Is Disneyland Hotel or Grand Californian a Better Investment?

It has been a week now since the Villas at Disneyland Hotel (VDH) went on sale. Starting at $230 per point before incentives, many of us like myself were excited about buying at this property. After all, the only other Disney Vacation Club resort at Disneyland Resort in Anaheim, CA is the Villas at Grand Californian (VGC) which went on sale in (2009) and has been sold out for quite some time with the only option being the resale market. VGC is also the smallest DVC resort, featuring just 48 units and a maximum of 71 rooms.

Villas at Disneyland Hotel Goes on Sale

VDH went on sale May 2nd, 2023, with an incentive offer starting at 125 points for existing DVC members. At 125 points you receive $5 off per point, but the best deal starts at 150 points where you receive $20 off per point bringing the price down to $210 per point.

Disneyland Hotel DVC Tower

Controversy Over VDH Point Charts

While many of us have been excited about VDH going on sale, on April 18th, 2023, Disney announced point charts for VDH, and it was not without controversy. VDH is the second resort to charge a transient tax at checkout. Aulani being the first. This means that at checkout, the person staying on points will pay $2.73 per point in 2023 and $2.82 per point in 2024. That is in addition to annual dues, which are $9.06 per point.

It is important to note that DVC members already pay transient tax, but it is normally paid with your annual dues. For comparison, at VGC, the transient tax in the annual dues is charged at about $0.51 per point.

Comparison of Transient Tax Rates for VDH and VGC

This is something I don’t understand.  Why is it so much higher at VDH than VGC?  The Anaheim, CA tax is 15% of the rent charged by the operator.  For VDH, if you say it is $230 per point, divided by 50 years then you are paying $4.60 per point each year. If you take 15% of that, the price is $0.69 per point, which is similar to what VGC is paying.  If you add in annual dues, 15% is $2.05 per point which gets us closer to the $2.73 rate, but not quite there. The rate is also increasing to $2.82 per year in 2024, a 3.2% increase.  If that same increase continues linearly over 50 years, it would cost $12.78 per point just in taxes. That probably isn’t realistic, but how that tax increases over time is a big unknown.

For 2023, if you use all of your points at VDH this is equivalent to an annual dues rate of $11.79 per point which you need to factor into your equations when comparing the prices of VDH vs. VGC.

VGC and The Resale Market

VGC on the other hand has only been for sale via the resale market. Through 2022 it commanded a very high average selling price, generally above $295 per point. However, the expectation was prices might drop once VDH went on sale, after all, more supply at a lower price should lower overall prices right?  In early 2023, with pricing down in general, VGC contracts were also coming down in price. It was not uncommon to find prices at $250 per point or even unicorns as low as $225 per point.

With the announcement of VDH and the controversial transient tax rate, however, the exact opposite happened to VGC prices, they started to go up, with multiple offers on contracts and available inventory disappearing overnight.

Grand Californian

For myself, my plan was to buy a small contract at VDH and use it every other year. Being on the East Coast and a Disney World regular, a trip to Disneyland every other year made sense to me.

But, would it be more economical to buy at VGC or at VDH?

Even at the higher prices of VGC, over time the lower taxes could cover the increased initial price point.

Spreadsheet Analysis

After doing a spreadsheet analysis which is imperfect at best, assuming a 4.0% increase in dues each year for VDH and a 4.5% increase for VGC, and a 3.2% increase in the transient tax each year (this is based on the increase from $2.73 per point in 2023 for the tax to $2.82 per point in 2024) my estimates say for 150 points at around $255-260 per point VGC is a better deal over ten years while at 37 years (the number of years left on VGC) even at $310 per point you come out ahead. If you’re buying a smaller contract with no incentives, $270-275 is the break-even point for ten years.

However, VDH has 13 more years on its contract, and your upfront capital investment is less. I’m not in finance, so I make no guarantees, but you could invest those savings and might come out ahead of VGC.

Also right now, if you buy VDH they are direct points, and if you bought 150 or more would give you Membership Extras (the old blue card), and you could use them at any DVC resort, including Riviera and any new resort.

The VDH point chart is cheaper than VGC too, meaning many times of the year, you can get a room for less points at VDH than at VGC. Plus, VDH has the Duo Studios, which are even less points but only sleep 2. If the Duo Studios work for you, this is a big advantage over VGC.

Resale Restrictions for VDH

The potential drawback of VDH other than those taxes? Resale restrictions. If you sold your VDH contract in the future the new owners would only be able to use that contract at VDH. You may not care about that since you won’t have those restrictions, but it could result in lower prices in the resale market. VGC resale buyers can use those points at any of the original 14 DVC resorts. I say potential drawback because I believe the demand for VDH at resale will still be high, resale restrictions or not. Too many people want points at a Disneyland Resort!

Advantages of VGC

What about VGC? Other than the advantages on taxes, it is also closer to the entrance of Disneyland, and it has its own dedicated entrance to Disney California Adventure. Location, location, location! VGC is also often considered the premier Disneyland hotel, similar to the Grand Floridian in Walt Disney World. When I was fortunate enough to stay at VGC using points, I received a backpack full of swag from their DVC office, and they have amenities such as slippers and extra toiletries like Q-tips that most DVC resorts I stay at do not have. Perhaps VDH will have all of these perks as well, though!

Cost Per Night Analysis for VDH and VGC

Another way of looking at this is how much you would expect to pay for points after accounting for the dues you’ll pay over the next 37 or 50 years and using the existing point chart, how much does that cost you per night?  For VDH, that 150-point contract would cost $38.40 per point over 50 years and between $499.19 to $1075.17 per night for the cheapest to the most expensive Deluxe Studio on a weeknight.  Because VGC only has 37 years left on it, you have fewer years to spread the upfront costs across but also less years of annual dues. Annual Dues are the larger cost driver here, so for a 150-point contract at $300 per point, you’d pay $29.00 per point and between $492.98 and $869.96 per night for a Deluxe Studio on a weeknight. 

So at the end of the day, what should you do? This ultimately isn’t just a decision you can make using financial numbers, where you own is a personal preference too. There definitely isn’t just 1 right answer.

For me, the location of VGC is just so amazing and the atmosphere of the hotel. Most importantly my wife also loved VGC. So we were lucky enough to find a reasonably priced contract last week in this crazy resale market for VGC.