(When) will DVC go “negative”?

[gsdweller]

My VGC purchase made a year ago I am at $16.04 per point. It's very rare to see someone renting VGC for the standard $20 per point, it typically is $24 all the way up to $35. As cash prices increase and dues increase rental rates will have to follow suit. Also there is value in owning vs renting.

I don't disagree at all. There is always value in owning over renting.

My comment was based on having enough money to buy a contract at $257pp, then paying yearly fees while investing the rest at 6% vs using that same amount of money and renting points at $22 pp and investing the rest at 6%.

If you vacation every year until 2060, you are better off renting at VGC over buying if it is a purely financial decision. At $200 pp you basically break even. Lower than that ($180 pp), buying is the better option.

There are obviously lots of factors left out. Inflation, market change, % of fee increase vs rental price increase etc.

 

[VGCgroupie]

I don't disagree at all. There is always value in owning over renting.

My comment was based on having enough money to buy a contract, then pay yearly fees while investing the rest at 6% vs using that same amount of money and renting points at $22 pp and investing the rest at 6%.

If you vacation every year until 2060, you are better off renting at VGC over buying if it is a purely financial decision. At $200 pp you basically break even. Lower than that, buying is the better option.


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Yeah I would never recommend buying VGC as sap it basically a restricted resort purchase. But I would also argue that if we are taking investing into the equation investing typically always wins out over dropping large sums of cash on any DVC resort.

 

[gsdweller]

Yeah I would never recommend buying VGC as sap it basically a restricted resort purchase. But I would also argue that if we are taking investing into the equation investing typically always wins out over dropping large sums of cash on any DVC resort.

Agreed. We have been at VGC for a long time, and it is totally worth it. That being said, if you factor in the fact that you will be buying DVC or ALWAYS renting, there are a lot of options out there where buying is for sure the way to go. Aulani is a prime example of that.

 

[tidefan]

CFW being part of DVC is "broken". Disney's only viable option is:

1. Recognize the mistake and not declare any more cabin units as DVC. Rent the undeclared units out as cash.
2. Roll the declared DVC cabin units into LSL.

At this point, stop the bleeding and dilute the blood that already let out.

Which is too bad because it's our current favorite WDW DVC property. That said, we aren't buying and there are 3 main reasons:

1. Dues are way to high (I think that this is by far the biggest issue)
2. Restrictions. If you sell, someone could only use those points at the Fort, which is fine for a certain subpopulation of buyers, but that is probably a small subset.
3. Ambiguity with the Trust. I don't trust DVC after all the shenanigans they've tried to pull in the past (see lockout premium, etc.) that they specifically allow reallocation across unit types. I don't trust that the nice 132 point week in May would stay that way when and if they roll it in with LSL, make the A-frames 1200 points a week, then reallocated to raise the required points on the Cabins. Nope, not going to take that risk.

 

[Brian Noble]

I would also argue that if we are taking investing into the equation investing typically always wins out over dropping large sums of cash on any DVC resort.

That's not the comparison.

The comparison is two different ways of booking the exact same stays. In one: put the purchase price plus what you would have spent on annual dues in some investment vehicle, and pay cash to rent the necessary points for your VGC stay each year. In the other: Buy VGC and book the same stays as an owner.

In both scenarious, one is spending a metric ton of cash on DVC stays. The only question is which is the slightly smaller metric ton. The larger the purchase price, the harder it is to make owning pay vs. renting.

 

[muppets3d]

Which is too bad because it's our current favorite WDW DVC property. That said, we aren't buying and there are 3 main reasons:

1. Dues are way to high (I think that this is by far the biggest issue)
2. Restrictions. If you sell, someone could only use those points at the Fort, which is fine for a certain subpopulation of buyers, but that is probably a small subset.
3. Ambiguity with the Trust. I don't trust DVC after all the shenanigans they've tried to pull in the past (see lockout premium, etc.) that they specifically allow reallocation across unit types. I don't trust that the nice 132 point week in May would stay that way when and if they roll it in with LSL, make the A-frames 1200 points a week, then reallocated to raise the required points on the Cabins. Nope, not going to take that risk.

I feel like the only way to buy CFW is to buy a Halloween or Christmas favorite week. That way at least if you decide to sell, the new buyers will at least be guaranteed that week. Now not everyone may want that week but I feel like enough people do that there will be a market for that contract. Even then, it's tough to make the math work vs. paying cash or renting points every year.

The math works out much better for Riviera. Even using the same discount, the same week at Riviera would cost $3035.50 paying cash and $1181.91 just in dues for the 125 points spent. You could probably rent those points from an owner for $2250-2500.

 

[Dodgerburt8]

I sort of feel like CFW is going to tank faster than any other resort, even Riviera. Looking at a week in June this year, the dues cost is $1816.79 for 148 points but I can book the cabin for cash (with daily mousekeeping) for $2201.82 using the new promos. At current incentives it would cost $30,750 to buy enough points to book that trip.

They could sell the points for $50 apiece and it would still take years to come out ahead versus cash with these promos.

Wow, I didn’t realize the math was that brutal.

 

[airjay75]

I sort of feel like CFW is going to tank faster than any other resort, even Riviera. Looking at a week in June this year, the dues cost is $1816.79 for 148 points but I can book the cabin for cash (with daily mousekeeping) for $2201.82 using the new promos. At current incentives it would cost $30,750 to buy enough points to book that trip.

The math works out much better for Riviera. Even using the same discount, the same week at Riviera would cost $3035.50 paying cash and $1181.91 just in dues for the 125 points spent. You could probably rent those points from an owner for $2250-2500.

Your posts prompted me to run a few comparisons.

7/19-7/26 at RIV:
Deluxe Studio, Resort View, Cash Rate with 40% AP Discount - $3,422; Dues cost - $1,181; Savings of $2,241
1 BR, Preferred View (Resort view unavailable), Cash Rate with 40% AP Discount - $5,698; Dues cost - $3,364; Savings of $2,334

7/19-7/26 at CCV:
Deluxe Studio, Cash Rate with 30% Discount - $2,889; Dues cost - $1,091; Savings of $1,798
1 BR, Cash Rate with 30% Discount - $4,774; Dues cost - $2,219; Savings of $2,555

Of course, playing with the dates just a bit, very clear that owning would provide much more flexibility with respect to which dates are available. Plenty of dates just don't show any availability for the heavily discounted rates. And, it does seem like these heavy discounts are primarily targeted at the summer timeframe which, well, I'm not opposed to a summer trip to WDW, but it is a bit like living on the surface of the sun for a few days . TBH, I think some of this really argues in favor of points chart adjustments. Summer should be less points. December should be more, especially early December. That would probably go a long ways to addressing some of the issues with spec renting too.

 

[VGCgroupie]

Your posts prompted me to run a few comparisons.

7/19-7/26 at RIV:
Deluxe Studio, Resort View, Cash Rate with 40% AP Discount - $3,422; Dues cost - $1,181; Savings of $2,241
1 BR, Preferred View (Resort view unavailable), Cash Rate with 40% AP Discount - $5,698; Dues cost - $3,364; Savings of $2,334

7/19-7/26 at CCV:
Deluxe Studio, Cash Rate with 30% Discount - $2,889; Dues cost - $1,091; Savings of $1,798
1 BR, Cash Rate with 30% Discount - $4,774; Dues cost - $2,219; Savings of $2,555

Of course, playing with the dates just a bit, very clear that owning would provide much more flexibility with respect to which dates are available. Plenty of dates just don't show any availability for the heavily discounted rates. And, it does seem like these heavy discounts are primarily targeted at the summer timeframe which, well, I'm not opposed to a summer trip to WDW, but it is a bit like living on the surface of the sun for a few days . TBH, I think some of this really argues in favor of points chart adjustments. Summer should be less points. December should be more, especially early December. That would probably go a long ways to addressing some of the issues with spec renting too.

I LOVE seeing savings cash vs DVC!

 

[HyperspaceMountainPilot]

The brutal CFW math is why I think we will only see higher point charts going forward. I’m not saying they will be higher than VGF or Poly, but at least on par with BLT and maybe even RIV. Disney experimented with low point charts and higher dues and the DVC community has largely said “hard pass.”

 

[muppets3d]

The brutal CFW math is why I think we will only see higher point charts going forward. I’m not saying they will be higher than VGF or Poly, but at least on par with BLT and maybe even RIV. Disney experimented with low point charts and higher dues and the DVC community has largely said “hard pass.”

The problem is cfw itself isn't resonating with people. People will pay higher dues for a resort that justifies it. People will spend more points for a resort that justifies it. But people won't pay high dues for a moderate resort. And I don't blame them.

 

[walt34]

The problem is cfw itself isn't resonating with people. People will pay higher dues for a resort that justifies it. People will spend more points for a resort that justifies it. But people won't pay high dues for a moderate resort. And I don't blame them.

I can't help it but the CFW photo doesn't look anywhere as appealing to me as the Riviera photo did in the DVC kiosks. I guess that's true for many. I understand that it has its own audience but this is probably a much smaller group.

 

[Patmcpsu]

The brutal CFW math is why I think we will only see higher point charts going forward. I’m not saying they will be higher than VGF or Poly, but at least on par with BLT and maybe even RIV. Disney experimented with low point charts and higher dues and the DVC community has largely said “hard pass.”

Reminds me of this post I made a few months ago: Why Expensive Points Charts are a Good Thing. And it stems from this post which concluded:

All that being said, I recommend DVC:

1. Makes the annual fees $9/pt.
2. Determine total number of points required to maintain the resort at $9/pt.
3. Make the number of points for studios and smaller villas comparable to other resorts.
4. Calculate the number of remaining points to assign to larger villas and treehouses, assign accordingly.
5. Check to see if the resulting chart "makes sense" and tweak it until it does.

 

[muppets3d]

Reminds me of this post I made a few months ago: Why Expensive Points Charts are a Good Thing. And it stems from this post which concluded:

VGF sort of fits in there and it outsold CFW despite being sold out for quite a while. So it makes sense.

CFW's only path forward is to be rolled in to LSL, and hopefully that will bring dues down to reasonable levels.

 

[tidefan]

The brutal CFW math is why I think we will only see higher point charts going forward. I’m not saying they will be higher than VGF or Poly, but at least on par with BLT and maybe even RIV. Disney experimented with low point charts and higher dues and the DVC community has largely said “hard pass.”

The inherent problem with this is that would you rather have a week that costs 120 points at $14 pp dues (total - $1,680 in dues) or a week that costs 160 points at $10.50 pp dues (total - $1,680 in dues). You end up at the same place... except you've paid even more up front.

The problem is cfw itself isn't resonating with people. People will pay higher dues for a resort that justifies it. People will spend more points for a resort that justifies it. But people won't pay high dues for a moderate resort. And I don't blame them.

For us, CFW is way more appealing than RIV, however, we still wouldn't buy it...

 

[Brian Noble]

This discussion is why I keep coming back to my strong suspicion that Lakeshore and CFW were always going to be part of the same resort*.

The cabins have two big problems. The high fees are only one problem, and maybe not the biggest one. After all, OKW is creeping up there, and there are a few others that aren't all that far behind.

The second problem---and in my opinion, the more serious one---is that it is a very narrow offering. There is exactly one unit layout. That layout is combined with a very unusual vacation experience, and it's not the experience that is top of mind when one thinks "Disney World Resort." There will be people who want that experience, and for whom that layout is exactly the right fit for what they need. And, for those people CFW isn't a terrible idea.

But, I think that the reason that the prevailing rental rates are on the low side vs. Dues expenses is precisely because it is a narrow offering, and there are a lot of cabins.

If you combine them with Lakeshore Lodge, all of a sudden Problem Two goes away. There is no longer just one layout. There are many, and most of them are closer to the idea most people have in their mind's eye when they think "Disney World Resort." (I suspect Problem One also gets better, but I don't know that one for sure.) The Cabins are another option in a resort with many of them, and that is a much easier sell.

Okay, now, let's imagine a different branch of the multiverse. One in which Covid-19 doesn't happen. In that world, The Resort Now Known As Lakeshore Lodge (TRNKALL) would not have paused construction, and instead would have opened in 2022. The Cabins end-of-life is still sometime in 2023-2024-ish, and their conversion can be announced as a "new expansion" of the existing resort (like the Treehouses at SSR) rather than a standalone thing.

(I also suspect that in this alternate reality, Big Pine Key never happens---in our branch, it was the stopgap to create a set of points to sell that backfills the hole left by the fact that TRNKALL didn't open as planned. It was a quick flip, announced more or less at the last minute, and it opened in....2022!.)

 

[muppets3d]

This discussion is why I keep coming back to my strong suspicion that Lakeshore and CFW were always going to be part of the same resort*.

The cabins have two big problems. The high fees are only one problem, and maybe not the biggest one. After all, OKW is creeping up there, and there are a few others that aren't all that far behind.

The second problem---and in my opinion, the more serious one---is that it is a very narrow offering. There is exactly one unit layout. That layout is combined with a very unusual vacation experience, and it's not the experience that is top of mind when one thinks "Disney World Resort." There will be people who want that experience, and for whom that layout is exactly the right fit for what they need. And, for those people CFW isn't a terrible idea.

But, I think that the reason that the prevailing rental rates are on the low side vs. Dues expenses is precisely because it is a narrow offering, and there are a lot of cabins.

If you combine them with Lakeshore Lodge, all of a sudden Problem Two goes away. There is no longer just one layout. There are many, and most of them are closer to the idea most people have in their mind's eye when they think "Disney World Resort." (I suspect Problem One also gets better, but I don't know that one for sure.) The Cabins are another option in a resort with many of them, and that is a much easier sell.

Okay, now, let's imagine a different branch of the multiverse. One in which Covid-19 doesn't happen. In that world, The Resort Now Known As Lakeshore Lodge (TRNKALL) would not have paused construction, and instead would have opened in 2022. The Cabins end-of-life is still sometime in 2023-2024-ish, and their conversion can be announced as a "new expansion" of the existing resort (like the Treehouses at SSR) rather than a standalone thing.

(I also suspect that in this alternate reality, Big Pine Key never happens---in our branch, it was the stopgap to create a set of points to sell that backfills the hole left by the fact that TRNKALL didn't open as planned. It was a quick flip, announced more or less at the last minute.)

Would PIT have happened in this no-COVID alternate reality? EPCOT would certainly look much better/different. Would Tiana's Bayou Adventure have happened? Interesting to think about how far the dominos fall here.

 

[RoseGold]

I sort of feel like CFW is going to tank faster than any other resort, even Riviera. Looking at a week in June this year, the dues cost is $1816.79 for 148 points but I can book the cabin for cash (with daily mousekeeping) for $2201.82 using the new promos. At current incentives it would cost $30,750 to buy enough points to book that trip.

They could sell the points for $50 apiece and it would still take years to come out ahead versus cash with these promos.

WOW. Forget what is costs to book the room. Points are points, and that is Vero level bad dues.

That is the first time I have seen those dues flagged. That is 12.27 vs Vero's terrible dues at 11.68. That is painful. At least Vero points only cost $50.

This could be some of the worst DVC math ever for direct buyers of this property. Usually the direct sales hold decent resale value, or at least hold relatively low dues for a while, like RIV.

This buy has the resale restriction of RIV +++PLUS+++ the dues of Vero. This makes a direct RIV buy look like a bargain. Wow.

 

[WinterSolider]

Rentals won’t stay at $20pp forever…. but we’ve had a depression, stagflation, and 2 world wars in the last 100 years…. So no one really knows.

I think there's also an underappreciated psychological barrier at $20. It's just a round number, so it becomes "famous" among even those who are new to renting points. It sticks in their head that $20 is a fair price, $18 is a good price, $22 is fine for Grand Cal and Animal Kingdom Value, and anything above that is a ripoff.

Whenever that dam breaks, it might break hard towards $25 rather than trickling up slowly. It'll look more like a step-function.

 

[muppets3d]

WOW. Forget what is costs to book the room. Points are points, and that is Vero level bad dues.

That is the first time I have seen those dues flagged. That is 12.27 vs Vero's terrible dues at 11.68. That is painful. At least Vero points only cost $50.

This could be some of the worst DVC math ever for direct buyers of this property. Usually the direct sales hold decent resale value, or at least hold relatively low dues for a while, like RIV.

This buy has the resale restriction of RIV +++PLUS+++ the dues of Vero. This makes a direct RIV buy look like a bargain. Wow.

Vero's dues are quite a bit higher at $14.89, at least unless you have a rare subsidized contract.