Value of DVC points - 2023 case example

[wrigleyville]

TLDR: DVC points can save more then 82% off room costs for a 2-bdrm villa.

I thought folks might appreciate this real-world example of DVC point values/savings. I just rented my points through our favorite rental store and decided to look up the same reservation on Disney's booking site to see what it would cost to book with cash. Then I compared that price against my tracking spreadsheet, which calculates my real cost per point for each year (calculation explained below)...and the savings are staggering, The actual cost of the reservation to me is 17.9% of the cost of booking the exact same room and dates direct from Disney. Here is the breakdown...

Reservation Details

• Bay Lake Tower
• 2-bedroom Villa
• Theme Park View
• 12/16 - 12/21/2023

Disney Pricing

• $13,750 plus $1,718.75 taxes =
• $15,468.75 TOTAL

DVC Cost

• 294 points x $9.45/point* =
• $2,776.98 TOTAL

SAVINGS

• $15,468.75 - 2,776.98 =
• $12,691.77 TOTAL
• 82.04% DISCOUNT

Overall, I would say that this case is a great example of the types of savings you can realize if using points for your family as well as the value the points hold on the open market as rental options to non-DVC members. Either way, I thought it might make everyone feel better about sending in this maintenance fee payments!

* Annual DVC cost per point is based on purchase price of points amortized over life of contract plus 2023 Maintenance Fee per point for BLT:

• $101/point purchase price (did not finance and bought direct from Disney when first offered with incentives)
• divided by 50 years of contract =
• $2.02/point annual cost
• + $7.43/point Maintenance Fee assessment for 2023 =
• $9.45 Annual DVC Cost per Point
• Note: cost per year does not adjust for inflation or equity value of contract, which makes eventually realized annual cost even lower per year.

 

[miTnosnhoJ]

So if you ignore the time value of money, DVC looks pretty good.

 

[Canadian Tom]

Have to agree with you on this. Thanks for the numbers. Have you done it for a studio? Thanks Canadian Tom

 

[5kidsmommy]

Thanks for this. Even using today's direct prices which are quite a bit more it's still a significant savings.

 

[Nabas]

I’ve kept track of all our costs and rack rate. However, I have not amortized, instead spreading the purchase price and closing costs over stays already completed.

To date, we are at $11.95 per point. That will continue to drop until the annual Maintenance Fee climbs above that cost.

To date, this represents a savings of 65% over rack rate. Savings will increase as we take more stays and the purchase price gets spread over more years.

 

[AnnaKristoff2013]

TLDR: DVC points can save more then 82% off room costs for a 2-bdrm villa.

I thought folks might appreciate this real-world example of DVC point values/savings. I just rented my points through our favorite rental store and decided to look up the same reservation on Disney's booking site to see what it would cost to book with cash. Then I compared that price against my tracking spreadsheet, which calculates my real cost per point for each year (calculation explained below)...and the savings are staggering, The actual cost of the reservation to me is 17.9% of the cost of booking the exact same room and dates direct from Disney. Here is the breakdown...

Reservation Details

• Bay Lake Tower
• 2-bedroom Villa
• Theme Park View
• 12/16 - 12/21/2023

Disney Pricing

• $13,750 plus $1,718.75 taxes =
• $15,468.75 TOTAL

DVC Cost

• 294 points x $9.45/point* =
• $2,776.98 TOTAL

SAVINGS

• $15,468.75 - 2,776.98 =
• $12,691.77 TOTAL
• 82.04% DISCOUNT

Overall, I would say that this case is a great example of the types of savings you can realize if using points for your family as well as the value the points hold on the open market as rental options to non-DVC members. Either way, I thought it might make everyone feel better about sending in this maintenance fee payments!

* Annual DVC cost per point is based on purchase price of points amortized over life of contract plus 2023 Maintenance Fee per point for BLT:

• $101/point purchase price (did not finance and bought direct from Disney when first offered with incentives)
• divided by 50 years of contract =
• $2.02/point annual cost
• + $7.43/point Maintenance Fee assessment for 2023 =
• $9.45 Annual DVC Cost per Point
• Note: cost per year does not adjust for inflation or equity value of contract, which makes eventually realized annual cost even lower per year.

You’re missing your amortized cost basis adjusted for the time value of money… which is a pretty significant thing to be missing.

 

[AnnaKristoff2013]

I’ve kept track of all our costs and rack rate. However, I have not amortized, instead spreading the purchase price and closing costs over stays already completed.

To date, we are at $11.95 per point. That will continue to drop until the annual Maintenance Fee climbs above that cost.

To date, this represents a savings of 65% over rack rate. Savings will increase as we take more stays and the purchase price gets spread over more years.

Have you adjusted based on what would have happened if you instead invested your dvc purchase money into an S&P 500 tracking index fund for 20 years? Don’t get me wrong, DVC is a savings and i think is worth it (at least resale is now, and direct was 20 years ago), but it’s not quite as much of a savings as these calculations are implying.

 

[AstroBlasters]

Have you adjusted based on what would have happened if you instead invested your dvc purchase money into an S&P 500 tracking index fund for 20 years? Don’t get me wrong, DVC is a savings and i think is worth it (at least resale is now, and direct was 20 years ago), but it’s not quite as much of a savings as these calculations are implying.

Which 20 year period and what was the volatility as you took out the withdrawal?

If you are assuming cash/rack rate draw downs on the portfolio and started in a bear market then the real world outcome of the TVM option might look pretty awful.

 

[Bjaiken77]

While the time value of money should be considered, so should inflation and other rack rate price increases, which are locked in at the time of purchase with DVC (I get dues still go up). That takes some more of the bite off of locking your money up.

 

[Boomatt]

My investments and 401k are done bad right now, the value of my dvc contracts are WAY up from what I paid for them.

 

[New Mouse]

It doesn't factor in the countless discounts that Disney has and will continue to offer. Knocks that percentage down significantly but it is still a good deal.

 

[vakamalua]

Dis I miss something or are you leaving out annual maintenance costs that continue to increase?

 

[KAT4DISNEY]

Dis I miss something or are you leaving out annual maintenance costs that continue to increase?

It's there using the 2023 # to correspond to the points rented.

 

[ehh]

It doesn't factor in the countless discounts that Disney has and will continue to offer. Knocks that percentage down significantly but it is still a good deal.

Because I'm weird and track this sort of thing for my own stays (which happened to line up with the OP's stay): there was no discount for BLT 2BR TPV for these dates for public, Disney+, Disney Visa, or passholders.

If you paid through Disney, the rack rates are what you paid for this stay. I can't speak to pricing or availability on 3rd party sites.

There were discounts available for other resorts or for other dates, if you wanted to discount hunt. But then we're talking about something pretty different.

Dis I miss something or are you leaving out annual maintenance costs that continue to increase?

Looks like wrigleyville did a calculation of a single stay and used the dues paid for the points for that stay, so future dues are moot.

If they were doing a total cost of ownership calculation, then yes they'd need to estimate future dues increases and future rack rate increases.

 

[KAT4DISNEY]

Nothing like rack rates flying up in cost to make the calculations look much better again. Discounts are coming back but they were pretty non-existent for a couple of years. ie - they can't always be counted on.

 

[ehh]

Nothing like rack rates flying up in cost to make the calculations look much better again. Discounts are coming back but they were pretty non-existent for a couple of years. ie - they can't always be counted on.

Definitely can't always be counted on.

As someone who tracks this for every one of our stays, it's rare for our exact stay to be discounted and have availability. Availability is the main issue. Expanding to a highly-comparable stay (e.g., going from Poly studio to Poly hotel room with the same view), we would have a bit more luck.

But if we were discount hunting, it's likely we would be able to find something for each of our stays (except over NYE), but we would almost never stay at the resorts we wanted to stay at most.

 

[StevieB81]

The way I look at it, based on how we use our points, the purchase price and to-date maintenance fees were recouped about halfway through our 4th trip. Current MFs are worth about 2 1/2 nights in a 2 bdrm, so everything after that from now on is "free". TVM doesn't mean as much to me because, the way I look at it, I was gonna spend the money anyway. It was never going to be invested.

 

[stwaldman]

The way I look at it, based on how we use our points, the purchase price and to-date maintenance fees were recouped about halfway through our 4th trip. Current MFs are worth about 2 1/2 nights in a 2 bdrm, so everything after that from now on is "free". TVM doesn't mean as much to me because, the way I look at it, I was gonna spend the money anyway. It was never going to be invested.

Yeah, the TVM thing is always a bit complex, because some people might be pulling funds for DVC from what they would have otherwise invested or was sitting under a mattress, and some are pulling it from other vacations or a kitchen renovation or something similar that has no ROI. I feel like these calcs and the comments always find a way to prove what the poster or replyer wants to prove, same goes for the resale site's cost of points calculator

 

[stwaldman]

Yeah, the TVM thing is always a bit complex, because some people might be pulling funds for DVC from what they would have otherwise invested or was sitting under a mattress, and some are pulling it from other vacations or a kitchen renovation or something similar that has no ROI. I feel like these calcs and the comments always find a way to prove what the poster or replyer wants to prove, same goes for the resale site's cost of points calculator

Not to imply a kitchen renovation has no ROI, before somebody comes after me lol. I think the point still stands a bit.

 

[wrigleyville]

So if you ignore the time value of money, DVC looks pretty good.

What's your definition of pretty good? I am cool with 79% off versus the 82% originally stated.

The present value of the $29,700 spent (what the 294 points actually cost 12 year ago) is $55,000. Using that as the cost basis for the 294 points only increases the 2023 price per point by $1.72. So, you now get a cost with MF of $3,282.66 vs the $15,468.75, so 79% savings off booking today or, in my case, $2,009 in cash realized by renting at ($18/pt * 294 = $5,292) for a profit margin on my $3,282.66 cost of 61%.