Is 160 pp that bad?

[jerseyduke]

So rumors that the poly will be 160 per point.

Now, i know it is a two tier system; price per point, and points per night.

However:

Looking at VWL...resale is in the neighborhood of 80 per point. Boardwalk around that, BCV higher.

But they expire 24 years earlier. So they have about half the life. And are half the price.

So, while I do not like 160, it seems "about right", doesn't it?

I know AKV, OKW and SSR are "cheap" with later dates, but they are large resorts.

 

[CarolMN]

Interesting question - should be an interesting discussion.

To replicate what I have at the BWV, I'd have to come up with $40,000.

And that number of points would get me about half the nights I get at the BWV (assuming the point charts are similar to the VGF), or I can stay in a 1 bedroom at the BWV for what a studio would cost at the Poly.

We bought in 1999 (and got more than 40 years worth of points) and paid $65 per point, for a total buy-in of $16,250. That's 15 years ago and according to the BLS Inflation calculator, $16,250 in 1999 is equivalent to $23,033 in 2014. $65 is equivalent to $92.14.

So yes, for me, $160/point is bad - Disney is charging $68 /point over what inflation would suggest the price would be if only inflation were considered.

Looking forward to other perspectives.

 

[chalee94]

But they expire 24 years earlier. So they have about half the life. And are half the price.

So, while I do not like 160, it seems "about right", doesn't it?

not really as the value of pts 25-30 years or more out is really pretty close to zero...but a lot of people don't get present value calculations and will cheerfully divide by the years left as you did here and sign away five figures over to disney...

investing in disney corp is the much better move in this case. (yay for a problematic educational system! )

 

[KAT4DISNEY]

That's a whole giant chunk of change to pay up front but DVC would like you to believe it's worth it. With the huge point creep that has happened with the new resorts it's even worse. Just using the comparison resort you mentioned (VWL) 204 points gets you a 1BR at VWL during adventure season. It takes 247 to get a standard view 1BR at VGF and at the Poly - oh wait, you can't get a 1BR. But I'm guessing they'll do a lakeview studio for somewhere in the 160 range and perhaps a standard in the 130 although I'm kind of thinking I'm low on that number. And that then compares to 107 points for a VWL studio that now also sleeps 5.

130* $160 = $20,800
107 * $80 = $8,560

Yes, that's $20,800 vs $8,560 up front!

Or you could do points for a 1BR at VWL for $16,320 vs $20,800 for a Poly studio.

Or looking at the point cost per year:

$160/50 years = $3.20/pt per year
$80/28 years = $2.85/pt per year

VWL requires far less points for the same number of sleeping accommodations albeit Poly will be a little larger and have a different bathroom set up.

If you compare to the value vs onsite hotels I'm sure they make the numbers work to get a payback on your vacation "investments" over a decade or so but that can happen faster with resale. The comparison as always also needs to include the fairly ridiculous hotel room prices to stay onsite in accommodations that are not as high end as the price the charge vs offsite. Of course as long as people pay it then Disney will charge it but one also ought to consider off site into the equation or else onsite but non-Disney with the 4 Seasons or Bonnet Creek.

(yes Charles - keeping it a simple comparison for my take on it )

 

[jerseyduke]

So what should the price per point be in your opinion? Present value of points 25-30 years out is close to 0. 2042 contract values are indeed 0. How do you come up with "what the price per point should be". (Obviously it is as much as Disney can get). Also I do own a piece of the mouse...and I do not mean DVC.


Carol,

DVC has gone up so much faster than inflation. Comparing new direct purchases to old direct purchasers really really shows that!
But compared to what the options are today?

 

[drusba]

Half the life half the price is not a valid comparison. The years of current and near future use are far more valuable today than years after 2042. If you think of it from just a marketing view, how much do you think they could charge for Poly today if the only years being sold are those after 2042.

If the opening price is $160 and Poly sells well at that price (likely) then one may conclude the price was set at a fair market value. But one cannot say it compares in any way value-wise to $80 a point at BWV or any other older resort. The points per night are going to be very high for Poly, equal to and higher than VGF for the studios, and equal to the VGF GV's for the 2BR bungalows. It will thus be extremely expensive in comparison to the older resorts including when you consider that Disney has managed to increase prices in the last several years, when you factor in both price and points needed, by about double, while inflation has been near or even under 2% per year. Having essentially only studios is also a recognition by Disney that it's price and points per night have now reached the stage where most of the typical purchasers to which it sells can no longer afford to buy more points than what is necessary for a studio.

 

[jerseyduke]

Half the life half the price is not a valid comparison. The years of current and near future use are far more valuable today than years after 2042. If you think of it from just a marketing view, how much do you think they could charge for Poly today if the only years being sold are those after 2042.

If the opening price is $160 and Poly sells well at that price (likely) then one may conclude the price was set at a fair market value. But one cannot say it compares in any way value-wise to $80 a point at BWV or any other older resort. The points per night are going to be very high for Poly, equal to and higher than VGF for the studios, and equal to the VGF GV's for the 2BR bungalows. It will thus be extremely expensive in comparison to the older resorts including when you consider that Disney has managed to increase prices in the last several years, when you factor in both price and points needed, by about double, while inflation has been near or even under 2% per year. Having essentially only studios is also a recognition by Disney that it's price and points per night have now reached the stage where most of the typical purchasers to which it sells can no longer afford to buy more points than what is necessary for a studio.

Excellent point. I was thinking about that. And the villas. I was under the impression that the grand villas at the VGF were far form the highest in demand. They are available right now for the full last week of feb and the first week of march.

So, now 20 new ones? 6 at VGF seems to be plenty. 20?
If there is 51 UYs, 20*51 = 1020. I doubt DVC is going to sell anywhere near 1020 PVB contracts that are enough points for a week there. Those bungalows compose about 1,000,000 points of the Poly. And my guess is half those points are going to be purchased for studios, which may further increase the burden on studios.

 

[KAT4DISNEY]

Another thought - one could buy an older resort today for half the cost and use it until 2042. At that time they could then consider what's available for resale and if they wanted to continue with Disney and DVC - or DVC may very possibly extend contracts. In my scenario that's $12,240 that you have not tied up in a vacation 28 years from now and can use or invest until that time.

There's always going to be other variables such as people that will stay at the Poly anyway (although with that many studios I think it's going to be available to book at 7 months very often), if one plans to keep it for the entire length of contract or not, just to name a few but it's also not easy to say that $160/pt makes sense compared to 1/2 the cost for a resort with 1/2 the lease left.

 

[CarolMN]

......(snip)..........

Carol,

DVC has gone up so much faster than inflation. Comparing new direct purchases to old direct purchasers really really shows that!
But compared to what the options are today?

Very hard for me to say at this time in my life - I'm old now and probably won't be going much longer than another 10 - 12 years, if that.

I'd have to compare renting points for BLT (Lake View), AKV (savanna) or BWV (PV) to buying the Poly, because that would be what I would do absent our DVC membership. Don't think a $160/point purchase would compare favorably - I'm too lazy to do the math right now, LOL. But I think I could easily rent a stay for at least another 10 years for $40K, even if I paid $15 or $16 per point to do so.

 

[jerseyduke]

Very hard for me to say at this time in my life - I'm old now and probably won't be going much longer than another 10 - 12 years, if that.

I'd have to compare renting points for BLT (Lake View), AKV (savanna) or BWV (PV) to buying the Poly, because that would be what I would do absent our DVC membership. Don't think a $160/point purchase would compare favorably - I'm too lazy to do the math right now, LOL. But I think I could easily rent a stay for at least another 10 years for $40K, even if I paid $15 or $16 per point to do so.

True. And 16 per point is really kind of like 10 per point, since if you owned you would be paying about 6 pp in MF on those points

 

[jerseyduke]

More food for thought:

Documents seem to imply that the bungalows are going to average 147 points per night.

51 Use weeks * 7 days a week * 147 points per night * 160 $ per point = 8, 396, 640

Yep: 8.4 million for a two bedroom sounds about right! Then give it back in 50 years.


I am so in the wrong business....

 

[quinnc19]

I think $160 doesn't sound that bad compared to the $180 some people expected. It also doesn't sound too bad compared to the *direct* prices of the other/older resorts - which is what DVC is banking on!

 

[rfc0001]

You can easily compare any two DVC purchases (direct or resale, regardless of resort) by simply calculating:

1) Total purchase costs (incl. closing/excluding MFs) / total points remaining on contract
2) Adding MF/pt.

This gives you your actual cost of each point you spend this year.

E.g. assume you buy 1 PVB point @ $160, that's $160/52 points remaining on contract (assuming 2066 expiration) = $3.07. We don't know what MFs will be which is the other part of the equation, so let's assume the same as VGF ($5.52), so a total cost per point of $8.59 -- e.g. if you use 1 point this year that points will cost you $8.59 (your purchase cost divided by total points plus the maintenance cost for that same point).

IF you compare this to resales, SSR/AUL (sub)/BLT/OKW (ext) are typically in the $7-$8 range, AKV/VGC/OKW are in the $8-9 range and it goes up from there to $10 for VB. So, $8.59 for PVB retail is actually a pretty good deal. Keep in mind this is the best value it will ever be because (a) it's the lowest point value it will ever be and (b) it has the most points remaining on the contract it will ever have. As they say, it's all downhill from here.

 

[drusba]

Another way to look at it is from the view of comparing current apples to apples to see how much of an initial impact there is when both price and points per night are considered. Assume you are a new purchaser and would like to get a week in a studio annually during Magic Season (what you need to buy if you have any school aged kids). You look at resale for BWV and see that you can get the best view on site, boardwalk view, for 132 points during magic season. At $80 a point resale, it will cost you $10,560. Now suppose Poly comes in at $160 a point and the same points as VGF. A lake view will be 199 points per night for a week in a studio in magic season. At a $160 a point, it will cost you $31,840, three times more than BWV. In fact, you can get a 2BR boardwalk view for a week in magic season at $80 a point for $28,000, over three thousand less than that studio with an inferior view at Poly. Moreover, even if you are a rich sheikh, you can get three BWV grand villas for a week during magic season for about the price it will cost you for one week in one of those significantly smaller 2BR bungalows at Poly if, as expected, the points are the same as a VGF GV.

And now you really need to think about another issue. With 360 studios there is a very good chance that Poly will be available at 7 months out many times of the year, particularly between mid-Jan and mid-Sep, DVC's slow to moderate demand season. If that assumption is correct, your real value lies in buying SSR in resale to get those 199 points needed for a Poly lake view studio during magic season.

 

[rfc0001]

Another way to look at it is from the view of comparing current apples to apples to see how much of an initial impact there is when both price and points per night are considered. Assume you are a new purchaser and would like to get a week in a studio annually during Magic Season (what you need to buy if you have any school aged kids). You look at resale for BWV and see that you can get the best view on site, boardwalk view, for 132 points during magic season. At $80 a point resale, it will cost you $10,560. Now suppose Poly comes in at $160 a point and the same points as VGF. A lake view will be 199 points per night for a week in a studio in magic season. At a $160 a point, it will cost you $31,840, three times more than BWV. In fact, you can get a 2BR boardwalk view for a week in magic season at $80 a point for $28,000, three thousand less than that studio with an inferior view at Poly. In fact, even if you are a rich sheikh, you can get three BWV grand villas for a week during magic season for about the price it will cost you for one week in one of those significantly smaller 2BR bungalows at Poly if, as expected, the points are the same as the VGF GV.

And now you really need to think about another issue. With 360 studios there is a very good chance that Poly will be available at 7 months out many times of the year, particularly between mid-Jan and mid-Sep, DVC's slow to moderate demand season. If that assumption is correct, your real value lies in buying SSR in resale to get those 199 points needed for a Poly lake view studio during magic season.

Completely agree with this last point-- your best bet is to get SSR (which is the best value) unless you need to book one of the very few room types that sell out before 7 mos.: AUL standard views, AKV value/concierge, BCV two queen 2bdrm, BLT standard views, VGF studios/2bdrm lock-offs, BWV studios/2-bdrm lock-offs. Given PVB should have the same overall point rates as VGF, I'd expect that to put a damper on demand, at least for Bungalows. However, VGF studios regularly sell out before 7 mos. despite their higher point price compared to other WDW resorts, so same could hold true for PVB, esp. initially.

As far as your first point, it's a valid consideration, but while you will save money up front you will still spend more per individual point used over time. Best example of where you fall into this value trap is VB, which has the lowest face value ($40 CPP) but highest actual cost per individual point used ($10), so why while you will save money up front you'll spend more over time. That said, if it's all you can afford, then understandably it's still a valid consideration. Conversely, if you can afford it PVB is a decent value on a total cost per point basis, given you are buying more points with the contract -- and this value is limited since the price will go up and points will go down over time, so if you are going to buy, you should buy now. You can always wait and buy resale, but typically the resale values are proportional to the initial offering price minus used points (e.g. $145 VGF presale price x 48/50 years = $139, which is what VGF resale is going for currently).

 

[crisi]

However, VGF studios regularly sell out before 7 mos. despite their higher point price compared to other WDW resorts, so same could hold true for PVB, esp. initially.

I suspect that as more studios sleep five, this will go away. For sleeping five, a studio at VGF is a value over a one bedroom at another resort. And I don't think the room conversion at VWL is that well known yet.

 

[Deb & Bill]

So rumors that the poly will be 160 per point.

Now, i know it is a two tier system; price per point, and points per night.

However:

Looking at VWL...resale is in the neighborhood of 80 per point. Boardwalk around that, BCV higher.

But they expire 24 years earlier. So they have about half the life. And are half the price.

So, while I do not like 160, it seems "about right", doesn't it?

I know AKV, OKW and SSR are "cheap" with later dates, but they are large resorts.

I keep thinking about the story of putting a frog in a pot of water and slowly raising the temperature until it is cooked.

I bought points at about $50 a point in 1997. I thought $85 a point was crazy.

 

[rfc0001]

I keep thinking about the story of putting a frog in a pot of water and slowly raising the temperature until it is cooked.

I bought points at about $50 a point in 1997. I thought $85 a point was crazy.

It's all relative -- rack rates were a 1/3 what they are now as well, which is where the saving buying timeshares is derived from.

 

[Deb & Bill]

It's all relative -- rack rates were a 1/3 what they are now as well, which is where the saving buying timeshares is derived from.

Nah, not 1/3 of what they were in 1997. Maybe half. Not one third.

 

[sleepydog25]

Another way to look at it is from the view of comparing current apples to apples to see how much of an initial impact there is when both price and points per night are considered. Assume you are a new purchaser and would like to get a week in a studio annually during Magic Season (what you need to buy if you have any school aged kids). You look at resale for BWV and see that you can get the best view on site, boardwalk view, for 132 points during magic season. At $80 a point resale, it will cost you $10,560. Now suppose Poly comes in at $160 a point and the same points as VGF. A lake view will be 199 points per night for a week in a studio in magic season. At a $160 a point, it will cost you $31,840, three times more than BWV. In fact, you can get a 2BR boardwalk view for a week in magic season at $80 a point for $28,000, over three thousand less than that studio with an inferior view at Poly. Moreover, even if you are a rich sheikh, you can get three BWV grand villas for a week during magic season for about the price it will cost you for one week in one of those significantly smaller 2BR bungalows at Poly if, as expected, the points are the same as a VGF GV.

And now you really need to think about another issue. With 360 studios there is a very good chance that Poly will be available at 7 months out many times of the year, particularly between mid-Jan and mid-Sep, DVC's slow to moderate demand season. If that assumption is correct, your real value lies in buying SSR in resale to get those 199 points needed for a Poly lake view studio during magic season.

Great examples. The highlighted part got me to thinking what's to stop the "value" DVC resorts from rising in resale value if the proposed direct sale from DVC contracts actually start at $150 or more? "Hey, what a good deal $120 would be for SSR since enough points there can still get you into a new PVB studio since there are 360 of them!" Something like that, anyway.