Please explain this to me like I am 5 years old.

[DizBub]

I'm editing this to agree with the above statement. Well said.

I have chosen to make a long-term commitment to Disney and have chosen to spend the money, whether I have DVC or pay OOP, we are going. I personally feel like DVC enhances our experience and saves us money.

When I hear of people going every year and paying $3000/$5000 to stay at a deluxe resort for a week I feel they have more $ than sense. Especially when they could buy a resale contract with 3 or 4 years' worth of cash trips. After that people will save money, at least on their accommodations.

At the end of the day I really don't care what someone else does with their money and how I spend my money shouldn't matter to others. JMHO.

 

[chalee94]

They can be slow on the uptake in terms of putting amenities into DVC units - it isn't like we'll stop coming if they don't get a Keurig in the rooms.

if they did replace all the coffeemakers with keurigs, wouldn't they just add a penny or 2 to our dues?

 

[suefly]

I'm buying DVC after years of research. I have been going yearly or more for the past 5-6 years, paying cash. Usually stay at moderate or value. I am paying more upfront, but getting better accommodations. I'm 44, my daughter is 26, both love Disney. Only problem I might have is going more often and spending more on food and tix.

Disney is going to get the money out of me one way or the other. lol

 

[DVCcurious]

Others have mentioned this, but I don't think they captured it quite right. Not only are you not limited to the DVC pools, you can use the main resort pools as well as many of the pools across property.

Well, when I visited Animal Kingdom Lodge and I saw the Kidani Village pool I asked an employee what it was and he said "it's the DVC pool".

I also saw a pool at Wilderness Lodge that was not the main pool and I asked about it and I was told it was the DVC pool.

 

[DizBub]

Well, when I visited Animal Kingdom Lodge and I saw the Kidani Village pool I asked an employee what it was and he said "it's the DVC pool".

I also saw a pool at Wilderness Lodge that was not the main pool and I asked about it and I was told it was the DVC pool.

Yes, that's what they are. But you can still use them. At least at Wilderness Lodge. I know there is supposed to be no pool hopping at AKL but if you are staying at Kidani you can swim there.

BLT pool is blocked from pool hopping but DVC members can use the Contemporary pools. People cannot hop to Stormalong Bay at BCV but DVC can hop to the BW pool.

DVC members can pool hop to SSR and OKW too, unless it's too crowded.

 

[skier_pete]

Well, when I visited Animal Kingdom Lodge and I saw the Kidani Village pool I asked an employee what it was and he said "it's the DVC pool".

I also saw a pool at Wilderness Lodge that was not the main pool and I asked about it and I was told it was the DVC pool.

The pool at Kidani is for anyone staying at Kidani. Technically, Kidani is entirely a DVC resort, but of course there are some staying on cash.

Certain resort do have DVC pools in addition to the regular pools. DVC members can use both. I honestly don't know if normally anyone can use the DVC pools. However, I do know when the main pool at Wilderness Lodge is in refurb, they are allowing regular guests to use the DVC pool.


Here's the list of pools DVC members CAN'T hop to:

Pool hopping is not available at Bay Cove Pool at Bay Lake Tower at Disney's Contemporary Resort, Uzima Pool and Samawati Springs Pool at Disney's Animal Kingdom Lodge, Stormalong Bay at Disney's Yacht & Beach Club Resorts, the leisure pool at Disney's Beach Club Villas, and the pools at Disney's Art of Animation Resort. There are no exceptions to this policy.

So that's 4 resorts you CAN'T pool hop to - though as Dizbub said you can use the regular pools at the Contemporary. I wonder how many people actually take advantage of this.

 

[Millionaire2K]

Here is how I see DVC as a good deal. First I keep it real simple.

100 points for $80 SSR ($8000)

With those 100 points I can spend 8 nights at AK, OKW or BW (BW not likely) every Oct.

I divide the buy in cost over the term of the contract. So a 2014 SSR contract will last 40 years. $8000/40 = $200 a year. I then divide the cost per year by the points per year $200/100 = $2

So each point I will get over the 40 years cost me $2. I paid that $2 up front.


Then each year I just add in the dues to my $2 I paid per point upfront:

2014 dues $4.91 + $2 for contract point = $6.91

So the cost per point for my 2014 trip would be $6.91

$6.91 x the 100 points for 8 nights at AK = $691

So I'm paying $691 for 8 nights at AK. That is less then $70 a night.

I don't need to look at the rack rates to know that I just saved a TON of cash. That $70 a night is less then a value resort rate.

BUT AK is now $266 a night on a deal. So SSR would MATCH that rate ONLY when Annual dues grow to $19.28.

Example: future dues = $19.28 + $2 per point = $21.28 x 100 points for 8 nights at AK = $2128 $2128 is = to the 2014 AK deal rate.

DVC is a GREAT deal for anyone who will use the points given. If you go to Disney at least 1 time every 3 years its a good deal. Just do not overbuy. Buy small and grow as needed.

 

[bethy]

The only other thing I'd caution you to think about is the commonly suggested back-up strategy of renting points out when you don't need to use them. People here at the Dis are well informed and savvy and dedicated folks. I generally am too but the thought of renting my points out for any reason is totally paralyzing.

It is not a simple and easy process. There is trust and work involved. It's something I would only do with a gun to my head. I am not crazy so I know there must be others out there like me who either don't know that renting their points out is an option, don't know how to do it (yes, I've looked at David's - that's still too complicated for me), or don't have the bandwidth to deal with it.

Honestly I'd rather spend the money on an extra trip and/or let my points expire than deal with that. That's just me - I know renting works great for plenty of folks.

 

[bethy]

There is one other intangible DVC perk that I don't see mentioned. It honestly is the *number one* reason we bought in:

It forces us to 1) vacation regularly 2) take regular Disneyland trips 3) stay in a deluxe resort

If we were left to our own devices we'd delay trips, and often choose to stay in cheaper accommodations which would impact the quality of our family time while there.

In the reality of daily living and fluctuating cash flow, the savings of those dollars would make a lot of sense - to delay trips and downgrade accommodations. Plus we get busy and would have a hard time finding the time to get away. Now we are forced to get away and do so in way that facilitates the most relaxation and family bonding time for us.

 

[skier_pete]

If we were left to our own devices we'd delay trips, and often choose to stay in cheaper accommodations which would impact the quality of our family time while there.

In the reality of daily living and fluctuating cash flow, the savings of those dollars would make a lot of sense - to delay trips and downgrade accommodations. Plus we get busy and would have a hard time finding the time to get away. Now we are forced to get away and do so in way that facilitates the most relaxation and family bonding time for us.

Wow, I get where you are coming from with that, but that is so never an issue for us. We are more "Is there any way we can get back SOONER?"

 

[disneynutz]

There is one other intangible DVC perk that I don't see mentioned. It honestly is the *number one* reason we bought in:

It forces us to 1) vacation regularly 2) take regular Disneyland trips 3) stay in a deluxe resort

If we were left to our own devices we'd delay trips, and often choose to stay in cheaper accommodations which would impact the quality of our family time while there.

In the reality of daily living and fluctuating cash flow, the savings of those dollars would make a lot of sense - to delay trips and downgrade accommodations. Plus we get busy and would have a hard time finding the time to get away. Now we are forced to get away and do so in way that facilitates the most relaxation and family bonding time for us.

Could be a blessing or a curse. For people that would rather not vacation, they now the have to. Some don't like having to do things so they end up selling their ownership. The other issue is that you are tied to a company who aggressively goes after your money, has a new focus on increasing attendance and for the DVC only does what they have to.

Disney is a wonderful vacation but for the repeaters who know what the experience was like years ago versus today, for our family some of the magic has faded.

Bill

 

[Dean]

The only other thing I'd caution you to think about is the commonly suggested back-up strategy of renting points out when you don't need to use them. People here at the Dis are well informed and savvy and dedicated folks. I generally am too but the thought of renting my points out for any reason is totally paralyzing.

It is not a simple and easy process. There is trust and work involved. It's something I would only do with a gun to my head. I am not crazy so I know there must be others out there like me who either don't know that renting their points out is an option, don't know how to do it (yes, I've looked at David's - that's still too complicated for me), or don't have the bandwidth to deal with it.

Honestly I'd rather spend the money on an extra trip and/or let my points expire than deal with that. That's just me - I know renting works great for plenty of folks.

While I think renting points should be far easier and less hassle than you describe, that means the owner must plan accordingly to minimize the risk and aggravation. However, as I've said many times, one should never buy with the intent of long term renting. There's simply far too many risks and variables. Sometimes people buy needs less now but knowing they'll need more later and in some of those situations buying more and using them for other options such as RCI or rental is a good idea, sometimes it's not. Generally it's better to slightly underbuy in this situation than plan to rent unless that would put one at under 150 pts or so.

 

[HokieGCC]

Here is how I see DVC as a good deal. First I keep it real simple.

100 points for $80 SSR ($8000)

With those 100 points I can spend 8 nights at AK, OKW or BW (BW not likely) every Oct.

I divide the buy in cost over the term of the contract. So a 2014 SSR contract will last 40 years. $8000/40 = $200 a year. I then divide the cost per year by the points per year $200/100 = $2

So each point I will get over the 40 years cost me $2. I paid that $2 up front.


Then each year I just add in the dues to my $2 I paid per point upfront:

2014 dues $4.91 + $2 for contract point = $6.91

So the cost per point for my 2014 trip would be $6.91

$6.91 x the 100 points for 8 nights at AK = $691

So I'm paying $691 for 8 nights at AK. That is less then $70 a night.

I don't need to look at the rack rates to know that I just saved a TON of cash. That $70 a night is less then a value resort rate.

BUT AK is now $266 a night on a deal. So SSR would MATCH that rate ONLY when Annual dues grow to $19.28.

Example: future dues = $19.28 + $2 per point = $21.28 x 100 points for 8 nights at AK = $2128 $2128 is = to the 2014 AK deal rate.

DVC is a GREAT deal for anyone who will use the points given. If you go to Disney at least 1 time every 3 years its a good deal. Just do not overbuy. Buy small and grow as needed.

There is some additional analysis suggested to capture the costs over time.

If you would have invested the original $8000 at 5% in 40 years this grows to $56,320. At the end of 40 years the value goes to zero so this is really your purchase cost. This averages to $56,320/40 or $1408/year.

The maint fees also increases about 3% per year. So, over a 40 year period this is another $38,624 or another $966 per year on average.

So, your average cost per year for the 40 years is $1408+$966=$2374 (or $297 per night).

It is safe to assume that over time the cash rates will also be increasing and although I do agree eventually you come out ahead it really takes several years ... likely 8 to 10.

 

[crisi]

Though, to complicate things further, you would leave that $8k sitting in an investment account, because you would use it for what you are using it for - going on vacation.

After years of playing with numbers, my conclusion is this:

Numbers are fun - and depending on what assumptions I'm willing to make and what factors I'm willing to account for or ignore, I can make this a great deal or a really bad one - but honestly - if DVC works for your family, you can afford the initial investment, and can afford annual dues - don't worry about "saving" or "spending" over what you would pay for a regular resort. This is simply money you are spending to vacation - we don't all stay in values because it "saves" us money.

If DVC doesn't work for you, it could be the greatest "savings" in the world, but not worth it. And not working is everything from "like my room cleaned every day" to "don't want to plan that far out" and a lot of other things.

And if you can't afford it - which includes the numbers needing to work to be able to justify the cost - you shouldn't do it. Disney can be done many, many ways without endangering your financial security - and there are a lot more important things that can be done with money than DVC.

 

[Millionaire2K]

There is some additional analysis suggested to capture the costs over time.

If you would have invested the original $8000 at 5% in 40 years this grows to $56,320. At the end of 40 years the value goes to zero so this is really your purchase cost. This averages to $56,320/40 or $1408/year.

The maint fees also increases about 3% per year. So, over a 40 year period this is another $38,624 or another $966 per year on average.

So, your average cost per year for the 40 years is $1408+$966=$2374 (or $297 per night).

It is safe to assume that over time the cash rates will also be increasing and although I do agree eventually you come out ahead it really takes several years ... likely 8 to 10.

I'm not investing the $8000. Because As I said the $$ would have been spent visiting DW at the cost of $2300 just for an AK room. So the $8000 would be gone in just a few years (less than 4). You can't say "If I invested" and still go on Vacations. You would have to say "if you invested and stopped going to WDW, i.e. stop having fun" I mean everyone who is paying cash today at WDW could of course invest their $$ also. So this is not a point worth worrying about.

A penny saved is a penny earned applies to DVC and Cash guest.

Also my numbers are to account for the Dues each year as they happen. So next years dues will be added to the $2 "buy in" cost and will be x by the points used on the trip that year. As long as this cost stays below the cash rate for that year then DVC is worth keeping.

As I mentioned Dues would have to be around $19 to make DVC cost more than a 2014 AK discount rate. So in x amount of years when dues reach $19 I assure you cash rates will have gone up also.

 

[chalee94]

If you would have invested the original $8000 at 5% in 40 years this grows to $56,320.

i agree with crisi that this is problematic. you are either dipping into that $8000 each year to pay for room costs onsite at wdw (in which case it will disappear in only a handful of years) or else you are using money that you ought to be saving to buy into DVC. "vacation spending" and "savings" should be separate buckets.

I divide the buy in cost over the term of the contract. So a 2014 SSR contract will last 40 years. $8000/40 = $200 a year. I then divide the cost per year by the points per year $200/100 = $2

So each point I will get over the 40 years cost me $2. I paid that $2 up front.

this is simple and fine up to a point. but it does ignore the time value of money...you are not really paying $2 per year per pt and every dollar upfront "hurts" considerably more than a dollar you pay in annual dues in 2030. (if it doesn't, i will happily borrow piles of money from you and pay it back at par in 2030.) so you really should be weighting that initial purchase more heavily...

 

[Dean]

I'm not investing the $8000. Because As I said the $$ would have been spent visiting DW at the cost of $2300 just for an AK room. So the $8000 would be gone in just a few years (less than 4). You can't say "If I invested" and still go on Vacations. You would have to say "if you invested and stopped going to WDW, i.e. stop having fun" I mean everyone who is paying cash today at WDW could of course invest their $$ also. So this is not a point worth worrying about.

For most situations the $8K would not be gone in 4-5 years compared to what 100 points would buy for room only. If you deduct only the applicable amount that would be above the yearly dues (roughly $500 per year in today's dollars) and compare to what you would have spent or to renting DVC from someone else; it'd take some time to deplete those dollars. That's why I would divide the up front money into 2 groups, short term savings and long term (greater than 4 years) investing. I'd assume 1% of the short term and 8% after tax on the long term. Even comparing to $15 a point rental it'd take some time to exhaust the total, at least 10 years, more if you use different variables. Comparing simply points costs purchase to points renting is the simplest method. However, for most people it's really buying vs staying in a hotel which is far more variable from one scenario to another.

 

[supersnoop]

this is simple and fine up to a point. but it does ignore the time value of money...you are not really paying $2 per year per pt and every dollar upfront "hurts" considerably more than a dollar you pay in annual dues in 2030. (if it doesn't, i will happily borrow piles of money from you and pay it back at par in 2030.) so you really should be weighting that initial purchase more heavily...

We've been through the time-value-of-money many times. I still argue that it's irrelevant; or, rather, it's already figured in.

The time value of money accounts for inflation risk. By pricing this in today's dollars, you're dealing with the net present value of the future value (and cost) of those future points. Those points cost $2 in today's dollars. That money would obviously grow, at roughly the same rate as the value of those points in future years.

Most people on these boards, when they throw around the time-value-of-money phrase, actually mean "opportunity cost." The idea that you could invest the money at a greater rate of return. Yes, you would, and the money would grow, and you could dip into it to fund vacations. If it grows at a higher rate than inflation, you'd come out ahead, in theory.

But, all the calculations, especially when we discuss 4-12 year ROI's, ignore the asset value of the real estate contract. True, the asset will reach zero at the end of its term, but should grow in the near term. This is, essentially, a complex annuity structure with an up-front cost, inflation-adjusted annual contributions (maintenance fees), and an inflation-adjusted payout in the form of lodging. When you recognize it for what it is, and calculate it in those terms, it's pretty easy to reach a favorable ROI, especially in a relatively liquid investment.

 

[Missyrose]

If you buy direct from disney you can stay at any disney hotel on points through the Disney Collection. It isn't as affordable, or make much sense to do that unless there aren't any other DVC rooms available at the time you want to travel. And even if you really want to stay at a non-DVC the best way to use your DVC is to rent out your points to someone else and use the proceeds to rent the cash room you want.

This point is important, even though you can do RCI exchanges or Disney Adventure etc. etc. the most cost effective way of using your DVC ownership and vacationing out side the club is to rent out your points, and then book wherever you want.

Actually, this isn't quite true. SOME of the non-DVC resorts can be booked via points in the Disney Collection. Any Deluxe that has a DVC component to the resort has been removed from the collection. So once Poly DVC opens, Yacht Club will be the only Deluxe resort left in the collection. Even so, the Disney Collection is a pretty terrible point value. You will be spending 2 or 3 times the number of points per night to stay in a standard room in a Moderate or Deluxe resort than you would to stay in a studio.

 

[chalee94]

Actually, this isn't quite true. SOME of the non-DVC resorts can be booked via points in the Disney Collection. Any Deluxe that has a DVC component to the resort has been removed from the collection. So once Poly DVC opens, Yacht Club will be the only Deluxe resort left in the collection.

they actually did change this BTW:

http://dvcnews.com/index.php/dvc-program-51703/policies-a-procedures-46504/news-83631/2520-wdw-hotels-added-to-the-disney-collection