Riviera Sales by the numbers (vs CCV) for 2019 - (December added 1/16/2020)

[Sandisw]

With the way it is priced I doubt this is the target clientèle. It is hard to justify the finances at Riv when comparing to just booking rooms every year at riviera, I imagine the math looks significantly worse if you stay commonly at cbr, aoa and pop.

True..but throw in a monthly finance option and all of a sudden you have people committing to something that doesn’t seem that bad. Plus they then try to sell them on how much more they get!

We shall see what happens with sales when it opens for those who are not well versed in it all like those here on the DIS.

 

[Spark65]

When comparing numbers especially fees you need to compare the amenities as well. What are the amenities room size, location, food options and obviously parking if you're staying at BWV there are lots of comparisons needed to show dollar value.

Disney magic is free but pixie dust might have a fee.

 

[emchen]

@Soap_1984,

To address you first point, I think there is a quantum shift in mindset between then and now. We are in the era of low-wage service sector workers driving Lexus' and Audi's. It is a fact that the average cost of a car has gone up thanks in large part to easy and longer-term financing. On the boards, it is conventional wisdom that financing DVC is a bad idea... just like people used to say financing cars were a bad idea. I know that people see financing DVC as akin to financing a car now...as normal. People like us on the boards, creating ROI excel charts, are on the fringe. Mainstream cohort don't see DVC as an investment, but a luxury item like a Lexus or Audi...in fact, better, because it still retains value better than your typical luxury car.

<snip>
I think wereofftoneverland was making the point that everything is high at riviera: price per point, point chart and dues. The other resorts have trade offs (I.e. high fees but low chart and up front cost etc). sure high point chart at vgf, but the dues are among the cheapest so you can sell that as a savings. And with a high point chart comes the requirement for more points, which makes dues an even bigger consideration; $2 less per year is significant.
<snip>

It's easy to get caught up looking at each individual attribute and cherry-picking where RIV is high or has less value, but I think the best one is "cost per point per year" to allow direct economic comparison. Based on that (https://www.dvcresalemarket.com/blog/best-economical-dvc-resort-to-purchase-spring-2019/), RIV direct ranks better than VB, BWV, and BCV (resale)! That's $12.07 (without incentive) / $12.52 / $12.91 / $12.98 respectively.

 

[CanadaDisney05]

I agree this is the target market, but my point is that there has been some kind of roi to the product that doesn't seem to be there any more. At some point all the people on this board were the target market and knew almost nothing. I think for many/most a tangible financial consideration, whether that was spending the same amount as you previously did but having nicer accommodations, or the same accommodations and spending less money, factored into your decision making. With the pricing and new restrictions that benefit only disney, I am wondering how they expect to sell so many memberships; this isn't 2001 when dvc was brand new and no one knew what it was. It is a well developed and marketed product.

Up until I've never run the numbers on Riviera, because it simply did not interest me due to the restrictions. The restrictions made it a non-starter for me. However, it's been repeated in this thread and others, that Disney has now priced Riviera so high that there is no mathematical way that it made sense. I was curious to see if this was true.

Assumptions

Trip: 1 week annually during magic season in a preferred studio (190 points)
Maintenance Fees: Stay static for 2020, and then begin to increase at 4% annually
Hotel Rates: increase at 4% annually
US Inflation Rate: 2%
Rack Rate: $679 tax in (average rack rate over 7 days during the summer according to mousesavers)

Results

- Break even was after 11 years. Not to bad considering its a 50 year contract
- The average cost per night is 480.87 in today's dollars. Keep in mind, this is not the same as a flat 30% discount off of rack rate. It's equivalent to a 30% discount in year 1, but every year after that, hotel inflation is higher than US inflation, so the "discount"becomes more and more.
- Break even when factoring in a flat 30% discount off of rack rate is after 18 years.
- Break even when factoring in a 6% opportunity cost & a 30% discount was 27 years. Much longer.
- Break even when factoring in a 8% opportunity cost & a 30% discount was 39 years. Even longer.
- If you were to compare Riviera DVC against a hotel that costed $288 per night tax in today, you would get the same results over 50 years. This is due to the assumption that hotel inflation is greater than US Inflation.

Conclusion

The numbers still technically make sense for Riviera (atleast in the scenario I laid out) if you compare it against the option of staying at Riviera. If you suggest that you can stay offsite, or in values for cheaper, you are correct. Riviera direct yields similar results to a moderate today. For myself personally, at a breakeven of around 39 years when compared to a 30% discount (not too hard to find), and 8% opportunity cost (reasonable expectation on a 39 year investment), I don't think I would give up the flexibility and liquidity for Riviera DVC. But that is me as a financial nerd. I wouldn't suggest that everyone's situation is the same as the one I laid out, so it may make sense for some.

 

[Henwen88]

Sorry to contribute to thread drift... I stayed at the Institute in a 'Bungalow' when I was in college (around 98 or 99) as a paying guest, not castmember. I know the central part of SSR looks very similar with the building facades and street structure. The check-in building may even be the same. I remember walking to a plain jane pool in the treehouse section to swim. Would love for some links to find out more if anyone has them?

The Treehouses too were already in exhistance since at least the late '70's...

SSR does sound like it might be a good baseline . How far ahead of completion did the points go on sale? And this was an existing resort wasn't it - The Disney Institute? So you could at least get a feel for it before it opened as DVC.

The Disney Institute was not part of DVC or any other resort. It was a learning institution that never caught on. The majority of its buildings were leveled to make way for SSR. When SSR opened it was nothing like the DI.

Those treehouses were originally housing for the CP...they were never part of a Disney hotel.

They were vacation guest accommodations for quite awhile.

I recall reading somewhere that after planning the residential section and maybe even a model or two Disney realized that would have permanent residents with voting rights within Reedy Creek. Those people would get a say on taxes, development etc. And so that idea came to an end. It's so easy to find instances where Disney had some fairly simple oop's moments like this that I always chuckle when people state how Disney has a plan and always knows exactly what they are doing. Sure, they have a plan. They also miss things - sometimes very obvious things.

 

[skier_pete]

@Soap_1984,

It's easy to get caught up looking at each individual attribute and cherry-picking where RIV is high or has less value, but I think the best one is "cost per point per year" to allow direct economic comparison. Based on that (https://www.dvcresalemarket.com/blog/best-economical-dvc-resort-to-purchase-spring-2019/), RIV direct ranks better than VB, BWV, and BCV (resale)! That's $12.07 (without incentive) / $12.52 / $12.91 / $12.98 respectively.

Cost per point per year is a great way to look at it - but it ignores one factor in the cost equation - the number of points per night required to stay at the resort. I was just looking ahead to booking a 7 month reservation memorial day weekend. Options between Riveria (Preffered) and Boardwalk (Pool/Garden) which are the most expensive categories at each resort. Riviera would cost me 78 points for 3 nights in studio - Boardwalk would cost 57.

So in your calcs - That $12.07 for Riviera and $12.91 for Boardwalk per point per year, my three day weekend would cost me $942 at Riviera and $735.87 for 3 nights (That's assuming I booked those with home resort advantage.) So While I agree that Riviera on a per point basis is high but in the ballpark of other resorts - the point structure actually makes it one of the most expensive DVC resorts to stay at.

 

[we"reofftoneverland]

Cost per point per year is a great way to look at it - but it ignores one factor in the cost equation - the number of points per night required to stay at the resort. I was just looking ahead to booking a 7 month reservation memorial day weekend. Options between Riveria (Preffered) and Boardwalk (Pool/Garden) which are the most expensive categories at each resort. Riviera would cost me 78 points for 3 nights in studio - Boardwalk would cost 57.

So in your calcs - That $12.07 for Riviera and $12.91 for Boardwalk per point per year, my three day weekend would cost me $942 at Riviera and $735.87 for 3 nights (That's assuming I booked those with home resort advantage.) So While I agree that Riviera on a per point basis is high but in the ballpark of other resorts - the point structure actually makes it one of the most expensive DVC resorts to stay at.

Exactly. This to me is so important. And why is it so point expensive? The rooms are smaller than many other resorts, have less bathrooms than some resorts, and it is in the middle of nowhere with nothing special at the resort. I.e. animal kingdom is in the middle of nowhere but you are in a savanna. There is just a pool (that everyone else will come use because it won’t be monitored). No community hall. Nothing. Just a regular hotel. Dh has commented that they did not plus this hotel. They seem to be offering less, not more. Disney should look at where that has gotten apple with the iPhone. I am holding at my 6plus. Dh has a 7 and has no intention of upgrading.

 

[kboo]

With the way it is priced I doubt this is the target clientèle. It is hard to justify the finances at Riv when comparing to just booking rooms every year at riviera, I imagine the math looks significantly worse if you stay commonly at cbr, aoa and pop.

Well ... (calling @CanadaDisney05 !!) someone who might want a 2br won’t necessarily buy 400 points but may be sold on 200 points to use every other year, and there will still be an incentive, which puts buy in cost more in the neighborhood of 33-34k.

Alternatively, if someone is staying at CBR, AOA or POP in a regular hotel room, they’re going to get pitched “150 points will get you in a studio annually for a week or more”. With incentives, that 150 points will cost around $27k. Say their room is costing $2000 for the week anyway (I have no clue if this is accurate); without factoring in dues or interest on a loan or anything else, they can get pitched on, “you’ll spend at least that much in the next 10-12 years staying in less luxurious accommodations, whereas you’ll have paid off the loan in 10-12 years, while still coming to the parks during that time, and the next 35-40 years will only be the cost of the MFs!”

Another point to the people who are pricing against a 30% deluxe room discount - those discounts are not always easy to find, and don’t always come up when you need them to. 5 years ago we stayed at the contemporary in a garden wing and it was around $200/nt before taxes, 4 years ago we booked a studio at BWV for $289 before taxes on the same deal, but even though it was showing online we had to call. Just to say that it’s not always to get a 30% discount even when they’re offered, and sometimes they don’t line up with your dates.

 

[emchen]

Cost per point per year is a great way to look at it - but it ignores one factor in the cost equation - the number of points per night required to stay at the resort.

You're absolutely right, the way I look at it ignores the points chart because it is such a variable. My point is to try and reduce it down so that we can best compare apples to apples, not apples to oranges. As you and I know, every family justifies paying the "11mo window premium" differently. And it simply comes down to the 11mo window because at 7-mo (as I think I first read in one of your posts), all points become equal.

Some families, like mine, justify the added premium due to "newness" and being on the Gondola line. Your family because you can walk to two parks during F&W. Some VGF owners do the same but for being on the monorail line and soon being able to walk to MK, even though their point chart is more expensive than PVB and BLT and just as high as DRR. All those reasons are oranges though... that can be debatable. Only factor that can't be debatable is the CPP per year.

BTW, the CPP per year for resale data is from https://www.dvcresalemarket.com/blog/best-economical-dvc-resort-to-purchase-spring-2019/ and represents resale buyer averages for that slice of time, not my calculation. YMMV for each resale-owner, but I think it is a valid basis since the present debate is based on current circumstances.

 

[CanadaDisney05]

You're absolutely right, the way I look at it ignores the points chart because it is such a variable. My point is to try and reduce it down so that we can best compare apples to apples, not apples to oranges. As you and I know, every family justifies paying the "11mo window premium" differently. And it simply comes down to the 11mo window because at 7-mo (as I think I first read in one of your posts), all points become equal.

Some families, like mine, justify the added premium due to "newness" and being on the Gondola line. Your family because you can walk to two parks during F&W. Some VGF owners do the same but for being on the monorail line and soon being able to walk to MK, even though their point chart is more expensive than PVB and BLT and just as high as DRR. All those reasons are oranges though... that can be debatable. Only factor that can't be debatable is the CPP per year.

BTW, the CPP per year for resale data is from https://www.dvcresalemarket.com/blog/best-economical-dvc-resort-to-purchase-spring-2019/ and represents resale buyer averages for that slice of time, not my calculation. YMMV for each resale-owner, but I think it is a valid basis since the present debate is based on current circumstances.

If your a 7 month family, point charts are irrelevant because at 7 months all points are equal.

If your an 11 month family, then point charts very much factor into the equation. Cost per point per night per year is probably the best quantitative measurement when comparing resorts.

Of course, quantitative measures are not the be all when it comes to decision making.

 

[CanadaDisney05]

Well ... (calling @CanadaDisney05 !!)

I think I've done my share of work today on my day off.

 

[pineapplepalms]

Cost per point per year is a great way to look at it - but it ignores one factor in the cost equation - the number of points per night required to stay at the resort. I was just looking ahead to booking a 7 month reservation memorial day weekend. Options between Riveria (Preffered) and Boardwalk (Pool/Garden) which are the most expensive categories at each resort. Riviera would cost me 78 points for 3 nights in studio - Boardwalk would cost 57.

So in your calcs - That $12.07 for Riviera and $12.91 for Boardwalk per point per year, my three day weekend would cost me $942 at Riviera and $735.87 for 3 nights (That's assuming I booked those with home resort advantage.) So While I agree that Riviera on a per point basis is high but in the ballpark of other resorts - the point structure actually makes it one of the most expensive DVC resorts to stay at.

But this is ignoring the room/bed layout as well. We own BWV and RIV, and we have a split stay booked with the first half in a 1BR at RIV and the second half in a 2BR at BWV. This is because the 1BR at BWV only has one real bed, while the 1BR at RIV has three including the two Murphy beds, which I consider to be vastly better than traditional sofa beds. We have a son and a daughter, and this setup is conducive to us staying in a 1BR at RIV for longer whereas we’re already upgrading to a 2BR at BWV.

 

[Soap_1984]

True..but throw in a monthly finance option and all of a sudden you have people committing to something that doesn’t seem that bad. Plus they then try to sell them on how much more they get!

We shall see what happens with sales when it opens for those who are not well versed in it all like those here on the DIS.

Fair point. I guess I am always assuming that at some point during the process the people buying actually look at the numbers. And I am sure at 150 points, most people are not just pulling $29,000 out of their room safe at Caribbean beach. If you actually look at what you're paying with the disney financing, I think the number was about $45,000 over the course of 10 years just to buy your points (not including dues). Also at year ten with 4% increases your dues would be about $1850 a year.

With 6.5mm points at riv and, just guessing, an average contract size of 200 points ($38k) they need 32,500 people/families to sign up for that deal. With the initial cost I am guessing there will be a lot of financing for direct buyers; I'm sure many will sort out their own financing at a better rate, but it will be interesting to see how it all unfolds. I can't figure it out, but I wouldn't be shocked if disney sold them all and kept the restrictions in place. It just seems with all the factors at Riv, they may run into some trouble selling at some point.

 

[pineapplepalms]

The rooms also look too small. We looked at it last night on utube.

I’ve seen this sentiment a few times but I think it’s just that the videos aren’t accurately able to portray the room sizes. If you actually look at the square footage, RIV has among the largest DVC villas:
https://www.easywdw.com/forums/showthread.php?20457-DVC-Rooms-Charts-with-detailed-room-info

Just too expensive, too many points to stay there, too much in member fees, and too difficult to get out of if we want to (due to resale restrictions).

I think this just depends on the individual situation. We bought BWV resale and RIV direct, and when you consider the number of years left plus incentives, our BWV contract was actually more expensive per point. Also considering room and bed layout, the point chart is okay for us since we can stay in a 1BR for longer than at BWV, where we’re already booking 2BRs. We also own VGF and often stay at VGC which are also point intensive. As for MFs, I guess we’ll have to see, but I don’t see RIV looking as high in a year or two if MFs at other resorts increase at a higher rate.

I’m not a fan of the resale restrictions (most of our points are resale, although luckily pre-2019 restrictions), but for us the resale risk of RIV was manageable and we have plenty of other points to sell if ever needed. I could see how it is more risky if it’s your only contract.

I think only couples who want to go for the studios and can do something with a smaller contract. I am not a marketing professional, but I’d bet money that this resort does not appeal to families at all.

I don’t know about others, but we are a family of four with young kids and we bought RIV direct with the intent of booking 1BRs in the short term and 2BRs when they get older. But we also have a lot of other points so we don’t need to use all of our RIV points every year and can bank/borrow as needed. RIV really appealed to us, but like every resort I can see how it’s not for everyone.

 

[Soap_1984]

But this is ignoring the room/bed layout as well. We own BWV and RIV, and we have a split stay booked with the first half in a 1BR at RIV and the second half in a 2BR at BWV. This is because the 1BR at BWV only has one real bed, while the 1BR at RIV has three including the two Murphy beds, which I consider to be vastly better than traditional sofa beds. We have a son and a daughter, and this setup is conducive to us staying in a 1BR at RIV for longer whereas we’re already upgrading to a 2BR at BWV.

That is true, and it's one of several reasons why price per point isn't necessarily a great metric to determine whether to buy or where to buy. To me it's not relevant without doing more analysis. All that price per point tells you is don't buy direct because they all cost too much.

Up until I've never run the numbers on Riviera, because it simply did not interest me due to the restrictions. The restrictions made it a non-starter for me. However, it's been repeated in this thread and others, that Disney has now priced Riviera so high that there is no mathematical way that it made sense. I was curious to see if this was true.

Assumptions

Trip: 1 week annually during magic season in a preferred studio (190 points)
Maintenance Fees: Stay static for 2020, and then begin to increase at 4% annually
Hotel Rates: increase at 4% annually
US Inflation Rate: 2%
Rack Rate: $679 tax in (average rack rate over 7 days during the summer according to mousesavers)

Results

- Break even was after 11 years. Not to bad considering its a 50 year contract
- The average cost per night is 480.87 in today's dollars. Keep in mind, this is not the same as a flat 30% discount off of rack rate. It's equivalent to a 30% discount in year 1, but every year after that, hotel inflation is higher than US inflation, so the "discount"becomes more and more.
- Break even when factoring in a flat 30% discount off of rack rate is after 18 years.
- Break even when factoring in a 6% opportunity cost & a 30% discount was 27 years. Much longer.
- Break even when factoring in a 8% opportunity cost & a 30% discount was 39 years. Even longer.
- If you were to compare Riviera DVC against a hotel that costed $288 per night tax in today, you would get the same results over 50 years. This is due to the assumption that hotel inflation is greater than US Inflation.

Conclusion

The numbers still technically make sense for Riviera (atleast in the scenario I laid out) if you compare it against the option of staying at Riviera. If you suggest that you can stay offsite, or in values for cheaper, you are correct. Riviera direct yields similar results to a moderate today. For myself personally, at a breakeven of around 39 years when compared to a 30% discount (not too hard to find), and 8% opportunity cost (reasonable expectation on a 39 year investment), I don't think I would give up the flexibility and liquidity for Riviera DVC. But that is me as a financial nerd. I wouldn't suggest that everyone's situation is the same as the one I laid out, so it may make sense for some.

I agree with your conclusion, your analysis assumes you take $35k to get 190 points and do nothing with that money in the alternative. The payback period is actually so much longer than 11 years.

 

[CanadaDisney05]

I agree with your conclusion, your analysis assumes you take $35k to get 190 points and do nothing with that money in the alternative. The payback period is actually so much longer than 11 years.

- Break even when factoring in a 6% opportunity cost & a 30% discount was 27 years. Much longer.

The 6% opportunity cost is the alternative of what you would do with the cash if you didn't buy RIV. Yes, it's much longer if you factor in 6% opportunity cost and a 30% discount.

If you factor in 6% opportunity cost without the discount, then the break even is about 12 to 13 years. 8% opportunity cost is about 15 years.

 

[Soap_1984]

The 6% opportunity cost is the alternative of what you would do with the cash if you didn't buy RIV. Yes, it's much longer if you factor in 6% opportunity cost and a 30% discount.

If you factor in 6% opportunity cost without the discount, then the break even is about 12 to 13 years. 8% opportunity cost is about 15 years.

When I did the numbers I was factoring a discount but it was less than 30% and it was longer payback than my expected ownership/benefit which is why I went resale.

 

[CanadaDisney05]

When I did the numbers I was factoring a discount but it was less than 30% and it was longer payback than my expected ownership/benefit which is why I went resale.

Without looking at your calculation its hard to tell where the differences would like. Everyone's calculations are going to be a bit different because of different assumptions. Keep in mind, in my original post, I did say that the break even point when using a 30% discount and an 8% opportunity cost was 39 years which is quite long.

 

[Soap_1984]

Without looking at your calculation its hard to tell where the differences would like. Everyone's calculations are going to be a bit different because of different assumptions. Keep in mind, in my original post, I did say that the break even point when using a 30% discount and an 8% opportunity cost was 39 years which is quite long.

Yeah I understand, I don't have my calcs in front of me (away for Canadian Thanksgiving) I just always assume I am going to sell at some point and if I can't save money in 10-12 years what is the point. I'm also not a "leave it to my kids" person so that doesn't factor in at all for me.

 

[CanadaDisney05]

Yeah I understand, I don't have my calcs in front of me (away for Canadian Thanksgiving) I just always assume I am going to sell at some point and if I can't save money in 10-12 years what is the point. I'm also not a "leave it to my kids" person so that doesn't factor in at all for me.

Happy Thanksgiving! Yeah, in my honest opinion, of all the scenarios I laid out there, I think the 30% discount and 8% opportunity cost is going to yield the closest results to what actually happens. 30 to 40 years break even is just too much for me personally. That's why I did they hybrid direct and resale SSR. Break even is much quicker, and the contract duration leaves me into my late 60's. If my kids want DVC in the future, they can buy it themselves.