DVC saving me money? Please prove me wrong/right!!

[NC2WDW]

I apologize if this has been said somewhere else but when we bought in June 2010, we added the initial purchase price + the annual dues for the next 50 years + a little inflation for dues, then divided that by the 50 years. That computes to a nominal annual fee. Let me conclude by saying we pondered and calculated, and pondered, and calculated before the purchase. But, we are thrilled with our investment - our vacation investment.

 

[RocketEAR99]

I'm not going to get into the math involved but I figured at one point that if I was not a DVC member and wanted to go to WDW 2 times a year, I would likely always book a value accomodation (Pop Century) every time and get the annual pass and dining plan (since after 10 days or so that annual pass becomes a bargain).

Being in DVC and going 2 times a year, I save very small amounts of money in comparison to the above, but I get discounted annual passes, and deluxe accomodations...and a few other perks as well.

Though I admit that if I were not DVC, I would not go to WDW 2 times a year

So do I save money, yes and then no.

 

[Golden Rose]

I've done the calculations for us, too, and we'll definitely save money eventually. Before we bought, we always stayed at deluxe resorts (club level, which we do sometimes still miss), and more than half the time, we traveled with my DM, so we had to get two rooms or a suite. We were going to WDW approximately every 9 months. We haven't changed our vacation habits too much because of DVC, except that we have taken friends with us twice now when we didn't take family.

We calculated that the 1st year of our DVC ownership, we saved approximately a third of our buy in cost. That was partly because we had double points the first year; we bought AKV direct and got developer's points, and we bought BWV resale and got a year's worth of banked points. When we figured out just how much we saved, we took into account some of the perks we took advantage of that we would have paid for anyway - the golf discounts, the annual pass discounts, and the free internet. We did make 3 trips that year instead of the 2 we would have made. (We would have taken a 3rd trip that year, but it would have been a cruise instead of WDW. We were feeling a little tight on cash at the time, having just purchased 2 DVC contracts, and we decided that WDW would actually be the cheapest vacation we could take, between our DVC, our annual passes, and our TiW card.)

When we calculate our savings with DVC, we don't calculate it based on what that particular room would have cost us without DVC, we calculate it based on what we would have paid for the type of rooms we liked to get during the types of promos we generally found. (The rack rate on the DVC rooms is insane, and we wouldn't ever have paid it!) It's still going to be several years before we reach the point where we've basically broken even, and are just paying for the room on the cost of our dues. That said, we've really enjoyed our DVC, and it will truly save us money eventually. We like the value for the money, and we like the amount of space we get with the views we've generally booked.

We were pretty much the definition of people who should buy into DVC because of the money it would save us, based on our patterns in the years before we bought. We're eventually going to buy a few more points, since we've discovered how much we do like having friends travel with us. This, of course, may keep us from actually saving much money long term... So we may fall into the DVC trap of spending more than we would have, after all.

 

[alice99]

I'm not going to get into the math involved but I figured at one point that if I was not a DVC member and wanted to go to WDW 2 times a year, I would likely always book a value accomodation (Pop Century) every time and get the annual pass and dining plan (since after 10 days or so that annual pass becomes a bargain).

Being in DVC and going 2 times a year, I save very small amounts of money in comparison to the above, but I get discounted annual passes, and deluxe accomodations...and a few other perks as well.

Though I admit that if I were not DVC, I would not go to WDW 2 times a year

So do I save money, yes and then no.

I completely agree with this analysis.....

But, do have one thing to say to the people comparing DVC to Value resorts... (Rocket, I know this was not your intention, this isn't a personal jab)

You are comparing 2 completely different things .... I , admittedly, have not ever stayed in a value resort.... only the moderates (Caribbean Beach, Coronado) and deluxe (Wilderness Lodge).
I am not interested , at all, in staying in a value resort. I was barely satisfied with the moderate, and know that a value resort is of NO interest to me.

A more accurate comparison (for me, my personal opinion) is that I can stay in a DVC studio, for the same cost as a Disney Moderate Hotel/resort....and get more bang for the buck.

I know that actually staying in a value would give me more credibility on the subject.... but after seeing the moderate resorts , I wouldn't even consider it.

 

[crisi]

I completely agree with this analysis.....

But, do have one thing to say to the people comparing DVC to Value resorts... (Rocket, I know this was not your intention, this isn't a personal jab)

You are comparing 2 completely different things .... I , admittedly, have not ever stayed in a value resort.... only the moderates (Caribbean Beach, Coronado) and deluxe (Wilderness Lodge).
I am not interested , at all, in staying in a value resort. I was barely satisfied with the moderate, and know that a value resort is of NO interest to me.

A more accurate comparison (for me, my personal opinion) is that I can stay in a DVC studio, for the same cost as a Disney Moderate Hotel/resort....and get more bang for the buck.

I know that actually staying in a value would give me more credibility on the subject.... but after seeing the moderate resorts , I wouldn't even consider it.

Yes, that's the difference between "saving" money and "spending a bit more (or a lot more), but getting a better value for the dollars you spend."

Or, as I've said before, if we really all wanted to SAVE money, we wouldn't go to Disney at all. We'd stay home.

The trick is to figure out what you choose to/can afford, what you behavior patterns are, and then get the most bang for the buck with that combination. DVC gets you a fair amount of bang for the buck - but its easy to spend fewer bucks and get some bang (value resorts, skyauction offsite condo rentals, Bonnett Creek.....).

 

[Snurk71]

OP - you can save money with DVC. But the number you oriignally quoted is high for your savings.

Here is a little something I posted about a year ago when someone claimed that you won't/can't/don't save money buying DVC and going from a regular room to a 1BR...


Time for some real world math experience for illustration to the naysayers...

Prior to buying DVC we stayed at GF, always at GF, every year for about 10 years. We used to get a room discount years ago, but were striking out most recent years. So here we go...

GF garden view rack rate - $435
2010 cost for 7 nights, with tax - $3,630

But let's be a little conservative and assume we might get a 40% discount every other year. So we restate the GF rate to 80% of current rack rate.

GF garden view rack rate - $348
2010 cost for 7 nights, with tax - $2,903

As regular room rates go up every year, let's use a 4% average inflation increase (we'll use this same rate for maintenance fees on the DVC side).

Here are the cumulative GF 7 night room costs:

5 years - $15,726
10 years - $34,859
20 years - $86,459
30 years - $162,840
40 years - $275,903 (though I don't know if I'll still be alive in 40 years)

Now for the DVC numbers...

A 7 night stay at BLT in a 1BR LV in Choice season is 240 pts, 274 for Dream season. So let's stay conservative and use a 260 pt need for our week's stay as we cross seasons occasionally.

260 point cost in 2010 at the current $110/pt - $28,600

Let's assume maintenance fees are $4/pt and will grow at that same 4% inflationary factor we used for the GF room. 2010 MF - $1,040

Since we paid cash for the points, we have lost capital use of that money. I'm not getting anything near this now, but let's assume the old standard 8% cost of capital factor on the money I don't have use of because I spent it all on pts. So in 2010 it's going to cost me another $2,139 to not be making money off that money I used to buy the points.

So here are the cumulative 7 night stay costs for BLT:

5 years - $43,962
10 years - $55,835
20 years - $74,714
30 years - $102,073
40 years - $142,571

Breakeven - year 17

Under this conservative model I break even at year 17 and save $133K over the 40 years of vacation. I say it's conservative because I'm not staying at less point resorts, taking a standard view every so often, and I didn't add back in the cost of capital on the money I'm actually saving starting in the latter years.

Now, my real numbers were a little better since we bought at $97/pt, will occasionally stay at lesser point resort and lower point room category, and I'll be lucky to have a cost of capital of 5%. I think I'll break even on a 1BR in 10-12 years. What if we stop going to Disney in 10 years, around the time we break even? I think it would be fair/conservative to assume we could probably sell for at least half of our initial buy-in cost and be up $14K. I'm not planning on doing this or recommend doing it as an investment, but that's just how the numbers play out for us.

My real break point is around 10 years - so I think I'm good. But even when all the stars are misaligned like in my example case, I showed that you can still get a decent deal changing over to a 1BR.

Also, the assertion that anyone can get a discount is a big leap. No discounts available at the GF for the weekend we want in Dec this year - I checked.

 

[psac]

The break-even analyses all do hinge on what type of discounts Disney will be offering over the next few years. To the OP, you're right that Disney is not offering any discounts right now for those dates, since they've been waiting until closer to the booking dates to offer the discounts (I'm sure to see what their occupancy rates are, figure out holiday block out date ranges -- which your dates might hit at President's day, etc.) So when it gets closer, there could be free dining or 30% off Deluxes, etc., and you could cancel and re-book if that were the case, but it's hard to predict.

The potential discounts are what kept the figures in a range that didn't make sense for us in terms of the break-even being too far out... until we found the resale market. With the resale market, it made a whole lot of sense for us financially. Not only were we staying Deluxe, but we were staying in the "Deluxe" rooms at Deluxe Resorts because we liked the big rooms (like King Deluxe at GF, Deluxe Club at BWI, etc.). So for us, a 1BR fits the bill at a WAY quick break-even with the resale price we bought at.

 

[Plutofan]

The only other item I would add is the lost income on the up front payment if you did not get a loan. With interest rates low you probably not losing to much currently.

 

[wildernessDad]

Since you are spending your money on DVC and vacations, you are not saving said dollars.

 

[otterpop]

Since you are spending your money on DVC and vacations, you are not saving said dollars.

That would be correct if that was what I was asking...my OP was comparing staying at BWV as a DVC member versus staying as a non-member.

To some of the other posters...thank you for you calculations, but I must be missing something. Again, as of right now, it looks like I am paying to stay at BWV for those specified dates as a DVC member around $1,000 versus if I was not a DVC member, I would be paying $4,000. So I am spending $3,000 less (I won't use the word "saving" any more since that seems to make things confusing). From this, I can say that in about 3-4 years I would have "covered" (recovered?) my initial costs of about $11,000+ (I bought into OKW at $56/point). Again, assuming that I go to DW every year, I always stay in a studio at BWV, I go on the same dates, etc, etc....

Is this correct?

Evan

 

[wildernessDad]

That would be correct if that was what I was asking...my OP was comparing staying at BWV as a DVC member versus staying as a non-member.

I was responding to the question in the title of this post.

 

[crisi]

That would be correct if that was what I was asking...my OP was comparing staying at BWV as a DVC member versus staying as a non-member.

To some of the other posters...thank you for you calculations, but I must be missing something. Again, as of right now, it looks like I am paying to stay at BWV for those specified dates as a DVC member around $1,000 versus if I was not a DVC member, I would be paying $4,000. So I am spending $3,000 less (I won't use the word "saving" any more since that seems to make things confusing). From this, I can say that in about 3-4 years I would have "covered" (recovered?) my initial costs of about $11,000+ (I bought into OKW at $56/point). Again, assuming that I go to DW every year, I always stay in a studio at BWV, I go on the same dates, etc, etc....

Is this correct?

Evan

Once again - sure - where you staying in Villas before? Would you be staying in Villas if you didn't own DVC?

You are getting a great value on Villas, that's why those of us that own, own. If without DVC you'd be staying out on 192 in a Days Inn and be a happy camper, you've been had. But you probably weren't doing that.

By the way, remember this great deal when you start complaining about lack of perks or travel when free dining is offered and end up paying for your meals.

 

[disneynutz]

Once again - sure - where you staying in Villas before? Would you be staying in Villas if you didn't own DVC?

You are getting a great value on Villas, that's why those of us that own, own. If without DVC you'd be staying out on 192 in a Days Inn and be a happy camper, you've been had. But you probably weren't doing that.

By the way, remember this great deal when you start complaining about lack of perks or travel when free dining is offered and end up paying for your meals.

I still think that your vacation habits are a determining factor. Do you vacation somewhere every year? Do you want to vacation at WDW every year in a deluxe resort until you sell your contract? Do you have the money for the purchase, and the cost of yearly dues, travel, food, admission tickets, and miscellaneous expenses which increase each year? It's the extra costs that most people don't think about.

Bill

 

[mikeweider1]

Anyone who buys DVC JUST to save money is crazy! It only saves you money if you were going to go to Disney every year for 10-15 years and pay close to rack rates, at Deluxe resorts. But does anyone do that? DVC is buying a premium product for a premium service. Nice hotels with a lot of space and feeling like you're part of an exclusive club (even if you're not). DVC shouldn't be done as a budget saving tool...

 

[crisi]

I still think that your vacation habits are a determining factor. Do you vacation somewhere every year? Do you want to vacation at WDW every year in a deluxe resort until you sell your contract? Do you have the money for the purchase, and the cost of yearly dues, travel, food, admission tickets, and miscellaneous expenses which increase each year? It's the extra costs that most people don't think about.

Bill

Vacation habits are one of several determining factors.

Another huge one is "can you afford this?" As has been said a few times already - the hotel is only one component of what is for most people a pretty expensive vacation (you can eat in your room from the grocery store and hang by the pool without park tickets, but most of us don't do that). And, as has also been said - this is a luxury.

I love playing the ROI game - its the accountant in me and over the years I've probably had a dozen models for "how much value am I getting." But I'll admit, I get a little nervous playing the ROI game sometimes around here because some people use it to justify DVC when its beyond their reach. (I do NOT get that feeling from the OP - but 2009 was a really hard year around here, where it seemed like every week more people would loose their jobs and their DVC - and sometimes I remembered helping them play the "this will save us so much money" game.).

 

[dmccarty]

As the OP can tell, there are various ways to run the numbers.

I did a bunch of calculations over the years regarding DVC as well.

First of all, we did not take out a loan. We also knew that we would be going to WDW often on vacation. As a kid I was at WDW at least once or twice a year until my late teens and I wanted my kids to have the same experience. We did not have vacations from the time the kids were born until their first trip to WDW. Once we went to WDW we knew we would be going at least yearly for a few years, and worse case, every couple of years.

The only discounts we have seen were after we bought DVC and the PINs were for times we could not go to WDW.

At this point, our DVC membership has bought about 45 nights. If the room cost $400 a night then our DVC membership is paid in full. Every time I check the room costs at AKL during the dates of our vacation the price is up around $500 or more.

The simple calculation for us is that DVC is paid in full. Our room cost is our DVC fee divided by the number of nights. We try stay eight nights during a vacation so we are paying at most $100 a night.

We just stayed at a Hampton Inn for $130 a night. Very nice but they did not have a balcony overlooking a savanna with wild critters though we did stay in Savanna. Just not the same.

A WDW vacation is expensive but so are other types of vacations. The summer we bought DVC we went to the beach. Long story short, the trip was not supposed to cost us anything but when it was over, three days cost about $1000. We spent almost $300 a night for the place we stayed. It was nice and all but I do not like the beach. At ALL. BORING.

If we stay eight nights, then DVC is saving us $300-400 a night or $2,400-3,200.

Two things are very expensive in a WDW vacation, the rooms and park tickets. DVC minimizes the cost of the rooms. I wish I could minimize the cost of the park tickets.

Later,
Dan

 

[toyboy]

Two things are very expensive in a WDW vacation, the rooms and park tickets. DVC minimizes the cost of the rooms. I wish I could minimize the cost of the park tickets.

Later,
Dan

Oh but you forgot the third thing which is the FOOD! Most don't factor in the food when making the case for DVC due to how they vacation.

Many folks don't want to cook when on vacation and I can totally understand and respect that. For my family of 6, however, food was becoming a much bigger problem for vacation affordability than any other factor. For 6 people to eat three meals on Disney property with a few snacks thrown in was costing me $120 to $150+ / day and this wasn't going to any of the really nice sit down places (this will only increase as the little ones get bigger). Utilizing the 1 or 2 Bdrm option for DVC and planning out meals ahead of time is much cheaper if you are willing to cook. On our trip last year, we had groceries for a 7 day stay brought in which cost about $250. I would have spent about $1000 for the week in food and we had more food (and better food). It means you have commit to doing a little work during vacation, but the savings add up pretty quick. Plus we get sick of park food after a few days.

I did the spread sheet thing too, before I bought in. I never would have been able to afford staying in a villa before on rack rates so I did the calculations using a mid resort like Coronado. Making assumptions on promotions and other factors, my calculations showed that my family would still be getting a slightly cheaper rate thru DVC for a villa than a mid resort, but it meant we were getting more room and better amenities. For our family, we get a better room for just under the price of a mid level, with additional savings from planning out food preparation. We haven't generally traveled when free dining plans were offered to attract outside guests.

 

[dmoore22]

When we first purchased into DVC all six of our kids were still at home and traveled with us. At that time it was a somewhat expensive proposition given that we always had to rent multiple rooms in a value, moderate, etc. We actually dreaded vacations just because of the logistics. Vacations were far and few between. A visit to WDW or DL was left for special occasions such as HS graduation. The story of why we purchased into DVC we've provided in posts elsewhere on disBoards. The bottom line is that, for a large family, it is a cost effective option, even to rooms offered at a discount. Much nicer to have a 2 BR to renting two separate rooms and sleeping with one eye open. We found that, initially, we where spending about the same as we did before joining DVC but our visits were now 12 nights instead of 5 nights, my DW and I had our own bedroom and privacy, cooking allowed us to save over the cost of food in the parks, a laundry allowed us to pack lighter and DVC discounts at various restaurants were very nice to have over being a non-DVC guest. There was no such thing as "free" dining at that time. We did buy a resale and did pay cash which may be a contributing factor to the savings. Since we itemize, though its not a large amount, we have a small deduction to add from that part of our maintenance fees that are designated as property taxes. Since we purchased we now have the discounted AP/PAP which, along with the reduced admission to the parks, allows us to purchase the TIW which has contributed to our membership cost effectiveness. Now that our youngest has now moved into the dorms (total empty nest not far behind!?!) we have been staying in studios and making multiple trips each year, sometimes taking an extra long weekend to enjoy events such as the Food & Wine Festival and Mickey's Not So Scary Halloween Party (with DVC discount) that we would not have done otherwise. Occasionally one or two of our children will come from out of town to stay with us in our Home Away from Home for a special visit. Since the kids are struggling to make their way in the world in this challenging economy it allows them to have some mental hygiene, courtesy of DD & DM at WDW. They definitely cannot afford accommodations on their own. You can certainly play with the spreadsheets to validate your decision to buy into DVC but that doesn't tell the whole story. There are the many intangibles that, to steal from the MC commercial, are "priceless." We also went through various stages of "buyer's remorse," rationalizations, and attempts at validation. As the old saying goes, "hindsight is 20/20." In our case it has been very good. After nearly 10 years, and retirement within the next couple of years for my DW & me, it appears to have been a wise expenditure. Rather than purchase DVC we could have left the funds in our portfolio which, if you've been following the market, (down 459.36 as I type) it makes our DVC points look like a great investment -- plus a lot more fun than staring at stock certificates. I've rambled enough. Here is a nice primer at Mouseplanet.com that gives a nice perspective and links to another excel spreadsheet to play with: http://www.mouseplanet.com/8739/A_Disney_Vacation_Club_Primer

 

[Mtnman44]

Disney did NOT create the DVC program to help people spend less at Disney.

Surely there are certain examples where someone is truly spending less, but I'd bet that is a tiny fraction of DVC members.

The rest of us have CHANGED our current and future travel behavior to be more WDW-centric, and have changed our lodging budget as well. Comparing our DVC expenses to existing cash rental prices certainly makes our DVC costs look good but for almost all of us this is a misleading comparison. Would we be booking that 2BR villa anyway had we never become DVC members? For the vast majority of us, I'd say the answer is No. If I go to buy Hyundai sedan for $20, but drive off with a $45k Shelby GT that was regularly priced at $55k, did I really save $10k, or did the salesperson get an extra $25k out of me by enticing me to spend more by offering me more?

It is all a matter of persective but read this again:

Disney did NOT create the DVC program to help people spend less at Disney.

I would guess also that Disney Rack Rates, especially the vacation villas, are inflated significantly to a rate that almost no one actually pays, and which Disney doesn't actually expect to get for most of the rooms. These high rates further create the impression that DVC "saves money".

So, the DVC program has encouraged us to spend more than we would have at Disney by offering us a discount program, or in other words a sale price. DVC is a marketing vehicle for Disney Hotels, with the added benefit of redcuing Disney upfront capital expenses when building new resorts.

Now, I am a DVC member, and we love staying at DVC resorts. These are units that we would never have been able to stay at nor would have considered otherwise. So for us, DVC was a way for us to upgrade our vacation experience. But that upgrade included spending more money on lodging at Disney and more frequently. The DVC program has caused me to spend and vacation a lot more at WDW.

 

[fishermouse]

vacations are not for saving money, you can spend less or more and stay somewhere else. Comes back to you get what you pay for, I like DVC, we go several times a year and have stayed at almost all the resorts. To me it's worth it if you don't want to go to WDW you should not buy DVC.