DVC vs Value resort analysis

[RSWA2]

My sister (who owns MouseSavers.com)

I didn't know she owned that!

Again, I enjoyed your analysis. Great job!

It does seem silly to compare a DVC deluxe with a value, but you are still comparing $ to $. So at the end it is about money still.

Comparing off sites are a little harder since you miss out on a few value added perks, like any of the Disney transportation, charging privileges, emh, etc...

 

[Mystery Fan]

Can you do an analysis of a Value to a Ft. Wilderness tent campsite also?
My point is, since you can get a room at SSR for cash, a better comparison would be cash vs. DVC cost analysis for SSR, only. After all, Disney charges more for SSR for a reason. Just saying.

 

[twinsouvenirs]

Very valuable analysis. Comparisons are all about testing for one aspect, so yeah, you could split out the costs by sq ft of space, by some quantified amenity scale etc but this gives you a bare bones analysis of least expensive onsite option v. dvc; so if you are looking for an onsite resort option, this could make sense for a beer budget or a champagne budget depending on how much they want to outlay up front. Good to know, makes me feel better about my choice!

Also, re GFV, someone was mentioning the rooms--that is what sold me. They are FABULOUS. I cannot wait to stay there. Hoping the Poly comes along and blows it out of the water too.

 

[crisi]

You beat me to it. I was just going to say that you have to be joking to try to compare Pop to SSR.

I feel similarly when comparing a DVC room to a Deluxe Disney room where you get daily housekeeping and the room is better maintained and appointed. But we do that all the time.

 

[Anal Annie]

Considering that we're using our DVC membership at 2 of the priciest DVC resorts this summer (VGC and Aulani) and that we used our points at BLT last year (another pricey resort) I would have to say that the timeshare aspect of owning DVC outweighs anything in the original analysis. Why not compare the cost of staying in a Value Resort to the cost of staying at Aulani in an OV studio for a week. See how the numbers work out if you use your DVC membership as a real timeshare and take different vacations rather than the same old same old. The ability to stay at a different resort on each trip is a major part of the appeal to us and adds to the value of our purchase.

 

[twinsouvenirs]

Considering that we're using our DVC membership at 2 of the priciest DVC resorts this summer (VGC and Aulani) and that we used our points at BLT last year (another pricey resort) I would have to say that the timeshare aspect of owning DVC outweighs anything in the original analysis. Why not compare the cost of staying in a Value Resort to the cost of staying at Aulani in an OV studio for a week. See how the numbers work out if you use your DVC membership as a real timeshare and take different vacations rather than the same old same old. The ability to stay at a different resort on each trip is a major part of the appeal to us and adds to the value of our purchase.

Totally agreed. We definitely plan to circulate amongst the resorts.

 

[dburg30]

We bought DVC because

a) we like the idea of kitchen and laundry, some people dont, we get that. We love it since we like to cook and that saves SOME $.

b) we dont plan on going and staying offsite. We, after 6 or 7 years now, have no desire to get a car and stay offsite or look at any offsite timeshares / resorts.

c) along with b, we like being 'held captive' I like nothing more then parking our car at the airport and, that's it. well, still have to get on the plane and land, but you get my point. Now that has nothing to do with DVC as much as WDW in general.

d) the space. Once my wife walked into a 1bd (not studio) and we talked about the pricing etc etc, she asked me why it took us 2 years into WDW vacations to do this. We LOVE the 1bedroom even just for the 2 of us, because if one wants to crash out / sleep in, the other can go about stuff in the living room and leave them alone. THIS is a biggie for us.

e) the money, we would spend it on something, might as well spend it on something we like, we know we like, we know we will use, and have a basic idea of how much it will cost us. Sure MF's can go up which changes it somewhat, but still, we arent a total slave to hoping for discounts etc etc.

So IMO we are the 'ideal' DVC peeps. We arent looking to use the point other places, we only do WDW when we goto florida. We dont want to drive, we like hoping on a bus and going where it takes us

As much as we love WDW, I dont think we would go as much if we were 'stuck' in a value, or even moderate.

 

[FlipHipster]

I love the analysis you guys do with these threads. Love to see real numbers. If you are looking at just the financial outlay you will almost always win staying offsite IMHO.We haven't stayed in a DVC villa yet but we have stayed at a deluxe and rented VWL points for our upcoming fall stay. We have stayed at a few places off property including TS and 2 on property (PO and YC). We can rent a 2br 2ba at Harbour Lake or BC (7 nights) for less than 1/2 of the cost of a VWL studio in Nov. (9 nights) at $13/pt.

Its not worth it to me to rent the cheaper offsite places anymore. I told my wife last year, as much as we love Disney I don't want to come back every year if we are not onsite and preferably at a deluxe "park" resort. She agrees. It's a totally different vacation for us to be onsite and walk/boat/monorail to parks. Our comparison to onsite park resort vs. offsite is like going to the beach and staying ocean front vs. several miles inland. Value/Moderate might be equated to a few rows over from the beach. You can save money inland, but its not the same experience. It really depends on what type of vacation you want to take.

Based on past experience, I find it hard to believe that DVC will ever "save" us money. I look at it as paying upfront for many Disney trips with the trade off being nicer "villa" accommodations and the convenience of knowing our lodging is taken care of every year for roughly the same or a little less $'s than if we booked deluxe through Disney or rented DVC points. If we go every year for many years (at least 10) we might come out ahead financially but only if I compare it to staying onsite at a Deluxe resort every year. This is where personal preference takes over as far as I am concerned. How much are the perks worth? They have different value for everyone. Some can justify the premium, some never will. That is the problem I have with our spreadsheets. They only tell part of the story. The cost is important but if that is the only thing considered, I consider that a mistake.

I run the numbers as well, ALOT, but use our actual costs and not rack rate. We've never paid rack-rate anyway. It works out if I compare it to staying onsite at a deluxe resort. However, if I want to do Disney on a budget and that is the primary objective, I can beat DVC easily many many ways. When I factor in everything DVC has to offer, it is hard to beat because the perks are worth a lot to us. I don't have a $ amount but it's worth at least 2x as much for a smaller room to be onsite

 

[Mystery Fan]

I also did a little math and used a Saturday-Friday September stay in a SSR Studio for comparison. I assumed a 3% annual increase for Pop Century's room cost and 3% annual increase in SSR annual dues.

The cost for 1 week at SSR in September is 90 DVC points.
The cost for 1 week at Pop Century in September is $895/week, by contrast a SSR studio is $2,575/week.

Over the course of 41 annual one-week September vacations, I would spend the following.
Pop Century, $70,403.65

SSR (studio), $47,753.34.

Hmmm.....

If I did not use my DVC points and paid cash for SSR (studio), $202,557.99 (ouch)

 

[Dean]

I'm not saying you're wrong, but I have trouble going beyond 15% for a few reasons:

- Some parts of the year (peak holiday seasons, essentially) there are no discounts of any kind.
- Even during moderate seasons, not everyone is able to get a discount room, or not for their whole stay.
- The discounts tend to be higher for deluxe resorts than for value.

There are exceptions, and during low season you can sometimes get as high as 25% off for certain value rooms (usually the more expensive ones), but that's not common at all.

The days where there's no AAA or AARP discount are very few and there are times when the discount is more than 20% and then there's the free dining. But we overlap at 15% and that's the lowest I'd use personally UNLESS one were routinely looking at a time where there aren't routine discounts, basically the holidays.

My sister (who owns MouseSavers.com) tells me that these last few years have been a relative bonanza of room discounts because of the sour economy. She expects that Disney is going to be stingier with the discounts when the economy picks up. I mean, the future is hard to predict, but she's spent over 10 years obsessing about the best discounts, so I tend to trust her instincts. She said she wouldn't go higher than 10% off as an assumption. I think she's being extra conservative, but she's the expert. My basic rule of thumb: don't assume you know more about Disney discounts than my sister.

To some extent it depends on the person. If you're a discount maven and plugged into all the sources of info, and willing to keep checking for discounted rooms and be flexible on dates, you'll be able to get higher discounts, maybe 15% on average for a Value resort. Some people will try briefly to find some kind of discount and get 5-10%, and perhaps only average 7% over time. The naïve person just goes on Disney's web site and takes what they can get.

I too think she's being overly conservative since you're essentially guaranteed a 10% discount possibility (even if you have to join AAA or AARP or buy a pass to get it.

I agree. When you stretch NPV out more than 10 or 15 years, uncertainty goes waaaaay up. A conservative valuation would only go out maybe 15 or 20 years, and if the numbers look good, the rest of the years are gravy.

I'd look at DVC like I would a risky investment such as a REIT. I personally wouldn't go longer than 10 years but I can see up to 20 maybe.

Hmmm... seems like the nicer timeshares that you can book by the night are doing a 2 bedroom for $130-150. So you mean they're similar in price to a value room? If so, I agree. They tend to be further out, though.

Is there any way to book Wyndham Bonnet Creek for cash by the night? Or do you have to rent from an owner? I couldn't find a booking site for them, but maybe I'm just not looking in the right place.

There are ways to book for cash but there are other ways to secure it as well. You mentioned renting from an owner and that's be one of the better ways for many. RCI rents weeks out also both to RCI members and to the general public. And of course since we're comparing to buying DVC, it's only fair to consider comparing to buying non DVC timeshares. My marginal costs for an exchange to Orlando using RCI is normally about $300 per week including the exchange fee. It's a little more variable using II but can be as low as about under $200 or as high as $500 to 600. But that's not realistic for a newby buying a timeshare to trade to Orlando or buying a non DVC timeshare in Orlando to use. HERE is a post a few months ago related to buying non DVC timeshare for Orlando.

 

[FlipHipster]

If I did not use my DVC points and paid cash for SSR (studio), $202,557.99 (ouch)

Never been on the DVC tour so I don't know exactly how the pitch goes, but I have to believe somewhere in there they have to do a rack rate comparison and that's a big hook. I think our studio was $434/night if you booked through Disney. Even if you could get a 30% discount, it's ~$100/night more than renting the points at $13 for our stay. It doesn't take long for owning to win the race using that math. I still wouldn't buy direct but suddenly resale contracts start looking really tasty even when you factor in an extra $5/yr for detergent to wash the towels

 

[dmunsil]

I look at it as paying upfront for many Disney trips with the trade off being nicer "villa" accommodations and the convenience of knowing our lodging is taken care of every year for roughly the same or a little less $'s than if we booked deluxe through Disney or rented DVC points.

It should be substantially less than booking deluxe rooms, even if you imagine getting big discounts.

A deluxe studio at SSR, which is the cheapest way to buy a deluxe room, averages $365/night through CRO, or $411 with tax. If you think you can get 20% discounts on average (which is generous; you can't count on discounts being available all the time), that makes the room $329. The average cost of that room in points is 16, for which the dues are $77. Renting that room through David's would cost $224.

If you compare to renting, which is the cheapest option, the dues are still about 1/3 the cost. Obviously you have the buy-in to consider. You're going to get $14 worth of value from each point for $4.81. Thus you're getting $9.19 per point each visit, going up by about 3% or so each year. If you run those numbers, you pay off a $70 buy-in in about 8 years (assuming 4.5% time value of money). Even if you buy direct from Disney for $130, you pay off the initial expense in 15 years.

And owning is less hassle than renting; you just make the reservation with Disney. You can cancel up to 30 days ahead with no penalty, and up to the day before with only moderate restrictions. That's worth something.

As a rule of thumb, if you go to WDW at least every three years and stay in Deluxe rooms or Deluxe Studio Villas, DVC purchased resale pays off within 6 years if you compare to discounted cash rates, or within 9 years if you compare to DVC point rental rates through a broker.

Obviously the downside is that you have to predict how often you'll go and how long. If you predict too high, it's not the end of the world; you just occasionally rent out your spare points. If you predict too low, you are faced with the dread "addonitis" which can only be cured by getting more points.

 

[Mickey'sApprentice]

I think anybody considering and opting for the AoA route over SSR(or one of the other DVC resorts) obviously hasn't stayed in a DVC resorts to see the difference. Obviously DVC is not in everyones budget. Anyone contemplating a DVC membership needs to consider the amentities they are comparing. Really, it's like opting a piece of chuck over a filet. No comparison.

Not necessarily. We hosted my sisters family at BWV when her boys were 9 & 6. We spent our 1st night at Pop.

They preferred Pop. Why? Great food court, fun kids decor, 2 double beds. My sister told me she was afraid her kids would break something in the boardwalk lobby.

They loved Beach Club 2 years later.

 

[Mystery Fan]

Dean,

I'm not so sure about your comparison to a REIT. With a REIT, you don't get any participation with your investment. DVC is not a cash flowing, appreciation potential investment. DVC is a vacation option offering long term discounted upper scale resort accommodations. No more, no less.

Bottom line is, if you vacation Disney often, over a very long period of time, DVC is a viable option to save money, even over cash paid value resorts.

 

[Dean]

Dean,

I'm not so sure about your comparison to a REIT. With a REIT, you don't get any participation with your investment. DVC is not a cash flowing, appreciation potential investment. DVC is a vacation option offering long term discounted upper scale resort accommodations. No more, no less.

Bottom line is, if you vacation Disney often, over a very long period of time, DVC is a viable option to save money, even over cash paid value resorts.

The comparison was in terms of the level of risk involved. I realize it's not quite that high but much higher than many think. The fact it's Disney seems to lull people to sleep related to the risk of a timeshare. DVC is far more of a timeshare than most realize with all the inherent risks and problems of any timeshare. I would qualify your last statement that DVC is viable for some, not for others. Plus I do think staying in a value will be cheaper than DVC long term even for a SSR resale purchase but DVC offers a significant added value for some, again, not for others. Plus there is a psychology of timeshares and DVC and there is the reason that I don't believe very many people will actually save money with DVC and that includes most who always stay in the deluxe resorts. But there's no way to fit those variables into a spreadsheet with the limited info we have. Rest assured, Disney has this info though and it's part of the reason they keep expanding DVC on site.

 

[RSWA2]

It is true that you can't always get discounts, but I think in comparing $ to $, you have to take the biggest discount. If you were paying cash for a trip one year and you were looking at when to go. The bargain hunter would wait for a high discount. Right now, I see a 30% off room only discount for the late summer travel. If they don't, they wouldn't go, or they would book a room at a mod or value, hence saving the money. If $300 is my limit for a room one year, then $300 is my limit.

The point, I'm trying to make, is that everyone always say you can't count on discounts and so they'll use a small one like AAA or 20%. Well, I would have to say, you want to use the best case scenario for a discount, since that would make it the worse case for DVC. That would make a stronger case for DVC.

However, I also want to say that Disney will always win. Why would they get into DVC as a loss leader. It's not. They sell and push it like it is, any car salesman will always say they are taking a loss on the car they sell you. Disney will never say, "if you buy this, I'll be making $$$ from you for the next 30 years." It's always, "Imagine the 30 years of vacations you get and how much you'll save."

There is also a psychological effect behind this. If you plan a vacation knowing you'll leave with a big hotel bill, that will influence your purchasing while on vacation. But if you know you have $0 hotel bill (even though you've paid upfront on points and MF) you will tend to spend more.