Disney adds time shares despite recession

Posted Monday, June 1, 2009 9:36 AM | Contributed by Jeff

Three new Central Florida properties — along with 50 new units that will open later this year at Disneyland in Anaheim, Calif. — constitute the most ambitious expansion yet for Disney Vacation Club, Disney's 17-year-old time-share unit. It may also be the riskiest. The growth spurt comes as Vacation Club, like many other units across Walt Disney Co.'s media-and-entertainment empire, is being buffeted by the global recession and credit squeeze. Sales at the Celebration-based time-share business fell during the three months that ended March 28 — the first quarterly decline Disney has recorded at its time-share arm in at least 3 ½ years.

Read more from The Orlando Sentinel.

Monday, June 1, 2009 7:17 PM

The whole dvc is a scam.

Not only is it waaaay overpriced, but it is actualy a heck of a lot cheaper to just book a vacation youself.

Tuesday, June 2, 2009 8:55 AM

One vacation, sure.

Even under very conservative assumptions (e.g. you could earn 7% after taxes reliably in the market, etc.) a DVC studio costs about the same as a discounted Moderate Disney resort room and significantly less than a Deluxe Disney resort room. A DVC 1BR is about the same cost as a discounted Deluxe room, and is much nicer.

I don't own DVC---I don't spend that kind of money on vacations, and if I were renting conventionally, I'd be offsite where you get vastly more for your money. But, if you want to visit the Mouse every year or two, expect to do so for decades, and only staying onsite in something better than a Value resort will do, DVC is a no-brainer.

Last edited by Brian Noble, Tuesday, June 2, 2009 8:56 AM
Tuesday, June 2, 2009 6:23 PM

Totally Disagree with it being a scam, and agree with BN about it requiring more than one visit to make it worth it..

Initially it was about $15K for boardwalk and 275 points.. A whole week stay during low season is about 85 to 100 points for a studio depending on view. If you were to pay for the boardwalk you are looking at about $200 minimum or so a night.

Now like a loan, once the 15K is done and paid off, all you have is maintenance fees which are $5.21 per point, so I pay yearly $1400 for up to 2.5 weeks of staying at a room that minimum runs $200 a night, 2 weeks being $2800. I also have the share until 2042, so all I pay is just $1400 a year. (assuming no price change in maint fees, which does happen but very small changes.)

On top of that I get my premium pass at over $100 less than anyone else outside of Florida would get it and discounts (sometimes deeper than passholder rate) on food, events, shopping.

So im not sure where the idea of a scam comes in? I guess it depends on how many times you go.. We fulfill the cost break yearly! Not to mention the ability to walk to Epcot or take a boat to HS is nice.

Last edited by ridemcoaster, Tuesday, June 2, 2009 6:24 PM
Tuesday, June 2, 2009 7:01 PM

Since it's just my wife and I, and we only go once or twice per year, it works out the same staying in a moderate, minus the buy-in - We'd still love to do it one day, but at the same time, I'm so in love with Coronado Springs, that I'd hate to give it up, even for a deluxe villa.

Tuesday, June 2, 2009 9:11 PM

Did you just call me a moderate snob?? ;)

Just my wife and I too.. But for 1400 a year to stay up to 3 weeks total at a deluxe resort (mind you any deluxe resort on property.. not limited to my home resort), we felt DVC was worth it.. Passes alone, made the benefit even more Gucci.

C'mon RP.. Once you go deluxe you dont go back =)

Last edited by ridemcoaster, Tuesday, June 2, 2009 9:15 PM
Wednesday, June 3, 2009 8:58 AM


Do I understand you correctly in that your $1400/year cost totally ignores the $15k upfront cost? That is a cost as well.

Wednesday, June 3, 2009 9:19 AM

For those interested in the real costs, Mary Waring over at MouseSavers has a very nice analysis that most of the CPA-types that I know think is very sound. It includes an accounting of buy-in, considers the lost opportunity on that capital investment, and compares invest-and-rent to buy-and-use:


Note that this analysis is a cash purchase. If you finance, the benefit becomes a lot more dubious.

Edited to add: Raven-Phile, I've stayed at Old Key West several times now. It is fabulous. Once you've stayed in a 1BR unit, with a full kitchen, a washer-dryer, a balcony with a table that seats four, a king bed, and a whirlpool tub that fits two comfortably, you'll have a hard time going back to a 320 square foot box at CSR. OKW doesn't have anything like CSR's food court and the pool area isn't as spectacular, but your "personal space" would be just fabulous.

Last edited by Brian Noble, Wednesday, June 3, 2009 9:27 AM
Wednesday, June 3, 2009 11:33 AM

We always do the dining plan, so I've got to need for a kitchen, and I totally spend more time in the hammocks than in my room, anyway. :)

I like the deluxe resorts, don't get me wrong. I'm still considering "renting" someones points from them at some point, but when it costs less than $2000 for Jen and I to spend a week at CSR, including park hoppers and meals, I'm OK with that.

Wednesday, June 3, 2009 11:36 AM

The benefit of the kitchen isn't "cooking". The benefit is being able to grab a bite for breakfast without (a) having to get cleaned up or (b) scaring the other people at the food court.

The blender comes in handy, too. ;)

Wednesday, June 3, 2009 12:08 PM

Hahaha, I just mix my margaritas on the rocks. :)

I still just don't see it for us. Then again, it's just us - no kids or anything, so we can bring granola bars and orange crystal light packets, and have our breakfast that way.

edit: Not to mention we're usually still stuffed from dinner the night before, or holding off on a meal, for our next sit-down.

Last edited by Raven-Phile, Wednesday, June 3, 2009 12:10 PM
Wednesday, June 3, 2009 9:33 PM

Lankster said:

Do I understand you correctly in that your $1400/year cost totally ignores the $15k upfront cost? That is a cost as well.

No you didnt understand correctly. We have had this for several years now.. and have it for several years to come.. That 15K has long since been paid and we are quickly coming upon the number of trips have now paid for that between discounts, cheaper passes, times where i visited during $400+ per night days, etc.

Like I said.. This is assuming you dont just go once a year. Nor once a lifetime.. I have this till 2042. My cost break is nearing its time and from there its just savings..

Wednesday, June 3, 2009 9:56 PM

I'm not understanding correctly? This is what I have:

You paid your $15k up front. You pay $1400 per year after.

Is this correct? If so, therefore, your $1400/year cost ignores the $15k up front. I'm not saying you didn't get your money's worth. (Though no way in heck I could justify spending that--I take cheap vacations compared to this board.) I'm saying that for someone considering buying one of these it's misleading to say the cost is $1400/year--it is far more once you factor in the upfront cost.

The value of the thing I'm not commenting on, just the cost.

Wednesday, June 3, 2009 11:31 PM

Not sure what to say other than you handle your affairs how you see best.. I will handle mine as I see best..

I know the economics and what Ive put in and what ive gotten out of it.. It works for my wife and I based on how frequent we are there. Mileage may vary.. But its up to the driver to decide it, not the guy in the other car.

Thursday, June 4, 2009 1:14 AM

I think the real world example people want is, how much will it cost you per night assuming you stay "x" number of nights per year for "y" years, including the amortized up front cost.

Thursday, June 4, 2009 6:49 AM

Ok.. I dug up receipts from last year, and compared it to Boardwalk room prices. This is how I calculate the savings and how it works for us.

Lets call the $15k the "principle", and the $1400 the reoccurring.

Last year we did 2.5 weeks at Disney. Our stay at Boardwalk was on day the room was an average $300 per night (weekends can peak into the mid to high $300s and weekdays can hover $250 and higher, during the periods we were there).

We paid our ususal $1400 last year in maint fees.

If we decided to be 'regular joe' then at $300/d x 17 days = $5100.

Now subtract that from the $1400 we paid for a years worth of staying that gives us "equity" of -$3700. From this we can deduct that savings off my "principle" of $15K (mind you paid off long ago). From there you can see that every year we get a theoretical credit that eats away at the "principle". Im not going to break down my finances every year.. Thats no ones business personally, but you can deduce from this 1 year how we look at the savings over a period of time.

Then obviously if you stay that long you have reached the price break of a hopper vs a seasons pass. We get considerable discounds off the seasons pass vs someone not from Florida buying a pass. More savings. From the Pass we get 20% discounts off food (incl. alcohol).. More savings..

Does this make a bit more sense?

Thursday, June 4, 2009 9:00 AM

I'm not sure how my posts could be construed that I was trying to run anyone's affairs, but ok.

I'm in a business where I often have a choice to pay more for a better product that will save money on a yearly basis. I normally look for a 10 year or better payback time to justify the added expense. $15k over 10 years is $1500/year. Adding in the $1400/year gives $2900 for 17 days-- ~$170 a night. Sounds like a great deal compared to the $300/night you're talking about.

Can you resell these, and what is the resale price?

I can't justify it for many reasons, tops being that I don't care for Disney! I much prefer Universal, and I also stay in Tampa for $0/night with the in-laws.

But if I were doing the comparison, I'd include off-property places as well. The benefits of staying on-property have never been worth the cost to me. Obviously many people disagree with me--and they are free to drive their own car (or ride in Disney transportation), I won't interfere with them!

Thursday, June 4, 2009 9:39 AM

As I have been saying from earlier post.. Mileage may vary.. for our trend and our enjoyment of Disney it works VERY well for us.

Initially I didnt see a point to break down my personal economics, but if it helps someone understand that it can work if you have similar dynamics, im all for it. (Thanks Jeff) ;)

I just dont like when people say its a "scam", or nay say that it couldn't be economically feasible at all or some other uneducated remark because honestly it depends on your vacation habits. Works for me.. Works for lots of other people. Doesnt have to work for everyone to be a successful endeavor.

And yes you can resell them, or buy resells. They usually range within $50-90 per point. Really depends on how desperate the sale is, what resort its for, and how many points available. In fact I encourage going that route vs through Disney direct. Its much cheaper and you can get resorts that are technically unavailable, like Boardwalk..

Thats actually how we increase the amount of points is getting a resale and then gaining a new home resort (which allows you to reserve much further in advance).

You dont lose any benefits from resale.. They treat you exatly the same at Disney.

Last edited by ridemcoaster, Thursday, June 4, 2009 9:53 AM
Thursday, June 4, 2009 9:40 AM

ridem: I think what Lankster is getting at is that you are ignoring the lost opportunity and amortization of your initial capital expense (the "principal"). Take a look at Mary Waring's analysis to get a better explanation than I could give you. This is a very common mistake with timeshare owners. In some sense, it's not "material", because it doesn't affect your cash flow. On the other hand the MBAs and CPAs you know will cluck at you if you try to sell them with this analysis.

Lankster: if you are willing to stay off-property: stop, do not pass go, and do not buy DVC. The two are simply incomparable. I'm normally part of the great unwashed offsite community, and it's a lot less expensive to stay there. My worst-case effective stay cost is about $1,064 for a peak-season week in a 2BR unit at Wyndham Bonnet Creek, a resort that is "inside the gates" at WDW, but not Disney-owned. That includes amortization and lost opportunity on the purchase price, plus ongoing yearly costs. Usually, it's a lot less than that---anywhere from $500 to $750 a week.

Compare that to someone who buys Saratoga Springs resale, for $65 a point. (This would reliably pass ROFR today.) 2008 dues on those points were about $4.25. You'd need 318 points for a peak-season 2BR (more for a holiday week). At even 5% cost of capital, the SSR week has an effective cost of $2,385. And, 5% is probably way too low to cover amortization and lost opportunity.

Now, $2400 is equivalent to a nightly rate of $300 before tax, and that's a great price for a 2BR villa in a Disney-owned resort. But, for the difference in cost, I would rather drive myself to the parks, and do without EMH, and do other things with the money that's left over.

But, if you absolutely must stay on site, this is a great deal---in fact, I'd argue that right now is the time to buy DVC, resale of course. The economy has depressed prices lower than they've been in a long time.

Last edited by Brian Noble, Thursday, June 4, 2009 9:42 AM
Thursday, June 4, 2009 10:05 AM

I dont think I lost anything in my expense Brian. In fact over the years I think I have gained quite a bit. Ive seen the article you mentioned with mousesavers and Im fully confident for our family it was the right decision.

Our only worry is if we consider moving to Florida at some point, the ROI we get then.. But thats not a concern at this point.

I think the thing thats being missed in this thread is the danger of applying your own circumstance to everyone else.. We all dont have the same salaries, we all dont have the same desires, we all dont have the same level of ROI. One thing I have been consistant about is it works for us, and I know we arent alone.

You have to measure your own factors to see if it works for you.. My point is .. it can work.

And I agree.. Now is the time to buy from a resale, if it fits your needs.


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