Am I wrong . . . DVC is a great deal right?

CanadaDisney05

Mouseketeer
Joined
Mar 20, 2017
Total Inception-to-date costs = $36,707
$36,707 / 74 Nights = $496.04 per Night.
You're forgetting Time Value of Money. The money you paid upfront is not equivalent to paying $496 per night today. I know it makes the calculation complicated, but it cannot simply be ignored. The difference is material, and not to the benefit of DVC ownership.
 

E2ME2

ET
Joined
Oct 17, 2011
You're forgetting Time Value of Money. The money you paid upfront is not equivalent to paying $496 per night today. I know it makes the calculation complicated, but it cannot simply be ignored. The difference is material, and not to the benefit of DVC ownership.
After many Present Value / Net Present Value (NPV) calculations, ROI calculations, and Cost-Benefit-Ratios, I would argue that the fluctuations in the assumed discount rates to account for the time value of money are actually immaterial, and the qualitative benefits derived from all the other benefits of DVC ownership would easily offset those factors. IMHO :earboy2:
 
  • DLgal

    DIS Veteran
    Joined
    Feb 12, 2013
    Just once, I'd like to see someone say "DVC was a terrible financial decision, but it makes me super happy!" Let's be honest, it's a luxury purchase. It's not a "deal." And that is fine. Just own it.

    Also, are people not aware that Disney ALWAYS discounts the DVC villas whenever they have promotions. They are usually 25-35% off and availability is often much better than you will see at your 7 month window. There are also even better discounts available as well (military...35-40% off).

    The current summer promotion has studio rooms as low as $299/nt in several DVC properties and one bedrooms around $550-600/nt.
     

    CanadaDisney05

    Mouseketeer
    Joined
    Mar 20, 2017
    After many Present Value / Net Present Value (NPV) calculations, ROI calculations, and Cost-Benefit-Ratios, I would argue that the fluctuations in the assumed discount rates to account for the time value of money are actually immaterial, and the qualitative benefits derived from all the other benefits of DVC ownership would easily offset those factors. IMHO :earboy2:
    I'm not going to argue that DVC ownership is bad, or even quantitatively a bad deal in certain situations. I'm just suggesting that Disney wants you to run the numbers without utilizing NPV because it makes it look like more of a "deal" than it really is. That's why you always here people claiming its a protection from inflation.

    In terms of discount rates, you don't have to make it complicated and compare it to potential investments. Just discount based on average inflation rates (which don't generally fluctuate drastically).
     

    E2ME2

    ET
    Joined
    Oct 17, 2011
    I'm not going to argue that DVC ownership is bad, or even quantitatively a bad deal in certain situations. I'm just suggesting that Disney wants you to run the numbers without utilizing NPV because it makes it look like more of a "deal" than it really is. That's why you always here people claiming its a protection from inflation.

    In terms of discount rates, you don't have to make it complicated and compare it to potential investments. Just discount based on average inflation rates (which don't generally fluctuate drastically).
    CanadaDisney05-
    You know I'm having fun with you on this, right?
    I understand the math, but I also understand this, to quote Blaise Pascal "The heart has it's reasons, of which reason knows nothing"
    And in considering our DVC purchase, I led with my heart, not my head.
    & I've been happy with our DVC experience since day 1!
     

    Alexander

    DIS Veteran
    Joined
    Jun 11, 2002
    $188/point....nope not worth it! We paid $85 and cannot even fathom paying what they want today!
     

    Wakey

    DIS Veteran
    Joined
    Dec 22, 2015
    I worked in quantitative financial analysis for over 20 years and was blown away by what a good deal DVC is when I discovered it. I calculated that even if someone detested all things Disney, buying points and intending to only ever rent them out, while never staying in a resort, was an excellent investment under every plausible scenario. If not for the “no commercial activity” restrictions, all DVC points would be snapped up at current prices by investment banks and hedge funds.
    Would your analysis be the same at current prices?
     

    gdrj

    Boardwalk owner since 1999
    Joined
    Jan 13, 2012
    I guess I feel like I get a superior experience for much less money by staying at WBC. The amenities are amazing, and Disney would really have to step up their game to ever make on site worth it to me.
    The nice thing is there are different resorts for different folks. We have stayed at WBC and enjoyed our stay very much. I understand there is a big price difference be it own or rent. If WBC works for you thats great! As far as amenities I guess we have to agree to disagree. From being able to use Magical Express, to multiple transportation options on property, to being able to walk or boat 2 Parks, to the Boardwalk when staying there, to Fireworks from the Poly or BLT w/ the music piped in, to renting boats, bikes, as well as many other items for us, makes on property great for us, the way we vacation. My in-laws stayed at WBC with us and loved it, they are not big WDW people and dont really visit the parks so they liked the look.

    To me WBC, like many offsite time shares have thin walls and miss the mark with some things. WBC furniture was very nice but we also have had worn and chipped there as well (as had DVC). If WBC was walking distance to DS it would rate higher for us. The transportation to for us is a big negative. We prefer to stay at DS hotels to be able to walk to DS than to stay at Hilton or Waldorf At Bonnet Creek.

    Meanwhile there are people who love Pop Century or an All-Star Resort, to each their own.
     

    GoingSince1990

    Mouseketeer
    Joined
    Oct 31, 2018
    Would your analysis be the same at current prices?
    I just looked at VGF as an example and believe that it is definitely great value at below $200 per point, probably good value at around $200-$250, and above $250 starts to become a bit more questionable.
     

    gharter

    DIS Veteran
    Joined
    May 3, 2004
    DVC has been a huge benefit for us. We are staying at much better (larger rooms) than we would normally stay at. Prevoulsy, we stayed in a normal room in a deluxe resort. With DVC, we generally stay in a 1 BR and love it!
    We have 2 contracts. One is at BWV. By year 4, we are saving money based on staying at a 1 BR.
    Second contract is at AKL, at year 4 we will be at break even for staying at a 1 BR.
    If we didn't have DVC, we wouldn't stay in a 1 BR and realistically our break even would be closer to year 6-7/
     

    Dean

    DIS Veteran<br><a href="http://www.wdwinfo.com/dis
    Joined
    Aug 19, 1999
    I may have mentioned in another thread that my wife and I bought DVC as an inflation hedge. That is, I buy the points today and in 30 years it costs the same number of points for a studio, 1Br, etc. (more or less) as it does now. Then the MBAs show up with models and graphs and say "not really because the maintenance fees eat you up." I'm not buying it. I admit that I am pretty dumb but I just don't buy it.

    Here's how I look at. Let's say I bought 300 points at CCV and I can use that annually for 7 nights in a 2Br. The cost to get a 2Br at CCV from Disney is (let's say) $1,500/nt. So I paid $56,400 for the CCV points (300 x $188) now and I get $10,500 in today's dollars of hotel rooms (7 x $1,500). Now, assuming you have (or can prudently borrow) $56,400 and that you go to WDW every year who cares about $2,250 in fees a year (300 x $7.50)?

    Again, I'm pretty dumb but it appears to me I break even pretty quick on this and keep banking for years to come. Plus there is some possibility I can sell this thing in the future and break even on the purchase (again just a possibility).

    One more thing I have to state. My wife and I don't want to go to Disney anymore and stay in a hotel room with our 2 boys. We want to go on vacation and for it to be at least as nice and comfortable as our house. We just don't "fit" anymore in the hotel rooms. Aside from the savings we bought DVC because we wanted the space and the comfort.

    Anyway, I'd be happy to hear other's thoughts. Don't wanna argue with folks but would like it if folks could point out things I'm missing since I may buy more of these things. :)
    It depends on the specifics. DVC is is more expensive than other options but if it makes sense financially for your situation and you value staying on property, it can be a great choice. It's both a financial liability/risk and a hedge. For a studio it's pretty easy to make the financials work, same for a 2BR compared to 2 rooms but more difficult for a 1 BR. If it made sense when you bought and it still make sense otherwise, I wouldn't worry about it.
     

    Happyinwonerland

    DIS Veteran
    Joined
    Jul 1, 2014
    The nice thing is there are different resorts for different folks. We have stayed at WBC and enjoyed our stay very much. I understand there is a big price difference be it own or rent. If WBC works for you thats great! As far as amenities I guess we have to agree to disagree. From being able to use Magical Express, to multiple transportation options on property, to being able to walk or boat 2 Parks, to the Boardwalk when staying there, to Fireworks from the Poly or BLT w/ the music piped in, to renting boats, bikes, as well as many other items for us, makes on property great for us, the way we vacation. My in-laws stayed at WBC with us and loved it, they are not big WDW people and dont really visit the parks so they liked the look.

    To me WBC, like many offsite time shares have thin walls and miss the mark with some things. WBC furniture was very nice but we also have had worn and chipped there as well (as had DVC). If WBC was walking distance to DS it would rate higher for us. The transportation to for us is a big negative. We prefer to stay at DS hotels to be able to walk to DS than to stay at Hilton or Waldorf At Bonnet Creek.

    Meanwhile there are people who love Pop Century or an All-Star Resort, to each their own.
    We drive to WDW and even of we flew, would rent a car. I don't enjoy Disney transportation, it takes a very long time to arrive anywhere. As passholders, we get free parking anyway.

    I haven't noticed thin walls or anything in disrepair. I do love all of the resort activities they offer in addition to the multitude of uncrowded pools.

    Yes, different things for different people, but you will be hard pressed to find anyone outside of the "owners" who think timeshare is a good deal, especially a timshare that expires and you have nothing in the end.
     

    CanadaDisney05

    Mouseketeer
    Joined
    Mar 20, 2017
    $188/point....nope not worth it! We paid $85 and cannot even fathom paying what they want today!
    Just to make sure we're comparing apples to apples, I searched up the historical prices of DVC. $85 would have been somewhere around 2002 to 2003. Adjusting for inflation, that is equivalent to $121 today. Still a huge price gap when comparing direct pricing. More in the lines of the current resale market.
     

    Deb & Bill

    DVC-Trivia Contest, Apr-2006: Honorable Mention
    Joined
    Mar 20, 2000
    $188/point....nope not worth it! We paid $85 and cannot even fathom paying what they want today!
    We paid $50 a point direct for our first 175 points and thought $85 a point was high. Without DVC we wouldn't have gone nearly as often, probably wouldn't have found Marco Island and would still be living in Louisiana.
     

    Bing Showei

    DIS Veteran
    Joined
    Sep 10, 2017
    DVC was a terrible financial decision, but it makes me super happy!

    I will have given Disney more money over the 12 months on my AP than I have over the 4 years preceding my first Disney timeshare stay.
    ...the MBAs show up with models and graphs and say "not really because the maintenance fees eat you up." I'm not buying it.
    If Mickey Math keeps you happy and you can afford it, power to you.

    My Disney timeshare is not an investment, it’s not a hedge against inflation, and it wasn’t a great financial decision. It is a cheaper alternative to Disney’s artificially inflated rates for a hotel room (not apples to apples, but that’s a whole other thread) and it’s a source of tremendous happiness for my family. This, of course, comes at the cost of assuming the risk of buying a timeshare and committing to 50 years of paying to keep the lights on, whether or not it will still fit into our lives.

    At the end of the day, if it’s not causing your family undue stress financially, whether you paid cash, financed, or sold a kidney to buy it, a Disney timeshare, if you’re happy with it, is a great buy.
     

    DLgal

    DIS Veteran
    Joined
    Feb 12, 2013
    DVC was a terrible financial decision, but it makes me super happy!

    I will have given Disney more money over the 12 months on my AP than I have over the 4 years preceding my first Disney timeshare stay.

    If Mickey Math keeps you happy and you can afford it, power to you.

    My Disney timeshare is not an investment, it’s not a hedge against inflation, and it wasn’t a great financial decision. It is a cheaper alternative to Disney’s artificially inflated rates for a hotel room (not apples to apples, but that’s a whole other thread) and it’s a source of tremendous happiness for my family. This, of course, comes at the cost of assuming the risk of buying a timeshare and committing to 50 years of paying to keep the lights on, whether or not it will still fit into our lives.

    At the end of the day, if it’s not causing your family undue stress financially, whether you paid cash, financed, or sold a kidney to buy it, a Disney timeshare, if you’re happy with it, is a great buy.
    Thank you!!!!
     

    CanadaDisney05

    Mouseketeer
    Joined
    Mar 20, 2017
    My Disney timeshare is not an investment, it’s not a hedge against inflation, and it wasn’t a great financial decision. It is a cheaper alternative to Disney’s artificially inflated rates for a hotel room (not apples to apples, but that’s a whole other thread) and it’s a source of tremendous happiness for my family. This, of course, comes at the cost of assuming the risk of buying a timeshare and committing to 50 years of paying to keep the lights on, whether or not it will still fit into our lives.
    The DVC is not an investment argument is not really true, and you point that out in the next sentence. No, DVC is not a method to grow your money for retirement, or wealth building. The return on investment IS the savings on future hotel stays. That still qualifies it as investment and should be treated as such. As the old saying goes, a penny saved is a penny earned.

    DVC is not some intangible thing. It doesn't give you any real exclusivity to experiences where the value is in the eye of the beholder. It is strictly a discount program. Pay a lump some of money up front plus a nominal fee annually, and in return you get certain amount of hotel nights. The real question, is whether the amount your paying through DVC offers a material savings vs not having DVC. The value is explicit.

    You can create all sorts of models that can argue that the math of DVC is favourable, or non-favourable. At the end of the day, all of these models are based on assumptions of future facts. No model will have been 100% correct at the end. But just because the predictability of these variables may not end up being 100% factual, at the end of the day, the math behind DVC is not an opinion. It is fact. Once the contract is over or you sell it, there will be a 100% definitive answer of whether DVC did save you money or it did not. Math is not a matter of opinion.

    The other argument I see often is that "without DVC, I wouldn't have traveled nearly as much as I do. This is the intangible part of DVC that all of these MBA's with their quantitative analysis don't understand". This is THE sales tactic that Disney uses. It manipulates your mind into thinking that since you paid for it, you have to take advantage even though travelling back to WDW includes many extra expenses that are not included in your DVC package.

    Remember, the alternative to DVC IS NOT, not going on vacation. The alternative to DVC is putting the money into a savings account (or investment account), and using that money to pay normal cash prices instead. At the end of the day, you can travel just as often without DVC as you do with DVC. DVC doesn't buy you more vacations.

    For the record, I'm not trying to downplay the value of DVC, nor am I trying to convince current owners that they made a dumb move investing into DVC. DVC can actually be a very smart investment in certain situations. The savings from DVC can far outweigh the long term costs of paying cash for your hotels. In other situations, DVC can be much more expensive and restrictive. You have to run the numbers to match your long term expectations, travel style, and family situation.

    The point I am trying to make is that prospective purchasers really need to look at this as a financial investment, and don't let yourself get caught up in the magic. DVC is strictly a financial move. Don't get fooled by marketing, sales tactics, and magic.
     

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