Is DVC Right For My Family?

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won't let you order a nice scotch
Is DVC Right For Me?


My goal for this article is to shed light on the economics of a Disney Vacation Club (DVC) purchase. There are a number of possible directions you can go with this and they all have merit, but it would be next to impossible to include all of the possible combinations and permutations of possibilities when comparing purchasing DVC to renting rooms.

For this article, consider me your financial advisor, except I wont actually give you advice. My job is to objectively explain the dollars and cents of a DVC purchase. YOU then, can take this information and decide what to do with it. As Gregg, your financial advisor, I will NOT be entertaining notions such as the emotional impact of being a DVC owner, which, as an owner, I can tell you there is such a thing. No one can put a logical dollar figure to this, so it will not be included in this article.

In addition, after consideration, I will NOT be including information on the value of DVC discounts. DVC membership affords you a number of wonderful discounts including amazing discounts on merchandise, Annual Passes and special event tickets. In addition, you can buy the Tables in Wonderland card, which can amount to hundreds of dollars of savings in many table service restaurants. Since each family’s utilization of these discounts could be drastically different, I have decided to leave these variables out.

So, if you want an objective economic analysis of what the cost of purchasing DVC points is relative to other ways of staying on-site at Disney, this is the place. I will do my best to compare apples to apples, but in reality there may be subtle differences where the comparisons may not be absolutely equal.

I am going to compare the cost of FOUR different modalities of on-site stay at Disney. These will be: 1. Purchasing direct from Disney Vacation Club, 2. Purchasing DVC from the resale market, 3. Renting points from a current DVC owner, and 4. Classic hotel rental of on-site property. I will be comparing Animal Kingdom Villas vs. Animal Kingdom Lodge. This is an obvious “almost” apples to apples comparison. I will also be comparing studio versus studio. As you start to add more bedrooms, the relative cost of DVC goes up. Of course, this relationship can flip if you have more than 5 in your immediate family and need to rent two rooms for your stay. In addition, for the purposes of this article I am going to be comparing prices for a one-week stay during “Magic Season,” specifically late June (Saturday to Saturday trip). The reason to use this time is that Magic Season is when Disney is at its busiest (i.e. most people visit during these times).

I did spend a little time trying to compare a moderate DVC to a moderate Disney resort. This really turned into a mess since some moderates were more expensive than AKL standard view. In addition, some aspects of the more moderate DVCs were more expensive than some of the deluxe. So for the purposes of this article, this will just be an apples to apples comparison of AKV vs. AKL. You can adjust your numbers accordingly for different resorts as desired.

And away we go….

Costs Explained

Disney Vacation Club Buy-In
To become a Disney Vacation Club member, you must designate a home resort. After you decide which home resort you want, you will need to decide how many “points” you want to purchase. DVC points are the currency of the system. For the purposes of this article, we are going to buy 100 points. This is a very close approximation of how many points you will need to stay one week in a value studio room at Animal Kingdom Villas during Magic Season (based on the 2013 DVC points chart). Now, if you want savannah view or concierge, this will cost you more. The current purchase price of AKV is $140/point (prices as of 1/7/13). Now, it is possible that you could get some bonus points upon purchase or even get a discount. For the purposes of this article, we will mostly be dealing with non-discounted rates. 100 points is also close to the minimum purchase for DVC.
So, for AKV, by our previous calculation, the current amount due for our buy-in is $14,000. This is an upfront cost. The idea behind DVC is that you are paying ahead of time (for the most part) for your Disney vacations for the next few decades. If we were to purchase the same contract off the resale market, our initial cost would be considerably less. In fact, according to The Timeshare Store, the pending contracts for AKV are averaging $66/point. This is before ROFR by Disney. This would make your buy-in $6,600. Not bad, eh?

Remember, I am your financial advisor. I am very fiscally conservative. I hate debt. HATE IT! If you are not in a financial position to be able to pay for your buy-in in total, then DVC membership quickly becomes extremely less appealing. The current “preferred” interest rate through Disney is 11.75%. WHAT?!? Yes. That means if you were to take out a loan for the entire cost of your AKV buy-in (which I know most people don’t finance the whole thing, but just humor me), then with a 10 year loan, you will eventually pay $23,860.80, which is nearly $10,000 more than the original buy-in. Basically, unless you can get an amazing interest rate, then borrowing for DVC purchase is a bad idea. It would push your “break-even” point so far out, that it would be very difficult to justify the purchase economically. Let me say this again for the people who are in the BUT I WANT IT REALLY BAD club: DO NOT PURCHASE A DVC CONTRACT UNLESS YOU CAN PAY FOR THE PURCHASE WITHOUT BORROWING. Now, I know there are people out there that will say: “But what if I can get a 5% interest rate and only have to borrow $3,000?” Well that’s something you will have to decide on your own. But, I, as your financial advisor, will tell you that you probably shouldn’t buy-in.

Annual Dues
These are the dues associated with ownership of a property. These used to be called maintenance fees. Your annual dues are some small multiplier number that is based on your home resort. The cheapest multiplier for Disney World resorts is currently Bay Lake Tower. The most expensive is Boardwalk Villas. The current annual dues rate at AKV is $5.67 per point per year. So, using our handy calculator, that means that if you own a 100 point contract at AKV, then you will owe DVC $567.00 per year. This can be paid as one lump payment or can be spread out over the year. The trick to these annual dues is that they increase over time. Over the last four years, AKV has averaged a 3.97% increase in dues per year. For the purposes of our later comparisons, I am going to assume a 4% increase in annual dues per year.

Renting Points
This is a tricky one. There are some people that are just uncomfortable renting points from strangers. It does require a bit of trust in your fellow man. However, there are sites like Dave’s DVC rental site that have quite an impressive track record and are about as safe as you get. The way rentals work is you find a owner who is willing to rent points for the time you will be visiting. You then determine how many points you need for your stay based on your current points chart. You then set up a payment method to the owner and the owner then calls member services and makes your reservation for you. Dave’s site charges $13/point. This is slightly more than what you could find on other rental sites, but it’s without worry for the most part. For the purposes of this article, we will use Dave’s site. So, using Dave’s site, we will owe $1,235.00 for our stay at AKV. There are no other costs involved. Point costs do tend to slowly creep up with regards to renting. Now, remember, although it is not something we are going to look into here, if you are renting points, you lose any extra benefits of DVC because you are not the DVC member. For the purposes of my later comparison, I am going to hold the cost of rental steady at $13/point. This is because the rental inflation tends to rise more slowly. In addition, I am going to offset not taking into account the slight inflation of the rental cost by the fact that Dave’s site is slightly overpriced and you could probably find better deals if you are willing to assume a little more risk.

Renting as Hotel
The cost of staying at Disney on-site is on a per-night basis. The current cost (as of 3/1/13) of a seven-night stay at AKL, standard view during late June is $2,622.41. Now, historical data of these room rates is difficult to find. However, using data from other sites, it seems Disney raises room rates between 3% and 4% a year. For the purposes of the later comparison in this article, I will assume a 3.5% increase annually in rates. Now, a big sticking point when considering comparing to Disney’s rack room rates is that rarely have people paid these rates in the last 5 years. It is very easy to compare some DVC to the rack Disney rates and come out with a favorable break-even point. You would almost have to be trying to not at least find a 10% room discount rate. Many people can find 30% room discount rates or higher. As of right now, the current 30% discount off the rack room rate at Disney expires before our proposed stay in late June. However, if you can get as much as a 20% discount, the prices goes to $2,097.93. That’s a $524.48 decrease.

Direct Comparisons

Now we get down to it. In the following graph, I will be comparing costs of ownership in DVC over time versus other options. Pay special attention to the break-even point. The break-even point is defined as some time in the future when the cost of one option switches from becoming less advantageous to more advantageous. It is this break-even point you are looking for. Simply put, break-even point means: how long does it take for one option to make more economic sense than the other.


As you can see by the above graph, for the variables I chose to compare, DVC eventually comes out ahead. Even when you compare direct purchase from DVC (red line) versus a 20% discount on the rack room rate (green line), the break-even point is between year 8 and 9. If you were to compare resale (yellow line) versus rack room rate (blue line), the break-even point sits between year 3 and 4. I am not trying to ignore the large pink elephant in the room. Look at renting points (black line)!! In fact, the only favorable comparison to renting points is buying a resale DVC contract and even then the break-even point is between year 13 and 14! Now, the major downside of renting points is the inherent uncertainty in the system. In addition, there is no guarantee that you can get exactly what you want when you want. Lastly, there is no way to predict what will happen to this market over time. The market for resale has been pretty steady for at least the last five years.

Remember, I purposely did not figure in any DVC discounts. Depending on how you vacation, DVC discounts can amount to hundreds of dollars of savings per year. This fact could shift your break-even point to the left.


It is very easy with any type of statistical analysis or scientific analysis to be tempted to form conclusions that are NOT supported by the data. Here is what you can conclude from my data above: if you are a family that can fit into a single studio room, prefer Animal Kingdom Villas or Lodge, and go to Disney World once a year for one week during Magic Season, then DVC will eventually pay off, except when its compared to renting points from a DVC owner. There are a number of variables that many people choose that can easily push your break-even point further out. These variables include larger rooms, upgraded views, concierge lounge and initial purchase financing. This data also begs the question, will your children or you still be interested in doing a Disney vacation every year until your break-even point? Families age and mature. New experiences are sought. Vacation preferences change. However, I think for those who are convinced that Disney is a place they want to return to over and over again for many years to come, then under the right circumstances, DVC could be a financially sound decision.

I would love any feedback regarding this article.
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won't let you order a nice scotch
Due to popular request, I am expanding the cost analysis of DVC purchase. This time, I am going to look a little more closely at the options for either a larger family (6 or more) or a medium sized family that just cant fit in a single hotel rooms space. I have three kids whom I adore. However, a weeks worth of having to co-exist in a small space can be taxing to say the least.
We are going to shift home resorts to Bay Lake Tower, which happens to be my home resort. Location, Location, Location. I am a big believer. We are going to be throwing around a few more dollars also. I am going to compare the costs of a two bedroom villa, standard view, at BLT with renting 2 rooms every year. Now, most people when having to get adjoining rooms to fit their family would not choose something as expensive as the Polynesian, BUT some have the means to and do. So I will be comparing a two bedroom villa at BLT with renting 2 rooms at two separate resorts: the Polynesian and Port Orleans – Riverside.

Bay Lake Tower Purchase
If you will remember from my first article, you have two main costs at DVC: your initial purchase and your annual dues. Reserving one full week per year during Magic Season at Bay Lake Tower standard view will cost you a total of just under 400 points per year, so we will round up to 400. Currently, if you purchase over 120 points at BLT you will get $5 off the asking price of $165 per point. That makes your initial buy-in $64,000. Again, as I stated in the earlier article, it is entirely possible that you could get additional discounts and bonus points but for the purpose of this article we are not going to include those. In addition, there are probably not a ton of families that are willing to lay out the entire buy-in amount of $64,000. I will not be including potential financing in this article either. So remember, if you are going to have to finance a large portion of your buy-in, this will shift this cost much higher and could easily move this into the “won’t ever make economic sense” category.

Bay Lake Tower Annual Dues
BLT is actually one of the cheaper DVC resorts when it comes to annual dues. There are no animals to feed or grounds to maintain. This is essentially a medium-rise luxury hotel. BLT is $4.50 per point per year. For 400 points, you will be required to pay $1,800 per year. Again, you can pay this in one lump sum a year or break it up. Like in the previous article, I am assuming a 4% increase in dues per year.

Polynesian Resort
This one is not cheap. The price for a one-week stay at the Polynesian during Magic Season without discounts is $4,988.59. This is with taxes. So, to rent 2 adjoining rooms would be $9,977.18. Ouch! As per the previous article I am assuming a 3.5% increase in room rates per year. Remember, in the chart below, you will be looking at the rack rate, NOT a discounted rate, so adjust accordingly.

Port Orleans – Riverside
Much more reasonable. The same one-week stay at Port Orleans – Riverside will run you $2,799.41. Two adjoining rooms would be $5,598.82. As with the Poly, I am assuming a 3.5% increase in rates per year and again, this is rack rate.



As you can see above, your break-even point for purchasing DVC direct from Disney at BLT is somewhere around 7 years when compared to 2 rooms at the Polynesian. Remember, this is against the rack room rate at the Polynesian. Oftentimes, you can get some type of a room discount so rarely do you have to pay full price and this could shift your break-even point further out. When you compare this to 2 rooms at Port Orleans – Riverside, it becomes a much more difficult problem. The break-even point shifts WAY out to almost fourteen years!! Again, this is against the rack rate.
Now, a few variables could change this graph dramatically. If you were to purchase your DVC contracts from the resale market, then my guess would be that you would save dramatically on your purchase and could help BLT make a little more economic sense. Conversely, its not uncommon to be able to get 30-40% discounts off the rack rate on deluxe resorts (Polynesian).
My personal opinion (major editorializing here) is that it is much harder to make economic sense of purchasing enough points for a one week stay at BLT in a two bedroom villa when compared to other conservative options, especially if you are purchasing direct from DVC. Thus, I would say that this option remains largely a decision to be a little less frugal for the comfort of a two-bedroom villa and the convenience of staying right next to the Magic Kingdom.
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