Spreadsheet fun!

[ValpoCory]

More spreadsheet fun:

So, I did some more comparisons, and I decided to do a couple apples-to-oranges comparisons:

First:
--Cumulative total cost of DVC: $160,215.90
--Cumulative total cash cost at a moderate: $286,806.75
--Savings of DVC vs. Moderate: $126,590.85

Second:
--Cumulative total cost of DVC: $160,215.90
--Cumulative total cash cost at a value: $159,941.87
--Savings of DVC vs. Moderate: -$274.03

I think the second one is most interesting: Over the life of the contract, you are staying at a deluxe resort for almost the same cost as the value resort!

Interesting yes. But it assumes the person pays full price at the hotels without doing any homework to find specials. I have stayed moderate three times through southwestvacations.com and gotten $95 per night. Also, when Disney offers specials like Buy 4 nights, get 3 free, with a $200 voucher, that is when we go.

But the biggest assumption is that someone would go 50 times in 50 years. And non-DVC members just don't do that. 15 times in 15 years, maybe, but 50 times in 50 years didn't happen until the DVC.

 

[ValpoCory]

Very interesting! It's nice to see it saves tons of money for either non-financed or financed contracts. Thanks for sharing your spreadsheet We did a spreadsheet for ourselves and it breaks even at our 6th trip . Some trips really speed up the process. For our upcoming AKV trip, our concierge 1BR would be $735.00 per night (plus tax) if paying rack rate! Ouch Thankful for our DVC !

You're only breaking even assuming you are the type of person who would pay $735 per night to stay in a hotel.

If you're not, then the number you need to be using in your break even analysis is the cost per night you would pay if you were not a DVC member.


Remember, a break-even analysis for some rich person, where money is no object, is not the same break-even analysis you should use. You have to use the value of what you would be doing if you were not a DVC member.

 

[ValpoCory]

No need to worry about Disney. They got us figured out just fine, LOL.

Hardly any DVC members "save" money by buying DVC. A whole lot of us end up going more often, staying in larger accommodations, and treating friends and relatives. We probably wouldn't do those things without DVC.

Kind of like that new top that I bought but didn't need. Bought because it was on sale and "saved" 40%!!! Never mind that I spent $$ that I hadn't planned to spend until I saw the sale!

Exactly. Disney is not stupid.

 

[ValpoCory]

Well I was just trying to humoursly make the point that for the most part these calculations are academic, not reality. Almost none of us would otherwise have spent X amount on Disney hotels every year for the next few decades. So, if we really wouldn't have spent it, then we haven't really "saved" that money by going with DVC. Go out and buy the biggest TV you can find that is on sale and try to convince the spouse that you have "saved" money. I've tried, it doesn't work.

The fact is, Disney Co. all together, makes more $ with the DVC program than without it. That means we all spend more $ with DVC than without it. I think that the idea that DVC saves us all $, while logical when you sit down and look at hotel costs, is largely an illusion as DVC has actually caused us to alter our behavior from what our vacation habits would have otherwise been. Altered in a way that causes us to spend a lot more money at Disney than we otherwise would have. You alluded to this when you correctly point out that DVC provides them with a new, predictable revenue source.

Agreed. Excellent points.

 

[PattiPB]

Great thread!!! Well-constructed spreadsheet, that assumed many of the same factors we considered before buying. Nobody can account for every single irregularity, but your assumptions worked well for us!

DVC was a wonderful purchase for us! Unfortunately, we didn't purchase as relative newlyweds in 1991, but I'm thrilled we finally did. The true value, as mentioned, isn't academic or mathematically sounds---it's the memories and time spent with loved ones. This summer we're taking a friend for a 4-nighter at OKW and extended family to AKV for a week. We never could have extended these offers had it not been for DVC.

Even we math-geeks (I'm an Accounting teacher) sometimes need to bow to old-fashioned warm and fuzzy feelings!!

 

[ValpoCory]

Well I was just trying to humoursly make the point that for the most part these calculations are academic, not reality. Almost none of us would otherwise have spent X amount on Disney hotels every year for the next few decades. So, if we really wouldn't have spent it, then we haven't really "saved" that money by going with DVC. Go out and buy the biggest TV you can find that is on sale and try to convince the spouse that you have "saved" money. I've tried, it doesn't work.

But has she ever used it on you, when she went shopping for clothes, or things for the house, etc? I suspect that TVs aren't her passion, so it's never going to work for her (hubby is the same with computers), but the thought process would work for her with something else.

Regardless of whether there's a passion or if it would "work", Mtnman44's point is valid. Thinking you "saved money" on something when there was no way you'd pay full price is just a delusional fallacy.

 

[ValpoCory]

This summer we're taking a friend for a 4-nighter at OKW and extended family to AKV for a week. We never could have extended these offers had it not been for DVC.

If you want to buy vacations for other people, then DVC is for you!

Just joking. I definitely agree that Disney is selling memories here, and those are priceless to the consumers.

 

[ValpoCory]

YourEveryDayAdam, can you run this one?

Assuming a renter goes 50 straight years, when will they break even buying into the DVC versus renting every year?

Let's assume the renter rents at $10/point this year and $(2x the Annual Dues)/point in future years.

 

[YourEveryDayAdam]

YourEveryDayAdam, can you run this one?

Assuming a renter goes 50 straight years, when will they break even buying into the DVC versus renting every year?

Let's assume the renter rents at $10/point this year and $(2x the Annual Dues)/point in future years.

I don't think that those are good numbers to use. Simply because first year for the reservation I used in my example, using your numbers, would be $1,820. The second year would be $1402.68.

A better comparison would be to take the current ratio of the current rental cost ($1,820 at $10 per point) over the current cash cost ($2,953). This gives us 61.6%. Basically, people are willing to rent reservations for about 60% what the cash cost is.

The cash cost is going to go up every year, and if people are willing to pay about 60% now to rent, they should be willing to pay 60% in the future to rent. This would indicate that the rental cost would climb at the same rate as the cash cost.

Also, since paying 60% of the cash cost of the hotel is the same as finding a 40% off coupon, then you can use my numbers for 40% off to compare.

In general: my numbers for 40% off will work for almost all of the best discount savings that Disney offers: the 40% off coupon codes, the "buy 4 get 3 free", AP discounts, Free dining, renting points, etc. They are all pretty close to "40% off" once you add up all the numbers. Each one just has a different gimmick. Some are more flexible that others, and some work better for large groups, etc. Also these specials come and go with the economy and the travel season. DVC will save you money EVERY time you travel, regardless of economy or how easy it is for Disney to sell rooms.

But to ultimately answer your question: Someone buying DVC will break even with renting at around 13 years. The person who bought versus the person who rented will save over $210,000 over the 50 year life of the contract.

 

[ValpoCory]

Thanks Adam. You are the man!

 

[YourEveryDayAdam]

Interesting yes. But it assumes the person pays full price at the hotels without doing any homework to find specials. I have stayed moderate three times through southwestvacations.com and gotten $95 per night. Also, when Disney offers specials like Buy 4 nights, get 3 free, with a $200 voucher, that is when we go.

But the biggest assumption is that someone would go 50 times in 50 years. And non-DVC members just don't do that. 15 times in 15 years, maybe, but 50 times in 50 years didn't happen until the DVC.

Even 15 times in 15 years, the DVC person would save money:

Cumulative DVC cost at 15 years: $34,797
Cumulative Cash cost at 15 years: $63,721
Cumulative Cash cost with 40% off coupons: $38,232

At the end of the 15 year period, the DVC person has spent $3,500 less than the cash guest (not including taxes that my numbers in my spreadsheet don't account for and DVC guest doesn't pay). Also, at the end of the 15 year period, the DVC person has a DVC membership that they can sell and get most, if not all or more, of their original $20,384 back. That also assumes that the cash guest is going to get a 40% off coupon (or equivalent deal) for every trip. Not likely when the economy starts to pick back up.

 

[YourEveryDayAdam]

so, I decided to do another spreadsheet to compare costs for another hypothetical family. This is for a family of 6.

I used the same time period: a week in september. MK view. 2 Bedroom. vs. the same room's cash cost. I also did 2 regular rooms at a value resort, which would sleep the family of 6.

In this example:
1 week at MK view is 360 points.
$112 per point
I used the cheapest room at Pop Century for the value costs.

Here's what I came up with:

Some interesting numbers:
You'll remember in my first example above that the break-even point was 7 years. For a family of 6, staying in the same room, the break-even point is now 5-6 years.
Even a cash guest with a 40% off coupon will break-even at 9-10 years.
For a family of 6 staying in 2 value resort rooms, the break-even point is 13 years AND they will have tons more room, an extra bathroom, a full kitchen, deluxe accommodations, superior transportation, and a guarantee of joining rooms every year.

A DVC member will have spent about $317,000 over 50 years.
A cash guest will have spent about $1,656,000 over 50 years.
A cash guest with 40% discount will have spent about $994,000 over 50 years.
A cash guest staying at value resorts will have spent about $749,000 over 50 years.

In this case, the savings are DRAMATIC:
DVC vs. Cash savings: $1,339,053.01
DVC vs. Values: $432,094.69
DVC vs. BLT 40% coupon: $676,667.58
DVC vs. Values with 40% coupon: $132,492.58

In this case, the MOST expensive DVC 2 bedroom beat the values, even with coupons, by $132,000!

 

[Kickapoo Joie Juice]

so, I decided to do another spreadsheet to compare costs for another hypothetical family. This is for a family of 6.

I used the same time period: a week in september. MK view. 2 Bedroom. vs. the same room's cash cost. I also did 2 regular rooms at a value resort, which would sleep the family of 6.

In this example:
1 week at MK view is 360 points.
$112 per point
I used the cheapest room at Pop Century for the value costs.

Here's what I came up with:

Some interesting numbers:
You'll remember in my first example above that the break-even point was 7 years. For a family of 6, staying in the same room, the break-even point is now 5-6 years.
Even a cash guest with a 40% off coupon will break-even at 9-10 years.
For a family of 6 staying in 2 value resort rooms, the break-even point is 13 years AND they will have tons more room, an extra bathroom, a full kitchen, deluxe accommodations, superior transportation, and a guarantee of joining rooms every year.

A DVC member will have spent about $317,000 over 50 years.
A cash guest will have spent about $1,656,000 over 50 years.
A cash guest with 40% discount will have spent about $994,000 over 50 years.
A cash guest staying at value resorts will have spent about $749,000 over 50 years.

In this case, the savings are DRAMATIC:
DVC vs. Cash savings: $1,339,053.01
DVC vs. Values: $432,094.69
DVC vs. BLT 40% coupon: $676,667.58
DVC vs. Values with 40% coupon: $132,492.58

In this case, the MOST expensive DVC 2 bedroom beat the values, even with coupons, by $132,000!

Adam, I have two questions:

1. Have you sent this to Disney?

2. Have they hired you yet?

 

[Modeltrf]

so, I decided to do another spreadsheet to compare costs for another hypothetical family. This is for a family of 6.

I used the same time period: a week in september. MK view. 2 Bedroom. vs. the same room's cash cost. I also did 2 regular rooms at a value resort, which would sleep the family of 6.

In this example:
1 week at MK view is 360 points.
$112 per point
I used the cheapest room at Pop Century for the value costs.

Here's what I came up with:

Some interesting numbers:
You'll remember in my first example above that the break-even point was 7 years. For a family of 6, staying in the same room, the break-even point is now 5-6 years.
Even a cash guest with a 40% off coupon will break-even at 9-10 years.
For a family of 6 staying in 2 value resort rooms, the break-even point is 13 years AND they will have tons more room, an extra bathroom, a full kitchen, deluxe accommodations, superior transportation, and a guarantee of joining rooms every year.

A DVC member will have spent about $317,000 over 50 years.
A cash guest will have spent about $1,656,000 over 50 years.
A cash guest with 40% discount will have spent about $994,000 over 50 years.
A cash guest staying at value resorts will have spent about $749,000 over 50 years.

In this case, the savings are DRAMATIC:
DVC vs. Cash savings: $1,339,053.01
DVC vs. Values: $432,094.69
DVC vs. BLT 40% coupon: $676,667.58
DVC vs. Values with 40% coupon: $132,492.58

In this case, the MOST expensive DVC 2 bedroom beat the values, even with coupons, by $132,000!

A few questions for you:

How did you know I have a family of six?

How did you know I just stayed at Pop Century 3 months ago and swore never again to stay in a hotel with my family?

How did you know I just bought enough BLT points for a 2 Bedroom MK view?

Have you been spying on me?

Your wonderful spread sheets have only confirmed my own cost analysis. Thanks so much for your efforts!!!

 

[YourEveryDayAdam]

A few questions for you:

How did you know I have a family of six?

How did you know I just stayed at Pop Century 3 months ago and swore never again to stay in a hotel with my family?

How did you know I just bought enough BLT points for a 2 Bedroom MK view?

Have you been spying on me?

Your wonderful spread sheets have only confirmed my own cost analysis. Thanks so much for your efforts!!!

Yes. I have been spying on you. Mwahahahahaha

 

[SunnieRN]

I must admit, this one stunned me!! I am so glad there are number people like you in this world!! I am SO NOT a math person and if I tried to figure this out I would never make it to the end! Thanks so much!!

 

[ValpoCory]

Even 15 times in 15 years, the DVC person would save money:

Cumulative DVC cost at 15 years: $34,797
Cumulative Cash cost at 15 years: $63,721
Cumulative Cash cost with 40% off coupons: $38,232

At the end of the 15 year period, the DVC person has spent $3,500 less than the cash guest (not including taxes that my numbers in my spreadsheet don't account for and DVC guest doesn't pay). Also, at the end of the 15 year period, the DVC person has a DVC membership that they can sell and get most, if not all or more, of their original $20,384 back. That also assumes that the cash guest is going to get a 40% off coupon (or equivalent deal) for every trip. Not likely when the economy starts to pick back up.

Good call. That brings up a good question. How often would a family have to visit a moderate resort in the next 50 years to tip the scale financially in favor of the DVC? You did a great analysis earlier that showed "--Savings of DVC vs. Moderate: $126,590.85".

That was against 50 Moderate trips. So if a family was going to take 50 Moderate trips, the DVC would save them money

What if the family would only go 25 times in 50 years? What is the breakeven number of trips?

 

[vellamint]

so, I decided to do another spreadsheet to compare costs for another hypothetical family. This is for a family of 6.

I used the same time period: a week in september. MK view. 2 Bedroom. vs. the same room's cash cost. I also did 2 regular rooms at a value resort, which would sleep the family of 6.

In this example:
1 week at MK view is 360 points.
$112 per point
I used the cheapest room at Pop Century for the value costs.

Here's what I came up with:

Some interesting numbers:
You'll remember in my first example above that the break-even point was 7 years. For a family of 6, staying in the same room, the break-even point is now 5-6 years.
Even a cash guest with a 40% off coupon will break-even at 9-10 years.
For a family of 6 staying in 2 value resort rooms, the break-even point is 13 years AND they will have tons more room, an extra bathroom, a full kitchen, deluxe accommodations, superior transportation, and a guarantee of joining rooms every year.

A DVC member will have spent about $317,000 over 50 years.
A cash guest will have spent about $1,656,000 over 50 years.
A cash guest with 40% discount will have spent about $994,000 over 50 years.
A cash guest staying at value resorts will have spent about $749,000 over 50 years.

In this case, the savings are DRAMATIC:
DVC vs. Cash savings: $1,339,053.01
DVC vs. Values: $432,094.69
DVC vs. BLT 40% coupon: $676,667.58
DVC vs. Values with 40% coupon: $132,492.58

In this case, the MOST expensive DVC 2 bedroom beat the values, even with coupons, by $132,000!

OMG..

I know this thread is a month old.....but I think I love you.....

You have mapped this out for my family of six perfectly!!!

 

[Kickapoo Joie Juice]

Yeah, every time somebody asks if DVC is worth it I point them to this thread.

Maybe the mods can make it a sticky? It's certainly worthy!

 

[savannahcat]

It's worth it assuming you would be going to the expensive Luxury hotels if you were not a DVC member, and assuming you would vacation that much to Disney or other DVC destinations if you were not a DVC member.

That's a couple of big assumptions.

Maybe I can bring a different perspective to this. We are a family who got hooked on Disney while tagging along on DH's business trips to Orlando. Now, those business trips have all but ended, but we still find ourselves coming to Disney 3-4 times a year staying offsite in Windsor Hills. We love Windsor Hills, but have always dreamed of staying in the Boardwalk area. We just assumed it was out of our reach financially. To clarify, if we couldn't stay in the Boardwalk area or on the monorail, we would definitely be offsite.

This summer, I got a discount rate of $119/night for the Swan and we spent three nights there. (Well, sort of, since my DD3 ended up in the hospital, only half of us were there at any given time.) We LOVED the location. EPCOT is our favorite park and the convenience of being right there is worth a lot to us.

We decided to explore DVC and took the tour a couple of weeks ago. When we came home, I did our own break-even analysis, comparing DVC with an offsite condo and an occasional stay with a discount rate at the Swan or Dolphin. I assumed two weeks of vacation a year and also included the value of the DVC annual pass discount since we would be buying annual passes anyway. I know that circumstances change, but DH and I think we would still come to Disney even after the kids are grown, so we think the analysis will still be correct even over 30 years or more.

Guess what? We still break even after 12 years! A month ago, before staying at the Swan, no one could have convinced us that DVC is a good deal for our family. Now we know different and we're just waiting for the right contract to come up on the resale market before we take the big plunge!