Just curious how people do a cost analysis

[jockotaco]

I looked at a studio as an equivalent to booking 1 room, even though a studio has slightly better amenities. For me a 1 bedroom is equivalent to 2 rooms. As a family of 5 we were getting 2 rooms but are comfortable in a 1 bedroom with my 2 boys sharing the sofa and my daughter on the Murphy bed, although we like a 2 bedroom. How do you value the 2 and 3 bedroom. When we did our cost analysis we tried to compare apples to apples. As we were always booking 2 rooms we used a 1 bedroom point total as our minimum cost. Just curious how others looked at it. Not fancy calculations just the nuts and bolts. I'm a pretty simplistic guy that likes deluxe resorts.

 

[bwvBound]

We began by comparing a DVC Studio to a Dolphin Hotel room using Conference Rates.

Soon after, we adjusted our expectations to comparing a DVC 1BR booked direct (as DVC owners) against booking that same accommodation via other means, primarily II/RCI inbound exchange. The inbound exchange is always less expensive but not as flexible as owning. We conceded to attributing value to the goofy factors of convenience and flexibility when embracing direct ownership.

Beyond that, we often use the saying, "It's only money."

 

[Dean]

I looked at a studio as an equivalent to booking 1 room, even though a studio has slightly better amenities. For me a 1 bedroom is equivalent to 2 rooms. As a family of 5 we were getting 2 rooms but are comfortable in a 1 bedroom with my 2 boys sharing the sofa and my daughter on the Murphy bed, although we like a 2 bedroom. How do you value the 2 and 3 bedroom. When we did our cost analysis we tried to compare apples to apples. As we were always booking 2 rooms we used a 1 bedroom point total as our minimum cost. Just curious how others looked at it. Not fancy calculations just the nuts and bolts. I'm a pretty simplistic guy that likes deluxe resorts.

IMO a studio compares to a single deluxe room with some plusses and some negatives and a 2 BR compares to 2 rooms. A 1 BR is simply a luxury item and is best compared to a single room for a financial analysis. The "value" for a given person is where the added luxury of a 1 BR comes into play. Most people don't take enough advantage of the kitchen to use that in the financial analysis even for those that think they will.

 

[crisi]

And because you can fit five in a Deluxe room, but only four in a DVC studio, you won't financially come out ahead with DVC. HOWEVER, if you can afford it, you may discover that putting the kids in a one bedroom - or even a two bedroom - makes a qualitative difference in your stay - enough so that the increase in cost is worth it.

 

[staceymay00]

Also a family of five...I compared what we had been paying for a deluxe room that slept five to the cost of owning DVC points for a 1BR villa. I did not compare to rack rates of the deluxe rooms since we would not be willing to pay that much for our usual 7 night stay, but instead used the discounted rates of around 40% that we had been getting, I found that our nightly costs buying a resale contract at OKW were in line with what we were paying for the deluxe rooms that sleep five. We've ended up staying in 2BRs instead of 1BRs, so DVC isn't really saving us money; but, we are getting a much better experience in a 2BR without spending too much more than we had been. Also, we now don't have to wait and wonder if discounts will be offered (and lately due to my kids' schedules we visit WDW at times when discounts are not offered).

Sent from my iPad using DISBoards

 

[Deb & Bill]

I looked at a studio as an equivalent to booking 1 room, even though a studio has slightly better amenities. For me a 1 bedroom is equivalent to 2 rooms. As a family of 5 we were getting 2 rooms but are comfortable in a 1 bedroom with my 2 boys sharing the sofa and my daughter on the Murphy bed, although we like a 2 bedroom. How do you value the 2 and 3 bedroom. When we did our cost analysis we tried to compare apples to apples. As we were always booking 2 rooms we used a 1 bedroom point total as our minimum cost. Just curious how others looked at it. Not fancy calculations just the nuts and bolts. I'm a pretty simplistic guy that likes deluxe resorts.

I think the standard deluxe hotel room has better amenities than the studio. Two real beds to start with. The microwave? Not much and you can probably find one somewhere to use. A one bedroom is hardly equivalent to two rooms. You are comparing sleeping space for four or five to sleeping space to 8 or 10.

 

[jockotaco]

A one bedroom for our family would be sufficient for us to be comfortable where as a single hotel room would not be. I would gladly give up the second hotel room for a living room and kitchen. The living room would convert to our second bedroom at night.

 

[crisi]

A one bedroom for our family would be sufficient for us to be comfortable where as a single hotel room would not be. I would gladly give up the second hotel room for a living room and kitchen. The living room would convert to our second bedroom at night.

Yep, that's what I mean by a qualitative difference. You probably won't save money, but the value you get for your extra dollars might be worthwhile to you.

And wait until you you try a two bedroom.

 

[rusafee1183]

Beyond that, we often use the saying, "Its only money."

We are a couple with no children who, before DVC stayed in Mods and Values and dreamed of the day that we might ONCE stay at the Boardwalk. Since buying into DVC, it's more - "Which beautiful. luxury accomodation will we be able to stay at this time" or "We can afford to take the family!"

And that is the most amazing feeling ever.

Not that we have money to be throwing around - but every time I start to think maybe DVC isn't "worth it" or start reading the posts about cost breakdowns and break even points and start to freak out that I didn't get a great "deal", this is what we come back to.

"It's just money, we'll make more tomorrow" is the phrase we live by in our house.

 

[BEASLYBOO]

It's very hard to compare apples to apples between hotel rooms and DVC accommodations!

We're a family of two (my son 16 and I) and though we could easily fit in a studio but we stayed in a one bedroom from the get go and that's how I liked it. Now, we always bring 4 to 5 people with us each time and I book a 2 bd. We come more often (because of the kitchen, the laundry room & the living space) something I wouldn't do if booking a standard hotel room, reason being comfort level. Personally, I need my own room, and I like those who I invite to stay with me to be comfortable as well. It's not spring break, I'm not 20 anymore and I'm not staying in a room with 3 other people (children or adult). Now, I could but I won't. For those individuals whom the studio/hotel room w/4 works, more power to you and perhaps your value goes up, but for me value is inclusive of the quality of my stay! There's value in being able to commune together that is not available in a standard hotel room!

So how does one compile all this and compare apples to apples, what does it equate to $$$ wise, it's different for everybody I think!

 

[RJPoste]

I guess it can be tough. As people mentioned, there are ammenities you get from DVC rooms, that you may not get with standard hotel rooms. Besides the cash value, I also try to look at the "I wants" in a room.

 

[JimMIA]

I'm always leery of "financial analyses" because they often turn out to be nothing more than a tortured manipulation of numbers to justify whatever the person wanted to prove in the first place.

I also agree with those who say it's difficult to compare DVC accommodations to other types of accommodations.

Instead, if I were looking at the financial aspects, I would just figure my cost for a DVC reservation during the season I wanted to visit. Once I have an accurate idea of what my points are costing this year, I can do simple math and evaluate the relative value of DVC costs and non-DVC accommodations.

I would start with the assumption that I sell my DVC after 10 years for 20% of my purchase price, after all costs of selling. (I'm basically figuring I'd sell ten years later for about 25-30% of what I paid, and have to pay a 10% commission.)

I'd take my 80% of my purchase price, add 100% of any closing or financing charges (because I'm not going to get any of those costs back) and divide that sum by 10X the number of points I own. That would give me my acquisition cost per point, per year. Then, I'd add my current annual dues per point to get my total cost this year for those points.

For example, let's say I was contemplating purchasing 200 points resale with SSR as my home resort. I think I can get SSR for $55 per point, so I'm looking at an $11,000 purchase + closing costs of $500 -- and I'm paying cash, so no financing. My math is as follows:

80% of purchase price = $8,800 + Closing costs $500 = Total acquisition cost over 10 years = $9,300

Acquisition cost per point per year = $9,300 divided by (10X200 points) = $4.65 per point.

$4.65 + 2013 dues of $4.81 = $9.46 per point total cost for 2013

Then I'd multiply my cost X the number of points needed for a particular reservation and decide whether that cost was reasonable or not.

I assumed paying cash. Obviously, if I'd financed, the per point cost would be significantly higher.

 

[DougEMG]

First to make apples to apples comparisons, I agree with Dean that

DVC studio = hotel rooms
DVC 2 bedroom = 2 hotel rooms
and a 1 bedroom is extra luxuary.

Then I would look at three things to compare on costs

(1) Price that I would pay for the hotel room
(2) Price to pay to rent the equivalent DVC room
(3) Price to purchase (include annual MF) the equivalent DVC room. The trick here is over what time period do you discount your purchase price.

Finally I look at what the breakeven point is on purchasing as compared to options (1) and (2). If that is a short enough time period, then buying makes sense for me.

I like to minimize my up front costs, and I don't want to wait 20+ years before I see any benefits, so at the end of the day I only want to purchase if I see the benefit within 6-8 years.

 

[Dean]

We are a couple with no children who, before DVC stayed in Mods and Values and dreamed of the day that we might ONCE stay at the Boardwalk. Since buying into DVC, it's more - "Which beautiful. luxury accomodation will we be able to stay at this time" or "We can afford to take the family!"

And that is the most amazing feeling ever.

Not that we have money to be throwing around - but every time I start to think maybe DVC isn't "worth it" or start reading the posts about cost breakdowns and break even points and start to freak out that I didn't get a great "deal", this is what we come back to.

"It's just money, we'll make more tomorrow" is the phrase we live by in our house.

One can over think it but the reality is that DVC likely saves no one money, even the ones that think they're getting a great deal. It may or may not give extra value, it depends. However, I think many assume that the only way to get these benefits is by owning DVC and that simply isn't true for most of the situations. I generally stay 2-3 weeks a year (or get a week and only use it a long weekend) for a fraction of the cost of buying/owning. I'd likely be better off not owning or just keeping 25 points for the perks but I just haven't gotten around to divesting myself of the extra points we have. It's likely been 6 years (Dec, 2006) since anyone in our family had a full stay on points alone and even that trip, we had a 1 BR for 6 nights at SSR on points, a 1 BR at BWV BW view 5 nights on points and a 2 BR at SSR exchange for a week. Since we've had somewhere in the range of about 20-25 weeks in 1 & 2 BR spanning every resort on property except BLT and had the opportunity for there as well. Otherwise we've rented our points or used them to supplement other stays.

 

[lucyem]

I have an excel spreadsheet on my computer. I have the following columns on it:

Cost of DVC up to that point (meaning purchase plus I add dues as I pay them)
Lines with each trip we have taken as DVC members
The cost of paying cash for exact same room (+tax)
That cost plus any discounts I could have used (+tax)
The cost of paying cash for whatever room we would have had instead (+tax)
The cost of paying cash minus any discounts I could have used (+tax)

Mostly we stay in 1 bedrooms. The space, the laundry, our own meals, the space, etc is just heavenly. It will become more so as my boys both reach 6+ feet.

If we were paying cash we would have a basic garden view. We so far have only stayed at BCV & AKL which is where we would pay to stay if we were paying cash.

I know DVC is saving us money on rooms. On the other hand we are certainly not saving by all the money we spend to get there, eat there, tickets etc. And we are going more. And I think that is what DVC does ultimately - allow us to go more for the same price.

 

[Serkazong]

My analysis for DVC, and about everything, consists of:

Do I want that?

Can I afford it?

Would I rather do something else with that money that I want more?

Yes, yes, and no, ok its bought.

 

[Dean]

My analysis for DVC, and about everything, consists of:

Do I want that?

Can I afford it?

Would I rather do something else with that money that I want more?

Yes, yes, and no, ok its bought.

Your choice of course just like you could go in and lay $10K on the craps table and lose it. Unfortunately so many people skip the "can I afford it" test and buy when they can't. In my view if you can't pay off your debts and save up to pay for vacation OOP, one really doesn't deserve to go on vacation anyway.