Using Points Outside DVC Resorts

[DaddyBrady]

There have been a couple of threads recently about using DVC points for Interval International resorts and BVTC ("World Passport Collection"). The posts really made me reconsider the value of this. People with alot more experience than I have provided some excellent information and perspective.

They also got me to thinking about using points for other purposes. What is value of a point when used for something other than a DVC resort? (For example, for a room at a DL resort, for Cruises, or one of the non-Disney hotels.) Is it worthwhile to use DVC points for something other than a stay at a DVC resort?

I've had a rule of thumb for frequent flyer and hotel points that they have greatest value when used directly rather than exchanged. (For example, airline points are best used with the airline rather than converted to a hotel stay.) Is this true with DVC? Are the points "worth" less if used for something else?

Is a point worth what I could rent it for? Say it took 35 points for a night at a hotel (any hotel, it doesn't matter). If I can rent that point for $10, then it seems like as long as the hotel room is less than $350 a night, I'd be better off renting the points out and using the money to pay for the hotel instead of using points.

But I have this nagging feeling the maintenance cost figures into this, I just can't exactly think how. And maybe this isn't the right way to think about this question.

I ask because I'm trying to figure out if it makes sense for us to add on at DVC. My partner isn't a huge Disney fan (and yet I love him almost as much as I would if he were), so the ability to use the vacation investment in other places is a selling point, but only if it makes financial sense to do so.

Thanks for some thoughts; the collective wisdom and knowledge on this board is amazing, and I've been drinking from the firehose for the last month!

 

[sigillaria]

I am going on the 2006 Member Cruise using points. Since I am going solo I have to pay the single supplement. Stateroom Cat. 8 cash is $1925-points 272 (computes to $7.08 per point).

Click for member cruise point chart.Member Cruise 2006

PS: I could have rented the points out and then paid cash, but that is WAY too much of a hassle, not to mention the renter could back out, etc.

 

[MAO]

I know that this is not how I look at the question. I look at it in this manner -- I've already paid for my DVC points. I have no choice in this matter (unless I'm willing to sell my DVC membership.) Therefore, however I want to spend the points is fine.

Yes, technically I might be able to pay for a non-DVC resort stay for less than it costs me per point (taking into consideration how much I paid for my points over the time span of membership, adding in yearly maintenance fees, etc.) But a) I don't want to take the time to try and figure that cost out and b) if I pay for it in cash, I'm still left with DVC points to 'spend.'

I recently retired and, as such, have *much* less disposable income. That's not to say that I need to sell my DVC membership, just that the costs of getting to and from a vacation destination is suddenly a larger part of the equation of determining where and when I want to go somewhere. From Arizona, flights to Florida are usually more epensive than to California, so I've started going to DL sometimes instead of WDW every year. Also, I don't have the cash on hand to pay for a hotel stay unless I use my DVC points. And I would have a hard time justifying the level (concierge, suite, whatever) I stay at in a non DVC resort if I were paying cash out of pocket.

Like sigillaria says, I could technically rent my points and use that cash, but I happen to value my time and energy (and worrying about finding someone, trusting that they'll pay on time, and that they won't back out would consume a fair amount of time and energy) more than the cost of my DVC points. Are the DVC points "worth" the time and energy needed to rent and receive cash in return? Not to me, but most likely they are to someone else. Or several someones, many of whom will probably reply to this thread.

In my view, you need to sit down and determine what your values are. Do you value your vacations to the extent that you are willing to take several (using DVC points only at DVC resorts and paying cash for any other places.) Do you feel that you've paid for your DVC points and, as such, they're already spent. Do you think that they're a current resource that you should be renting out for cash in hand and, if so, how much are they currently worth for cash versus you using them yourself.

Personally, I would vote for an initial investment in DVC (which it sounds like you have) and investing any other cash in stocks, bonds, CDs, or whatever that makes you enough in interest or dividends to take a vacation outside of DVC parameters on a regular basis. That's my view.

 

[Mickey'sApprentice]

Great Question!

My DH and I recently bought into DVC and are looking forward to our 1st trip home to BWV.

We were concerned that the yearly fees would be higher than what we would normally pay per year for a non-disney vacation and that we would be tied to Disney for many years.

The right solution for us was to purchase a 100 point contract instead of 150 or more points.

We are spending 29 points this year to take a weekend trip to HHI. I've always wanted to see Charleston and Savannah and finally decided to go. We will then be using 200 points next year and taking my sister, her husband and 2 kids to WDW and will have a 2 bedroom villa with a boardwalk view. (That's 71 '06 points, 100 '07 points, and 29 '08 points.) We still have 71 points to do with as we please in 2008.

I could not have dreamed of paying for my sister's "condo" to do Disney before DVC, and that trip will pay for half of the purchase price into DVC.

Bottom line, you can purchase as few as 25 points, and if you stay at OKW every other year, you can stay at a studio in the off season for 5 days during the week. If using this option, IMHO you probably should think twice before buying into BCV because it eats points, and you will want to be able to stay at your home resort.

Anyway, purchasing fewer points handles your Disney craving, doesn't make others feel tied down, has a lower purchase price, and lower fees.

I saw something about needing 120 points for II, so you may want to get 50 points so that could be an option using all 3 years.

The only problem I've seen so far with having only 100 points, was that when the big trip was put off from one use year until the next, we had anxiety about having points hanging out. Lesson: Having a small contract doesn't give you a lot of wiggle room, be very certain before making reservations. I felt a little sick (got over it) when DH told me he had banked the rest of our '06 points so we could go in '07.

DVC isn't the easiest decision to make, but we were very glad we did it.

The only thing is, I haven't seen any resale contracts for less than 150 points lately except on ebay, and the prices on ebay are ridiculous.

Good Luck!

 

[Dean]

But I have this nagging feeling the maintenance cost figures into this, I just can't exactly think how. And maybe this isn't the right way to think about this question.

I ask because I'm trying to figure out if it makes sense for us to add on at DVC. My partner isn't a huge Disney fan (and yet I love him almost as much as I would if he were), so the ability to use the vacation investment in other places is a selling point, but only if it makes financial sense to do so.

Maint fees only figure in to the cost of a point over time. What you would need to decide is how much each point cost you and what you could get for it when renting (it's rental value). You also need to decide the return when you use points compared to cash and, in some instances, other timeshare exchanges. Rack rate is a poor way to compare unless you'd otherwise pay rack rate.

I am going on the 2006 Member Cruise using points. Since I am going solo I have to pay the single supplement. Stateroom Cat. 8 cash is $1925-points 272 (computes to $7.08 per point).

Click for member cruise point chart.Member Cruise 2006

PS: I could have rented the points out and then paid cash, but that is WAY too much of a hassle, not to mention the renter could back out, etc.

Your choice of course, but I'll point out there are also negatives in using points for the cruise. These include the $75 fee which must be paid again if you make ANY changes. The fact that if you pay cash plus points you pay a higher cash amount on that portion as a rule, have to pay it all up front, and can't take advantages of any other specials or discounts that many come along later. And if you cancel, your points are not returned to you in a fully functional format, they are reservation points. The 11 months rule apparently has changed so as long as the points schedule is available, hopefully one can get access to the better cabin choices. This also creates another benefit for one reserving far out with points. If it's 2 use years ahead, you get the choice of which use year to pay with, the current one or the following one.

MAO, I find it interesting that one who has less income and has to worry more about the overall costs of a trip, isn't interested in generating cash from their points when they wouldn't be using them anyway. Particularly when renting out the points is actually FAR safer, done correctly, that essentially all direct points reservations other than DVC directly, contrary to what many believe. In your situation I'd recommend getting VERY familiar with the exchange system and keep some searches running a full 2 years in advance for the things you'd consider.

DaddyBrady, I'd recommend not adding on for the purpose of using those points routinely other than at DVC.

 

[MAO]

<snipped>
MAO, I find it interesting that one who has less income and has to worry more about the overall costs of a trip, isn't interested in generating cash from their points when they wouldn't be using them anyway. Particularly when renting out the points is actually FAR safer, done correctly, that essentially all direct points reservations other than DVC directly, contrary to what many believe. In your situation I'd recommend getting VERY familiar with the exchange system and keep some searches running a full 2 years in advance for the things you'd consider.
<snipped>

I'm not sure how I managed to imply that I've ever not used all of my points. I certainly didn't mean to do that. I've been a member almost 8 years now and have yet to "waste" any points. This particular topic is one way that I've done that -- by using non-DVC resorts and non-Disney hotels that are closer to my home and therefore cheaper for me to get to. I also *enjoy* going to DL occasionally and the points allow me a concierge level room at the Grand Californian.

And it didn't hurt that I took the whole family in 2004 to WDW. 3 one bedroom and a two bedroom for 4 nights was a good use of 2004 & 2005 points!



After spending some time recently looking over how much DVC costs me, I'm seriously considering extending the length of my WDW stays since transportation costs will remain the same (I normally stay only about 3 nights at one time.) I have also been considering renting points; at least making them available to rent in the early part of my use year so I don't stress if someone hasn't rented them by the deadline for me to bank them. I can always take them off the market, bank them, and start planning a "blowout" trip the following year.

 

[Dean]

I'm not sure how I managed to imply that I've ever not used all of my points. I certainly didn't mean to do that. I've been a member almost 8 years now and have yet to "waste" any points. This particular topic is one way that I've done that -- by using non-DVC resorts and non-Disney hotels that are closer to my home and therefore cheaper for me to get to. I also *enjoy* going to DL occasionally and the points allow me a concierge level room at the Grand Californian.

It's not about using your points, it's about how one uses their points. You can use them any way you like of course or let them expire, it's doesn't hurt me and actually may help me with less competition. You seemed to suggest that the other cost of using points at WDW (air fare, etc) make it difficult for you to do so consistently. My points are that there is usually a significant (frequently hundreds of dollars or more) difference in the cost of using points for other options. That many people think it's too risky or too much hassle to rent points and that they are generally incorrect. And that there are significant risks to using points for non DVC stays, usually more than the risk of renting if one rents with proper precautions. But I'd think that flying from out west for 3 days stays is a considerable expense regardless and would definitely recommend you stay longer if possible. I also hope those 3 day jaunts are not over weekends because if it is, you're actually losing money by using DVC.

 

[rinkwide]

...I'd recommend not adding on for the purpose of using those points routinely other than at DVC.

Ditto.

If your points are already bought and paid for then use them as you see fit. But when you're thinking about the value of a new purchase it should only be considered viable for stays at DVC resorts (and preferably be limited to Sunday through Thursday nights).

 

[MAO]

<snipped>
My points are that there is usually a significant (frequently hundreds of dollars or more) difference in the cost of using points for other options. That many people think it's too risky or too much hassle to rent points and that they are generally incorrect. And that there are significant risks to using points for non DVC stays, usually more than the risk of renting if one rents with proper precautions. But I'd think that flying from out west for 3 days stays is a considerable expense regardless and would definitely recommend you stay longer if possible. I also hope those 3 day jaunts are not over weekends because if it is, you're actually losing money by using DVC.

I agree with all of your points, with the possible exception of "significant risks to using points for non DVC stays..." I've never had a problem -- could you elaborate? For the record, I've stayed at the Grand Californian twice, Paradise Pier once, the Arizona Biltmore once, and have the Hotel del Coronado scheduled for a little over a week from now. The only potential problem I've had (so far) was the Biltmore when I didn't realize that I was supposed to bring the piece of paper DVC sent me as my confirmation. They had my reservation, and either they contacted DVC or I contacted DVC and then DVC contacted the hotel (don't remember) and it all was fine.

And, yes, 3 day jaunts over a weekend would be suicide. ;-) They were taken back when I had a very good paying job and plenty of vacation time, and were still taken in the middle of the week. I could just take multiple vacations in a year. Now I have loads of vacation time and enough money to live on. That's why I think my 2007 UY trip will be for an entire week. (Already have two smaller trips planned with the 2006 points.)

 

[Dean]

I agree with all of your points, with the possible exception of "significant risks to using points for non DVC stays..." I've never had a problem -- could you elaborate? For the record, I've stayed at the Grand Californian twice, Paradise Pier once, the Arizona Biltmore once, and have the Hotel del Coronado scheduled for a little over a week from now. The only potential problem I've had (so far) was the Biltmore when I didn't realize that I was supposed to bring the piece of paper DVC sent me as my confirmation. They had my reservation, and either they contacted DVC or I contacted DVC and then DVC contacted the hotel (don't remember) and it all was fine.

I'd be happy to elaborate. First, one should rent out the reservation made with points early in a current use year and requires a deposit plus full payment well in advance, say 3-4 months prior to travel. Or one can do points transfers to other members with full payment prior to the transfer. In either case there is almost no risk. The minimal issues would be if one accepted a check that ended up not being good, you might have a returned check fee, my CU charges $5 but some banks are higher. And there would be a slight risk for damages or charges left on the room and not paid but the renter, also minimal risk in my book. As for effort, if one sticks to the above situation and refuses to make inquiries without having a verbal commitment, there is little work involved.

For the risk and cost of using points, DCL is an easy example. As a rule, a DCL reservation returns less than or equal to $6.75 per point, sometimes significantly less. If one makes ANY changes in the reservation, you must also pay the $75 fee again. If you do cash plus points, you have to pay for the entire thing up front. If you have to cancel, you get your cash back but the points come back in reservation points that expire the end of the use year of the reservation. Every AC, DC, DCL and CC item I've looked at returns similar information.

I'm sure that one can come up with a specific example where the generalizations break down. That's why I suggest getting real information and making a true and direct apple to apples comparison. This usually happens with DCL when you've already missed the early booking discounts. And occasionally with other options for specific dates where discounts would not otherwise be available. I'm always amazed that people will spend months, sometimes years, investigating DVC and whether it's a good value for them; then throw money away without even considering the other options available to them. Many assume it's risky or difficult to rent out points rather than taking a small amount of time to educate themselves. In your case your situation has changed and your travel habits are changing as well accordingly.

I guess I'd ask you if you knew then what you know now about your situation, would you have bought DVC or the same number of points? I'll make the point again that one can easily make use of DVC without being a member or by owning a small contract. I've made the same point as rinkwide many times, the decision to buy in or add on is totally different than if you already own the points. The example I use is the difference between buying a stock vs holding one you already own, it is not the same decision. For me, I'd have to be getting at least $8 pp minimum AND feel there were no other negatives, to make using points in this way worthwhile. Of course distressed points are a different matter.

II is somewhat different. It takes far more knowledge and time to make good choices. Timeshare trading is not for the lazy or faint of heart.

Added: One issue to consider is whether one would ever consider a specific option for X price. While the curve may shift when using points, I think it's not smart to pay a dramatic amount of points for something you'd never consider on cash for an equivalent value.

 

[MAO]

Dean-
I think I answered the OP with my original response in a manner very similar to what you're saying -- an initial (hopefully rather small) contract gets you in the door, but to add on with the express purpose of using those points to go outside of DVC doesn't make a lot of sense to me.

As far as your comments regarding using existing points outside of DVC resorts, you raise some interesting issues, but I cannot remember the last time in 20 years I've made any modifications to my set-in-stone vacation plans. That is, while I have been known to back out of or change dates on tentative vacations, once I make a reservation (either via DVC or through "normal methods") I have not changed it. This is, quite possibly, NOT "normal" behavior for many people but it is one of the things I know about myself that caused me to go ahead and purchase DVC. So, while I can trust myself to not change my mind, based on your expectations (and mine, I might add,) anyone I rent points to is much more likely to want to make changes. Even if that likelihood is only 10%, it's still a greater risk than I have with myself. Therefore, I feel that using the points myself is less of a hassle than renting them out. And as I mentioned in my original post, a "hassle" is worth some money which is not easily quantifiable but which, to date, has tipped my decision to use points myself to stay at non-DVC resorts versus renting my points to someone else.

And yes, I think if I knew 8 years ago that I would retire at the age of 38 and have (hopefully) a very long period of complete freedom in terms of vacation/sightseeing opportunities, I would have purchased the same number of DVC points as I did. The only thing I would probably have done differently would have been to set aside monies in some interest bearing/dividend producing method to help pay for maintenance fee increases while I was still employed.

I hope the OP understands that, in the midst of all this back and forth, everyone seems to be in agreement that using points outside of DVC resorts is not the most cost effective means of using those points and that no one would recommend adding on to an existing contract if that's the main use to which you expect to use those points. The debate in this thread seems to be mainly focused on what the best use of existing points seems to be and I believe that to be a completely personal decision.

 

[DaddyBrady]

I think I answered the OP with my original response in a manner very similar to what you're saying -- an initial (hopefully rather small) contract gets you in the door, but to add on with the express purpose of using those points to go outside of DVC doesn't make a lot of sense to me.

. . .

I hope the OP understands that, in the midst of all this back and forth, everyone seems to be in agreement that using points outside of DVC resorts is not the most cost effective means of using those points and that no one would recommend adding on to an existing contract if that's the main use to which you expect to use those points.

OP here... This has been great! The dialogue today has really helped clarify this topic, and confirm the sense I had that points have their greatest value when used as "intended" -- that is, as a stay at a DVC resort. Like I said in the original message, that's pretty consistent with my experience in frequent flyer and hotel programs.

And, it makes complete sense not to add on points with the expectations of using them for something other than a DVC stay.

But part of my original message is still puzzling me. I probably have more points than I need (faulty logic in the original purpose, water under the bridge). How do I value those points now?

I looked at a stay at DL (which is pretty cheap to get to for me since I live on the West Coast, and can often combine a trip to LA with business). A cash reservation at a DL hotel is almost exactly $10 times the number of points it would take for the same room. That may be just a coincidence right now, but illustrates my question. If I could rent the point for $10, it would be a push: use it for a stay at a DL hotel or rent it for cash that I'd use to pay for a DL hotel. (Although Dean makes a good point concerning other risk factors, for now assume these aren't a factor.)

The cruise example seems a good counterpoint. If the "conversion" is about $6.75 a point, then I'd be much better off renting or transferring the point (again, assuming I do so prudently and heed all advice on this forum) and using the cash against that DCL cruise I want to take in the Mediterranean....

Anyway.... sorry for the very long-winded response, but you all have helped me with the original decision: do I add on or not? Given that I have more points than I probably need, it seems clear I don't add on now.

That is, unless I want to piss off the Boyfriend!

 

[rinkwide]

...A cash reservation at a DL hotel is almost exactly $10 times the number of points it would take for the same room. That may be just a coincidence right now...

Hardly, DVC is currently subsidizing the point values at the DLR. And that's because they have no local resort despite an overabundance of annoying DVC sales carts.

 

[Dean]

But part of my original message is still puzzling me. I probably have more points than I need (faulty logic in the original purpose, water under the bridge). How do I value those points now?

I looked at a stay at DL (which is pretty cheap to get to for me since I live on the West Coast, and can often combine a trip to LA with business). A cash reservation at a DL hotel is almost exactly $10 times the number of points it would take for the same room. That may be just a coincidence right now, but illustrates my question. If I could rent the point for $10, it would be a push: use it for a stay at a DL hotel or rent it for cash that I'd use to pay for a DL hotel. (Although Dean makes a good point concerning other risk factors, for now assume these aren't a factor.)

Ultimately you must decide how you value the points and how you want to use them. You can use a strictly $$$ approach or the approach that I've already paid for them and don't really care what they are worth, I suspect most people are somewhere in between. I take a practical approach and look at ALL my options then deciding what's best for me. In some cases, it may mean choosing not to do certain things. My general cutoff for non distressed points is $8 per point. But even then I need to feel the other components are worth it. For DCL, I'd want MORE than $10 per point unless I were reserving short notice. DL CA, there was a significant decrease recently but you can still generally can get in under $10 per point. For 2007 they've gone to the weekend/weekday model similar to DVC, DC & CC. Weekends will be a poor value and weekdays will be an even better value.

There are other factors including YOUR personal risk of having to cancel or make changes as well as how early you are in your use year. Since the points expire at the end of the use year, the more time you have to truly make use of them the better. This also plays to when you cancel. Say you reserve a DC or DCL using this years points for a stay next year and know you're going to cancel. You would generally want to wait until the use year has past before you did so so you'd have far more time to use them. You could even be planning their use for months prior to canceling.