Many of these discussions have been on various Podcasts. I know it's been a recurring topic on the Mouse Guest Weekly podcast and more specifically discussed between Jennifer and Lisa in their Those Darn Cats segments on the podcast.
I also know that a segment has recently been tested on Ricky Brigante's Inside the Magic podcast about the DVC.
What is the Disney Vacation Club
I know that Disney and many other people refer to the Disney Vacation Club as a timeshare. But, I like to tell people that it's more like purchasing tomorrow's Disney Accommodations at today's prices.
In other words, you are pre-purchasing your resort stays for the next 48+ years (length depends on what resort you buy into).
In my mind, it's kind of like a Roth IRA.
In a Roth IRA, you are depositing money that has already been taxed at current rates so when you take it out, at retirement, you don't owe any taxes because you paid them before depositing. So, in that case, you are paying your taxes at today's rate instead of the rates when you retire.
As we all know, Disney isn't known for reducing the room rates for their Deluxe Accommodations. They typically go up from one year to the next. So in a few years you should see a benefit in pre-paying for your accommodations
What is a DVC Guide
Every member has a DVC Guide.
When you walk into the DVC office at Saratoga Springs Resort (or wherever it is in Anaheim), you'll be asked who referred you to the Disney Vacation Club. If you have a friend or family member who is already a member of the Disney Vacation Club, then you can give the person who greets you their Guide's name. This way, you'll end up with the same guide as your friend or family member. If you don't have a guide, one will be assigned to you.
Your DVC Guide is the person who will give you the tour of the rooms and give you the sales pitch from a numbers and functionality standpoint. I didn't experience any arm twisting or coercive type salesmanship going on. It was pretty much, "Here is what the DVC is, here is how it works, here is what it would cost you, what do you think?"
Once you are a member, your Guide is also your go-to person with any questions that you may have that cannot be resolved by calling the Customer Support Number. They are also the person you will communicate with for the buying process.
Your guide will also be the one who notifies you of new DVC opportunities in the future. For example, my guide was the one who notified me, officially, of the sale of points for the units at Disney's Animal Kingdom Villas.
My DVC Guide is Brad Smith. I must say that he was a very friendly and outgoing person [Ed. Note: Yes, I know he's a sales person]. Trust me, I asked a ton of questions, pointed him to negative commentary that I found on the web and he answered them all with a smile and had a believable response for every thing I threw his way. Plus, when we used our points to stay at Saratoga Springs Resort in September he made sure to call and make sure we didn't need anything.
It should be noted that if you decide to purchase into the Disney Vacation Club and you had named a friend or family member that person may be eligible for a "reward". It just depends on what state they live in. Many states don't let the awarding of the rewards. If I remember correctly, the person gets a few Disney Dollars.
How much does it cost?
Well, I cannot speak from the Resale market because I purchased directly from Disney. So, all my discussion will revolve around that.
The first thing you need to know is that the Disney Vacation Club works in points. You purchase a set number of points that are deposited into your account on your anniversary date. My anniversary date is December 1. So, on December 1 of every year I get my next allotment of points.
I believe if you are making your first purchase into the Disney Vacation Club, the minimum purchase is 150 points. The price per point, is something that your DVC Guide, will provide you and they have a great app to help you easily see the price of everything once you start playing around with point levels
Disney seems to always be offering some sort of incentive to get you to think seriously about purchasing. In the case of my purchase, I had the option of get a few dollars per point removed (to lower my down payment) or getting double points for my first year. We chose the double points.
Since the incentives are always changing, you need to check them out and decide accordingly.
For this blog post, I'm going to assume there are no incentives. When I purchased into Saratoga Springs Resort, the price per point was $101 and I bought 210 points. This came to a price of $21,210. But, in addition to that, you also had various costs that are normal when dealing with real estate transactions (fees, fees, fees).
There is also this another little cost known as annual dues. This is a per point dollar figure that every member pays. The more points you own, the more annual dues you pay. This dollar figure is typically broken out for you so you know where the money is allocated. My annual dues for 2007 are $810 and according to my statement that I can view on the member's only web site, they went slightly down from last year (ever so slightly). Annual dues are monies collected for the upkeep of the resort.
How many points should I get
So, I bet you are asking, "Why 210 points".
Well, our decision was somewhat influenced by our guide who told us that he personally owned 200 points. But we also started looking at the point chart to see how many points it would take to stay at the resorts at the times we'd like to go.
Each DVC resort has a point chart. These point charts tell you how many points it "costs" to stay on a particular day or the week. Weekends cost more points than weekdays. Points also fluctuate based on the tourist season. High season is more costly than low season. Your point value is also dependent on the size of the room you want and in some locations (i.e. Animal Kingdom Villas), what view you want.
So, your number of points is really dictated by what style of room you like to stay in (studio, one bedroom, two bedroom, grand villa) and when you like to travel.
So, if you are interested in the Disney Vacation Club you might want to start looking at the point chart and figuring out how many points it would cost you to take a vacation during the period you typically like to go. That way, when you are sitting in the office, you already know how many points you think you need.
What if I cannot use all my points?
One thing you need to realize is that your points aren't a use-it-or-lose it plan.
There is a process called banking and borrowing in place. This process can be very confusing to people, so it is highly recommended to leverage the people behind the phone number they give you to help make sure you do it right.
Every member has a cutoff date to bank 100% of their points that haven't already been used to book trips for your current year.
You pretty much need to figure out how many points you want to use during the year by that date and bank your remaining points to the next year. If you don't do this, then any points left unused go away at the end of your year.
Points that are banked must be used before any of your new points. So, if you banked 100% of your points to the next year, then you need to use those points before you can tap into that year's points.
You can also borrow points from the next year. So, in theory, you could have triple points. You would combine this year's points, next year's points, and the previous year's points. This is how some people get enough points to take a cruise or book one of the Grand Villa rooms (holds up to 14 people at Saratoga Springs)
So, you can see, getting the right number of points is kind of crucial.
What if I didn't Buy Enough Points?
But, if you don't buy enough points, there is the ability to buy more points and the DVC does seem to run periodic incentive periods for current members to try and get them to buy more. This is often referred to, in the community, as addonitis.
We almost succumbed to addonitis when the Animal Kingdom Villa DVC units were announced at the Animal Kingdom Lodge. If we hadn't been building a house, we most assuredly have added on.
Why would I want to own points in more than one resort
When you buy your points, that resort becomes your "Home Resort". You have the ability to book vacations at your home resort up to 11 months in advance. You have to wait until 7 months out to book at non-Home Resorts. You can only use points from your Home Resort when booking greater than 7 months out.
So, if I had purchased those points at the Animal Kingdom Villas, I could've only used up to the number of points I used when booking early. But, if I needed more, I would've had to borrowed from the next year.
Now if you book within the 7 month window, you can tap into your entire pool of points.
Since Disney Cruise Lines aren't a DVC resort, you aren't governed by the 7 or 11 month rule so you can tap into all your points to book a cruise, or book at non-DVC Disney resort. We actually used our points to book at Disneyland's Paradise Pier Resort. We almost booked at the Grand Californian and wished we had afterwards [Ed. Note: The Grand Californian will be getting DVC units during it's latest remodel].
How do I know when I have broken even
It's often heard that people say that you will break even around 5-7 trips. The break even point is when you've stayed enough vacation nights in a DVC resort where the "rack rate" value of those nights would've met or exceeded your initial investment.
I don't know how others have determined this, but I tend to get a rough cost by using Disney's online reservation system to get a quote for staying at a resort I normally would've booked if I wasn't staying at the DVC (Polynesian, Animal Kingdom Lodge, Swan and Dolphin, etc.). Then I plug that number into a spreadsheet which is tracking all those fictitious numbers for all my trips.
Some people want to know how the annual dues factor it. I have been adding the annual dues to the original buy-in total. So every year the total we are trying to exceed increases by a few hundred dollars.
But, the way I see it, you can still exceed it over time. When we stayed at the Animal Kingdom Lodge in 2006 (on the concierge floor), it cost us several thousand dollars for a 9 night stay. If I remember correctly it was around $5-6K.
How Do I know that the DVC rooms are cheaper than paying rack rate
The most important question is how to determine if you are actually saving money by pre-purchasing your resort accommodations.
The first thing you need to keep in mind is that you cannot compare your "cost" to stay at a DVC resort to that of a Value Resort. If you do that, the value resort will most likely always be cheaper. This is more of a deluxe resort vs. DVC comparison
There is a simple calculation to determine the "value" of a point based on your what you spent. This calculation was given to me by my guide who had received it from one of his clients who happened to be a CPA. The math makes real good sense to me and several other people I have given it to.
First you take the initial cost per point you bought your points with. In my case it's $101. Then you divide it by the number of years in your contract. In my case 48 years.
$101/point ÷ 48 Years = $2.10 per point per year
This is your base price per point. This dollar amount will never change.
Then you need to figure out the per point cost for your annual dues. In my case, the annual dues for this year was $810. So I have to divide that $810 by 210 points.
$810 Annual Dues ÷ 210 Points = $3.86 per point
Now you take these two numbers and add them together:
$2.10 + $3.86 = $5.96 per point
This number will fluctuate based on your annual dues. Each year you'd calculate your new cost per point for your annual dues and add it to the cost per point per year for your investment.
We will then take this figure that we've calculated and multiply it by the number of points that we used for our stay.
We used 202 points to stay at Saratoga Springs Resort in September. Using my real-life point cost as an example, my 8 night stay in a one bedroom unit during the slow season has a cost basis of $1,203.92.
$5.96 per point * 202 points = $1,203.92
Which came out to $150.49 per night.
$1,203.92 ÷ 8 nights = $150.49/night
To me, that is a pretty low rate for staying at a deluxe resort. The special rate for MouseFest guest at the Swan & the Dolphin was $159/night and the rate for Registered Nurses at the Swan & Dolphin is $169/night in December [Ed Note: Yes you can get special rates at the Swan & Dolphin for select professions such as Police Officer, Nurse, Teacher...It's a Starwood Resorts thing]. There is a good chance the per night rate would've been cheaper in September since it is "hurricane season".
But, you cannot do a true apples-to-apples comparison because I also got a full kitchen, a washer and dryer and a one bedroom unit. Plus, the bathroom was significantly larger and we got a jetted garden tub.
If we had stayed in a studio unit, which is the closest approximation to a regular resort room (in size, not amenities), the total number of points would've been 106. This would've given me a total point value of $631.76 which translated to a $78.97/night point value. That is definitely between Value and Moderate resort prices.
$5.96 per point * 106 points = $631.76
$631.76 point value ÷ 8 nights = $78.97/night
Now, as Disney keeps increasing the cost of staying at the resorts, it could very well be possible that the cost per night of a value resort will eventually become more expensive than the cost per night of your stay at a DVC resort.