Editorial note: First, I’d like to thank each and every one of you for visiting. This article is by far the most popular on the site and I appreciate each and every one of you visiting.
Rightly so, some commenters below have pointed out that I accidentally neglected to include some important information about the numbers I’ve posted. I believe in complete transparency, so here are the facts:
Comparing a one-bedroom villa to a hotel room is not a direct comparison as far as room size and amenities are concerned. However, I believe it’s a realistic comparison because it’s a reasonable way to use 200 points as compared to what a guest would pay cash for. In actuality, there are an infinite number of ways to use a DVC contract. An ideal solution would be to come up with a schedule of how someone would use their points over time, but my aim was to keep this simple and realistic and not simply an academic look at a studio against a hotel room, although some do stay only in studios.
If you are considering DVC, I implore you to do extensive research. At the bottom of this article I have provided the spreadsheet I used to calculate these numbers. Feel free to download it and adjust the numbers as you see fit. The initial values are the only ones that should need to be changed; the spreadsheet should take care of the rest itself.
Finally, I am considering writing a follow-up to this article with additional situations. Again, thank you very much for visiting!
The Disney Vacation Club (DVC) infomercial I reviewed recently led me to start thinking about DVC again. DVC on a strictly emotional level sounds incredible: having the ability to book Disney and other vacations using points instead of cash. However, I’m going to take all the emotion out of a DVC purchase today and look at it from a strictly financial standpoint. How much will DVC actually cost over the life of a contract? When does DVC break even compared to paying for Disney hotel accommodations in cash?
Let’s start with three DVC purchasing scenarios. All three are for 200 points; the first is for Animal Kingdom Lodge through Disney, the second at Animal Kingdom Lodge through resale, and the third for Saratoga Springs through resale. Disney’s cost per point includes current incentives and resale costs per point were found in current listings on dvcbyresale.com.
|Cost per Point||Number of Points||Total Upfront Cost|
|Animal Kingdom Lodge (through Disney)||$110.00||$200.00||$22,000.00|
|Animal Kingdom Lodge (resale)||$83.75||$200.00||$16,750.00|
|Saratoga Springs (resale)||$65.00||$200.00||$13,000.00|
A resale at Saratoga Springs is the absolute cheapest way to buy into DVC on Walt Disney World property. However, buying a resale anywhere will save you a good deal of money versus buying directly from Disney ($5,250 in our Animal Kingdom Lodge example above).
The next part of the DVC monetary equation is dues. Dues are collected from every DVC member based on the number of points owned at a DVC resort. These dues are similar to homeowners association fees; they go toward the upkeep of the resort. DVC dues go up around 3-4% each year according to DVCNews.com. For this example I am assuming I purchased DVC in 2011 and will have all 200 of my points available in 2011; therefore, I will be paying full DVC dues for 2011 and each year thereafter. Unfortunately, as of this writing the dues for 2011 are not yet published; however, I am assuming a 3% increase annually. For 2011 I expect to pay $5.10 per point ($1,019.70 total) at Animal Kingdom Lodge and $4.59 per point ($918.76 total) at Saratoga Springs.
For the sake of simplicity I plan to visit Walt Disney World each year the last full week of August starting in 2011. This is generally near the beginning of Value Season for the resorts and Dream Season for the DVC resorts. 200 points will be enough to book DVC accommodations at the home resorts at this time of year. In addition to the three DVC options above, I have chosen six resort rooms to compare at rack rates. For the Value Resorts, all of which are priced similarly, I chose a standard room at Pop Century. For the Moderates, I chose a standard room at Port Orleans French Quarter. Finally, for the Deluxe resorts, I chose a standard room at Animal Kingdom Lodge, a water view at the Boardwalk, a studio at Saratoga Springs and a Contemporary Club Level room with a Magic Kingdom view.
I will use the six resort room options and the three DVC options to find break-even points for each. First, here’s a look at total costs in 2031, twenty years after purchasing DVC. I am also assuming a 3% increase in the cost of hotel rooms annually. According to DVCNews.com, resort rates increase 3-5% each year.
|Twenty Year Cost|
|Animal Kingdom Lodge (through Disney)||$51,241.41|
|Animal Kingdom Lodge (resale)||$45,991.41|
|Saratoga Springs (resale)||$39,346.81|
|Pop Century Standard Room||$16,775.74|
|Port Orleans French Quarter Standard Room||$31,113.99|
|Animal Kingdom Lodge Standard Room||$48,721.35|
|Saratoga Springs Deluxe Studio||$59,044.88|
|Boardwalk Water View Room||$82,588.28|
|Contemporary Magic Kingdom View Club Level||$117,430.21|
Twenty years later, all three example DVC purchases cost less than paying cash for a Saratoga Springs Deluxe Studio, a Boardwalk Water View room, and a Contemporary Magic Kingdom View Club Level room each year.
The following chart shows final costs for Animal Kingdom Lodge as compared to cash rooms. The Animal Kingdom Lodge contracts last until 2057.
|Animal Kingdom Lodge (through Disney)||$124,374.31|
|Animal Kingdom Lodge (resale)||$119,124.31|
|Pop Century Standard Room||$58,731.95|
|Port Orleans French Quarter Standard Room||$108,930.20|
|Animal Kingdom Lodge Standard Room||$170,573.66|
|Saratoga Springs Deluxe Studio||$206,716.40|
|Boardwalk Water View Room||$289,141.92|
|Contemporary Magic Kingdom View Club Level||$411,123.67|
As shown by the chart above, at current costs an Animal Kingdom Lodge contract through either Disney or resale will cost less than all the Deluxe resort options. It will not cost less than paying cash each year at a Value or a Moderate resort.
Here are the comparisons for the Saratoga Springs resale. Saratoga Springs contracts end in 2054, so the numbers are different for all resorts.
|Saratoga Springs (resale)||$94,814.12|
|Pop Century Standard Room||$52,093.32|
|Port Orleans French Quarter Standard Room||$96,617.52|
|Animal Kingdom Lodge Standard Room||$151,293.25|
|Saratoga Springs Deluxe Studio||$183,350.67|
|Boardwalk Water View Room||$256,459.42|
|Contemporary Magic Kingdom View Club Level||$364,653.24|
The final cost of a Saratoga Springs resale contract compares favorably to all cash room options except for Pop Century. The difference between the final cost of a Saratoga Springs DVC contract and Port Orleans French Quarter, however, is less than $2,000.00.
What can we draw from this exercise? A DVC contract is generally worth the outlay if you plan to visit WDW very regularly and stay in Deluxe accommodations. Even the cheapest on-property DVC option, a Saratoga Springs resale, is only barely cheaper than paying for a moderate resort with cash every year. I excluded extraneous costs such as closing costs and property tax to make an apples-to-apples comparison. These would eat into any savings a little further. Also, this excludes any discounts that may be available each year, reducing the cash cost of a room. Any savings through DVC are definitely long-term savings. Disney claims the cost of DVC can be made up in as little as four or five trips. In actuality, of the comparisons here, only the Saratoga Springs resale costs less in five years than the Contemporary Magic Kingdom View Club Level room. I also believe DVC rooms carry a cash premium for no other reason than to make a direct comparison from cash costs to DVC costs.
Because of the comparisons I’ve made here, I’m not planning to invest in DVC right now. At this point, we’re a Value and Moderate Resort family; paying cash and keeping an eye on the discounts serves us better than purchasing a DVC contract. DVC is a very personal decision; I suggest running similar numbers for your own family before making an investment.
For reference I’ve included my complete calcuations here.
This post is part of the eleventh Disney Blog Carnival. Click for more excellent Disney blog articles.