question on direct vs. resale

[CastAStone]

Which resort(s) would you purchase for SAP?

I would only really suggest SSR. Mathematically nothing is particularly close.

Some people like the DVCRM semi-annual analysis but it treats every year equally when of course that’s ridiculous. It still puts SSR #1 but has Poly at #2; Poly is a terrible SAP choice IMHO, for one the buy in is too high, second any economist will tell you that money in the future is worth less than money now, so practically you should treat your 2040 vacation as less valuable than your 2021 vacation, and your 2060 vacation as far less valuable. So just dividing by the number of years left is easy, and makes the payback more attractive, but it’s financially suboptimal. And third if you get stuck at your home resort your options will be a studio with 1 real bed or a ~30,000 point bungalow.

I did an analysis here with this years dues and this summers selling prices. The next few best we’re Aulani, OKW (extended) and Riviera. But Aulani and OKW have seen dues increases far above average for several years in a row while Riviera resale points literally can’t be used to Sleep Around. After that you’re looking at paying 15%+ more than SSR for Bay Lake Tower, which would be my suggestion for a resort for someone who wants to semi-sleep around but also wants a home near MK.

Here is what it looks like if I replace the ~2% inflation factor I had in the model with a 3.5% inflation factor, which adjusts the net savings rate to 4.8% (just because you would spend the money on something else doesn't mean that you couldn't choose to save it, and thus by spending it now you are still costing your future self that money). As you can see it penalizes the 2042 resorts while overall showing better economics for DVC across the board. Riviera remains the 3rd best "deal" after SSR and OKW (e).

I would say this chart is only better than the one I posted above for comparing the resorts that may expire before you want to stop doing DVC (and then drive a repurchase) with the resorts that will outlast your will to travel.

View attachment 526110
People are welcome to quibble with the resale prices; changing them by a couple bucks doesn't make a huge difference.

 

[sethschroeder]

If you’re buying AKV for Sleep Around Points you’re doing it wrong, in every sense. Far too expensive for that.

Well now but people were getting them for sub $100/point not that long ago. So it was in the ball park of being in the SAP realm. Its just since basically May timeframe AKV has been "over priced" for SAP.

What if you could buy AKV for $100/point right now? It can't be that out of line with SSR. Also people get AKV for the benefit if you are stuck at your home resort you have access to the Value Rooms and Club Level possibly.

 

[CastAStone]

Well now but people were getting them for sub $100/point not that long ago. So it was in the ball park of being in the SAP realm. Its just since basically May timeframe AKV has been "over priced" for SAP.

What if you could buy AKV for $100/point right now? It can't be that out of line with SSR. Also people get AKV for the benefit if you are stuck at your home resort you have access to the Value Rooms and Club Level possibly.

Even if it was priced at a $5 premium to SSR, which seems to be more this historical norm, it works out to about $1/point more expensive per year, about 8% more, almost entirely from the difference in dues. Now we can justify that 100 different ways, and there is no doubt that AKV has some unique benefits as a home resort, but none of those benefits justify it being used as an SAP play. They justify it as a home resort, and its my impression that most people use their home resorts for a mix of stays and 7 month swaps. And unless you are buying at like BCV or VGC, that’s financially justifiable! Most of the resorts have very similar cost structures once accounting for price, dues, and years left. SSR has been a pretty big outlier on the low end for a long time, which is why it was worth buying for SAP.

 

[RoseGold]

Some people like the DVCRM semi-annual analysis but it treats every year equally when of course that’s ridiculous. It still puts SSR #1 but has Poly at #2; Poly is a terrible SAP choice IMHO, for one the buy in is too high, second any economist will tell you that money in the future is worth less than money now, so practically you should treat your 2040 vacation as less valuable than your 2021 vacation, and your 2060 vacation as far less valuable. So just dividing by the number of years left is easy, and makes the payback more attractive, but it’s financially suboptimal. And third if you get stuck at your home resort your options will be a studio with 1 real bed or a ~30,000 point bungalow.

Funny, that's why I like this analysis. I always thought it undervalued long contracts, especially if you plan to sell relatively soon. Well, at least everyone agrees on SSR.

I did buy a screaming Poly deal as SAP -- I was shocked it made it through ROFR. I plan to unload it in 10-15 years, and I'm sure it will, like SSR, at least hold value that long, and no complaints about the Poly dues, as one of the newest properties and nothing like animals to take care of. If the point charts keep inflating at this rate, it might be worth keeping around just to rent out. Pre-Covid at least, demand for Poly was always bananas.

But yea, the obvious answer to SAP is SSR, and has been for a long time. I also agree with BLT for semi-SAP. The chart, location, and pricing combo are hard to beat, and the 11 month has some high demand rooms.

 

[Sandisw]

This isn’t a provision in the deeds, it’s in the rules that govern operations of BVTC (Buena Vista Trading Company), which is the entity that we DVC owners actually use without realizing it when we trade out of our home resort and into a non-home DVC resort. I think @drusba might know which document - I don’t, sorry. And I don’t think they’d “discount” resorts, that was @sethschroeder ’s idea! But they could make it more expensive for a DVC owner to trade into VGF, for instance, to decrease the 7-month competition for non-home bookings there. Just another way to manipulate demand vs. supply at the 7-month window.

For the RIV POS, it is Exhibit G that is the BVTC rules and regulations document.

The way I read it is that they can make points charts for using DVC vacation points,..which is what home resort points become when booking non home resort.

However, I don’t see anything that would allow them to make charts for different resort points trading in. For example, they can adjust the points say to book BCV with other points, but it would apply to all other home resort points that an owner wants to use.

 

[CarolynFH]

For the RIV POS, it is Exhibit G that is the BVTC rules and regulations document.

The way I read it is that they can make points charts for using DVC vacation points,..which is what home resort points become when booking non home resort.

However, I don’t see anything that would allow them to make charts for different resort points trading in. For example, they can adjust the points say to book BCV with other points, but it would apply to all other home resort points that an owner wants to use.

I agree with you. The fact is that Home Resort Points are one set of points, and the points chart for that home resort has to balance through the years as changes are made through reallocations (such as weekends to weekdays, season to season, etc.).

Then there are Vacation Points, which as you say are what our points become when we trade out of our home resort at 7 months. The Vacation Points charts do not have to balance from year to year and can be set as BVTC sees fit. This is what happens with the other timeshares we own - when we deposit our weeks with RCI, they tell us how many "trading power units" we get for that week, and that number can and does vary over the years.

I'm very sorry I used a specific resort (SSR) in my example far above, because the point is that BVTC is at liberty to say that if a DVC member who does not own at BWV wants to book a stay at BWV, they have to pay more points than I would have to pay for the same villa size, view and dates. I fully agree that they could not say an SSR owner would have to pay more points than a VGF owner; it's simply that they could say a non-owner must pay more points than an owner pays for the exact same accommodations. BVTC has had that right for 20+ years (I assume since its creation) but has simply never exercised that right.

 

[CastAStone]

Funny, that's why I like this analysis. I always thought it undervalued long contracts, especially if you plan to sell relatively soon. Well, at least everyone agrees on SSR.

I did buy a screaming Poly deal as SAP -- I was shocked it made it through ROFR. I plan to unload it in 10-15 years, and I'm sure it will, like SSR, at least hold value that long, and no complaints about the Poly dues, as one of the newest properties and nothing like animals to take care of. If the point charts keep inflating at this rate, it might be worth keeping around just to rent out. Pre-Covid at least, demand for Poly was always bananas.

But yea, the obvious answer to SAP is SSR, and has been for a long time. I also agree with BLT for semi-SAP. The chart, location, and pricing combo are hard to beat, and the 11 month has some high demand rooms.

Any contract that you can get a screaming deal on can wildly change the math vs my generic calculations, and I think on the low dues resorts, that would be doubly true, as the buy in is a higher percent of what you pay overall.