Updated DVC info at Mousesavers.com

[tjkraz]

A few months ago the quality of a DVC article at Mousesavers.com was hotly debated here. Today I noticed that Mary has updated the info on her website:

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

Wow! What a great article. Kudos to Mary and anyone who contributed. Now I know where I'll be referring people whenever they question the value of DVC.

 

[DisFlan]

Saw it earlier today. Nice article - very balanced.

DisFlan

 

[Dean]

Overall it's a nicely written article that's right on target. Two things I'd add are that the lead in shows a lack of knowledge of other timeshares as there are MANY points systems out there. And that under the heading "Best Candidates" or in the general discussion, one could have added the Sunday to friday stay savings.

 

[rinkwide]

Nice article - very balanced.

Hardly. It <I>is</i> an improvement but still remains a clear arguement against DVC (which is quite understandable considering Ms.Waring's profession).

 

[JimMIA]

Good article, and I agree with most of what she said.

There is, however, one HUGE glaring error:

"Resale or Direct From Disney?

Only Saratoga Springs Resort is still available for purchase directly through Disney."

That statement is just plain wrong. Somebody missed a BIG point on their research.

Other than that, the only points I don't agree with are her assertions that 1) you should only buy DVC if you can pay cash, and 2) that you should only buy DVC if you plan on visiting until the expiration of the contracts in 2042 or 2054.

I agree that the best way to buy DVC is to pay cash and that's what we did. Much more importantly, I think it is foolish for someone to consider DVC when they don't have the rest of their financial house in order.

But I wouldn't rule out financing a DVC purchase if the rest of the equation works. I think there are a lot of young families with good incomes and small children who can reasonably finance DVC -- especially if the term of the financing is short, and especially if they can do so through a very low-cost vehicle like a home equity loan.

On the other point (use it until the bitter end), I just don't know where that comes from at all. I'm sure there are a lot of DVC owners who plan to pass DVC down to their kids and expect someone to use it until the end, but I wouldn't consider that to be a requirement for DVC to make sense.

I don't consider DVC an investment at all (although I'm aware than most early owners who have sold have made nice profits), and I don't even listen to the "...it pays for itself in X trips" claims from guides. But I don't think you have to hold it forever for it to be a reasonable purchase. I think DVC is a really foolish purchase if you only intend to hold it a short time - like under five years - but to say you have to keep in until 2042 or 2054 to make it worthwhile is a big over-reach.

 

[JimMIA]

The other nit that I would pick with Mary's article is the comparison between the DVC dues and room rates at other Disney resorts.

I haven't checked her math, so I assume that's correct, but there is a major flaw in her statistics. First of all, she's not comparing the same periods, which is a fundamental mistake.

More important, the time frame she chose for comparing hotel rates is 1999-2005. She seems to have forgotten - or at least ignored - a little event we call 9/11. 9/11 sent the travel/hospitality into an unprecedented depression, which they are only now starting to recover from.

Mary's using a six year timeframe for her comparison, but the hospitality industry has been struggling incredibly for four of those six years she's looking at. Post-9/11 room rates do not accurately reflect the historical rise in Disney hotel rates, and they darn sure are not an accurate predictor for what Disney's room rates will do over the next 37 or 49 years.

 

[calypso*a*go-go]

You know, I personally don't think it matters what the article says...if someone wants to buy into DVC...they're going to find a way to justify it. It's kind of like someone on a diet ordering a hot fudge sundae -- you know you shouldn't do it, but you do it anyway and it tastes soooo good. You feel guilty about it afterwards, but you keep thinking about how great it was and realize sometimes you just gotta do, what you gotta do!

 

[Lasrnw]

I have a small disagreement with this thread........whether to pay cash or finance is clearly something that can be a benefit in either case. Some may find that by financing the purchase and claiming the interest may be more benficial at tax time than the loss of the interest income should they have taken that same money out of savings. For large point purchases it is a wonderful way to get a second home deduction without the hassles. Everyone's tax circumstances and personal preferences are different, but paying cash is not always the best option.

 

[JimC]

The other nit that I would pick with Mary's article is the comparison between the DVC dues and room rates at other Disney resorts.

I haven't checked her math, so I assume that's correct, but there is a major flaw in her statistics. First of all, she's not comparing the same periods, which is a fundamental mistake.

More important, the time frame she chose for comparing hotel rates is 1999-2005. She seems to have forgotten - or at least ignored - a little event we call 9/11. 9/11 sent the travel/hospitality into an unprecedented depression, which they are only now starting to recover from.

Mary's using a six year timeframe for her comparison, but the hospitality industry has been struggling incredibly for four of those six years she's looking at. Post-9/11 room rates do not accurately reflect the historical rise in Disney hotel rates, and they darn sure are not an accurate predictor for what Disney's room rates will do over the next 37 or 49 years.

She does state a longer term 1992-2006 average increase of just over 5%. That seems reasonable considering it includes a balance of good and back years for Disney. Getting historical rate information is difficult unless you are a collector of back copies of Birnbaum.

 

[JimC]

I have a small disagreement with this thread........whether to pay cash or finance is clearly something that can be a benefit in either case. Some may find that by financing the purchase and claiming the interest may be more benficial at tax time than the loss of the interest income should they have taken that same money out of savings. For large point purchases it is a wonderful way to get a second home deduction without the hassles. Everyone's tax circumstances and personal preferences are different, but paying cash is not always the best option.

There is no way a tax deduction on interest expense works out better than paying taxes on interest income.

Second homes are not right to use leases with zero value at the end. This is a prepaid vacation, not an investment. Lets not foget that sometime these contracts are going to begin to depreciate in value.

 

[FoodLover]

Hardly. It <I>is</i> an improvement but still remains a clear arguement against DVC (which is quite understandable considering Ms.Waring's profession).

I don't know what you consider my "profession" to be... or why on Earth you think that would make me argue against DVC!

The only intention behind my article is to suggest that potential buyers think the purchase through before plunking down the money. I have nothing against DVC. Some of my best friends are DVC owners. I like them anyway.

BTW, a couple of days ago I wrote a long post responding to the earlier thread about MouseSavers supposedly "bashing" DVC. The moderators removed it for some reason. I wrote to a moderator of this board and asked why, but got no response.

I suppose the same will happen with this one. Apparently it's fine for other members of this board to complain that I "bash" DVC and speculate wildly about my motivations -- but it's not okay for me to respond?

Mary

 

[FoodLover]

the time frame she chose for comparing hotel rates is 1999-2005. She seems to have forgotten - or at least ignored - a little event we call 9/11.

Er, no.

I give one resort rate comparison for 1992-2006, one for 1997-2006 and one for 1998-2006.

Old resort rates aren't all that easy to dig up, as another poster pointed out!

The DVC increases I cited were for 1991-2005, 1996-2005 and 2000-2005. Those are very similar timeframes.

Mary

 

[gjw007]

There is no way a tax deduction on interest expense works out better than paying taxes on interest income.

There are situations where it is better to take a loss (tax deduction) than to take a gain. This applies to tax implications where the gain would move you into a higher tax bracket and while taking a loss may move you into a lower tax bracket. It may seem counter intuitive to take a $5000 loss (as an example) but that $5000 loss may save you move money than if you had to pay more in taxes om a higher tax bracket. Of course, most of us wish that we were in a tax bracket where this would be a concern .

 

[gjw007]

Hit the wrong button to edit

 

[calypso*a*go-go]

I don't know what you consider my "profession" to be... or why on Earth you think that would make me argue against DVC!
Mary
MouseSavers.com

Here's what I think your profession is: Disney Goddess

I love your website and visit it almost daily. When I read the article, I never thought it was bashing DVC, I interpreted it to mean interested parties should have their facts/figures straight before making a huge investment in DVC (or any timeshare, for that matter). Keep doing what you're doing...I, for one, really appreciate it.

 

[DisFlan]

Hardly. It <I>is</i> an improvement but still remains a clear arguement against DVC (which is quite understandable considering Ms.Waring's profession).

I wouldn't call it anti-DVC. If I were an interested buyer, her article wouldn't have disuaded me. I don't personally agree with all her opinions. She seems to see DVC mainly as an investment, I don't. She made a few errors, but anyone doing due diligence should pick them up. She's improving, but maybe she'll get an actual DVC person to vet the facts in her next piece.


DisFlan

 

[FoodLover]

She seems to see DVC mainly as an investment, I don't.

Please re-read my article. I specifically state that DVC is NOT an investment -- it is a prepaid vacation plan.

Mary

 

[rinkwide]

I don't know what you consider my "profession" to be... or why on Earth you think that would make me argue against DVC!

First, let me say that I did not mean to offend. I thought it obvious that your profession is that of a website proprietor specializing in Disney discounts; Discounts that I believe are of much less importance once you join the Disney Vacation Club. I suppose my post was esoteric and ambiguous, for that I apologize.

Ambiguous or not, the foundation behind my post is solid.

For example, I know that there are more than a few DVC members like myself who were once <i>slaves</i> to the pending release of AP rates. Personally, I would frequent your site multiple times per week looking for the almighty discount codes as well as other savings on accomodations, admission and dining.

But now that I've joined DVC I have my rooms and rates secured, receive a sizable break on APs, and am, in turn, allowed to buy the DDE card (at a discount) which saves me tremendously on WDW dining. The net result is that I personally have little need for your site anymore. Additionally, I've read anecdotal stories from other members describing situations similar to mine.

Now, maybe those are just isolated incidents but I suspect they're not and that every new DVC member is potentially a bit of lost traffic for your site. My conclusion is that a rapidly expanding DVC is no friend to your Mousesavers business.

As a result of my hypothesis I expect you to argue against membership in DVC and I think you clearly do in the section <i>Long-Term Issues</i>.

You explain; "A DVC owner who became a member 12 years ago mentioned to me that she might not make the same decision today ... she sometimes regrets owing $2000 in annual DVC dues."

Unfortunately, you fail to mention the significant price appreciation of her buy-in and the ease with which she can cash-out should she wish to. You also neglect to explain that she could simply rent her points and make a modest <i>profit</i> to help pay those tuition bills (this despite acknowledging the benefits of renting later in your article). These are important factors that easily negate this woman's burden of ownership. Their omission results in a negatively skewed presentation of her long-term ownership experience.

There are other examples of negative bias but I'd say the most glaring is this unfair portrayal of the "long-term" outlook for members.

That said, please know that I appreciate your website and I respect your work (and I may just be way off base ).

 

[Miffy2003]

A
Wow! What a great article. Kudos to Mary and anyone who contributed. Now I know where I'll be referring people whenever they question the value of DVC.

I totally agree. I found this a well balanced article and to me, the financial comparisons were fine.

 

[JimC]

Having read the article again I still see it as balanced even looking for the criticisms noted in this thread. It is a good primer -- just what I would expect if I wanted to learn the basics.

Sure it might be nice to have universal information on the history of room rates at WDW. Maybe someday someone will undertake that enormous task (there a very well done history on ticket prices -- http://www.allearsnet.com/tix/tickethistory.htm and even that has some missing information). Mary's article simply illustrates that changes from year to year and resort to resort vary by the resort and the time period examined. She illustrates it both with DVC dues and WDW resort rates.

SSR is the only resort immediately available direct from Disney. For the others you will most likely go on the wait list. Seems an accurate statement to me.

She states that she is conservative in being against financing for vacations or prepaid vacations. Many of us here are as well. Many have a different view and that is okay. She points out her bias as one expects a publisher to do. Just to be clear on my bias -- I am in the do not borrow for vacation group.

You do need to consider long term potential use when making a long term purchase. Don't we advise on this Board to think about how you will use your membership in the future -- don't just think of it for today's teenage son or daughter as was posted in a recent thread.

That many have been able to cash out with price apprecitation is wonderful. But there is no gurantee that the substantial price appreciation so far will continue. It exists primarily due to ROFR. And at some point the 2042 contracts will begin to decline in value. I do offer a minor improvement to the article to say that current resellers are getting about 75% of the current retail price (after resale market price adjustements and selling commissions) rather than their original purchase price.

Yes you can rent your points, and correct it was not mentioned in the article -- but just how far do you want to take your primer into the nuances of DVC ownership?

I suspect that as Mary has done in the past her site's DVC content will continue to evolve as conditions change and new information becomes available. I use her site as much now as I did before DVC -- got our DL passes from a link on her site. It is an amazing resource.