can anyone help? My dh just went over the DVC points info. He is basically convinced that the prices for non-DVC people are inflated (at the DVC resorts) and that the savings isn't as good as it first looks. He calculated that for a non DVC reservation at OKW it is 1500 for a studio stay for a value week and only 400 equivalent for DVC. He says 1500 can't be fair market value. Once Disney fills the rooms with DVC they don;t care about filling the other rooms so they overcharge for them to make DVC members feel like they get an exceptional deal. He says you are basically giving them your money to invest and they are using the interest off of it plus the annual dues for your stay. Not sure if I am being clear since I am not a numbers girl, but can anyone give me a good argument against this? My dh is a statistican for his work and it is tough to talk around numbers with him. I do think that DVC has other added values, especially helping to put an annual vacation on your calendar to a great fun place! He even said that at a resort like the Grand Floridian it cost more money for DVC members to stay there using points in the value season than it does for a non-DVC member, factoring in your inital investment and dues and then points. He said also that as prices go up so will the maintenance fees. Anyways, he is not dead set against it, but anyone else on here good with numbers and can give me some other rationale?
A bit disappointed DH is a numbers guy
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Caskbill
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If he's a number guy, tell him his DVC is an investment against INFLATION.
Have him do this:
Pick a Studio at any DVC Resort. Pick a date. See how many points it takes. Multiply that by about $4.50 and that's the cost for that night for the maintenance fees.
Pick a hotel room at one of the non DVC resorts. Maybe the Poly, or Carribbean Beach. Check the cash price, add about 11.5% tax. That's what that room costs for the night.
Now factor in inflation. Take both numbers and multiply them by 1.04, and repeat 30 times. That gives you the price of each about 30 years from now.
This uses 4% as possible inflation values. It also assumes the room tax does not go up on the regular WDW hotel room.
Now that's just one room-night. Figure what it would be for 5-nights, or 10 nights. You'll see that over the years the difference between room rates and DVC points (maintenance fee) rates start to separate quite a bit. Figure the difference for each of those years. Eventually it becomes more than your initial purchase price. Consider that the 'break even' point. After that year, you begin substantial savings.
Two other things he might not have considered. (1) If you finance your DVC purchase, the interest paid most likely will be tax deductible. (2) Part of the maintenance fees paid are actually Florida property taxes. These too are most likely tax deductible.
He is correct that using points to stay at non-DVC hotels is a poor choice. So plan on staying at any of the many DVC resorts.
If you go to WDW a lot, and purchase annual passes, be sure to factor in the $100 DVC savings, per person, on those passes each year.
If he has any specific questions, just post back.
Hope this helps.
BTW, I majored in Physics, minored in Math/Statistics. Worked as an Engineer for years doing a lot of statistical process control. I worked the numbers years ago and they showed me then it was a good choice.
Have him do this:
Pick a Studio at any DVC Resort. Pick a date. See how many points it takes. Multiply that by about $4.50 and that's the cost for that night for the maintenance fees.
Pick a hotel room at one of the non DVC resorts. Maybe the Poly, or Carribbean Beach. Check the cash price, add about 11.5% tax. That's what that room costs for the night.
Now factor in inflation. Take both numbers and multiply them by 1.04, and repeat 30 times. That gives you the price of each about 30 years from now.
This uses 4% as possible inflation values. It also assumes the room tax does not go up on the regular WDW hotel room.
Now that's just one room-night. Figure what it would be for 5-nights, or 10 nights. You'll see that over the years the difference between room rates and DVC points (maintenance fee) rates start to separate quite a bit. Figure the difference for each of those years. Eventually it becomes more than your initial purchase price. Consider that the 'break even' point. After that year, you begin substantial savings.
Two other things he might not have considered. (1) If you finance your DVC purchase, the interest paid most likely will be tax deductible. (2) Part of the maintenance fees paid are actually Florida property taxes. These too are most likely tax deductible.
He is correct that using points to stay at non-DVC hotels is a poor choice. So plan on staying at any of the many DVC resorts.
If you go to WDW a lot, and purchase annual passes, be sure to factor in the $100 DVC savings, per person, on those passes each year.
If he has any specific questions, just post back.
Hope this helps.
BTW, I majored in Physics, minored in Math/Statistics. Worked as an Engineer for years doing a lot of statistical process control. I worked the numbers years ago and they showed me then it was a good choice.
drakethib
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There are many on the DIS that are numbers people (I am one of them). I have seen people generate spreadsheets on analyzing this very question that would have mad Einstein himself scratch his head.
In my case (and I bet many others) your really don't come out ahead with DVC.
We found that we are making more trips since we own DVC and end up spending more then we would have if we didn't buy.
Is it worth it? Too me it is. (We have added points on twice since our initial purchase)
It is just a question you and your family are going to have to answer.
Just putting a "dollar figure" on DVC won't give you a direct answer IMHO.
Either way, good luck and hope it works out for you.
In my case (and I bet many others) your really don't come out ahead with DVC.
We found that we are making more trips since we own DVC and end up spending more then we would have if we didn't buy.
Is it worth it? Too me it is. (We have added points on twice since our initial purchase)
It is just a question you and your family are going to have to answer.
Just putting a "dollar figure" on DVC won't give you a direct answer IMHO.
Either way, good luck and hope it works out for you.
Oh my goodness....he must be very intelligent but he's got no common sense! Assuming you aren't planning to just divorce him & start over - have him call to book ANY deluxe resort, since those are comparable to DVC. I'd skip WL & AKL, since those rooms are more like a moderate. When he sees that regular rooms sell every day to thousands of people for $300-400/night, maybe he'll pull his head out of his pants and realize Disney isn't overcharging for rooms they don't care to sell in order to make us dvc dummies think we got a good deal 
Good luck!
Good luck!
JimMIA
There's more to life than mice...
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I'll give you two approaches for a non-numbers girl to use with a numbers guy.
The most effective is the one my bride uses on me all the time. She just smiles sweetly and tells me, "This would make me very happy." It's understood that if she's happy, I'll be happy. And if she's not happy...
The second approach is a numbers-guy approach. Yea, an OKW studio may now go for $1,500 for a week in a particular season. NOW being the operative word.
That's an accurate observation, although I think he's wrong on the why part. I am pretty sure Disney charges their rates for room inventory because they can. They don't set their prices to make DVC look good; they set their prices at a level they can get. They're a for-profit business, and they charge all the traffic will bear.
Right now, that may be $1,500. But what will it be 5 years from now, 10 years from now?
The OKW studio points cost will always be the same, more or less. With a timeshare, there are a fixed number of points per unit, and Disney can't change that.
They can tinker on the margins a little, but they would have to make it up somewhere else. In other words, if they decided they'd charge 10 points instead of 8, they'd have to cut two points somewhere else. They only have a fixed number of points to work with.
That's what buying a timeshare does for you -- it locks in your cost.
You'll hear all sorts of "DVC will pay for itself in X # of trips" calculations. I don't pay any attention to those claims, because there are SO many variables. One person's formula may have no bearing whatsoever for another family with different travel patterns.
But I do know this -- my point costs won't change; they're locked in. That's why we bought DVC.
The other cost of timeshare ownership is dues (or maintenance fees, as they are often called). Those can and do go up (and occasionally down), but historically they have risen much slower than Disney hotel room rates.
The most effective is the one my bride uses on me all the time. She just smiles sweetly and tells me, "This would make me very happy." It's understood that if she's happy, I'll be happy. And if she's not happy...
The second approach is a numbers-guy approach. Yea, an OKW studio may now go for $1,500 for a week in a particular season. NOW being the operative word.
That's an accurate observation, although I think he's wrong on the why part. I am pretty sure Disney charges their rates for room inventory because they can. They don't set their prices to make DVC look good; they set their prices at a level they can get. They're a for-profit business, and they charge all the traffic will bear.
Right now, that may be $1,500. But what will it be 5 years from now, 10 years from now?
The OKW studio points cost will always be the same, more or less. With a timeshare, there are a fixed number of points per unit, and Disney can't change that.
They can tinker on the margins a little, but they would have to make it up somewhere else. In other words, if they decided they'd charge 10 points instead of 8, they'd have to cut two points somewhere else. They only have a fixed number of points to work with.
That's what buying a timeshare does for you -- it locks in your cost.
You'll hear all sorts of "DVC will pay for itself in X # of trips" calculations. I don't pay any attention to those claims, because there are SO many variables. One person's formula may have no bearing whatsoever for another family with different travel patterns.
But I do know this -- my point costs won't change; they're locked in. That's why we bought DVC.
The other cost of timeshare ownership is dues (or maintenance fees, as they are often called). Those can and do go up (and occasionally down), but historically they have risen much slower than Disney hotel room rates.
I'm not sure I followed everything, but I think I agree with him. I don't think you'll find anyone who's been a member for very long who will tell you that staying at a non-DVC resort is a good use of your points -- pretty much any post from someone asking about buying will have multiple people saying "don't plan on using your points to stay at a non-DVC resort." So you definitely want to buy based on 1) where you want to stay and 2) how many points you need (and not many over) to stay there however long you want when you want.
It is possible that Disney overcharges for a room to non-DVC people, but I doubt it. And even if they do, so what? Take a look at the facts sheet available at allears.net and compare the size of the rooms at the Boardwalk Villas vs. the Boardwalk Inn. A studio at the Villa is smaller than an Inn room, but it has a microwave, plates and silverware and a table for eating. I know I won't stay in a studio, but instead take a 1 bedroom (even for just myself.) That gets me a full kitchen, washer & dryer, whirlpool tub, dining area, two TVs, living room, etc. etc.
If you don't spend any time in your room except to sleep, then DVC may not be right for you. I like lounging around, not feeling like I have to clean (but having the option of doing laundry without having to take it somewhere,) meeting with friends/family in the living room (we usually play poker or Scrabble,) and just having the room to move around in instead of falling over a bed or chair just trying to get from one side of a hotel room to the other.
I figured this year I'm paying $154 (after taxes) a night for a one-bedroom at the Boardwalk. A Boardwalk Inn room is almost half the space and goes for $370 a night (before taxes) during the same time I go to WDW. I feel like it has saved me money every year but the first two or three years; I still have over 30 years left on my contract. I can't imagine hotel prices going down, and it's hard to imagine maintenance fees going up as fast (or faster) than hotel prices.
Good luck with your arguments. It sounds like he's decided it's a bad deal and it's going to be hard to sway him.
It is possible that Disney overcharges for a room to non-DVC people, but I doubt it. And even if they do, so what? Take a look at the facts sheet available at allears.net and compare the size of the rooms at the Boardwalk Villas vs. the Boardwalk Inn. A studio at the Villa is smaller than an Inn room, but it has a microwave, plates and silverware and a table for eating. I know I won't stay in a studio, but instead take a 1 bedroom (even for just myself.) That gets me a full kitchen, washer & dryer, whirlpool tub, dining area, two TVs, living room, etc. etc.
If you don't spend any time in your room except to sleep, then DVC may not be right for you. I like lounging around, not feeling like I have to clean (but having the option of doing laundry without having to take it somewhere,) meeting with friends/family in the living room (we usually play poker or Scrabble,) and just having the room to move around in instead of falling over a bed or chair just trying to get from one side of a hotel room to the other.
I figured this year I'm paying $154 (after taxes) a night for a one-bedroom at the Boardwalk. A Boardwalk Inn room is almost half the space and goes for $370 a night (before taxes) during the same time I go to WDW. I feel like it has saved me money every year but the first two or three years; I still have over 30 years left on my contract. I can't imagine hotel prices going down, and it's hard to imagine maintenance fees going up as fast (or faster) than hotel prices.
Good luck with your arguments. It sounds like he's decided it's a bad deal and it's going to be hard to sway him.
jana
Diva
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As far as using points at the Grand Floridian tell him he may be correct ( that will put him in a good mood), however why would you want to spend 4 nights in a $500 a night hotel ( value $2k), when you could spend 12 nights in a $350 a night room (a $4k plus value) . However any good statistition should compare like for like. A more real example ( he's wrong on the room cost of OKW being inflated but it's more subjective and harder to prove) is to compare the charges for the Boardwalk Inn for $ rentals and Boardwalk villas points cost, or the Yacht and Beach club rooms to the Beach Club villas points costings.
As Mao points out using the resorts that share the facilities with comparable DVC resorts is a much fairer measure ( as your husband will acknowledge if getting a true picture of the economics is his primary concern) However if he just doesn't want to buy into DVC and is using the "economic numbers" to try and baffle you with science, you're in for a tough journey. Just out of interest did you both take the DVC tour, just one of you or neither of you. His attitude/line of thought is similar to many people who just look at the printed material without actually physically seeing the high quality of the DVC units, particularly the 1+2 bedroom units.
As Mao points out using the resorts that share the facilities with comparable DVC resorts is a much fairer measure ( as your husband will acknowledge if getting a true picture of the economics is his primary concern) However if he just doesn't want to buy into DVC and is using the "economic numbers" to try and baffle you with science, you're in for a tough journey. Just out of interest did you both take the DVC tour, just one of you or neither of you. His attitude/line of thought is similar to many people who just look at the printed material without actually physically seeing the high quality of the DVC units, particularly the 1+2 bedroom units.
drag n' fly
Sassy, salty and sweet....
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tidefan
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marshmallow
Earning My Ears
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We have just purchased at SSR. I have worked in the timeshare/vacation ownership industry for 18 years. I have never wrorked for Disney but my husband works at Disneyland. My company is one of the major companies in timeshare dev., sales, association and club management.
I toured SSR with my sister about 3 years ago. I was very impressed by the quality of materials used in the construction of the DVC units compared to what I have generally seen. I told my DH that if we ever purchased I would buy DVC because they have structured the situation to protect the investment. We went to the weekend event in May and ended up purchasing... the price was just too good. We want the Grand Californian Villas.
To speak to the actual question. It is totally normal in the VO industry for the associations to segment inventory to represent unsold space and then offer it to owners at a reduced rate. Usually the equivilant of the assessments for the inventory. It helps protect the association for maintenance, reserves and so on.
Outside rentals generally will go for what the market will bear. Disney is in the enviable position of having a bit more control because they do have a steady stream of customers. The prices mentioned for non-DVC owners are not outlandish at all given the industry and demand. Those prices are in line with other high demand resorts. The quality of the units and the extras such as transportation and dining plan add tremendously to the value. By keeping the prices high just like the ROFR they are maintaining the value of the investment for all the owners and ultimately DVD as it all goes back to them eventually.
I toured SSR with my sister about 3 years ago. I was very impressed by the quality of materials used in the construction of the DVC units compared to what I have generally seen. I told my DH that if we ever purchased I would buy DVC because they have structured the situation to protect the investment. We went to the weekend event in May and ended up purchasing... the price was just too good. We want the Grand Californian Villas.
To speak to the actual question. It is totally normal in the VO industry for the associations to segment inventory to represent unsold space and then offer it to owners at a reduced rate. Usually the equivilant of the assessments for the inventory. It helps protect the association for maintenance, reserves and so on.
Outside rentals generally will go for what the market will bear. Disney is in the enviable position of having a bit more control because they do have a steady stream of customers. The prices mentioned for non-DVC owners are not outlandish at all given the industry and demand. Those prices are in line with other high demand resorts. The quality of the units and the extras such as transportation and dining plan add tremendously to the value. By keeping the prices high just like the ROFR they are maintaining the value of the investment for all the owners and ultimately DVD as it all goes back to them eventually.
marshmallow
Earning My Ears
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At this point I would not use my points for anything but a DVC resort. Disney had to offer variety. One of the issues in Vacation Ownership is that a number of owners want a variety of options. That is why RCI, II and all the other exchange companies exist.
It does not mean that it has to be a good value for the outside exchange but the opportunity is there.
It does not mean that it has to be a good value for the outside exchange but the opportunity is there.
eliza61
DIS Legend
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Couple of flaws,
Generally a dvc member would not use their points to stay at the GF. If you are considering buying please look at your vacation style carefully. If you really really want to stay at the GF every year, or happy in a value this may not be for you. The reason behind Disney overcharging rooms is really moot, it is what it is. Disney charges what the market can bear, Deluxes are regularly packed to capacity, so I'm not really understanding that point. Regardless to the reason why, if you want to stay at the poly, you pay.
So true, many dvc'ers will tell you what started out as a once every other year is now twice a year. I'm included. It's only due to the fact that I've got 2 college tuitions breathing down my back that I'm not salavating at the thought of adding on at the BLT. I am so blowing the money if one of my kids gets a scholarship.I'll give you two approaches for a non-numbers girl to use with a numbers guy.
The most effective is the one my bride uses on me all the time. She just smiles sweetly and tells me, "This would make me very happy." It's understood that if she's happy, I'll be happy. And if she's not happy...
This makes you offically the smartest guy in the world for the day!
That's what buying a timeshare does for you -- it locks in your cost.
The other cost of timeshare ownership is dues (or maintenance fees, as they are often called). Those can and do go up (and occasionally down), but historically they have risen much slower than Disney hotel room rates.
Also tell Dh to factor into his cost the 11.5% Florida tax, that often brings room rates way up.
No big spreadsheet for my family, Dh & I simply calculated what we were spending at Disney when we would go. We were averaging ~3 to 4 K every year between 1997-2001, (on room cost only) when we finally purchased. We did not see our travel style changing (it has not) so the dvc membership made sense.
eliza61
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So, can we call you "Six-Sigma Caskbill"?
That's just evil. I just had a six-sigma flashback, I am now cowering underneath my desk.
bookwormde
<font color=darkorchid>Heading out now, another ad
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I am a numbers person also. The rack rates for DVC are comparable to the cash resorts. They are also discounted regularly just like the cash resorts. If you are buying into DVC it should not be for using points to stay at non DVC WDW resorts, this is one of the most inefficient uses of points. DVC is a good system for those who would otherwise stay in a deluxe for full weeks or for those who stay in moderates and want to use there points for weekday stays and stay offsite or cash on weekends.
You need to be able to plan 11 months ahead (or at least 7 months) if you need to travel on specific dates.
There is also, currently an issue for people staying less than 7 days that you should be aware of, although it only effects specific reservations. Here is the link. http://www.disboards.com/showthread.php?t=1861954
bookwormde
You need to be able to plan 11 months ahead (or at least 7 months) if you need to travel on specific dates.
There is also, currently an issue for people staying less than 7 days that you should be aware of, although it only effects specific reservations. Here is the link. http://www.disboards.com/showthread.php?t=1861954
bookwormde
we just started thinking about DVC, we're in no rush so I have some time to see if it is right for us. Thanks for all of the responses. I'm going to let dh have a break from the idea and see what we think in 6 months or so.... Thanks again!
JimMIA
There's more to life than mice...
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I agree with the basic premise that it's been a good purchase for us, but our family has actually gone the other way.
We initially started off doing two or three trips a year, partially because we live so close. Now, we usually do one trip per year, and we're starting to make plans for major vacations elsewhere with an annual WDW fix thrown in. Currently, we're planning some type of a Western National Park trip (not sure where yet) for next year, and we'll schedule a short Disney trip around that. Girlie needs to know there is more to nature than sawgrass prairies, tree islands, alligators and birds!
One of the things we like about WDW is that it's very familiar now, and we really don't have to do much planning. We just go, and if we miss something this trip, we'll do it next time. For example, we wanted to see La Nouba this May, but they were dark the week we were there. No biggie, we'll go next trip. That feeling is exclusively a function of the DVC ownership, because we know we're coming back -- that's a given.
I'm sure we'll go back an forth with that, probably doing two trips some years, but there is a LOT more to see and experience out there than just WDW.
janni518
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Honey? Is that you? j/k I kind of took that tactic with my hubby but skewed it a bit. I told him we were buying this as a luxury to make sure that he took the vacation he deserved every year and that it was an investment in his health and well being.
Then I gave him "the look."
JimMIA
There's more to life than mice...
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Nope, sorry.
That actually IS one of the main benefits for many DVC families. We often hear the fact that DVC encourages (almost forces) annual vacations cited as one of the biggest benefits of ownership. In that sense, it's not a financial investment (a claim many of us don't like to hear anyway -- it's a luxury purchase), but an investment in your family.
And, "the look" works too. Sometimes looks work better than words. Whatever works.
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