Buying resale. One question....

[Mtnman44]

Ok, I'll play. I just priced out a random cruise, for July 7, 2013, 4 day Bahamas for Two Adults. Cat 4 staterooom

Cash Rack rate price 3,333.24

DVC points cost between 444 and 466.

Keep in mind that I don't think it is customary to pay the full rack rate for the cruise. I could be wrong but I assume many people book with a code or thru an agent or thru Costco, etc and get a better deal.

IF you think about it, when a member exchanges for a cruise, etc DVC has to take the members points and get MONEY from them by selling DVC reservations using those points to Cash customers at DVC resorts. Thinking criticially, the cash market value of those points must exceed DVCs cost to the exchage provider, aka the cost of the cruise, in order for the exchange program to remain solvent. DVC also has expenses of administration and member services, and the risk/losses of un-rented points.

 

[Tunseeker1]

No, I saw it, but as usual your numbers were all wrong. I'm not going to argue with you about this. Let's do this...you continue to buy VB direct contracts and use the points for DCL, and I'll buy my resale contracts and use the points to stay on site. Then we'll both be happy thinking we got the best deal.

I did buy VB direct SO I CAN GO TO VERO BEACH, and I wanted the same use year.
I have gone on DCL, but I like NCL Haven suites much better.

Always remember there would be no resales if no one bought direct.

 

[Mtnman44]

Is it a time frame for which you could book with points if you were actually looking today? Besure to compare points vs. cash for a time window that you could actually use points for.

How are my numbers wrong?

I priced a cruise on a well regarded cruise reseller website, then used the point chart for how many points.

 

[princesscinderella]

Disney does not allow discounts by different travel agents for their cruises. Travel agency's will give usually a small onboard credit and Costco gives a gift card for costco after sailing based on the cost of the cruise. The price that is on the disney site is what it will be regardless of where or who you book through. They run very few deals, mostly military and Florida resident ones or last minute specials such as the dvc one just offered for the first time. As the ship fills the prices for each cabin category rises. It is a totally different animal and there is not really such a thing as rack rate for the cruise. It's more about booking early to get the opening day pricing or waiting for a last minute special that not everyone can do on the spur of the moment.

I understand both sides of the arguement of not a good use of points but if your maintenance fees on the number of points needed to book the cruise is still less than the out of pocket cost of the cruise then I say go for it. Not everyone wants the hassle of renting the points.

 

[RobDoc]

I understand what you are saying, but you are overlooking one thing. Points have a real cash value of $10 each. So take the number of points it would take for a cruise and multiple it by 10. If the number is greater than the cash cost of the cruise, then it makes better financial sense to rent the points and pay for the cruise out of pocket.

For those willing to rent reservations to others using DVC points, they may be worth $10 (or more) per point. However, DVC does NOT value them at $10. They value those points at whatever they received in maintenance fees for the points. For many DVC members (especially those who purchased years ago and have already reached some sort of "break even" point) the points are worth under $6 pp and options like a cruise or ABD may be a good value based on the specifics of the cruise or ABD trip.

Many posters have insisted for years that using points for non-DVC options is a poor value - and if you compare that to renting the same points for cash they may be right - but for those who won't be taking a trip to a DVC resort this year, or who want to try another option, using points can still be a value compared to just paying cash for the cruise just at maintenance fee values. For many, the "cost" in time, effort and problems with renting is more than they wish to deal with when they can still get a reasonable value just by calling MS, paying the $95 fee and using their (already paid for) DVC points to "pay" for the option.

We purchased at OKW (direct) in 1993 and had "broken even" within 6 years. (I tracked all costs associated with DVC and compared that with what the same accommodation would have cost OOP.) We have since added on (both direct and resale) many, many more points and the same "break even" held true for all purchases. Our DVC accommodations have cost us no more than the maintenance fees on the points used for all trips since 2004. In total we have spent almost 2 years onsite using our DVC points.

Using the example provided by Mtnman:

Cash Rack rate price 3,333.24

DVC points cost between 444 and 466.

Our cost using 466 OKW points for that stateroom would be $2518.20 including the $95 fee. I would be very surprised if ANY travel agency could beat that price for the July cruise used in the example. Sure if I rented the points it would be even better, but the point here is that the cruise is priced as a value using the actual amount paid to DVC for those points (and even less if I used points banked from last year).

For those making a direct purchase with the intent to use their points regularly for DCL, be aware that your "break even" time will be much greater than using the points at DVC resorts. Please consider that before making a major purchase decision like DVC.

For those who purchase(d) DVC and just want to try some other options once in awhile, using DVC points for non-DVC options can still be a value. YMMV

 

[ELMC]

For those willing to rent reservations to others using DVC points, they may be worth $10 (or more) per point. However, DVC does NOT value them at $10. They value those points at whatever they received in maintenance fees for the points. For many DVC members (especially those who purchased years ago and have already reached some sort of "break even" point) the points are worth under $6 pp and options like a cruise or ABD may be a good value based on the specifics of the cruise or ABD trip.

Many posters have insisted for years that using points for non-DVC options is a poor value - and if you compare that to renting the same points for cash they may be right - but for those who won't be taking a trip to a DVC resort this year, or who want to try another option, using points can still be a value compared to just paying cash for the cruise just at maintenance fee values. For many, the "cost" in time, effort and problems with renting is more than they wish to deal with when they can still get a reasonable value just by calling MS, paying the $95 fee and using their (already paid for) DVC points to "pay" for the option.

We purchased at OKW (direct) in 1993 and had "broken even" within 6 years. (I tracked all costs associated with DVC and compared that with what the same accommodation would have cost OOP.) We have since added on (both direct and resale) many, many more points and the same "break even" held true for all purchases. Our DVC accommodations have cost us no more than the maintenance fees on the points used for all trips since 2004. In total we have spent almost 2 years onsite using our DVC points.

Using the example provided by Mtnman:

Cash Rack rate price 3,333.24

DVC points cost between 444 and 466.

Our cost using 466 OKW points for that stateroom would be $2518.20 including the $95 fee. I would be very surprised if ANY travel agency could beat that price for the July cruise used in the example. Sure if I rented the points it would be even better, but the point here is that the cruise is priced as a value using the actual amount paid to DVC for those points (and even less if I used points banked from last year).

For those making a direct purchase with the intent to use their points regularly for DCL, be aware that your "break even" time will be much greater than using the points at DVC resorts. Please consider that before making a major purchase decision like DVC.

For those who purchase(d) DVC and just want to try some other options once in awhile, using DVC points for non-DVC options can still be a value. YMMV

Doc,

I see your perspective and thank you for sharing your experience. To a certain extent I agree with your valuation that the true cost of a vacation club point is your purchase price amortized over the life of the contract plus your maintenance fees for that year. Where it gets tricky is that someone, somewhere, is willing to give you $10 for that point that you are valuing at $6ish. Yes, there is a little work involved, but I can't seem to get past that $10 number.

 

[RobDoc]

Doc,

I see your perspective and thank you for sharing your experience. To a certain extent I agree with your valuation that the true cost of a vacation club point is your purchase price amortized over the life of the contract plus your maintenance fees for that year. Where it gets tricky is that someone, somewhere, is willing to give you $10 for that point that you are valuing at $6ish. Yes, there is a little work involved, but I can't seem to get past that $10 number.

We are all welcome to value our points as we wish. Some will use $10, some will use much more and some less (a quick visit to the Rent/Trade Board will show the variance). The issue at hand is not how an individual member chooses to value their points, the issue is how does DVC value those points when offering non-DVC options - and my understanding is that they value them as exactly what they charge each member in January each year. That is what they will receive for each point from each member.

That 'value' is also used when DVC negotiates how to price DCL cruises, Concierge Collection stays, ABD trips and stays at non-DVC Disney Resorts. DVC does not actually send a check to the Poly every time a DVC member stays there using points and DRC does not send a check to DVC every time someone reserves a DVC villa thru them, but there is an internal accounting of those exchanges which will influence the point charts for the following year. Thus, there are times when DVC members see and complain about special upgrades into DVC resorts for those originally reserving stays at Value and Moderate resorts. When we complain, we often forget that those are accommodations already used from the member inventory and now "owned" by DRC to do with as they wish and to charge what they want - or even to give away as a loss leader.

I choose to value my points exactly what they cost me this year. No more and no less. If I choose to use them for a DVC stay I am happy to use that as my actual cost for that trip and compare that to the rate as defined by DRC. Could I rent my points for more and then pay for the villa thru DRC? - of course, but that involves additional effort and not that much of a savings to me if any. Could I rent my points and stay at a Value or Moderate Resort instead? - again, of course, but then I'm not staying in a 1BR villa and any comparison is apples to oranges. Could I rent my points and then pay cash to go on a Disney cruise? - of course, but again the actual savings is minimal when I only paid $5.52 each for those points thru my annual fees and already can demonstrate a nice savings. In addition, there is little variance from rack rate for cruises. For DCL the best value is based on the pricing available when the cruise is released for reservation and rises towards the rack-rate as time goes on. Some large agencies will reserve a block of staterooms for their own reservations and is therefore able to offer rates lower than DCL late in the reservation process, but timing is everything there too. Other cruise lines have recently had a little more difficulty than DCL regarding filling their ships and have offered some great deals shortly before departure (just as DCL did recently by offering 'special' rates to DVC members for an early June cruise on the Fantasy).

The bottom line is that, IMO, the best value is to use DVC points for stays at DVC resorts (and even there weeknights are a better value than weekends) but, the non-DVC options can still have value as described in my post above. As a disclaimer, I have never used DVC points for a cruise or other Disney Collection stay, but I have used points for a Concierge Collection stay (and felt the value for the points used was tremendous). Until the past year or so, I had never rented reservations made using points, but have also done that now - but not to pay for a cruise using cash instead of points. I understand the perceived value for those who do rent to take a cruise and won't argue the math in those situations, but I do think we sometimes do a great disservice to those asking simple questions about using points to take a cruise or other non-DVC option by repeating the best value mantra.

Years ago I offered this same opinion many times, but was always met with such continued outcry that it became easier to just allow the screams to die down on their own. Every once in awhile I still feel it important to offer an opinion (with explanation) that differs from the majority.

YMMV.

 

[crisi]

The real issue to me with buying points to use outside the system is that you then have ALL THESE POINTS and are stuck in the system. Cruising on points isn't cheap - unlike a room - its a per person cost. So if you want to do that, or ABD trips, you'll have LOTS of points. Plus, no guarantees those options will always be available - there was about a year or so where it was really hard to cruise on points - the rooms just weren't there. There are better timeshare systems for trading, and frankly, renting a timeshare unit for cash is seldom expensive or hard.

Now, if you buy and one year you say "lets save three years of points and cruise" - that's great. But you are talking about enough points for every other year - that's what we do - and we don't have enough points to do more than pay for one person to cruise - and in doing that we'd be giving up WDW.

We've cruise - for cash - and we've done the Adventures by Disney thing - on cash (and got a great deal - about half price in 2009 after the market crashed).

Know as well that points for travel outside DVC are subject to point inflation.

 

[ELMC]

I understand the perceived value for those who do rent to take a cruise and won't argue the math in those situations, but I do think we sometimes do a great disservice to those asking simple questions about using points to take a cruise or other non-DVC option by repeating the best value mantra.

Years ago I offered this same opinion many times, but was always met with such continued outcry that it became easier to just allow the screams to die down on their own. Every once in awhile I still feel it important to offer an opinion (with explanation) that differs from the majority.

YMMV.

Well said. It's this type of thinking that has informed my position on buying direct vs. buying resale. My "official" position has developed to be that buying resale is typically the most economical option, but buying direct offers convenience and flexibility...at a cost. It's a nice middle ground that I am trying to settle into. Somewhere there is a direct BLT purchaser laughing at me because it's taking 80 days to close on my resale contract and they got their points immediately. I guess it's all a matter of priorities and we should try to consider priorities other than our own. Thanks for the insight.

 

[DougEMG]

I always valued my DVC points at $10/point, although I'm thinking that that in the future I'm going to value them at $11/point.

That means when I book a room at DVC for 300 points I consider that to have been $3,000 that I just spent. So if I would rather do 'X' with that $3,000, I'll rent the points and do 'X'.

Last year instead of using my points to stay at DVC I rented them out and stayed for cash at CSR with the free dining discount package. Next trip I could have stayed at CSR with the free dining discount package again, but instead choose to stay at a 1 bedroom at DVC (it was actually my wife and daughter doing the choosing ).

So while I'm a frugal person and will do the work required to rent out my points when I want don't want to use them, I can totally understand why some people would prefer the convience of just using their points the easiest way possible even if it isn't the most cost effective.

 

[DougEMG]

Ok, I'll play. I just priced out a random cruise, for July 7, 2013, 4 day Bahamas for Two Adults. Cat 4 staterooom

Cash Rack rate price 3,333.24

DVC points cost between 444 and 466.

Keep in mind that I don't think it is customary to pay the full rack rate for the cruise. I could be wrong but I assume many people book with a code or thru an agent or thru Costco, etc and get a better deal.

The cheapskate in me would book the cruise for cash and rent out my points.

 

[DougEMG]

Doc,

I see your perspective and thank you for sharing your experience. To a certain extent I agree with your valuation that the true cost of a vacation club point is your purchase price amortized over the life of the contract plus your maintenance fees for that year. Where it gets tricky is that someone, somewhere, is willing to give you $10 for that point that you are valuing at $6ish. Yes, there is a little work involved, but I can't seem to get past that $10 number.

I got past the $10 number to $11

 

[dangeron]

Well said. It's this type of thinking that has informed my position on buying direct vs. buying resale. My "official" position has developed to be that buying resale is typically the most economical option, but buying direct offers convenience and flexibility...at a cost. It's a nice middle ground that I am trying to settle into. Somewhere there is a direct BLT purchaser laughing at me because it's taking 80 days to close on my resale contract and they got their points immediately. I guess it's all a matter of priorities and we should try to consider priorities other than our own. Thanks for the insight.

I just bought direct at BLT, but certainly not laughing at you. I check the new resale listings daily and plan to buy some in the future. But, today I was able to book at BLT through disney since it was my first reservation. They were able to "find" a 1 bedroom lake view at BLT for the beginning of December for me. We obviously would never have been able to book this trip this late in the game otherwise. So my overall cost was $6000 more than resale, but having this trip with my family is almost priceless to me.
And if I ever use my points for a cruise, I'm sure I'll feel the same way about that trip.

One thing I think it's important for people to think about is that most of the posters here have non-restricted resale points, at least some. For those of us who are new buyers, only restricted resale is available. So for my family, the best choice is going to be a mix of direct and restricted resale. I like to have some options, even if I never end up using the points that way. (But I think I will)

 

[keaster]

I guess the one thing I worry about (and yes I do worry ) is what if I can't get my points rented? Just my luck I'd be the one who books the cruise with cash, puts my points up for rent, and nobody takes me up on them!

If I can bank them, that's okay...but if they must be used up, then I'm stuck with a bunch of points that I wouldn't be able to use because I've already used my vacation time on my cash cruise!

Has anyone ever NOT been able to rent out their points?

 

[keaster]

BTW, when we bought direct in July of last year, our guide was very straight forward with us. He said if someone wants to cruise consistantly on a regular basis (like every year), then DVC was NOT the best way to do that.

However, we figured if we alternated (did a couple Disney trips one year, a DCL cruise every other year), it would actually balance out okay.

 

[dangeron]

I guess the one thing I worry about (and yes I do worry ) is what if I can't get my points rented? Just my luck I'd be the one who books the cruise with cash, puts my points up for rent, and nobody takes me up on them!

If I can bank them, that's okay...but if they must be used up, then I'm stuck with a bunch of points that I wouldn't be able to use because I've already used my vacation time on my cash cruise!

Has anyone ever NOT been able to rent out their points?

I worry about that too, which is so unlike me
but really, I worry more about the renters market in 5-10 yrs, what if i can rent now but not then? Unfortunately, there's no crystal ball for us. I think you just have to make the decision that lets you sleep best at night. (not that a dvc contract would keep me up but it could add to all the other things that do.)

 

[jodifla]

It really depends on how they've priced the cruise points-wise, and how it's selling. There have been some years the points were much less than the going price of the cruise.

Cruising on points all the time wouldn't be a reason to buy DVC, but it's a fine occasional use, as is trading into RCI.