To DVC or not...

[JimMIA]

Can you explain what you mean by this? I'm not sure I understand. Doesn't there come a point somewhere between now and 2054 (for example, when a SSR contract expires) where the owner has "broken even" (and thereafter "get ahead") by having prepaid and locked into 200 points, regardless of what a week at SSR "costs" in even discounted dollars in, say, 2048?

My memory is that, even assuming the loss of investment power of the initial capital and the increasing maintenance fees, that if that SSR owner goes to WDW every year on their 200 points, after 8-10 years, they'll "break even" on what they would have otherwise spent for the same exact accommodations at a discounted (not rack rate).

Unless, of course, I totally missed your point, which is possible...

Anybody can set up a "break-even" model to show whatever they want to show.

If you compare DVC ownership to the cost of renting a DVC villa from CRO, of course you'll "save money." If you compare it to rack rates at an onsite Disney deluxe hotel, of course you'll "save money."

That's the same sucker bet as comparing the price of DDP to the inflated prices of onsite Disney table service restaurants. Of course you'll "save money," the model is rigged to force a showing of savings.

If a family wants to vacation at WDW every year, or most years, for the forseeable future...and if they really want to stay in very nice accommodations ONSITE at WDW...and if they are comfortable with a longterm financial timeshare obligation...DVC is great.

If someone has to work the details out to the exact date in 20whatever when they "break even," I suspect they're grasping at straws to justify something they should look at in a more critical and objective way.

 

[SSR]

Got it (both previous posts). Now I see where you're coming from.

I totally agree and understand that if you stay at a value resort and get the DDP, making a leap to DVC is likely not a "savings" measure of any sort. I also agree that it's hard to come up with any sort of breakeven analysis given the variables (discounts, rack rate, etc.).

However, if you're in this situation that Jim describes, it's a different proposition: "If a family wants to vacation at WDW every year, or most years, for the forseeable future...and if they really want to stay in very nice accommodations ONSITE at WDW...and if they are comfortable with a longterm financial timeshare obligation."

We found ourselves in that group: staying in Deluxe, wanting larger accommodations, never trading out, usually going in off season, etc. Obviously, everyone's situation is different, so that's where I agree it's hard to universally answer a question of whether DVC is a "good idea" (in the abstract).

 

[SSR]

If someone has to work the details out to the exact date in 20whatever when they "break even," I suspect they're grasping at straws to justify something they should look at in a more critical and objective way.

Isn't the "break even" analysis a critical and objective way of looking at it if we assume this to be true? "If a family wants to vacation at WDW every year, or most years, for the forseeable future...and if they really want to stay in very nice accommodations ONSITE at WDW...and if they are comfortable with a longterm financial timeshare obligation."

If not, what's a good critical and objective way to measure the dollars of whether DVC makes sense?

 

[KingRichard]

This site has a good break down on the cost and break even.

http://www.mousesavers.com/dvc.html

Remember that the cost of rooms goes up every few years. You are locked in on your cost except for dues and those are held low.

If you decide in 20 years it isn't for you then you might get some money back(might). People who bought almost 20 years ago and doing very nicely selling their DCV points.

 

[JimMIA]

Isn't the "break even" analysis a critical and objective way of looking at it if we assume this to be true? "If a family wants to vacation at WDW every year, or most years, for the forseeable future...and if they really want to stay in very nice accommodations ONSITE at WDW...and if they are comfortable with a longterm financial timeshare obligation."

I personally don't think any kind of "break-even" analysis is especially helpful to me, but it may be helpful to you. One reason I don't think it's helpful is that it's easy to base the calculations on outlandish assumptions like comparisons to rack rates. There are just too many financial logic traps inherent in those kinds of calculations for me to put much stock in them.

If not, what's a good critical and objective way to measure the dollars of whether DVC makes sense?

Everybody's got their own ideas and what makes sense to one family may not make sense to others. When we bought, I first went through the exercise I stated above: 1) do we want to get involved in any timeshare? and 2) is DVC the right timeshare for our needs?

Only after I was satisfied with those two things did I look at the financial aspects. I first checked to see how many points we'd need, and what they'd cost. We had the cash to purchase, but if we hadn't, I would not have purchased...period. (That's just me, YMMV)

The next thing I looked at was the ongoing annual expense, which I found to be easily manageable.

And the final financial calculation I did was to evaluate what a typical stay would cost us. For that, I calculated the per-point price we paid (including all fees) divided by the number of years remaining on the contract. To that, I added the estimated annual dues. We first bought OKW, and my ballpark annual cost per point worked out a little under $7 per point.

The most recent time I did a price calculation was for a stay this May Sun-Thurs in an OKW one bedroom. That was 27 points per night, or $189. After all of those financial gymnastics, I evaluated whether $189 per night seemed like a reasonable price for those accommodations...and I concluded that it did.

From this, hopefully you can see that -- to me -- the only two calculations that mattered were a) can we afford it? and b) are we getting good value for the money we're putting in?

(Incidentally, I eventually canceled that OKW reservation and booked at Wyndham Bonnet Creek with my Wyndham points...for $40 per night. That price was a little flukey -- it should normally have been about $65 per night, but there was a weird timeshare calendar quirk that helped us out.)

 

[SSR]

Thanks, Jim. That makes a lot of sense. Again, the break-even analysis only makes sense if you can normalize or apple-to-apple it as much as possible (i.e. consider loss of opportunity for cash outlay, use 40% discount, not rack rate, for CRO assumptions, etc.) We're on the same page.

We went through the same thought process as you did, primarily, do we want to be "locked" into Disney? We concluded that we did (for a host of reasons), and bought as SSR because when our son is older, my wife and I could see ourselves at the SSR spa/golf/environment just the two of us etc. Plus, getting 200 points for a song on the resale market made it even easier.

Sweetening the deal is that we never pay out of pocket for flights on Southwest. We have a Southwest credit card and always can fly on points. Our biggest expense when we're down there is the park tickets.

 

[Mtnman44]

I see your points. Heck, I'm a happy DVC owner too. However, I think I've come to realize that I am spending and will spend a lot more at WDW due to my DVC purchase than I otherwise would have.

Chances are slim, SSR, that you would have traveled to WDW, stayed in Deluxes, etc every year for the next 20 to 30 years without DVC. Most owners seem to have been to WDW a few times prior to purchase. There is no way to know for sure that you want to go there every year for the rest of your life. Even if you would have, chances are that you are now going or will go even more frequently or for longer durations than you would have without DVC. I think this is the main point of the DVC program, otherwise Disney is simply losing money on you and many other DVC owners.

Got it (both previous posts). Now I see where you're coming from.

I totally agree and understand that if you stay at a value resort and get the DDP, making a leap to DVC is likely not a "savings" measure of any sort. I also agree that it's hard to come up with any sort of breakeven analysis given the variables (discounts, rack rate, etc.).

However, if you're in this situation that Jim describes, it's a different proposition: "If a family wants to vacation at WDW every year, or most years, for the forseeable future...and if they really want to stay in very nice accommodations ONSITE at WDW...and if they are comfortable with a longterm financial timeshare obligation."

We found ourselves in that group: staying in Deluxe, wanting larger accommodations, never trading out, usually going in off season, etc. Obviously, everyone's situation is different, so that's where I agree it's hard to universally answer a question of whether DVC is a "good idea" (in the abstract).

 

[SSR]

I see your points. Heck, I'm a happy DVC owner too. However, I think I've come to realize that I am spending and will spend a lot more at WDW due to my DVC purchase than I otherwise would have.

Chances are slim, SSR, that you would have traveled to WDW, stayed in Deluxes, etc every year for the next 20 to 30 years without DVC. Most owners seem to have been to WDW a few times prior to purchase. There is no way to know for sure that you want to go there every year for the rest of your life. Even if you would have, chances are that you are now going or will go even more frequently or for longer durations than you would have without DVC. I think this is the main point of the DVC program, otherwise Disney is simply losing money on you and many other DVC owners.

I absolutely agree that Disney, through DVC, is going to "make more money" overall on us now that we're DVC members. I don't think they'll be doing that, however, on the lodging/accommodations. Rather, by "hooking" us to return (when we might have skipped) and spending money on tickets, merchandise, dining, etc, that's where they've "got" us and will "make more money" on us. I agree with that. It's kind of like the razor/replacement blade model. The razor is relatively cheap, but buying the proprietary razors is what gets expensive. For us, DVC and the lodging component is the razor - we know the blades (food, tix, etc.) are what really costs us in the long run.

We're Disney nuts, and there's no other place we'd rather vacation. For various reasons, we won't travel internationally. We don't drink very much, live near the beach already, and don't gamble. So, not many other places in the US (besides national parks and other attractions, which we go to in the summer) interest us.

We've gone to WDW the previous 10 years, every year, before we bought DVC. I will certainly acknowledge, however, that if we're ever "on the fence" or ambivalent about going to Key West (for example) or Disney, we'll "lean" toward Disney given that we're DVC members. However, on the other hand, we're staying in Vero Beach in April for a few nights, which we would never have done unless we were DVC members. We certainly don't feel locked in to WDW. That being said, if we ever feel like we're being "forced" to go to WDW, we'll either bank our points to double them for an Aulani trip, rent them, or gift the year's points to a family member by making a reservation in our name.

All this discussion drives home is Jim's and others' points (pun intended) about how this is really a personal decision.

 

[Mtnman44]

I think we are on the same page basically. I still think Disney is making more from you (and me) on accomodations than they otherwise would have, either through the time value of your up front purchase, increased frequency, longer stays, or simply that you have chosen to upgrade to pricier rooms than you otherwise would have spent, due to the DVC savings, or some combination of these.

I think the main point is that for many, many folks considering DVC, they often see it as a way to save money on their future WDW vacations and I think that for almost everyone, that isn't really the case. Again, I'll simply allude to Disney Marketing Genius.

With all this being said, I hope to add on some more points next spring!

I absolutely agree that Disney, through DVC, is going to "make more money" overall on us now that we're DVC members. I don't think they'll be doing that, however, on the lodging/accommodations. Rather, by "hooking" us to return (when we might have skipped) and spending money on tickets, merchandise, dining, etc, that's where they've "got" us and will "make more money" on us. I agree with that. It's kind of like the razor/replacement blade model. The razor is relatively cheap, but buying the proprietary razors is what gets expensive. For us, DVC and the lodging component is the razor - we know the blades (food, tix, etc.) are what really costs us in the long run.

We're Disney nuts, and there's no other place we'd rather vacation. For various reasons, we won't travel internationally. We don't drink very much, live near the beach already, and don't gamble. So, not many other places in the US (besides national parks and other attractions, which we go to in the summer) interest us.

We've gone to WDW the previous 10 years, every year, before we bought DVC. I will certainly acknowledge, however, that if we're ever "on the fence" or ambivalent about going to Key West (for example) or Disney, we'll "lean" toward Disney given that we're DVC members. However, on the other hand, we're staying in Vero Beach in April for a few nights, which we would never have done unless we were DVC members. We certainly don't feel locked in to WDW. That being said, if we ever feel like we're being "forced" to go to WDW, we'll either bank our points to double them for an Aulani trip, rent them, or gift the year's points to a family member by making a reservation in our name.

All this discussion drives home is Jim's and others' points (pun intended) about how this is really a personal decision.

 

[galligan4]

Thank you Everyone for your input! I will have to go and think about it. Originally, the thought was very much driven by my emotions. I love Disney and I love going. Every time we come home I am already to start planning and dreaming of our next stay. So I guess I really need to sit down and work out our facts and finances.

Thanks again Everyone! This has been so very helpful.

 

[snarlingcoyote]

Anybody can set up a "break-even" model to show whatever they want to show.

If you compare DVC ownership to the cost of renting a DVC villa from CRO, of course you'll "save money." If you compare it to rack rates at an onsite Disney deluxe hotel, of course you'll "save money."

That's the same sucker bet as comparing the price of DDP to the inflated prices of onsite Disney table service restaurants. Of course you'll "save money," the model is rigged to force a showing of savings.

If a family wants to vacation at WDW every year, or most years, for the forseeable future...and if they really want to stay in very nice accommodations ONSITE at WDW...and if they are comfortable with a longterm financial timeshare obligation...DVC is great.

If someone has to work the details out to the exact date in 20whatever when they "break even," I suspect they're grasping at straws to justify something they should look at in a more critical and objective way.

You just described DH and I. We're contemplating DVC.

DH and I want to go to Disney once every 2 years until we die; we want a kitchenette and a premium location at a nice deluxe resort on site. We only use housekeeping once every 3 days no matter where we stay.

We're thinking of buying enough points to do Bay Lake Towers, MK view studio every 2 years and paying cash on a resale.

D'ank you!