The Disney Vacation Club has become immensely popular over the last few years, and is a huge money-spinner for the company. No wonder Disney is investing so heavily in new DVC properties at present.
Members of the club must buy a real estate interest in a Disney Vacation Club Resort, and thereafter pay annual dues. This will earn them DVC "points", which can be spent on vacations at any of the DVC resorts.
You can discover the basics of DVC by reading this article. In this follow-up, we'll look at the advantages of membership, and in a future column we'll explore the downsides.
1. Staying at Disney for "free"
The obvious advantage and honestly the only one Disney needs is the ability to stay at the company’s finest resorts for “free.” There are obviously (big) expenses incurred at the outset of a DVC purchase, as well as on an annual basis for maintenance fees. The latter expense is a paltry sum relative to what a member gains with their ownership.
The “worst” DVC properties cost $350 a night while the best rooms available can be double or triple that amount. A week’s stay at a DVC location provides a guest with a hotel room valued at $2,500 or more. If you visit for four trips of similar length over a ten-year period, you will have taken $10,000 worth of vacation. Given the cost of $130-$165 per point via Disney, this amount may be less than you spend on your actual membership since 50 points every other year would be enough for five weekly visits at Old Key West at an actual cost of $6,500 - $8,250. In other words, breaking even on your investment is reasonably easy to do.
Return on investment
This view of return on investment brings us to sunny point number two. Most timeshares are financial sinkholes. Everyone realizes it, but people like the idea of “owning” a vacation home, so they sometimes buy a timeshare anyway. DVC behaves differently than other timeshares. You do not “own” the property forever. Instead, your deed has an expiration date that could be as “early” as 2047 or as late as 2064. As a reminder, 2064 is half a century away. Unless you are 10-years-old when you read this – and if you are, go do your homework – DVC ownership extends until you are well past your amusement park glory days.
The beauty of the ownership is that it trends against the nature of standard timeshare purchases. People who have purchased points in the past oftentimes discover that they can sell them for either the same amount originally paid or possibly even a profit. A lot depends on exactly when the purchase occurred and whether it was made via Disney or resale. Yes, resale is an option for DVC membership. While you lose some of the benefits, the purchase price is often significantly lower, especially for DVC properties that have been for sale for longer. We will explore resale versus direct purchase in detail in a future column.
For now, let’s focus on a simple example. My brother purchased a DVC membership at Beach Club Villas several years ago. At the time, the price was in the upper-$70s. The same membership costs $130 per point for direct purchase now. Were he to sell his membership on via resale, he would probably get around $100 per point. Part of this is because he chose wisely with his Beach Club Villas purchase. As one of the smallest properties as well as the location with the best standalone pool, it is in high demand.
Since the time of purchase, my brother and his family have taken over 10 trips to Disney World, meaning that he has received at least 75 nights of free residence, thereby paying for his membership cost many times over. So, he has not only maximized his points but also positioned himself to MAKE money if he ever sells his DVC timeshare. And I say all of this in the wake of the greatest real estate bubble collapse in the history of the United States. DVC membership has maintained popularity during a dramatic economic downturn, a novelty in an industry that has been otherwise decimated by financial distress. DVC may require a significant financial investment, but the results over the past 20 years have indicated that the buyer will get their money’s worth and then some.
2. The family angle
Best of all, Disney is all about family, and DVC membership is no exception. Ownership may be deeded or willed to other members of the family. Even if you are too old to enjoy DVC, your kids can still enjoy it with their kids in 2050, presumably by using their rocket packs or flying cars to get there.
3. Other discounts
DVC membership also includes a few advantages beyond exchanging points for hotel stays. The best of them is also one that is technically not guaranteed. Disney occasionally rewards the loyalty of DVC members by providing steep discounts on annual passes. The most recent offer occurred last January. DVC owners were provided a 33% or $245 in savings off of the regular $729 cost. A family of four would have saved roughly a thousand dollars on annual passes. Disney wants to incentivize their most loyal customers to embrace the brand as much as possible, and this is the methodology.
In addition, DVC savings are sprinkled across the Disney realm. A lot of park merchandise is discounted 10%, which is how I justified to myself spending a hundred dollars on Christmas ornaments…in May. Similarly, some restaurants provide a 10% discount as well, which is admittedly not a huge amount given the pricey nature of most of their table services. There are also discounts on luxury services such as spas, golf and tennis. Plus, DVC members can get Disney cruise discounts as well.
The next big asset for DVC membership is versatility. There are currently 12 participating properties, with a 13th being readied for 2015. Once that location, Disney's Polynesian Village Resort, has its new DVC rooms completed, there will be 10 different choices onsite at Disney World and Disneyland. In other words, a person could receive the same world class Disney experience in 10 different ways while visiting the same two theme parks.
Personally, I am a creature of habit, so I prefer the comfort of knowing that I can stay at the same hotel each visit. The beauty of the design of DVC is that your points have a location designated. That property is your home resort, and you can book there as soon as 11 months prior to your vacation.
When you are seven months away from your visit, your options expand. At this point, you can select any DVC property to make reservations, assuming that they have availability, which is usually the case in my experience. So, a DVC member can pick their favorite property and know that they can always get reservations there as long as they plan ahead.
Owners also have the option to pick one of the many other resorts on those occasions when they want to try something new. I know someone who stayed at four different resorts during a recent nine-day stay. I wouldn’t recommend that for most people, but it’s a viable option. As long as you are still staying at a Disney property, they will pick up your bags and ship them to the next location for free.
Another key advantage for DVC over ordinary timeshares is flexibility. Your DVC points renew each year based upon your membership use year. The use year is the month when your points refresh, which sounds complicated, but it really isn’t. My use year is December, so when that month rolls around, a fresh batch of points will be deposited in my account.
Again, Disney wants to encourage the addiction of visiting their theme parks. In order to facilitate this, they provide maximum flexibility for would-be guests to return whenever their schedule allows. My wife and I prefer to visit the parks annually. We get twitchy if we don’t visit Haunted Mansion for a long time.
My brother, also a DVC member, takes an entirely different approach. They bank the first year in anticipation of visiting multiple times the second year. In order to do that, they also borrow points from year three. Effectively, they only go to Disney once every three years, but they go three times during that calendar year. In this manner, they save money by buying a single annual pass that entitles them to roughly 25 days’ worth of park visits. For anyone who doesn’t live in the state of Florida, that is basically maximum Disney. None of this would be possible without the maximum flexibility available through banking and borrowing.
6. Magic Express
Have you ever stayed at a Disney resort before? If so, did you use their Magic Express service?Presuming that the answer is yes, you already appreciate the value of this service. If you are unfamiliar with it, Magic Express is living proof that Disney planners are the best in the business at maximizing the earning potential of their theme parks.
Disney wants you to stay at their hotels. They need you to stay at their hotels. When you travel to a Disney theme park but stay with a competing hotel chain, the company suffers a loss in potential revenue. In economic terms, it’s described as opportunity cost. In layman’s terms, it’s money spent on meals, sundries and tourist merchandise that should be given to Disney. When you stay elsewhere, another company takes their cut.
In order to discourage this behavior, Disney provides Magic Express service for people flying to their theme parks. Guests who use these buses are delivered to Disney resorts straight from the airport, virtually guaranteeing that Disney will keep the overwhelming majority of your travel budget. Since you will likely not have a car of your own, your only options for the aforementioned meals, sundries and tourist merchandise will be in-house purchases at Disney hotels and parks.
Some of you may be wondering how this could be viewed as an advantage for DVC membership. The answer is simple. Since you are staying at Disney resorts every time you utilize your points, you will be eligible for Magic Express on your trip. As a tourist, you will not have to worry about keeping up with your luggage from the moment you board your plane. You will place an identifying bar-coded sticker on your belongings, and Disney will do the rest. You get off the plane, get on the bus, and then your bags will be waiting when you get back to the hotel after a day spent at the theme park. Disney has perfected the travel process, thereby creating the smoothest vacation possible for DVC members and other guests staying at their resorts.
7. Dining Plan access
The final advantage is that DVC visitors are provided the same options as other Disney guests. Included among these is the Disney Dining Plan. This selection is a hotly contested issue among DVC owners, many of whom choose to utilize a program known as Tables in Wonderland instead. A future column will also evaluate those options.
For my part, I am an ardent supporter of the Disney Dining Plan, as I love the cost control built into the process. It allows me to pay for all of my meals (excluding tip and adult beverages) before I ever reach the park. And once I am there, I never have to worry about the cost of anything.
This fixed cost is important because some of the character meals at Disney can provide a dramatic amount of sticker shock. DVC members do not have to use the Disney Dining Plan option, of course, but simply having the choice provides many with peace of mind. Combined with Magic Express, it takes all of the stress out of vacation the moment you arrive at your destination.
Not all of the advantages above will interest everyone reading this. Personally, a golf discount is absolutely wasted on me while many Disney members drive to the parks, so they have never used Magic Express. Similarly, Tables in Wonderland loyalists ardently opposed the Disney Dining Plan. And not everyone will be able to visit Disney theme parks enough to enjoy the advantages of an annual park pass discount. I still perceive the advantages to be overwhelmingly positive, and the fact that my wife and I are members is a testament to that belief.