Speculation on point requirement increase for direct benefits

[Sandisw]

The entire thread is about benefits yes but that particular section that the PP was specifically discussing TOWL which is why I was confused.

I try and read from start to finish but I can certainly see where people don’t do that.

Thank you for your clarification.

Yeah.,, that initial mention about TOTWL and WWD was an example of maybe DVD already changing who can and can not do things with rented points and how they already have with MM.

So, it could be interesting to see where they go in the future with enhancing things and require eligible points only!

 

[eticketplease]

It’s hard to be certain about booking the same size room and location for the next 50 years.

Well stated!!

 

[CastAStone]

Interesting thread.

It seems clear to me that 150 is already too high for Disneyland hotel, and for the cabins.

Hence, why they lowered the minimum overall purchase.

Raising the threshold for perks more seems bananas to me.

 

[WilsonFlyer]

I'm not sure what the "recommended minimum" is but I'm assuming that it is whatever the point requirement at the time is to obtain membership extras.

Doesn't have anything to do with 'membership extras' at all. Most first-time buyers don't even know about this kind of stuff at the initial sales meeting.

The guides have always had a 'cookie-cutter' agreement that everybody they see is offered at the initial sales meeting. I'd dare venture a bet that 90%+ of first-time DVC owners that buy in at the initial sales meeting buy in at this cookie-cutter point value.

That point value has varied over time, but not by much. When we bought in, it was 160 at AKK. It was also 160 when we added on at BLT as founders. I'm not sure what it is today, but I assure you that the guides have a magic number their cookie-cutter contracts are already set up for. Both of our base contracts are at these values. We didn't know any different at the time. Most people don't either.

"We recommend that you buy 160 points. This gets you blah, blah, blah..." It has always been that way, and I can't imagine it's changed. Why would it? It's based on marketing and the magic pain-threshold that market research has determined that buyers are likely to buy without balking and to 'understand' why they need that number after having it 'explained' to them. Obviously, it is optimized to increase sales revenue for DVD because that is ultimately their end game.

Maybe I'm the only one that ever realized this, but I doubt it. LOL

 

[eticketplease]

Doesn't have anything to do with 'membership extras' at all. Most first-time buyers don't even know about this kind of stuff at the initial sales meeting.

The guides have always had a 'cookie-cutter' agreement that everybody they see is offered at the initial sales meeting. I'd dare venture a bet that 90%+ of first-time DVC owners that buy in at the initial sales meeting buy in at this cookie-cutter point value.

That point value has varied over time, but not by much. When we bought in, it was 160 at AKK. It was also 160 when we added on at BLT as founders. I'm not sure what it is today, but I assure you that the guides have a magic number their cookie-cutter contracts are already set up for. Both of our base contracts are at these values. We didn't know any different at the time. Most people don't either.

"We recommend that you buy 160 points. This gets you blah, blah, blah..." It has always been that way, and I can't imagine it's changed. Why would it? It's based on marketing and the magic pain-threshold that market research has determined that buyers are likely to buy without balking and to 'understand' why they need that number after having it 'explained' to them. Obviously, it is optimized to increase sales revenue for DVD because that is ultimately their end game.

Maybe I'm the only one that ever realized this, but I doubt it. LOL

Well actually it would have to do with "Membership Extras" since as you pointed out and I totally agree they have a cookie-cutter agreement and that agreement is setup for the Membership Extra minimum of 150 points currently.

I just wasn't sure what minimum you were talking about as the minimum buy-in for off the street is 100 points and yes I'm sure they aren't mentioning it but instead the cookie cutter agreement that you mentioned.

I doubt they have a cookie cutter for the 100 to say you are member but get no discounts, can't attend MM, can't purchase MMB etc. I would say the cookie-cutter agreement will always tailor to whatever level is needed for Magical Extras going forward.

Remember BLT and AKV there wasn't a minimum at the time for ME so as you said it was just a set number that DVD has set just like with OKW at 230 when opening.

 

[Sandisw]

Well actually it would have to do with "Membership Extras" since as you pointed out and I totally agree they have a cookie-cutter agreement and that agreement is setup for the Membership Extra minimum of 150 points currently.

I just wasn't sure what minimum you were talking about as the minimum buy-in for off the street is 100 points and yes I'm sure they aren't mentioning it but instead the cookie cutter agreement that you mentioned.

I doubt they have a cookie cutter for the 100 to say you are member but get no discounts, can't attend MM, can't purchase MMB etc. I would say the cookie-cutter agreement will always tailor to whatever level is needed for Magical Extras going forward.

Remember BLT and AKV there wasn't a minimum at the time for ME so as you said it was just a set number that DVD has set just like with OKW at 230 when opening.

From everything that I have heard and read, they start with the 150 and go from there.

If it seems like the potential buyer can’t do that, they offer the 100 point option with more of a “well, you can start with 100 but it doesn’t come with access to membership extras. “.

My guess is that given the increase in financing options, to 15 years, selling that extra 50, isn’t too hard.

 

[SL6827]

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What is the break even point now with a direct purchase of 150-160 points now? And is that number just the cost of only the points and financing?

 

[Genie+]

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What is the break even point now with a direct purchase of 150-160 points now? And is that number just the cost of only the points and financing?

It’s also going to depend on resort specific dues. More importantly will depend on what type of rooms you were booking before purchasing DVC and after.

There is no one right way to do the math. I try to take all my costs into account for what it costs me to use each point, then consider if the points needed for a certain room, resort and date is worth it to me. Very easy to make a 10 or 12 point room ‘worth it’ at BWV, though also worth considering how much work it costs to secure the reservation lol. For that I like the options at BLT and AKV. Generally have relatively good point costs and above average availability because high mount of inventory.

 

[Sandisw]

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What is the break even point now with a direct purchase of 150-160 points now? And is that number just the cost of only the points and financing?

It really all depends what you want to include in the equation. We did it the simple way....we looked at our resort of choice at the time...CR.....used a 35% discount of cash rate....which was what we were typically getting....and figured out how long we would need to own before we could give the contract away and "broke even".

We did not worry about TVM, lost interest, etc. because the money we were using would get spent anyway, and the interest we might be losing because we took it out in one chunk wasn't enough for us to worry about.

Financing is defintely going to add to that figure...but my guess is that the bulk of the buyers who do finance aren't as concerned about it the way some here are....they may simply look at it as an affordable way to do WDW each year with manageable payments.

 

[Cfabar1]

There are some who simply look at the cost of the monthly payment and determine if it is affordable for them.

My personal view is for most people "time value money" is well beyond how they would choose to make a purchase, so a better way to view it is what is the cost they are comfortable spending NOW and what is the cost they are comfortable spending over the long term....

Then, figure out an approximate cost per year, and see how that compares to (discounted) cash rates....

Time Value Money is imperative to understanding how a timeshare works, but I think many people would prefer to just determine if it makes sense for them... DVC has the advantage of a relatively high resale value, though I don't think of it that way... I think of it as "sunk money", and if you sell, be grateful for any amount you happen to get after the sales process....

 

[PolyRob]

There are some who simply look at the cost of the monthly payment and determine if it is affordable for them.

This is my friend that is just about done paying off her direct PVB from 2016. It was "less than a car payment" at the time so she thought it was a great deal.

 

[CastAStone]

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What is the break even point now with a direct purchase of 150-160 points now? And is that number just the cost of only the points and financing?

Depends immensely on where you buy and how you use the points.

The worst uses will never break even.

 

[Judique]

This is my friend that is just about done paying off her direct PVB from 2016. It was "less than a car payment" at the time so she thought it was a great deal.

This is really striking close to home as I shop for a new vehicle. Since I either pay cash or set up a payment plan of 36 months and then make larger payments to get rid of the loan, anything I would buy DVC is less than a car for me. I'm probably going to do an installment plan as I owe nothing and that alone can lower your credit score a little.

Depends immensely on where you buy and how you use the points.

The worst uses will never break even.

The break even may come later, when one tires of the WDW rat race and sells the contract.

 

[Takeitforgranite]

As someone who lives 500+ miles away, my decision to go with eligible direct over resale all depends on getting the Sorcerer Pass for several years. Lounges are something we would like to have access to, but they don’t seem all that impressive, especially if we have to wait. As for all the other benefits, we just won’t/can’t take advantage.

If they increase the minimum eligible points level in the next couple months, that might be the tipping point to send me over to resale, especially considering that WDW could cut benefits at any time.

 

[muppets3d]

Truth right there! Kind of like a premium of points paid. The system definitely rewards early planning. The more an owner doesn’t book their home resort, the better a low dues resorts will work out for them. And vice versa. That’s what makes CFW such a hard sell. Even though the cabins are very economical pointwise, it has no variety. The more an owner ends up trading out the more painful those high dues become. It’s hard to be certain about booking the same size room and location for the next 50 years.

CFW has no path forward unless it is included in Lakeshore Lodge, that's the truth of the matter.

 

[Zubon]

As someone who lives 500+ miles away, my decision to go with eligible direct over resale all depends on getting the Sorcerer Pass for several years.

I think of direct benefits in two categories: locals and out-of-state.

Sorcerer's Pass is a huge benefit for out-of-state guests who are or want to be Annual Passholders. If you are a family of 4, that saves $2000/year versus getting IncrediPass. It is very easy to make the direct math work that way. Even if you are a couple taking advantage of that every other year, that is still $500/year for that one direct benefit. (Of course, that could just induce you to spend more if you were not planning on AP years, but let's assume people buying DVC are planning to visit Disney frequently. I like AP binge years and then taking 1-2 years off.)

Many of the smaller benefits favor locals over out-of-state DVC members. Welcome Home Weeks are a big basket of tiny benefits that are individually worth very little. A free Mickey bar is not inducing someone from Minnesota to add a trip, but someone from Tampa might swing by for a few extra visits that summer. Moonlight Magic is much more accessible if you live within a 2-hour drive than a 3-hour flight. These little bonuses are harder to quantify than "$500 per person per AP year," but they add up and people like their little bonuses.

 

[Takeitforgranite]

I have been curious about what % of owners were out of state. I haven’t seen anything official, but the internet suggests that number is at least 70%. If that’s the case, then it makes sense that Disney would HAVE to offer some significant benefit for those members.

At the same time, I wonder how Disney looks at offering a discount AP for a member who only buys 150 points. Yeah, you can’t justify an AP for a relatively small amount of points, but that’s not exactly a bad thing for Disney.

I’d like to see the analytics of what makes Disney more money when considering raising the 150 min to, say, 200.

1. Selling APs to 150 point members who they know can’t come very often.

2. Selling AP to 200 point members who will be able to stay a few more nights.

There will be a trade off with fewer people being able to meet the minimum for full benefits.

 

[Zubon]

The only way the AP incentive loses Disney any revenue is if the only people buying Sorcerer's Passes would already have taken exactly those same trips with higher price tickets. If the incentive gets someone to buy an AP who not have otherwise: money. If the incentive gets someone to buy an AP more often than otherwise: money. If the incentive gets a family to buy an AP for more members (as opposed to one person getting it for the discounts): money. And DVC members already have overlapping benefits with APs, so that reduces the relative cost to Disney when people have both.

If someone buys 150 points and cannot justify buying an AP: no loss from the incentive.

If someone buys 150 points and an AP that they underuse: money.

If someone buys 150 points and an AP and then takes more trips to justify it: money.

If someone buys 150 points and an AP and needs more cash rooms or decides to get more points: money money.

The real cost of getting the Disney Dining Plan is finding out which expensive restaurants you like at Disney World. Boma is an expensive habit. The real cost of getting an Annual Pass is the extra trips which you take because they're "free."