DVC Direct Economics

[MartyParty]

”Pay once cry once”.

Love it! First time I’ve heard that saying but oh so true.

 

[broncofan]

Absolutely no guarantee…but resale 100% guarantees you don’t have a chance…

You do hear the same argument, though, regarding resale…which is it still gives you a lot of options at 7 months…so being shut out of new isn’t a big deal., Direct or resale, trading is not guaranteed.

When the 2042 resorts are gone, regardless of what happens, it really limits those with resale points to the big three.

Most resale BLT, Poly, CCV, and VGF owners are not buying to SAP…and if they are, it may be to to try for BCV or BWV…but I don’t think the bulk are trading out to stay at those easy to get resorts.

That’s why I think ii is more important now to make sure you are okay with where you are buying resale because the ease at which to use SAP is changing…

This is a really good point, and I thought long and hard about buying BLT instead of SSR resale as a result! Although I haven’t quite figured out how I think all the changes with resale restrictions plus the end of the Covid related availability crunch will play out,

I think those resale restrictions really will be a serious point in favor of direct points, so we feel very fortunate to have bought our AKL direct many years ago. For example, wouldn’t surprise me at all if Riviera and VDH are pretty easy to get at 7 months in the future given there won’t be any competition from resale at any of the original 14 (in the case of VDH I also expect way more people than VGC to consider using points at WDW at least occasionally).

 

[nalabear]

Rule #1: Buy where you want to stay. This is where Direct vs Resale talk happens and the true Blue Benefits is what was described best earlier: New Shiny products. Direct is you way and the premium paid for that. Is it worth it? Only you and family can justify that on your scales.

If you're a value based consumption person -- resale will forever win over Direct. Disney isn't targeting you for Direct sales. They will have to work REALLY hard to get you to sign. Disney is targeting 'first day, want to do this now, and new swag, new celebration, new x,y,z disney' type goer over 50 years. Take my money Mickey.



For experienced well travelled disney folk : Resale for Sleep Away Points (SAP) is a whole different subject matter.

 

[Duckbug.Ducktales]

I take issue with the idea that DVC math doesn't add up regardless of if you go resale or direct. The savings are there if you would want to be staying on property, particularly when compared with deluxe cash rates. Maybe at the 2042 resorts the math gets dicey if you're comparing to discounted cash rates of regular hotel rooms, but with the bigger units it would still be a savings.

 

[take36]

I take issue with the idea that DVC math doesn't add up regardless of if you go resale or direct. The savings are there if you would want to be staying on property, particularly when compared with deluxe cash rates. Maybe at the 2042 resorts the math gets dicey if you're comparing to discounted cash rates of regular hotel rooms, but with the bigger units it would still be a savings.

I think if you are not a disney diehard and "must" stay at a disney resort and "must" go to disney yearly there are some problems.

DVC math is just that math. Compare it to other investments, consider time value of money, alternative options, predictability of value, and confidence of your models. There is no room for "magic." It is just digits on a screen. I have been told I lucked with my GCV purchase a year after it was released, it 3x in value and I've had great accommodations and beautiful memories and will continue to do so.

But math says that if cash that I had at the time was sitting in a brokerage in a regular mutual fund would've 4x (assuming I took dividends out to maybe pay for part of my hotels). And that is me "winning the lotto." And also I would've had that money available to me the entire time for other uses/emergencies even during the market down years vs the money given to DVC is pretty much gone unless I sell or rent them out.

I think that is where the DVC math "doesn't add up" but everyone knows there is an emotional component to DVC and to our money quite frankly. There are plenty of Disney fans that absolutely thinks DVC is a rip off (most in my family!). If you must do DVC math then you must put a value on the "magic" which ultimately makes any spreadsheet you do specific to you. I run my "math" with each potential purchase to keep me grounded in the real world, but I have shared before that my best DVC "investment" was GCV and it was straight up luck.

That's why I think the membership "extras" while maybe dollar wise not a big deal, is absolutely a big deal for members to feel being part of the magic. I know disney trying to discourage resale but man I wish they lowered that initial direct price. We want more people in the "club" and get that good magical feeling and enjoying perks that make you feel a bit special-er. This is timeshare yes, but it use to be so much more!

 

[tom1944]

I don’t compare vacation money to any investment vehicle I have.

To me it is a vacation cost to a place I want to go in the type of accommodation I want to use

 

[take36]

I don’t compare vacation money to any investment vehicle I have.

To me it is a vacation cost to a place I want to go in the type of accommodation I want to use

I think these days we are all about optimization and min/max (at least in industry) that it has spilled over to our daily lives. Its all about getting the best value, smartest deal, and bang for our buck. Gone are some of the intangibles, human factors, and "magic." But its somewhat valid as DVD has been using their spreadsheets to maximize the dollars they get from us so its seems only fitting we counter with our own spreadsheets!

Once you decide that DVC is for you in terms of your vacation style then it is best to get what you want whether that is the home resort you really want or the 150 points for full membership. If I had to start again today, there is no way I can afford direct but I would be okay with resale with no benefits because my family does not need to stay at a deluxe much less a disney deluxe every time. But I would be lying if I were to say I would be ambivalent with missing out on moonlight magic (amazing!) and DL lounges.

 

[Duckbug.Ducktales]

I think if you are not a disney diehard and "must" stay at a disney resort and "must" go to disney yearly there are some problems.

DVC math is just that math. Compare it to other investments, consider time value of money, alternative options, predictability of value, and confidence of your models. There is no room for "magic." It is just digits on a screen. I have been told I lucked with my GCV purchase a year after it was released, it 3x in value and I've had great accommodations and beautiful memories and will continue to do so.

But math says that if cash that I had at the time was sitting in a brokerage in a regular mutual fund would've 4x (assuming I took dividends out to maybe pay for part of my hotels). And that is me "winning the lotto." And also I would've had that money available to me the entire time for other uses/emergencies even during the market down years vs the money given to DVC is pretty much gone unless I sell or rent them out.

I think that is where the DVC math "doesn't add up" but everyone knows there is an emotional component to DVC and to our money quite frankly. There are plenty of Disney fans that absolutely thinks DVC is a rip off (most in my family!). If you must do DVC math then you must put a value on the "magic" which ultimately makes any spreadsheet you do specific to you. I run my "math" with each potential purchase to keep me grounded in the real world, but I have shared before that my best DVC "investment" was GCV and it was straight up luck.

That's why I think the membership "extras" while maybe dollar wise not a big deal, is absolutely a big deal for members to feel being part of the magic. I know disney trying to discourage resale but man I wish they lowered that initial direct price. We want more people in the "club" and get that good magical feeling and enjoying perks that make you feel a bit special-er. This is timeshare yes, but it use to be so much more!

Yes, of course, if you want to invest money or don't go to Disney frequently or do visit frequently but don't need to stay on property or are ok with the All-Stars... no need to look at DVC. Even the guides will tell you as much.

Otherwise, DVC can be a good way to save on deluxe accomodations at Disney resorts and that's great.

 

[Epcot Forever Forever]

I take issue with the idea that DVC math doesn't add up regardless of if you go resale or direct. The savings are there if you would want to be staying on property, particularly when compared with deluxe cash rates.

I’m looking for a pretty substantial savings to make all of the restrictions (booking windows, difficulty booking close in, cancellation penalties, etc) worth it. Direct doesn’t give me enough savings, or honestly even close to enough savings to justify that for me.

Y’all can use whatever floats your boat in terms of a financial break point. It is absolutely possible to save money direct. But for me, and what I know I want to do, it doesn’t make financial sense, and it’s not particularly close to making financial sense.

 

[broncofan]

I’m looking for a pretty substantial savings to make all of the restrictions (booking windows, difficulty booking close in, cancellation penalties, etc) worth it. Direct doesn’t give me enough savings, or honestly even close to enough savings to justify that for me.

Y’all can use whatever floats your boat in terms of a financial break point. It is absolutely possible to save money direct. But for me, and what I know I want to do, it doesn’t make financial sense, and it’s not particularly close to making financial sense.

This sums it up for me - what I loved about the program in 2008 was that I felt like the NPV of the hotel stays minus dues was about twice the purchase price. A good deal for Disney (return on capital up front) and for me. Now it’s more like a small 10-20% over the purchase price. Which may very well work for some, especially if you are willing to pay $700-$1000 per night for the kind of suite accommodations DVC has. That wasn’t and isn’t me - the power of DVC for us was allowing us to stay in Disney hotels / accommodations we’d have never chosen otherwise.

 

[take36]

This sums it up for me - what I loved about the program in 2008 was that I felt like the NPV of the hotel stays minus dues was about twice the purchase price. A good deal for Disney (return on capital up front) and for me. Now it’s more like a small 10-20% over the purchase price. Which may very well work for some, especially if you are willing to pay $700-$1000 per night for the kind of suite accommodations DVC has. That wasn’t and isn’t me - the power of DVC for us was allowing us to stay in Disney hotels / accommodations we’d have never chosen otherwise.

Yes! At 2008 prices it was a great savings. And back then there wasn’t the four seasons or westin so if you wanted “luxury” you got to stay at disney land/world.

 

[Duckbug.Ducktales]

I’m looking for a pretty substantial savings to make all of the restrictions (booking windows, difficulty booking close in, cancellation penalties, etc) worth it. Direct doesn’t give me enough savings, or honestly even close to enough savings to justify that for me.

Y’all can use whatever floats your boat in terms of a financial break point. It is absolutely possible to save money direct. But for me, and what I know I want to do, it doesn’t make financial sense, and it’s not particularly close to making financial sense.

Sure, I definitely agree that there are a lot of personal aspects that affect whether the decision is worthwhile for an individual. If anybody asked me whether they should buy DVC my first response would be "it depends." Because it really depends on a lot of factors even if you frequent Disney regularly.

Further, I also think the price of direct is getting higher at very high pace. I mean, just three years ago one could buy Riviera in the $150s/$160s.

So the value proposition is a personal calculation, I was just objecting to the suggestion of this being only an emotional purchase with no savings.

 

[PrincessKL]

Sure, I definitely agree that there are a lot of personal aspects that affect whether the decision is worthwhile for an individual. If anybody asked me whether they should buy DVC my first response would be "it depends." Because it really depends on a lot of factors even if you frequent Disney regularly.

Further, I also think the price of direct is getting higher at very high pace. I mean, just three years ago one could buy Riviera in the $150s/$160s.

So the value proposition is a personal calculation, I was just objecting to the suggestion of this being only an emotional purchase with no savings.

Yes! I wish I had bought Riviera at that time! The DVC math did not make sense to me then because I could pay the same money yearly (totaled over 50 years) to stay at Caribbean beach when I did my math. But we had no experience of deluxe hotel back then.

Now that DVC is even more expensive, but the math actually makes sense to me now because we want to stay at a deluxe hotel.

 

[tom1944]

I wonder if a significant number of people purchase when they come into discretionary funds.

A bonus at work, a spouse goes back to work, daycare costs end, lump sum retirement payment, inheritance, mortgage is paid off, downsize of home etc.

 

[broncofan]

I wonder if a significant number of people purchase when they come into discretionary funds.

A bonus at work, a spouse goes back to work, daycare costs end, lump sum retirement payment, inheritance, mortgage is paid off, downsize of home etc.

This reminded me of another point - whether DVC is a good deal at all, either direct or resale, can have a lot to do with an individual / family approach to money in general.

For some, using a windfall on DVC direct might be a very good financial decision, particularly if they would be prone to otherwise spend that windfall on short term consumption or on rapidly depreciating assets.

Similar with financing - I wouldn’t recommend borrowing for DVC. However, that’s based on my own financial management strategy - for someone with a different approach, it can absolutely be the right decision. Allows them to buy now, make the monthly payments, and then own a valuable asset in 4/8/12 years depending on term. That can work as almost something like a forced savings mechanism - yes there’s interest but if you would have likely spent that money on something else I can’t argue that it doesn’t make sense.

 

[MartyParty]

I wonder if a significant number of people purchase when they come into discretionary funds.

A bonus at work, a spouse goes back to work, daycare costs end, lump sum retirement payment, inheritance, mortgage is paid off, downsize of home etc.

That’s an interesting question. My wife and I have talked about this a lot. IF we could do it over, we would have bought direct points in 2010 at VGC and BLT. Nothing crazy. Maybe 100 or 150 at each. But we had a not so great time share experience a few years before and weren’t interested. And doing the hotel rack rate at the time we just couldn’t mentally get there. Plus, our family and preferences evolved.

So as of today we are in. Window missed but we eventually got there. No lasting regret. It’s just life.

 

[tom1944]

That’s an interesting question. My wife and I have talked about this a lot. IF we could do it over, we would have bought direct points in 2010 at VGC and BLT. Nothing crazy. Maybe 100 or 150 at each. But we had a not so great time share experience a few years before and weren’t interested. And doing the hotel rack rate at the time we just couldn’t mentally get there. Plus, our family and preferences evolved.

So as of today we are in. Window missed but we eventually got there. No lasting regret. It’s just life.

I look back to 1996 and say what if but we would most likely have sold it by now.

In a lot of ways this purchase is better because it is going to be centered around our 4 year old granddaughter.

In fact she has been going around telling everyone she is going to Disney and asking them if they want to come.

 

[broncofan]

I look back to 1996 and say what if but we would most likely have sold it by now.

In a lot of ways this purchase is better because it is going to be centered around our 4 year old granddaughter.

In fact she has been going around telling everyone she is going to Disney and asking them if they want to come.

How does one value that in $. There’s no spreadsheet that can do that math.

 

[bakerworld]

I wonder if a significant number of people purchase when they come into discretionary funds.

A bonus at work, a spouse goes back to work, daycare costs end, lump sum retirement payment, inheritance, mortgage is paid off, downsize of home etc.

For use, we purchased on a fluke (anytime FPs) and we financed it **gasp** - LOL. Apparently there was a economic issue in 08, along with DVC having multiple offerings at the time, which resulted in big incentives to purchase direct. Whatever. We bit.

Have to say I used some math proposed by someone here on disboards and we plopped out at about $275/pn in studio to stay in walkable locations on WDW property. For us, this was worth it. Then I loused that up by talking the better half into purchasing 30 points at BC in 2018 at $225/p for which we had to hand over ready cash (minimum to finance is 50 points) and tipped him into 'no more' territory (he hates using savings for anything). I think that cha-cha boosted us to $327/pn. Last week I was pricing a 35% passholder discount for the Coronado Tower for $327/pn so I guess I'm still ok with it. LOL

 

[RoseGold]

That’s an interesting question. My wife and I have talked about this a lot. IF we could do it over, we would have bought direct points in 2010 at VGC and BLT. Nothing crazy. Maybe 100 or 150 at each. But we had a not so great time share experience a few years before and weren’t interested. And doing the hotel rack rate at the time we just couldn’t mentally get there.

Back then, the deluxes were still very expensive, but rack rates on the moderate were much more compelling. I stayed in a Little Mermaid room for $150 in 2018. It's only recently that the values have even gotten expensive. But DVC has also gotten much more expensive.