February 2024
Before we get to the math, there’s an important disclaimer here. I am not a financial advisor, and the content in this article is for educational purposes only, following the logic I used when evaluating Disney Vacation Club. In order to make the best financial decision that suits your own needs, you must conduct your own research and seek the advice of a licensed financial advisor if necessary. Know that all investments involve some form of risk, and the information presented on this page is time sensitive and can change shortly after its publication. When considering Disney Vacation Club or any other investment mentioned on this page or beyond, please be sure to conduct your own research and seek professional support if needed.
Disney Vacation Club ownership is Disney’s version of timeshare (Disney Vacation Development, Inc. is the club’s legal name). The word “timeshare” can often send your skin crawling, and I’ve had my fair share of some pretty horrendous timeshare sales pitches (my wife literally had to cry at a timeshare presentation once just to be allowed to leave the room… I won’t say the company’s name but it’s large and starts with a W). Meanwhile, I’ve not only worked at Disney Vacation Club but also am a proud Disney Vacation Club Member who has enjoyed (intentional word choice) about half a dozen sales presentations from a Disney Vacation Club Guide. Only one of those presentations resulted in an actual sale for the company, and the other five or so were concluded with a warm handshake and thank you from Disney.
It’s not just the sales process that’s different at Disney but also Membership itself. For Disney fans, there are countless benefits to becoming a Disney Vacation Club Member, many of which I outlined in a two-part podcast episode on this topic. In case you’d like to hear more, I’m embedding both episodes for your convenience below.
Ultimately, Disney Vacation Club Membership can be a rather emotional purchase for Disney fans, but it also needs to be rationally considered. After some consideration, Disney Vacation Club Membership can still be the right decision for your family (I wouldn’t be writing this article, nor would I be a Disney Vacation Club Member, if I thought otherwise). Reviewing the “Basic Math” of Membership can be a great place to start, analyzing the value of Membership (comparing renting vs. buying) and the time value of money (opportunity cost).
How Does Disney Vacation Club Work (Quick Review)
Just to quickly review how Disney Vacation Club works, members purchase vacation points that can be used to book accommodations at Walt Disney World, Disneyland, Aulani, Hilton Head, and Vero Beach. Members who purchase directly through Disney (or are grandfathered in) can also use their vacation points to access thousands of international destinations through the World Collection, or book an Adventures by Disney or Disney Cruise Line vacation.
The number of vacation points purchased represents an annual allotment that is credited to your membership account at the start of your use year, with the option to bank or borrow points from a previous or future year (but no further than one year in either direction). The more points purchased, the greater the purchase price and annual dues (maintenance fees that can increase every year and are priced based on your home resort), plus the more options available to visit during more peak times of the year and in larger or more valuable accommodations or vacations.
Although Members purchase their contracts for a particular resort (considered your “Home Resort”), everyone who purchases directly through Disney is able to use their points at any Disney Vacation Club Resort or transfer their points to be used for other vacations, all pending availability. This is unlike the traditional timeshare model in which owners would purchase specific weeks at specific hotels (and sometimes even get the same room number year after year).
In other words, you are purchasing your Disney vacations in advance at a discounted rate, then paying annual dues throughout the duration of your membership contract.
To get more information about how Disney Vacation Club works, I highly recommend visiting the official Disney Vacation Club Website (https://disneyvacationclub.disney.go.com/explore-membership/). It’s also worth exploring the Membership Extras, which can offer savings on Disney experiences and exclusive opportunities like Moonlight Magic, but we will not be considering these extras in our financial considerations because (1) they are too complicated to account for given that no two Members vacation the same way, and (2) Disney has the right to change, remove, or add to these Membership Extras at any time.
Basic Math of Disney Vacation Club
There are two major components to a Disney Vacation Club purchase: the initial purchase price (plus closing costs) and annual dues. While the initial purchase can be financed, we’re going to first explore the value of membership paying cash, and we’re going to do so without looking at current incentives, which can vary depending on when you’re reading this article.
There are multiple resorts on sale through Disney Vacation Club right now, but we’re going to consider Disney’s Riviera Resort for this study. Today, Disney’s Riviera Resort is priced at $225 per point. To spend 5 nights in a Deluxe Studio with a Preferred View in early March, you’ll need 141 vacation points (see this official points chart). We’ll round this up to a 150-point purchase. At $225 per point plus $872 closing costs, this means the total cost of this purchase would be $34,622. If you were to purchase that today, you would now become a Disney Vacation Club Member with ownership at Disney’s Riviera Resort and 150 points every year to be used through 2070 (that’s when all contracts at Disney’s Riviera Resort end).
In addition, your annual dues for this year would amount to $8.86 per point if paying monthly, which amounts to $1,329 for the year ($110.75 per month). While annual dues can increase every year, we’re going to consider the cost in today’s dollars, assuming this price keeps at pace with inflation (historically, the cost of a hotel room at Disney has increased faster than annual dues).
Taking the price in today’s dollars, you would pay $1,329 for the next 47 years (through 2070), a total of $62,463. Added to our initial purchase price, this comes out to a total of $97,085. What’s important to remember is that this is the price for 47 years of vacations, about $2,065 per year. Up above, we showed that 150 points is equivalent to 5 nights in a Deluxe Studio with a Preferred View at Disney’s Riviera Resort. Dividing that $2,065 by 5, the average cost per night of your Membership comes out to $413.
How does $413 compare to the current rack rate for that same week at Walt Disney World? I went to book a Walt Disney World vacation for the exact same nights this year (2024), and the average cost with tax is $1,090 for the same room. That means, in today’s dollars, Members using their points at Disney’s Riviera Resort who purchase this month are essentially spending 62% less than the same person paying cash to stay in that room, nearly doubling the best offer for Walt Disney World right now (35% off for Annual Passholders).
In fact, $413 per night is less than the cost of a standard room with a preferred view at the neighboring moderate resort, Disney’s Caribbean Beach Resort, which for those same nights averages $465 per night. Better yet, if you were to act on the current incentive offer ($1,050 off) plus stack that with a few additional offers like a Member referral ($500 off) and Magical Beginnings ($22 back per point to give up your first year’s points), you’d actually reduce your average cost per night further from $413 to $392 (64% off).
Remember, this is all basic math and assumes paying with cash. It also considers the annual dues in today’s dollars. It’s important to remember the cost will increase over time, which means that average $413 per night will increase every year, but the relative savings should remain fixed because that $1,090 per night paying cash will also likely increase every year (at the same rate or, usually, greater).
Now what happens if you’re taking out a loan for your purchase? We’ll assume that you’re putting down the minimum down payment (10% of the purchase price, which in this case is $3,462) and that you can get the best rate through Disney to finance the rest (9.99%). If you’re paying this off over the 10-year maximum, your monthly payment comes out to $411.58, or a total purchase price plus interest of $52,852. Adding in the annual dues using the same method as before, this increases your total cost to $115,315 over 47 years. That puts the average cost per year at $2,453. At 5 nights per year, that puts the average nightly rate at $491, still 55% off the current rack rate and only slightly higher than your average rate at Disney’s Caribbean Beach Resort for the week that we evaluated.
In summary, this is the basic math of Disney Vacation Club when you just consider the value of Membership, but there are a few disclaimers to consider before we get to more financial considerations.
First, this value holds only if you’re planning to visit Walt Disney World every year. There are still benefits to going every 2-3 years, but the value gets diluted.
Second, the value holds if you normally stay at a Deluxe Resort or Villa. As the Caribbean Beach example demonstrates, the price per night is similar to a Moderate Resort, so if you normally stay at a Moderate Resort, you won’t nearly find the same savings, although your vacations will probably feel more luxurious. In addition, if you normally stay at a Value Resort, you will certainly be paying more for Disney Vacation Club in the long run. Again, your experience may be grander, but that’s something your family will need to weigh in your considerations.
Finally, this assumes availability. Depending on the time of year, it can be challenging to book the resort of your choice and the room of your choice, especially if you’re booking at a peak time of year later than the earliest day you can book (it can be just as challenging as trying to reserve Cinderella’s Royal Table a week before your trip, if not more challenging). That’s why it’s generally advisable to consider Disney Vacation Club if you book your vacations far in advance or are willing to be flexible with how you use your points.
Other Financial Considerations
While the Basic Math of Disney Vacation Club clearly showcases the value of Membership, there are some important financial factors worth considering.
The first and perhaps most important consideration is to realize that a Disney Vacation Club contract, while it does hold value, acts more as a liability than an asset. Like a real estate purchase, the deed you buy can be sold or gifted, but it also comes with recurring expenses (the trademark of a liability), not recurring income (the trademark of an asset). There fortunately is a strong resale market for Disney Vacation Club contracts right now, which means that there’s a better exit strategy than other timeshares should you find yourself needing to sell your deed, but from a financial perspective, it would be more accurate to compare purchasing Disney Vacation Club to purchasing a car. That car might hold value (and if it’s a classic that’s well-maintained, could even increase in value over time), but that car also comes with regular expenses (to stick with the analogy: insurance, gas, and maintenance costs). Disney Vacation Club acts in a similar way. After your upfront cost, you have recurring expenses (not just the annual dues but also park tickets, dining, merchandise, airfare, and other trip expenses).
By the way, Disney discloses this information on their website and in all forms of marketing. As stated on their website, “An ownership interest should only be purchased for personal use and enjoyment by Members and based upon its value as a vacation experience. Ownership interests should not be purchased for resale or rental, as an investment opportunity, or with any expectation of achieving income, capital appreciation, or any other financial return or valuable benefit, including any tax benefit.”
Second, even if we are to consider a Disney Vacation Club deed as an asset or an investment (which it’s not), it would not be the strongest way to invest because of a financial principle called the “time value of money”, the idea that the value of a dollar today is greater than the value of a dollar tomorrow (as one of my wisest Finance professors described it, “cash promised today is better than cash promised tomorrow”).
To demonstrate this principle, let’s imagine you were to invest that initial $34,622 into the stock market and invest the $1,329 annual dues into your account every year. Over the long term, the stock market has returned about 10% per year (source). Let’s imagine your portfolio only performs half as well (5% returns). After 47 years, following this trend, you could expect your account to grow to approximately $583,000. Even if you were to still take a Disney vacation every year at the full retail cost ($1,090 per night at Disney’s Riviera Resort), you’d still come out ahead, paying $256,150 over 47 years but netting $326,850, more than triple the savings of Membership. There are of course some tax considerations here, and there are other ways to invest, but this provides a very simple demonstration of the time value of money principle.
Finally, it’s worth exploring purchasing Disney Vacation Club through the resale market if you’re truly interested in saving more money. On average you can spend a considerable amount less, but you forego a few key benefits if you purchase resale today. For instance, if you purchase resale at Disney’s Riviera Resort, you can only use your points at that resort (nowhere else), and if you purchase resale at any other resort that went on sale prior to 2019, you can only use your points at the resorts that opened through 2019 (not Riviera or anything that opened after). In addition, when purchasing resale today, you do not qualify for Disney Vacation Club Member discounts, benefits, or events. If these extras do not matter to your family, resale can be a great way to tap into the value of Disney Vacation Club for a lower cost. If they do, you might want to consider a direct purchase through Disney.
It’s Not a Financial Investment. It’s a Family Purchase.
Despite the contrasting logic presented above, I still decided to become a Disney Vacation Club Member, and there’s a very simple switch that had to click in my head for me to make sense of it all. Disney Vacation Club is not intended to be a financial investment. It’s a purchase you make for your family.
I elaborate more on this idea in the podcast episodes (I know, that’s three shameless plugs now), but the short version is that deciding to become a Disney Vacation Club Member means you and your family will have more reason to take that Disney vacation every year. Even if finances are tight and you can’t visit the parks on that particular trip or you simply want to enjoy a more laid back vacation, you still will have the points to stay at some of the best properties at Walt Disney World, Disneyland, and beyond, enjoying time with your family in the middle of the magic. It’s not really about saving money. It’s about guaranteeing decades of memorable Disney vacations for your family. And the great news is, as long as there’s a strong resale market for Disney Vacation Club, there’s a good chance of a viable exit strategy should you need to sell your deed.
Personally, I’ve only been a Disney Vacation Club Member for 10 months now (after about 10 years of crunching the numbers and saving up for the purchase), but I can already feel the benefits for my young family. Our next trip, we’re staying at the Villas at Disney’s Grand Floridian Resort & Spa in a room that would have otherwise cost us over $900 per night. We’ll be a monorail stop away from the Magic Kingdom (or a stroll around World Showcase), and our daughter, now 2 years old, will be able to see Cinderella Castle from her hotel room. On our last trip, we stayed in a 1 bedroom villa at Disney’s BoardWalk Villas, a room I could never justify spending the cash to rent, and it was one of the best Disney vacations we ever had. We walked to EPCOT and Disney’s Hollywood Studios, did laundry with the in-room washer/dryer (which ironically made for a less stressful vacation), and spent some leisurely time strolling around Crescent Lake before returning to our room in the evening. In the grand scheme of things, these little extras matter very little, but the memories we’re building together as a family are proving to be worth every bit of the purchase.
If you’re interested in learning more about becoming a Disney Vacation Club Member, definitely consider visiting the Disney Vacation Club website or scheduling time to speak with a Disney Vacation Club Sales Guide. This article was in no way associated with or sponsored by Disney Vacation Club or any other Disney entity. The opinions expressed here are my own.