumentative. Please keep the discussions respectful to others opinions. It is fine to discuss the topic, but do not make personal comments about others. We do not have the benefit of verbal inflections and body language when using the internet, so please be mindful that posts that are not properly worded can be misinterpreted.

Thanks.

 

[Caren90]

13 pages later and still going strong... impressive!

Stephen

 

[theguda]

13 pages later and still going strong... impressive!

Stephen

I created a monster!!!

 

[bighoo93]

What Dean posted above has everything to do with what we are talking about, assuming that you understand what it is he (and I) are trying to say. [I'm not saying this to be insulting or demeaning, but some of your replies indicate that either I have not made myself clear or you are not understanding what I'm trying to say]. Nobody is saying that point rental prices don't follow the laws of supply and demand. What I am saying is that they follow the laws of supply and demand within the DVC point rental market. An example of that would be the recent shortage of rental points available to point rental brokers, which led to them offering to pay more in an effort to attract more points. My interpretation of what Dean is trying to say is that even within that market, point rental prices have remained fairly static for a prolonged period of time and that it doesn't operate as efficiently as you suggest.

I think I've been unclear as well. I don't believe I intended to specify any degree of efficiency. I might be able to clarify if one of you could point me to where I may have said that. Also, we may be thinking of efficiency in a different way. Can you clarify what you mean by that term?

First, the majority of Disney guests are completely unaware of Disney Vacation Club. Within that community that is aware of its existence, there is only a small percentage that is aware that point rental is even an option. They're can't be a demand if people don't know something exists. I don't believe that direct booking guests are creating any demand for rentals at all.

I know I am difficult this way, but I would like to see the evidence of these numbers. What are the percentages of people with this awareness? Or are we just kind of guessing? But you jump from "a small percentage" to "people" (as if it is everyone). True, if nobody is aware of a product then there won't be an effect of their demand for it in the market. But even you don't think that there are no people aware of it.

On the other side, people who are aware of point rentals are trying to get the best price per point based on what is available, either by trying to take advantage of distressed points or negotiating with posters advertising points. In my experience, they are not going on the Disney site, checking to see what the cost of a direct booking is, and then comparing that to renting points. They are only functioning within boundaries of the point rental market.

This does clear things up, thanks. If neither those who rent DVC points nor those who book resorts directly are aware of the existence of the other, then there would be no connection. But I don't believe this at all. In fact, I am one of those who rented points and compared to the price of direct booking. Now, it is possible that I am the first and last and only person in the world who ever has or ever will do this. But I don't think so. At least we understand where the disagreement is.

And to be clear, it does not require that all or even a majority of people are aware of both markets. Even without anyone ever providing any facts to support the position, I will accept that most people who book hotel rooms or directly book DVC resorts don't know about DVC point rentals. But it doesn't require all of them or even most of them to know in order for their prices to have influence over each other.

I simply don't believe that there is any connection between direct booking prices and point rental prices. They are two completely separate products operating in two completely separate markets with two completely separate customer bases. I am curious to hear why you think otherwise.

Well, I'm aware of both markets, so are you, so that makes two of us. And I think we are not alone. Dean is also aware of both markets, now that is three people, and we're just talking about this particular message board thread! I think there are a lot of people, and it doesn't take everyone knowing for prices to have an influence. Is it the only factor? Of course not, I never suggested otherwise. But completely disconnected? I don't see how that is possible, unless it really is just the three of us who know about this.

However, you have done a good job explaining your reasons in a way that got through my thick head. Thank you for making the effort.

 

[bighoo93]

For the record, I wasn't comparing the DVC market to Keynesian economics, as I don't believe the two are related. My point, which was clearly missed, is that in most aspects of economics you have established, credible, intelligent economists believing in the truth of two diametrically opposite theories.

You are right, I missed that was your intention and I agree that many economic theories are not settled. This isn't really the same thing, but now you have clarified that your reasoning is because you think nobody knows about both products, so I fully understand why you believe there is no discussion. I don't think I can prove it one way or another to you, so I will fully agree with you that if that assumption is correct, there would be no connection.

BTW, I am sorry if this appears to be a heated discussion. To me it is just a discussion and I don't really feel particularly emotional about it or you at all. I know message board posts don't always come across the way they are intended. To me this is about discussing an issue and topic, not about the people who are having the discussion, and I hope others are treating it the same way.

 

[bighoo93]

I'm adding my opinion and experience and suggesting you haven't made your argument to prove your opinion as it applies to DVC. Thus you haven't met your own requirement.

Dean, for whatever reason, you and I almost never understand anything the other is saying. Frequently you quote back things that I have supposedly said or think and I have no idea where you get them. I guess it is just a communication issue. But you remain The King of Timeshares.

 

[Dean]

Dean, for whatever reason, you and I almost never understand anything the other is saying. Frequently you quote back things that I have supposedly said or think and I have no idea where you get them. I guess it is just a communication issue. But you remain The King of Timeshares.

I can't speak to what you intend, only what you say, all you can do is the same. However, I think I general understand the idea you are trying to convey and simply and frequently disagree with it in part or in total and that's OK both directions, IMO. In this situation I happen to feel that the timeshare realities are the largest factor by far and that the economics are an important but secondary factor, your posts would suggest you feel the reverse it true. Much of economics in such a discussion is theory anyway otherwise the stock market would be far more predictable than it is. The other issue I have is that you demand proof where clearly no one here is going to have that proof but yet you fail to provide the same proof to support your reverse opinion. The reality is that there are a lot of things I can tell you about many things timeshare but few of the important ones that have documentation that you or I would have access to and there are many here in the know where the same statement would apply. Generally there are rules then the rest of the story, it's the rest of the story where we can all help each other out. Regardless I'm willing to bet that almost everyone here have far more in common than they disagree on but what's the fun in only talking about what everyone agree on, it doesn't make for long or interesting thread's.

 

[bighoo93]

The other issue I have is that you demand proof where clearly no one here is going to have that proof but yet you fail to provide the same proof to support your reverse opinion. The reality is that there are a lot of things I can tell you about many things timeshare but few of the important ones that have documentation that you or I would have access to and there are many here in the know where the same statement would apply.

Thanks for the post, I just do want to clarify this one because there is an important distinction, and this makes it sound like I arbitrarily demand proof of things for no particular reason just to be a pain in the neck (or some other place). Here is the scenario that actually happens.

1) Someone makes an argument that rests on a certain asserted fact.
2) Unaware of whether this fact is actually true or not (and often skeptical of it), I ask for evidence (not proof, necessarily, but evidence) that it is true. Maybe it is something that can't be proven, but it can be assumed true because of X, Y, and Z. This is good enough.
3) If it can be provided, the fact stands and it supports the argument. If it cannot, the assertion is withdrawn and the argument either falls with it or something else stands in place to support it. If someone then becomes testy that their assertion is being questioned, well, there isn't much to do about it but you do have to wonder why.

For example, if someone says that certain laws of economics do not apply to renting DVC points because nobody who rents DVC points knows about direct booking, that argument rests entirely on that fact. One might be skeptical of that fact because, frankly, it is difficult to possibly know such a thing. But if it were known and true, then it would support the argument. If it isn't known, then it may or may not be true, and it doesn't really advance the position. All you can say is well, as long as we assume X, then it is true, and people can differ on whether X is a good assumption.

And, since you mentioned it, I absolutely expect to be held to the same standard. Criticizing someone's argument is a show of respect. It means they got you thinking and it is worthy of discussion. If an argument I make rests on an assertion that you don't think is true, you ought to mention it. Everyone is better off for thinking a little harder about their arguments.

I appreciate you, Dean, because I know that if I ever need an opinion about anything related to timeshares, you are going to have one and are willing to share it. There aren't many people I can say that about.

 

[Dean]

... and this makes it sound like I arbitrarily demand proof of things for no particular reason just to be a pain in the neck (or some other place).

Not quite that arbitrary but I believe this is twice now where you've demanded proof when I disagreed with you without providing the same proof to support your opinion. It's really fine and I do sometimes enjoy a little back and forth up to a point. It's been a while since I've said this so I'll post it again here. Anytime you read something from me, assume it's my opinion. If it happens to be factual as well so be it but I tend to not try to convince people nearly as much as I used to mostly because they often don't want the info anyway. You'll see me post mostly to info about exchanges, other timeshare, rules, usage and principles. One of the things about timeshares is even for those in the know you have to piece things together from bits and pieces of info. Timeshare and exchange companies tend to hold their cards very tight. Various people will know more about certain subjects and others know more about other subjects. IMO that's really what makes timeshares and timesharing great, the people and sharing. So while this back and forth may be uncomfortable for some, it often has gems that the sideline people can use and those that want can move on.

 

[AllieV]

Just answering the original question here, nothing else.

I bought resale, a cheap contract with high dues. I looked at the increase % in dues over the last several years, took that average, upped it a little, and estimated the dues for the next several years. I added that to my total buy in cost -- due, closing costs, etc. I compared that to the current rental price I was paying for a DVC room and estimated the annual increase based on my history with the owner. I came up with a 4.8 year break even point. So after 5 years, my vacations only cost me the annual dues, which is still far less than renting points.

I also did a comparison to room rentals at Moderates and Deluxes straight from Disney (not DVC renting from them). That was about a 3.9 year payback.

Then I did a third calculation to see how long it would take for my annual dues to overtake the cost of renting points. It would take about 12 years before renting was probably cheaper than owing my contract. So between years 5 and 12, I get a really good deal on rooms and I sell my contract for one with lower dues. That money I recoup brings down those earlier numbers, but I didn't even account for that since you can't count on it.

 

[DougEMG]

...educated and efficient markets, ...

I think this is a very valid point. The vast majorit of all timeshares are bought on impulse, that implies to me that people do not educate themselves properly before puchasing.

I also think that the DVC owners and people looking to own DVC that are on boards like this looking to become more educated are a very small minority of owners.

 

[DougEMG]

As I said before, I think the issue that's being missed here is that timeshare really don't track any logical approach very well including economics. DVC MAY come closer than most but historically there's still been a significant void between what should be happening and what has/is happening. My view is that this is a mix of psychology and economics and that psychology is the larger factor beyond the logic of the economics.

I agree that it is a combination of economics and psycholog, with the vast majorit of timeshares being sold from the psychology side and for us board junkies the economic side. Which is the bigger group will tell you what factor is more important.

 

[Galun]

Where you and I differ in our thinking (and again, not to be insulting but I'm not sure you've heard this point) is that I believe there is little to no established connection between the direct booking market and the DVC point rental market. I don't believe that direct booking prices influence point rental prices at all for two distinct reasons. First, the majority of Disney guests are completely unaware of Disney Vacation Club. Within that community that is aware of its existence, there is only a small percentage that is aware that point rental is even an option. They're can't be a demand if people don't know something exists. I don't believe that direct booking guests are creating any demand for rentals at all.

I would actually argue differently. I can't speculate how most people learn about DVC, but I learn about DVC because the Grand Californian rack rates cost $500 plus tax per night, and as I try to find cheaper ways to stay there, I found out about DVC and VGC.

On the other side, people who are aware of point rentals are trying to get the best price per point based on what is available, either by trying to take advantage of distressed points or negotiating with posters advertising points. In my experience, they are not going on the Disney site, checking to see what the cost of a direct booking is, and then comparing that to renting points. They are only functioning within boundaries of the point rental market.

I agree with you that the rental price per point is mostly a function of supply and demand within DVC rather than direct booking prices. However I think direct booking price does have an effect on rental points in the long run. We are talking about products that are almost perfect substitutes.

I simply don't believe that there is any connection between direct booking prices and point rental prices. They are two completely separate products operating in two completely separate markets with two completely separate customer bases. I am curious to hear why you think otherwise.

I am curious as to why you think direct booking and rental DVC are two completely separate customer bases. Just because the vast majority of direct booking customers are unaware of DVC rental option doesn't mean they are not driven by the same economic motives when they become aware of the option. Don't the DVC direct sales people try to pitch the savings by comparing to booking direct? Didn't we buy DVC because it's a cheaper way to stay at a Disney property? Then how can direct booking prices have no impact on DVC?