DVC Direct Economics

[RoseGold]

I like the Art of Animation 1BR if I really need the space and am on a budget.

This is the room I used when I did my initial math to buy. It went up so much, pricing on it now is insane. Over $500 on a random Tuesday in August.

 

[take36]

This is the room I used when I did my initial math to buy. It went up so much, pricing on it now is insane. Over $500 on a random Tuesday in August.

Yeah prices these days! With the summer discount, I am looking at just under 500/night (2400 for 5 nights) including tax for a Cars room for my stay in August. The kids want all star music though so I am still trying to work it out.

 

[RoseGold]

Yeah prices these days! With the summer discount, I am looking at just under 500/night (2400 for 5 nights) including tax for a Cars room for my stay in August. The kids want all star music though so I am still trying to work it out.

The Waldorf is $250 for my August dates on Hotwire blind. I'm still thinking about keeping the points and doing that.

 

[take36]

I find it telling that up until 2015 DVC said their savings was 70% and now I think their marketings says 40%. When I see that I often think with the Passholders discount of 35% is 5% savings worth the investment.

I went on a full tour at Bay lake a year ago and they did not realize I was already a member so they were giving me general info and I did not want to interrupt lol.

They no longer have any hard saving numbers or signage at least when I was there. It is more about lifestyle and family memories. They approximate savings asking how much you paid for your accommodations (I was staying at contemp club thanks to some disney magic so they used "about one thousand a night") and then did a basic 30k divided by 40 years and ran with that. It is really up to you to do your own numbers to see how much you can save.

I use to price out my dvc stays in cash and see how much I would've spent. May be its luck, change in pattern with the kids or just how it is but with the discounts and traveling around the school break times, I am still spending about 500-700 for deluxes, 200-300 for moderates, and 150-250 for values. So the simple math still works with dvc, kind of?

 

[take36]

The Waldorf is $250 for my August dates on Hotwire blind. I'm still thinking about keeping the points and doing that.

Waldorf is so good! All of the those bonnet creek ones are fantastic. I haven't stayed at the Waldorf since the pandemic but the hilton across the street with the lazy river and the jw marriot I have stayed at since, I hate to say it, way better in service, rooms, value, and comfort then my fancy gflo and nostalgia (for me) bay lake.

Do you usually drive for off site resorts? I ended up just ubering/lyft with all money I "saved." when off site.

My kids insist on the all star music this trip after watching some youtube videos, I think they are the age where that appeals to them. I will bank the gflo points burning a hole in my pocket for next year.

 

[Epcot Forever Forever]

This is the room I used when I did my initial math to buy. It went up so much, pricing on it now is insane. Over $500 on a random Tuesday in August.

The All Star Music family suites ones are 40% less and, after the redesign, a more functional room. The cooktop and laundry (and for most resorts, location) add value to a 1 bedroom vs the ASMu suites but I think it’s a good comp in 2023.

 

[Brian Noble]

assuming DVC cost X amount of dollars, and that money would be spent either on DVC or retirement savings, is not a good argument to make.

That's not the argument people are making---at least, not the people I have in mind!

Instead, the argument is this: Imagine you have a particular set of DVC resort nights planned for the next many years. There are two different ways you can pay for those stays. One way: buy the right number of DVC points to make those stays happen, paying the entire purchase cost in cash, and then dues as you go. The other way: Take the purchase price and invest it in a low-fee index fund. Every year, you add to that fund the amount that would have gone to dues, and then you rent the DVC nights you wanted from (a) Disney or (b) from an owner at the prevailing rates, paying for it out of that fund. But, you will take exactly the same vacations in these hypothetical futures--the only difference is how you pay for it.

The question then is: which of those options costs more? If your hypothetical investment account has money left over then renting is a good deal. If you run out of money in your hypothetical investment account, then buying is a good deal.

It's a little more complicated, because to answer that you have to make some assumptions about how the market will behave, how rental prices will change, how Dues will change, etc. But, MouseSavers has a spreadsheet that you can use to play with different assumptions, allowing you to come up with the answer you prefer. ;-)

I find it telling that up until 2015 DVC said their savings was 70% and now I think their marketings says 40%. When I see that I often think with the Passholders discount of 35% is 5% savings worth the investment.

I think of it a little differently. You are not only getting that extra 5%, but you are also guaranteeing that you will get that discount on the room you want at the resort you want for the dates you want. That might matter, because your preferred room type/resort may not be part of the discounted offer for some or all of your nights, or it might be less than the expected 35%, or whatever.

 

[take36]

That's not the argument people are making---at least, not the people I have in mind!

Instead, the argument is this: Imagine you have a particular set of DVC resort nights planned for the next many years. There are two different ways you can pay for those stays. One way: buy the right number of DVC points to make those stays happen, paying the entire purchase cost in cash, and then dues as you go. The other way: Take the purchase price and invest it in a low-fee index fund. Every year, you add to that fund the amount that would have gone to dues, and then you rent the DVC nights you wanted from (a) Disney or (b) from an owner at the prevailing rates. But, you will take exactly the same vacations in these hypothetical futures--the only difference is how you pay for it.

The question then is: which of those options costs more? If your hypothetical investment account has money left over then renting is a good deal. If you run out of money in your hypothetical investment account, then buying is a good deal.

It's a little more complicated, because to answer that you have to make some assumptions about how the market will behave, how rental prices will change, how Dues will change, etc. But, MouseSavers has a spreadsheet that you can use to play with different assumptions, allowing you to come up with the answer you prefer. ;-)


I think of it a little differently. You are not only getting that extra 5%, but you are also guaranteeing that you will get that discount on the room you want at the resort you want for the dates you want. That might matter, because your preferred room type/resort may not be part of the discounted offer for some or all of your nights, or it might be less than the expected 35%, or whatever.

Very true! DVC is more like a bond in terms of low but somewhat guaranteed returns (savings) vs the broader market (cash rates).

I will disagree about always getting the resort and dates I want though! Always feels like the hunger game for me lol

 

[kboo]

So, for those that have decided direct was the right answer, other than member events and ability to have unrestricted points is there any other factor that swayed you to choose direct over resale, especially if you were in an older demographic?

• Since we intend to pass on to family then direct works as I want them to enjoy the maximum flexibility and benefits (us as well while we here!).
• If it doesn’t work out that the family wants the points, I’ve structured them in to smaller contracts to sell down, recoup some of the costs, and keep only what my wife and I need.

We are older parents too - kids are school age, we are in our 50s. We are lucky enough that we got in earlier when resale points could book anywhere except cruises and hotels, which we didn't want to do anyway. So we toyed with the idea of buying BWV or BCV resale since we (adults) loved the Crescent Lake area, and EP and HS are probably our favorite parks. But the 2042 end date had us still pausing -- I hope to be happily retired and going to WDW more, not less, by then, so we opted for a longer end date. The added benefit of buying direct is we've broken up the contracts so that we can sell off in smaller chunks if we need/want to, and the carry costs may be easier if the kids need to make that decision later as well. (Additionally, we hope to pass on enough money to them that they could pay dues for a while.)

But, MouseSavers has a spreadsheet that you can use to play with different assumptions, allowing you to come up with the answer you prefer. ;-)

I like the smiley because it is true that you can pretty much make the chart come up with the answer you want to justify your decision. Case in point - we stayed a few times at VGF over Christmas and, although it is super-crowded then, we are a) locked in to school breaks for a while, and b) it is a special kind of magic during that season. So while I would never have paid cash for such a stay (and bringing my dad, no less, so now we are looking at a 2br!), I did compare it to renting points for a similar unit at that time of year, at a bargain price of $19.50, and came out with a break even after 4 stays. But of course, without DVC we wouldn't have even been thinking about Disney World at VGF over Christmas.

 

[Cfabar1]

The question is, and I don't mean this flippantly, how much do you care about fancy hotels?

DVC is definitely transitioning to being an upscale product compared to the days of the "Disney Vacation Club".... resorts like VGF and Riviera are setting a higher bar for quality and guest expectations, along with much higher points charts and cost per point by the way.

Touring Boardwalk to say VGF is a real eye opener.... And Boardwalk at least offers one of the most prime locations, arguably a better location than VGF.

 

[NorCalFanatic]

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[KalamityJane]

The question is, and I don't mean this flippantly, how much do you care about fancy hotels?

DVC is definitely transitioning to being an upscale product compared to the days of the "Disney Vacation Club".... resorts like VGF and Riviera are setting a higher bar for quality and guest expectations, along with much higher points charts and cost per point by the way.

Touring Boardwalk to say VGF is a real eye opener.... And Boardwalk at least offers one of the most prime locations, arguably a better location than VGF.

There’s a nice resort near us that runs 300-500/nt with complimentary valet parking, warm cookies at night, free soda and popcorn in their movie theater or they will bring it to your room, robes for all to use, et al.

I 100% do not mind paying if that’s the type of stay I get. DVC/Deluxe resorts used to do more of this but little by little it has whittled down. I would buy so much DVC if they brought back even a portion of the magic. I remember my mom totally getting why we loved staying deluxe when they had baggage service to the plane, Magical Express, and so forth. I hope it is coming back

 

[WeIcomeHome]

We are planning to buy our first contract at Poly 2 and our decision for a purchase is leaning towards buying direct simply because we are in our 30s and expect to be visiting Disney well after the 2042 resorts are no longer available to resale purchasers. The premium to have direct points that can be used anywhere is worth it to us. Initially, we had also considered having blue card/DVC-Y benefits as another factor pushing us towards direct but my wife is going to be grandfathered in on those after being added to her parent's DVC deeds. Still the future flexibility of the points is where we are seeing the value in a direct purchase.

One thing a lot of people overlook when purchasing DVC, particularly for resorts with 40+ years remaining on the deed, is that the initial purchase cost will only be a small percentage of your overall costs even when ignoring park/food/travel costs. Maintenance fees will likely end up 3 to 5+ times the purchase price over the length of the contract. Initial purchase price will range somewhere around 15 to 25% of total DVC costs. If you factor in park tickets, food and travel expenses, this lowers the % of the total costs even more.

I estimate the additional cost of Poly2 direct over the cost of resale poly1 to be approximately 5% of the overall expected costs of Disney trips for the duration of my contract. 5% is likely on the high end as I only accounted for inflation on the maintenance fees but not for food/park tickets/travel costs.

Would you pay a 5% premium on your overall Disney trip costs each year to have direct point benefits over the coarse of 50 years? Or to put it another way, do you think the benefits of direct membership could save you over 5% of your overall expenses each year compared to resale points?


Regarding opportunity costs of a DVC purchase - I've put together a break even analysis spreadsheet for tracking DVC stays over the coarse of your contract and inlcuded a break even calculation with and without factoring in the opportunity cost of the initial purchase. When comparing resale poly prices to estimated direct pricing for new resorts along with current poly room/point rental rates, what I found for direct pricing is that when ignoring opportunity costs, you will break even on a full length contract regardless if you assume rack rates or point rental rates for cost of the rooms if you didn't purchase DVC. When accounting for opportunity costs, you would only break even when assuming rack rates of rooms but not if using point rentals. This is assuming 3% increase in MF, rack rates, and point rental rates and average investment returns of 7% after inflation each year. Buying direct on shorter contracts at older resorts with less than 40 years remaining likely won't ever make financial sense.

 

[Drewski77]

Resale of 2042 resorts is definitely a different proposition than say SSR and others right now.

We are really enjoying using our SSR points at other resorts that have a much longer expiration than 2042, and the resale cost of SSR right now (and lower MF) is a great option for many.

 

[HyperspaceMountainPilot]

We are planning to buy our first contract at Poly 2 and our decision for a purchase is leaning towards buying direct simply because we are in our 30s and expect to be visiting Disney well after the 2042 resorts are no longer available to resale purchasers. The premium to have direct points that can be used anywhere is worth it to us. Initially, we had also considered having blue card/DVC-Y benefits as another factor pushing us towards direct but my wife is going to be grandfathered in on those after being added to her parent's DVC deeds. Still the future flexibility of the points is where we are seeing the value in a direct purchase.

One thing a lot of people overlook when purchasing DVC, particularly for resorts with 40+ years remaining on the deed, is that the initial purchase cost will only be a small percentage of your overall costs even when ignoring park/food/travel costs. Maintenance fees will likely end up 3 to 5+ times the purchase price over the length of the contract. Initial purchase price will range somewhere around 15 to 25% of total DVC costs. If you factor in park tickets, food and travel expenses, this lowers the % of the total costs even more.

I estimate the additional cost of Poly2 direct over the cost of resale poly1 to be approximately 5% of the overall expected costs of Disney trips for the duration of my contract. 5% is likely on the high end as I only accounted for inflation on the maintenance fees but not for food/park tickets/travel costs.

Would you pay a 5% premium on your overall Disney trip costs each year to have direct point benefits over the coarse of 50 years? Or to put it another way, do you think the benefits of direct membership could save you over 5% of your overall expenses each year compared to resale points?


Regarding opportunity costs of a DVC purchase - I've put together a break even analysis spreadsheet for tracking DVC stays over the coarse of your contract and inlcuded a break even calculation with and without factoring in the opportunity cost of the initial purchase. When comparing resale poly prices to estimated direct pricing for new resorts along with current poly room/point rental rates, what I found for direct pricing is that when ignoring opportunity costs, you will break even on a full length contract regardless if you assume rack rates or point rental rates for cost of the rooms if you didn't purchase DVC. When accounting for opportunity costs, you would only break even when assuming rack rates of rooms but not if using point rentals. This is assuming 3% increase in MF, rack rates, and point rental rates and average investment returns of 7% after inflation each year. Buying direct on shorter contracts at older resorts with less than 40 years remaining likely won't ever make financial sense.

Your analysis sounds very sound. Would you be willing to share the spreadsheet as a Google doc? I’m trying to talk myself into or out of adding a small direct contract at VGF on top of the resale points that just cleared ROFR.

We are already Y members through direct points at Aulani, so am not concerned about the value of those benefits (which I do find to be worthwhile!).

 

[WeIcomeHome]

https://docs.google.com/spreadsheet...ORdt_fZ0wUzMe0nW-7vzgJpLunQ/edit?usp=drivesdk

This link is for the tracking spreadsheet. I recommend saving a personal copy for your edits. I've shared this before so others can access the link as well.

The overall cost estimates I mentioned was just back off the napkin stuff I did one time.

 

[take36]

https://docs.google.com/spreadsheet...ORdt_fZ0wUzMe0nW-7vzgJpLunQ/edit?usp=drivesdk

This link is for the tracking spreadsheet. I recommend saving a personal copy for your edits. I've shared this before so others can access the link as well.

The overall cost estimates I mentioned was just back off the napkin stuff I did one time.

Thanks for this spreadsheet! It was super helpful and a different perspective/assumptions. It is also easy to use and understand.

However, I don't like it and won't be using, I don't like how it tells me I wont be breaking even until year 20 lol! The truth hurts!

 

[HyperspaceMountainPilot]

https://docs.google.com/spreadsheet...ORdt_fZ0wUzMe0nW-7vzgJpLunQ/edit?usp=drivesdk

This link is for the tracking spreadsheet. I recommend saving a personal copy for your edits. I've shared this before so others can access the link as well.

The overall cost estimates I mentioned was just back off the napkin stuff I did one time.

Thank you so much!

 

[HyperspaceMountainPilot]

Thanks for this spreadsheet! It was super helpful and a different perspective/assumptions. It is also easy to use and understand.

However, I don't like it and won't be using, I don't like how it tells me I wont be breaking even until year 20 lol! The truth hurts!

Haha, and here I am hoping that the truth shall set me free (from addonitis)!

 

[Jayunit09]

We are planning to buy our first contract at Poly 2 and our decision for a purchase is leaning towards buying direct simply because we are in our 30s and expect to be visiting Disney well after the 2042 resorts are no longer available to resale purchasers. The premium to have direct points that can be used anywhere is worth it to us. Initially, we had also considered having blue card/DVC-Y benefits as another factor pushing us towards direct but my wife is going to be grandfathered in on those after being added to her parent's DVC deeds. Still the future flexibility of the points is where we are seeing the value in a direct purchase.

One thing a lot of people overlook when purchasing DVC, particularly for resorts with 40+ years remaining on the deed, is that the initial purchase cost will only be a small percentage of your overall costs even when ignoring park/food/travel costs. Maintenance fees will likely end up 3 to 5+ times the purchase price over the length of the contract. Initial purchase price will range somewhere around 15 to 25% of total DVC costs. If you factor in park tickets, food and travel expenses, this lowers the % of the total costs even more.

I estimate the additional cost of Poly2 direct over the cost of resale poly1 to be approximately 5% of the overall expected costs of Disney trips for the duration of my contract. 5% is likely on the high end as I only accounted for inflation on the maintenance fees but not for food/park tickets/travel costs.

Would you pay a 5% premium on your overall Disney trip costs each year to have direct point benefits over the coarse of 50 years? Or to put it another way, do you think the benefits of direct membership could save you over 5% of your overall expenses each year compared to resale points?


Regarding opportunity costs of a DVC purchase - I've put together a break even analysis spreadsheet for tracking DVC stays over the coarse of your contract and inlcuded a break even calculation with and without factoring in the opportunity cost of the initial purchase. When comparing resale poly prices to estimated direct pricing for new resorts along with current poly room/point rental rates, what I found for direct pricing is that when ignoring opportunity costs, you will break even on a full length contract regardless if you assume rack rates or point rental rates for cost of the rooms if you didn't purchase DVC. When accounting for opportunity costs, you would only break even when assuming rack rates of rooms but not if using point rentals. This is assuming 3% increase in MF, rack rates, and point rental rates and average investment returns of 7% after inflation each year. Buying direct on shorter contracts at older resorts with less than 40 years remaining likely won't ever make financial sense.

Having access to whatever happens to those 2042 resorts was probably a top 2 reason we ended up going direct, mainly having access to any future resort was my wife's main reason.