DVC - For couples or for families?

[MrInfinity]

To rent a 1 bedroom theme park view through Davids during Choice season for a week would be about $4,100. One very prominent DVC reseller's analysis shows that the current cost per point on a trip when owning at BLT resale is currently $9.35 point. That puts the same cost of the same stay when you own at $2,200.

Be wary of this $9.35 number -- it's presented by a company trying to sell timeshares. They are slanting the numbers in favor of buying. $9.35 is only counting the yearly dues and the initial spend spread over the remaining years. There is no reason if you have cash now, you would value it at a linear spread over 40 years. For example... If you had $40,000 now, would you be willing to give that to me if I would give you $1000/year for 40 years? I sure hope not! That $40k is worth $280,000 over 40 years.

A good approach might be to look at what you actually spend. Do you currently book 1-Bedrooms thru David's for $4100/wk? We really do spend about $350/nt and stay in the Deluxe hotels. Your price on the 1B is $586/nt. We've never paid that much. If you compare to a high alternative amount that you don't really pay then you can make DVC look like a massive savings.

At $350/nt, a week is $2450 in cash hotel rooms
A 1B week (210 pts) = $1960 at $9.35/pt
A 1B week (210 pts) = $3360 at a more realistic $16/pt
A Studio week (128 pts) = $2048 at a more realistic $16/pt

As you can see a 1B in this model costs you quite a bit more than traditional travels in Deluxe rooms -- but you get an extra room.
A studio will shave a bit off your costs ($2048 vs $2450) but at the cost of only 1 bed and a sofa, no housekeeping, not being in the feature building and having more restrictions. That's why people say if you lose a years' points it'll eat up many years of the savings of DVC. You're saving maybe a few hundred per trip, not thousands.

OP... If you like it, why not? I don't see any need to have kids to justify trips to Disney World.

 

[Bruin_mouse]

A good approach might be to look at what you actually spend. Do you currently book 1-Bedrooms thru David's for $4100/wk? We really do spend about $350/nt and stay in the Deluxe hotels.

I don't take issue with that approach. But is $350/night at Contemporary? If so, I'm not sure why you'd ever buy into DVC if those are the prices you're getting. I'm getting $583/night for a standard hotel room at Contemporary in July on Expedia.

I used the David's number because it's a truly apples to apples comparison (although point rental brokers are generally non-refundable). The $9.35 number can be manipulated 50 ways from Sunday, but it's a fairly simple way to get at the real costs of your stay. I agree canceling a trip that took three years worth of points is not ideal, however, those points can still be rented out at fire sale prices to salvage some of the loss. My previous post was just pointing out that one cancelled trip doesn't make a whole DVC purchase to use every three years a bad idea, it just pushed your break even point to the right.

Another data point in this whole thing is that hotels have been gradually tightening up their cancellation policies, so cancelling a hotel isn't necessarily free like it used to be. I booked my January DLR trip through Disney/Costco. If I cancelled less than 30 days out I lost my deposit. If I cancelled within 48 hours, I lost the cost of my trip.

I think the rules of thumb people give on here (e.g. avoid financing, buy if you like going to Disney, etc.) are generally good, I just don't think they're always as black and white as people say.

Edited to Add: I don't know where I got $4100 for David's. $3500 is correct ($17/point). Sorry.

 

[kboo]

I don't take issue with that approach. But is $350/night at Contemporary? If so, I'm not sure why you'd ever buy into DVC if those are the prices you're getting. I'm getting $583/night for a standard hotel room at Contemporary in July on Expedia.

When we stayed in 2014, we got an email pin code that effectively reduced the rate to just under $300. Same with our stay in 2016 at the GF - we managed to pile on some discounts somehow to get a deluxe lagoon view room at the hotel for the high 300's. Then there was a snafu with our room the first 2 nights and we got refunded 1/2 of 1 nights room stay, so it made it even more cost effective. The 2015 BWV stay was a studio at under $300 (using another special deal on the Disney site, not sure if it included an email pin code), that we then got pixie dusted into a 1BR. But each of those situations was one of those deals that a) never comes along during typical school vacation times or holidays, and b) involved some combination of luck and lots of hunting for discounts that involved a lot of searching around on the web and putting together a relatively last minute trip. These days, I'd rather be able to plan more in advance and know what I'm getting.

 

[Bruin_mouse]

But each of those situations was one of those deals that a) never comes along during typical school vacation times or holidays, and b) involved some combination of luck and lots of hunting for discounts that involved a lot of searching around on the web and putting together a relatively last minute trip. These days, I'd rather be able to plan more in advance and know what I'm getting.

I think it was @skier_pete that made a similar observation a few months ago. He pointed out a huge benefit of DVC is knowing you're getting a good deal on your accommodations without all the hoops.

 

[kboo]

I think it was @skier_pete that made a similar observation a few months ago. He pointed out a huge benefit of DVC is knowing you're getting a good deal on your accommodations without all the hoops.

And now that we're paying airfare for 4, any savings on the rooms and waiting til 3-4 months out can be swallowed up by high airfares too. Actually planning 7-11 months out appeals to the planner in me!

 

[skier_pete]

I think it was @skier_pete that made a similar observation a few months ago. He pointed out a huge benefit of DVC is knowing you're getting a good deal on your accommodations without all the hoops.

Yes - I started a thread where I said how nice it is to not have to hunt for the bargains. It really is a nice aspect of it, I don't need the "savings" of free dining or 25% room because that's already built in.

Others have already counted the plusses and minuses of DVC. The key to savings is do you (a) go every year, (b) plan ahead, (c) pay deluxe rates, (d) plan on going for a long time.

Someone above pointed out that if I had $40,000 today and invested it for 40 years I would have $280,000. But if I stayed at Boardwalk back 20 years ago I could've stayed there for $200 a night, but today it costs me $500 a night, and 20 years from now it might be $800 a night. Dues go up as well, but they go up much slower than room rates, so the benefits are there. You just have to be able to take advantage of the benefits.

DVC obviously is for those with a large disposable income.

 

[MaryLovesPoohBear]

We also don't have to pay for the 3rd adult when our son comes with us. It isn't much, but it adds up and cuts into any deal that I get.

 

[MrInfinity]

But is $350/night at Contemporary? If so, I'm not sure why you'd ever buy into DVC if those are the prices you're getting. I'm getting $583/night for a standard hotel room at Contemporary in July on Expedia.

I just did a search of Deluxe resorts and it came up with several in the $300-$400 range. You're probably seeing a Tower room which is not a good comparison. You can get Standard View or Garden Wing for cheap. If you're comparing to DVC you should not pick the premier rooms.

I do agree w your other point, that things aren't as black and white as people say. DVC is a luxury, thus it's purchase is driven by desire / passion / love not by cost. I could have gone thru life never buying and being no worse off financially, but I like the vacations and like owning it so it's a good value to me. Can't reduce this to it's only a good value to me if I paid X or did not finance or had certain credit debt. If someone wants this and they'll love it and they can make it happen then I tend to say go for it that's what life is for.

But if I stayed at Boardwalk back 20 years ago I could've stayed there for $200 a night, but today it costs me $500 a night, and 20 years from now it might be $800 a night. Dues go up [...] slower than room rates.

I hear this a lot, but usually by timeshare salespeople. In our recent history of going to WDW since about 2010, we were paying in the $330-range for Poly rooms, and today I can still find Poly-Contemporary for $350-$400. I can't find $330 any more. Even if you take the $400, that's a $70 increase which is 21%. But, in the same time BLT dues have gone from $3.67 to $5.92. 61% rise. So I don't accept that rates will definitely rise more than dues. Add to this there will be recessions when rates will fall sharply and deals will abound. But dues will not. I predict that in 20 years my dues will have risen a larger % than equivalent hotel rooms. Just my prediction.

 

[skier_pete]

So I don't accept that rates will definitely rise more than dues. Add to this there will be recessions when rates will fall sharply and deals will abound. But dues will not. I predict that in 20 years my dues will have risen a larger % than equivalent hotel rooms. Just my prediction.

I think you are right that the dues could raise at a faster % rate, but it's all relative. I am paying roughly $150 a night with my points to stay at say BWV. And let's say I can find a room for $400 a night right now at Boardwalk. So maybe in 10 years that only good up to $500 a night which is only a 25% increase in 10 years. But if my dues go up by 50% in that same time, I'm still only pay $225 a night (no tax) versus $500 a night. The difference went from $250 a night more today to $275 a night more in ten years - even though the percentage the rates went up on the dues were twice the percentage of room rates.

By the way - I ran these numbers this year.... We have 20 nights booked (7 in February, 9 in August, 4 in October). Average room price i paid through DVC (understanding I bought resale and factoring in a $/point of the buy-in and 2018 MF) my average cost per night was $158, and that's including that 4 nights I rented points from a friend.

I then priced out the same room I booked through DVC as cash rooms at Rack Rate. I then said that I could get 25% off rack rate on these rooms (I think a reasonable estimate - though perhaps 30% is even possible.) and then added back on 12.5% room tax. I got an average room rate of $475.87 including tax. Now realize I was not trying to pick the cheapest room at each resort - I was matching room type to room type. So for instance our 4 nights at BWV in February we had Boardwalk view rooms - these run almost $700. Our 4 nights in August at AKV are in a Savannah view room - so again I'm comparing apples to apples - rack rate for a Savannah room - not "what's the cheapest rack rate I can get." My feeling is this is the fairest way to do it.

So again $158 vs $476 - a difference of $318. Increase the first number by 50% and the second number by 20% - you get $237 vs $571 - a difference of $334. So even though the dues grew significantly faster the actual difference went up. And this is assuming the hotel rates only go up 2 % a year for the next 10 years. The beauty of compound interest - you start with a lower number you can afford a greater percentage increase.

 

[MrInfinity]

You're making a strong case to buy the Boardwalk. It's unique with its abundance of 10-point rooms. This resort in particular is better insulated from dues increases because you can own half as many points as anywhere else. I'm generally looking at summers around the Magic Kingdom where rooms cost twice as many points/nt.

 

[Dean]

I think you are right that the dues could raise at a faster % rate, but it's all relative. I am paying roughly $150 a night with my points to stay at say BWV. And let's say I can find a room for $400 a night right now at Boardwalk. So maybe in 10 years that only good up to $500 a night which is only a 25% increase in 10 years. But if my dues go up by 50% in that same time, I'm still only pay $225 a night (no tax) versus $500 a night. The difference went from $250 a night more today to $275 a night more in ten years - even though the percentage the rates went up on the dues were twice the percentage of room rates.

By the way - I ran these numbers this year.... We have 20 nights booked (7 in February, 9 in August, 4 in October). Average room price i paid through DVC (understanding I bought resale and factoring in a $/point of the buy-in and 2018 MF) my average cost per night was $158, and that's including that 4 nights I rented points from a friend.

I then priced out the same room I booked through DVC as cash rooms at Rack Rate. I then said that I could get 25% off rack rate on these rooms (I think a reasonable estimate - though perhaps 30% is even possible.) and then added back on 12.5% room tax. I got an average room rate of $475.87 including tax. Now realize I was not trying to pick the cheapest room at each resort - I was matching room type to room type. So for instance our 4 nights at BWV in February we had Boardwalk view rooms - these run almost $700. Our 4 nights in August at AKV are in a Savannah view room - so again I'm comparing apples to apples - rack rate for a Savannah room - not "what's the cheapest rack rate I can get." My feeling is this is the fairest way to do it.

So again $158 vs $476 - a difference of $318. Increase the first number by 50% and the second number by 20% - you get $237 vs $571 - a difference of $334. So even though the dues grew significantly faster the actual difference went up. And this is assuming the hotel rates only go up 2 % a year for the next 10 years. The beauty of compound interest - you start with a lower number you can afford a greater percentage increase.

Dues are tied to real costs and room charges are tied to what they can charge to reach the desired occupancy. When times are good this favors DVC members, when the economy is struggling, this tends to favor cheaper cash rooms. For true cost one has to use what they paid increased by lost earnings on the excess plus dues plus interest if financed. And truthfully one probably should use what it'd cost if buying today since that's what they could sell for.