DVC 101

The following is from an email I recently sent to a friend who was asking about how DVC works.  This is basically the same email I have sent multiple times to multiple people asking the same question.  I finally wised up and found a good place (this blog) where this information can permanently reside for anyone to benefit from.

DVC - WHAT IS IT?

Disney Vacation Club (DVC) is Disney's version of the timeshare program.  It differs from traditional timeshares ion that instead of buying a "week", you buy a block of points to use during the year.  Your bank of points gets refreshed every year based on an anniversary date assigned to your contract.  

HOW DO THE POINTS WORK?

Each room/unit/condo is assigned a daily point value based on 4 factors:

• SEASON - Disney breaks down the year into 5 different seasons.  These seasons fall into a LOW - MEDIUM - HIGH type of hierarchy
• UNIT TYPE - DVC resorts typically have 4 types of room sizes:
• Studio - a little larger than a regular hotel room, studios typically have a queen size bed and a queen size sleeper sofa.  All include a dorm size fridge and microwave.  These units sleep 4 people.
• 1 Bedroom - includes a full size kitchen and a separate living room with a sleeper sofa.  Bedroom has a king bed and separate tub/shower combo in the bathroom.  These either sleep 4 or 5 people.
• 2 Bedroom - At some resorts, the 2 bedrooms are comprised of a one bedroom with a lock-off studio.  Other have dedicated 2 bedroom units.  In the dedicated 2 BR's, the master is the same as the one bedroom, but the second bedroom will have 2 queen beds as opposed to one queen bed and a sleeper sofa.  Each bedroom will have it's own bathroom.  We stayed at the Animal Kingdom Lodge last year with friends and our 2 bedroom actually had a 3rd full bath.  These size units sleep up to 8 people
• Grand Villa (3 Bedroom) - Don't know much about these as the points per night are very high and I don't expect to have the need to reserve one.
• RESORT WHERE YOU STAY - Some resorts point values are less than others.  A lot of this has to do with when the resort opened.  Point values for the most part cannot be adjusted for inflation, so the older resorts tend to not require as many points for a nightly stay (I'll explain more in person)
• DAY OF THE WEEK - Historically weekend nights (Friday & Saturday) have been more points (almost 2X) than weekday nights.  In 2011, DVC raised the weekday point values a bit and lowered the weekend night point values a bit to get them more in line (short story is more people were staying elsewhere on weekends to make their points go farther).

WHERE TO STAY (DVC RESORTS)

DVC  has resorts at Walt Disney World in Orlando, Disneyland in California and others not connected to Disney Theme Parks.  In some cases, the entire resort is DVC.  In other instances, DVC units were added to existing hotels, so there is a separate hotel component as well.  Both DVC and hotel guests have the use of all amenities at these resorts (pools, restaurants, etc.)

• WALT DISNEY WORLD IN ORLANDO, FL
• Old Key West (this was the 1st DVC resort)
• Saratoga Springs (this is our "home" resort where we own)
• Boardwalk Villas (connected to the Boardwalk Hotel)
• Beach Club Villas (connected to the Beach Club Hotel)
• Villas at Wilderness Lodge (connected to the Wilderness Lodge Hotel)
• Animal Kingdom Lodge (initial DVC units were connected to the Animal Kingdom Lodge hotel...a separate section has since been built that is entirely DVC).
• Bay Lake Tower (connected to the Contemporary Hotel...the one that the monorail goes through).
• DISNEYLAND CALIFORNIA
• Disney's Grand Californian (part of he hotel was converted to DVC units)
• NOT CONNECTED TO DISNEY THEME PARKS
• Vero Beach, FL (about 1.5 - 2 hrs from WDW)
• Hilton Head, SC
• Ko Olina, HI (near Honolulu...1st phase opens later this year)

CONTRACT - NUMBER OF POINTS 

When we bought in back in 2005, the minimum initial contract for new owners was for 150 points.  We purchased a 160 point contract at Saratoga Springs, which is considered our home resort (this was the only resort Disney was selling at the time we purchased...I'll explain later on why we settled on 160 points).  With our 160 points we can usually get in a 3 day weekend trip for Sherri and I every year to attend the Epcot Food & Wine Festival held each fall, plus a week long family trip every other year.  We usually stay in a studio size unit which is enough room for the 3 of us.  As Zoe gets older, we may need to start staying in 1 bedroom units to give ourselves more space.  This will probably require us to do an add-on contract.  Once you are an owner, you can buy smaller sized contracts (I think there is a minimum of 25 points).  Your DVC sales rep (DVC calls them "guides") can work with you on selecting the right number of points that works with your family.  Now that you are almost a family of 6, you may have no other choice than to stay in a 2 bedroom unit (DVC is pretty strict about their occupancy levels).

BANKING & BORROWING POINTS

DVC allows you to "bank" points, which is to carry over any unused points from one year to the next.  You can also borrow points from the upcoming year if you are in need.  Basically, at one time you can have up to three years worth of points in your account (prior year assuming none were used, current year and next year). 

HOME RESORT

The resort where you own your contract is referred to as your home resort.  Regardless of which resort is your home resort, there is no extra charge to book accommodations at another DVC resort.the advantage of a home resort is that you can make a reservation at your home resort 11 months in advance of your arrival date, but only 7 months in advance of your arrival date at any of the other DVC resorts (for example, my booking window at Saratoga Springs opens at 11 months, but I can't reserve a room at Old Key West until 7 months out).  Basically you get a 4 month priority window for booking a room at your home resort over owners at other DVC resorts.

CONTRACT LENGTH

DVC contracts actually have specified end dates based on the estimated useful life of the resort.  When we bought our contract at Saratoga, it has an end date of the year 2054.  Other timeshare programs (Marriott for example) never end.  The explanation I received from DVC is that they estimate that the useful life for a resort is around 50 years factoring in the typical maintenance, upgrades, etc.  You do have a deeded interest in the property that can be handed down/transferred to your children, but still with an end date.  Last year, DVC gave owners at Old Key West (the 1st DVC resort) the option to add 15 years to their contract (I think the original contract end date for these owners was 2042) for 25 per point (if your contract was for 100 points, you could extend for another 15 years for $2500).  Who knows if they'll offer this same deal for owners of other resorts down the road (I don't expect to be visiting Disney World much by 2052!).

ANNUAL DUES

Dues are paid for each point you own.  While dues may vary slightly from one resort to another, I have found that they typically average between $3.50 - $5.00 per point .  I think at Saratoga our dues are roughly $4.00 per point.  Times 160 points, we pay roughly $640 per year.  The dues cover things like maintenance and real estate taxes (if you itemize deductions on your tax return you can deduct this portion of your dues).  The amount per point has fluctuated slightly (really only by a few pennies) both up and down since we have had our contract.  

WHO TO BUY FROM - DISNEY OR RESALE MARKET

There are actually advantages and disadvantages to buying both from Disney and also the resale market.  Our friends that bought into DVC last year bought a contract at Saratoga Springs on the resale market.

Buying direct from Disney

• Advantages
• Disney usually covers your closing costs
• You are an owner as soon as your contract is approved
• Disney will arrange financing (we did ours this way and financed over 10 years at a pretty good interest rate)
• ***NEW CHANGE TO DVC POLICY *** - Sometime this March (2011) a new policy is going into effect that limits where you can use your DVC points if you buy your contract on the resale market.  Basically, you get full rights if you buy directly from Disney, but only partial rights if you buy on the resale market.  This may or may not be an issue depending on how/where you use your membership (more details below)
• Disadvantages
• Limited to only buying at the resorts Disney is currently selling (currently this would be the resort opening in Hawaii, Bay Lake Tower at Walt Disney World, with maybe some remaining contracts at the Animal Kingdom Lodge at WDW and Grand Californian at Disneyland)
• Higher cost per point 

Buying Resale

• Advantages
• Contracts are usually cheaper (lower cost per point) than buying direct from Disney
• Contracts are available at other resorts that Disney no longer offers (for example, if you really want to own at the Beach Club resort, you can find these contracts available through the resale market, but they are (for the most part) no longer available through Disney)
• Disadvantages
• Must arrange your own financing/pay your closing costs
• Must pass Disney's right of first refusal (ROFR) - All DVC resales must be approved by Disney.  If they feel the cost you are paying is too low, they have the right to buy the contract from the owner, rather than allowing you to purchase it below their perceived market value.
• Time to ownership is longer as Disney's ROFR process can take up to 8 weeks before a contract sale is approved (or Disney buys it themselves).

Our friends that bought a resale last year had their first purchase rejected by Disney (Disney bought the contract instead of allowing them to do so), but made it through ROFR with their second attempt.

FULL MEMBERSHIP RIGHTS VS. PARTIAL RIGHTS

Before now, once you became an owner, Disney would treat you no differently if you bought your contract on the resale market than if you bought directly through Disney.  Beginning sometime in March, any resale contract purchased after some specified date (March 21st comes to mind for some reason) will not have the same rights as a contract purchased directly through Disney (any resale contracts purchased before this date will still be treated as having full rights).  Basically, having partial rights limits where you can use your points.  It does not affect your contract term, booking window, banking/borrowing criteria, etc.

WHERE YOU CAN USE YOUR POINTS (FULL AND PARTIAL MEMBERSHIPS)

• DVC Resorts - Both full and partial memberships can book at any of the DVC resorts I listed above
• Member Trades Through RCI - DVC uses a company called RCI to trade with outside of Disney (for most trades).  The reason we purchased a 160 point contract is that to trade through RCI, 160 points are needed to get a 1 bedroom accommodation for a week in high season.  There are several hundred properties in this system including Marriott's, Hyatt's, Hilton's and others at many destinations around the world.

WHERE YOU CAN USE YOUR POINTS (FULL MEMBERSHIPS...AS I UNDERSTAND IT)

• Disney Cruise Line
• Adventures By Disney
• There are other exchanges similar to RCI that are higher end properties that partial rights may not have access to

WHERE YOU CAN USE YOUR POINTS (FULL MEMBERSHIPS...NOT SURE ABOUT PARTIAL MEMBERSHIPS)

• Disney Collection (I think this is what they call it) - Basically this is where you can use your points at any non-DVC Disney resort at the parks in Florida, California, Paris or Tokyo.  For example, The Polynesian and Grand Floridian resorts at Walt Disney World do not have a DVC component, but you can use your points to stay in one of the hotel rooms at these resorts.  This is not a good use of points as to book a room at one of these hotels would cost you triple (or more!) the number of points per night than if you booked at a DVC resort.

WHERE YOU CAN USE YOUR POINTS (MY ANALYSIS)

For us, I don't see our family using our DVC membership outside of staying at the DVC resorts, unless we trade through RCI.  Said another way, I would feel that I would get full value even if I bought my membership on the resale market and only had partial rights.  My understanding is that the amount of points required to use your membership for any of the other options is not an economical use of your points.  One thing I haven't mentioned is "renting" your points (this is when you don't want to bank, or can't bank unused points and "rent" them (make a reservation for a third party).  The going rate has been $10 per point).  I think a majority of the people in the DVC community feel that you would be better off renting your points and using the cash from that transaction to pay for the Disney cruise or one of the other options when compared to the number of points it would take.

BUYING FROM DISNEY - INCENTIVES FOR BUYING WHEN ON VACATION

If you buy into DVC when on vacation at Disney World, they usually have some incentives that are not usually offered if you contact them over the phone.  When we bought our contract, they offered us a discount of $8.00 per point (which ended up being $1280.00 on a 160 point contract!).  I have also heard of offers that they will apply all or part of the cost of your current vacation (hotel stay, assuming you are staying at a Disney property) as a down payment if you purchase a DVC membership.  I guess you could always ask what current promotions they are running and negotiate to get them even if you don't buy in person at WDW.

PERKS

Membership has it's privileges.  DVC members get various discounts on shows, tours, dining and shopping.  Usually in the neighborhood of 10-20%.  The biggest perk we have taken advantage of is that DVC members get $100 discount on annual passes.  These passes are good for 12 months from the day they are first used.  A great option for longer stays or if you can squeeze in more than 1 trip in that 12 month period.  Of course any of these perks are subject to go away or change at any time.

How We Jumped Into Vacation Ownership Part II

When we last left off, my wife and I just finished our tour of a Marriott Vacation property in Orlando, and were given two free tickets to Epcot, which we planned to use the next day.

Since our baseball game for that evening was canceled, we decided to drive over to the Disney Boardwalk Inn to walk around and have dinner.  On our way back to the car at the end of the evening we stopped in the hotel lobby so my wife could "powder her nose".  I waited for her next to the DVC kiosk in the lobby and struck up a conversation with the young man working there.  I told him he had 30 seconds to tell me all he could about DVC before my wife came out of the restroom.  He tried to talk me into signing up for a tour, but at this point I wasn't quite ready to commit, having already endured two other presentations the past 48 hours.

The next day the weather was beautiful and we spent the entire day and night touring Epcot.  This is the first trip where I really began to notice all of the DVC kiosks around the parks and other parts of the Walt Disney World resort.  I had noticed them on previous trips, but they seemed to now be present in greater numbers than before.  We were early for our dinner reservation at Alfredo's Restaurante' at the Italy pavilion (amoment of silence for the dearly departed restaurant), and while waiting for our name to be called, I struck up a conversation with the lady working the nearby DVC kiosk.  

After talking with her for a while I was interested enough to have her sign us up for the tour for the next day.  As we had friends driving down from Jacksonville the next day to meet us for dinner, we had nothing schedule for the afternoon.  They offered to send a van for us to pick us up anywhere we would be, but we opted to just take our own car(I have also heard stories that if you interrupt your park touring to take the DVC tour, they will give you Fastpasses for when you return back to the park).

At this time DVC was only selling Saratoga Springs, and this is where the preview center was located.  We drove over to the resort, and a few minutes after checking in, we were introduced to our guide, Tommy Costanzo (before you ask, no relation to George Costanza).  Tommy spent some time talking to us about the benefits of DVC, how the program works, etc.  We then hopped in a golf cart and Tommy drove us over to where the model units were located.  They were very smart in how they toured you through the units, starting off with the smallest (Studio) and working our way through the one and two bedroom, before finishing up in a two story, three bedroom Grand Villa.  At this point I was ready to move in!

After the tour, Tommy took us back to the preview center and put us in a conference room.  He then talked about the cost of ownership, the financing options and current incentives being offered (at this time, Saratoga was selling for $91 per point, and they were offering an incentive of an $8 per point discount down to $83).  The main difference here between DVC and Sheraton/Marriott was that the incentive wasn't only available if we signed right then, but it still applied for 3 days if we needed some time to think things over.

Tommy was very up front with us at this point in saying that now was the time for him to go back to his office so my wife and I could talk things over in private (an option neither Sheraton nor Marriott offered up), and to call him at his extension from the phone in the conference room whenever we were ready to continue with him.  Take 1 minute, take 10 minutes, take 30-60 minutes, whatever you need, Tommy said.  

Now at this point I was ready to sign on the dotted line, but I had a huge obstacle between me and DVC.  The wife, and her consent.  I love my wife more than words can describe, and have never had a mean thing to say about her.  But the woman is...frugal (and she will admit that).  I thought best case with her was that she was going to suggest we take the 3 days while the incentive still applied to sleep on it and talk things over before making a final decision.  I was floored when she said (as soon as Tommy was out the door) that it sounded like a great deal and we should sign up.  I think we called Tommy in his office before he even had a chance to sit down in his chair!

We signed up for 160 points with Saratoga Springs as our home resort.  At the time, the minimum purchase for a new contract was 150 points, but it takes 160 points to trade outside of Disney for a week at a non-Disney resort in High Season (more on this in a future post).  We figured the additional 10 points over the minimum would cover all of our bases if we ever decided to do an exchange outside of DVC.

At the conclusion of the tour, we were ushered through a replica of an old time ice cream shop where we could have any type of ice cream sundaes that they could make (not sure if this is offered to those who don't purchase a contract).  After dropping $13K on my DVC contract, that was the best ice cream sundae I have ever eaten!

A few follow up items...

1. We were given the option of filling out all of the paperwork right there, or having DVC mail us everything and we could complete at home.  We opted for the latter option and completed everything at home with no issues.
2. Every year since I order the DVC planning DVD (nerd alert!) just because.  Watching a video from a few years back, none other than Tommy Costanza pops up as once of the guides explaining the Disney Vacation Club to the viewers.
3. Tommy was not only our guide for the tour, but also was assigned as our "guide" going forward for assisting with any of our DVC needs with our contract (or future add on contracts).  For some reason within the last year we were assigned another guide, although to our knowledge, Tommy is still with DVC.  It was rumored he was going to take an assignment to the West Coast to sell DVC at the Grand Californian resort at Disneyland so maybe this had something to do with the change.

Coming next post...DVC 101: How Does the DVC Program Work?!?!

How We Jumped Into Vacation Ownership Part I

Up until I recently changed careers, for the past 15 years I was traveling quite extensively for my job.  I made the decision early on that Marriott was going to be my hotel chain of choice.  Back in the late 90's, early 00's, you could always find some Marriott property (Courtyard, Residence Inn, etc.) in any town, even if there was no full service Marriott.  At that time, other chains like Hyatt and Hilton did not offer lower cost alternatives as they do today.  


At it's highest, my Marriott Rewards account held well over a million points (almost felt like George Clooney in the movie "Up in the Air"), and maintained Preferred Platinum status for several consecutive years.  As a result, we would frequently receive offers for discounted vacations to some really nice properties through Marriott.


Our first experience with the timeshare presentation was at a Marriott property in Kauai , HI.  My wife and I were there on a promotion where we received 7 nights, plus rental car, plus a hotel credit for $700.  All we had to do was attend the 90 minute time share presentation.  We had the option of buying into one of several properties in the islands, but the location that I was most interested in was in Ko Olina, just outside of Honolulu (coincidentally, right next door to where the new DVC Aulani is being built).  The $30K price tag quickly scared us off and we told our hostess "Thanks, but no thanks.".  Talk about a change in temperature at that point.  She cooled on us right away (but in a nice way, just in case we came back).


While we knew this wasn't the right deal for us, it did plant the seeds of doing something like this eventually.  Fast forward a few years later and my wife and I (no kids yet, but that would quickly change) found ourselves in Orlando on a deal we received from Sheraton to stay at the Vistana Villages for $200 for 4 nights.  Part of the deal was that we would receive a $100 resort credit, but they also gave us the option of taking it in cash (which we did).  We weren't even required to take in the presentation, but if we did, we would get another $100 cash, basically making our stay free.  


We liked the resort, so we signed up for an early morning presentation.  I think our host was fresh from Used Car Salesman University.  Lots of pressure, multiple incentives that would go away if we did not make a decision on the spot, bad mouthing the competition, plus a guilt trip for depriving our future children of years of enjoying vacations at their wonderful property.  Needless to say we got out of there as soon as our 90 minutes was up.


After our 4 days at the Vistana Villages, we moved over to the Marriott Courtyard near Walt Disney World for the remainder of our stay.  When we got to the hotel around lunchtime, we found our room would not be ready for another 3 hours.  Did I mention it was pouring down rain (and continued to do so for the remainder of the day)?  We didn't have any plans for the afternoon (we had tickets for an Astros/Braves spring training game that night, which ended up as a rain out).  The hotel concierge offered us two free tickets to Epcot for the next day if we were willing to tour one of their vacation properties that afternoon.  Since this beat sitting around the hotel lobby for several hours, we took him up on his offer.


The Marriott Vacation Club sent a van for us shortly, and we met up with our host and were taken to their Horizons property.  We knew right away that this wasn't for us.  To me it just had a cheap feel about it.  Our host sensed this right away and quickly called an audible and had the van driver take us to one of their other nearby properties that they were still selling.  The name of this property now escapes me, but it had a very Mediterranean look and feel.  My wife and I really liked the property and the vacation units were very nice.


Once we got back to the Marriott Vacation Club offices, they started to put the hard sale to us.  To their credit, they weren't of the same used car salesman ilk as the Sheraton guy, but they were still very persistent with their incentives that were only available if we signed on the dotted line right then and there.  They even brought in a closer to try and seal the deal, but we managed to escape unscathed, and with two tickets to Epcot in my pocket, which would be put to good use the next day.


Little did we know, but at this point, we were about 48 hours away from becoming DVC members.  Tune in same bat time/same bat channel tomorrow for the rest of the story...

Welcome to the DVC Dad Blog!

So I decided to write this blog on a whim.  I have so many friends that reach out to me about the Disney Vacation Club, trip planning to Walt Disney World, or just things about Disney in general, I thought I would create this forum to provide everyone access to all of the Disney stuff residing in my brain.
  
I plan to focus the blog primarily on the Disney Vacation Club (DVC for short, from here on out), but will touch on other topics, both Disney and non-Disney as well.  I've never blogged before, so in the end, I might just be writing this stuff for myself, but who knows, maybe someone will get something out of the information I provide here.


A little bit about me, and my Disney background...

• Married with a 7 year old daughter
• DVC member since 2005
• DVC stays include Saratoga Springs, Old Key West, Beach Club Villas, Boardwalk Villas, Animal Kingdom Lodge (Kidani Village) and Vero Beach
• Approximately 30+ visits to Walt Disney World staying off site, on site (non-Disney), Disney resorts and Disney Vacation Club resorts
• 2 trips to Disneyland in California (only the Disneyland park, have not yet made it to California Adventure)

Future blog entries will include such items as the DVC program and how it works, resort reviews, trip reports and much more.  I hope you enjoy reading as much as I think I'll enjoy putting this together!