DVC Direct Price Increase

[TravelTime]

https://www.dvcresalemarket.com/blog/anticipated-direct-price-increase-coming-january-16/

“It is being reported by DVCNews.com and DVCInfo.com that a direct price increase is coming on January 16th. Although there was never a formal announcement, which is unusual as it tends to drive selling urgency for direct sales, this increase comes as no surprise with a 27% buy back rate on right of first refusal in December. Note that Disney Vacation Club has not confirmed increases, so prices may be subject to change...”​

Grand Cal will be $260 and Grand Floridian will be $245. Astronomical increases in less than 2 years. Grand Floridian was $185 direct in Dec 2017, a 32% increase since then. Poly was $176 in Dec 2017, now it is going to $235, a 34% increase. Grand Cal was $185, now $260, a 41% increase.

The economy must be really hot right now. No wonder the Fed is increasing rates. It needs to slow down inflation!

Here are prices in 2017:
https://dvcinfo.com/dvc-direct-price-increases-january-17/

Compare to new prices as of Jan 16, 2019:
https://www.dvcresalemarket.com/blog/anticipated-direct-price-increase-coming-january-16/

 

[MichaelColey]

Wow. That's just dumbfounding to me. We bought our small 25-point contract resale for a fraction of that. Fortunately, it was before they removed most of the restrictions on resale contracts, so we're grandfathered in with most of the perks.

 

[littlestar]

Holy smokes! Beach Club Villas is going up a lot and it expires in 2042.

 

[TravelTime]

Holy smokes! Beach Club Villas is going up $40 a point direct from Disney. And it expires in 2042.

Location, location, location.

 

[TravelTime]

I still think Disney may be making a mistake if it does not allow resale owners at its new resorts to internally exchange into other resorts. To me, the smaller the delta between resale and direct, the easier it is to sell direct. If DVC shuts down the resale market, I think selling direct to many of us will be harder. With all the Disney boards, words spreads quickly to Disney’s most loyal customers.

Disney can argue that most DVC buyers are not aware of resale and prefer to buy direct. However, if Disney were not threatened by resale, they would not be trying to shut it down. So I see some possible inconsistences in their strategy. I am not yet convinced they will make the resale restrictions on the new resorts as extreme as you can only use at your home resort.

 

[MichaelColey]

Holy smokes! Beach Club Villas is going up a lot and it expires in 2042.

I know, right? That's something like $10/point/year on top of maintenance fees. That'll make it close to $20/point/year total. With studios averaging almost 20 points/night, that's $400/night for a studio. About $750/night for 1BR, and approaching $1000/night for a 2BR. The savings just isn't there anymore.

I stay off-site in 2BR or 3BR timeshares for less than 1/10th of that. I don't mind 10 minutes of driving.

 

[TravelTime]

I know, right? That's something like $10/point/year on top of maintenance fees. That'll make it close to $20/point/year total. With studios averaging almost 20 points/night, that's $400/night for a studio. About $750/night for 1BR, and approaching $1000/night for a 2BR. The savings just isn't there anymore.

I stay off-site in 2BR or 3BR timeshares for less than 1/10th of that. I don't mind 10 minutes of driving.

A studio at 20 points a night is $140 - $160 depending on your average cost per point. It now ranges between high $6s to $7s pp. Only a few places are about $8 pp in MFs. My average right now is a little under $7 pp.

A 1 br ranges from about 30-50 points per night (only more during very high seasons and only at the high end for the premium resorts like VGF with lake view). So that would range from $210 to $350 per night on average. It could be lower and not much higher.

Not sure where you got your numbers.

 

[littlestar]

Glad we bought our Beach Club Villas points back in 2002 for $80 a point. Our first DVC purchase in February of 2002 was at the Villas at Wilderness Lodge for $75 a point. Amazing how the prices have increased.

 

[Lisa P]

With studios averaging almost 20 points/night, that's $400/night for a studio. About $750/night for 1BR, and approaching $1000/night for a 2BR. The savings just isn't there anymore.

A studio at 20 points a night is $140 - $160 depending on your average cost per point.

Maybe somewhere between... for a new purchaser.

Beach Club will now be $225/point purchased from DVC. With only 23 years left on the contract, that's $9.78/point/year (rounded to $10) for purchase plus $6.94/point/year (rounded to $7) for annual dues, equals $17/point for a new BC purchaser. At 20 points a night, a studio would be $340/night. At 40 points a night, a 1BR would cost $680/night. Seasons give a wide range: studios are 15-28 points per night, 1BRs 27-56, and 2BRs 37-71.

I agree, Michael, it seems like a savings is not really a given anymore, with so many alternatives, both onsite and offsite, to making a new DVC purchase. Waiting to see the hotel rate increases that they apparently anticipate with the openings of new attractions under construction.

 

[MichaelColey]

Maybe somewhere between... for a new purchaser.

Beach Club will now be $225/point purchased from DVC. With only 23 years left on the contract, that's $9.78/point/year (rounded to $10) for purchase plus $6.94/point/year (rounded to $7) for annual dues, equals $17/point for a new BC purchaser. At 20 points a night, a studio would be $340/night. At 40 points a night, a 1BR would cost $680/night. Seasons give a wide range: studios are 15-28 points per night, 1BRs 27-56, and 2BRs 37-71.

Exactly. And that doesn’t even factor in interest, opportunity cost of the purchase price, or future MF increases. The real price is even more than that.

I just can’t see any way to justify $700/night for a 1BR DVC (and even more for bigger units). My net cost exchanging into a very nice 2BR or 3BR off-site timeshare is less than that for a WEEK.

 

[TravelTime]

Exactly. And that doesn’t even factor in interest, opportunity cost of the purchase price, or future MF increases. The real price is even more than that.

I just can’t see any way to justify $700/night for a 1BR DVC (and even more for bigger units). My net cost exchanging into a very nice 2BR or 3BR off-site timeshare is less than that for a WEEK.

I guess we do not really know our cost until we sell. The cost will depend on how many years on the contract and what price you can sell at. My contracts are not 20 years nor did I pay that much per point. I think the analysis you are listing is the worst case. But it does make me wonder why anyone would buy the resorts expiring in 2042 at full retail price.

 

[Dean]

I still think Disney may be making a mistake if it does not allow resale owners at its new resorts to internally exchange into other resorts. To me, the smaller the delta between resale and direct, the easier it is to sell direct. If DVC shuts down the resale market, I think selling direct to many of us will be harder. With all the Disney boards, words spreads quickly to Disney’s most loyal customers.

Disney can argue that most DVC buyers are not aware of resale and prefer to buy direct. However, if Disney were not threatened by resale, they would not be trying to shut it down. So I see some possible inconsistences in their strategy. I am not yet convinced they will make the resale restrictions on the new resorts as extreme as you can only use at your home resort.

The only way to prove it is to have it not sell so they have to reduce the price or offer incentives. If it sells, it's "worth" that amount to someone.

 

[ljmiii]

I just can’t see any way to justify $700/night for a 1BR DVC (and even more for bigger units)....

When people ask me if they should buy DVC I ask three questions in return, "Do you plan on visiting WDW at least once every two years for at least the next 10 years?", "Can you plan at least 7 and ideally 11 months in advance", and "Do you really want to pay a premium to stay 'on property'?" Only if the answer to all of these questions is 'Yes' should you buy.

$700/nt is less (depending on the day substantially less) than paying cash. Assuming you can find cash availability at all. I just looked for a day around Easter and saw no availability at BCV (for any size room) and a 1BR at BLT is $1202-$1365 per night including tax.

But it does make me wonder why anyone would buy the resorts expiring in 2042 at full retail price.

As the RE broker says, "Location, location, location." If you want to stay at a resort that is walkable to EPCOT and HS for the next 22 years you are going to pay through the nose - one way or the other.

 

[ljmiii]

Exactly. And that doesn’t even factor in interest, opportunity cost of the purchase price, or future MF increases. The real price is even more than that.

It also doesn't factor in the residual value of the contract in 2042-ish. Which *could* be $0...or could be a number substantially higher than that. Roughly speaking there are four camps of belief as to what DVC will do for the WDW resorts as 2042 approaches. Nothing, offer a better executed OKW-style extension, offer a option to 're-buy' before opening sales to the general public, and offer an option to 'pre-buy' at a discount off the general public prices. Only in the first of those four cases is the value of existing contracts $0.

(BTW, I say "WDW resorts" as it is unclear if DVC will keep Vero and HHI. There is also a school of thought that DVC will blow up the resorts in 2042 and start fresh...but I don't see them spending that kind of money if they don't have to - the buildings will only be 50ish years old at that point. It isn't as if we see similar speculation that Disney will blow up the Contemporary or Grand Floridian or any other of their resorts that are of a similar age or older.

*Maybe* to put a tower at BCV because of the location...but most of Disney's money at the Beach and Yacht Club comes from the hotel/convention side so I don't see that happening.)

 

[rickandcindy23]

On Disboards, there is a thread for ROFR. We should start one here for resales of DVC. I don't know that TUGgers have gone as crazy over DVC as Disboards people.

I bought our SSR and OKW contracts at $50-$65 per point quite a few years ago. I will be very old in 2042, when OKW expires. I don't think I will care much.

 

[ljmiii]

On Disboards, there is a thread for ROFR. We should start one here for resales of DVC....

I'm not saying we shouldn't, but the usual advice I've read on TUG is for everyone to post their ROFR experiences (no matter what timeshare system) on rofr.net

 

[TravelTime]

On Disboards, there is a thread for ROFR. We should start one here for resales of DVC. I don't know that TUGgers have gone as crazy over DVC as Disboards people.

I bought our SSR and OKW contracts at $50-$65 per point quite a few years ago. I will be very old in 2042, when OKW expires. I don't think I will care much.

I suspect there are very few DVC owners among Tuggers. Many of the folks who have been commenting on the recent threads seem to be non owners. It would be nice to know which Tuggers are DVC owners to get some perspective on their comments.

I think the ROFR information on Disboards and elsewhere is more helpful than ROFR.net or TUG because they have hundreds of people reporting every quarter for all the resorts. I do not think there are enough Tuggers to get broad enough data here.

 

[TravelTime]

It also doesn't factor in the residual value of the contract in 2042-ish. Which *could* be $0...or could be a number substantially higher than that. Roughly speaking there are four camps of belief as to what DVC will do for the WDW resorts as 2042 approaches. Nothing, offer a better executed OKW-style extension, offer a option to 're-buy' before opening sales to the general public, and offer an option to 'pre-buy' at a discount off the general public prices. Only in the first of those four cases is the value of existing contracts $0.

(BTW, I say "WDW resorts" as it is unclear if DVC will keep Vero and HHI. There is also a school of thought that DVC will blow up the resorts in 2042 and start fresh...but I don't see them spending that kind of money if they don't have to - the buildings will only be 50ish years old at that point. It isn't as if we see similar speculation that Disney will blow up the Contemporary or Grand Floridian or any other of their resorts that are of a similar age or older.

*Maybe* to put a tower at BCV because of the location...but most of Disney's money at the Beach and Yacht Club comes from the hotel/convention side so I don't see that happening.)

They might rebrand some of the DVCs that are not as interesting or do not have as much of a following or emotional connection to their owners. I could see OKW and SSR being re-branded with a new theme. They are known as the “sleep around” resorts. DVC would only need to change theming and decor. They do this all the time anyway during refurbishments. I would not want them to change the theme in the classic and very popular DVC resorts like VGF, VGC, AK, Poly or BLT. Similarly BW and BC have a big following too so they would be better off keeping those themes going.

 

[MichaelColey]

I suspect there are very few DVC owners among Tuggers. Many of the folks who have been commenting on the recent threads seem to be non owners. It would be nice to know which Tuggers are DVC owners to get some perspective on their comments.

I own a 25 point DVC contract that I bought resale before most of the restrictions were added. I use it mainly for the perks, but enjoy a night every year or two at a DVC property for my ~$125/year MF. I’ve got tremendous value out of the perks, mainly buying discounted APs (five of us, three times, always with a promotion, so even better than the normal DVC discount). We also enjoy the DVC lounge at Epcot.

Like many (non-DVC) timeshare owners, I’m very frugal, and DVC isn’t frugal.

 

[MOXJO7282]

Exactly. And that doesn’t even factor in interest, opportunity cost of the purchase price, or future MF increases. The real price is even more than that.

I just can’t see any way to justify $700/night for a 1BR DVC (and even more for bigger units). My net cost exchanging into a very nice 2BR or 3BR off-site timeshare is less than that for a WEEK.

I say the same thing about the Marriott program in an age where just about everyone is internet savvy, how the hell do they keep selling these points at such obscene prices when all people have to do is do a quick internet search to find the same or very similar accommodations that can be had much lower than retail.

DVC is slightly different because people get crazy about staying onsite, which I totally understand but at some point the price just becomes obscene and prices out all but the wealthiest. I guess there is still a lot of very wealthy people again or at least Disney and Marriott think so because they just keep raising their prices year after year.

 

[littlestar]

We will soon be down to 275 DVC points total. We sold a 50 point Saratoga contract this last week to reduce our dues/points.

We started looking at DVC in 2001 (but held back after 911 happened) and finally bought our first contract in February of 2002. No way would I pay $200 a point or more for DVC today. DVC is the only ownership in our timeshare portfolio that we bought some contracts retail.

With the changes/restrictions coming for the future DVC resorts, we are warning family and friends to tread carefully with the new DVC (not as easy an exit strategy like in the past because of resale not being able to trade amongst DVC resorts). More like the leisure suit, sweaty armpit timeshare sales tactics (disguised with pixie dust) we all know and love - ha. The old DVC club was good while it lasted, though (I suppose the original 14 DVC resorts’ contract language should offer an easier exit strategy for those owners thank goodness).

 

[Lisa P]

When people ask me if they should buy DVC I ask three questions in return, "Do you plan on visiting WDW at least once every two years for at least the next 10 years?", "Can you plan at least 7 and ideally 11 months in advance", and "Do you really want to pay a premium to stay 'on property'?" Only if the answer to all of these questions is 'Yes' should you buy.

Sounds like good advice, helpful in determining a good fit with DVC.

$700/nt is less (depending on the day substantially less) than paying cash. Assuming you can find cash availability at all. I just looked for a day around Easter and saw no availability at BCV (for any size room) .... If you want to stay at a resort that is walkable to EPCOT and HS for the next 22 years you are going to pay through the nose - one way or the other.

Looking at Disney's website for cash rental nights between 4/13/19 - 4/27/19, the 2 weeks surrounding Easter this year, Sat-Sat, at BCV:

Short stays (3+ nights) during both weeks and a 7-night stay during the first week (between 4/13/19 - 4/20/19) tend to only show availability in studios.
7 nights of the second week (4/20/19 - 4/27/19) shows availability in all 3 unit sizes at BCV - studio, 1BR, 2BR.
14 nights, the full 2 weeks of Easter (4/13/19 - 4/27/19) shows availability in all 3 unit sizes.

It's only ~3 months out but apparently Disney holds back their limited prime season rental inventory for the big spender of a longer rental stay. Costs are better for the DVC member (vs. cash rental for a week) in all unit sizes but pretty close for a 1BR week, even after adding taxes to the cash rental (both over $6K for the week). For the few hundred dollars difference, the cash renter gets daily housekeeping (which would cost a similar amount if the DVC member purchased it) and the cash renter is not committed to annual dues.

However, renting from Disney for cash is not the only alternative to buying DVC. Renting from a current owner or from a points broker would cost about the same ($17/point) or less and it carries NO ongoing commitment. So it's hard to understand the value of actually buying direct at DVC's new, higher prices.

 

[TravelTime]

Here's a comparison. I know many people will criticize and say there are cheaper ways to get this but that is assuming they can find availability from a member renting points or a broker.

A 1 BR Club villa at Animal Kingdom for Easter week (highest point season April 20-27) is 466 points for the week. This works out to $3467 based on a cost per point $7.44 in MFs.

The price to rent this is $10,440 on the Disney website.

This is a difference of $6937.

AK has 38 years left on the contract.

Assuming you bought 466 points @ the new 2019 price of $176, your retail price for 466 points would be $82,016.
The break even is 11.82 years.

Assuming you bought 466 points @ $100 per point resale, your resale price would be $46,600.
The break even is 6.7 years.

After BE, all you get is savings and the savings increase as the rental prices increase.

Obviously this does not take into account the opportunity costs. However, in this analysis, we should assume you would have gone to AK every year or rented out your points.

I used an expensive example since it is peak season and requires a huge contract of 466 points.

But you can see why people are still buying direct and resale. If this is how someone likes to spend their vacations, then DVC is a great deal, even after price increases.

Plus if someone decides they changed their mind, they can still get some money back before the 38 years ends.

I did not include any perks such as AP discounts, 10-20% discount of food and other perks. That makes BE a little faster.

Grand Floridian, where I have a large chunk of my points, has no availability in any category for Easter week this year.

Some people may argue $10,000 is a lot to spend on one week's vacation. However, we used to easily spend this much in the past for a week. That is why I started buying timeshares at places I thought I might enjoy. The savings start to add up after 6-10 years. Some of my timeshares have a shorter breakeven. I think based on prices I have purchased at (almost all resale) as well as the style of travel we enjoy, our breakeven has tended to be 1-6 years on average across all of the various points programs and weeks we own.

 

[TravelTime]

People ask who buys all those private tours at Disney. Uhm, I should not admit this but I do. I have 3-4 planned for Ak and 1 for Epcot. I did get 15% off as a DVC member or an AP holder. It added several hundred dollars to my stay. Some of the private tours were not very expensive, believe it or not. The rhino and elephant excursions at AK are about $35 or so, less the 15% discount.

 

[Dean]

Here's a comparison. I know many people will criticize and say there are cheaper ways to get this but that is assuming they can find availability from a member renting points or a broker.

A 1 BR Club villa at Animal Kingdom for Easter week (highest point season April 20-27) is 466 points for the week. This works out to $3467 based on a cost per point $7.44 in MFs.

The price to rent this is $10,440 on the Disney website.

This is a difference of $6937.

AK has 38 years left on the contract.

Assuming you bought 466 points @ the new 2019 price of $176, your retail price for 466 points would be $82,016.
The break even is 11.82 years.

Assuming you bought 466 points @ $100 per point resale, your resale price would be $46,600.
The break even is 6.7 years.

After BE, all you get is savings and the savings increase as the rental prices increase.

Obviously this does not take into account the opportunity costs. However, in this analysis, we should assume you would have gone to AK every year or rented out your points.

I used an expensive example since it is peak season and requires a huge contract of 466 points.

But you can see why people are still buying direct and resale. If this is how someone likes to spend their vacations, then DVC is a great deal, even after price increases.

Plus if someone decides they changed their mind, they can still get some money back before the 38 years ends.

I did not include any perks such as AP discounts, 10-20% discount of food and other perks. That makes BE a little faster.

Grand Floridian, where I have a large chunk of my points, has no availability in any category for Easter week this year.

Some people may argue $10,000 is a lot to spend on one week's vacation. However, we used to easily spend this much in the past for a week. That is why I started buying timeshares at places I thought I might enjoy. The savings start to add up after 6-10 years. Some of my timeshares have a shorter breakeven. I think based on prices I have purchased at (almost all resale) as well as the style of travel we enjoy, our breakeven has tended to be 1-6 years on average across all of the various points programs and weeks we own.

For most of the time one can count on discounts inc Easter at 15-20%. Premier times with DVC tend to be some of the worst $$$ values comparatively speaking. The rental price, which can be better than owning since there are no home resort restrictions if you can find an owner, would be in the range of $7500 for 466 points and no tax. Even if you go yearly and assume you'd use that money for the trip, the break even is much longer since the opportunity costs/TVM are real even if one doesn't want to think about them. I ran the numbers. Comparing to renting at the current price of $16 per point adjusting for inflation on dues and rental costs at 4.5% and assuming a 5% ROR on the money (averaging out the first few years in a MM and the rest at market rates), I get a 14 year break even at $100 per point and a 24 yr break even at $176 PP. If you use cash it'll be a little quicker comparing to DVC but basically almost no one would consistently do DVC on cash.