DVC Purchase – What exactly are you getting?

[18sprint]

This is not meant to sound depressing, down or negative...it is said with a smile on my face...."what do you get as a DVC member?" You are pre-paying for a place to stay at Disney at today's prices for the length of your home resort contract. There is no other entitlement owed to you. No discounts, no free parking, no lithographs or personal audiences with Mickey. Yep, there are currently perks, but all this is subject to change or elimination. As many people who have been DVC members for years can attest, perks have changed alot over the years. Main thing to remember....don't by DVC for discounts.

 

[AllieV]

I read something interesting over on the Mouscellaneous board and thought it might be a good mention here in this thread. It seems that the AKV contract includes a small maintenance fee that goes toward the animal upkeep on the savannahs. But on top of that, it also says that there is no guarantee that there will always be animals.

 

[disneynutz]

I read something interesting over on the Mouscellaneous board and thought it might be a good mention here in this thread. It seems that the AKV contract includes a small maintenance fee that goes toward the animal upkeep on the savannahs. But on top of that, it also says that there is no guarantee that there will always be animals.

The only guarantee is a owners ability to book at their home resort, everything else can change.

Bill

 

[ct_chris]

Thank you for the write-up Mike, but you are missing one important fact in your write-up regarding your home resort and that is that the total number of points that resort has to allocate in a given year is fixed. So your points you buy will roughly get you a similar amount of days at your home resort during the lifetime of your membership.

It is better explained in the following post.
http://www.disboards.com/showpost.php?p=35907434&postcount=7

1. Total points for the resort cannot change. The exception to that is that they can always build more units at the resort and thus increase total points that way. Point "shifting" is permitted, meaning they can raise points for days or seasons or type of rooms as long as they lower them for other days or seasons or other type of rooms by an equal amount so that total points remain the same. In the last two years there was a planned point shifting mainly by lowering weekend nights while raising weekday. They were trying to correct a problem that has actually existed virtually forever in that weekday demand greatly exceed weekend because the weekend points were so high. Likely that particular planned shift is over. There are two limitations to a point shift, one definite, one more general. The first is that they cannot change any particular day by more than 15% (up or down) in any given year. Because of that 15% rule they took two years to complete the planned point shifting because the total over two years was more than 15% (but was no more than that in either year). The second is that they need to base point shifting on what they see in historical patterns of use and make any changes in the best interests of the members to accomodate shifting demand. That is what they perceive to be the bests interests of the members as a whole not any one individual member. As a result, if you buy points to go particular days of the year and base your decison as to what you buy on the current point charts, you are doing so at the risk that the points for those particular days may change (up or down).

 

[mickeysbestfriend]

I did my homework. I added up the costs of the initial purchase price, the MF's figuring a 4% annual increase. then I divided it by the number of years in the contract and to arrive at a cost per point basis which I rounded up to $7. We have 220 points to use each year. We can stay 4-5 night trips in a studio or two 5 night trips in a one bedroom every year. We love disney World but travel to other places around the world to explore.

When I look at the increases every year in the Diney hotel prices I see the value in my DVC jumping right out at me. We stayed at POP for a RNR trip when no DVC rooms were available. It cost me $167 per night in a standard view room. A studio at OKW at 44 points for 4 nights would have been $77 per night for a larger room and much better amenities.

We spend more time relaxing by the pool and exploring other areas now than at first but we still behave like teenagers when we hit the parks!

just our experience!

 

[ToddyLu]

I am completely happy with my DVC room. I understand that I spent a premium to get it. I understand that I financed it and that is frowned upon...but everyone of us makes different decisions for different reasons. My DH does not like to travel at all--but I can get him to WDW once or twice a year. I didn't run the numbers at all. DH and I found out the cost, knew we would go to WDW at least once a year as long as we could and could afford the luxury. That is what it is in a sense. It affords a luxury trip to one of the most coveted vacation spots in the world--one that a nurse and fireman can afford. I completely understand how a person could/would think we are nuts for owning a timeshare in WDW. But I also have studied the DIS and all the great tips and advice from previous members and we use our membership very effectively. So what I don't understand is why someone would spend $20,000-25,000 and not do the research to learn that all they are guaranteed is a room. Period.

It just boggles the mind that folks can own DVC and never use it and loose their points, never the wiser.

 

[marynvince]

It's not simply the right to reserve a room, but the right to reserve a room that has been paid for.. this is a big difference and a benefit.

 

[JimMIA]

When I look at the increases every year in the Diney hotel prices I see the value in my DVC jumping right out at me. We stayed at POP for a RNR trip when no DVC rooms were available. It cost me $167 per night in a standard view room. A studio at OKW at 44 points for 4 nights would have been $77 per night for a larger room and much better amenities.

I love this comparison, because it makes the critical assumption that you must make to justify DVC on a financial basis -- comparing the cost of DVC to the cost of an onsite Disney resort room.

Of course that math works! DVC pricing is structured to look good in that comparison. In fact, using that same logic, the Disney Dining Plan also looks good! And buying a Marriott, Hilton, or Wyndham timeshare direct from the developer also looks good...if you compare their timeshare to their hotel rack rates. The Disney bean-counters and marketing kids must chuckle whenever they see this comparison here on the DIS!

In order to justify DVC financially, you must start with the assumption that your family would not be happy vacationing anywhere else but in an onsite Disney resort. That IS a valid assumption for many families who consider the onsite value-added to be critical to their enjoyment of a vacation.

But a lot of other families would be much smarter comparing the cost of DVC to not only onsite cash options, but to all other options including offsite vacation homes, cash hotel offsite, offsite timeshares, etc. I'll give you an actual example of that type of comparison.

Last May, I had a split reservation -- two days (Sun-Mon) at OKW followed by three days at Wyndham's Bonnet Creek Resort (which is basically right across the street). Both reservations were with my DVC or Wyndham points, both were for one-bedroom villas, and obviously both were in the same season and weeknight stays. My OKW points cost was also $7 per point X 27 points = $189 per night. My Wyndham cost was $40.32 per night. (Full disclosure: We caught a flukey break with Wyndham; the normal rate for that period would have been $67.20 per night)

If you're going to justify DVC using a financial basis, I submit that you should compare the DVC cost against what you really would spend -- not the phony marketing comparison with Disney onsite rack rates.

I think the only way that works out in DVC's favor is for those few families who absolutely would not go to WDW unless they could stay in a Disney deluxe resort.

 

[ELMC]

It's not simply the right to reserve a room, but the right to reserve a room that has been paid for.. this is a big difference and a benefit.

I'm not sure I would go that far...you still have the annual maintenance fees which actually make up the majority of the cost of DVC.

 

[ELMC]

Of course that math works! DVC pricing is structured to look good in that comparison. In fact, using that same logic, the Disney Dining Plan also looks good! And buying a Marriott, Hilton, or Wyndham timeshare direct from the developer also looks good...if you compare their timeshare to their hotel rack rates. The Disney bean-counters and marketing kids must chuckle whenever they see this comparison here on the DIS!

If you're going to justify DVC using a financial basis, I submit that you should compare the DVC cost against what you really would spend -- not the phony marketing comparison with Disney onsite rack rates.

This is a really good point and it is actually the major flaw that had me walking out of the DVC sales presentation without purchasing. My salesperson told me that there was a 7-8 year break even point vs. paying cash rates at Deluxes. But comparing to rack rate is a fallacious argument because there are frequently ways to get around that. When I compared a DVC direct purchase to staying at Deluxes with a discount or renting points from a member, the break even point extended to the 13-15 year range. I've said it before, I'm not going to to anything at a loss for 15 years just so that I can profit in years 16+.

Enter resale, where I was able to negotiate a great price and get three years worth of points, and all of a sudden my break even point was down to about 5 years. All of a sudden that seemed more reasonable to me.

In order to justify DVC financially, you must start with the assumption that your family would not be happy vacationing anywhere else but in an onsite Disney resort. That IS a valid assumption for many families who consider the onsite value-added to be critical to their enjoyment of a vacation.

Last May, I had a split reservation -- two days (Sun-Mon) at OKW followed by three days at Wyndham's Bonnet Creek Resort (which is basically right across the street). Both reservations were with my DVC or Wyndham points, both were for one-bedroom villas, and obviously both were in the same season and weeknight stays. My OKW points cost was also $7 per point X 27 points = $189 per night. My Wyndham cost was $40.32 per night. (Full disclosure: We caught a flukey break with Wyndham; the normal rate for that period would have been $67.20 per night)

This is an interesting point and it speaks to how I think about staying at Disney properties. I understand the whole "being immersed in the Disney experience" thing, I really do. I understand that there is value to not constantly breaking the barrier between "The World" and the world when you're on vacation. But to me, that wasn't enough to justify these kinds of price differences that you cited above. What puts me over the edge is the ability to walk to the parks. That is the one advantage that some DVC resorts have that others simply don't. And to me, that's enough of a (non financial) justification to purchase. So we bought BWV and BLT and we can forever (well at least for the next 30 years) walk to 3 out of the 4 parks. To me that's worth the extra $100 or so a night.

 

[DougEMG]

In order to justify DVC financially, you must start with the assumption that your family would not be happy vacationing anywhere else but in an onsite Disney resort. That IS a valid assumption for many families who consider the onsite value-added to be critical to their enjoyment of a vacation.

But a lot of other families would be much smarter comparing the cost of DVC to not only onsite cash options, but to all other options including offsite vacation homes, cash hotel offsite, offsite timeshares, etc. I'll give you an actual example of that type of comparison.

Last May, I had a split reservation -- two days (Sun-Mon) at OKW followed by three days at Wyndham's Bonnet Creek Resort (which is basically right across the street). Both reservations were with my DVC or Wyndham points, both were for one-bedroom villas, and obviously both were in the same season and weeknight stays. My OKW points cost was also $7 per point X 27 points = $189 per night. My Wyndham cost was $40.32 per night. (Full disclosure: We caught a flukey break with Wyndham; the normal rate for that period would have been $67.20 per night)

If you're going to justify DVC using a financial basis, I submit that you should compare the DVC cost against what you really would spend -- not the phony marketing comparison with Disney onsite rack rates.

I think the only way that works out in DVC's favor is for those few families who absolutely would not go to WDW unless they could stay in a Disney deluxe resort.

Totally agree with you that one should compare the DVC costs against what one would normally spend. For us we always stayed on-site in a moderate. So when I looked at DVC that is what I compared it against. Direct was to pricey, but a resale contract at the right price does work out to be a better deal and give me more flexiblity. And a better deal in roughly 5-7 years. I'm with ELMC in that I'm not willing to wait that many years before I break even.

 

[marynvince]

I'm not sure I would go that far...you still have the annual maintenance fees which actually make up the majority of the cost of DVC.

So when I spend $1,156.94 worth of points (246pts * $4.703MF) for a week in the THV you are saying that this is what the THV would cost if I booked direct from Disney? Not even close. I'd be looking at double or triple that cost if I booked direct.

Your simple statement was misleading to those that do not frequent the boards but stumble upon and then are misinformed.

 

[DougEMG]

It's not simply the right to reserve a room, but the right to reserve a room that has been paid for.. this is a big difference and a benefit.

I'm not sure I would go that far...you still have the annual maintenance fees which actually make up the majority of the cost of DVC.

So when I spend $1,156.94 worth of points (246pts * $4.703MF) for a week in the THV you are saying that this is what the THV would cost if I booked direct from Disney? Not even close. I'd be looking at double or triple that cost if I booked direct.

Your simple statement was misleading to those that do not frequent the boards but stumble upon and then are misinformed.

ELMC is correct in what he said, I just think you might have misunderstood what he was referring to. He was referring to the fact that your room has not been paid for with your initial purchase. The majority of your room costs over the life of the contract will be paid for with your annual maintenance fees.

To see how this works, take your purchase price and divide it by the number of years left on your contract. As an example, let's say this works out to be $2/year, average MF for most resorts are around $5/year right now. So for this year, you can think of your room cost as $7/point, of which $2 or 29% of the room cost was covered by your initial purchase, while $5 or 71% of the room cost you are paying with your maintenance fees.

So you can see that your initial purchase is definitely not paying for your room, but instead is only paying for a small part of it.

Buy DVC is like giving Disney a gift that keeps on giving year in and year out.

 

[JimMIA]

So when I spend $1,156.94 worth of points (246pts * $4.703MF) for a week in the THV you are saying that this is what the THV would cost if I booked direct from Disney? Not even close. I'd be looking at double or triple that cost if I booked direct.

Your simple statement was misleading to those that do not frequent the boards but stumble upon and then are misinformed.

Your initial post that "what you get" includes a paid-for period of vacation lodging is correct, and an important, valid point. However, once you strayed off into the math, I think you are making some big errors.

First of all, as Doug pointed out above, your math is simply wrong. You have to consider the initial purchase price (including any closing and financing costs) in the cost of your points.

To leave those REAL cost components out is like me saying I drive my car for whatever I pay in gas, repairs and insurance. That would be true only if I got the car as a gift!

Secondly, you are making the common mistake of comparing DVC costs to Disney's rack rates...as if there is no other option. You're taking a sucker bet.

Unless you would actually PAY rack rate at THV directly from Disney, your example is a weak argument designed only to prove a point -- certainly not a meaningful analysis.

 

[ELMC]

It's not simply the right to reserve a room, but the right to reserve a room that has been paid for.. this is a big difference and a benefit.

I'm not sure I would go that far...you still have the annual maintenance fees which actually make up the majority of the cost of DVC.

So without getting into an argument, I would like to clarify what I meant by my comments. I think a more appropriate phrase would be that you are securing future reservations at a discount, because I do agree that DVC accommodations (over the long term) are discounted even when you factor in the initial purchase price.

I'm not sure I would go that far...you still have the annual maintenance fees which actually make up the majority of the cost of DVC.

So when I spend $1,156.94 worth of points (246pts * $4.703MF) for a week in the THV you are saying that this is what the THV would cost if I booked direct from Disney? Not even close. I'd be looking at double or triple that cost if I booked direct.

Your simple statement was misleading to those that do not frequent the boards but stumble upon and then are misinformed.

I bolded your statement above. I think you misunderstood, because that is definitely not what I am saying. What I am saying is that if you add up the total cost of DVC over the life of the contract, the initial purchase price is a small percentage. Here's the math:

Assuming a $99 per point initial purchase price and a 2.5% annual increase of maintenance fees (which is low, but I wanted to err on the side of caution), the initial purchase of 246 points at SSR is $24,354. The maintenance fees over the life of the contract are $112,711.40. So the initial purchase price is only 17.7% of the total outlay for the contract over time. That is why I disagreed with your statement that the room has been paid for. Perhaps I didn't understand what you meant when you made that comment?

 

[marynvince]

So without getting into an argument, I would like to clarify what I meant by my comments. I think a more appropriate phrase would be that you are securing future reservations at a discount, because I do agree that DVC accommodations (over the long term) are discounted even when you factor in the initial purchase price.


This is 100% correct and I agree with this statement. That was my point, poorly made, that your initial statement was a little too general. Thank you for clarifying.

I over exaggerated my opinion to make my point....Seems like we met somewhere in the middle. Thanks

 

[matthew517]

Well you get to use the points you purchase at your home resort.
And have a chance to try to get into another resort. Or you can do a cruise.

There are a few perks that members have lobbied for and got.

I have a family of 6 and a two bedroom does us well.

I bought when the points were alot less and it has done us well.