What makes DVC worth investing in?

[crisi]

What I'm saying is that if you're in a good place financially to buy and enjoy a Disney timeshare, meaning you can treat it as a luxury purchase, whether you are saving $7/visit or $6,000/visit won't matter much. It's money well spent.

And if you can't afford it, you could find yourself bankrupt before you take your first vacation and start saving anything

 

[gscott8075]

The value proposition over cash rates
has narrowed considerably over the past 20 years. The MF alone cost )110 per night for a 2 br HHI in 2001. In 2019, it’s $350 due to MF increases and a point reallocation.

 

[stewart715]

The value proposition over cash rates
has narrowed considerably over the past 20 years. The MF alone cost )110 per night for a 2 br HHI in 2001. In 2019, it’s $350 due to MF increases and a point reallocation.

HHI is a unique situation in regards to hurricanes. Most DVC members join for WDW in which it is in the neighborhood of $225/night for a 2BR in MF (rooms that are cash rack rate of over $1,000/night). An absolute steal from that perspective.

 

[zavandor]

I think you're both right.
I agree with CanadaDisney05 when he says some financial analysis is needed before buying DVC. Buying a timeshare to end up paying equal or more than the cash "equivalent" is just silly. There must be some form of savings, otherwise why commit to a long term purchase with less flexibility and more risk?
But, if the saving is 20% or 40% makes a difference if you can afford it or not, then you shouldn't buy.
When I bought I followed the same line of thoughts that Crisi wrote: I was staying offsite or in values before DVC and going to WDW every 3-4 years. I knew I wanted to go more often and stay in better accommodations. I could afford to buy DVC without sweating and paying dues, flights, ticket and food for my extra stays is not a problem. I knew I would pay more owning DVC, but I knew also that I would get more value. I do not care how much I saved over cash stays. I started keeping in an Excel file how much I saved every year to see when I would break even, I got tired pretty soon because it was pointless.

 

[PsycProfPlum]

I think you're both right.
I agree with CanadaDisney05 when he says some financial analysis is needed before buying DVC. Buying a timeshare to end up paying equal or more than the cash "equivalent" is just silly. There must be some form of savings, otherwise why commit to a long term purchase with less flexibility and more risk?
But, if the saving is 20% or 40% makes a difference if you can afford it or not, then you shouldn't buy.
When I bought I followed the same line of thoughts that Crisi wrote: I was staying offsite or in values before DVC and going to WDW every 3-4 years. I knew I wanted to go more often and stay in better accommodations. I could afford to buy DVC without sweating and paying dues, flights, ticket and food for my extra stays is not a problem. I know I would pay more owning DVC, but I know also that would get more value. I do not care how much I saved over cash stays. I started keeping in an Excel file how much I saved every year to see when I would break even, I got tired pretty soon because it was pointless.

I did something really similar. I ran a ton of different numbers using different scenarios of percent of dues increases and a wide variety of resorts to get a feel of what I might be in for but I never really compared against cash rates because I'm cheap enough I knew I'd never fork over the $750/night for a deluxe. When I crunched all of the numbers under a wide variety of scenarios, it looked like ultimately I'd be able to stay at DVC for not a lot more than I was paying for moderates. Given our financial situation, we understood that this was a luxury purchase we could afford and went for it.

Trying to tell someone else if an expensive purchase is "worth it" is a fools' errand. People vary widely in both resources and what they value in ways that are impossible to quantify. Ultimately for us, given our values and resources, we decided it was "worth it", but I would never recommend someone else make the same decision. I'd recommend they do a similar process described by zavandor of trying to ballpark what they think the cost and rewards are going to be and making their own decisions.

 

[gscott8075]

HHI is a unique situation in regards to hurricanes. Most DVC members join for WDW in which it is in the neighborhood of $225/night for a 2BR in MF (rooms that are cash rack rate of over $1,000/night). An absolute steal from that perspective.

Really? OKW has increased from 3.14 in 2001 to 7.32 in 2019 a 230% increase.

Dues increased over 7% at OKW. 9% at BWV last year. Not too far off from HHI.

DVC has realized the profit potential of jacking up MF.

 

[stewart715]

Really? OKW has increased from 3.14 in 2001 to 7.32 in 2019 a 230% increase.

Dues increased over 7% at OKW. 9% at BWV last year. Not too far off from HHI.

DVC has realized the profit potential of jacking up MF.

While last year was high in increases, that still comes out to about 4-5% per year since 2001 (more than reasonable). Dues go up, but so do rental costs and hotel rack rates. It's all relative to inflation. But you're still missing the point. At OKW and BWV (your examples), the MF for a 2 bedroom are above and beyond a good deal. Not so much at Hilton Head (higher dues, not nearly as desirable as WDW, and not as nice as the WDW properties).

For example, I would absolutely pay $2,158 cash to stay for a week in a 2 bedroom in July at Boardwalk (301 points at $7.17). That room, rack rate direct from Disney, would cost $7,765. MF represent only 28% of the cash price.

However, I would not pay $2,884 cash for the same room at Hilton Head (337 points at $8.56). A room that costs $4,920 cash rack rate. Here, the MF represent nearly 60% of the cash price.

One is a good deal, the other isn't really. It's the reason that HHI is selling for 60-70 bucks a point on the resale market. And back to my original point, the membership fees at HHI are not proportional to the cash rack rates as they are at WDW properties. And it's because of the hurricanes. HHI MF should be in the $4-5 range, yet they are nearly $9 (double what they should be).

 

[crvetter]

Really? OKW has increased from 3.14 in 2001 to 7.32 in 2019 a 230% increase.

Dues increased over 7% at OKW. 9% at BWV last year. Not too far off from HHI.

DVC has realized the profit potential of jacking up MF.

DVC must jack up the MF at cost, plus they sell direct and pay dues on their points so keeping them lower is in their interest. The only item not really at cost is transportation. They can try to get creative with assigning costs between hotel and cash but Florida law really is somewhat strict what they can and usually based on occupancy for costs associated to that and building costs are usually by square footage.

It’s important to consider averages not single point in time measures of the MF increases. There have been years with just as high MF increases historically and some years with 0. The big increases last year, and the smaller (but significant) ones expected in the next two years is mostly driven by wage increases which is at least noble to pay living wages.

Here is a post that presents the average due increases historically

https://www.disboards.com/threads/r...d-with-a-poll-discussion-information.3750009/

 

[crisi]

I think you're both right.
I agree with CanadaDisney05 when he says some financial analysis is needed before buying DVC. Buying a timeshare to end up paying equal or more than the cash "equivalent" is just silly. There must be some form of savings, otherwise why commit to a long term purchase with less flexibility and more risk?
But, if the saving is 20% or 40% makes a difference if you can afford it or not, then you shouldn't buy.
When I bought I followed the same line of thoughts that Crisi wrote: I was staying offsite or in values before DVC and going to WDW every 3-4 years. I knew I wanted to go more often and stay in better accommodations. I could afford to buy DVC without sweating and paying dues, flights, ticket and food for my extra stays is not a problem. I knew I would pay more owning DVC, but I knew also that I would get more value. I do not care how much I saved over cash stays. I started keeping in an Excel file how much I saved every year to see when I would break even, I got tired pretty soon because it was pointless.

Even there, doing the financial analysis is unnecessary. Is Disney going to sell you a product where the numbers don't work out? DVC wouldn't sell if the numbers were grossly unfavorable. They need to be able to make the pitch that this will save you money - and they are legally obligated to have at least some truthiness to that statement - they need to be able to justify their advertising statements. Disney's sales pitch calculations are pretty darn favorable - and decent. So why bother going to the effort of doing them yourself? On paper, the product is going to save you money, or Disney wouldn't have a successful pitch. (And the answer to the question is, some people, including myself, have fun doing this sort of analysis. But using it for decision making is dangerous. Because if you know what you are doing, you don't need someone else to do it for you - you probably delight in running the numbers and changing the assumptions. And if you don't know what you are doing, you don't know enough to realize the weaknesses of this sort of analysis to understand what assumptions underlie the analysis.)

 

[stewart715]

DVC does make money but DIS also makes a lot of money on DVC members who tend to visit more often and spend more.

 

[zavandor]

Even there, doing the financial analysis is unnecessary. Is Disney going to sell you a product where the numbers don't work out? DVC wouldn't sell if the numbers were grossly unfavorable. They need to be able to make the pitch that this will save you money - and they are legally obligated to have at least some truthiness to that statement - they need to be able to justify their advertising statements. Disney's sales pitch calculations are pretty darn favorable - and decent. So why bother going to the effort of doing them yourself? On paper, the product is going to save you money, or Disney wouldn't have a successful pitch. (And the answer to the question is, some people, including myself, have fun doing this sort of analysis. But using it for decision making is dangerous. Because if you know what you are doing, you don't need someone else to do it for you - you probably delight in running the numbers and changing the assumptions. And if you don't know what you are doing, you don't know enough to realize the weaknesses of this sort of analysis to understand what assumptions underlie the analysis.)

I'm sorry I don't agree on this. DVC financial analysis compares DVC to rack rates, which is a no starter.

Also, while I don't need to know if I'm saving 20 or 40%, and I have no intention to buy more points regardles, I still enjoy such posts and people looking to buy should still read them and the various comments. They help identify common mistakes (like doing comparisons with rack rates) and above all highlight risks with owning DVC. Then everyone should weight risks toward their personal situations and decide by themselves if DVC is for them.

It's like easywdw touring plans. They're brilliant and I suggest everyone to download and follow them. However life doesn't always go according to plan. An attraction could be closed or a kid have a meltdown. If you know the logic behind the touring plan you can adapt and deviate from the plan and still have success.
If you know the principle behind a well thought financial analysis you will take better decisions regarding your DVC, even if the financial analysis are not that useful.

 

[stewart715]

I'm sorry I don't agree on this. DVC financial analysis compares DVC to rack rates, which is a no starter.

Also, while I don't need to know if I'm saving 20 or 40%, and I have no intention to buy more points regardles, I still enjoy such posts and people looking to buy should still read them and the various comments. They help identify common mistakes (like doing comparisons with rack rates) and above all highlight risks with owning DVC. Then everyone should weight risks toward their personal situations and decide by themselves if DVC is for them.

It's like easywdw touring plans. They're brilliant and I suggest everyone to download and follow them. However life doesn't always goes according to plan. An attraction could be closed or a kid have a meltdown. If you know the logic behind the touring plan you can adapt and deviate from the plan and still have success.
If you know the principle behind a well thought financial analysis you will take better decisions regarding your DVC, even if the financial analysis are not that useful.

It’s not THAT silly. People DO pay undiscounted rack rates. Maybe it’s that that is silly haha

 

[Katie L]

It’s not THAT silly. People DO pay undiscounted rack rates. Maybe it’s that that is silly haha

In which case, DVC did the financial analysis for those people. For the rest of us some sort of approximation is worthwhile, imo. It has also helped me to understand exactly what I'm getting.

 

[CanadaDisney05]

If you know the principle behind a well thought financial analysis you will take better decisions regarding your DVC, even if the financial analysis are not that useful.

Well put

 

[DisLiss]

I think DVC is a really great idea for people who go to Disney all of the time...like at least 1-2 times per year and/or people who go to Disney is large groups. A few people I know who have a DVC membership also have a very large extended family and they tend to always take their trip with siblings, parents, cousins, etc., so to be able to get suites without always having to pay out of pocket for those suites really works out well for them.

I mean, a DVC membership can be great for anyone if that's what they want (as mentioned above, it may allow people to vacation differently, and they appreciate that, even if it costs more), but in terms of it saving folks money in the long run, I think it's people in those categories (large groups and/or those taking frequent trips) who are more apt to work out ahead of the game.

 

[crisi]

I'm sorry I don't agree on this. DVC financial analysis compares DVC to rack rates, which is a no starter.

Also, while I don't need to know if I'm saving 20 or 40%, and I have no intention to buy more points regardles, I still enjoy such posts and people looking to buy should still read them and the various comments. They help identify common mistakes (like doing comparisons with rack rates) and above all highlight risks with owning DVC. Then everyone should weight risks toward their personal situations and decide by themselves if DVC is for them.

It's like easywdw touring plans. They're brilliant and I suggest everyone to download and follow them. However life doesn't always go according to plan. An attraction could be closed or a kid have a meltdown. If you know the logic behind the touring plan you can adapt and deviate from the plan and still have success.
If you know the principle behind a well thought financial analysis you will take better decisions regarding your DVC, even if the financial analysis are not that useful.

But that is what MOST people do in their analysis - especially the ones that get you to save money - you are already ahead of the game if you understand enough to understand why rack rates are flawed.

 

[stewart715]

But that is what MOST people do in their analysis - especially the ones that get you to save money - you are already ahead of the game if you understand enough to understand why rack rates are flawed.

If you are very picky with travel dates, resorts and room types, rack rates are not a poor comparison (good luck getting a 2 bedroom BWV room during Food & Wine for a discounted rack rate).

 

[stewart715]

The reason I have difficulty with these conversations is that DVC owners make up a wide variety of people. To some, 300 points at VGF was a whim purchase that they barely feel financially and simply purchased because they like the peace of mind that DVC brings and just like the vacation club overall. Yes, they are still saving money, but it's not about the money entirely, but it's about ease of booking, making Disney a part of your family and just knowing you have all these vacations to look forward to for many years. These are the people who buy only direct points, don't care that it's more expensive. It doesn't matter to them.

On the opposite end of the spectrum, there are people who bought 100 points at SSR who are making a huge financial commitment with that purchase and tossed and turned for months before finally making the decision to buy and are still questioning if it was the right decision. These are the people who spreadsheet out DVC savings down to lost interest in another investment option.

At the end of the day, for me, I don't feel like DVC is a good decision for the latter person. It is a luxury purchase. No one needs to visit WDW every single year. If it is such a huge financial commitment to you, then maybe visiting WDW every single year is probably not the best use of money anyways whether or not you are saving 80% off rack rates or not.

All of that being said, the most practical/safe/smart use of DVC is purchasing 1/3 of the number of points you need at SSR, using the points every 3 years and that's it.

Anyways, these conversations are tough because "worth" means so many different things to so many people.

 

[Matty B13]

I think for larger families (3+ kids), DVC can make a lot of financial sense. For my family, with 3 small children, it is great to have my parents around to help with the kids, but we would need 2 regular hotel rooms. Now, we book 2 bedroom units, and the "savings" are much larger and we can go every year, instead of every 3rd year.

 

[CanadaDisney05]

The reason I have difficulty with these conversations is that DVC owners make up a wide variety of people. To some, 300 points at VGF was a whim purchase that they barely feel financially and simply purchased because they like the peace of mind that DVC brings and just like the vacation club overall. Yes, they are still saving money, but it's not about the money entirely, but it's about ease of booking, making Disney a part of your family and just knowing you have all these vacations to look forward to for many years. These are the people who buy only direct points, don't care that it's more expensive. It doesn't matter to them.

Why do these people need DVC though? DVC does not provide "ease of booking". DVC itself doesn't give you vacations to look forward to. You can still book these exact same vacations in the same hotel room without all of the stress of booking 11 months out, banking, borrowing, and renting out points and fighting for limited availability.

I get it. Theres that odd multi-millionaire who absolutely loves Disney and who's life won't be complete without the blue card. None of the cost savings matter to them. DVC is a status item for them. But in my opinion, that person is the exception, not the rule.