The Truth about Disney's Huge Money Maker - Disney Vacation Club
Hey guys, Juan here with The Cost of Autism. Now don't get me wrong, I ABSOLUTELY LOVE AJ's Disney's Food Blog, but when I looked at her video about the Disney Vacation Club or DVC for short, it left me with the impression that the Disney Vacation Club is not really for everyone and is way too expensive.
I have a very different take on this and if you give me a moment, I think I can show you that in reality it's actually the opposite. DVC is really for people who LOVE going to Disney, especially Disney World here in Florida and want to SAVE money, while going to the very BEST resorts Disney has to offer.
My son Jonathan, who is now 19 years old is Non-Verbal Autistic and like practically any child ABSOLUTELY loves going to Disney. Everything from the rooms to the pools to the parks, rides and roller coasters, they are ALL his favorites. You never see Jonathan smiling more than when he's at Disney World. Because of this I wanted to try to find a way to be able to afford to take him as much as possible. One of the things we do is to get a Pixie Dust pass, which of course isn't good on the weekends or any other busy day such as Holidays and Spring Break, but for us honestly this is BETTER because it forces us to go only on days that are slower. Like most Autistic children, Jonathan may have good days and he may have bad days where we can't really go to the parks, so if that's the case we want to stay in a room that has a full kitchen and is more like a home than a hotel room. Also if there's an issue in the middle of the day, we'd like to EASILY go back to our room, without fighting traffic. That's where DVC really makes it special for us.
So according to AJ, the minimum cost to get into DVC is over $30K and you won't see any savings for 7 to 10 years, and while she does touch on the fact that you can buy DVC on the resale market, she doesn't really make it clear that this can REALLY save you a ton of money. I'd like to go through an exercise with you so you can see what the real cost is of a DVC membership today, if you're willing to take a look at the RESALE market. I'd like to actually compare it in real time to getting the same accommodations from Disney or possibly some sort of Travel Agent. So let's get started!
I put together a hypothetical situation to highlight the difference between getting a DVC resale contract and just booking a room via the Disney website. While this is hypothetical, I'm going to use real contracts and real financing that as of today, Dec. 14, 2024 you can ACTUALLY get. Let's just say that I want to plan for Jonathan's 20th birthday in Sept. of 2024 and I want to do it over at Animal Kingdom Lodge. As I've stated before, I don't like doing weekends, it's just too crowded so I'm going to plan for a Sunday Through Thursday trip. Keep in mind that Sept is not only the lowest priced in dollars for Disney Hotel rooms, but it's also the lowest in POINTS COST, which is what you utilize when you're a DVC member. Additionally Friday and Saturday nights cost more in both Dollars OR points so the comparisons I'm making here carry over to pretty much any other month or day. So when I looked up a 1 Bedroom Villa at Animal Kingdom Lodge in cash, it worked out to $3168.00 including Tax, but not including parking, for those 4 nights of Sunday through Thursday. That works out to $792 per night. With Disney, you can usually pay 1 night as a down payment then spread your payments out, but it must be paid in full within 30 days of the date of the reservation.
So how much would that room cost you if you booked it with points? $30K up front? No! Let's first take a look at one of my favorite sites, DVCforLESS.com, these guys are FANTASTIC and they aggregate the listings of around 8 different sites and growing. By the way, I have ZERO affiliation with the sites I'm mentioning today, they're just sites that I love to utilize.
I looked up the cheapest Animal Kingdom DVC I could find and found one with 100 points at $107 per point or $10,700. I'm looking for the lowest cash out of pocket and I don't want to run my credit so there's two options, either Monera Financial or Vacation Club Loans. If I then look at Monera Financial and get a quote, since Monera will do it with just 5% down, even with no credit check AND they'll finance some of the closing costs, it says I would only need $1,862.20 cash to close and that includes pre-paying the annual dues in advance for 2024. Total payments for 12 years at 17.9% is $184.47 per month.
The same loan on Vacation Club Loans can only be financed for only 10 years, requires 15% down but in exchange the interest rate is almost 3% less. So the total cash you would need to close is a bit higher at $2515.06, but then your monthly payment is just $119.69 AND it's 2 years LESS so you end up saving thousands in Interest. Considering that you only have to pay $652.86 more and your monthly payment is $777.36 LESS PER YEAR, obviously Vacation Club Loans is the no brainer here.
So utilizing the numbers from Vacation Club Loans, I put together a spreadsheet that shows your cost per point the first year and then your cost per point in subsequent years, assuming a historical 4.1% annualized increase in Dues at the Animal Kingdom Resort and a historical 4.8% increase in Hotel Prices.
So go ahead and click on my spreadsheet and let's look together. It may surprise you to find that there actually 3 different ways you could book a 1BR Villa at Animal Kingdom Resorts. Of course the most popular way is via Disney's website, but as you can see in 2024, that cost would be $3168. A lower out of pocket way to book would be via Davids or another travel agent site. The Advantage you generally have with booking direct via Disney is that you can cancel your reservation up to 5 days in advance without losing a penny and 4 days up to the day of the reservation only loses you a single night. Davids and other travel agents or even agency's like Expedia and others let's you book at a discount but it's usually non-refundable. About the only site I've ever found where you could possibly get some value back is the DVC rental store. But even with them, you're not getting money back they just allow you to change your reservation to something else and the amount they will give you back depends on how far in advance you cancel.
You guys can let me know if I need to dive deeper into any of these things and I'll put together another segment giving you the goods.
So if you're looking at the spreadsheet and you wanted to come along with me and not sure what to do, your choices are pretty clear. If you're only doing a once in a lifetime trip, you go with Disney if you want the flexibility to cancel and get ALL your money back. However, if you're willing gamble that you're not going to cancel and rent through Expedia, DVC Rental Store or Davids or another discount site. However, if you've decided to stay in the Disney Bubble your next option would be to consider buying DVC. So AJ already told you, that's going to be VERY expensive direct. So should you consider a DVC resale contract? Let me explain this spreadsheet.
As I've stated before, financing via Vacation Club Loans between the down payment, the dues and loan payments, it works out to almost $4K. That's $2515.06, which includes the down payment and the Maintenance fees for the year, plus that 4K INCLUDES monthly payments of $119.69. As for the savings, vs Disney it's actually $784 MORE. VS the Travel Agents, it's like DOUBLE!
Beginning the second year, you're ALREADY ahead of Disney, but it's going to take a few years to be ahead of booking through Agents. Now I know what you're saying, well for that I'll just book through Agents, but here's the problem. Sites like Expedia will SOMETIMES beat Disney, but very often if the demand is high enough their price ends up right around the same price as Disney or only slightly below. There's no guarantee they'll always give you a good deal. Especially if it's a room that's already sold out on Disney's site. Sites like Davids and DVC Rental Store rent points from members and resell them to you. This means there's usually a bit of a lag between you requesting a room and they actually booking it. That lag time is usually 24-48 hours, and longer on weekends. This means by the time you pay them for the room, it may be already booked by another member and you're out in the cold. Especially hard to get rooms or hard to book times like spring break and Holidays. Your BEST BET for getting the room you want is to own at that resort and book right at the 11 month booking window. This way you're practically guaranteed that you get the room you want. For those of you who say, "I don't plan that far in advance" ... Give me a break! You don't know when your kids birthdays are, or when they have spring and summer break?
Clearly owning a resale contract after just a couple of years is MUCH better than annually booking via Disney's website. However even when compared to the Travel Agents, there's a huge financial advantage to owning at DVC and that comes down to the Equity you're building. If you're paying cash to either Disney or an Agency, that money you've spent is gone and has done nothing for you, other than your one time stay. However when you own at DVC a portion of that monthly payment is going towards your principle so you end up owing less and less every year. While the value of DVC has gone up by over 35% over the past decade, I've only included a 3% growth rate in my spreadsheet because we really don't know what the future holds. But you know what, even at that modest growth rate, after just a few years you can see that you can end up selling your contract for thousands more than what you owe. In essence actually PROFITING from your past vacations. Obviously, once your loan is fully paid your cost per year is FAR LESS than either Disney OR the Agencies.
One final huge advantage that you have with owning at DVC is that as AJ was explaining in her video, you can bank or borrow points to combine multiple years points into one big vacation, such as if you want to do a Family Reunion at a 3 Bedroom Grand Villa. Additionally however, if you decide not to take a vacation for a year or more, you could also RENT your points, which usually more than covers the Annual Maintenance.
Of course, there HAS to be a downside, why would people buy direct from Disney when they can get these resales so much cheaper? Simple, what Disney has done is make it to where if you buy a resale today, you can't use it at any of their new properties. Normally, if you buy at say Animal Kingdom Resorts DVC, you can go book only at Animal Kingdom Resort at 11 months ahead BUT, at 7 months out, you can also book at Old Key West, Boardwalk, Beach Club and any of the 14 Legacy DVC resorts. By Legacy I mean the ones built before Riviera. Any new DVC associations created after Riviera can't be used by a DVC resale. If you happen to purchase a Riviera contract on the Resale market, it can ONLY be used at Riviera! Additionally, there are other restrictions such as the inability to exchange points for Disney Hotels and Cruises, but those are very poor usages of points anyway.
That's all I have for today guys and thanks for joining us here at CostOfAutism. I've recently started a Patreon Page for those of you who want to support what we're doing here. Membership starts at just $3, 100% of which goes to Jonathan's Special Needs Trust or his ABLE account and of course you can cancel any time.