Cost Analysis......hmmmmmm

[canoe86]

Sitting down tonight to really look at the TRUE cost of DVC.

I know a bunch of you have done spreadsheets, so I have a couple of questions/comments.

First, shouldn't a true analysis take into consideration rising dues? I tried to do this by raising mine ROUGHLY 4% a year over the life of the contract, then adding that money back on to the original purchase, then divide by total points for a cost per point of the life time of the contract.

Second, shouldn't the value of the points be taken into some sort of consideration? ie 200 BLT points get you less than 200 SSR. I tried to address this by cost as percentage of BLT, using comparable room type point cost. I used BLT since that is the one Disney is currently pushing.

Of course I'm making an assumption of ownership until contract expiration.

Hmmmmmmm

 

[vicki_c]

There's a million ways to do it (or at least a bunch), but I don't understand your point 2.

Points are points. My 160 SSR points are no different than 160 BLT points. If I want to stay somewhere that costs 160 points, they're all the same. Now depending on where you want to stay (which may change every trip), and when you decide to go (which may change every trip), you may get more or less bang for your buck for those 160 points. But I don't see how you could ever factor that into your cost analysis - it doesn't seem to be relevant to me.

I think what you meant was 200 points gets you less at BLT than at SSR (which is of course debatable anyway depending on how you value the rooms, the location, etc.). That may be true by the points charts, but that is not related to where anyone currently owns their home resort points.

As for the dues, of course that should be considered - you will pay much more in dues over the contract life than you paid for the initial points purchase.

 

[canoe86]

There's a million ways to do it (or at least a bunch), but I don't understand your point 2.

Points are points. My 160 SSR points are no different than 160 BLT points. If I want to stay somewhere that costs 160 points, they're all the same. Now depending on where you want to stay (which may change every trip), and when you decide to go (which may change every trip), you may get more or less bang for your buck for those 160 points. But I don't see how you could ever factor that into your cost analysis - it doesn't seem to be relevant to me.

I think what you meant was 200 points gets you less at BLT than at SSR (which is of course debatable anyway depending on how you value the rooms, the location, etc.). That may be true by the points charts, but that is not related to where anyone currently owns their home resort points.

I understand what you are saying, but what I'm trying to get a grasp on is that your SSR points probably are not the same as your BLT points. (unless of course you got them at EXACTLY the same price )

BLT will 'cost' a certain number of points, which have been purchased at varying prices. Also, if I have BLT points, and use them at SSR, what % cost increase do I pay for using expensive points for an option that existed at a possible lower price.

I guess a complete point comparison might be in order across rooms and resorts. Anyone ever do THAT?!?!?!?

 

[palaemon]

First, points are not just points - until the 7-month mark. The "value" comes with the entire package: Resort, amenities, park proximity, theming, etc.

Second, if you wanted to compare apples to apples (SSR vs. BLT) then pick a season and a room size and use that. Choice Season - BLT 1BR 241 LV, SSR 1BR 197. But even that is difficult because BLT has view categories, although LV has the most.

But that's not really a fair assessment because BLT is newer, next to MK, and the only resort on a monorail - how to add all that into the equation?

 

[bookwormde]

Yes increasing dues should be figured in as long as if you are doing a comparison with CRO that you adjust those rates each year aslo.

You also need to figure interest or loss of income from committed funds from interests (I use 10 year treasuries) in the calsulation also to be complete.

 

[18sprint]

As stated already, of course you need to figure the increase in everything. Like the others, I'm not quite understanding pt.2 as even if you take out BLT, there is still differences between all the resorts, as far as pt cost is considered. Like us, we purchased 150 at OKW, with the intention of going to OKW the majority of the time. Once in a while, like this May we are spending time at OKW them moving to WL for 4 days, which is costing us more in points than OKW, but that's our choice. As mentioned before, there are alot of ways to do a comparison, and I would suggest doing several a couple different ways. Are you looking for payback period? I did it a couple ways. Compare DVC against your "normal" vacation habits. Do you go to Disney every year? How long? Where do you normally stay? DVC may very well change your vacation habits...I know for us it did. Make sure you calculate in the cost of increased maint. fees, and the increase of what you would consider a "normal" hotel stay. Want to make DVC look real good? Just compare the DVC cost against what it would really cost if you would stay at any DVC or deluxe resort as a cash customer. Doesn't take long for payback!

 

[disneynutz]

IMO many don't factor in the most important item. You are committing you and your family to a yearly Disney vacation. For many it can become a "we have to go or lose our points" kind of thing. Even if you pay the higher Disney cash price for a room as a non-member, you don't have to deal with getting rid of your points if you decide to take a year off.

When you add a couple of thousand dollars, (in todays dollars), per year for transportation, food, and admission, Disney and DVC ownership can be really expensive. In the past when and if you decided to sell, there were plenty of buyers and you could get back a good portion of your original purchase price, not so today for many of the members and it looks like it is only going to get worse.

Disney doesn't change much from year to year, after you see and do everything a few times, will you still feel the same Disney magic? Some do, but many don't.

Bill

 

[adminjedi]

Here is how we do it (excel spreadsheet):

Points bought
Cost per point
Maintainance/pt/yr (we use current year and update yearly)
Principle (total cost)
Term (Yrs) (life of contract)
Rate/Yr (if we had invested the cash instead)
Payment/mo (if we had invested the cash instead)
Amort. / year
Maintainance/yr
Cost per year
Cost/yr/point (the value given to each contract point)

Choice Season Studio / wk (cost per point with points per stay)
Choice Season Studio / day (cost per point with points per stay)
Room type
Points/week
Amortized cost per night
Per week

 

[khmiller]

Here's the way I look at it.

I compare the cost of going to Disney over the next few years with the DVC and without the DVC. I include rooms, tickets, transportation, and meals.
For without the DVC, I assumed we stayed at a value resort.

I assume we are going to pay for the DVC with interest over 10 years.

For us, the DVC saved us a little money each year. After the 10th year, we save a lot!

The good: We are going to Disney more than if we were not members.
The bad or good: We are probably going to spend a little more money on vacations than we've had in the past.

I'm not concerned about the maintenance fees going up. Your income should increase by a similar percentage.

As an added bonus, there are some tax savings and discounts that will also be gained.

If you buy direct, I think it will cost you a little more each year until it's paid off. This is the reason we didn't buy 5 years ago. I didn't realize you could purchase resale properties back then.

If you like Disney, IMO, the DVC is the way to go if you can get a good resale deal. You are committing yourself to many years of vacationing at Disney, which you have to want.

 

[JimMIA]

First, shouldn't a true analysis take into consideration rising dues?

Not necessarily, unless you think there will be a significant difference between the rise in DVC dues and the increase in cost of non-DVC accommodations. For a down-and-dirty comparison, I think just comparing a reasonably accurate cost for this year should work as well.

The more you fine-tune your analysis, the more you try to split hairs to get that precise pinpoint accuracy that makes MBA's and CPA's tingle with delight, the more subjective your assumptions have to be. At the end of the day, all you're left with is an estimate anyway, and if you have to calculate every penny saved to justify a purchase, you probably shouldn't do it.

Second, shouldn't the value of the points be taken into some sort of consideration? ie 200 BLT points get you less than 200 SSR.

No, as others have said, points is points. There is an intrinsic value to the home resort booking window, but again that's subjective and very difficult to value.

The point differences between resorts can be significant if you are comparing the cost of staying at OKW with using the same points at BLT, or the cost of staying at OKW vs. paying cash somewhere offsite. For example, our upcoming May Sun-Thurs 1 BR trip would cost 160 points at OKW, 185 points at BLT with a lake view. I roughly calculate my OKW per-point cost at $7 per point this year, so that's $1,120 for OKW and $1,295 for BLT. That's not a big difference, but sometimes the spreads are much greater.

If I rented a one-bedroom deluxe at Bonnet Creek from a Wyndham owner, I could probably get it for half what I'd pay onsite...but of course we would not be onsite. (We're staying on our Wyndham points, so that's even better.)

If I exchange out, I could get a full week in a 1 BR somewhere for those 160 OKW points, but I'd have to then compare that $1,120 with whatever I could get the same accommodations for through some other channel.

 

[paeskie]

Sitting down tonight to really look at the TRUE cost of DVC.

Cost of Ownership by itself is not really meaningful. The question is what are you comparing cost with. Are you comparing to the value of that money in some other investment, or are you comparing to the cost of taking the same vacations with cash over the life of the ownership?

 

[mdsd8700]

Cost of Ownership by itself is not really meaningful. The question is what are you comparing cost with. Are you comparing to the value of that money in some other investment, or are you comparing to the cost of taking the same vacations with cash over the life of the ownership?

For me this is how I think of Cost of Ownership (what I underlined). Maybe I am wrong, I really don't know. I am new to DVC just this past June and I have been reading these boards long before that. I know that with DVC I will most likely end up spending more on Disney due to the ability to be able to take more trips. However I think as I begin to put the nubmers together this is the approach I will be taking.

We have been doing Disney Vacations for 14 years and our love of Disney has only grown which is another reason we decided to finally purchase.

Thanks for the some of the various ways other members do this anaylsis. Will be checking into these.

 

[Finally DVC]

Cost of Ownership by itself is not really meaningful. The question is what are you comparing cost with. Are you comparing to the value of that money in some other investment, or are you comparing to the cost of taking the same vacations with cash over the life of the ownership?

I'm too much of a cheapskate to let Disney sucker me into spending more on accomodations than I would without DVC. We compared the cost of DVC to what we would spend at Disney without DVC (we generally used room only discounts and stayed at values or moderates with an occasional deluxe).

But when our kids got to be 12 and 15, we were just too big to consider 6 nights on two double beds in a tiny room a VACATION. On top of that our oldest was getting closer to the point where we would be charged for an extra adult (she's currently 17 and plans on going with us for the forseeable future). On our trip to the Pop in December 2008, we resolved to get two rooms for our next trip.

Comparing the cost of DVC to the cost of two value rooms gave us a breakeven point of about 20 years. Not great, but at least it was in the ballpark and we had our excuse to purchase BLT.

 

[arthur06]

Maybe I am in the minority when worrying about the cost. I bought what I could afford and will/may add on when the budget allows.

DVC cost to our family...money

DVC return to our family... great family vacations!

My in-laws neighbor just passed away Sunday at the age of 63. I don't know when my time will come, but when it does, I want my wife and kids to know that they will always have memories of great times, and not a memory of a father/husband who was too worried about what things cost more so then what they actually gain!

 

[joandegennaro]

Maybe I am in the minority when worrying about the cost. I bought what I could afford and will/may add on when the budget allows.

DVC cost to our family...money

DVC return to our family... great family vacations!

My in-laws neighbor just passed away Sunday at the age of 63. I don't know when my time will come, but when it does, I want my wife and kids to know that they will always have memories of great times, and not a memory of a father/husband who was too worried about what things cost more so then what they actually gain!

Well said!

 

[6bowmans]

One variable that is most difficult to figure into the spreadsheet is that just owning DVC may cause you to increase your Disney spending. Most people start by comparing DVC with moderates and value resorts, and look to purchase the number of points to allow them to stay the same length of time they normally would. Most people figure the break even point at 15-20 years. So, you convince yourself to buy DVC. You go to Disney, stay in your excellent DVC resort, and decide you want to visit Disney more often. You buy more points (I started at 200 and now happily own 600), visit Disney more often, and spend more money. All the time, you try to justify to yourself, what a great bargain you found in DVC. If you are truly concerned with the costs, then DVC may not be for you - there is certainly a danger to becoming even more addicted to Disney. I'm glad I bought into DVC and we have certainly increased the frequency of our visits (including trips to Disneyland).

 

[arthur06]

If you are truly concerned with the costs, then DVC may not be for you - there is certainly a danger to becoming even more addicted to Disney.

 

[Sandisw]

If you are going to use as part of your analysis the number of points at a resort, be sure you are comparing to the resorts you would likely go to.

I know that there are resorts that you can stay at that cost less, for example, than BLT. But, be sure that those resorts are one you would actually go to.

For example, we travel in the summer and the only resorts we would consider are BLT, BWV, BCV, and VWL. BLT, SV rooms, are pretty much the same in terms of points for our vacations at those resorts (ie: My BW view 2 bedroom at BWV is costing me the exact same thing that my 2 bedroom SV room at BLT would have cost for those same nights). Yes, OKW, AKV, and SSR would save points, but since we wouldn't be staying there, we took that out the equation.

However, for anyone who would stay at those less points expensive resorts, it is definitely something to think about in terms of how many points you have to own.

Good luck!

 

[ldo]

As many posters have said over the years, DVC is best used to stay at DVC from a economic point of view. Thus, my advice to anyone considering buying DVC right now would be to buy what you need for every other year. You won't be locked into DVC vacations every year, won't have to rent your points if you can't go that year and can still take advantage of some of the great free DDP, room only discounts, etc. when you want. If you have a time when you want to go to DVC every year, you can borrow points (yes, I know it can change, but it hasn't yet). If you are shy of points one year, you can easily get a points transfer from an owner here. And, after several years. if you just HAVE to have more points, then add-on. There have been add-on deals that can be just a good as the original purchase deals. Also, in these uncertain times, it's less $ up front and less to finance. Elaine

 

[canoe86]

Cost of Ownership by itself is not really meaningful. The question is what are you comparing cost with. Are you comparing to the value of that money in some other investment, or are you comparing to the cost of taking the same vacations with cash over the life of the ownership?

I'm assuming that we will visit Disney once a year going forward.

The last 4 we have stayed in Deluxe.

That is the base line I've started from. So, I'm trying to decide not only value comparison based on PAST accommodation, but also value of points purchased versus purchasing power of the points.