Why be a DVC member???

[MojitoMiss]

A car is not an example of an "investment",

No, it isn't. We're talking about GM stock, which is currently trading dismally low.

 

[ms.mightyduck]

A car is not an example of an "investment", as they depreciate the minute you buy them, and typically go down in value over time and rarely go up in value (the sole exception being rare classic cars).

If anyone is buying a car with the hope of future gains, they'll be sadly disappointed in most cases.

I read the comment to mean that the STOCK was an investment, not the car...

 

[dizney4us]

Not everything is about dollars and cents. It's too bad that some people worship money so much, that they look at things only in that way. Why ever go on a vacation if thats how you want to look at things.
Gas prices will probably remain high, people in Europe pay much per gallon, and yet they still manage to make their way to Disney, and so will the majority of Americn Disney lovers. If things are going to be high, I sure am glad that I took a big bite out of our vacation cost by buying into DVC. My family and I get so much happiness from our DVC, and when we bought, we never even knew you could sell them, so as far as what the value may be, it will always be exactly what we paid for....50 years of family vacations, thru good time and bad, for us, our children, future grandchildren, my parents, my siblings and my nephews. That value to us now and in the future is Priceless!

 

[Mystery Fan]

Ka-chow,

Serving the Mouse? Touché.

A DVC purchase is similar to your SUV vs. Camry hybrid trade. Based on your assumptions, you made the trade. Congratulations.

Everyone must decide if it works for them. Based on my vacationing preference, my DVC purchase had a positive net present value. In other words, I concluded that my current expenditure would save money in the long term though the receipt of future discounted lodging.

BTW, net present value is a term used to evaluate an investment.

 

[Dina]

A car is not an example of an "investment", as they depreciate the minute you buy them, and typically go down in value over time and rarely go up in value (the sole exception being rare classic cars).

If anyone is buying a car with the hope of future gains, they'll be sadly disappointed in most cases.

Wasn't Mojitomiss referring to GM stock? That's how I took it.

 

[Dina]

Ooops--- should have kept reading before I replied.

 

[Dina]

Not everything is about dollars and cents. It's too bad that some people worship money so much, that they look at things only in that way. Why ever go on a vacation if thats how you want to look at things.

Well said. We didn't buy DVC because we wanted to make an investment (that's what a portfolio is for, and I think most people realize that they won't make money from a timeshare). We bought because we wanted it, just like my parents bought their boats and trailers and a motorhome over the years. Vacations help families make memories which are priceless. And that's important. My parents didn't make any money when selling their trailers or motorhome--- but we'll have memories from all of those trips forever. We considered a trailer instead, but we'd be at Ft. Wilderness all the time anyway-- so DVC was a better choice (and honestly, less expensive).

 

[jfinke]

Investing in anything can be a crap shoot though unless it is guarenteed. According to fool.com: "Over time, because of their costs, approximately 80% of mutual funds will underperform the stock market's returns."

There are a lot of people losing their shirts right now. Heck, their are a lot of people losing their shirts over their house which is usually regarded as the single biggest "investment" people make. Something is only worth what someone else will pay for it. That is even true with regards to currency, look at the value of the dollar vs. the pound right now. 10 years ago, it was around a 1.6-1.7 ratio. Now, we are close to a 2.0 ratio.

I don't know about everyone else, but I work to play, not play to work. I save as much as I can, but if something is worth doing or buying, than I do it. In fact, I probably suffer from paralysis analysis.

Purchasing DVC is just like any other purchase decision. You need to weigh the benefits of it vs. the cons. It is very individual. If it was a slam dunk, then everyone would be doing it. Buy a house vs. renting. Buy a car vs. leasing.

For me, purchasing DVC came about because of a couple of things. RoFR, right now, does help insulate us from a significant loss. That can change at any moment, just like IndyMac going out of business and leaving investors with $1B in uninsured debt and transferring $4B-$8B to the FDIC. Second, I believe that the accommodations are significantly nicer than the value resorts. Heck, just to get away from the crowds at the values are almost worth it. Third it forces us to take vacations which is something I used to struggle with. If we don't want to go a particular year, that is fine with us, we bank the points or borrow in the previous years.

There are always ways to be more thrifty. Don't travel. Don't go out to eat. Shop at walmart and aldi's. Don't get cable tv. Ride your bike to work. Don't have kids.

Buying DVC is a personal choice and people's situations change, so you need to be sure about it. I can tell you one thing for sure, you better like Disney or you will have chosen poorly if you purchase.

 

[Ka-chow!]

jinke: Liked you post. Just a few points

Investing in anything can be a crap shoot though unless it is guarenteed. According to fool.com: "Over time, because of their costs, approximately 80% of mutual funds will underperform the stock market's returns."

I've read that years ago; I thought it was a misleading statement because they included money market and bond mutual funds into their percentage. Not an apples to apples comparison.

I probably suffer from paralysis analysis.

I LIKE THAT!

There are always ways to be more thrifty. Don't travel. Don't go out to eat. Shop at walmart and aldi's. Don't get cable tv. Ride your bike to work. Don't have kids.

Oops, I have to call you out on your Reductio ad absurdum argument.

 

[Ka-chow!]

BTW: Have you guys noticed that originally, there was a general tone in the thread going to the argument that a DVC purchase is wise because it was a "good investment" I'm laughing now because some are arguing that it is stupid to invest (rationalizing the purchase as "If you are going to loose money, may as well enjoy it!" ).

I'll remind you that my original point with the GM stock price went to my thesis that gas prices have powerful effects on consumer behaviors. I think that applies to a corporation in the travel business like Disney too.

It will be interesting to see if consumers can adjust to the rising fuel prices and prices that Disney will have to pass on. I'm just making the bet that they won't as they historically have. If I'm right, points will be available at a significantly lower price than they are now. I don't see them increasing in value in the near term. So I don't see significant downside in waiting to see if the points market softens in the next year or two.

 

[Ka-chow!]

Kachow, I'm curious about your claim that Disney does not discount rack rates. I frequently get postcards offering discounts, they post discounts regularly, and with an AP, I'm paying $129/night next week to stay at WL. I'm not arguing--just trying to understand.

I guess I was talking too generally. APH and AAA have some discounts. Lately, Disney has been offering late discounts when bookings are soft. They prefer to offer incentives like free dining rather than cut rate.

In fact, they recently announced discounts for August 3-Sept 27, 2008. That's probably the period that you got. I guess there were not enough bookings for that period by offering free dining. You'd get a cheaper room, but you can't get free dining with the room discount.

I may be wrong, but if memory serves, Kevin Yee was interviewed in The DIS Unplugged Podcast and talked about it as a general policy. I recently read Disney Wars (really good book!) and I know this policy was discussed there.

 

[Dina]

BTW: Have you guys noticed that originally, there was a general tone in the thread going to the argument that a DVC purchase is wise because it was a "good investment" I'm laughing now because some are arguing that it is stupid to invest (rationalizing the purchase as "If you are going to loose money, may as well enjoy it!" ).
.

Are you referring to me ( wondering because I mentioned investing)? If so, I never said it was stupid to invest-- we invest in our portfolio, but not DVC. Even in the beginning of this thread, I don't believe I mentioned DVC as an investment (except an investment toward family memories--- not a financial investment).

 

[snyderla]

For us it works. I had been to WDW 10 times and was getting ready to rent points for the 2nd time when I decided to purchase my own. I have now been to WDW 19 times and will continue to go until I can't get there anymore! It still wasn't so much a financial decision as an emotional one. I love that I own a piece of WDW, that it is where I own a timeshare. It has enabled me to take members of my family to WDW that would not have been able to go otherwise. I treasure those times and memories. My brother and father live in southern Florida and it is a great place for us to gather. The fact that those vacations are mostly paid for in advance gives us piece of mind and makes it easy to go on planning each year! It was the right decision for ME, and only YOU can decide if it is right for YOU.

 

[Ka-chow!]

snyderla:

I totally get your point. I hope you have great vacations and experiences in the future and I have by no means discounted the emotional value that come with personal memories and family vacations. But I've had and will have very similar WDW experiences with no long-term commitments to DVC.

 

[ms.mightyduck]

I guess I was talking too generally. APH and AAA have some discounts. Lately, Disney has been offering late discounts when bookings are soft. They prefer to offer incentives like free dining rather than cut rate.

In fact, they recently announced discounts for August 3-Sept 27, 2008. That's probably the period that you got. I guess there were not enough bookings for that period by offering free dining. You'd get a cheaper room, but you can't get free dining with the room discount.

I may be wrong, but if memory serves, Kevin Yee was interviewed in The DIS Unplugged Podcast and talked about it as a general policy. I recently read Disney Wars (really good book!) and I know this policy was discussed there.

Interestingly enough, I discovered that Deluxe AP rates are lower in some cases in July than in August.... We don't have DVC; up until now, we have AP and use the discount. However, we MUCH prefer the Deluxe room experience over Pop (which we have done to either save cash or because we couldn't get a good deluxe/moderate rate) or the moderates (DH hates the bus stop experience at POR, for example). We're going to WL later this week at $129/night for some of the nights.

We are considering DVC, however, because as you said, it's sometimes hard to get those discount rates for the deluxe. And the dining plan doesn't appeal to me--I have such a small appetite, and we don't do a lot of TS meals because it takes too long sometimes. We have DDE, and with our eating habits, it works out better for us.

But I have to say, there is almost always a discounted room rate available for AP, and the few months ahead they release them has been enough for us to get some great trips in--including BC, AKL, and now WL.

 

[mnra]

I own two disney timeshare the okw and boardwalk. I bought okw in 1993 and boardwalk in 2003. We have traveled to disney for many years and have never lost points in any year. Yes I most likely could sell the okw piece for more then I paid for it but I like many other people here feel that is isn;t about the money for the dvc membership but the great memories that we have. I have traveled with friends and parents over the time we own the timeshares and often when we are all together the kids talk about how much fun they had on one of the trips. The memories are well worth the amount we have paid. In addition we have these for many more years and I will be 85 when they run out so plan on taking the grandkids (when I have some ) down to enjoy the time there.

 

[Quiksilvr]

BTW: Have you guys noticed that originally, there was a general tone in the thread going to the argument that a DVC purchase is wise because it was a "good investment" I'm laughing now because some are arguing that it is stupid to invest (rationalizing the purchase as "If you are going to loose money, may as well enjoy it!" ).

I'll remind you that my original point with the GM stock price went to my thesis that gas prices have powerful effects on consumer behaviors. I think that applies to a corporation in the travel business like Disney too.

It will be interesting to see if consumers can adjust to the rising fuel prices and prices that Disney will have to pass on. I'm just making the bet that they won't as they historically have. If I'm right, points will be available at a significantly lower price than they are now. I don't see them increasing in value in the near term. So I don't see significant downside in waiting to see if the points market softens in the next year or two.

I think you definitely have a point. I think part of it also depends on the DVC ownership demographics. If DVC member per capita income is high enough to absorb additional fuel and other inflation costs, then I don't think you'll see as much of an influx of resales at lower price points as you think. If the opposite is true, and the DVC member per capita income is not high enough to absorb the additional costs, I think you'll definitely see more resales. I suspect that the latter is true, especially once you factor in people who purchased DVC but couldn't really afford it in the first place. I believe there are a lot more of those people out there than there are people who have plenty of disposable income. In my situation, my household income is high enough that even though I'm grumbling about paying higher airfare it really doesn't affect my bottom line so that you'd notice. If I made half as much money as I do I might be rethinking my DVC ownership.

Another interesting thought is that as prices continue to rise, you may see wealthier people purchasing DVC who would never have purchased it before because they have always stayed in Deluxe and paid rack rate and never saw the point in owning. If they have fewer vacation dollars they may decide that owning a timeshare is a good bet as a hedge. Of course, there are far fewer of these hypothetical wealthy people to choose from so I don't know that any such spike would be enough to sustain new purchases, and in fact, these people would probably end up purchasing from the likely glut of resales.

 

[Ka-chow!]

Interestingly enough, I discovered that Deluxe AP rates are lower in some cases in July than in August.... We don't have DVC; up until now, we have AP and use the discount. However, we MUCH prefer the Deluxe room experience over Pop (which we have done to either save cash or because we couldn't get a good deluxe/moderate rate) or the moderates (DH hates the bus stop experience at POR, for example). We're going to WL later this week at $129/night for some of the nights.

We are considering DVC, however, because as you said, it's sometimes hard to get those discount rates for the deluxe. And the dining plan doesn't appeal to me--I have such a small appetite, and we don't do a lot of TS meals because it takes too long sometimes. We have DDE, and with our eating habits, it works out better for us.

But I have to say, there is almost always a discounted room rate available for AP, and the few months ahead they release them has been enough for us to get some great trips in--including BC, AKL, and now WL.

Thanks for sharing that info about the AP. You got some good room prices! Do you know if they extend the last minute discounts to Florida residents too? As I understand, they really try to withhold those types of discounts to the general public because if they loose their price integrity, people will not make advanced bookings and will wait until the last minute to get a cheaper price. They'd rather give incentives than cut price. Disney has some deep pocket and can do that, at least for a while. They'd rather try to cut services. Did you read where Disney is considering closing some of the parks during slow weeks? Yikes!

We are staying at Ft. Wilderness in September with "free dining" (I have 3 kids, 5 and 4 y.o. twins). The boys want "to camp". The free dining is a good incentive to make sure that people (us included) set aside enough time to rest/feed the kids. But I hear you about food: if it were just DW and me, we wouldn't eat all that much either. I thought about joking about South Carolina, but I'll refrain...

 

[ms.mightyduck]

Thanks for sharing that info about the AP. You got some good room prices! Do you know if they extend the last minute discounts to Florida residents too? As I understand, they really try to withhold those types of discounts to the general public because if they loose their price integrity, people will not make advanced bookings and will wait until the last minute to get a cheaper price. They'd rather give incentives than cut price. Disney has some deep pocket and can do that, at least for a while. They'd rather try to cut services. Did you read where Disney is considering closing some of the parks during slow weeks? Yikes!

We are staying at Ft. Wilderness in September with "free dining" (I have 3 kids, 5 and 4 y.o. twins). The boys want "to camp". The free dining is a good incentive to make sure that people (us included) set aside enough time to rest/feed the kids. But I hear you about food: if it were just DW and me, we wouldn't eat all that much either. I thought about joking about South Carolina, but I'll refrain...

AP discounts are different from the general/FL resident discounts. They are released a few months in advance, so "last minute" is relative. It's generally early enough that we can score some great airfare deals, too (it doesn't help to save a lot on the room if airfare is crazy). Our airfare from NJ is $99 r/t ($125 with fees) each, about half of usual airfare costs.

It's my understanding that the AP rates are based on what hasn't been booked a few months out. Mousesavers.com has a chart that tracks the discount release dates and applicable dates; you'll see that almost every day you would want to go with the exception of major holiday weeks has a discount.

Disney is smart to add value and keep their sale price up--it's a good business decision. That said, if those rooms would be empty without the discount, that's lost revenue. And I'm sure in some cases people call about the discounts and end up booking a room for a little more somewhere else. We've spent more per room to take a deluxe (although I couldn't help but laugh when I realized our WL room is $129 and the POR room booked for the same night WITH THE DISCOUNT was $144 (seasons are different for deluxe and moderates).

When we think about DVC, we use the discounted numbers, and we still come out ahead with DVC over cash because of the frequency of our visits. This is our FIFTH trip down in a year (I know, I have a problem) for a total of 29 nights.

If we had kids, dining might be a better deal. As it is, can eat an appetizer as an entree in many cases. DDP forces you to make ADRs, and that holds us to a particular schedule, with doesn't always fit with how we spend our time (after all, it's only the two of us!).

Have a super time camping! We're considering doing the Chip n Dale sing along, with smores and a movie.

 

[Ka-chow!]

I think you....glut of resales.

Quiksilvr: I really enjoyed reading your post and you brought up some really interesting points about how certain income demographics would react. It would be interesting to see DVC's data on the average income and demographics of its members. For a family of four, mostly upper middle class income earners, i.e. with an income of $150k - $175k? Has disposable income, but with the mortgage and kid expenses, can't afford the 2nd house at the lake or beach?

It's a good point that maybe the more wealthy demographics would pick up some DVC points on dips. I'm dubious. I'd guess they'd put their capital into a second house, like a beachfront properties that their children could inherit, instead of a vacation club. (No expiration dates!)

Maybe I know too few wealthy people, but from those I know, they travel to overseas and more off the beaten path destinations.