Do the Disney Vacation Club member perks justify the high cost of buying points directly from Disney?
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Over the past 24 hours, much has been written about the value of Disney Vacation Club owner perks. Informed buyers know that resale points can be purchased for 1/3 to 1/2 the cost of buying direct from Disney. But now that Disney has decreed that future resale buyers will not have access to a slate of exclusive owner perks, a new element has been added to the financial analysis.
While the list of perks includes ticket discounts, dining discounts, tour discounts, merchandise discounts and more, the debate largely focuses on the Disney Vacation Club member Annual Pass pricing. Many of these other dining and shopping perks are also offered to Annual Passholders, so the question becomes whether the AP incentive justifies the higher direct pricing. In lieu of an Annual Pass purchase, it would take an awful lot of meals at Olivia's with that 10% discount to justify paying thousands more for a DVC contract.
The most advantageous ticketing option for grandfathered Disney Vacation Club members is access to the Gold Annual Pass to Walt Disney World. This ticket rougly mirrors the Platinum Annual Pass, offering admission to the four Florida theme parks, albeit with modest blockout dates around Christmas and Easter. The Gold pass currently retails for $584, a savings of $213 off the non-discounted rate of the Platinum pass at $797.
A family of four could save over $850 per year on Walt Disney World Annual Passes, assuming they can work around the blockout dates and are elgiible for this Disney Vacation Club perk.
Even at those numbers, it will take a long time to bridge the gap between direct and resale pricing. To illustrate, a buyer could purchase 200 points at Disney's Animal Kingdom Villas via the secondary market for about $85 each. That net price of $17,000 is siginificantly lower than Disney's $30,850 net price for 200 points at Disney's Polynesian Villas & Bungalows or their $32,000 direct price for the same number of Animal Kingdom points.
Our hypothetical family of four will have to purchase more than 16 sets of Annual Passes to make up the difference. That assumes Disney / DVC maintains the Annual Pass discount at its level for many years to come. It's worth noting that discount programs are not contractually guaranteed to owners. While some form of Annual Pass discount has been a fixture among the DVC perks for more than 10 years now, it is within Disney's rights to eliminate that benefit at will.
Looking to the member perks and discounts to compensate for the higer direct pricing is a long term gamble. However one "X-factor" in this analysis centers around Disney Vacation Club's plans for its "Membership Extras" going forward. While DVC's perks programs have historically been limited to ticket discounts plus a selection of modest shopping & dining incentives, 2016 is shaping up a bit differently.
In a letter to members, Disney Vacation Club Senior Vice President & General Manager Ken Potrock had this to say:
"We see this policy change as a very positive step to ensure that, going forward, our Members who purchase directly from Disney Vacation Club receive a premium advantage – in addition to all the magic that Disney has to offer."
Potrock highlighted the recent "Disney Vacation Club 25 and Beyond Bash" at the Magic Kingdom as an example of what DVC has in store for owners. Nearly 16,000 members participated in that event, offering exclusive after-hours access to the theme park at no additional cost to owners. Later this year DVC will host similar events at Disney's Animal Kingdom and Typhoon Lagoon.
Given recent news that the Magic Kingdom will offer similar after hours events to the general public at a cost of $149 per person, attendance at just one DVC exclusive could represent a significant value for some families. Of course, that is only true if one's vacation dates happen to concide with these special events, and it assumes that Disney Vacation Club plans to continue such events beyond 2016--a point which is entirely open to speculation at this time.
For some buyers, the most sensible--at least the "safest" solution--may be a combination of direct and resale points. Instead of purchasing 200 points direct from Disney at $168 less incentives, just 50 or 100 points should help secure access to all member perk programs while also granting the owner access to multiple Home resorts.
Perhaps this is the net impact that Disney hopes to see.
Given the wide gap in resale and direct pricing--combined with uncertainty over discounts--this move is unlikely to cause a seismic shift in purchase patterns. Many informed buyers will still choose the cheaper resale alternative, thumbing their noses at Disney's modest perks and benefits. But some will undoubtedly combine resale contracts with a direct purchase. Still other buyers will throw caution to the wind and buy all of their points directly from Disney.
If you were considering your first Disney Vacation Club purchase following this announcement, what would you do?
