educating myself on dvc

[JimMIA]

Originally Posted by Dean

...and that they put value in on property options such that they're willing to pay more to that end.

To me, this is really the one KEY assumption that MUST underly any decision to purchase DVC. IMHO, you really have to be at the point where you simply would not be satisfied staying offsite.

Real world example: For May 2011, I booked a split stay -- OKW 1 BR for several days, Wyndham Bonnet Creek 1 BR for several days. Both stays were booked with DVC or Wyndham points and all days were Sunday - Thursday...so low points cost at both resorts.

I checked the costs, and the OKW 1 BR worked out to $189 per night (27 points X my per point cost of $7 per). To me, that is good value.

The Wyndham Bonnet Creek stay should have been $67.20 per night (15,000 points X $4.48/K), but we lucked out and got it for $40.32 per night (9,000X $4.48/K).

WBC is great, OKW is our favorite DVC resort. But $140 per night is $700 for the 5-night stay. We canceled OKW and spent the whole trip at WBC...and had a great trip.

[bighoo93]

Originally Posted by Missyrose

Because far more people than you may realize come on these boards and say "If DVC costs me $12,000 and my annual trips cost $3,000, then I will break even after four years." It's nonsensical but it gets said, a lot. People like to use entire trip costs in their break-even calculations, even though DVC is only about lodging. Like ELMC said, they'll sometimes calculate break-even using full rack rate even if they've never once paid rack rate for a deluxe resort in their lives.

That's the point, I believe, that Jim was trying to make: You rarely see break-even points accurately calculated in any of these threads.

Wow. That is really bad. I certainly agree that if anyone does any analysis in a nonsensical fashion, it is totally useless. I can't believe most people wouldn't at least try to do a legitimate breakeven analysis on a purchase like this, but if someone can't even come close to doing it right, there really is no point.

[bighoo93]

Originally Posted by Dean

We've seen a lot of attempted justification. IMO using the rack rates as the benchmark is one such example.

I completely agree. I've pointed this out when I have seen people use rack rate as their comparison. My own breakeven comparison was in using rented points, which is much less expensive than rack rate and even most discounted cash rates. But it was the realistic alternative, and that is the key.

10 years is my timeframe too. Too many variables after that and who's to say it won't be simply a liability long term, odds are it will be at some point.

I wouldn't want to go past 10 years before reaching my breakeven point either. But it isn't because I assume Disney or DVC will be worthless at that time. Maybe we are thinking along the same lines but using different terms.

There is no way to justify DVC without using non financial criteria even if you assume you're going to visit WDW routinely.

As long as you spend less on lodging as a DVC member than you would as a non-member for the same trips, then you can justify it on purely financial terms. As you often point out, for people who would normally stay in value resorts, it probably doesn't make sense financially. But for those who would otherwise stay in the same DVC resorts, but either pay cash or rent points, you can definitely justify it with only financial measures.

[bighoo93]

Originally Posted by JimMIA

Also, I have big trouble predicting with any certainty what I'll be doing beyond ten years from now, so I try to keep my assumptions to what seems realistic to me.

This makes sense. I think I misunderstood what you were saying. I wouldn't be comfortable going past ten years (and even that is pushing it) for a breakeven period either.

[Dean]

Originally Posted by bighoo93

I completely agree. I've pointed this out when I have seen people use rack rate as their comparison. My own breakeven comparison was in using rented points, which is much less expensive than rack rate and even most discounted cash rates. But it was the realistic alternative, and that is the key.

IMO you use what you would have spent without DVC as the benchmark and what you could spend off property for condo's or timeshares the an additional comparison. IF you were consistently renting points, that's fair, but only in that situation.

As long as you spend less on lodging as a DVC member than you would as a non-member for the same trips, then you can justify it on purely financial terms. As you often point out, for people who would normally stay in value resorts, it probably doesn't make sense financially. But for those who would otherwise stay in the same DVC resorts, but either pay cash or rent points, you can definitely justify it with only financial measures.

IMO you can only compare what you would spend for lodging, not for the trips. Plus I believe that the psychology of DVC puts MOST people in a position where they spend more, not less, even when the numbers sound great for them. If you're talking only room only then I'd agree, at least on paper.