As point charts increase over the long term, does a DVC investment make sense?

[gianjoe]

Hello,

Maybe some of you DVC veterens can help me with a thought about long term inflating point charts.

If point charts go up each year, but a DVC member maintains a constant amount of points, wouldn't that suggest that over time their membership will buy them less and less each year? Wouldn't it also suggest that if the maintenance costs rise each year, then owning a DVC property would cost more each year but buy you less and less each year?

I just recently bought 180 points. If a 15 point stay increases to say 25 points in 10 years, then where did all of my long-term value recuperation go? and likewise I'll go form paying roughly $850 per year in maintenance fees to maybe double that, will it be worth it?

Thanks.

Joe

 

[disneynutz]

For existing resorts, if the points are adjusted up during certain dates, they have to be adjusted down somewhere else. The over all total can not change.

That doesn't mean that the points to stay at new resorts won't be higher than other resorts. The points required to stay at BLT are higher than the points at SSR. The points needed to stay at the new Hawaii resort will be higher than BLT.

Bill

 

[Lawshark]

Like Disneynutz says...the cost for that particular night might go up...but that means that other nights are becoming less expensive.

 

[Dean]

Hello,

Maybe some of you DVC veterens can help me with a thought about long term inflating point charts.

If point charts go up each year, but a DVC member maintains a constant amount of points, wouldn't that suggest that over time their membership will buy them less and less each year? Wouldn't it also suggest that if the maintenance costs rise each year, then owning a DVC property would cost more each year but buy you less and less each year?

I just recently bought 180 points. If a 15 point stay increases to say 25 points in 10 years, then where did all of my long-term value recuperation go? and likewise I'll go form paying roughly $850 per year in maintenance fees to maybe double that, will it be worth it?

Thanks.

Joe

As noted, the overall points do not go up, but they can be reallocated. The end result may be that your stay may indeed go up or down. If you bought for a full week in a higher season, it's unlikely you'll see much change long term. Those that are looking at smaller units, 5 or 6 days light on weekends and certain times of year have more risk than others. For the most part, the damage has been done in the last 13 months. Over the next couple of years those buying for long weekends are actually likely to be at most risk and those looking at early December adventure time. However, I think there are other risks in that there may be other changes over simply changing the points for a given stay.

 

[Deb & Bill]

But should DVC add new resorts to the mix, they could increase the number of points required to stay in that resort over what they might require at an older resort. Such as the GVs. The GV at OKW requires the fewest number of points per stay. Other GVs require more points. A brand new resort with GV could require double the number of points of OKW to stay a single night.

Kind of like what happened at BLT. A studio there is more than other studios during the same time frame. It allows Disney to sell points at the same price, but the new member must buy more points to stay at their home resort than they might at OKW or another older resort.

We'll just have to see what the points ranges are for Hawaii.

What your 150 points at OKW could get you for a week, won't get you a week in the same size villa at BLT or any other resort for that matter.

 

[Chuck S]

For the OP: The point totals must remain the same only at DVC resorts. If you are talking about staying at non-DVC resorts, the cruise, RCI, or any other non-DVC venue, the points are renegotiate every year (or two or 3) depending upon the length of the negotiated contract. There is no limitation to those increases.

 

[Dean]

But should DVC add new resorts to the mix, they could increase the number of points required to stay in that resort over what they might require at an older resort. Such as the GVs. The GV at OKW requires the fewest number of points per stay. Other GVs require more points. A brand new resort with GV could require double the number of points of OKW to stay a single night.

Kind of like what happened at BLT. A studio there is more than other studios during the same time frame. It allows Disney to sell points at the same price, but the new member must buy more points to stay at their home resort than they might at OKW or another older resort.

We'll just have to see what the points ranges are for Hawaii.

What your 150 points at OKW could get you for a week, won't get you a week in the same size villa at BLT or any other resort for that matter.

They certainly could escalate the points at new resorts. To date I haven't seen indications that they've raised the points simply to increase the price but rather for things that were potentially more valuable like VGC and BLT. Certainly other systems have taken that approach over the years, I hope DVD doesn't go down that road partly because it will hurt the value of existing ownerships beyond the other pertinent factors.

 

[gianjoe]

For the OP: The point totals must remain the same only at DVC resorts. If you are talking about staying at non-DVC resorts, the cruise, RCI, or any other non-DVC venue, the points are renegotiate every year (or two or 3) depending upon the length of the negotiated contract. There is no limitation to those increases.

Funny you say that because this was not mentioned anywhere in our discussion with the DVC salesperson. We were there probably two years ago, I wound up buying DVC on a resale to get in at BCV. The salesperson said at that time it was 160 points for a week anywhere outside of DVC.

So for 7 days, Paris...160 points, Colorado....160 points, California...160 points. So in my head this whole time (until reading your post) I was under the impression that was the case. I just checked the 2009 book and its nowhere close, so maybe in 2007 it was 160 but since then its gone up.

It takes a little off the whole picture knowing that in say 15 years when my wife and I will be traveling mostly alone that we will probably be forced to upgrade our membership to do a week trip somewhere outside of Disney. All that said, I got a heck of a deal on the resale, lost two steals to ROFR before getting the third one. With that I am happy to now enjoy this property to at least the next 10 years since my children are only 3 and 6. We got 180 points at BCV with a full 180 points from 2009.

 

[gianjoe]

They certainly could escalate the points at new resorts. To date I haven't seen indications that they've raised the points simply to increase the price but rather for things that were potentially more valuable like VGC and BLT. Certainly other systems have taken that approach over the years, I hope DVD doesn't go down that road partly because it will hurt the value of existing ownerships beyond the other pertinent factors.

Won't it just be that much harder to sell those DVC properties?

Also, what does DVD stand for?

Thanks,

Joe

 

[Chuck S]

Funny you say that because this was not mentioned anywhere in our discussion with the DVC salesperson. We were there probably two years ago, I wound up buying DVC on a resale to get in at BCV. The salesperson said at that time it was 160 points for a week anywhere outside of DVC.

So for 7 days, Paris...160 points, Colorado....160 points, California...160 points. So in my head this whole time (until reading your post) I was under the impression that was the case. I just checked the 2009 book and its nowhere close, so maybe in 2007 it was 160 but since then its gone up.

It takes a little off the whole picture knowing that in say 15 years when my wife and I will be traveling mostly alone that we will probably be forced to upgrade our membership to do a week trip somewhere outside of Disney. All that said, I got a heck of a deal on the resale, lost two steals to ROFR before getting the third one. With that I am happy to now enjoy this property to at least the next 10 years since my children are only 3 and 6. We got 180 points at BCV with a full 180 points from 2009.

160 points is for RCI trades (World Passport Collection), not the Concierge Collection, Disney Collection, Adventures by Disney or cruises and I think RCI trades are still 160 points, though it could change. This is why taking the time to read and understand the POS during the cancellation period is important. You may have simply misunderstood your guide about which collection the 160 points applied.

Won't it just be that much harder to sell those DVC properties?

Also, what does DVD stand for?

Thanks,

Joe

It wouldn't necessarily make newer harder to sell. It depends upon the demographic to which they are marketting.

DVD=Disney Vacation Development, the development arm of DVC. It's all in your Public Offering Statement.

 

[z28wiz]

Disney Vacation Development

 

[RobDoc]

Funny you say that because this was not mentioned anywhere in our discussion with the DVC salesperson. We were there probably two years ago, I wound up buying DVC on a resale to get in at BCV. The salesperson said at that time it was 160 points for a week anywhere outside of DVC.

So for 7 days, Paris...160 points, Colorado....160 points, California...160 points. So in my head this whole time (until reading your post) I was under the impression that was the case. I just checked the 2009 book and its nowhere close, so maybe in 2007 it was 160 but since then its gone up.

It takes a little off the whole picture knowing that in say 15 years when my wife and I will be traveling mostly alone that we will probably be forced to upgrade our membership to do a week trip somewhere outside of Disney. All that said, I got a heck of a deal on the resale, lost two steals to ROFR before getting the third one. With that I am happy to now enjoy this property to at least the next 10 years since my children are only 3 and 6. We got 180 points at BCV with a full 180 points from 2009.

The World Passport Collection currently is as follows:

Studio. 106 Low/123 Mid/134 High
1 BR.... 124 Low/144 Mid/160 High
2 BR.....207 Low/252 Mid/270 High
3 BR.....276 Low/317 Mid/349 High

It was not always the same and there is nothing to prohibit those points from changing - the program itself could also be dropped (although that is not likely, IMO). The same thing holds for the Concierge Collection, Adventure Collection and the Disney Collection (which have both changed over the years). This is all covered in the POS along with the unchangeable total points for DVC resorts.

DVD is Disney Vacation Development - the Disney division responsible for building and selling the DVC resorts. DVC provides operational management for those same resorts. There are also provisions in the POS where the owners could replace DVC with other management if they desired (again, not likely IMO and not advisable either since any resort doing so would no longer have access to any other DVC resorts or programs).

 

[Dean]

Won't it just be that much harder to sell those DVC properties?

Also, what does DVD stand for?

Thanks,

Joe

I suspect higher points will have some effect on sales but likely not that much. Even if they did take this approach, they wouldn't want to drastic a change.

 

[matt and beth]

If they keep raising the points for new resorts it will just make my investment that much more valuable. People will be looking for resales at the resort that requires half the points. Go ahead Disney. Have fun. I'll sale mine when the resale doubles.

 

[gianjoe]

If they keep raising the points for new resorts it will just make my investment that much more valuable. People will be looking for resales at the resort that requires half the points. Go ahead Disney. Have fun. I'll sale mine when the resale doubles.

Its all about supply and demand and there is too much supply at the moment to see increases. In 5-10 years maybe but not now.

Joe