Why be a DVC member???

[Ka-chow!]

This is our FIFTH trip down in a year (I know, I have a problem) for a total of 29 nights.

I'm both AND
Girl, I think you desperately need an intervention. Until they cart you away for a "rest", have a great trip!

Have a super time camping!

Thanks. We do it only for the kids.

 

[Quiksilvr]

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.

I think you're on the money with respect to the wealthy's travel habits. All of my direct bosses are millionaires of one stripe or another and most of them tend to travel to more exotic locations. WDW is definitely beneath them (except for the obligatory trips when their kids are tiny). I guess any effect on DVC would result from how we define "wealthy". If "wealthy" means the top .5% of earners, then the point where travel becomes prohibitively expensive is clearly much farther away than someone in the top 1% (the spread in that top 1% is pretty wide from what I understand). I think anyone who purchases DVC has to have some sort of propensity to attend WDW or else they wouldn't bother; there are plenty of other timeshares out there with more options. So practically, it's unlikely that a vast number of the truly wealthy who don't go to WDW in the first place would see the point in owning DVC (it's probably more likely that a truly wealthy person who wants to go to WDW would just buy at the Four Seasons once it's built).

Re the demographic issue, I think that if we delved into the DVC data we'd find that the fat part of the bell curve of DVC owners fit squarely into either middle class or "lower upper middle class" (if there were such a designation) income levels. I have a suspicion that the demographics change the farther away from WDW you get geographically. A large concentration of the DVC membership lives in the Southeast and probably owns DVC because they can treat it more like a second home at the beach. More large concentrations live in heavily populated East Coast states that (until now) have had competitive and relatively cheap airfares down to WDW. I think the farther away you get from the DVC strongholds that, on average, the income of the people who own is higher.

TWDC has done its best to promote DVC as a way for average and slightly above average customers who love WDW to be able to increase the duration and frequency of their WDW trips in a "cost-effective" way. Anecdotally, most of the DVC owners I have met personally probably average somewhere around $100K in annual household income. That's a pretty good income for a couple, but once you throw kids into the mix the dollars get stretched a little more.

I would love to see DVC's demographic info. I think it would be very telling. If my suspicion is correct and a high number of the DVC membership has a household income in the neighborhood of $85K-$135K I think we will definitely see a large number of resales as travel costs increase. As the supply increases, the prices will go down (I think Disney will become more selective in its ROFR exercise). Before all of that happens, I think you'd definitely see a change in usage and occupancy patterns. Members would start staying longer for fewer trips. I think once DVC starts seeing that pattern emerge they'll know the writing's on the wall for a downturn in new sales and a marked uptick in resales.

 

[Grandbuddy]

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.

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.

I thought you had to be either a Florida resident or a DVC member to purchase an annual pass(?).

 

[snyderla]

Anyone can buy an annual pass, but if you are a DVC owner or Florida resident you can get discounts. My father & brother buy seasonal passes and they are a good deal for them, since they prefer to go to WDW in off seasons.

 

[Mickey'sApprentice]

I have a suspicion that the demographics change the farther away from WDW you get geographically. A large concentration of the DVC membership lives in the Southeast and probably owns DVC because they can treat it more like a second home at the beach. More large concentrations live in heavily populated East Coast states that (until now) have had competitive and relatively cheap airfares down to WDW. I think the farther away you get from the DVC strongholds that, on average, the income of the people who own is higher.

If my suspicion is correct and a high number of the DVC membership has a household income in the neighborhood of $85K-$135K I think we will definitely see a large number of resales as travel costs increase. As the supply increases, the prices will go down (I think Disney will become more selective in its ROFR exercise). Before all of that happens, I think you'd definitely see a change in usage and occupancy patterns. Members would start staying longer for fewer trips. I think once DVC starts seeing that pattern emerge they'll know the writing's on the wall for a downturn in new sales and a marked uptick in resales.

DVC does not have a particularly high concentration of owners in the South. Incomes and cost of living are significantly lower in the South, and I suspect average vacation time off is probably less as well, which makes DVC out of reach for many Southerners. The closer proximity does make WDW easier to travel to by car, which does improve the concentration of Southern DVC owners. Of course, the flipside of that is that many Southerners live far enough away for it to be a long drive, but really too short to justify flying.

You are 10 times more likely to own DVC if you are from New Jersey than if you are from Alabama.

BTW, Disney...if you are watching the boards...the 100 point buy ins will go over really well in the South.

 

[jfinke]

jinke: Liked you post. Just a few points


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.

That may be true, which is why I actually went out an researched it. However, it shows that there are always losers when it comes to investing. I seem to remember some arguments in the late 90s of never buying DVC because the opportunity cost was so great vs. investing in the stock market. However, after the dotcom crash and 9/11, DVC had out performed the stock market. Again, don't know if that is true, it is probably not. But, I think that you can make the argument that almost everyone loses money on an "investment" at some point. In the 1990s, Trump almost went bankrupt.

I LIKE THAT!

It should have been analysis paralysis. Great, now I am going dyslexic. I am learning my lessons as I get older though. You get what you pay for and my time is valuable. The problem is, I just love to research.

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

Well, I was just trying to go overboard. We can argue back and forth whether DVC is a good vacation expense. However, people are always going to bring in qualitative measurements, such as pictures, memories, kids, etc. that cannot be measured in dollars and cents.

It is an individual decision that needs to be made in a responsible manner.

 

[Ka-chow!]

However, it shows that there are always losers when it comes to investing. I seem to remember some arguments in the late 90s of never buying DVC because the opportunity cost was so great vs. investing in the stock market. However, after the dotcom crash and 9/11, DVC had out performed the stock market.

Sure, but remember that humans have a hardwired into inertia bias, a belief that recent trends will continue indefinitely into the future, which eventually lead to economic cycles. People in the 90's made the error expecting the stock gains to continue indefinitely into the future. Trump's problems in the 90's related to overleveraged positioned in real estate/casinos going into an economic downturn.

Whoops, it appears out great-great-great grandparents had that problem in their 90's too. http://en.wikipedia.org/wiki/Panic_of_1893http://en.wikipedia.org/wiki/Panic_of_1893

And our great-grandparents in 1929, the founders in 1780's... ad nauseum.

A real estate correction is now going through it now. And something will boom and bust after that, and something after that, and that.....

So my point is, absolutely take risks, but don't assume anything by past performance because our inertia biases hinder our abilities to see true values in the moment.

 

[Mystery Fan]

Let's face it, the bottom line is....

DVC owners have Panache.

 

[dvczerfs]

:

Let's face it, the bottom line is....

DVC owners have Panache.

oh ya! the dvc snooty fan club. we have to start our own club!! any other fellow snoots out there?