Do Discounts Hurt DVC Value?

[pax_65]

I'm just wondering if anyone out there has taken the time to analyze how Disney's heavy discounting affects the value of their DVC purchase.

I've been a DVC member for years and love the accommodations, but it does sting a little when you hear of people getting rooms at a Deluxe at huge discounts and/or getting free dining for the duration of the trip - deals we DVC members constantly miss out on.

I assumed the heavy discounting would be relatively short-term to get through the recession, but they seem to just keep on coming. Since the value of DVC is paying for your accommodations up-front and protecting yourself from inflation, at some point these discounts have to affect the long-term value of DVC membership.

Just wondering if anyone has any thoughts or insights...

 

[DisneyJoe]

If you do the math, and calculate your cost of your room accommodations over the life of your DVC ownership, even including dues, you should find that the cost per night is much less than any discount than Disney could offer.

This assumes you can make an apples to apples comparison with a standard hotel room vs a studio; larger accommodations can skew the math - it becomes more difficult to find an apples to apples comparison...

 

[Daddio]

You're likely to find as many thoughts on this as there are colors in a rainbow.

Even with all the discounting, one can not stay at a Vacation Club resort for less than the dues we pay + the initiall investment amortized over the number of years of ownership (which I think is usually around $2.00 per point).

David

 

[becanya]

I actually did a powerpoint presentation to convince my husband that it was smart financially. We always stay at WL, and that's where we bought into the DVC. The past two years that we have gone, we got free dining once and a 40% discount on our room the second time, paying the full price for our dining. So...you can look at it like this. Even if we get 40% off our room rate at the WL, we would pay $1500 for nine days during the off season. Extending that out 32 years (until our points expire), we would pay a total of 48K just on our room...buying our DDP at full price. With DVC, we paid 10,200 to buy in, and our room fees are $550 per year (and I know that will go up slightly through the years but so will the rack rates on rooms). Projecting out those dues for 32 years, and including our buy-in price, we will pay $27,800 over the course of 32 years, then buy our DDP at full price. So...the comparison is $48,000 without DVC, and $27,800 with DVC (for the next 32 years)...just on the room, paying full price for dining each time. Not to mention the fact that we save $400 every 2 years on our park tickets because we get the $100 discount on annual passes. I think it is absolutely a good deal, no matter how many crazy discounts Disney gives. They would have to offer free vacations to make up the difference.

 

[pax_65]

Well, the first assumption is that staying in a Deluxe room is equal to a DVC studio. I'm not sure that's true but I will agree they're close.

For argument's sake I think you compare Deluxe with discounts/free dining to DVC studio, paying for all your meals.

I'm just curious if anyone has taken the time to really study it with numbers. Obviously DVC is a better deal if the alternative is paying full-price for a Deluxe hotel room.

 

[Master Yoda]

From a completely mathematical standpoint anything that lowers the prices of rooms at WDW will devalue the benefit of DVC. How much that devaluation actually is can be highly debatable. Depending on whose spreadsheet you use DVC members are getting a roughly 70% discount on their accommodations over the life of their contract. No other Disney promotion have ever come close to that level of a discount.

Most of the problem is perception. DVC members see this "deal" out there and they feel excluded because they can not get a piece of it. (in reality they can get a piece of it they just can't use points to do it) They fail to realize that the "deal" they signed up for years ago is better but because they have had that "deal" for so long it has become the norm in their mind.

Your statement on discounts is however incorrect. Discounts are drying up compared to years past. AP discounts are becoming as rare as hen's teeth and the availability on existing promotions it very tight and they are riddled with black out dates. For the first time in my short time as a TA I have 2 separate clients traveling at rack rates simply because there were no promotions available for their travel dates and resort choice. This was almost unthinkable 3 years ago.

 

[pax_65]

So...the comparison is $48,000 without DVC, and $27,800 with DVC (for the next 32 years)...just on the room, paying full price for dining each time. Not to mention the fact that we save $400 every 2 years on our park tickets because we get the $100 discount on annual passes. I think it is absolutely a good deal, no matter how many crazy discounts Disney gives. They would have to offer free vacations to make up the difference.

Cool... thanks for this. It makes me feel better!

 

[becanya]

Well, the first assumption is that staying in a Deluxe room is equal to a DVC studio. I'm not sure that's true but I will agree they're close.

For argument's sake I think you compare Deluxe with discounts/free dining to DVC studio, paying for all your meals.

I'm just curious if anyone has taken the time to really study it with numbers. Obviously DVC is a better deal if the alternative is paying full-price for a Deluxe hotel room.

See my post right above yours. The comparison in my numbers is a 40% discount on a deluxe room with a DVC studio in the same hotel.

 

[DVCOwner]

I for one find a DVC room better than any others at WDW. The reason is the way I vacation. I always travel with family and never less than a two bedroom. I want a kitchen my room so that I can have breakfast in the room. In the afternoon I want to return to the room, rest and eat lunch or a snack. Usally soup and sandwick. In the evenings we eat at one of the great places on Disney and return to the room to relax and have a drink. I know that many people do not want to "cook" while on vacation, but I like to relax in the room and eat only my dinner meal out. DVC is the best rooms in the park to be able to do that.

The best thing about DVC is that I know that I will be coming "home" again soon and I do not have to rush to do everything at once.

 

[becanya]

Cool... thanks for this. It makes me feel better!

haha...I think we kept posting over each other and missing our previous postings! Glad the info could help, it did convince my husband! :animwink: And I think I needed to know as well, because it is sad to see all the discounts that we can't take advantage of! But I have to say, I haven't got an email with a pencode in months now. Like 6 months. I used to get them at least once a month. And we didn't even get a bounceback offer this year!

 

[pax_65]

Most of the problem is perception. DVC members see this "deal" out there and they feel excluded because they can not get a piece of it.

This is exactly true... that's why I asked the question because I was feeling that way too.

Your statement on discounts is however incorrect. Discounts are drying up compared to years past.

I'm kind of ok with that, since I never took advantage of the discounts anyway. If they stop giving away free dining maybe I can actually eat a sit-down meal on property again!

Thanks for the info!

 

[Master Yoda]

This is exactly true... that's why I asked the question because I was feeling that way too.



I'm kind of ok with that, since I never took advantage of the discounts anyway. If they stop giving away free dining maybe I can actually eat a sit-down meal on property again!

Thanks for the info!

That is one discount that I do not ever see going away completely. The simple reason is people drawn to the word "free" like a moth to a flame. There are more in depth reasons as to why I think free dining will be around for quite some time but I won't bore you guys with my borderline tin foil hat level hypothesis.

 

[Funfy]

As I stated on a different post. We have 405 points. We pay roughly 1900.00 a year in dues. We have been members since 2003. We have booked enough trips, etc. to more than pay for the 405 points. Just this year we took three separate vacations that the rack rate was about 12-15K. That more than makes up for the $1900.

Yes, I know people get discounts and free dining, so a true comparison is not accurate. However, we have to go late May-July and a week in Sep or Feb. If we take my DH's brother and family -it is summer because he is a teacher. There are rarely big discounts during the summer peak periods.

My husband and I are both Disney Freaks and we know we will be going after children are totally grown (16 and 19 haven't got tired of it yet!). Then guess what, 5-10 years later grandchildren come along! Then we are back in the multiple unit business!

It just works for us-it doesn't work for everyone. We don't even blink when we see the free dining, etc. offers-When you book two savannah view rooms for six days and with borrowing, banking, etc. you can still go to Vero Beach for four days and back for four days at the Treehouses in September-life does not get sweeter.

Also, something else to consider-SPACE. Can't get enough of it when those cute small children that can/will sleep together now-need to be in separate rooms later! Also, Mom and Dad get a separate room too! A kitchen, living room-nothing compares even in the deluxe accomodations. I don't think you can really put a price on the Space asset!!!

Just my 6 cents worth!:ROFLOL:

 

[Pioneer Hall]

I recently purchased after much thought, and found that the math really made sense. Maybe it is the fact that I am still young and know that I can get many years of use out of contract (i'll only be 70 when my AKL contract runs its course). However, it seems that dues costs don't usually increase as much as rack rates, and there is never a guarantee of a discount being available. I also was able to cover the cost of my membership up front and didin't finance the purchase on my 200 points (resale-saved me about 6000 from Disney prices). Now I don't have to worry about paying for anything except my dues for the next 47 years (until I have kids of my own and have to add points for those lovely 1 br villas).

 

[dizzney]

Buying into DVC was the smartest vacation move we have ever made, we only wish we had purchased earlier than 1999 but then we may not have purchased into our favorite Boardwalk Villas. Our 275 points there and 100 at BLT give us lots of flexibility, heading down there in August with alot of family and already have my two beadroom and additional studio at BW booked. My kids are counting down to when we can make our dining reservations for dinner and have already decided some of the ones we will eat at. Our beloved Boardwalk will allow us to relax when not in the parks either in the room, or doing some of the many actiivities around there. We know that we made back the cost of our BW investment some years back and are now working on BLT, and this will be around for our childrens children to enjoy.

We dont miss any of the other discounts because we feel we have the best one in DVC itself

 

[Frau Farbissina]

This is slightly off topic so I apologize in advance, but from the perspective of someone who would love to own DVC but currently rents points, what discounts do for me is influence how much I'm willing to pay per point. At $10 a point, I'm still saving a lot of money even with the most generous discounts Disney offers. Anymore per point than that and you're looking at only a $200 or $300 difference. To me, this makes going directly through Disney more attractive.

Conversely, when discounts inevitably dry up, I think the standard (rental) cost per point will go up as well.

I know this isn't how most DVC owners value their ownership, but I just thought it was interesting from the perspective of those who rent in relation to villa discounts.

 

[mlayton14]

Be careful with math that some are throwing out there. There are Alot of assumptions. While I don't doubt that those who bought early do well, current prices seem marginable at best. The biggest assumption in the math is that you will use it for many years to come. How do you really know what your travel habits will be 15-20 yrs or more from now? I love Disney but I'm certainly not going to pay now for a room I will use more than a decade from now? I think combo of direct cash w discounts and renting is the most sensible approach for our family

 

[Tiggerish]

I actually did a powerpoint presentation to convince my husband that it was smart financially. We always stay at WL, and that's where we bought into the DVC. The past two years that we have gone, we got free dining once and a 40% discount on our room the second time, paying the full price for our dining. So...you can look at it like this. Even if we get 40% off our room rate at the WL, we would pay $1500 for nine days during the off season. Extending that out 32 years (until our points expire), we would pay a total of 48K just on our room...buying our DDP at full price. With DVC, we paid 10,200 to buy in, and our room fees are $550 per year (and I know that will go up slightly through the years but so will the rack rates on rooms). Projecting out those dues for 32 years, and including our buy-in price, we will pay $27,800 over the course of 32 years, then buy our DDP at full price. So...the comparison is $48,000 without DVC, and $27,800 with DVC (for the next 32 years)...just on the room, paying full price for dining each time. Not to mention the fact that we save $400 every 2 years on our park tickets because we get the $100 discount on annual passes. I think it is absolutely a good deal, no matter how many crazy discounts Disney gives. They would have to offer free vacations to make up the difference.

And don't forget, becanya, that once you are an annual passholder, you can buy a Tables in Wonderland card, which will get you 20% off food & alcohol at most Disney dining (table service) locations! Another bundle of money to be saved--our TiW card has paid for itself several times already this year. Some people consider the TiW card to be a better value than the DDP, but it might not work out that way for all.

 

[tjkraz]

The only "value" that matters to me is what I get for my points....and that doesn't change one bit based upon Disney's discounting.

I did some comparisons about 8 years ago when first buying just to validate the decision. But I have no interest in keeping up with those numbers. Reality is that we have no idea what Disney's room rates will do in the future so any projections are simply guesswork.

I could care less how Disney discounts its rooms or how resale values change. We're in it for the long haul. Points are paid for and we're certainly getting more than adequate value for our $1000 per year in dues.

 

[pax_65]

Points are paid for and we're certainly getting more than adequate value for our $1000 per year in dues.

We're in the same boat, and I agree. I've never second-guessed my decision to buy DVC - it was some of the best money I've ever spent.

I will say that my financial calculations for buying were based on costs when I bought (1999), and with discounts some of the room rates are lower now than what I figured (amazing but true).

Seeing the math that other people calculated was helpful, though.