Why are DVC members paying so much?

[poopie]

If we would have put the money in our vacation club that we spent on the last 3 vacations it would have been piad for and we would have 42 years of free vacations.

We started now and it will start paying for itself in a few years.

Disney Vacation Club is for those who like the magic, luxuary, convience, flexability and affordability of their Disney vacations.
If these things don't appeal to you don't buy, I'm not going to spend my time trying to convince you.

Rachael

7 days to WDW

All-Star Movies 99
Dixie Landings 00
DVC Members 00
Contemporary 01
BVW,Wonder,AKL 02

 

[Dumbo]

Gee Rich,

After Jan. 15th. Disney will be selling DVC points for $72. per point. And you only paid $51 and $53 per point. Plus you had all those wonderful vacations already. Your real estate interest in the Disney Vacation Club keeps rising. Imagine that!

Dumbo

 

[POLLY ANN]

Another VERY satisfied DVCer here. We have been owners since 3/95 and have had WONDERFUL vacations with our points.

Last year we had our family join us in a Grand Villa!! That would have cost us over $8000 alone to stay in the same building and share the same living room, kitchen, etc!! And, we wowed our family with how nice OKW is.

At the end of this month, we will be WOW'ing our closest friends by staying in a GV with them and that would have cost us about the same price as last year.

To lsjp, that is wonderful that you get to go where you want to go, when you want to go, etc. But, we DVCers CHOOSE Disney to be our main vacation place! And, we DO have a choice to transfer our points to other areas of the world, BTW. Not as good a deal as staying onsite at Disney, but it's still a choice.

Good Luck with all your vacation plans, wherever you choose to go!

DVC Member since 1995

 

[ceejay13]

Great responses everyone! There is absolutely no way to compare the DVC accomodations to a Best Western offsite. We could all go on and on about the magic and benefits of staying onsite in our wonderful DVC accomodations. I do agree it is not for everyone. Over the years our family has gone from staying cheaply offsite to moderates onsite, and now to the DVC. For us the only regret we have is that we didn't join sooner. Much has already been posted about the financial benefits, but most of us also love it for the extras Disney provides that makes all of our stays so magical. You certainly can stay cheaper offsite and you won't get much argument there, but you cannot stay in the same accomodations with the same ammenities for anywhere close.

 

[robinb]

I just added up what my 1999 point allocation would have cost me in rack rates:

3 days Studio OKW Holiday Season = $900
2 days 1 BR Stand View BWV Holiday Season = $950
3 days 1 BR Stand View BWV Value Season = $1095
5 days Studio OKW Regular Season = $1270

Grand total: $4215 + 11% tax = $4678 for 13 days.

BTW: We have 230 points and banked 20 from 1998 and borrowed 2 from 2000 to stay all these days. Not bad, AFAIC!


-- Robin

 

[baileybrad]

I am a happy and contented DVC owner, but seriously how many would actually pay rack rates for a week in a 2 or 3 bedroom say at OKW.
Before we bought into DVC we stayed at least a dozen times on-property and never once paid rack rates in any resort. We always got either AP or MKC discounts. I do not think that most timeshares will ever be a great way to save money on vacations. I do feel that they tend to "force" one to take time out to enjoy a yearly vacation. That being said if you aren't one of us, you are against us And finally, I don't really think that folks who need to be "convinced" that something is right for them really need to concern themselves with if other folks are being taken advantage of, they should just go with what their gut is telling them and not buy into the DVC.

[This message was edited by baileybrad on 01-04-01 at 12:01 AM.]

 

[Lesley]

I think Captain Midnight had a great point...
"Then, of course, there is something about that feeling you have walking around the parks knowing you own a piece of the place, that if you miss an attraction this time, there's no need to rush, you'll be back again.....
I don't know what the price is for that ownership feeling, but that has value for me..... "

We joined on our last WDW trip....and had this feeling even though we were staying at the Poly with a cash ressie. We vowed never to say off property again after our honeymoon off site (t'was a gift...what can I say?)....but to then own a piece of the magic..well that's just a great feeling.

 

[ronbrack]

More playing with numbers.. ..

For prospective buyers at $72/point and 3% annual dues inflation, a cost of $10.00 per point is a reasonable guesstimate and a common current rental endpoint.
If you were to average all point costs for a one bedroom at WLV over all seasons, your cost will be near $430/night. If you average all seasons cash costs for these accomodations it is closer to $440/night in 2001.

While accomodations might be expected to rise 6%/year, you could expect at least 6% /year even after taxes if you had invested reasonably.

Seems like a wash to me, no big winners or losers economically. Interested in your thoughts. I will work on quantifying pixie dust and magic in the mean time.

 

[jimh13432]

the cost of an Ice Cream Cone at Peach's and Cream - $4.00
the cost of a Hamburg at ESPN - $8.00
the cost of a night at Best Western - $109.00
the cost of a night at a DVC resort? - Priceless

 

[chris1gill]

Ronbrack

Your 10.00 figure for an owner at WLV's is wildly overstated... considering the 72.00 per point plus the 3.69 for annual dues, that comes out to about 5.45 per point - owners cost, not 10.00 per point... there is a very big difference there....

Calculated easily by taking that 72.00/41 years left to use that point, add that to the current 3.69 dues, and there you have your true owners cost.

I've seen people try to justify that 72.00 if they banked it, and earned interest... but lets face it, you would use that money ANYWAYS to have your Disney vacations... said in a different way, you would still be spending the money on your Disney vacation.. so even if you calculate interest, you have to calculate the interest on a smaller balance every year, until you have exceeded the initial balance paid, if you paid ten grand for instance, you might get 5 years of accomodations before you would have spent that 10 grand on accomodations.... and that is being very conservative.. you might only get 4 years vacation if you stay at a deluxe for any reasonable amount of time....

So, time to get those calculators out to come up with a more accurate financial picture....

 

[Ed T]

After 3 pages of some very intelligent and detailed comments I guess lsjp finally got it since I don't see any further negatives from him.

I would suggest that we not give lsjp any more facts because he may see what he's missing out on.

If anyone wants to buy my 500 points that I paid $55 a point for and considering after I have been able to stay at OKW for the last 5 years for more than 70 nights and had free park passes for the length of my stays for the last 4 years tell me if I made the wrong decision. I still have 42 more years to go.

Ed

 

[DisneyCrazy]

Ed,

You made the wrong decision - I hate to see such a nice person go down such a terrible path. I think you best just give ALL your points to me before you get into any more trouble!



-Paul

 

[calbayBWV]

<BLOCKQUOTE><font size="-1">quote:</font><HR> the cost of an Ice Cream Cone at Peach's and Cream - $4.00
the cost of a Hamburg at ESPN - $8.00
the cost of a night at Best Western - $109.00
the cost of a night at a DVC resort? - Priceless [/quote]

Good one

Feel free to send me an email

If you need help with your Disney problem click here:Calbay's 12 Steps of Disneyholics Anonymouse


My recent trip to the Disneyland Resort
Calbay's Holiday 2000 Disneyland Trip Report

 

[lsjp]

For the record: I find the replies I've received to be fascinating. A good discussion.

Arguments I would deem as valid that support the DVC:

1) The size of the accomodations are much bigger. (Perhaps I'll have to tour them some day. Like I said, the very expensive room we had at the Boardwalk Inn was no bigger than a room at the Best Western).
2) If you are going to stay at Disney year after year anyway then DVC can be worthwhile.
3) Pride of ownership experience.
4) Enjoying being on-site as opposed to off-site. (This I appreciated when I stayed at the Polynesian. However, I didn't find the bus transportation to be that good at the Boardwalk. I suspect OKW would be better since they are closer to central transportation.).

As an aside to those who took my comments personally: I have stayed at Disney at both the Polynesian and the Boardwalk. I enjoyed the Polynesian the most. Will we stay again? Perhaps at some time in the future. But not every year. I am a very big fan of the Magic Kingdom. I am a very big fan of Disney. I am a very big kid.

Some arguments that have been put forth supporting the DVC that I think are worthless:

1) DVC has so much to offer, but I'm not going to take the time to tell you about any of it.
2) Lots of people have bought DVC so it must be a good value. (Lot's of people buy lottery tickets too).
3) Stay away.
4) Constantly referring to $25000 up front as $600 per year. It isn't. It's more like $1700 per year.
5) Regarding the question of how I calculated how long one could stay somewhere with a certain number of points: I used the point calculator on this site.
6) Ice cream $4 (yikes), burger $8 (double yikes), Best Western $109 (now who in their right mind pays $109 for a $40-$50 hotel? Triple yikes.) I will accept the On-site Disney vacation as "priceless". It is a wonderful vacation. As a Disney lover, I'm not disparaging that. . .
7) I reject all the comparisons to rack rates. I think comparisons to discounted rates that people actually pay would be more realistic.

I have to say, this discussion has been fascinating. Thank you all for responding.

 

[Pixieduster]

Okay, you don't accept the 600.00 per year for an initial 25,000 purchase price over a period of 42 years. But, I don't see how you're coming up with 1700.00. This was done roughly, but I come to approx. 1900.00 per year over 42 years, including dues, and 10 year financing. I know that's not completely accurate, it's just an estimate, but can you tell us how you are arriving a this 1700.00 amount? You stated in your previous post that this was excluding dues amounts. I'm not saying you're wrong, I'm just curious as to how you arrived at your figure?

 

[lsjp]

Oh, I didn't want to leave out the possibility of inflation protection is probably a very good reason to support the DVC. I didn't want to leave that out since I think that's an important reason. Although, I do have to chuckle when a few posters suggested that rates for accomodations at Disney would rise "faster than inflation" but that their annual dues would rise "slower than inflation". It's all what you want to believe, I suppose.

Despite that, I still think possible inflation protection is a valid reason.

Some other thoughts I have after perusing this site:

1) I see an entire board for people trying to rent their DVC points. Obviously these are folks that thought they wanted to visit Disney every year but have decided not to for whatever reason.

2) My sister did in fact have to rent other accomodations for her family's trip last year (off-site, boo). While I'm sure that you can get accomodations for January as another poster has told us they have, it is the slow season for them. We used to go late January as well for just that reason. No crowds (yeah!). All the hotels are at slash and burn prices (except Disney). Lots of attractions have 1/2 price fares (except Disney, boo). If you want to use DVC for school vacation periods, which is exactly when we would want to go right now, then you need to book your DVC early or lose out.

Thank you all again for your replies.

 

[PamOKW]

<BLOCKQUOTE><font size="-1">quote:</font><HR> 1) The size of the accomodations are much bigger. (Perhaps I'll have to tour them some day. Like I said, the very expensive room we had at the Boardwalk Inn was no bigger than a room at the Best Western).
[/quote]

I had thought you had been in a DVC resort with your sister or on a tour. Until you have seen a one-bedroom or larger this discussion is difficult. There is no comparison to any hotel room and a one-bedroom or larger. In fact, at Vero, a Grand Villa is a complete oceanfront home. (When they were building them locals wanted to purchase them.)

DVC resort rates have been increasing at a rate of 6% or more (sometimes much more depending on season and accomodation). DVC dues have been staying just about stable for the last five years. To stay at a DVC resort and not be a member, you have to wait longer to reserve with Disney than for other WDW resorts and aren't assured of a discount (or even a reservation).

Just a few more thoughts. However, if you do not want to go to Disney on a regular basis it does make more sense to play the reservation rate game for infrequent stays. That's something else DVC members no longer have to do either.

 

[lsjp]

Pixieduster:

No problemo.

I used a financial calculator to arrive at the result.

Let's do a hypothetical first. If someone offered you a choice of $100,000 now or $5,000 per year for the next 20 years, which would you choose? You would obviously choose the $100,000. Why? Because you can get much more than $5,000 per year for 20 years with $100,000. You can invest the money and earn interest on it. Considering the interst you would earn, you could withdraw roughly $9000 per year over 20 years (instead of getting only $5000 per year over 20 years).

That's why we can't just take $25,000 and divide by 40 to get (approximately) $600 per year. Once we figure the interest we would have earned on that money, we would have been able to withdraw about $1700 per year to have the account run dry after 40 years.

It's the time value of money. You are paying up front for a vacation that you will not receive (on average) until 20 years later. Of course, the vacations you will receive next year are worth a lot more than the vacation you will receive 40 years from now.

Here is the approximate break down.

Received in year 1 = 6.8% of value.
Year 2 = 6.34% of value.
Year 3 = 5.91% of value.
Year 4 = 5.50% of value.
Year 5 = 5.13% of value.

Year 10 = 3.36% of value.

Year 20 = 1.66% of value.

Year 30 = 0.82% of value.

Year 40 = 0.41% of value.

What does this mean? Well, of the $25,000, you would be paying 0.41% of that for the value you receive in year 40. You are paying $102 for the vacation you will receive 40 years from now.

You are paying $415 now for a vacation you will receive 20 years from now.

You are paying $840 now for a vacation you will receive 10 years from now.

You are paying $1700 of that $25,000 for the vacation you receive in the first year.

You are paying $1477 of that $25,000 for the vacation you will receive in the third year.

I hope this helps to clarify just what you are paying for and how it breaks down. I find it fascinating to see these breakdowns. Isn't this a fun chart?

 

[RobDoc]

<BLOCKQUOTE><font size="-1">quote:</font><HR>Although, I do have to chuckle when a few posters suggested that rates for accomodations at Disney would rise "faster than inflation" but that their annual dues would rise "slower than inflation". [/quote]

In the past 9 years DVC dues increases have averaged 2-3% per year while WDW room rates have increased in the >6% range. I guess it is "all what you want to believe".

The point calculator does offer accurate totals, but as most members realize, weekends are far more costly than weeknites and many find ways to maximize point usage by avoiding weekend stays when possible. The actual point cost can be far less than your assumptions.

Your "fun chart" fails to take into consideration the fact that you will still be taking vacations if you had invested the same $25,000- and that total would be earning on a decreasing principle. You can just as easily amortize the true cost over the next 41 years and compute the savings available thru DVC. Use whatever figures or calculator you find to be the most "fun" and DVC will still provide a savings, as long as you include all the factors- not just those that support your premise.

[This message was edited by Doc on 01-04-01 at 06:01 PM.]

 

[Doctor P]

To be perfectly honest, there are so many flaws in the "fun chart" that it's not even worth arguing about--we could start with the fact that taxes are not accounted for (I don't know of any account where you can both make annual withdrawals and avoid all taxes), then move to the fact that if you do things in real terms that inflation does NOT need to be accounted for, to the fact that if you borrow for DVC the opportunity cost is substantially less than the $25,000 upfront investment. Indeed, the quick and dirty methods are actually very, very close to being just as accurate as the supposedly elegant and complex methods. I actually test students on this point all the time