DVC Direct Economics

[MyDogTink]

Our plan is 1- bedroom stays. We have our initial trip in August at BLT.

We might find the 2 bathrooms to be a must have and the 1-bedroom perfectly fine. If that is the case our stays might just end up as BLT and Kidani. If that is the case direct points are not as necessary and I go back on the hunt for BLT resale points to use with my SSR resale points.

That works until a new restricted resort is built with 2 bathrooms in the 1-bedroom unit.

At least for me these decisions are a constantly changing process. Luckily, we have time before we make the next purchase.

Do you think new resorts will have 1 bedrooms with 2 full bathrooms. We had that at BLT and I came home and scrambled to buy a BLT resale contract for that purpose.

 

[kboo]

Do you think new resorts will have 1 bedrooms with 2 full bathrooms. We had that at BLT and I came home and scrambled to buy a BLT resale contract for that purpose.

I think it may depend on what part of the bathroom matters to you - around the time of VGF/Poly, and continuing with RIV, the studios had bathrooms that were much more usable for families - still only 1 toilet, but 2 places to shower and at least 2 sinks to brush teeth. It then made the 1br at VGF and RIV feel like a more luxury product because of the soaking tub but only 1 shower space - it is doable if you want more space and a private bedroom, but once the kids are bigger and more independent, you might as well go up to a 2br.

To your question, I think new resorts will continue to have split bath studios where possible, but I doubt there will be actually 2 separate full baths in the 1br. 1brs will always have a max capacity of 4/5, so adding a second full bath seems like a waste of space when you can sell studio contracts with a better bathroom setup. But I'm not a financial person, a real estate person, an architect, or anything. You might get a better answer asking a WDW bus driver!

 

[nalabear]

OP - we too are value proposition DVC owners. Strictly resale purchases to date cause the math worked in 2020 for AUL and VGC and west coast DLR folk holding annual passes

Now with VDH upon us, we are trying to reconcile the Direct purchase for blue card status. Simple math with any cost capital interest or compounding, the return with rental rates at $25pp turns out to be about 25 years (of 50 yr contract). Cost comparison of savings on VDH rack rates put it about the same. If you factor in the 15-25% discounts, it pushes to 30-35years.

Then there's the blue card privileges. Being DLR, there is little beyond the 1/year Moonlight Magic and newly minted lounge. No AP discount, no in-park discounts outperforming APs themselves. If they buffed up extras by a bit, perhaps the math is improved. We peg blue card at $300-500 yearly - being generous there too.

So the current incentives: 150pt buy-in at $210 for VDH -- not working out

 

[ark101]

To your question, I think new resorts will continue to have split bath studios where possible, but I doubt there will be actually 2 separate full baths in the 1br. 1brs will always have a max capacity of 4/5, so adding a second full bath seems like a waste of space when you can sell studio contracts with a better bathroom setup. But I'm not a financial person, a real estate person, an architect, or anything. You might get a better answer asking a WDW bus driver!

VDH has 2 full baths in 1brs and 3 in 2brs. Possible it is an exception though considering the tower has so few 1brs and 2brs.

 

[hcortesis]

IMO, BC points are more valuable rented than they are sold at the moment....

Ya. That gives me the best of both options I guess. Stay when I want. Rent when I want.

 

[Hubalorian]

We are both Resale and Direct. AK is by far our favorite resort and got double points on a 200 point AK contract at 113 a point, so that was just too good for us to pass up. The AK purchase was a peace of mind knowing we can get our favorite resort. However we do own at GF as well direct because we wanted the unrestricted access and the ability to stay at new resorts, because in 2042, there will be a presence felt on the restricted points with less resorts to choose from. We chose GF because it holds its value well compared to other resorts and doesn’t have the Riveria restriction if resold. It is also important to note we have a young child with another in the near future hopefully, so we are planning to have it far longer than 18 years

 

[MyDogTink]

I think it may depend on what part of the bathroom matters to you - around the time of VGF/Poly, and continuing with RIV, the studios had bathrooms that were much more usable for families - still only 1 toilet, but 2 places to shower and at least 2 sinks to brush teeth. It then made the 1br at VGF and RIV feel like a more luxury product because of the soaking tub but only 1 shower space - it is doable if you want more space and a private bedroom, but once the kids are bigger and more independent, you might as well go up to a 2br.

To your question, I think new resorts will continue to have split bath studios where possible, but I doubt there will be actually 2 separate full baths in the 1br. 1brs will always have a max capacity of 4/5, so adding a second full bath seems like a waste of space when you can sell studio contracts with a better bathroom setup. But I'm not a financial person, a real estate person, an architect, or anything. You might get a better answer asking a WDW bus driver!

Makes total sense. I really liked the 2 full bathrooms in a 1 BR at BLT. We are 2 adults and a 4 year old. So, we don’t need a two BR right now but the 2 bath helped and that accommodation at BLT didn’t eat up as many points as a 2 BR.

I totally get the thinking that the bath layout in some studios is sufficient and the 1 BR BLT could be seen as wasteful since it only sleeps 5 like the studios.

 

[MyDogTink]

Another way to think about the original question is to look at the price to rent points.

 

[Jlo85]

Another way to think about the original question is to look at the price to rent points.

Whenever I do a net present value comparison to renting, the 'value' of buying direct is basically nil / $0. Granted there are pros & cons to renting vs. owning, but I don't think the cost-benefit is really there for buying direct. Why I can never pull the trigger to buy direct.

 

[happythoughts & pixiedust]

Direct points can definitely still be a good value if bought strategically, in large quantities, and during good sales/incentive promos.

If you time your direct purchase correctly, you can get two years worth of points for only a couple months worth of dues. When buying 250-300 points, you can also often get great incentives. Right now DVC is offering the Magical Beginnings promo and buying back current use year points for $22 per point. They periodically offer flash sales on certain resorts - BLT, Poly, Aulani, all come to mind.

When buying direct you can also pay with a credit card. A well-planned purchase could net you 2, or 3, or 4, or even 5 credit card sign up bonuses worth thousands of dollars in cash back or future travel (points/miles). Often times these credit cards also offer 0% interest periods. For example, a husband/wife team could refer each other for the Chase Ink cards and earn 100k+ points between referral and sign up bonuses (worth over $1000 cash) for each card opened and used to buy the direct contract. Those Chase Ink cards are also offering 0% for 12 mo. None of these crafty purchasing options are available for resale contracts.

Direct purchases also offer time/convenience value, as you can buy exactly what you want when you want it vs. hunting for the right resale contract.

Ultimately, when you distill all this down you'll likely still find that resale costs a bit less than direct, but if you don't already have a blue card, you'll gain the benefit of discounts and the DVC annual pass, which saves $450+ per pass.

For us, the price difference between direct and resale was covered in the first five years after buying ~25 annual passes. All future passes and discounts for the next 40+ years will continue to bring the net cost of direct down. For us, direct was a no brainer. It will end up WAY cheaper by saving us thousands on annual passes. If you are already blue card or will never buy an AP, then the direct premium is harder to justify unless you want access to all future resorts.

Since buying direct I've added on points, but always resale, as there hasn't been a reason to pay the premium for direct since I buy where I want to stay and don't need to use those at the new resorts (and have one direct contract that I can use if need be).

However, I am considering buying VDH direct - 150 pts - to get the incentive and magical beginnings, which would bring the cost down to $188 per point. The question I ask is whether VDH resale will ever be meaningfully below 188. I can't decide the answer yet....I think Riv sells for less than VGF on the resale market because of restrictions, but I don't think restrictions will be as big of a deal at VDH...

 

[Epcot Forever Forever]

For us, the price difference between direct and resale was covered in the first five years after buying ~25 annual passes. All future passes and discounts for the next 40+ years will continue to bring the net cost of direct down. For us, direct was a no brainer. It will end up WAY cheaper by saving us thousands on annual passes. If you are already blue card or will never buy an AP, then the direct premium is harder to justify unless you want access to all future resorts.

I personally couldn’t allow myself to put any more than a year or two of value on the AP access since that program has only existed for less than a decade, has already been suspended during that time, and comes with no guarantees. Next year it might become DVC members save $20 on a Sorcerers Pass (aka the actual Disneyland DVC AP discount pre-Covid, which at least was $20 more than the current Disneyland DVC AP discount) and I would have no recourse on the lost projected savings.

 

[happythoughts & pixiedust]

I personally couldn’t allow myself to put any more than a year or two of value on the AP access since that program has only existed for less than a decade, has already been suspended during that time, and comes with no guarantees. Next year it might become DVC members save $20 on a Sorcerers Pass (aka the actual Disneyland DVC AP discount pre-Covid, which at least was $20 more than the current Disneyland DVC AP discount) and I would have no recourse on the lost projected savings.

Very true. At any time they could take the discount away or stop selling APs and make the direct benefits worth very little. It's possible that this is the long term strategy with restrictions - incentivize direct purchase so you have access to the network and reduce reliance on the other sweeteners like discounts.

 

[Duckbug.Ducktales]

Direct points can definitely still be a good value if bought strategically, in large quantities, and during good sales/incentive promos.

If you time your direct purchase correctly, you can get two years worth of points for only a couple months worth of dues. When buying 250-300 points, you can also often get great incentives. Right now DVC is offering the Magical Beginnings promo and buying back current use year points for $22 per point. They periodically offer flash sales on certain resorts - BLT, Poly, Aulani, all come to mind.

When buying direct you can also pay with a credit card. A well-planned purchase could net you 2, or 3, or 4, or even 5 credit card sign up bonuses worth thousands of dollars in cash back or future travel (points/miles). Often times these credit cards also offer 0% interest periods. For example, a husband/wife team could refer each other for the Chase Ink cards and earn 100k+ points between referral and sign up bonuses (worth over $1000 cash) for each card opened and used to buy the direct contract. Those Chase Ink cards are also offering 0% for 12 mo. None of these crafty purchasing options are available for resale contracts.

Direct purchases also offer time/convenience value, as you can buy exactly what you want when you want it vs. hunting for the right resale contract.

Ultimately, when you distill all this down you'll likely still find that resale costs a bit less than direct, but if you don't already have a blue card, you'll gain the benefit of discounts and the DVC annual pass, which saves $450+ per pass.

For us, the price difference between direct and resale was covered in the first five years after buying ~25 annual passes. All future passes and discounts for the next 40+ years will continue to bring the net cost of direct down. For us, direct was a no brainer. It will end up WAY cheaper by saving us thousands on annual passes. If you are already blue card or will never buy an AP, then the direct premium is harder to justify unless you want access to all future resorts.

Since buying direct I've added on points, but always resale, as there hasn't been a reason to pay the premium for direct since I buy where I want to stay and don't need to use those at the new resorts (and have one direct contract that I can use if need be).

However, I am considering buying VDH direct - 150 pts - to get the incentive and magical beginnings, which would bring the cost down to $188 per point. The question I ask is whether VDH resale will ever be meaningfully below 188. I can't decide the answer yet....I think Riv sells for less than VGF on the resale market because of restrictions, but I don't think restrictions will be as big of a deal at VDH...

Good way to look at it. It's possible for direct to compete with resale at higher volumes because of incentives and given CC sign up bonuses. This is what we did back in 2020 when we bought RVA instead of BWV. The delta got really narrow after the SUBs and after renting out the 2021 pts. But not everyone is as comfortable with credit cards.

 

[RoseGold]

Granted there are pros & cons to renting vs. owning, but I don't think the cost-benefit is really there for buying direct. Why I can never pull the trigger to buy direct.

Because the piece missing is risk. Spend 40K on 200 DLT points, or spend 20K on 200 SSR points. If Disney decides to make decisions that don't favor DVC, which has plenty of precedent, 20K is a lot less tied up in all this. A lot less risk. Numbers like 40K make people pause, as they should.

 

[MyDogTink]

Because the piece missing is risk. Spend 40K on 200 DLT points, or spend 20K on 200 SSR points. If Disney decides to make decisions that don't favor DVC, which has plenty of precedent, 20K is a lot less tied up in all this. A lot less risk. Numbers like 40K make people pause, as they should.

What’s the precedent? I’m just getting refamiliarized with Disney.

 

[RoseGold]

What’s the precedent? I’m just getting refamiliarized with Disney.

There are plenty of timeshares in general that haven't worked out well for owners. Reality is Disney is dependent on park decisions. The obvious death knell would be shutting down the parks, like happened in Heritage. If the parks starting making unfavorable decisions (like no APs), there's nothing DVC can do. You can already see plenty of this with the G+ and other hostile decisions. And there are less obvious death knells, like Disney not being cool anymore or some future vacation that isn't a theme park at all. Who knows? 50 years is a long time.

I own VGF1 points, once among the smallest resorts and most valuable points. DVC opened VGF2 and expanded the VGF1 association. It opened priced under what resale had been months earlier with a far, far inferior product, which I doubt I will ever stay in again. At the time, I was thrilled, and now I am not because they diluted my product. I can make the same argument for the treehouses and for Aulani in general in the DVC system.

DVC in general has had ever-increasing resale pricing, but there have been times that isn't true, like right now.

And DVC is still building. They are sitting on millions of unsold RIV and Aulani points (and a surprisingly big chunk of VGF) and still going forward with Poly and Trailers at WL. DVC can reach saturation, and it may already be there.

I own a lot of points, and I'm not selling right now. But I can see how the direction of DVC and Disney in general might make people second-guess buying, especially direct.

 

[Hubalorian]

There are plenty of timeshares in general that haven't worked out well for owners. Reality is Disney is dependent on park decisions. The obvious death knell would be shutting down the parks, like happened in Heritage. If the parks starting making unfavorable decisions (like no APs), there's nothing DVC can do. You can already see plenty of this with the G+ and other hostile decisions.

I own VGF1 points, once among the smallest resorts and most valuable points. DVC opened VGF2 and expanded the VGF1 association. It opened priced under what resale had been months earlier with a far, far inferior product, which I doubt I will ever stay in again. At the time, I was thrilled, and now I am not because they diluted my product. I can make the same argument for the treehouses and for Aulani in general in the DVC system.

DVC in general has had ever-increasing resale pricing, but there have been times that isn't true, like right now.

And DVC is still building. They are sitting on millions of unsold RIV and Aulani points (and a surprisingly big chunk of VGF) and still going forward with Poly and Trailers at WL. DVC can reach saturation, and it may already be there.

I own a lot of points, and I'm not selling right now. But I can see how the direction of DVC and Disney in general might make people second-guess buying direct.

Alunai isn’t a fair predictor of saturation as it is not theme park dependent. It’s an outlier being in Hawaii.

Riveria was the first resort with really limited resale market due to the restrictions, which will become the norm with the new resorts that are being built. Therefore it’s not shocking there are still unsold points

 

[RoseGold]

Alunai isn’t a fair predictor of saturation as it is not theme park dependent. It’s an outlier being in Hawaii.

Riveria was the first resort with really limited resale market due to the restrictions, which will become the norm with the new resorts that are being built. Therefore it’s not shocking there are still unsold points

Fine, remove Aulani. RIV has been for sale since May 2019, that's four years ago. VGF2 was only about 1.5M points and has been for sale for a year. It was the smallest offering in DVC in recent memory and the only one in many years. It's not sold out.

If DVC can't sell 1.5M unrestricted points at the flagship -- or millions at the shiny new tower on the shiny new skyliner they have been slogging for years with an army of salespeople all over WDW, can it sell the millions of points at the other tower? And the trailers?

It is possible for DVC to reach saturation. It might be there now. They are already sitting on millions of points they aren't selling and adding millions more. Scary time to buy direct.

 

[MartyParty]

Wanted to see what this community thinks of the direct pricing these days. For my part, we've owned since 2008 (250 pts at AKL). When we bought ($94/pt), we thought of it as locking in the potential to stay in a 1BR for ~ $250-$300 per night (dues were a lot lower way back then) vs staying in a hotel room at a moderate resort for just a little less. Made it seem really attractive.

We only recently became interested in adding on as our family has grown, so we looked at both direct and resale. Our analysis was that either VGF or RIV direct using a 5% cost of capital you'd be looking at a one BR for summer at somewhere around $800/night all in with direct.

I'm curious to get the Disboard feel on this - my analysis is that the cost per point at around $200pp for 200 points and point charts have gotten so high that it just doesn't feel worth the upfront cost anymore... hence we bought SSR resale despite the restrictions and the earlier end date. What says the Disboard community - are direct points and point charts too high to be a good value anymore? Particularly interested in the thoughts of those who maybe look at this a little differently than I do.

You've loaded a dangerous weapon on this board with the post! Ha Ha. The DVC cost value of resale vs. direct.

• I'll cut to the chase. DVC is enjoyment. If looking for investment then an index fund or high yield saving account will do nicely.
• If resale vs direct, main stream hotel rack rates will be the least expensive.
• If just resale or direct, resale financially is hard to beat. Vero, Hilton, and SSR resale are very attractive.

Aside from the above, for us its an enjoyment choice. Some of our early trips we stayed offsite in WDW. Our first trip we got a great deal on a Marriott hotel but lost on average about 1-2 hours a day in transportation back and forth (pre Uber). I also got a bit ill during one day of that first trip and it took me about ~3 hours to get back to the room. Trust I don't have to describe to you good folks here the details of my "illness". : )

As us parents and my parents get older, the heart is still willing but the body isn't quite the same. Thus a Bay Lake Tower location with 15'ish minute walk to the park is wonderful. And we can go back to the room mid-day, rest up, dinner, nap, and then still head back to the park. Staying on property gives us extra magic hours making for a nice less crowded less hot late night evening.

I'll kick back now and enjoy the rest of the thread. Bottom line its an enjoyment trade off. That's not to say someone who spends less via hotels or resale has less enjoyment. Its a preference for what financially, mentally, and emotionally works for each person.

 

[The Jackal]

Cash rates are a Disney myth - The contemporary tower and Beach Club/YC sell at cash rates. The rest of the deluxe properties have to be severely discounted to sell.
I would not be shocked to see VGF3 in the future as the cash side is still struggling with occupancy rates.

DVC is a way to convert former deluxe hotels to moderates- simple as that.

Buying direct or resale is simply a numbers game. If you want X points what is the difference in price. Last summer it was 4K for me - at times it was closer to 10k. With AP back most who go more than 10 days a year can save enough to make up a few thousand . But can you make up 10K if you only go 7 days a year ?

I think you are right on VGF 3, but I will up that and predict that they will probably make most of the exterior buildings DVC and build a 5 Star non DVC hotel right next to the MK on the monorail right next to the recent walkway bridge. There is more to all the road and other improvements they have made in the past few years.