How much are the extra 12 years worth?

[spiceycat]

no there have always been big discounts for AP - they use to be really good in the old ages - like 50 to 70% off. and boy the AP was cheap in those days.

the codes for everyone that WDW now has - this is a new thing I think from WDW reading these boards and deciding to allow everyone the codes.

lots of us got jealous when WDW put out state codes for NJ, NY, GA and Fl - and constantly left AL (well once we got one) out....

So this method of codes - that they generally put on their website - is much (in my opinion) fairer.

now some people still don't see them and still pay the rack rate.

there was also something called "Magic Kingdom CLub" that was free at work - and that could save you 10 to 30% off the room rates.

okay quit complaining about the old ways and appreciate the new!!!

 

[Desperado]

Originally posted by princess&tig
They are worth nothing for another 38 years

Great line.

 

[tjkraz]

Originally posted by mydogdrew
Come on - you know there's lots more discounts now than pre-9/11. Also, I didn't say they were a better value - only that room rates have not kept pace with inflation in recent years.

Well, spiceycat seems to think they were pretty good pre-9/11. But honestly that's neither here nor there. The issue we were debating was what rooms rates might be in another 39 years. Seems to me we know two things for sure:

1. Rack rates have increased at a rate of 4-5% annually for at least the most recent 7 years.

2. Discounts have historically been offered, but their availability is inconsistent, as is the exact level of the discount.

We also know that DVC dues are directly tied to the operating costs of the resort. Barring any disaster that might occur at a resort (which insurance would cover) or gross mismanagement on DVC's part, it seems they are likely to continue to increase at the current 1-2% annual pace.

I'm not going to claim that the value I receive for my stay in 2043 will necessarily be AS good as the value you receive for your stay in 2042. However, I do firmly believe that the additional dollars invested will return more than their share of value for stays over those last 12 years.

Whether that's true or not--we'll find out together in about 4 decades.

However, for the right person, they are an attractive alternative to investing $20k + dues. There are no restrictions (other than availability) on the above. I have friends who stayed at the BC in August for $200 per night and had no issues booking back in the spring.

All interesting points. Not really relevant to this discussion...but interesting nonetheless.

Since we're both DVC members already, I don't think it's really necessary to debate the merits of DVC vs. AP discounts.

Since you raised the rental point I'll also mention that I have no difficulty renting excess points at BWV (std view studio F&W or December) for 40% more than SSR points will yield.

Don't really care about renting points. Again, call me crazy but I actually bought DVC to USE the points.

Nevertheless, I'm not really sure what your point is here.

If you're saying that your BWV points allow you to rent Standard View rooms for your renters, my response would be: who cares? If I were to rent points, it wouldn't matter to me which resort they were used at or what perceived "value" the renter received for the points. I just want my $10 (or $12 or $15) per point.

On the other hand, if you are implying that you were able to rent your points for a higher per-point price because they are BWV points instead of SSR points, I would say that you are absolutely nuts for concluding that this is a deficiency on the part of SSR. As with anything else in life, the "value" of something is determined by what people are willing to pay for it. To conclude that it is possible to get non-members to consistently rent BWV points for 40% more than SSR points is ludicrous.

Of course that's after paying 40% less up front.

I think we've already covered that territory...

Any timeshare veteran will tell you don't buy from the developer. Disney is the only possible exception.

>gasp< You're starting to crack. I can feel it!

With regard to SSR pricing - I believe it is/was overpriced as reflected in recent maketing. There were people paying $95 initially. Now, noone pays more than $90 + other perks.

Not true. Here's the rate history for SSR:

Aug '03: Points first offered for $89 per point with pre-purchase incentive of $10 off. Net price $79 per point.

Nov '03: Pre-purchase incentive reduced to $5 per point. Net price $84 pp.

May '04: A few weeks before resort opening, base price is raised to $95pp. Magical Beginnings is offered for purchases of 100+, bringing price down to $85 if 2004 pts forfeit.

Aug '04: Phase 1 points begin to run out. DVC decides to sell only Phase 2 points to new members. Since Phase 2 points cannot be used until 2005, they offer the choice of $10 discount or Developer's Points.

As you can see, the cost of SSR points has been rising consistently. The current $95/85 pricing has only been in place for 5 months. And given that the next building will not open until March '05, I think there is every reason to expect another price increase in the Spring.

My point is that you can't count on price appreciation in the future to offset dues inflation risk.

See, here's where you're losing me. You keep labeling dues as a "risk", and yet the likelihood that Disney will continue to bump up it's resort rates every single year is something that we "can't count on."

Member dues are tied directly to the budgets for our resorts. DVC can't just arbitrarily decide that they WANT to raise dues by 5% or 10%. However, that's EXACTLY what can happen to cash rates at the Disney resorts.

 

[mydogdrew]

The point here is to help prospective buyers evaluate SSR vs. resale (or perhaps whether to buy at all). Lets see where we agree:

1. You can purchase resale at a 40% discount, net if you are willing to research and evaluate resales carefully.

2. There is no real SSR 11 month booking advantage at the current time. Preferred location reservations could change this in the future. Also, there is obviously no 12 year advantage for another 38 years.

3. Dues are significantly less at SSR currently. While these are curently subsidized due to development phase, it is expected that this will continue through term due to the size of the resort.

4. A dollar today is worth more than a dollar 50 years from now.

Risk and relative value are the two other major considerations. Prospective members need to evaluate these areas carefully. My opinions are as follows:

Risk:
Room rates have increased less than inflation over the life of DVC to date. This is due to the dramatic increase in room inventory over this period. Ignore the discount options if you wish but it is an important consideration for potential buyers. I used the old "magic kingdom club" discount back in 1991 to get $200 a night delux off-season. I can get the same, or lower price today for the same room off-season with current incentives. Also, with all these new DVC members, Disney is fighting to keep their cash rooms full - I expect discounts to continue. Dues on the other hand will increase and DVC has the ability to "manage to the numbers" here. No one will complain as long as the dues follow inflation trends. My prediction is that dues will outpace the underlying cash rates over time. Keep future development in mind as it will tend to dampen demand, keeping prices in check.

Value:
The best DVC value in my opinion is OKW. Low points, low dues, lower resale cost. Also many resales available to find the right contract. My problem is I have no interest in that location.

Second place is BWV. Dues are relatively high but the lower std view points allows buyer to get 200 points of value for 150 point contract. This more than offsets the dues issue in my opinion. Yes, you can get std view owning elsewhere if you travel Jan, May, Sep. However, you'll need to act early and have a little luck on your side. Other times are virtually impossible as BWV owners compete for these rooms and lead the wait list at 7 months. Finally, it is relatively easy to rent std view rooms for $14 per point during peak times vs. $10 for other resorts. Noone blinks at $120 per night for a std view for F&W. If you want to rent, you will always do better with these rooms.

Third place is all other on-site resorts. Lower dues at SSR offset buy lower price up front for resale. I might give the edge to SSR here but it's close. Over time, the price gap will widen between SSR and DVCI resorts as we approach 2042. After all, you are buying the remaining points.

Finally, I own BWV but I prefer VWL (own there also). You should decide based on location first and consider the above factors. I think DVC is a great value today (an outstanding value at inception). I do expect this value to erode over time. I would focus on the first 12 years and not the last when evaluating a purchase.

 

[tjkraz]

Originally posted by mydogdrew
Risk:
Room rates have increased less than inflation over the life of DVC to date.

For the purposes of this discussion, how is that any more relevant than the fact that DVC dues--the only portion for which we are responsible after our initial investment--are increasing at a rate 1/3 that of standard room rates?

Still seems to me that my dues in 2043 will be a LOT less than any projections you could make for cash room rates, with or without a discount.

Ignore the discount options if you wish but it is an important consideration for potential buyers. I used the old "magic kingdom club" discount back in 1991 to get $200 a night delux off-season. I can get the same, or lower price today for the same room off-season with current incentives.

I never said that discounts should be ignored altogether. But I do believe they represent the most ambiguous portion of this entire discussion.

It is a KNOWN fact--even today--that discounts are not offered during all travel periods. What is the cash rate for a 1B at BWV going to be during Christmas week in 2043?

It is a KNOWN fact that the number of rooms available at discount rates is unpredictable. Check the Resorts board for people who waited on hold for 3 hours the DAY that November/December codes were released, only to be told that all of the rooms were gone.

And, we wll know that Disney can and will change all of these elements over the years.

Also, with all these new DVC members, Disney is fighting to keep their cash rooms full - I expect discounts to continue.

No question that DVC is taking sales away from the cash resorts. Do you really think this is a factor that has gone completely unnoticed? If there are 5 DVC properties today on-site, do you really think there will be 10 by 2016 and 15 by 2028?

You can act as if that room at the Poly or Beach Club will still cost you $200 in 2043, but that won't make it so.

Dues on the other hand will increase and DVC has the ability to "manage to the numbers" here. No one will complain as long as the dues follow inflation trends. My prediction is that dues will outpace the underlying cash rates over time. Keep future development in mind as it will tend to dampen demand, keeping prices in check.

I'd love to see you explain that with some real numbers. I'm seeing a 28% upward trend in resort rates over 7 years vs. an 11% increase in dues over the same period. (EDIT: In the interest of fairness, I will add that over the same time period, OKW is up 17% and HHI 22%. BWV was chosen at random--not simply because it happened to be the lowest of the three. Still, these rates are all lower than the resort increases to varying degrees.)

I feel like I'm listening to John Kerry try to explain how he is going to cut the Federal deficit, insure 14 million Americans and lower taxes for the middle class simply by repealing a tax cut to the wealthiest 2%.

Value:
The best DVC value in my opinion is OKW. Low points, low dues, lower resale cost. Also many resales available to find the right contract. My problem is I have no interest in that location.

Second place is BWV. Dues are relatively high but the lower std view points allows buyer to get 200 points of value for 150 point contract. This more than offsets the dues issue in my opinion.

Another factual error, assuming we're still doing a direct comparison between BWV Standard and SSR. Here are some actual numbers based on room types / seasons chosen at random:

1B Adventure 16 BWVs / 20 SSR = 25% more points for SSR
St Choice 9 / 11 = 22%
2B Dream 30 / 31 = 3%
1B (weekend) Magic 51 / 54 = 5%
St Premier 16 / 17 = 6%

Also, I think it's unfair to plug your own personal preferences into the debate. YOU may be satisfied with the Standard View--others are not. If you want to do apples-to-apples, then why not the BWV Boardwalk View to the SSR Downtown Disney view.

I'm sure you want to jump in an point out that the SSR DD view is not guaranteed. To that end, I'll add that so far there is no evidence to prove that guests at SSR will have difficulty getting the view they want, so it's a moot point.

Yes, you can get std view owning elsewhere if you travel Jan, May, Sep. However, you'll need to act early and have a little luck on your side. Other times are virtually impossible as BWV owners compete for these rooms and lead the wait list at 7 months.

Never claimed I would be successful year-round. There are times of the year you need to plan ahead to book ANY room at ANY resort. But I don't plan on spending every single trip in a Standard View room at BWV, as I suspect is the case with many, many members who are consistently told "you'll never be able to get a room there unless it's your Home."

Finally, it is relatively easy to rent std view rooms for $14 per point during peak times vs. $10 for other resorts. Noone blinks at $120 per night for a std view for F&W. If you want to rent, you will always do better with these rooms.

"...always do better..."

That's arguably the most ridiculous statement you've made thus far. There are people who rent points on eBay at ALL resorts for more than $10 each. There are people who reserve high demand rooms during peak times and rent for more than $10 per point. There are people who base their rental fees on a percent of the Rack Rate, and end up with more than $10 each.

As I said in my last reply, the "value" of any commodity is whatever you can get another person to pay for it. Please don't pawn yourself off as the only DVC member who is smart enough to get more than $10 per point. That's insulting.

I would focus on the first 12 years and not the last when evaluating a purchase.

I don't disagree with that. But statement doesn't render the next 26 or 38 years meaningless.

But I also think there is sufficient reason to not immediately berate people who choose to buy their points at SSR. There are a number of good, supportable reasons for going that route. Whether it's because someone needs the financing from DVC, because they want the contract to leave behind for children or grandchildren, because they like SSR and want it to be their Home, or simply because they want the security of knowing they have a vacation destination in 2043 and beyond.

All of this started with JoeThaNo1Stunna's statement: "I'm def. buying the longest possible contract b/c to me it's worth twelve years of accomodations, even if you have to ride a bus to the parks." I don't see how it's any more appropriate to badger him over that statement than it is to rake you over the coals for choosing BWV because you "have no interest" in OKW, which is admittedly the best value. Seems a bit hypocritical to hit Joe (and every other SSR owner) with both barrels on the topic of "value" when you openly admit you did not choose the option with the highest value yourself.

 

[CRSNDSNY]

I have nothing constructive to add to this conversation right now other than to say how much I enjoy reading these conversations. To me, that's what this board is made for!

 

[mydogdrew]

So now I’m a liberal – my wife will get a kick out of that.

Not all discounts are date sensitive. I gave examples of current discounts available to everyone but don’t forget the AAA, military, AP, Florida resident, etc…. What is important in the analysis is what people actually pay, not the rack rates trend! From my experience, deluxe rates that are well researched have not increased over the life of DVC to date. That’s not necessarily the trend forward but I have a lot more confidence about market forces keeping room rates in line over time than I do about timeshare maintenance fees. I guess we’ll just disagree on this one.

With regard to the rental rate advantage at BWV - if you owned and rented there you would understand this makes perfect sense. If the market rate for studio during F&W is $120, BWV standard gets $13.33 per point while BCV gets $10. It’s got nothing to do with negotiating – it’s simply the location advantage and the underlying point cost for the room. Sure the renter might prefer a boardwalk view but the fact is all of these sell out and they take what they can get. BWV rentals are highest per point on average because of the standard view point structure combined with the location demand during certain periods. It just makes sense that if you are going to rent, you’ll tend to rent during these demand periods. You might get top dollar at BCV but you have to work for it – at BWV it’s relatively easy with std view option. I doubt there are many cases where a prospective renter insists on renting SSR points to use at SSR. There is nothing that I can see about SSR points that will command the higher end of the rental scale (e.g. OKW 3 BR, VWL Christmas, BCV/BWV F&W and Christmas).

I am simply explaining my thought process in purchasing BWV. I am not passing any judgment on anyone purchasing SSR. I do feel that too much emphasis is put on the 12 years issue and I’ve tried to explain why I did not consider that an advantage when I purchased. It’s certainly not in my best interest for SSR to fail or for a new crop of BWV owners to come along insisting on only std view.

At some point, I expect DVC will stop growing. Dean thinks SSR is it. I think they probably will do CR. Who knows - but it will be a different chapter after ROFR stops and I suspect that SSR, OKW and, to a lesser extent, VWL will be impacted more than the EPCOT resorts as far as resale value. I also don’t think you’ll see a resale price advantage at SSR for another 10 years when the gap should start growing. I know, you’re holding until term so this doesn’t matter but to some it is an important consideration. Yes - I think BWV is a better value (that’s why I bought it) but I would not suggest that SSR is to be avoided either. If you like SSR, and you’ve done your homework, then buy it.

 

[Dean]

DVC is a specialty purchase, plain and simple. Whether it will stand the test of time financially depends somewhat on variables that are beyond our control and knowledge. But I'll repeat some points I've made a number of time. DVC only makes sense for someone who would otherwise pay for moderates and/or deluxe on site properties at least every 3 years on average. It will likely not work out for one who uses it to trade out much or at all nor will the numbers work if you load in weekends.

But if you assume that dues and rooms will increase at the same rate, the overall costs of the rooms will outpace the dues very quickly since you're only paying a portion of the yearly costs and have prepaid a large portion of it, BUT NOT ALL. And it may very well be true that one who chases discounts will do as well or better in certain situations at certain times of the year.

IMO, the only reasons to buy SSR are the following:

• You specifically want to own there.
• You wouldn't buy from anyone but DVC.
• You need to finance and there are no other options.
• The extra 12 years are important to you.

It makes little sense to buy there if you want to stay at a different resorts most trips. But if you want to stay there part of the time and try out others over time, that is more reasonable.

Remember the cheapest option will likely always be off site timeshares. And there are more benefits and savings including saving on meals.