The Spirited Back Nine ...

[Goofyernmost]

I honestly find more disgusting to see extremely obese people slurping a giant 2Kilos mayo bottle with a big spoon.
Or consuming a 1 Kg cheese slice by biting.

Putting aside the "disgusting to see extremely obese people" comment which really is below anyone to say. I do not have a clue to the meaning of what came after that. What are you saying or if anyone else understands please let me in on it. I do not understand a single word of it. I might agree with you if I knew what you said.

 

[ParentsOf4]

And VGF points just went up to 175, to think I paid $95 with incentives for BLT points DIRECT from Disney price increases recently are at insane levels.

I agree. Even just a few years ago, a DVC purchase directly from Disney made much more financial sense than it does today.

As you suggest, recent DVC price increases are just crazy.

Until recently, I felt DVC was simply charging more for the brand name, an honorable business practice. Now it feels as if DVC is taking advantage of the consumer in the sordid way infamous in the timeshare industry.

 

[PhilharMagician]

I'm very familiar with WDW hotel rack rates and DVC prices throughout the decades.

In recent years, WDW's rack rates have stabilized as the disparity between the costs of staying onsite versus offsite have grown.

Before arriving in Orlando, consumers comparison shop and go with what works best for them. As a result of this comparison shopping, WDW hotel occupancy rates have declined, forcing Disney to keep hotel price increases in check, meaning WDW rack rates have increased at appreciably slower rates than other WDW prices.

After arriving in Orlando, many consumers go into what I call "vacation mode" and throw common sense out the window. "I'm on vacation. It's OK to pay $34.95 for a t-shirt."

Some act the same way when buying timeshares (including DVC), which are notoriously bad investments. It's one thing to pay too much for a t-shirt or meal. It's quite another to do so for a purchase costing tens-of-thousands of dollars.

As we've seen with everything at the theme parks in recent years, price increases have far outpaced consumer income. Someone buying at OKW or BWV decades ago paid considerably less than someone buying VGF today.

For example, someone buying at BWV in 2002 would have paid $65/point to get access to rooms starting at 10 points/night. Meanwhile, median household income was about $43K.

Someone buying today at VGF is paying $165/point (yes, $100/point more) to get access to rooms starting at 17 points/night. Today's median household income is about $52K.

So, at a time when DVC purchase prices have increased by 150% and points-per-night by 70%, consumer income has increased by only about 20%.

Rack rates for WDW resort hotels may have stabilized, but that is after an approx. 175% increase over the same time period from 2002 till today. I would say the price increases have slowed (not stopped) because of the decreased occupancy rates.

Also buying into timeshares is not always a bad investment. We bought into DVC @ $74.00 per point in 2003. Spent on average 15 nights per year in WDW in deluxe accommodations and paid an average of $800.00 per year in maintenance fees. During that time we took advantage of discount AP's, TIW discounts and countless other perks. In 2013 I sold our points for $82.00 per point since we new we would not travel to WDW for at least 4 - 5 years. DVC was one of the best investments I have ever done. I stayed in deluxe rooms for less than other guests stayed in value resorts for that time frame and made money in the end.

In hind sight, I should have just rented my points during this time of not traveling to WDW. That would have been a better investment since the rental would have cover my maintenance fees and put some money in my pocket while the value of my points goes up.

Purchasing DVC today is not the same value as it was because of the huge price tag the points carry today, but going to WDW is not the same value it once was. Everything in WDW is up at a rate that has far exceeded the US inflation rates. When will it stop?

 

[MattM]

It's an incredible indictment of the ignorance of today's WDW consumer. They are throwing away money as they gullibly swallow Disney's sales pitch hook, line, and sinker.

This is true, but to be fair, the same is to be said for customers of Marriott, Hilton, IHG, etc and their timeshares as well. But hey, it's an ASSET, right?

Truth is, you have to be really, really bad at math to think a timeshare is a good deal. But sadly, most people are really bad at math.

 

[PhotoDave219]

I'm very familiar with WDW hotel rack rates and DVC prices throughout the decades.

In recent years, WDW's rack rates have stabilized as the disparity between the costs of staying onsite versus offsite have grown.

Before arriving in Orlando, consumers comparison shop and go with what works best for them. As a result of this comparison shopping, WDW hotel occupancy rates have declined, forcing Disney to keep hotel price increases in check, meaning WDW rack rates have increased at appreciably slower rates than other WDW prices.

After arriving in Orlando, many consumers go into what I call "vacation mode" and throw common sense out the window. "I'm on vacation. It's OK to pay $34.95 for a t-shirt."

Some act the same way when buying timeshares (including DVC), which are notoriously bad investments. It's one thing to pay too much for a t-shirt or meal. It's quite another to do so for a purchase costing tens-of-thousands of dollars.

As we've seen with everything at the theme parks in recent years, price increases have far outpaced consumer income. Someone buying at OKW or BWV decades ago paid considerably less than someone buying VGF today.

For example, someone buying at BWV in 2002 would have paid $65/point to get access to rooms starting at 10 points/night. Meanwhile, median household income was about $43K.

Someone buying today at VGF is paying $165/point (yes, $100/point more) to get access to rooms starting at 17 points/night. Today's median household income is about $52K.

So, at a time when DVC purchase prices have increased by 150% and points-per-night by 70%, consumer income has increased by only about 20%.

You need a bigger outlet for your financial analyses.

 

[Nemo14]

You need a bigger outlet for your financial analyses.

We need a separate category called Making Common Sense.

 

[BrerJon]

This is true, but to be fair, the same is to be said for customers of Marriott, Hilton, IHG, etc and their timeshares as well. But hey, it's an ASSET, right?

Truth is, you have to be really, really bad at math to think a timeshare is a good deal. But sadly, most people are really bad at math.

What I never understood is how they could sell it as pre-paying for your vacation when accommodation is just a small part of a vacation's cost, with flights, food, transport and tickets not being included in the DVC price. Yet still people seem to think those vacations are paid for already when they sign up.

 

[NearTheEars]

I honestly find more disgusting to see extremely obese people slurping a giant 2Kilos mayo bottle with a big spoon.
Or consuming a 1 Kg cheese slice by biting.

I might be missing the reference, but where are you seeing this? Yuck!

 

[MattM]

What I never understood is how they could sell it as pre-paying for your vacation when accommodation is just a small part of a vacation's cost, with flights, food, transport and tickets not being included in the DVC price. Yet still people seem to think those vacations are paid for already when they sign up.

Logic -----------> Out the Window

"I can afford the monthly payment" BUT "I don't have a penny in my 401k"

 

[71jason]

It's an incredible indictment of the ignorance of today's WDW consumer. They are throwing away money as they gullibly swallow Disney's sales pitch hook, line, and sinker.

I know DVC owners with law degrees and who run hedge funds convinced they now "own" a piece of "The Magic." That it's somehow something more than a long-term rental contract. It's the best example of psychology trumping economic sense since Christmas Club accounts died out in the 70s.

 

[GoofGoof]

Truth is, you have to be really, really bad at math to think a timeshare is a good deal. But sadly, most people are really bad at math.

I don't think that's always the case. If you buy a timeshare with the hope it's gonna somehow be a real estate investment that will go up in value over time you are likely to be disappointed. If you buy a timeshare and enjoy using it for say 20 years it can be a good deal for you even if you sell it for $1. Where the math comes in is comparing the amount paid for the timeshare (including maintenance fees) and compare it to the cost of a similar hotel room.

It's not unlike buying a boat. Loads of fun but ends up costing you money each year and eventually you are going to sell it for less than you paid. With tineshares and boats it's always better to have a good friend or relative who owns one rather than owning one yourself.

With DVC the people who bought in 10+ years ago have already broken even and got a pretty good deal assuming they would have gone to WDW anyway. As @ParentsOf4 points out at the current direct from Disney prices it's getting harder to reach break even, especially if you finance the purchase at really high interest rates.

 

[DisneyGentleman]

I know DVC owners with law degrees and who run hedge funds convinced they now "own" a piece of "The Magic." That it's somehow something more than a long-term rental contract. It's the best example of psychology trumping economic sense since Christmas Club accounts died out in the 70s.

Well, I owned for many years, and sold at a break-even price. So there was no net investment cost outside of lost capital appreciation. My only costs were the fees, part of which were tax deductible.

By my math, I paid about $200 a night for on-site suite accommodations over the length of my ownership (18 years). I sold because I felt the upkeep was starting to wane. I also received free park tickets for the first 4 or five years. It also ensured I took annual vacations, which is a side benefit.

So I'm having a hard time seeing how this was a bad deal, unless of course I'm "very bad at math".

 

[doctornick]

Well, I owned for many years, and sold at a break-even price. So there was no net investment cost outside of lost capital appreciation. My only costs were the fees, part of which were tax deductible.

By my math, I paid about $200 a night for on-site suite accommodations over the length of my ownership (18 years). I sold because I felt the upkeep was starting to wane. I also received free park tickets for the first 4 or five years. It also ensured I took annual vacations, which is a side benefit.

So I'm having a hard time seeing how this was a bad deal, unless of course I'm "very bad at math".

I think most people would agree that if you purchased DVC in the first 10-15 years of its existence and used it to stay at DVC resorts and would have gone to Disney anyway (IOW, having DVC didn't obligate you to go more than you otherwise would have gone) then you have a gotten a great deal. The low buy in combined with increasing costs of rooms in the meantime plus other perks (especially the free tickets if you got them, but even the discounts that exist) made it easy to break even or benefit over the course of the 90's and early 2000's.

In the last 10 years, especially the last 5 years, the benefit of DVC is much more illusory given the higher costs to buy in, plus higher point tables for new properties (the ones people are likely to buy into) and less perks for members.

 

[71jason]

Well, I owned for many years, and sold at a break-even price. So there was no net investment cost outside of lost capital appreciation. My only costs were the fees, part of which were tax deductible.

By my math, I paid about $200 a night for on-site suite accommodations over the length of my ownership (18 years). I sold because I felt the upkeep was starting to wane. I also received free park tickets for the first 4 or five years. It also ensured I took annual vacations, which is a side benefit.

So I'm having a hard time seeing how this was a bad deal, unless of course I'm "very bad at math".

If you feel you got good value, I won't argue the point. It does seem even you would admit your earlier perks (free tickets, adequate upkeep) are no longer available, despite rates going up, given the fact you are no longer a DVC owner.

My larger point, tho, is you "owned" nothing, in a traditional property law sense. There is no fee simple arrangement here. TDO is selling all the feels but nothing truly tangible, just a series of hotel stays. And it says a lot about the mentality of the WDW customer base that people who should be smart enough to see through that do not.

 

[ford91exploder]

I agree. Even just a few years ago, a DVC purchase directly from Disney made much more financial sense than it does today.

As you suggest, recent DVC price increases are just crazy.

Until recently, I felt DVC was simply charging more for the brand name, an honorable business practice. Now it feels as if DVC is taking advantage of the consumer in the sordid way infamous in the timeshare industry.

I'd have to agree, I bought in because without the use it or lose it aspect I tended to ignore vacations to the detriment of family life, So DVC while never a great FINANCIAL investment has been a great investment from a FAMILY point of view.

But I would never buy in today at these price levels, I am disturbed greatly by the decreasing upkeep on the DVC units though because MF's continue to increase.

 

[Cesar R M]

Putting aside the "disgusting to see extremely obese people" comment which really is below anyone to say. I do not have a clue to the meaning of what came after that. What are you saying or if anyone else understands please let me in on it. I do not understand a single word of it. I might agree with you if I knew what you said.

just dont google the combination of words.

I might be missing the reference, but where are you seeing this? Yuck!

the internet...

 

[Goofyernmost]

just dont google the combination of words.

I don't even understand that post, so I think I will move along and mark that as "I'd have to care a lot more to even care a little" type topic.

 

[DisneyGentleman]

My larger point, tho, is you "owned" nothing, in a traditional property law sense. There is no fee simple arrangement here. TDO is selling all the feels but nothing truly tangible, just a series of hotel stays.

Well I sold the "nothing" and got my money back. So it's a bit more complex than you paint it.

I kept it as long as I felt it was a value. When it no longer appeared so, I sold it and got out. Sort of like the stock market, which depends on good management of companies, and may or may not be a winning proposition.

 

[Phil12]

Well, I owned for many years, and sold at a break-even price. So there was no net investment cost outside of lost capital appreciation. My only costs were the fees, part of which were tax deductible.

By my math, I paid about $200 a night for on-site suite accommodations over the length of my ownership (18 years). I sold because I felt the upkeep was starting to wane. I also received free park tickets for the first 4 or five years. It also ensured I took annual vacations, which is a side benefit.

So I'm having a hard time seeing how this was a bad deal, unless of course I'm "very bad at math".

I think the "very bad math" idea comes from the fact that the greater WDW area has been overbuilt with motel and hotel rooms during the past 35 years. The competition among the various establishments has always been very intense and huge discounts have always been the norm for off season visits. In all the years we've been visiting WDW we've always gotten discounts of 50% or more off rack rates. For many years we stayed at the old Courtyard by Marriott at DTD (now the Holiday Inn) for $20.00 per night. We also stayed at a variety of motels on U.S. 192 over the years as well for dirt cheap rates.

Also after 1994 when the All Star Sports was first build, Disney started to significantly discount their rooms as well in order to compete with the off site resorts. Over the years we always played a game of calling around to see who had the least expensive rates. In the process we learned a few tricks about how to get room discounts. But the real point is that most savvy guests get large room discounts so buying into the DVC never becomes a consideration unless you want to pay for the location factor.

Disney's idea of a deluxe resort is just not the same as my idea of a deluxe resort. I can easily find a bigger room with better service/amenities off site and at a far less expensive price than anything the DVC offers.

Some people are enamored with being close to the Mouse or staying at a monorail resort. For people that like that sort of thing, the DVC makes perfect sense and as long as they're willing to pay the price, more power to them. The DVC obeys the three rules of real estate, location, location, location.

 

[ParentsOf4]

With DVC the people who bought in 10+ years ago have already broken even and got a pretty good deal assuming they would have gone to WDW anyway. As @ParentsOf4 points out at the current direct from Disney prices it's getting harder to reach break even, especially if you finance the purchase at really high interest rates.

For someone fitting the right profile, it's possible to reach the DVC break-even point reasonably quickly even when purchasing directly from Disney.

If someone visits WDW every year, always stays at the Grand Floridian when Disney does not offer room-only discounts, and pays cash for their Villas at the Grand Floridian (VGF) purchase, it should take less than 10 years to reach the break-even point.

However, those who fit this financial profile represent a relatively narrow segment of all WDW visitors.

Instead, let's consider someone with the same financial means but who is willing to "downgrade" to the Yacht & Beach Club and stay when Disney offers its common 30% Deluxe Resort discount. For this person, the break-even point is more than 20 years.

Now let's consider perhaps a more typical profile; someone without tens-of-thousands of dollars sitting in the bank, with good (but not great) credit, and who is willing to stay at WDW's less expensive Deluxe Resorts with a 30% discount. Let's say they put 10% down and finance the rest over 10 years. For them, they will never reach the break-even point before their membership expires.

Do you think Disney explains it like that to anyone?