Most Economical Resort - Beyond Year 1

[ehh]

So DVC Resale Market does a solid job looking at the dues-inclusive economics of buying a DVC contract every quarter, last one being from May: https://www.dvcresalemarket.com/blog/best-economical-dvc-resorts-to-purchase-spring-2024/.

They take the tried-and-true method of taking the upfront cost then dividing equally across years remaining to get a cost/year figure that takes into account contract length. Then they add in the current year dues for an approachable and good breakdown of DVC resort economics.

But what if you want to know the economics of DVC contracts beyond year 1? What if you want to factor in the time value of money and weight sooner years more than distant years?

Well, you're in the right place then.

First, I really want to thank @CastAStone for his 'Discount' methodology for upfront cost weighting over time as the true inspiration for this. As soon as I saw it, it was a clear "oh duh!" moment for an improved apportionment of upfront costs. Also want to thank DVC Resale Market for their analysis every quarter as a bit of inspiration, as well as sharing resale prices every month, as those will be used here.

I'll have follow-up posts explaining the math of both the upfront cost apportionment as well as Dues forecasting, as they each both deserve full explanations. I'll also reserve space for a stretch goal of factoring in points charts, and another for factoring in cash room rates (you know what, make it a superstretch!).

So without further adieu, my forecast for the Most Economical Resort in 2025, based on buying at current resale prices (from here), direct prices (150pt contract, existing member, and Welcome Home), and Dues:

Okay, but you're here for Beyond Year 1. Here's a chart of the forecast from 2025 - 2034:

And one through 2074, with an upper-bound set to preserve some readability:

Charts with 21 lines are tough to read, so here's tables for Year 5 (2029), Year 10 (2034), and Year 17 (2041):

But here's the thing about this, these are still only 1 year snapshots of cost. You're (probably) not keeping the contract for just 1 year, let alone specifically Year 5, 10, or 17. You gotta pay dues every year and breaking down the upfront costs over multiple years only 'works' if you keep it for multiple years.

So here's cumulative 'costs' for Years 1-5, Years 1-10, and Year 1-17:

And some critical caveats:

• I'll explain more below in my Dues Explanation post, but VGF dues feel likely to be higher than forecasted.
• There's a ton of uncertainty when forecasting dues out, much past 10-17 years is likely no better than a total guess.
  • Even the next few years might be totally off!
• This is only a single 'discounting' method using a 5% value discount per year. This not necessarily better or more valid than other methodologies! Fuller explanation in a follow-up post below.
  • In fact, in my personal tracking spreadsheets I use a 0% discount to keep tracking simpler.
• A medium amount of data entry and lot of spreadsheet tinkering went into this, it's possible there's a clerical error.
  • In fact, about halfway into writing this I realized the resale prices I used were a hybrid of April 2024 and June 2024. I'm now using June 2024 exclusively.

Some other call outs!

• I've set this up such that updating for latest prices/dues/dues-growth is actually fairly easy, so I should be able to update and maintain this going forward!
• I've done my best with chart readability but with 21 curves it's tough. If you have any recommendations, I'll definitely listen.
  • I had the semi-bright idea of using color combos from the buildings at the resorts...but it turns out a bunch are very similar!
• I might regret or stop doing this later, but after I get through all my following explanatory posts, I might even be open to taking requests of custom comparisons.

 

[ehh]

Explaining the Math - Upfront Cost Apportionment

Credit here really goes to @CastAStone.

The idea is fairly simple: take into the account the time value of money and devalue later years. The value of additional years in the 2050s should be considered very low for a purchase made in 2024 with 2024 money. But not zero, just kinda close to zero.

So how to do that? What I've done above is reduce the value of points 5% every year. This is a compounding calculation, rather than linear, so Year 17 is worth ~42% of Year 1. If it were linear, Year 17 would be 20% of Year 1, and everything past Year 20 would be worthless.

Here's what the burndown looks like for a $100 contract that expires in 2042:

I have these for all contract lengths, here's a table for 17-37yr contract lengths:

Wanna know how much CFW's 50th year is valued in 2024? $0.84 considering a buy-in price of $191/pt.

So why 5% instead of 6.5% (or some other number)? We have one example of same-resort, different-length contracts and that's OKW. At current pricing 5% discount nearly perfectly matches the market prices for 2057 vs. 2042, so in that sense it's a good match to existing data. Plus a TVM of 6.5% is a little aggressive.

5% also has other 'feels nice' aspects:

• Crossover points with linear burndowns at roughly halfway through the contract.
• Results in a handful of resorts having near flat growth in the first 10-17 years.
  • 6.5% would result in a drooping curve for nearly every resort. Which I fear some might interpret as a suggestion to wait purchasing--which I'm definitely not.
• Humans typically have 5 fingers on one hand. We like things that are based in 5s.

You may have noticed one other 'choice' in all this: I start in 2025.

I don't have data here to back up including this year vs. not, but it felt safer to represent sorta-stripped contracts. In July 2024 are 2025-and-later-only contracts even considered 'stripped'? We're already part way into halfway of the 2024 UYs.

This does mean that I value all pre-2025 points as free/bonus points, which is also definitely wrong, especially for direct purchases.

It also just made everything slightly easier, and I'll take that win.

 

[ehh]

Explaining the Math - Dues Forecasts

So this is where things can (and probably did) go off the rails. Almost all forms of forecasting are a form of guessing, and this is no exception.

But I'll do my best to justify decisions and base everything in publicly available data.

First, I need to break the resorts into 3 cohorts:

1. Old-timers with many years of data
   • OKW
   • BWV
   • VB
   • HHI
   • BRV
   • BCV
   • SSR
   • BLT
   • VGC
   • AUL*
2. The awkward tweener
   • VGF
3. The babies/children with barely any data
   • PVB
   • CCV
   • RIV
   • VDH
   • CFW

Cohort #1 - The Old Timers
I used the following approach:

• Calculate the 10 year Compound Annual Growth Rate (CAGR) for years 11+ for the resort
• Take the median of the last five 10yr CAGRs

Why this approach?

• I want to forecast out 17+ years, so I need to smooth out spikes/dips from the input data, hence looking at 10yr CAGRs
• I want to weight recency slightly, hence picking from the last five 10yr CAGRs
• I want to 'middle of the road' this as much as possible, but with real data, hence picking the median from the last five

Here's what it looks like in a table for the 2042 resorts:

Why not Lifetime CAGR? Early years are just not great to include, candidly. BWV also had sustained lower growth rates early on, which we haven't seen in the last 15 years.

Aulani gets an asterisk because there aren't five full-10yr CAGRs to use, so I used the same methodology but with 5yr CAGRs for it's 4.29%.

Cohort #2 - The Awkward Tweener
Grand Flo gets its own category for a variety of reasons here.

First, it's actually not totally unique as I did apply nearly the same methodology as Aulani, but instead of median of last five 5yr CAGRs (already instead of 10yr CAGRs), I did 2nd highest of last 5. I went with 3.58% instead of the 3.52% in median position.

But it's wrong. It's gotta be wrong. Its 3.58% is just too low.

A brief history of VGF dues: over any 5yr CAGR in their existence, they've been either the slowest growing dues in the entire DVC portfolio, or within 0.11% of the slowest growing for that 5yr period.

In fact, VGF's highest 5yr CAGR in its existence is 3.64%. In the last 5 years of 5yr CAGRs (which would be inclusive of dues 9 years ago, at most), only the following resort-years have had lower-than-3.64% 5yr CAGRs across all of DVC-older-than-VGF:

• BCV 2020 - 3.40%
• BRV 2024 - 3.46%
• BLT 2024 - 3.47%

In 2020 VGF's 5yr CAGR was just 0.11% off of BCV's, at 3.51%. In 2024, VGF's 5yr CAGR was 3.47%, just 0.01% off of BRV's.

So while VGF has sustained this so far, I struggle to believe it's sustainable in the longterm. I could be wrong.

And before anyone talks about VGF's points chart--this is just growth rate of dues, which should be independent of the points chart. On top of it, the points charts are low, which that is explainable by the high points chart.

Anyway, I put my finger on the scale here and I still think it's too low. If it's not, then ultra-longterm VGF is an amazing value.

Cohort #3 - More data needed
For every resort that's PVB or newer, there isn't enough historical dues data to do even 'median of last five 5yr CAGRs'.

Poly itself is close, with 11yrs of dues in the books, but Poly had unusually low dues growth its first few years (as many resorts do), so any calculation that uses those dues is probably too low.

For Poly I actually did the same thing as VGF: I used the 2nd highest of the last five 5yr CAGRs. But it's also kind of moot with Island Tower coming onboard--who knows what dues will be like for Poly over the next 5+ years.

For the other newer WDW resorts, I used the median of the last five 10yr CAGRs for all of WDW. Of note, this does include new resorts and their small increases, so it's probably a low-middle forecast for CCV, RIV, and CFW.

For VDH, I just matched VGC's and applied it as a 'California dues growth' factor, essentially.

 

[ehh]

Points Charts Matter

So lots of information above about most economical points, but when it comes down to it you gotta end up using those points. Statisically, it's likely you'll use them at your Home Resort.

So let's combine the most economical points calculations with the points charts and figure out what the most economical resort is (when you stay at your Home Resort).

First, a bit of methodology discussion:

• I use an average week calculation that:
  • Counts 5x the average weekday in the 2024 points chart
  • Counts 2x the average weekend day in the 2024 points chart
  • At most resorts this ends up producing weeks a little above Season 4 numbers, though some room-resort combos can encroach on Season 5 territory.
• For each of the major categories, I do both a 'Cheapest room' calculation for the value-seekers, and an 'Average room' calculation to better represent the entire resort.
  • Average room is weighted based on max inventory, so if a category has 100 of one room view and 10 of another, it's a properly weighted average of the 110 rooms.
• I didn't do the Tower/Duo Studios, or Inn/Hotel Room rooms. Maybe when PVB has Duos?
• Cabungahouses are:
  • Cabins (the real ones)
  • Bungalows
  • Treehouses
  • Beach Houses
• I've sorted them by average Studio price, with CFW getting a custom sort based on its ranking within the 1BR.
  • This is pretty good sorting for 1BR+, but some are slightly out of place.
• I've done 'cost'/yr, as I feel it's more approachable, but definitely open to feedback!

You might need to click/tap on these to view them...

Years 1-5:

Years 1-10:

Years 1-17:

 

[ehh]

Post factoring in both points chart and cash room rates is a stretch goal, but this is a placeholder.

 

[ehh]

My thoughts on the July 2024 update (using June 2024 resale prices)

• Genuinely surprised at Aulani Subsidized being so strong. I know dues are low and it's a decently long contract with a reasonable price, but I just didn't expect it to so strong of a performer.
  • And this is even with using the upper-end of the Subsidized market pricing: $129.
  • I'm somewhat in the market for an Aulani contract, having waivered back/forth on it, and momentarily considered just not posting about Subsidized to reduce potential buyer competition.
• The market has organically priced the additional 15yrs of OKW amazingly well for a 5% 'discount'.
  • Costs at every major milestone are extremely similar, as are the cumulative costs over any time range.
• Speaking of very similar cost curves: BWV and PVB are unlikely twins in the first 17 years.
• Saratoga fares a little better than I expected considering its dues growth is quietly fairly high.
• Disneyland is expensive all around.
• This analysis does not take into account the Transient Taxes at VDH and AUL.
  • I suppose I could, but I don't have a good forecast methodology of them.

 

[AstroBlasters]

 

[VGCgroupie]

This is absolutely amazing. I prefer tables to line graphs so thank you for those.

I own at the top and the very bottom. I’m very surprised by SSR. I would’ve bet against it vs BLT. So again thank you for the charts.

 

[VandVsmama]

That analysis is next level awesome and amazing.

 

[intamin]

Thank you so much for this! Fantastic work. I'm surprised PVB is as low as it is on the chart. Seeing AUL-S so high up in these always makes me feel better about having a second use year as a result of owning one :X

 

[BrianLo]

Explaining the Math - Dues Forecasts

So this is where things can (and probably did) go off the rails. Almost all forms of forecasting are a form of guessing, and this is no exception.

But I'll do my best to justify decisions and base everything in publicly available data.

First, I need to break the resorts into 3 cohorts:

1. Old-timers with many years of data
   • OKW
   • BWV
   • VB
   • HHI
   • BRV
   • BCV
   • SSR
   • BLT
   • VGC
   • AUL*
2. The awkward tweener
   • VGF
3. The babies/children with barely any data
   • PVB
   • CCV
   • RIV
   • VDH
   • CFW

Cohort #1 - The Old Timers
I used the following approach:

• Calculate the 10 year Compound Annual Growth Rate (CAGR) for years 11+ for the resort
• Take the median of the last five 10yr CAGRs

Why this approach?

• I want to forecast out 17+ years, so I need to smooth out spikes/dips from the input data, hence looking at 10yr CAGRs
• I want to weight recency slightly, hence picking from the last five 10yr CAGRs
• I want to 'middle of the road' this as much as possible, but with real data, hence picking the median from the last five

Here's what it looks like in a table for the 2042 resorts:

Why not Lifetime CAGR? Early years are just not great to include, candidly. BWV also had sustained lower growth rates early on, which we haven't seen in the last 15 years.

Aulani gets an asterisk because there aren't five full-10yr CAGRs to use, so I used the same methodology but with 5yr CAGRs for it's 4.29%.

Cohort #2 - The Awkward Tweener
Grand Flo gets its own category for a variety of reasons here.

First, it's actually not totally unique as I did apply nearly the same methodology as Aulani, but instead of median of last five 5yr CAGRs (already instead of 10yr CAGRs), I did 2nd highest of last 5. I went with 3.58% instead of the 3.52% in median position.

But it's wrong. It's gotta be wrong. Its 3.58% is just too low.

A brief history of VGF dues: over any 5yr CAGR in their existence, they've been either the slowest growing dues in the entire DVC portfolio, or within 0.11% of the slowest growing for that 5yr period.

In fact, VGF's highest 5yr CAGR in its existence is 3.64%. In the last 5 years of 5yr CAGRs (which would be inclusive of dues 9 years ago, at most), only the following resort-years have had lower-than-3.64% 5yr CAGRs across all of DVC-older-than-VGF:

• BCV 2020 - 3.40%
• BRV 2024 - 3.46%
• BLT 2024 - 3.47%

In 2020 VGF's 5yr CAGR was just 0.11% off of BCV's, at 3.51%. In 2024, VGF's 5yr CAGR was 3.47%, just 0.01% off of BRV's.

So while VGF has sustained this so far, I struggle to believe it's sustainable in the longterm. I could be wrong.

And before anyone talks about VGF's points chart--this is just growth rate of dues, which should be independent of the points chart. On top of it, the points charts are low, which that is explainable by the high points chart.

Anyway, I put my finger on the scale here and I still think it's too low. If it's not, then ultra-longterm VGF is an amazing value.

Cohort #3 - More data needed
For every resort that's PVB or newer, there isn't enough historical dues data to do even 'median of last five 5yr CAGRs'.

Poly itself is close, with 11yrs of dues in the books, but Poly had unusually low dues growth its first few years (as many resorts do), so any calculation that uses those dues is probably too low.

For Poly I actually did the same thing as VGF: I used the 2nd highest of the last five 5yr CAGRs. But it's also kind of moot with Island Tower coming onboard--who knows what dues will be like for Poly over the next 5+ years.

For the other newer WDW resorts, I used the median of the last five 10yr CAGRs for all of WDW. Of note, this does include new resorts and their small increases, so it's probably a low-middle forecast for CCV, RIV, and CFW.

For VDH, I just matched VGC's and applied it as a 'California dues growth' factor, essentially.

Great job on all this first of all. This is clearly the area that’s always going to generate the most speculative discussion.

I think people’s dues forecasting is wildly off the mark. They cannot be running exponential circles over inflation forever, it doesn’t really make sense long term. These costs should be relatively fixed around reality on a long term scale and reality is both actual inflationary readings on the costs that make up dues and each other (resort to resort).

It’s important to note that while DVC is still somewhat in its early infancy, the Disney hotel business is not. The Disneyland Hotel is pushing 70 years. If this supra-inflationary dues trends continued unabated, wouldn’t Disney have already shuttered this resort? If it was aged based, why would Poly’s DVC in existing structures launch so well? It is after all a 50 year old resort.

Yet we continually see new resorts often launch in the same wheelhouse as others. There is some natural coupling of costs. As grim as we all are on the beach resorts, they simply cannot decouple to that extent, most of the US costs behind maintenance fees are fixed pricing and therefore there is some fixing between each resort.

Certainly the WDW resorts internally have a band of very similar costs, and I never expect the decoupling of dues from one another like the forecasting proposes.

 

[Chili327]

Wow, BLT dues could make some serious jumps in the future!!

 

[Anthony1971]

I will bite. We have owned for almost 21 years. I also have a financial background.
We bought direct as it made sense without going into detail a resale would have cost more. I believe we paid 87.50 average for the 2 contracts we have. With that as in past and past treads the dues will surpass the buy in for us 15 years give or take. Time value of money well that is hard to predict but I do understand the concept but many will be lost as that implies you would have not spent the money on something else like TP at today's prices so very hard to grasp...
Here is what I will say leaving the financial BS out - and yes again I am a numbers person so they were looked at:
We are way past saving points. I will stay whatever no matter the points. With that we could stay in a studio at OKW for around 100 a night some seasons compared to GF for around 200 a night some seasons current real cost. (not lowest not highest) There was a time when a 2BR at OKW was around 165 (or about) for week in late august- September. Points can and will be reallocated of course has to be = to the same number just spread different over seasons. So overall in real life DVC has been good to us and that is IF you plan on going every year.
This brings me to a major fact you are missing. One is not guaranteed to be able to book at other resorts other than the one you own at -This is important to keep in mind for below- although I do not think this will ever go away - But they did experiment with RIV. Look at the points charts that can never change as far # of points and number of rooms and you will see a steady increase in the number of points needed to stay in = size rooms. The point being when taking $ into consideration (not feelings and thoughts or perceived value) it is very difficult to justify paying twice as much for a room at GF as OKW being both are deluxe and offer similar amenities on paper. An owner at GF would currently need to purchase almost twice the number of points as an owner at OKW did to stay the same amount of time. This concept will make new points less valuable than older points. The older owners can also be priced out of staying at newer resorts. It seems to me Disney has taken into consideration time value of money in the form of # of points assigned to each room.

As I said above we do stay where we want now but there was a time when it would be hard to stomach twice the points. Is this not the reason BW standard view and AK Value has such fierce competition? OKW and AKL (especially standard) book faster than SSR has to be a good % as the point charts are lower. BW and BC low points great location. Many buy DVC for the value over everything else.

 

[pangyal]

WOWWWWWWWWW…..

 

[ehh]

I will bite. We have owned for almost 21 years. I also have a financial background.
We bought direct as it made sense without going into detail a resale would have cost more. I believe we paid 87.50 average for the 2 contracts we have. With that as in past and past treads the dues will surpass the buy in for us 15 years give or take. Time value of money well that is hard to predict but I do understand the concept but many will be lost as that implies you would have not spent the money on something else like TP at today's prices so very hard to grasp...
Here is what I will say leaving the financial BS out - and yes again I am a numbers person so they were looked at:
We are way past saving points. I will stay whatever no matter the points. With that we could stay in a studio at OKW for around 100 a night some seasons compared to GF for around 200 a night some seasons current real cost. (not lowest not highest) There was a time when a 2BR at OKW was around 165 (or about) for week in late august- September. Points can and will be reallocated of course has to be = to the same number just spread different over seasons. So overall in real life DVC has been good to us and that is IF you plan on going every year.
This brings me to a major fact you are missing. One is not guaranteed to be able to book at other resorts other than the one you own at -This is important to keep in mind for below- although I do not think this will ever go away - But they did experiment with RIV. Look at the points charts that can never change as far # of points and number of rooms and you will see a steady increase in the number of points needed to stay in = size rooms. The point being when taking $ into consideration (not feelings and thoughts or perceived value) it is very difficult to justify paying twice as much for a room at GF as OKW being both are deluxe and offer similar amenities on paper. An owner at GF would currently need to purchase almost twice the number of points as an owner at OKW did to stay the same amount of time. This concept will make new points less valuable than older points. The older owners can also be priced out of staying at newer resorts. It seems to me Disney has taken into consideration time value of money in the form of # of points assigned to each room.

As I said above we do stay where we want now but there was a time when it would be hard to stomach twice the points. Is this not the reason BW standard view and AK Value has such fierce competition? OKW and AKL (especially standard) book faster than SSR has to be a good % as the point charts are lower. BW and BC low points great location. Many buy DVC for the value over everything else.

All excellent points!

Despite *this thread and the work that goes into* I'm actually not a value purchaser We buy for specific stays at specific resorts and, at this point, rarely book at 7m. And we lean into the high-points resorts, as when we do switch at 7m it means our 'buying power' is higher (and, occasionally, we get to stay somewhere special, like a GV or Cabungalow).

And your mention of points charts (and max-value rooms) is well timed...small spoiler while I work on my next post:

 

[ehh]

Points Charts Matter - July 2024
(I'll also mirror this above in post 4)

So lots of information above about most economical points, but when it comes down to it you gotta end up using those points. Statisically, it's likely you'll use them at your Home Resort.

So let's combine the most economical points calculations with the points charts and figure out what the most economical resort is (when you stay at your Home Resort).

First, a bit of methodology discussion:

• I use an average week calculation that:
  • Counts 5x the average weekday in the 2024 points chart
  • Counts 2x the average weekend day in the 2024 points chart
  • At most resorts this ends up producing weeks a little above Season 4 numbers, though some room-resort combos can encroach on Season 5 territory.
• For each of the major categories, I do both a 'Cheapest room' calculation for the value-seekers, and an 'Average room' calculation to better represent the entire resort.
  • Average room is weighted based on max inventory, so if a category has 100 of one room view and 10 of another, it's a properly weighted average of the 110 rooms.
• I didn't do the Tower/Duo Studios, or Inn/Hotel Room rooms. Maybe when PVB has Duos?
• Cabungahouses are:
  • Cabins (the real ones)
  • Bungalows
  • Treehouses
  • Beach Houses
• I've sorted them by average Studio price, with CFW getting a custom sort based on its ranking within the 1BR.
  • This is pretty good sorting for 1BR+, but some are slightly out of place.
• I've done 'cost'/yr, as I feel it's more approachable, but definitely open to feedback!

You might need to click/tap on these to view them...

Years 1-5:

Years 1-10:

Years 1-17:

 

[Massachusetts]

Awesome stuff @ehh - Thank you for sharing this well thought out analysis!

 

[Mr_Woodchuck]

This is great! very similar to the massive spreadsheet I put together before we took the plunge. We ended up with CCV over SSR for two reasons: #1 we got a really good deal at 119/pt. #2 I factored in the rental market, in that you can typically get $18/pt versus $16/pt that SSR gets. We didn't jump in to rent points out, but you never know.

 

[Disdreaming479]

The difference in cost between 2 & 3 bedroom at SSR

 

[atthebeachclub]

This is great! very similar to the massive spreadsheet I put together before we took the plunge. We ended up with CCV over SSR for two reasons: #1 we got a really good deal at 119/pt. #2 I factored in the rental market, in that you can typically get $18/pt versus $16/pt that SSR gets. We didn't jump in to rent points out, but you never know.

CCV is great unless you need 3 sleeping surfaces. That was the deal killer for me! I would always be in a 2BR. I can do a studio at some other locations.