DVC Direct Economics

[RoseGold]

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.

Disney has not tried to compete in the real luxury market, they admitted that before Covid. The real luxury players like Waldorf and Four Seasons have taken this market. The way they could compete in this price category is more creative offerings, like Starcruiser (not looking good) or resorts right on parks, like the one you suggest or the one that was planned for Epcot.

But for now, Disney hasn't even really talked about it. They seem fine offering a hotel experience they call deluxe in super old buildings with mediocre amenities for $800, and it seems to be working most of the time. I think the Epcot one is going to happen, actually. But I don't see it as a priority for Disney right now, when they can get most of the way there slapping some paint on the old buildings. Heck, at Yacht Club they didn't even do that.

 

[nalabear]

Disney has not tried to compete in the real luxury market, they admitted that before Covid. The real luxury players like Waldorf and Four Seasons have taken this market. The way they could compete in this price category is more creative offerings, like Starcruiser (not looking good) or resorts right on parks, like the one you suggest or the one that was planned for Epcot.

But for now, Disney hasn't even really talked about it. They seem fine offering a hotel experience they call deluxe in super old buildings with mediocre amenities for $800, and it seems to be working most of the time. I think the Epcot one is going to happen, actually. But I don't see it as a priority for Disney right now, when they can get most of the way there slapping some paint on the old buildings. Heck, at Yacht Club they didn't even do that.

They may go the Dolphin/Swan route again for either the Epcot site in front or MK. It would be interesting to do MK a la Disneyland Paris. Deluxe accommodations with Lux pricing

 

[kboo]

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...

Has anyone done a back of the envelope "analysis" how resale and direct prices (with and without incentive) may have tracked (or not) inflation? I feel like it's not a coincidence that Riviera's direct price started at $188 and then went lower with incentives.

If looking for investment then an index fund or high yield saving account will do nicely.

Do those exist right now? Asking for a friend ... (curious whether those investments right now would yield enough to beat inflation)

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.

We bought into BLT for that reason when our kids were still in strollers and the parents/inlaws where preferring to be close. Close locations are good for the toddler set too.

 

[buzlite]

Counter point:
We bought direct and the more time that goes by the happier I am that we did. The biggest factor is the ability to book the new DVC resorts. I might get sick of VGF if I go 5 years in a row. But then I could stay at AKL or RIV. Over time the number and quality of resorts will go up. For resale owners the opposite will occur. The number of resorts and the quality will go down.
We will probably book a stay at DLT soon this year and maybe Poly 2 in the future. I’m not worried we’ll get tired of DVC and not get full value. I think if we purchased resale we may have regretted it.
Honestly it’s two different products at this point. Resale should be called Legacy DVC and is definitely the better option for more budget minded families. But I wouldn’t want to spend 20k and not be able to stay at a shiny new DVC hotel. Even if it’s just once.

 

[Epcot Forever Forever]

Do those exist right now? Asking for a friend ... (curious whether those investments right now would yield enough to beat inflation)

High yield savings are paying between 4 and 5 percent right now. Beating expected forward looking inflation, at least.

 

[Epcot Forever Forever]

Counter point:
We bought direct and the more time that goes by the happier I am that we did. The biggest factor is the ability to book the new DVC resorts. I might get sick of VGF if I go 5 years in a row. But then I could stay at AKL or RIV. Over time the number and quality of resorts will go up. For resale owners the opposite will occur. The number of resorts and the quality will go down.
We will probably book a stay at DLT soon this year and maybe Poly 2 in the future. I’m not worried we’ll get tired of DVC and not get full value. I think if we purchased resale we may have regretted it.
Honestly it’s two different products at this point. Resale should be called Legacy DVC and is definitely the better option for more budget minded families. But I wouldn’t want to spend 20k and not be able to stay at a shiny new DVC hotel. Even if it’s just once.

That’s all very valid, but the question was about the economics vs just paying cash, which you can do at any resort, no matter who you are.

 

[RoseGold]

But I wouldn’t want to spend 20k and not be able to stay at a shiny new DVC hotel. Even if it’s just once.

Now, the discussion is 40K for 200 direct points vs 20K for 200 SSR points. So the discussion is to pay 20K plus another 20K to stay at new DVC hotel.

 

[take36]

Counter point:
We bought direct and the more time that goes by the happier I am that we did. The biggest factor is the ability to book the new DVC resorts. I might get sick of VGF if I go 5 years in a row. But then I could stay at AKL or RIV. Over time the number and quality of resorts will go up. For resale owners the opposite will occur. The number of resorts and the quality will go down.
We will probably book a stay at DLT soon this year and maybe Poly 2 in the future. I’m not worried we’ll get tired of DVC and not get full value. I think if we purchased resale we may have regretted it.
Honestly it’s two different products at this point. Resale should be called Legacy DVC and is definitely the better option for more budget minded families. But I wouldn’t want to spend 20k and not be able to stay at a shiny new DVC hotel. Even if it’s just once.

I get the feeling of being restricted to where you can stay but with the thousands you saved along with the time value of money for those thousands you can do a cash stay and still come out way ahead.

 

[PrincessKL]

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.

Would it be possible that they are adding a new skyliner station? I saw people here talking about it going from Coronado Springs to Magic Kingdom.

 

[Drewski77]

I get the feeling of being restricted to where you can stay but with the thousands you saved along with the time value of money for those thousands you can do a cash stay and still come out way ahead.

Agree with this, there is nothing stopping a resale owner from renting points out and staying at the shiny new resorts or paying cash with the savings as you suggest.

It's entirely OK, but a direct purchase is an emotional one more than a financial or flexibility one, and again, nothing wrong with that at all.

 

[fluffybunny88]

I just went through this decision on buying my first contract. We knew we wanted to buy at BLT as our home resort, is it the cheapest points no, but buy where you want to stay right?

The $11,000 savings for me for my 225 point contract was something I could not ignore. The biggest benefit for me that we lost by buying resale was the AP option, but we only need 2 annual passes, just myself and my wife, and did the math, the 11K would pay for a lot of annual passes. The other negative is no RIV and other future resorts, but our thought if we really wanted to stay there was rent the points then get a confirmed reservation at RIV with the proceeds from renting our points.

 

[take36]

I just went through this decision on buying my first contract. We knew we wanted to buy at BLT as our home resort, is it the cheapest points no, but buy where you want to stay right?

The $11,000 savings for me for my 225 point contract was something I could not ignore. The biggest benefit for me that we lost by buying resale was the AP option, but we only need 2 annual passes, just myself and my wife, and did the math, the 11K would pay for a lot of annual passes. The other negative is no RIV and other future resorts, but our thought if we really wanted to stay there was rent the points then get a confirmed reservation at RIV with the proceeds from renting our points.

I know its not healthy but I stalk the cash prices even after booking with my points because sometimes the deals are so good (and back in the day with free dining) that I have more then once rebooked my dvc stay and booked it cash. This way I save money (not really) and get another trip!

That 11k you saved is an ABD trip lol!

 

[lilsonicfan]

I do enjoy the economics and math-based discussions that pop up around here. And it constantly surprises me that people are able to shell out $40,000+ on direct contracts, or buy multiple contracts, etc, but very different perspective here as a west coast Canadian - hello, crappy exchange rate - who doesn't get to Orlando nearly enough (in my opinion). So yeah, resale works for me, I won't mind at all staying at my home resort, and I paid less than half of what the direct-with-incentive AKL points were going for last month. I figure that if I absolutely have to sell 10 years down the road, the delta between what I paid per point and what I'll sell for is a lot smaller than if I'd bought direct.

 

[PrincessKL]

I just went through this decision on buying my first contract. We knew we wanted to buy at BLT as our home resort, is it the cheapest points no, but buy where you want to stay right?

The $11,000 savings for me for my 225 point contract was something I could not ignore. The biggest benefit for me that we lost by buying resale was the AP option, but we only need 2 annual passes, just myself and my wife, and did the math, the 11K would pay for a lot of annual passes. The other negative is no RIV and other future resorts, but our thought if we really wanted to stay there was rent the points then get a confirmed reservation at RIV with the proceeds from renting our points.

This is exactly why we bought BLT resale two years ago! I looked at prices for BLT resale and RIV direct, and we realized that it takes 8 years to make up the differences by buying annual passes for two of us at that time. And if you strategically use annual passes for two years of trips, it becomes 16 years!

Fast forward, we stayed at lots of DVC properties using our BLT points and we even tried RIV by renting points. Now we really want the blue card and the ability to stay at all new hotels.

Not saying that you shouldn’t do resale. It was definitely the best thing we have done.

 

[tom1944]

In the next 15 years it is possible that there are 5 or 6 restricted resorts at DVC so having direct points becomes more important in my opinion


I am happy that we purchased resale first which will allow us to purchase direct points in smaller quantities.

I believe resale points will be the core of our stays but having direct points that enable stays at restricted resorts on a 2 or 3 year cycle will be a nice addition

 

[Duckbug.Ducktales]

I really can't emphasize enough what a difference the ability to pay with credit cards can make in bridging the resale-direct delta. Of course, it depends on how wide the margin is for the specific resort at the time of purchase.

In my case last year during the BLT fire sale, the delta was $7,650 for the 200 total points (150 + 50). To compare apples to apples, I calculated using the price of loaded contracts and assumed the sellers would sell with a $3 pp discount.

After accounting for renting the 2021 loaded pts from the resale contracts, that purchase would have come to $29,050.
After renting the 2021 pts on the direct contracts, the purchase came to $36,700. So that's a difference of $7650.

DH and I each put half of the direct purchase on our Amex Biz Plat cards, netting us a total of 355K MRs (Amex points) from the spend and the sign up bonuses. The points guy values MRs at 2 cents each, so we could say the points were worth at the least $7,101. Taking that at face value, the delta becomes just ~$500, totally worth the convenience and having no restrictions/ability to combine with our RVA points. (But we actually got a much higher value than that. We used those points on flights for several trips: California, Iceland, France, and Germany, all in business class lie-flat seats that would have cost $5K or more each). Not to mention that the cards had 12 months 0% interest, so that was a nice perk.

Had we not been able to use credit cards for our purchase we might have thought differently. And of course, for someone who would have no use for CC points or airline miles, it's a moot point.

 

[take36]

I really can't emphasize enough what a difference the ability to pay with credit cards can make in bridging the resale-direct delta. Of course, it depends on how wide the margin is for the specific resort at the time of purchase.

In my case last year during the BLT fire sale, the delta was $7,650 for the 200 total points (150 + 50). To compare apples to apples, I calculated using the price of loaded contracts and assumed the sellers would sell with a $3 pp discount.

After accounting for renting the 2021 loaded pts from the resale contracts, that purchase would have come to $29,050.
After renting the 2021 pts on the direct contracts, the purchase came to $36,700. So that's a difference of $7650.

DH and I each put half of the direct purchase on our Amex Biz Plat cards, netting us a total of 355K MRs (Amex points) from the spend and the sign up bonuses. The points guy values MRs at 2 cents each, so we could say the points were worth at the least $7,101. Taking that at face value, the delta becomes just ~$500, totally worth the convenience and having no restrictions/ability to combine with our RVA points. (But we actually got a much higher value than that. We used those points on flights for several trips: California, Iceland, France, and Germany, all in business class lie-flat seats that would have cost $5K or more each). Not to mention that the cards had 12 months 0% interest, so that was a nice perk.

Had we not been able to use credit cards for our purchase we might have thought differently. And of course, for someone who would have no use for CC points or airline miles, it's a moot point.

This is the way.

But for many of us we've been churning for too long and all the good cards we already have or are no longer eligible for bonuses!

 

[Duckbug.Ducktales]

This is the way.

But for many of us we've been churning for too long and all the good cards we already have or are no longer eligible for bonuses!

Aw. Sometimes the lifetime language really only means 6 years or so, from what I hear.

 

[take36]

Aw. Sometimes the lifetime language really only means 6 years or so, from what I hear.

Amex finally shut me down lol, pop up jail after so many plat/gold/green cards over the decades

 

[Epcot Forever Forever]

Amex finally shut me down lol, pop up jail after so many plat/gold/green cards over the decades

Amen. IIRC I had 31 Citi HHonors cards back when you could get two new ones every 60 days and Citi hasn’t forgiven me.