Beach Club Villas direct pricing has reached its breakeven point

[DisDad-]

BCV 2018 direct pricing may have finally reached its ceiling. At $185 PP and MF at 6.44 pp with 24 years remaining, the spread between cash pricing and purchasing is almost at equalibrium. If Disney continues to increase direct pricing, there will no longer be any discounted benefit to owning unless you purchase resale at a lower price point. I did consider inflation at 3-5 percent and see that in the next 2-3 years direct purchase prices will need to come down to see any discount from a direct purchase (unless an extension is offered). I didn’t look into any of the other 2042 resorts but am curious if anyone else has done some number crunching of their own.

 

[mustinjourney]

it's still cheaper than cash rates. At $185 a point, that comes out to about $14-$15 per point when assuming a 5% IRR on your upfront money. Add in the $6.44 MFs and you're up to a total cost of about $21 per point. For a studio during value season, that comes out to 15 points, which is $315 per night total.

Rack rate is $458 plus tax -- so right around $500 a night. Even if you can get 30% off, that gets you to about $350 a night.

So at worst it is a $45 savings per night -- but more likely about $100 savings per night.

Of course, is buying into DVC worth $100 a night savings? Probably not. Too much hassle and restrictions for that amount of savings. At that price, you're far better off trying to rent points assuming you don't mind the risk associated with renting points from a stranger.

 

[DisDad-]

I do agree that there is still a bit of a benefit at this time. But i Honk the breakeven timeframe could even be 1-2 years rather than 2-3 if they increase any further. This really leads me to wonder if they may have plans on extending the lease at the BCV (or the other 2042 resorts)
Disney’s business model has always been to keep prices and up now that the tipping point is getting close, it’ll be curious to see what approach they take.
I think that an extension would definitely increase demand and sustain price levels.

 

[ScubaCat]

It's just not an apples-to-apples comparison. For one thing, the hotel rack rate could about to spike fairly soon, with the bigger convention center coming and fancier YC food offerings. Even if the price were identical or even slightly higher, it's still a prepaid room that offers some "protection" from future rack rate hikes. Also, the product just isn't the same. DVC offers studios with kitchenettes plus the 1 and 2 bedroom villas (and 3BR grand villas at BWV) with all the additional amenities -- full kitchen, laundry, living room, etc. I'm a little surprised it hasn't gone up more to be honest, especially BWV and BCV given the fairly low point cost for the rooms and popularity of Epcot (with F&W, F&G, NYE, etc.) and DHS being a complete theme park once again (hard to believe, I know).

 

[MinnieB]

it's still cheaper than cash rates. At $185 a point, that comes out to about $14-$15 per point when assuming a 5% IRR on your upfront money. Add in the $6.44 MFs and you're up to a total cost of about $21 per point. For a studio during value season, that comes out to 15 points, which is $315 per night total.

Rack rate is $458 plus tax -- so right around $500 a night. Even if you can get 30% off, that gets you to about $350 a night.

So at worst it is a $45 savings per night -- but more likely about $100 savings per night.

Of course, is buying into DVC worth $100 a night savings? Probably not. Too much hassle and restrictions for that amount of savings. At that price, you're far better off trying to rent points assuming you don't mind the risk associated with renting points from a stranger.

This assumes weekdays during value season. Does the math still work favorably when also considering full weeks during higher point cost periods? It seems lately that folks have been finding it more and more difficult to book some of the higher demand periods and it might be prudent to think about costs based on a distributed use of points across the year. Perhaps it comes out similarly because rack rates also vary?

 

[mustinjourney]

This assumes weekdays during value season. Does the math still work favorably when also considering full weeks during higher point cost periods? It seems lately that folks have been finding it more and more difficult to book some of the higher demand periods and it might be prudent to think about costs based on a distributed use of points across the year. Perhaps it comes out similarly because rack rates also vary?

Rack rates vary based on seasons so it's likely a wash. For 2017, peak season at BCV is $611 with tax and value was $470 with tax and Holiday pricing is $730.(according to www.mousesavers.com).

BCV points would be 15, 18 and 25, respectively. At $21 per point, the rooms would be $325, $378 and $525. Still a significant savings. Weekend pricing changes things slightly -- but not by much...and if you are staying a full week, then the extra points for the two weekend days get diluted over the course of the week.

 

[Ben E N]

Rack rates vary based on seasons so it's likely a wash. For 2017, peak season at BCV is $611 with tax and value was $470 with tax and Holiday pricing is $730.(according to www.mousesavers.com).

BCV points would be 15, 18 and 25, respectively. At $21 per point, the rooms would be $325, $378 and $525. Still a significant savings. Weekend pricing changes things slightly -- but not by much...and if you are staying a full week, then the extra points for the two weekend days get diluted over the course of the week.

First off, I don't think even Disney expects people to buy all of their BCV points direct. This is more to increase their cut when people add on, and to build interest in Riviera when it opens.

When comparing this direct cost to hotel costs and saying it is still a savings, though, I think people would be sacrificing too much to save just a little. On top of daily housekeeping, they would be giving up a ton of freedom in terms of when they want to come, how long they want to stay for, and what other vacations they would be interested in taking. It's a fine tradeoff if you can comfortably rent out your points for a profit, but at $7.40 per year + MFs, that gets hard to do.
Since they are both luxery purchases, I consider it like buying craft beer. I can buy a 6 pack for $10 and then enjoy it and buy a different one for $10 as well. Sometimes Costco has 24 packs of ones that I like for $34. If purchased, it's a savings of $6, but I am giving up the opportunity to try other drinks, and chances are high I will be sick of that beer by the time the 24 pack is emptied out. Hotel stays are a little different because they are annual, but the same idea applies more or less.

 

[Networth]

First off, I don't think even Disney expects people to buy all of their BCV points direct. This is more to increase their cut when people add on, and to build interest in Riviera when it opens.

When comparing this direct cost to hotel costs and saying it is still a savings, though, I think people would be sacrificing too much to save just a little. On top of daily housekeeping, they would be giving up a ton of freedom in terms of when they want to come, how long they want to stay for, and what other vacations they would be interested in taking. It's a fine tradeoff if you can comfortably rent out your points for a profit, but at $7.40 per year + MFs, that gets hard to do.
Since they are both luxery purchases, I consider it like buying craft beer. I can buy a 6 pack for $10 and then enjoy it and buy a different one for $10 as well. Sometimes Costco has 24 packs of ones that I like for $34. If purchased, it's a savings of $6, but I am giving up the opportunity to try other drinks, and chances are high I will be sick of that beer by the time the 24 pack is emptied out. Hotel stays are a little different because they are annual, but the same idea applies more or less.

For the analogy with craft beer, well done sir.

 

[Dtw002]

Resale pricing has gone crazy. We bought a year ago for $95 and now it looks to be averaging $120-130 for the same number of points.

 

[ScubaCat]

Resale pricing has gone crazy. We bought a year ago for $95 and now it looks to be averaging $120-130 for the same number of points.

I was looking for an add-on but I don't think it's worth it at the current resale price point. Even $120 seems low suddenly. It does appear that some of the brokerages are listing them a lot higher than others. I can't blame them since it will increase their commission, but I'm definitely not going to pay. Perhaps others will.... we'll see!

 

[Ben E N]

Resale pricing has gone crazy. We bought a year ago for $95 and now it looks to be averaging $120-130 for the same number of points.

According to this analysis from 3/2017, the prices at Beach club have risen about the same as at other resorts. BLT was $117 average, people such as kboo got it as cheap as $106 If I remember correctly, and it is now $130-140. AKL is now $20 more per point. The issue with BCV is that it was initially the worst value per year, so growing at the same rate still makes it a poor economic value. It really needs to be a passion purchase, not one made with the intent to save money over time.

https://www.dvcresalemarket.com/blog/best-economical-dvc-resort-to-purchase-spring-2017/

 

[chadwick61]

According to this analysis from 3/2017, the prices at Beach club have risen about the same as at other resorts. BLT was $117 average, people such as kboo got it as cheap as $106 If I remember correctly, and it is now $130-140. AKL is now $20 more per point. The issue with BCV is that it was initially the worst value per year, so growing at the same rate still makes it a poor economic value. It really needs to be a passion purchase, not one made with the intent to save money over time.

https://www.dvcresalemarket.com/blog/best-economical-dvc-resort-to-purchase-spring-2017/

100% agree it needs to be a passion purchase and we just closed at BCV. My wife and I were on the fence for a year because economically it doesn't make sense. However, my wife and her parents already had a contract their and that motivated my wife and I to settle on a small contract to supplement the in-laws since we now have 2 small kiddos. That is our short term plan for staying in a studio there every 18 months. As the kids grow we have agreed that we will buy elsewhere that is a better and longer value and still go every 18 months but stay in 1br and alternate resorts...at least for 24 more years.

We love the Beach Club, but it took a long time to come to terms with paying a lot of money for something that was not necessarily the best value!

 

[Ben E N]

100% agree it needs to be a passion purchase and we just closed at BCV. My wife and I were on the fence for a year because economically it doesn't make sense. However, my wife and her parents already had a contract their and that motivated my wife and I to settle on a small contract to supplement the in-laws since we now have 2 small kiddos. That is our short term plan for staying in a studio there every 18 months. As the kids grow we have agreed that we will buy elsewhere that is a better and longer value and still go every 18 months but stay in 1br and alternate resorts...at least for 24 more years.

We love the Beach Club, but it took a long time to come to terms with paying a lot of money for something that was not necessarily the best value!

Hey, as long as you have the money and can live comfortably without what you spent on the timeshare, I am thrilled you went for it. We can't take all of our savings to the grave, so enjoying a bit of it here and there helps add quite a bit of fun to life. As long as you realize it is a purchase for fun and are not trying to rationalize what a great deal it is or something along those lines, good for you. You will get many great trips out of it.

 

[chadwick61]

Hey, as long as you have the money and can live comfortably without what you spent on the timeshare, I am thrilled you went for it. We can't take all of our savings to the grave, so enjoying a bit of it here and there helps add quite a bit of fun to life. As long as you realize it is a purchase for fun and are not trying to rationalize what a great deal it is or something along those lines, good for you. You will get many great trips out of it.

We came to that same conclusion. We are funding retirement, college funds, and saving saving saving...we might as well have some fun with the money we are putting away! Now when childcare expenses go away....oh I can only dream...

 

[TexasChick123]

We seriously looked at both BCV and BWV last year when we were looking to add on. Well, the spreadsheets just didn’t pan out for those two, so we went with BLT. I just couldn’t do it with the ROR. I know I know. It’s a timeshare and not an investment, but I can’t avoid looking at my spreadsheets. Then again, I just rented BCV points from someone and plan on renting out some of my 2019 BLT points to cover. You know what they say about best laid plans...

 

[ScubaCat]

It really needs to be a passion purchase, not one made with the intent to save money over time.

I'd say that applies to just about any DVC timeshare contract, or any other luxury purchase for that matter. As a respectable cheapskate (I call myself a "saver" but DW would probably beg to differ ), the idea of spending tens of thousands of dollars on DVC contracts as a way to "save money" seems rather silly. The only way to save money is to not buy a contract at all! So, if I'm going to spend that kind of money on what's merely a luxury purchase, it's going to be what I want, not just what I can live with. Instead of dropping nearly $40K, I could have spent about $32K on the same number of SSR points instead in order to "save money". However, no way am I going to spend $32K to stress and hope that I can grab a BCV room during F&W or NYE right at 8am at the 7 month mark. As for the earlier expiration, when 2042 arrives I'll decide what to do then. For now, I'll see you all poolside!

All that said, to each his/her own.

 

[tjkraz]

I think that an extension would definitely increase demand and sustain price levels.

Why would Disney care about demand & resale prices for a resort that it hasn't been actively marketing for more than 15 years?

 

[Cyberc1978]

Why would Disney care about demand & resale prices for a resort that it hasn't been actively marketing for more than 15 years?

One could argue that when 2042 approaches fairly many of the DVC resorts expires like BRV, BWV, BCV, HHI, VB, OKW(not extended), DVC needs a "game plan". With that many resorts being removed from inventory that calls for some sort of game plan to level out the impact. The plan could be to just offer an 15 year extention like with OKW, or it could be to offer smaller extensions for like 2,4,6 years depending on the resort. That way you would have one resort expiring in 2042, the next in 44, next in 46 and on wards.

That would buy DVC time to open new resorts which could sort of replace the ones which is expiring.

Another thing is that when DVC is selling new resorts as part of the pitch they tell you you can "always" switch resort at 7 months. If 5½(OKW partially expiring) resorts is removed from inventory due to expiration the sell is gonna be harder. New resorts will ofc come before 2042 but if people are used to have ie. 20 resorts to choose from and suddenly only have 14½ then its a problem.

 

[Ben E N]

Why would Disney care about demand & resale prices for a resort that it hasn't been actively marketing for more than 15 years?

Also, higher resale justifies higher direct sale prices for new resorts. Why would anybody buy Riviera for $200 when they could get BCV for $60? When BCV resale is $140, thouth, it looks quite a bit more reasonable.

 

[kboo]

I was looking for an add-on but I don't think it's worth it at the current resale price point. Even $120 seems low suddenly. It does appear that some of the brokerages are listing them a lot higher than others. I can't blame them since it will increase their commission, but I'm definitely not going to pay. Perhaps others will.... we'll see!

Last fall when I made a few failed bids on BWV and BCV, that was what got me. The offers I had made were not even countered because they were too low (around $115 for BCV). So does this mean you're no longer looking for a BCV contract?

According to this analysis from 3/2017, the prices at Beach club have risen about the same as at other resorts. BLT was $117 average, people such as kboo got it as cheap as $106 If I remember correctly, and it is now $130-140. AKL is now $20 more per point. The issue with BCV is that it was initially the worst value per year, so growing at the same rate still makes it a poor economic value. It really needs to be a passion purchase, not one made with the intent to save money over time.

https://www.dvcresalemarket.com/blog/best-economical-dvc-resort-to-purchase-spring-2017/

Heh, only @TexasChick123 has totally done better than me on the BLT front! And last fall - as BLT prices kept going up... we got VGF for $135 - when I see 2042 resorts asking that, I just smh.

We seriously looked at both BCV and BWV last year when we were looking to add on. Well, the spreadsheets just didn’t pan out for those two, so we went with BLT. I just couldn’t do it with the ROR. I know I know. It’s a timeshare and not an investment, but I can’t avoid looking at my spreadsheets. Then again, I just rented BCV points from someone and plan on renting out some of my 2019 BLT points to cover. You know what they say about best laid plans...

I'd say that applies to just about any DVC timeshare contract, or any other luxury purchase for that matter. As a respectable cheapskate (I call myself a "saver" but DW would probably beg to differ ), the idea of spending tens of thousands of dollars on DVC contracts as a way to "save money" seems rather silly. The only way to save money is to not buy a contract at all! So, if I'm going to spend that kind of money on what's merely a luxury purchase, it's going to be what I want, not just what I can live with. Instead of dropping nearly $40K, I could have spent about $32K on the same number of SSR points instead in order to "save money". However, no way am I going to spend $32K to stress and hope that I can grab a BCV room during F&W or NYE right at 8am at the 7 month mark. As for the earlier expiration, when 2042 arrives I'll decide what to do then. For now, I'll see you all poolside!

All that said, to each his/her own.

Our BLT points will probably end up being our "sleep around" points. We do go in the late summer fairly often, and openings for 1BR and up are pretty available at BWV and BCV. And that's when we'd want to go to BCV for the pool, anyway. Although we didn't plan on owning 2 MK resorts, I would be more than happy to be "stuck" at them for NYE or F&W. F&W isn't really a possibility for us, anyway, unless they start it earlier and we work a few days into our late summer trips - kids are still small, we can't pull them out of school, and there's no one to watch them if we wanted to take a grownups trip.