I mean at this point, why is anyone buying direct?

[RoseGold]

I also approach timeshare analyses with an “assume it is worth $0” mindset. It’s true that DVC probably won’t be. But, I can imagine a number of different scenarios in which demand for WDW is significantly lower than it is now in the 10-ish year timeframe we are talking about. If the purchase still makes sense (and it certainly can) then any residual value is found money.

If you think DVC is worth $0 in 10 years, then DVC doesn't make sense to buy at all. Just stay cash or rent points. If you think DVC is that risky, there's no reason to buy it. Plenty of less risky options.

 

[davidhr]

If you think DVC is worth $0 in 10 years, then DVC doesn't make sense to buy at all. Just stay cash or rent points. If you think DVC is that risky, there's no reason to buy it. Plenty of less risky options.

There are multiple ways of seeing this. And people have different priorities.

With DVC I see it the same as a Disney trip. If I pay $2000 cash for a room, at the end of my trip the value of that room is $0. I spent that money and I’m not receiving any financial value back. I’m receiving something else, but not financial.

I use the same approach for DVC.

Instead of paying $2000 for that room, I get the chance to pay $1000, but I have to pay 30 years in advance. That’s fine and I’m ok with it. If I’m getting the rooms like my contract says, I’m ok if the resale value is $0 (let’s be honest, there’s a very low chance of that ever happening). I bought the rooms, and I expect to get back exactly that. That money is long gone for me.

It doesn’t matter how you look at DVC. At the end of the day it’s a timeshare and, as all timeshares, it comes with some risk. It doesn’t matter how you calculate your numbers, it’ll have a risk.

 

[DonMacGregor]

I know I’m a bit extreme in this, but for me the purchase price is a sunk cost. I say to myself “I paid for x years of vacations in advance”. That’s done.

If I have to sell, anything I can recoup is a “win” because I was considering 0. I know most people don’t do this and that’s ok. I see it this way because any money I use for DVC wasn’t going to be invested. It was going to be spent on something anyways. Trips, a nice car, or something like that.

This is exactly how I looked at it. The decision for me was made when I determined (back of the napkin method) how much I was going to spend in order to truly stay (with no fuzzy math) within what I consider Vegas Money (money that you ABSOLUTELY MUST be prepared to kiss goodbye no matter how it disappears).

 

[DonMacGregor]

If you think DVC is worth $0 in 10 years, then DVC doesn't make sense to buy at all. Just stay cash or rent points. If you think DVC is that risky, there's no reason to buy it. Plenty of less risky options.

See. that's the problem. For some of us, it's the exact opposite: there's zero risk. We decided to spend money that had no significant impact on our overall financial health. If something goes south down the road and DVC loses all value, or I can't use it anymore, then then it's simply gone. Move on. Not every single purchase in life has to have some financial benefit (or at least it shouldn't). DVC isn't an investment, so for me there is no risk. It's just a purchase.

If DVC disappeared tomorrow, then obviously my reaction to the news would be a bit more than "Aw shucks", but that's not going to happen and as long as I get the points I paid for, then I got the benefit of the bargain (and my financial health would still be unchanged).

As far as staying cash or renting: I bought DVC because I wanted to. I like being a member.

 

[tjkraz]

I mean that's not much of stretch. It's less than half sold still, I think. Almost 13 years later.

Probably didn't help that sales were "suspended" when it opened over the shenanigans.

I'm not sure it will ever sell out, unless they slash the price, which they have done a few times over the years.

Based upon the 2023 budget, Aulani is projected to be approximately 72% sold by mid year.

 

[CarolMN]

I would think that historically it is a very limited number of contracts that sold for 50% of the original cost if any

There was a period of time when many who sold had to bring money to the table to get rid of their contracts (monthly payments & annual dues). No idea how many, but it was a significant number. Lots of sad stories. It could happen again.

That's one big reason I advise against financing a luxury purchase except under very limited circumstances. DVC is a "want", not a "need"

 

[tjkraz]

My guess is that the data lives in some MS DOS based system that talks to 10 other legacy systems.

I believe DVC's core functions are running from an AS400 platform, with things like MDE and the member website trading data back and forth.

AS400s are generally reliable. It's not a configuration you would build from scratch today, but it's still serviceable. In a prefect world, Disney would rebuild everything from scratch. But given the likely cost involved, that will probably take a Southwest-level event.

 

[tom1944]

There was a period of time when many who sold had to bring money to the table to get rid of their contracts/monthly payments & annual dues. No idea how many, but it was a significant number. It could happen again

That's one big reason I advise against financing a luxury purchase except under very limited circumstances. DVC is a "want", not a "need"

I will be paying cash

Bringing cash to the table does not mean they sold for half the purchase price

 

[CarolMN]

I will be paying cash

Bringing cash to the table does not mean they sold for half the purchase price

Maybe not, but in nearly all of the posts I read, it was a financial hardship to have to do it.

Those who pay cash will not have to worry about that.

 

[Docwheeze]

Sometimes timing is important in the decision. My wife and I dreamed of celebrating our 20th Anniversary this year at GF similar to the "storybook" weddings conducted there. Knowing the exorbitant cost of a special event, it made sense to buy direct at VGF last year for the flexibility of future vacations with our young son at other resorts such as Epcot as he gets older.

The direct option seems to provide slightly more access to designing different vacation options. Don't think we will hold on to all of our points forever so bought split contracts to allow even more flexibility if we choose to sell. Doubt it will lose 50% of value knowing the Disney magical allure but ok with sunk cost to celebrate a special event which is sunk regardless of where you vacation.

 

[tom1944]

Maybe not, but in nearly all of the posts I read, it was a financial hardship to have to do it.

Those who pay cash will not have to worry about that.

Most likely they borrowed the maximum they were allowed and paid the minimum payment

They probably could not afford the purchase from the start

I wanted to make the purchase back in 1996 but knew it would be a strain financially

Now after paying off a mortgage, funding a lucrative retirement, paying for college and a wedding and now funding our granddaughter’s college I want to buy into DVC with what I consider found money

 

[RoseGold]

See. that's the problem. For some of us, it's the exact opposite: there's zero risk. We decided to spend money that had no significant impact on our overall financial health. If something goes south down the road and DVC loses all value, or I can't use it anymore, then then it's simply gone. Move on. Not every single purchase in life has to have some financial benefit (or at least it shouldn't). DVC isn't an investment, so for me there is no risk. It's just a purchase.

Putting five figures into something always has risk. If you think DVC is going to zero in ten years, it's a bad buy, even if you can afford to lose the money. It's not like the choices are buy DVC or stay at home. You could have spent that money at the Ritz and at least gotten a bathrobe and 2-ply toilet paper.

If you perceive DVC as being that risky, I don't see why you would buy in at all. The whole point is to buy into a system of hotel rooms, which you think will be worthless.

 

[Brian Noble]

They probably could not afford the purchase from the start

A tale as old as time.

 

[DonMacGregor]

Putting five figures into something always has risk. If you think DVC is going to zero in ten years, it's a bad buy, even if you can afford to lose the money. It's not like the choices are buy DVC or stay at home. You could have spent that money at the Ritz and at least gotten a bathrobe and 2-ply toilet paper.

If you perceive DVC as being that risky, I don't see why you would buy in at all. The whole point is to buy into a system of hotel rooms, which you think will be worthless.

But we DO go on other vacations (Bonvoy Platinum members, Delta Skymiles Platinum). We did a trip to Egypt pre-Covid and did the whole Nile valley, and just did the REI Machu Picchu trek last year. Future plans include Angkor Wat and if global politics play nice, a return trip to the Great Wall. I can get rooms with robes and toilet paper rolls sealed with little foil stickers all day. Oh, and I do have a 3-night stay coming up at the Ritz-Carlton Grande Lakes in March that I extended an extra day with some DVC points.

If it's either/or for you, then that's a decision/calculation you need to make, but to broadly assume that there is inherent risk in every purchase for everyone is simply not true.


ETA: Stop saying "worthless". You keep conflating the value of points with the existence of points and it's beyond disingenuous. Even if BRV resale points go to $5 each in 2030, the contract still provides the points which can still be utilized to make resort reservations through the end of the contract term. THAT is the value. The value of points is ALWAYS their value in securing resort room reservations.

 

[RoseGold]

ETA: Stop saying "worthless". You keep conflating the value of points with the existence of points and it's beyond disingenuous. Even if BRV resale points go to $5 each in 2030, the contract still provides the points which can still be utilized to make resort reservations. The value of points is ALWAYS their value in securing resort room reservations.

The comment I was responding to was about DVC going to $0 in 10 years, aka being worthless.

 

[DonMacGregor]

The comment I was responding to was about DVC going to $0 in 10 years, aka being worthless.

But the points will still exist and the contractual obligation to provide those points annually to the owner will still exist. The cash rate for the room will still exist as well by comparison. You may not be able to sell the contract, but you still have points that can be used to book rooms that would otherwise cost hundreds or thousands of dollars for non-members paying cash.

 

[Nursemanit]

But the points will still exist and the contractual obligation to provide those points annually to the owner will still exist. The cash rate for the room will still exist as well by comparison. You may not be able to sell the contract, but you still have points that can be used to book rooms that would otherwise cost hundreds or thousands of dollars for non-members paying cash.

"Worthless" and even "negative value" can happen if the MF become more than the commonly available cash rate ( not the rack rate)

Many timeshares cost more in annual maintenance than it would if you walked up to the door of the resort and asked to rent for the week.

 

[DonMacGregor]

"Worthless" and even "negative value" can happen if the MF become more than the commonly available cash rate ( not the rack rate)

May timeshares cost more in annual maintenance than it would if you walked up to the door of the resort and asked to rent for the week.

True, but that requires that Disney cash rates increase at a significantly slower rate than the increase in MF's, and there's a good gap between the two currently. If you look at a Grand Floridian cash rate, slow season, 25% discount, you're right at around $650 per night out the door (without parking). Right now, that VGF standard view villa is going for 16 points for that same stay. Based on MF's alone, that's the equivalent of 55 Vero Beach points per night based on 2023 MF's. If you used VGF points for that stay, MF's only, it comes out to 89 points.

In other words, the annual maintenance cost for the points required to book a room at VGF is $192 per night using VBR points, and $112 using VGF points. Versus the discounted cash rate of $650 per night. If someone owned fully-paid-for VBR points, and was only paying MF's on those points (and the highest MF's across the whole system), then the cost to stay in that $650 room is $192 per night. There's a long way to go before you get to the point where those fees are costing more than the discount cash equivalent.

 

[Nursemanit]

True, but that requires that Disney cash rates increase at a significantly slower rate than the increase in MF's, and there's a good gap between the two currently. If you look at a Grand Floridian cash rate, slow season, 25% discount, you're right at around $650 per night out the door (without parking). Right now, that VGF standard view villa is going for 16 points for that same stay. Based on MF's alone, that's the equivalent of 55 Vero Beach points per night based on 2023 MF's. If you used VGF points for that stay, MF's only, it comes out to 89 points.

In other words, the annual maintenance cost for the points required to book a room at VGF is $192 per night using VBR points, and $112 using VGF points. Versus the discounted cash rate of $650 per night.

Having theme parks and oceans really reduces this risk. HHI is the only one that this could happen, but the fan base is so loyal they will be chaining themselves to the doorknobs in 2042

There are timeshares in the Ozarks / Poconos / Smokey mountains that have people locked into 1k a year in MF when they sit empty at $600 / week deals. That is the classic timeshare nightmare.

 

[DonMacGregor]

There are timeshares in the Ozarks / Poconos / Smokey mountains...

And there's your answer...



just kidding. Beautiful country and amazingly warm and friendly folks.