Is 160 pp that bad?

[wdrl]

i only hope the contract that allows disney to keep 10 of the bungalows for cash reservations means that the PVB owners are only paying maintenance on the 10 that they have access to...(assuming that report about the bungalows was true.)

I think you are misunderstanding what has happened. There is no "contract" that allows Disney to keep 10 of the bungalows for cash reservations. Its possible that DVC members could book all 20 bungalows every night as soon as the resort opens on April 1.

DVD has initially declared 10 of the bungalows and 72 of the studios for the DVC inventory. The declared accommodations were the 10 bungalows on the west side (closest to the Grand Floridian) and all 72 studios in the Moorea Longhouse. The 10 bungalows closest to the Ticket and Transportation Center and the 288 studios in the Pago Pago and Tokelau Longhouses were not declared and are still owned by DVD.

Given the size of the declaration, DVC members can book using points accommodations equivalent to up to 10 bungalows and 72 studios worth of points each and every Use Day. Furthermore, because of the Reciprocal Use Clause in the master declaration, for each Use Day DVC members can book and use DVD's accommodations that have not yet been declared. In exchange, DVD can use accommodations that are part of the DVC inventory. This means that if DVC members want to book all 20 bungalows for any given night, they can do it. In exchange, DVD will take the number of studios equivalent in points to the 10 bungalows and use them for cash reservations.

DVD will probably make additional declarations at PVB in the next few months, thereby increasing the size of the DVC inventory. Eventually, 100% of PVB will be declared for the DVC. At VGF, 75.8% of the resort was initially declared for the DVC inventory. It was not until October 28, 2014, that the final declaration was made so that 100% was declared for the DVC inventory.

The master declarations at all DVC resorts gives DVD two choices regarding the payment of maintenance fees. It can either pay the maintenance fees for all the points it owns OR it can agree to make whole any shortages in a resort's budget, exclusive of ad valorem taxes. To my knowledge, DVD has stated that it will make whole the budget at every DVC resort.

 

[chalee94]

However, I don't think it's applicable from a possible member purpose standpoint. Other than those that are really set on the high end options like VGF & the Poly with or without DVC, I think DVC really has priced themselves out of the market for almost all potential members.

i agree, but they passed my bar for reasonable prices some time back...

 

[Dean]

I like the post on top of mine but want to add to it. Rather than focusing on whether it's a savings vs rack rates, let's look at how good a deal it is vs comparable resorts.

PVB studio standard view magic season = 169 points
169 points X 6.02 maintenance cost = 1,017 per year

Compare with Grand Floridian standard studio magic season = 169 points
169 points X 5.52 maintenance cost = 933 per year

Compare with BLT Standard magic season = 139 points
139 points X 5.05 dues = 702 per year

Poly is the most expensive monorail DVC simply based on annual dues per a certain room type. It's 10% more expensive than GFV and 50% more expensive than BLT.

Now, I'm sure people love Poly more than Grand Floridian or Contemporary, but are there enough people who love it 10% more than GF or 50% more than Contemporary? Frankly if I was a high-end buyer who needed "the best" DVC I'd go with GFV and save the 10% over the cost for Polynesian. And if I wanted a monorail resort I'd have an impossible time justifying Poly over BLT.

I've said many times that I though rack rate of the DVC option was a poor comparison for everyone that wouldn't be staying there or a suite on cash without DVC. I was simply limiting to the discussion presented. IMO the best comparisons are renting points privately and what one would get for cash without DVC for a savings standpoint. When looking at value there are other variables but many of them are subjective, situational and emotional making them difficult to compare. I believe that both VGF and the Poly dues will raise faster than the average long term, basically you haven't seen anything yet.

There is no reason hey have to declare the others and they wouldn't be available for points reservation undeclared unless DVD simply wanted them to be.

i agree, but they passed my bar for reasonable prices some time back

It depends but a large part of my point is that they passed the bar for most people from a reasonability standpoint some time ago retail, even many people who buy anyway. Of course anyone who could just throw away the cost and not worry about it could do what they wanted "reasonable" or not. However, most DVC members don't fit into that category and most that are in the situation aren't going to buy DVC anyway. DVC is a niche product aimed at and appropriate for those somewhere in the range with an income of say $75K to $250K with a few limited exceptions.

 

[Msmithmd]

And that calculation ignores the time value of money component and potential discounts it appears. Using the calculation I'd use a 20% discount but for the who travel at times where there are less discounts, 10% is reasonable (and the lowest discount one should use in this calculation IMO).

Quite correct, although you can get in the weeds pretty rapidly doing TVM calculations, because then you need to guess the delta for CPI inflation versus DVC dues inflation out 50 years and account for that as well, and also you must make the assumption that on purchase day, the purchaser would have used the money for something other than leisure (which might be a specious assumption).

TVM only really becomes relevant if the buyer would have deployed the assets in a different, productive manner. The calculation can get pretty inaccurate pretty quickly, which is why I just used absolute dollars.

Your most salient point is the one about cash rack rate versus cash discounts. It's not all that unusual to get a 20-30% discount on rack rates, or possibly some other offer on dining or tickets if bought as a cash package.

When one includes this comparison, it isn't much of a stretch that new PVB buyers might not save money AT ALL by owning DVC. Especially if they use those expensive PVB points for less expensive resorts, or for the financially inefficient trade-out options. And of course all this assumes a full payment purchase. Financing at 10-15% runs the figures down the rabbit hole even further.

 

[Dean]

Quite correct, although you can get in the weeds pretty rapidly doing TVM calculations, because then you need to guess the delta for CPI inflation versus DVC dues inflation out 50 years and account for that as well, and also you must make the assumption that on purchase day, the purchaser would have used the money for something other than leisure (which might be a specious assumption).

TVM only really becomes relevant if the buyer would have deployed the assets in a different, productive manner. The calculation can get pretty inaccurate pretty quickly, which is why I just used absolute dollars.

Your most salient point is the one about cash rack rate versus cash discounts. It's not all that unusual to get a 20-30% discount on rack rates, or possibly some other offer on dining or tickets if bought as a cash package.

When one includes this comparison, it isn't much of a stretch that new PVB buyers might not save money AT ALL by owning DVC. Especially if they use those expensive PVB points for less expensive resorts, or for the financially inefficient trade-out options. And of course all this assumes a full payment purchase. Financing at 10-15% runs the figures down the rabbit hole even further.

Actually I think the up front costs are as large of a factor as the ignored discount though I realize there are MANY variables and ways to look at it. Regardless it IS a factor that increases the cost of the timeshare portion and moves the 2 numbers closer together, we can only quibble about the amount, not the principle. IMO if one doesn't have the money you could use productively one likely shouldn't be buying in anyway. My personal view is that one allots about half of the purchase for long term investments (and invest it) and about half in a short term option such as a money market which is depleted as you use it for vacations taken in place of the timeshare taking MF's not owed as a yearly cash addition. For higher end options, I'd allot most, if not all, of the additional cost over lower resort resale as long term investment dollars personally but I'd think this would vary with one's normal cash choices. Conservative assumption for the long term amount, 8% after taxes, 1% on the short term dollars. I just can't see financing a luxury purchase so it's not on the table as far as I'm concerned.

 

[mjr0483]

Price is somewhat in our control. If people pay $160/point you are telling Disney the points are priced correct.


How long can Disney sit on the inventory if nobody buys it? And will people pay the cash price to keep it afloat?

 

[CMOORE185]

Price is somewhat in our control. If people pay $160/point you are telling Disney the points are priced correct.


How long can Disney sit on the inventory if nobody buys it? And will people pay the cash price to keep it afloat?

I just feel the value of DVC is not there at $160 per point. To put that much cash up front for vacations does not work for me. It amazes me that they can sell at this price.

 

[CarolMN]

......(snip).......How long can Disney sit on the inventory if nobody buys it? And will people pay the cash price to keep it afloat?

Historically, they have not reduced prices when sales didn't meet expectations. They've just added incentives / offered discounts. It will be interesting to see if those become necessary for the Poly.

They have not found the price to be a problem selling the VGF. AFAIK, they have never offered an incentive or a discount for VGF. We'll see if the same holds true for the Poly.

 

[mjr0483]

Obviously I would love to stay at a bungalow.
But they priced me out.
I did get into 250 OKW @ $65/Point

I am not their target audience.

Studios and 1 Bedrooms are more in my budget.

 

[McCrae]

I just feel the value of DVC is not there at $160 per point. To put that much cash up front for vacations does not work for me. It amazes me that they can sell at this price.

When you look at the number of people visiting Disney you only need a small % to buy and the resort will sell out. I wonder how many owners each resort has? I would guess that you would only need between 25k and 30k new owners to buy points and that will be enough.

 

[beer dave]

When you look at the number of people visiting Disney you only need a small % to buy and the resort will sell out. I wonder how many owners each resort has? I would guess that you would only need between 25k and 30k new owners to buy points and that will be enough.

yup... Poly has about 4m points--- that is about 27k new owners at 150 points each..... each of whom could spend 1 night in a bungalow at the right time of year....... I think that is.... actually... priceless.

 

[bigtony777]

With the crazy high number of points needed for the bungalows, I am not sure that the studios will be as available as many think they will be at the 7 month mark.

I just don't see many being able to afford the bungalows and almost everyone that owns there will booking studios. I know that there will be 360 studios, but if 98% of the owners will be booking studios, will there really be many available at 7 months?

There is no way that I will pay almost 1.5x more in points for a week in a studio or 3.5x more in points for a 2 BR than I could get at my home resort at BWV. Now I am not saying that I will never stay there, but it would be for a very short stay and likely on a weeknight in a cheaper season.

 

[kungaloosh22]

Cost per point increases to $165 next month once new members can buy. I don't visit WDW again until Sept, and would prefer to see it in person before I purchase (leaning to "no," but still undecided). What are the chances the price will have increased again by early Sept? I realize nobody has a crystal ball, but are there trends that might predict this based on previous offerings?

 

[Face Like Fizz]

With the crazy high number of points needed for the bungalows, I am not sure that the studios will be as available as many think they will be at the 7 month mark.

I just don't see many being able to afford the bungalows and almost everyone that owns there will booking studios. I know that there will be 360 studios, but if 98% of the owners will be booking studios, will there really be many available at 7 months?

I agree. I think seven month bookings could end up being pretty difficult, much in the same way VGF has gone. That's one of the reasons we have bought PVB points.

 

[Minniesgal]

I agree. I think seven month bookings could end up being pretty difficult, much in the same way VGF has gone. That's one of the reasons we have bought PVB points.

I totally agree with this. I just don't see Poly buyers spending there $160 points to stay at SSR/OKW/AKV when those could be bought much cheaper. I feel Poly buyers will be people who love the Poly and want to stay there.

We bought a small quantity of VGF points and plan to only ever use them for 1 bedrooms at VGF unless something comes up and we have to do something else. We might try Aulani once but most years we will be using our home resort points at home resort. I think this could also be the case for many Poly buyers.

 

[jgdsoarin]

That's my thinking. I just bought a small contract that I only plan to use at the Polynesian. I even got a different use year based on when we want to travel there. I will enjoy my other points to visit all the other resorts. We have loved everywhere we've stayed, but we are very happy with our new purchase. We are looking forward to being "welcomed home" aloha style!

 

[Slakk]

I totally agree with this. I just don't see Poly buyers spending there $160 points to stay at SSR/OKW/AKV when those could be bought much cheaper. I feel Poly buyers will be people who love the Poly and want to stay there.

We bought a small quantity of VGF points and plan to only ever use them for 1 bedrooms at VGF unless something comes up and we have to do something else. We might try Aulani once but most years we will be using our home resort points at home resort. I think this could also be the case for many Poly buyers.

I came over to see what the price was...yeah not interested. Not when my points that cost me $65 a point can get me pretty much wherever I want. I did the Grand Floridian tour loved the rooms but the sales were definitely pushed to NEW members not the older members.

I assume these will be the same. With our son getting older we can travel at off times so they will not be getting any more of our money. The rooms do look nice though but I wish they would stop building DVC - it used to be special now it is their go-to cash cow.

 

[rfc0001]

Price is somewhat in our control. If people pay $160/point you are telling Disney the points are priced correct.

You're not paying $160 "per point" -- you're paying $160 for 1 annual point x years on contract (52 at this point), or 52 total points, so $3/pt. used + $6/pt. MF, so $9/pt. compared to $14/pt. to rent the same pt. to stay at Poly -- so still a good value compared to renting. For comparison, Vero Beach is 1/4 the sticker price of Poly at "only" $39/pt., but you are actually paying $10/pt. used once you factor in the total price you paid per remaining point on contract plus MF fee/pt. -- and that's assuming the lowest priced resale available with no closing costs. So, despite being 1/4 the face value it's actually more expensive per point than Poly direct. That said, $39/pt. is 1/4 the price upfront, despite being 11% higher cost per point used, so still makes sense for some people. Even so, $9/pt. is still a better value, therefore fairly priced IMO. What is crazy is the direct prices people pay for older resorts with much fewer points left on the contract -- something I can't understand why people pay for the life of me (since you are paying more to buy the points than the price to rent the same points). FYI, Tikiman Pages suggests using this exact approach for comparing the value of buying vs. renting: http://www.tikimanpages.com/poly/the-resort/dvc/item/194-dvc-news-and-information.

 

[Dean]

I totally agree with this. I just don't see Poly buyers spending there $160 points to stay at SSR/OKW/AKV when those could be bought much cheaper. I feel Poly buyers will be people who love the Poly and want to stay there.

We bought a small quantity of VGF points and plan to only ever use them for 1 bedrooms at VGF unless something comes up and we have to do something else. We might try Aulani once but most years we will be using our home resort points at home resort. I think this could also be the case for many Poly buyers.

They'd be foolish to buy there and use the points routinely at other resorts though some will do so for both the Poly and VGF, esp those that don't know there are options. If that's the plan, may as well buy cheaper or a combo of cheaper and higher demand points.

 

[chalee94]

Historically, they have not reduced prices when sales didn't meet expectations. They've just added incentives / offered discounts.

i could have sworn the net price (maybe for AKV) came down after the initial purchase offering.

doubt that will happen at poly but it's not impossible that they would raise the asking price but offer $10-15 in discounts if sales are a disappointment...