Having doubts about owning DVC

[DVC2004]

And one thing that doesn't get brought up enough in the financial analysis is the lost opportunity cost on the money you invest in DVC. Yes, you may have paid $15,000 for your membership and gotten $30,000 in rooms back for that money (using one PP's numbers), but you have to factor out how much you could have earned in interest or investment income on that $15,000. That's a very important piece of the puzzle.

I see your point and I believe you are referring to my post re paying $15K and getting $30K in trips- but the money I spent on DVC, or would have spent on vacations had I not joined is NOT money I would have invested. I put aside other money for that, retirement, kids college, random investing and my monthly savings. This is strictly money I would have been spending anyway to travel because our familly vacations at least 2 times per year and it is a priority to us to do so. And spending money on travel is never an investment- it's money you are blowing and never getting back, wouldn't you agree? I don't think you could call any Disney vacation a financial investment.
Assumming I did save it in the bank I'd earn 2% maybe, and if I invested it I probably would have lost a good portion more than I would have gained anyway, especially in this past year or so.

I mean you could say that about anything- buying a car, eating out at restaurants, having an occasional bottle of wine, buying clothes or going to sporting events. Really what is the point of life if you do a gain/loss analysis on every single thing is all I am saying. Again for me- this is money I was spending anyway. Didn't pull it from a savings or invest, or home equity or retirement.

[Ian]

I see your point and I believe you are referring to my post re paying $15K and getting $30K in trips- but the money I spent on DVC, or would have spent on vacations had I not joined is NOT money I would have invested. I put aside other money for that, retirement, kids college, random investing and my monthly savings. This is strictly money I would have been spending anyway to travel because our familly vacations at least 2 times per year and it is a priority to us to do so. And spending money on travel is never an investment- it's money you are blowing and never getting back, wouldn't you agree? I don't think you could call any Disney vacation a financial investment.
Assumming I did save it in the bank I'd earn 2% maybe, and if I invested it I probably would have lost a good portion more than I would have gained anyway, especially in this past year or so.

I mean you could say that about anything- buying a car, eating out at restaurants, having an occasional bottle of wine, buying clothes or going to sporting events. Really what is the point of life if you do a gain/loss analysis on every single thing is all I am saying. Again for me- this is money I was spending anyway. Didn't pull it from a savings or invest, or home equity or retirement.

Well ... yeah, but here's what you're missing ...

First off, you can't think about operating in this market. This is the worst economy the U.S. has seen in 80 years. The fact is, that for the vast majority of our lifetimes investing in the market would have returned you about 8% on your money.

Secondly, you could still invest your money and yet spend it annually for vacations and the like. It would have to sit somewhere before you sent it to Disney.

Example ... you book a $4,000 trip to Disney World in January for travel in September. By buying DVC, you effectively paid that $4,000 whenever you purchased your membership, so Disney has that $4,000 and they're earning interest on it. You could, instead, put it in an ING account and get 3% on it yourself, pay for your trip when payment is due, and bank the earnings.

Obviously, this is a very simplistic example, but I really just used it to illustrate that investing vs. spending are not mutually exclusive.

[DVC2004]

Well ... yeah, but here's what you're missing ...

First off, you can't think about operating in this market. This is the worst economy the U.S. has seen in 80 years. The fact is, that for the vast majority of our lifetimes investing in the market would have returned you about 8% on your money.

Secondly, you could still invest your money and yet spend it annually for vacations and the like. It would have to sit somewhere before you sent it to Disney.

Example ... you book a $4,000 trip to Disney World in January for travel in September. By buying DVC, you effectively paid that $4,000 whenever you purchased your membership, so Disney has that $4,000 and they're earning interest on it. You could, instead, put it in an ING account and get 3% on it yourself, pay for your trip when payment is due, and bank the earnings.

Obviously, this is a very simplistic example, but I really just used it to illustrate that investing vs. spending are not mutually exclusive.

Let's just agree to disagree. I get your example. I would not recommend anyone to purchase DVC if it's not in their budget. I mean again, are you going to save up for a lifetime to buy a home in cash so as to avoid paying mortgage interest to a bank? I drive a BMW- I could buy a lesser car to get me from point a to point b and save the money but I would rather enjoy what I work for. You can't take it with you is my motto. Say I earn $1500 bucks in investment gains or earned interest on that money if I hadn't bought DVC; isn't the govenrment going to tax me on that anyway for interest income or capital gains? So what did I really earn. I paid more in taxes last year than some people make as a salary. We could go on and on debating these things. For me it was a good financial decision- for me. By all means I do not think everyone would be a good fit.

It's an emmotional purchase of course. I have a son with special needs. It's important to me to spend time with my family, and I liked that I could provide this for him and my other son so our family and future generations could enjoy it.

Ian no hard feelings- just a healthy debate. I always enjoy your point of view here on these boards.

[MidnTPK]

I would honestly love to see someone put together a detailed financial analysis of DVC vs. non-DVC over a 50 year contract life and see if it actually pays off. Someone with a solid economics and statistics background could probably do it fairly easily.

I attempted this analysis when I bought my Atlantis timeshare. The bottom line is that it comes down to too many volatile variables to know (for certain at the point of purchase) how good or bad a deal a timeshare purchase is.

You have to make assumptions about future hotel room rates, future dues requirements for your resort, future yields on income producing assets, and future income taxes on said assets. Note the FOUR future assumptions. And assume/want to take a vacation every year for the full term of your timeshare's life.

Hotel rates rely not only on general inflation, but the specific demand for your resort and if WDW grows more or less desirable to the general public.

Dues relies on the competence of the resort's physical plant management, the wear and tear on the individual unit, and then the price of home furnishings and construction material. Plus the price one must pay for competent professional property managers.

Then you also have to analyze what you would do with that money if you hadn't put it into a timeshare purchase. You'd have to find a place to earn income with it, perpetually until the lease ends. Then you have make assumption about the rates that income will be taxed at in the future. these are killers because it's VERY hard to find something very safe and reliable that pays anything more than the risk-free rate.

In the end, you take the present value of all those things and see which is less expensive. A timeshare was much less expensive in my case, but I wanted to be committed to at least one vacation a year with my family (I've seen my siblings and their families skip 3+ years of vacations because they like Volvos more than Hondas...I like vacations more than brand names on cars, so I wanted that portion of my budget mandatory).

[Ian]

Let's just agree to disagree. I get your example. I would not recommend anyone to purchase DVC if it's not in their budget. I mean again, are you going to save up for a lifetime to buy a home in cash so as to avoid paying mortgage interest to a bank? I drive a BMW- I could buy a lesser car to get me from point a to point b and save the money but I would rather enjoy what I work for. You can't take it with you is my motto.

Oh no no ... we don't have to agree to disagree at all. I completely agree with you! Remember, I own DVC (I've also owned two BMWs ), and love it. My only point was that, if you were going to do a true financial cost/benefit analysis you would have to include the lost opportunity cost of your upfront investment.

But I completely agree with you ... you can't take it with you ... enjoy what you have while you have the chance. That's my motto, as well. Live life to the fullest!

Or as I sometimes put it ... you can save for a rainy day, but no one six feet under cares if it's raining!

I attempted this analysis when I bought my Atlantis timeshare. The bottom line is that it comes down to too many volatile variables to know (for certain at the point of purchase) how good or bad a deal a timeshare purchase is.

You have to make assumptions about future hotel room rates, future dues requirements for your resort, future yields on income producing assets, and future income taxes on said assets. Note the FOUR future assumptions. And assume/want to take a vacation every year for the full term of your timeshare's life.

Yeah, but you could take a stab ... I mean there's meaningful historical data available on prices for Disney hotel rooms. There's meaningful historical data on typical annual increases on DVC dues. There's an accepted annual yield (8%) that's used in most future value calculations. The taxes are a bit harder, but you could probably reasonably estimate those, too.

I think it can be done. With a ton of assumptions yes, but you could get something reasonably accurate I bet.

[Carolanne]

DVC is best suited for guests who visit at least once or twice a year for 14-20 days or so ... guests who typically book deluxe or suite level accomodations ... and guests who intend on making Disney a resort destination for as long as circumstances allow.

It is really not suited for the "We're only in our room to sleep ... it's just my wife and I ... we normally stay at Pop Century because we're park warriors and don't care about our room ... and we go once every two or three years ... " folks.

I regret NOT buying into DVC. I've been going to WDW for over 13 years & it's something I'm always going to go back to. I used to go 3x a year, but have cut it back to 2 (either me & DH or me & mom). Used to stay only at deluxe resorts, but now if I want to keep going as much as I do, we're staying at moderate or value resorts.

When I think about how much money I've put out for WDW vacations (which I do love)...I probably could have put that money towards purchasing a DVC, and I regret not doing it.

[hubbyofadisneyholic]

I think this is one of those situations where the "facts" can be nudged to fit whichever side of the fence you are inclined to fall on.

We think DVC makes sense for us. We bought @ OKW via resale back in 2003 and could now sell for roughly what we paid (minus commissions, etc.) We were going to WDW at least once a year anyway so we have upgraded our accomadations for about what we were spending previously.

Others can put together figures justifying in their minds why they didn't buy in.

As long as your choice works for YOU, that is all that matters.

[MidnTPK]

Yeah, but you could take a stab ... I mean there's meaningful historical data available on prices for Disney hotel rooms. There's meaningful historical data on typical annual increases on DVC dues. There's an accepted annual yield (8%) that's used in most future value calculations. The taxes are a bit harder, but you could probably reasonably estimate those, too.

I think it can be done. With a ton of assumptions yes, but you could get something reasonably accurate I bet.

I have taken a stab...but I didn't save / can't find my spreadsheet. Things have gotten little crazy at work though, so it will be a few days.

[Ian]

We bought @ OKW via resale back in 2003 and could now sell for roughly what we paid (minus commissions, etc.)

Yeah, that's something I forgot that you'd have to factor in. Your equity ownership in your contract.

[Mousemates]

....I wanted to be committed to at least one vacation a year with my family (I've seen my siblings and their families skip 3+ years of vacations because they like Volvos more than Hondas...I like vacations more than brand names on cars, so I wanted that portion of my budget mandatory).

[locutus]

I know this has been brought up before, but I think we often get rankled by "sweet" deals like "free" dining offered to the general public and forget that DVC members get discounts all year on annual passes, water park tickets, special event tickets, dining and purchases. Plus we get to pool hop. Plus, overall we pay less for our room (yes, even when we stay in a one-bedroom, even if we own at SSR, even when Disney offers prospective purchasers big discounts to stay there).

I'm happy with DVC even without free dining. Including our initial purchase price AND annual dues, our last trip cost us about $120 a night for our 1-bedroom for 2 adults and 3 children. In June! We paid more than that for an extra night at a regular room at Port Orleans.

Aurora-I own at SSR. Many people say they dont care about the dining because " we forget" about the discounts DVC members get. PLEASE. Savings at water parks--a couple dollars off. Anual passes--nice if you get down there more than 1 trip per year but im sure most of us get only 1 vacation a year making an annual pass not worth it. And shopping discounts...where? WOD in the marketplace used to give the discount. No more. Most stores in the marketplace on my recent trip offered us no discounts. And while some say there is no such thing as "free dining"--when someone pays 1400 for 2 adults and 2 kids--for 1 week--gets upgraded from Coronado Springs to a 1 bedroom villa at SSR--that looks free to me. And bear in mind they get housekeeping EVERY DAY. We dont get that. And as someone else posted where does that money come from? Our dues? and they never go down. Given a choice Id take the dining plan and give back the 4 dollars per person savings at water parks or couple dollars saving at mini golf.

[Ian]

Yeah, but again ... you're taking an extremely rare situation and trying to make it the norm.

Getting one week with dining included at SSR for $1,400 is a one in a million shot. It's not something you can plan on year after year.

I really think you're too caught up in this one-off guy you ran into and it's preventing you from seeing the forest for the trees.

Over the life of your contract ... which is the only thing you should be worried about ... you're going to make out better than the average guest.

[DVC Mike]

I really think you're too caught up in this one-off guy you ran into and it's preventing you from seeing the forest for the trees.

Over the life of your contract ... which is the only thing you should be worried about ... you're going to make out better than the average guest.

Agreed.

[lockedoutlogic]

After browsing over this heated topic (which took about 3 hours....casually...)

-I can't shake a couple of things:

First, you can sugarcoat it all you want: But DVC owners are bankable, guaranteed clientele that basically don't need to be catered to...
I know there's a million, valid, "yeah but" counterarguments to this...but we all know that it is true.

My favorite is the "you can choose to take your points elsewhere"
YEAH...BUT...we all know that 99.9% of all DVC members bought the thing for the DISNEY aspect of it and get the best use of their points by repeat trips to DVC locations. It just doesn't work out any sweeter than DVC at WDW and in other future Disney run locations. This we know...it hard to use it as a counter argument when it really is the case.

Second,
We all know that you can get a better public deal for the money pound for pound that traveling with your DVC points right now. And we know it won't last forever and in a few years the pendulum will swing back into the DVC/Advantage direction.
But that doesn't change the truth of the moment: To shell off my room at Saratoga for a discounted free dining package at All-star prices is a bit insulting....even if it is a temporary desperation move.
Numero Uno - It again shows that something just ain't right with Saratoga....why is there never any demand for that place at anytime other than property wide capacity? we all know
Dos - At the end of the day, the deal they are receiving to stay for one random week is hard to equal in the here and now....and you can't say it will even it out in the future.
Remember that only our rooms are going to go down in cost (compared with inflation) in the longhaul...we will pay more for everything else (tix, food, junk, rec, liqua)....and since we go alot more on average - guess who's wallets will be ultimately lighter - even WITH the decline of comparitive room price as the resort rack rates climb.


In the end - does disney have to cater to DVC members and treat them as their number one priority? No...absolutely not.
Do they take them for granted in many ways? yes. DVC members get the benefit of new locations and their attached services coming - but that is just a residual. Those new towers are for new sales, DVC cares not whether those that bought OKW in 93 ever set foot in BLT. DVC members are in no way catered too as far as I can see it (and i've looked at from 1,327 different angles at this point)
Should Disney treat DVC more generously because they have invested long term large scale money in their operations? Absolutely...but they don't have to, it's not the way business is conducted anymore. A change for the worse - for sure.

[Aurora]

Well, you can lick the sugar off it as much as you want , but you can't make me unhappy that we bought DVC. I'm one of those people whose home resort is SSR and is HAPPY with it, and one of those people who used to take advantage of the huge discounts to stay at the Poly.

I also know that my room is still costing me less than the other guy.

What "ain't right" with Saratoga is that it's the largest DVC property with no adjacent major Disney gate. If Saratoga in its present design was right next to the Boardwalk, we know what would happen. For proof, what's the second largest DVC property not next to a major gate? Old Key West. And you can pretty much get rooms there nearly anytime too.

Respectfully Locutus, you didn't answer my question about how many points you have. If your home resort is SSR, with an approximate dues rate of $4.34 per point, in my estimate, you have more points to use this year than just your seven nights in a 1-bedroom, which means your $1,400 is going farther than just a weeklong trip.

[Joannelet]

I saw somewhere that someone wrote that they offer free dining during slow times.
Actually that is not the only time they offer it. They also offer free dining in november through December (they have done so the last 2 years) (and these are BUSY TIMES! I know because I was a cast member.....
I have to say that when they are pitching the club to you they are pushing the discounts (the member perks!) not just the rooms.
I have been on the phone with DVC the last 2 months because I have been feeling the same way as the first person that started this thread.
Here is what I was told: in response to the amount of discounts I was told that they will take my concerns and bring this up at meetings (I'm sure they do...) by the way Disneyland California-EVERY SINGLE RESTAURANT when I was there took 10% off my bill because we are DVC members....this is how it should be since a MAJORITY of DVC owners are from the DISNEY WORLD RESORT!

I was also told that Disney does not own DVC. ITs a private company so they cannot do any of the promotions that are offered to the general public that are not dvc members. This is what every person I spoke to said!

My personal sales person told me this: she said that the dining offer has only been during the bad economy because people can't afford the trips. This is absolutely not true its been longer than that. My sister has been there the last 3 years (with free dining) and it started even a year or 2 before that! Way before the economy was bad. Then I said to her well why is the economy only bad for the general public? Why isn't the economy bad for the DVC members who have to pay for all their food and their membership etc.? She was like well they just won't be offering it forever. (she avoided the question)

My other complaint had to do with why is it that I cannot EVER EVER EVER transfer out of my home resort (especially during SLOW times like someone posted) I go always in September and sometimes in December and everything is always always booked except for my home resort.
THen I hear that people who don't have DVC call up to the resort that I'm trying to get into and if they aren't DVC members they get in.

There answer to this was by Florida state law they have to have a portion I think 10% available for customers paying cash. I understand this so much better if that is the case but its still very fustrating that I cannot switch out ever. I have now been given a separate info number to call when booking my next trip as if magically that person will be able to get me into the resort I want....we shall see next year.....I am not planning on it....


I know in the long run we will probably be saving money but I hear the fustrations and just know that you aren't the only one. They are offering the free dining again while I am there this year. So while I'm paying monthly and paying more than the average person since it will not be payed off for many more years and paying free dining on top of it while everyone else is getting it for free ;( I am going to be a little jealous of all those people....but one day maybe those people will be jealous of me!!

I just want the discounts and member perks (like the ones at Disneyland- every restaurant should take a discount for us to give us more incentive to be members 10% is not going to hurt them!) and the ability to switch resorts like I was promised... what they still pitch today!

[lockedoutlogic]

Well, you can lick the sugar off it as much as you want , but you can't make me unhappy that we bought DVC. I'm one of those people whose home resort is SSR and is HAPPY with it, and one of those people who used to take advantage of the huge discounts to stay at the Poly.

I also know that my room is still costing me less than the other guy.

What "ain't right" with Saratoga is that it's the largest DVC property with no adjacent major Disney gate. If Saratoga in its present design was right next to the Boardwalk, we know what would happen. For proof, what's the second largest DVC property not next to a major gate? Old Key West. And you can pretty much get rooms there nearly anytime too.

Respectfully Locutus, you didn't answer my question about how many points you have. If your home resort is SSR, with an approximate dues rate of $4.34 per point, in my estimate, you have more points to use this year than just your seven nights in a 1-bedroom, which means your $1,400 is going farther than just a weeklong trip.

Not to highjack....but you brought up a good point:

If old key west and Saratoga are the largest two...which they are....and they have comparably less to offer because no adjacent gate...which they do...and they have the least amount of food/merchandise/ recreational opportunities to offer....which they do...

then why does a studio cost 11 points at Saratoga and only 8 at OKW (at value season)?

Huh?

there is no good reason...and that is one of the major problems with the great "horsethemed" location...but there are others

ok...back to the topic at hand

[Hammer]

I saw somewhere that someone wrote that they offer free dining during slow times.
Actually that is not the only time they offer it. They also offer free dining in November through December (they have done so the last 2 years) (and these are BUSY TIMES! I know because I was a cast member.....

They have offered the "free dining" promotion the last 2 years outside of late August-September because the economy has been in a recession since late 2007-early 2008. Disney started to feel it in mid-2008 because vacations are planned farther in advance thus delaying the effect on Disney. When the economy fully rebounds back (some sectors have started to show some improvement but tourism will see the delay in upswing) Disney will go back to offering the "free dining" type specials in just mid-August to end of September as the crowds are gone due to the new school year and hurricane season.

I have to say that when they are pitching the club to you they are pushing the discounts (the member perks!) not just the rooms.
I have been on the phone with DVC the last 2 months because I have been feeling the same way as the first person that started this thread.
Here is what I was told: in response to the amount of discounts I was told that they will take my concerns and bring this up at meetings (I'm sure they do...) by the way Disneyland California-EVERY SINGLE RESTAURANT when I was there took 10% off my bill because we are DVC members....this is how it should be since a MAJORITY of DVC owners are from the DISNEY WORLD RESORT!

Disneyland has a lot fewer restaurants than WDW and you do get a 10% discount at some WDW restaurants, probably the same number of restaurants as at WDW

My other complaint had to do with why is it that I cannot EVER EVER EVER transfer out of my home resort (especially during SLOW times like someone posted) I go always in September and sometimes in December and everything is always always booked except for my home resort.

Are you trying to book at a non-home resort at 7 months mark? I have been able to book a non-home resort every time I have called 7 months before my check-in date and have been able to get a reservation at another resort other than my home resort (SSR). I leave for Beach Club Villas in less than 2 weeks and I booked the day after my 7 month date.


Oh, and to back up Aurora, I also own at SSR and am happy there. I've stayed at my home resort and liked it very much. I find it much nicer than OKW, where I stayed for a week last year and could not wait to leave, though I know there are many who love OKW (I'm just not one of them). I plan to try all the WDW DVC resorts but I am more than satisfied with SSR.

[lockedoutlogic]

Oh, and to back up Aurora, I also own at SSR and am happy there. I've stayed at my home resort and liked it very much. I find it much nicer than OKW, where I stayed for a week last year and could not wait to leave, though I know there are many who love OKW (I'm just not one of them). I plan to try all the WDW DVC resorts but I am more than satisfied with SSR.

not to nitpick, Ham....

but this is the kind of comment i see all the time from the Saratoga "defenders"

"I've stayed there...and liked it"

That's great....but that leads me to believe that you'd rather be elsewhere and think of saratoga...your "home" as more of a fallback place.

Which seems to be the case for the vast majority of owners.

I've stayed there and it was ok. Not much like the other disney locations, not much to make you yearn for it in any way after you leave. Certainly not much to plan annual visits for 45 more years (boy that sounds bad). But for me the big sticking points are the comparitve point descrepancy between the 'Toga and OKW and AKV on the cheaper side and subesequently the Beach/BWV/WL for nominally more...amongst others

But Hey...I still think it stinks that I don't get 4 free days of tickets and free dining Too!!!

[dlpmikki]

Not to highjack....but you brought up a good point:

If old key west and Saratoga are the largest two...which they are....and they have comparably less to offer because no adjacent gate...which they do...and they have the least amount of food/merchandise/ recreational opportunities to offer....which they do...

then why does a studio cost 11 points at Saratoga and only 8 at OKW (at value season)?

Huh?

there is no good reason...and that is one of the major problems with the great "horsethemed" location...but there are others

ok...back to the topic at hand

That is an easy one to answer and it is the same reason why OKW has bigger rooms. OKW was the first and Disney were not as greedy then because they didn't know it would work so they made a good offering on point cost and room size. Points per room night have been going up ever since Disney started opening new resorts.