Mr D's ABC's of DVC Guide

DVC Overview

Introduction

• Full Disclosure, I am not a DVC member but have nearly been, several times, so over the years I have had a level of interest and wish I had joined back when we first looked at it. Free dining was probably the main reason I did not.

• This is not a sales pitch for DVC.

• Lots of people are interested in DVC, it’s been incredibly popular but it is not right for everyone.

• This is a guide that will go a little deeper than the basics and should be a good start point for anyone interested.  We will cover;

• What is DVC

• How does it work?

• What does it cost (Direct from Disney)

• Who is it for and the Pros and Cons

• Points to Note

• Buying resell - What is that? How does it work, pros and cons.

• Renting Points - What is that? How does it work, pros and cons.

What is DVC?

• Disney Vacation Club is a pre-paid vacation plan, which differs slightly from the traditional definition of a timeshare.

• You buy points, as opposed to weeks, and these can be used to rent one of the accommodation types at a DVC resort.  Also, you can use points for non-DVC resorts, Adventures-By-Disney, cruises etc, but these are typically not a good deal and not covered in this podcast.

• A Disney Vacation Club purchase is a real estate contract and can be viewed as an asset, albeit with a limited life (up to 50 years from new) and can be sold or bequeathed.

• Disney's Old Key West Resort was the first Disney Vacation Club Resort and opened on December 20, 1991 and was formerly known as Disney's Vacation Club Resort until January 1996.

• Let’s look at OKW as a start to see what the various accommodation types are;

• OKW has the largest rooms of any of the fifteen Disney Vacation Club Resorts.

• The resort is designed with a Key West theme.

• Deluxe Studio (sleeps 4/5) - 390 sq ft (36 m2)

• 2 queen sized beds, the OKW Studios are the only Disney Vacation Club studios that have 2 beds rather than a bed and pull-out couch.

• A small patio/balcony with 2 chairs and a small table

• Kitchenette; microwave, toaster, coffee maker, a sink, and a mini-refrigerator.

• One Bedroom Villas (sleeps 5) - 1,005 sq ft (93.4 m2)

• A large open plan lounge/diner/kitchen area with a twin sleeper couch, a large sleeper chair, 4-person dining room table, and a fully equipped kitchen.

• The master bedroom has a king sized bed

• Bathroom has a two-person jacuzzi, 2 sinks, and a shower.

• There is a laundry room, with a full-sized washer and dryer.

• Two Bedroom Villas (sleeps 9) - 1,410 sq ft (131 m2)

• A Two Bedroom Villa is the same as a One Bedroom, plus an additional bedroom off the living room, which is like a Studio. The only exception is that in some of the Two Bedroom Villas there is an additional walk-in closet in place of the studio entrance door and an additional sink in place of the kitchenette.

• Three Bedroom Grand Villas (sleeps 12) - 2,375 sq ft (220.6 m2)

• 1 king bed, 2 queen beds, 2 double beds, and 1 queen sleeper sofa.

• 4 bathrooms

• A very large living room area with everything you get in the One and Two Bedroom Villas.

• “Olivia's Café” is a table service restaurant and offers; breakfast, lunch, and dinner menus, with a few Key West touches.

• “Good's Food to Go” is a small counter service restaurant open for breakfast, lunch, and dinner. It serves fresh fruit and pastry for breakfast, with a small selection of hot items. For lunch and dinner, you can get hamburgers, hot dogs, pizza, and sandwich wraps.

• The “Gurgling Suitcase” is the bar at Disney's Old Key West Resort.

• Turtle Shack is a counter service location at the village pool on Old Turtle Pond Road. It offers a smaller menu than Good's Food to Go. The Turtle Shack is open seasonally and weather permitting.

• Disney's Old Key West Resort is served by Disney buses with five bus stops located throughout the resort. Watercraft service is available to Disney Springs.

• OKW is a dedicated DVC resort, i.e. not bolted onto a regular WDW resort).

• Currently 15 Disney Vacation Club resorts, with 1/2 more in development: a new Disneyland Hotel tower in California and Reflections – A Lakeside Lodge at Walt Disney World. The latter has almost certainly been quietly cancelled/postponed.

• Old Key West (Dedicated)

• Saratoga Springs (Dedicated)

• Animal Kingdom Lodge

• Polynesian

• Grand Floridian

• Contemporary - Bay Lake Tower

• Wilderness Lodge – Boulder Ridge

• Wilderness Lodge – Copper Creek

• Beach Club

• Boardwalk

• Riviera (Dedicated)

• Hilton Head (Dedicated)

• Vero Beach (Dedicated)

• Grand Californian

• Aulani Hawaii (Dedicated)

• Disney’s Riviera Resort is the newest DVC resort. It’s main selling point being a Skyliner station providing gondola access to Disney’s Hollywood Studios and Epcot.

• For the Riviera Resort, DVC implemented a new restriction for resale buyers. More on that later.

How does it work?

• Let’s look at buying direct from Disney and assuming a “new” resort. i.e. Copper Creek at the WL or the Riviera Resort.

• When Disney build a resort, they allocate a fixed number of points to that resort based on the number and type of accommodation types.  This number does not change.

• They produce a “points chart” for each resort which shows for each “travel period” (recently increased to 7) and each accommodation type showing the number of points needed per night/week.

• Sun-Thurs less points than Fri-Sat.

• Travel periods can jump about, the first and “cheapest” travel period is Sept 1-19 but second is a group of dates (Jan 1-31 + Sept 20-30 + Oct 1-14).

• The point chart is updated by Disney each year, and they can flex the number of points to balance the demand for accommodation types but they cannot increase the overall points. This part of the cost is relatively “fixed”.

• When you buy from Disney, you buy a 50-year contract for a certain number of points, for each of those 50 years. This is essentially a legally binding realty contract.  As such it can be passed on to children, etc.

• When you buy a contract, it is for a specific resort, say Copper Creek, this becomes your “home” resort.

• That means you have early booking privileges at that resort.  You can book up to 11 months in advance.

• It you want to stay at any other DVC resort you can only book from 7 months in advance.  This is key, as at busy times like Christmas you may struggle to get what you want.

• You should buy where you want to stay. This is especially true with the popular and small resorts, such as the Beach Club Villas, which are difficult to book at 7 months for much of the year.

• You can buy multiple contracts and have multiple home resorts if you have the funds.

• Can only use home resort points at the 11 month window

So what does it cost to buy DVC?

First let’s think about how many points we might need

• You want enough, but not more than you need due to the cost.  Do your research; how often to do you vacation? for how long? what time of year? and what size accommodation do you need?  But you need to know that you can Bank and Borrow points to combine them if you don’t want to go every year.

• Say you go every 2 years, for two weeks in July and stay in a studio.

• At Copper Creek a studio in July will cost 121 points per week, so you need 242 points. But you only need that every second year.

• You can combine up to 3 years points together; this year’s points (2021) you can “bank” or save into next year (2022). You will still have your 2022 points but you can also pull forward your points from 2023 if needed.

• So, in this example you go every other year, so you only need 121 points per year, say 150 in case you decide to go at a more expensive period. 

Disney is currently selling Riviera, Copper Creek and Aulani.

• Riviera is $201 per point

• Copper Creek is $220

• So, Riviera points are cheaper to buy.

There are also some admin fees or closing costs, so for 150 pts;

• Riviera will cost $28,852.59

• Copper Creek will cost $31,753.52

However, there is more to the cost, as each point also has a yearly maintenance due associated with it.  Just as the cost to buy the points is different for each resort, so are the maintenance dues.

For 2021 they are;

• $8.3833 for RR

• $7.5903 CC.

So, for 150 pts the maintenance dues are;

• $1,257.50 per year at Riviera

• $1,138.55 at Copper Creek. (Difference of $119/year).

The maintenance dues do go up over time.

From this you can do a rough calculation, ignoring the Value of “Money over Time”, and over the 50 years it will average out at;

• $1834.55 per year at RR

• $1,773.62 at CC.

Compare these figures to what you would pay for your normal Disney accommodation but remember that you can sell at any point and get some money back.

If you have to finance your DVC purchase, any potential savings could be wiped out by the interest you pay on the loan, so calculate those too. 

Who is DVC “right” for?

• From a purely economic perspective, Disney Vacation Club won’t make sense for a lot of people. 

• Whether it’s a good deal for you depends on; your party size, resort level preference, and how often you’ll visit Walt Disney World.

• If you visit WDW regularly (at least every 2 to 3 years) and think you will do for the foreseeable future, it should be of interest and thanks to the banking and borrowing system, it isn’t necessary to take a Disney vacation every year.

• If you plan your vacations at least 7 months out.  11 months even better.

• Accommodations Preferences – If you’re a Values and Moderates type person, Disney Vacation Club may never make financial sense for you. However, it’s tough to anticipate your vacationing preferences in the future. Many people “trade up” over time.

• If you prefer Deluxe, Disney Vacation Club might be right for you.

• If you want to own “a piece of the magic” and be in the “club”

• If you need or want more space but still want to stay within the “Disney bubble”, if you are tired of sleeping in one room with kids or holiday in a larger group, for example.

• If you like being able to do your laundry, prepare a meal in your kitchen, or enjoy spending a fair amount of time in the resort then DVC may be right for you.

Pros and cons and what you should think about before you decide to purchase…

Pros

• Over time DVC is a saving, if you go regularly and would normally stay in Deluxe resorts.

• We could have bought AKL in 2009 for $104/pt and now its $175/pt direct and $100-120 resale and we have been probably visited another 10 times since then and our normal stay is 17/18 nights. 

• There is flexibility; you can borrow, bank or transfer, you can rent out your points to others if you cannot use them and you can sell up if you have a change of heart.

• Holiday costs are more predictable, once you have bought the points you know what the monthly dues will be (but don’t forget; airfare, passes, etc).

• It has retained value very well, far better than regular timeshares. (OKW was originally $55/pt, it’s now around $105-$115 resale and $180-190 from Disney). Although that’s not a guarantee, it does give some comfort that you can sell for a reasonable price and Disney’s “Right of First Refusal” helps maintain the value of your contract.

• Psychological – Owning a piece of the “magic”, being in the “club”, bragging rights, peace of mind knowing that you have (somewhat) prepaid your vacations, etc.

• Membership Perks – DVC members get discounts on Annual Passes for Walt Disney World, dining and merchandise. There are several members only pins, events, a small magazine mailed to members, and other offerings throughout the year as well. Access to the “Top of the World” Lounge at the Bay Lake Tower. One major perk is free parking. That’s a potential savings of $24/night.

• A “Membership Magic” promotion runs from time to time that gives Disney Vacation Club members discounts on Disneyland, Walt Disney World, and the coast-to-coast Premier Annual Passes. Disney Vacation Club members may also purchase a Tables in Wonderland card.

• It is important to note that none of these perks are contractual rights, so Disney is free to terminate or reduce these benefits at any time and has done so in the past.

• These Membership Perks are no longer available to those who purchase their contracts via the resale market, we’ll come back to that. 

Cons

• If you find the Value Resorts acceptable, and spend minimal time in the resorts, DVC may not be a good option for you.  For two reasons;

• The initial cost of DVC plus the cost of the annual maintenance fees will be higher than the sum of the yearly cost of a room at a Value Resort over the life of the Disney Vacation Club contract.

• Secondly, because you simply don’t need one of the vacation-home style rooms and resort facilities offered by the Disney Vacation Club.

• Another consideration is if you can’t stand the idea of Mouse-Keeping not cleaning your room daily. They do a “Trash and Towel service every 4 days and a full service if your stay is 7 nights or more (done on the ¾th day).  If you need fresh towels, they are always available from the pool.

• Advance Planning – If you can’t regularly plan your vacations at least 7 months or more in advance, then Disney Vacation Club may not be right for you.

• During various times of year, popular Disney Vacation Club resorts fill up quickly. In fact, during the Christmas season, it can be difficult to get even Saratoga and Old Key West inside of 7 months.

• If you’re not sure whether Disney Vacation Club accommodations will be a good fit, rent points. There are a number of sites from which you can rent points.  We will talk about this more later/nest time.

• If you’re thinking about buying Disney’s Riviera Resort, its important to note that Disney changed the rules in 2019 the original owner can use their points at all DVC properties but someone who buys Riviera on resale will only be able to use those points at Riviera or any future DVC resorts i.e. not the original 14 resorts.  This could have an impact on the resale value of your contract.

Points to Note

• When you buy a contract (Direct or Resale) is has a “Use Year”.  This is a confusing term, its actually the month your points renew and is fixed for your contract.

• Possible “Use Years” are; Feb, Mar, Apr, June, Aug, Sept, Oct and Dec.

• So, if you buy a 200 point contract with a June “use year”, your 200 points renew each June 1st and you have to bank any points for that “use year” before Feb the following year, as you cannot bank points in the last 4 months of your “use year”.

• Choose your “use year” to match when you go on holiday, so you get maximum benefit from booking 11 months out, i.e. if you typically holiday in July or August then consider a July “use year”.  If you have to cancel it gives you maximum time to rebook, bank, transfer or rent out your points.

• Annual dues are due each in January for everyone.

• You can be put on a wait list if your desired accommodation and/or date is not available.  Some people say you can get a result by calling Member Services.  You can still make 1 “back up” reservation and have 2 waitlist options at any time.

• You can cancel a DVC reservation.

• Greater than 30 days out and the points go back into your account.

• If it is less than 30 days, you can cancel but you need to rebook within 2 months or lose the points.

• You can transfer points to another member or to yourself (if you have more than one contract).

• Only 1 transfer, per Membership number per “Use Year” and that’s “in” or “out”.

• You can only transfer points from current “Use Year”, not banked or borrowed points, but once transferred they can be banked.

• The points retain their “Use Year” even after transfer, even if it’s to an account with a different “Use Year”.

• There may be tax implications (US)

• They don’t show up in your online account, so keep a track of them and their “Use Year” so you don’t lose them.

• Banking, Borrowing and Transferring is final.  Once done you cannot change your mind, so think carefully.

• Disney have extended some contracts in the past at OKW (2042-2057), its not clear if they will do this in the future.

• Using DVC points for non-DVC resorts or trading DVC points into the RCI system or using them for Disney Cruise Line or Adventures-By-Disney vacations is not a smart use of points.

• 25 points is the minimum you can buy direct from Disney but you now need to buy 125 direct if you want the “Blue Card” for all the member perks.

• Strategy; you could buy 125 pts from Disney to get the blue card and top up with resale points to save money.

• You can add dining to any DVC booking, even if you are renting the points, up to 48 hours before you arrive but it needs to be paid in full at the time of booking and be for all members of your party.

• Disney will rent you up to 24 pts if you are slightly short.

• If you buy multiple contracts from Disney they will sell you the same “use year”.  If you buy resale you can choose your “use year” but it is best to keep them the same, as it can get very complicated.

• AKL is the only DVC with concierge room which is strange and these book up quickly.

• 4000 pts per resort is the maximum and 8000 points in total.

• 4000 pts = AKL Grand Villa at Christmas for over 4 weeks (not technically possible), or a Studio for nearly 40 weeks!!!

• DVC member Magic Bands flash purple when you present them to a reader at the park entrance/fast-pass return.

Buying Resale

• There is an alternative to paying Disney’s list prices.  DVC can be bought and resold on the secondary market, similar to a house.

• The savings can be substantial, for example as we saw CC costs $220 from Disney Direct but on the resale market it is $150-$165. Example 150 points for $152/point.  A 31% saving of a current resort.

• You can also make an offer but watch out…. Disney has “Right of First Refusal” on all resale contracts, and they likely will exercise it if they see the price per point is too low.  They keep the value up, which makes buying resale more time consuming and stressful but it means if you sell you get a better return.  There is no haggling once it goes to Disney, if they exercise RoFR you cannot up your offer.

• Disney may not exercise RoFR if a resale comes up for a property that they are still selling directly, such Riviera.

• Some foreign buyers need to be physically in the US to make the purchase but resale can be done remotely from anywhere.  I think you can buy direct from the UK.

• Disney tends not to buy back when foreign sellers are involved, so it’s an advantage if you are British, other nationalities are available, as it could make you a more desirable choice and resellers point this out to perspective buyers, some sites even label the contract.

• Small contracts are very desirable and go quickly.

• You cannot split a contract, if you buy a 200 point contract from Disney you cannot sell it as 2x100 point contracts.

Pros

• Cost to buy points can be significantly less (30-40%)

• Resale offers more choice on the older resorts.

• I believe Disney do resell the contracts they buy back and if you buy or have more 125 points they come with the member perks.

• Apart from the perks, you get the same rights and use the system to book vacations as all other members.

Cons

• If you buy resale now, you don’t get the member perks

• Shorter contract durations

• The buying process is significantly longer, with the risk of Disney swiping the deal and having to start again.

• If buying Riviera on resale you cannot use those points to stay at the original 14 resorts. 

Renting Points

• There are a number of long term options available. There are quite a few sites out there renting points, such as Dave’s Vacation Club rentals.  Stick to one with a good reputation, that’s been around for a while and check the cancellation conditions carefully.

• Points can be rented from $17-20 per point. This is actually another place where you might want to do the maths to see if renting Disney Vacation Club points for all of your trips is a better option than buying Disney Vacation Club points.

Comparison example DVC Vs Cash Vs Renting Points

Old Key West studio for 2 weeks in August 2021, not sure how representative the cash room price is at the moment but here goes;

If I had bought OLW originally from Disney at $50/point, it would now be costing me a year sum of $9.3578/per point, and I would need 184 points.  So it would cost me $1,721.83.  This assumes I only have exactly the right number of points or can bank/transfer/rent out any excess and not take a loss on them. Even if I bought OKW today via resale at $100/point, that still would only be £13.12/pt/year, so a total of $2,414.023

Cash price from Disney £3,898.44 = $5,405.68

Renting Points = 184 at say worst case of $20/point = $3,680.00

Summary

• It’s a complex subject and can be a lot of money so do your research.

• There is lots of info out there; The Dis, including their podcast, DVC official website, the resellers websites, Youtube, etc.

• Do your sums carefully and decide what is right for you but make sure you think about how and how often you holiday and what you may be doing in the future.

• Good luck and happy holidays.