A serious discussion on future 'guestimates' of MF's..

[disneynutz]

AKV - I find the total budgeted amount a better indication of what owners are paying.
Administration and Front Desk $5,771,613

Animal Programs $2,575,870

Annual Audit $14,500

DVC Reservation Component $46,439

Fees to the Division $46,716

Housekeeping $7,552,827

Income Taxes $143,321

Insurance $452,279

Maintenance $5,230,975

Management Fee $3,783,093

Member Activities $1,414,890

Security $551,509

Transportation $3,640,221

Utilities $2,052,152

Bill

 

[DLgal]

I'm curious as to how you are getting such a significant discount. Military, most likely? A club level room at the WL in June is $673 all-in at rack. I think the public at large is getting 10%-20% off.

Yep. Military is 40% off for Deluxe resorts, all room types. For my comparison, I put in the exact same dates as our honeymoon in 2001. June 26-July 4. Today, the rack rate for that room would be $686.25. At the discount, it would be $411.75/night.

And, IMO, you cannot compare a Studio with a Club Level room (although for simplicity sake, I did). It's not equivalent in terms of either accommodations or amenities. We use the CL lounge for breakfast, most dinners, desserts, and we drink the alcholic beverages. For our family of 4, we come out well ahead just on food and drinks when we stay CL. If we were in a Studio, we'd need to spend more money on food, and without a full kitchen and full sized refrigerator, we'd be limited in what we could cook in there.

 

[Pluto777]

As I posted, the prior management seemed to set the dues low for new resorts, three executives were fired over that mistake. The association is run by Disney with Disney employees as officers, they set the budgets and collect the dues. Isn't a budget an estimate of future costs? Do we always meet the budgeted amounts, end up paying more or get a refund?

Bill

Well, the officers can set budgets, but don't they still have some limitations as things are voted on? As to the CCV fiasco, even if they did miscalculate the costs (I'm still not sure what exactly happened) the fact remains that at least in the case of CCV, it certainly appears at least to me that they did not try to 'set MF's' at an unreasonably low price the first year to 'attract' buyers. Past is past, my concern is limited to attempting to estimate the future of the non-2042 resort MF trends (SSR, PVB, BLT, GFV, AKV and 'special' OKW) for the next few decades...

 

[DLgal]

Quick math:

$412 per night * 7 nights = $2884

$2884 weekly cost / $14 per point = 206 points

cost for week on points
Adventure 107
Choice 107
Dream 120
Magic 127
Premier 176 (only 3 of the 52 weeks)

it would appear renting at $14 is significantly less than discounted club level and owners do not pay $14 per point that is the rental rate with margin built in and today the rate is much closer to $16 per point average than $14.

I used the calculator on David's based on our dates this year. We will be at Contemporary in a Theme Park View Club Level Room from July 3-7. Equivalent would be a 1 Bedroom Unit, MK View, at BLT (taking into consideration the room size and sleeping arrangements (our kids can't share a bed, so we need three sleeping surfaces), plus the Club Level perks.

Total rental cost BLT: $3296.

Our second reservation is a Deluxe Room, Club Level, at the Beach Club July 7-14. That room comes with a water view, which you can't even get at BCV, and is significantly larger than a Studio, so I bumped that one up to a 1br as well.

The cost to rent a 1br at BCV would be $4304.

So, for a total of $7500 to rent, or $681/night. Plus groceries to make up for the loss of Club Level food/drinks.

We are paying $598/night at CR and $497/night for the Beach Club, for a total of $5871, taxes all in. And we don't need to budget for groceries.

 

[Pluto777]

AKV - I find the total budgeted amount a better indication of what owners are paying.
Administration and Front Desk $5,771,613

Animal Programs $2,575,870

Annual Audit $14,500

DVC Reservation Component $46,439

Fees to the Division $46,716

Housekeeping $7,552,827

Income Taxes $143,321

Insurance $452,279

Maintenance $5,230,975

Management Fee $3,783,093

Member Activities $1,414,890

Security $551,509

Transportation $3,640,221

Utilities $2,052,152

Bill

THANKS FOR POSTING THIS! : ) So "Animal Programs" is $2,575,870? So it is not terribly significant then is it? Funny how there is ALSO a slot called "Maintenance" - and it is pretty big! What does "Maintenance mean in this context? I thought the whole thing was maintenance? (also management fee?). Thanks again for that post!

 

[tjkraz]

I agree. It doesn't seem like people really understand how much a 3% annual increase is after 40 years. That $6.55/pt maintenance seems reasonable now, but in 40 years it becomes $21.37. Yikes! On a 200 point contract, you're talking over $4k per year in just MF.

In 40 years, the $412 room you cited later will be over $1300 per night at the same 3% increase.

I just pulled out my folio from our honeymoon at WL in June 2001. Our room rate (taxes all in) was $261. Club Level room. I entered the same dates for this year and my discount price would be $412 taxes in, same room type. The cost (using a discount) has increased about 2% per year for this room since 2001. Not a big increase. Looking at the rack rates only, the increase has been 2.7%. So, still less than 3% per year.

Likely inaccurate.

According to information archived from Mousesavers, rack rates on a WL concierge room during what was once Regular Season (April - July) have increased from $385 per night in 2005 to $460 in 2010 and $673 in 2018. That's an annual increase of 4.4%. And it doesn't take into account changes in seasons with the $673 rate actually being one of the cheaper summer dates offered. The same room in April & May ranges from $704-844 per night, an increase of more than 6%.

As previously stated, DVC annual dues are linked to the actual operating costs of Disney's resorts. Dues increase because all of the underlying expenses also go up. The hotel business is subject to those same increases. It makes little sense to suggest that Disney is spending 4% more on labor, utilities, fuel, taxes and other expenses to operate its timeshares and hotels, while only raising room rates by 2%. That's not how Disney does business.

....The cost to rent a 1br at BCV would be...

If you want validation that renting is unwise in your scenario, then I agree. But since the topic of future dues rates applies to owners, the total cost of ownership is far more relevant. Rental rates of $14-18 per point include a solid 100% markup over what the owner could pay to acquire the points and for their annual dues.

There's no clear comparison here since you're specifically looking at concierge rooms and applying a hefty discount. Timeshare ownership isn't for everyone and many of us have regrets about the timing and volume of purchase. But if you evaluate what it would cost to vacation on owned points from 2001 onward, the numbers would be quite a bit different from what you're presenting. Even more so when considering the VWL/BRV points are WORTH MORE today than in 2001.

 

[Ben E N]

I used the calculator on David's based on our dates this year. We will be at Contemporary in a Theme Park View Club Level Room from July 3-7. Equivalent would be a 1 Bedroom Unit, MK View, at BLT

Our second reservation is a Deluxe Room, Club Level, at the Beach Club July 7-14. That room comes with a water view, which you can't even get at BCV, and is significantly larger than a Studio, so I bumped that one up to a 1br as well.

This is the point I was making earlier about being able to cherry pick data to fit your argument, but not having the general trend work at all in your favor. You specifically looked for the highest price 1 BR on property to compare to a much smaller room at a different resort, ignoring that the larger accommodations are both closer to MK and provide a washer and dryer and extra bathroom. You then argued that the water view at BCV is equivalent to having all the extra space of a 1 BR at the same resort. Those are very subjective comparisons, and will be no means apply to all people.
That's where comparing something like the Polynesian club rooms to DVC makes more sense. The room sizes are about the same. You do get the extra cheap beer and wine with club level, but get the cost savings with DVC. To each their own, but it is a much more reasonable comparison, and one that most likely comes out in DVC's favor.

 

[hlhlaw07]

I used the calculator on David's based on our dates this year. We will be at Contemporary in a Theme Park View Club Level Room from July 3-7. Equivalent would be a 1 Bedroom Unit, MK View, at BLT (taking into consideration the room size and sleeping arrangements (our kids can't share a bed, so we need three sleeping surfaces), plus the Club Level perks.

Total rental cost BLT: $3296.

Our second reservation is a Deluxe Room, Club Level, at the Beach Club July 7-14. That room comes with a water view, which you can't even get at BCV, and is significantly larger than a Studio, so I bumped that one up to a 1br as well.

The cost to rent a 1br at BCV would be $4304.

So, for a total of $7500 to rent, or $681/night. Plus groceries to make up for the loss of Club Level food/drinks.

We are paying $598/night at CR and $497/night for the Beach Club, for a total of $5871, taxes all in. And we don't need to budget for groceries.

As someone who has also used the generous military discount, I agree that renting points generally doesn’t come out more favorable than the military discount. I have used the discount on 2BR villas and doing so always comes out ahead of renting unless you find distressed points. BUT, the military discount does not compare to what my costs are for a 2BR on my own points that I bought via resale. Comparing rental rates to the military discount is disingenuous in a discussion of maintenance fees which would only come into play if you actually owned the points and you are not likely to be able to find someone whose true point costs is close to current rental prices.

 

[John-DVC]

Looks like your mind is made up which is great for you. Happy you have found what fits for you.

To each their own when it comes to justification we seem to all see things a bit differently. I believe long term the % increase in MF is insignificant due to a similar increase in rack rate or rental points. The only way to avoid it is to not go on vacations. If I weren’t DVC I would stay in moderate or value. DVC gives me the deluxe experience at the same yearly cost. The up front investment is just a flat rate that I expect to get back (less time value of money).

The time value of money aspect when I run the numbers is 7 yr break even. I got my points at <50% of the direct cost. At direct it’s almost 20 years. Still pretty expensive to be honest but something we are pretty happy with.

 

[DLgal]

Here's the thing, though. This discussion is about whether or not people REALLY understand what the maintenance costs will be over the life of the contract.

I just ran some numbers ASSUMING THE FOLLOWING:

Buying DIRECT AT TODAY'S PRICES
Buying 150 points
Visiting Yearly for ONE CONTINUOUS WEEK IN JULY
Staying in a Studio
Buying at Copper Creek Villas
45 year contract (not sure if this is the current contract length, so correct me if I'm wrong)

Buy in: 150 Points=$26,400
Maintenance fees at $7.33/point on year 1, with a 3.5% assumed yearly increase over 45 years

Maintenance fees ALONE on this contract are $120,432.40

When you add in the buy in cost, you get a grand total of $146,832.40

Now, when you break that down, into our "week long July vacation scenario", the average nightly cost for that Studio is $466.13. That is close to the rack rate average for all the Deluxe resort Standard Rooms. And it's WAY more than I have ever paid (or will pay in the future) for a "standard view room" at a Deluxe resort. I just don't see the savings, sorry.

Now, these numbers vary if you buy resale and you have an old contract with more than 20 years of use already on it. However, regardless of when you bought your contract, the BULK of your monetary outlay on DVC is on the maintenance fees. And it's the part that everyone seems to just gloss over like it's no big deal.

 

[hlhlaw07]

Here's the thing, though. This discussion is about whether or not people REALLY understand what the maintenance costs will be over the life of the contract.

I just ran some numbers ASSUMING THE FOLLOWING:

Buying DIRECT AT TODAY'S PRICES
Buying 150 points
Visiting Yearly for ONE CONTINUOUS WEEK IN JULY
Staying in a Studio
Buying at Copper Creek Villas
45 year contract (not sure if this is the current contract length, so correct me if I'm wrong)

Buy in: 150 Points=$26,400
Maintenance fees at $7.33/point on year 1, with a 3.5% assumed yearly increase over 45 years

Maintenance fees ALONE on this contract are $120,432.40

When you add in the buy in cost, you get a grand total of $146,832.40

Now, when you break that down, into our "week long July vacation scenario", the average nightly cost for that Studio is $466.13. That is close to the rack rate average for all the Deluxe resort Standard Rooms. And it's WAY more than I have ever paid (or will pay in the future) for a "standard view room" at a Deluxe resort. I just don't see the savings, sorry.

Now, these numbers vary if you buy resale and you have an old contract with more than 20 years of use already on it. However, regardless of when you bought your contract, the BULK of your monetary outlay on DVC is on the maintenance fees. And it's the part that everyone seems to just gloss over like it's no big deal.

Well your numbers are off because it doesn’t take 150 points for a 1 week stay in a studio during July at copper creek. The contract is 50 years. And I’m not sure where you get that everyone seems to gloss over it like it’s no big deal. If you read most of the posts on this board or any blogs talking about purchasing DVC almost everyone lays out how MFs are the bulk of the cost with DVC and shouldn’t be dismissed. Hence why SSR and BLT are generally touted as the Best buys. Obviously that argument only works if we are looking at MFs as they sell for widely different price points. Now if you are only referring to those individuals who buy direct without doing any research and buy with pixie dust in their eyes or without even really knowing about the resale market, then maybe you have a point.

 

[pineapplepalms]

Here's the thing, though. This discussion is about whether or not people REALLY understand what the maintenance costs will be over the life of the contract.

I just ran some numbers ASSUMING THE FOLLOWING:

Buying DIRECT AT TODAY'S PRICES
Buying 150 points
Visiting Yearly for ONE CONTINUOUS WEEK IN JULY
Staying in a Studio
Buying at Copper Creek Villas
45 year contract (not sure if this is the current contract length, so correct me if I'm wrong)

Buy in: 150 Points=$26,400
Maintenance fees at $7.33/point on year 1, with a 3.5% assumed yearly increase over 45 years

Maintenance fees ALONE on this contract are $120,432.40

When you add in the buy in cost, you get a grand total of $146,832.40

Now, when you break that down, into our "week long July vacation scenario", the average nightly cost for that Studio is $466.13. That is close to the rack rate average for all the Deluxe resort Standard Rooms. And it's WAY more than I have ever paid (or will pay in the future) for a "standard view room" at a Deluxe resort. I just don't see the savings, sorry.

Now, these numbers vary if you buy resale and you have an old contract with more than 20 years of use already on it. However, regardless of when you bought your contract, the BULK of your monetary outlay on DVC is on the maintenance fees. And it's the part that everyone seems to just gloss over like it's no big deal.

A few things to note:

- Copper Creek is a 50 year contract.

- Buying a 150 point direct contract with incentives at today's prices before closing costs is $25,550 (with closing probably closer to $26k).

- A 150 point contract during a week in July (assuming the point chart doesn't get re-allocated) would get you ~63 more nights over the life of the contract compared to paying for 7 nights a year since it doesn't cost 150 points to stay at CCV for that week (cost is currently 127 points).

- The breakdown into the weekly scenario of $466.13 is a bit misleading... Disney hotel rack rates are likely to increase significantly in future years as well, so looking at the average nightly cost over the next 50 years compared to current rates doesn't provide a valid comparison. Looking at current rates can be helpful since we can compare the current rates to the cost of points - in this case, the average cost of a Deluxe Studio night that week is ~$196 splitting the cost of the purchase price over all the points for the life of the contract plus the MFs for the points needed for the week's booking this year. If your military discount beats that, that's great for you! A lot of us don't have the benefit of that discount.

- I'm not sure where everyone glosses over MFs... I did significant research on these boards before we purchased DVC, and I read over and over again that MFs over the life of the contract are going to be the bulk of what we pay compared to the initial purchase cost. I never got the impression that MFs are no big deal.

Regarding club level, it's great that it works for your family. Everyone has their own vacation styles. For us, eating out at various places on our Disney trips is a big part of the fun, and club level every trip is just not worth it for us since we would be tied to the same place for all those meals. We would much rather have a larger 1BR or 2BR villa and owning DVC allows us to do so much more affordably than paying for those rooms outright.

 

[hlhlaw07]

the average cost of a Deluxe Studio night that week is ~$196 splitting the cost of the purchase price over all the points for the life of the contract plus the MFs for the points needed for the week's booking this year.

And when you calculate with resale prices it becomes even cheaper. Arguing that DVC is close to rack rate at deluxe resorts just demonstrates that person probably doesn’t understand the ins and outs of how it works. DVC isn’t for everyone, and that’s perfectly fine, but arguing numbers that make no sense is silly. Just don’t buy it and move on.

 

[DLgal]

Well your numbers are off because it doesn’t take 150 points for a 1 week stay in a studio during July at copper creek. The contract is 50 years. And I’m not sure where you get that everyone seems to gloss over it like it’s no big deal. If you read most of the posts on this board or any blogs talking about purchasing DVC almost everyone lays out how MFs are the bulk of the cost with DVC and shouldn’t be dismissed. Hence why SSR and BLT are generally touted as the Best buys. Obviously that argument only works if we are looking at MFs as they sell for widely different price points. Now if you are only referring to those individuals who buy direct without doing any research and buy with pixie dust in their eyes or without even really knowing about the resale market, then maybe you have a point.

Sorry, forgot one assumption. I used 150 points per week because if you look at ALL the DVC resorts over a set week in July, you need an average of 150 points per week. People don't generally ONLY stay at their home resort so I wanted to use a more likely scenario of booking various properties.

 

[John-DVC]

I read it as the future of MF - So I took it as we all understand that MFs can add up based on its current cost. But we will focus on how much it will increase over time. Eg 3-5% per year

Here’s the MF for 50 yrs current cost $7.33/pt and 150 pts/yr:
1% = $72,685
2% = $95,954
3% = $128,840
4% = $175,671
5% = $242,786

I think most of the folks understand and are ok with it.

 

[DLgal]

I read it as the future of MF - So I took it as we all understand that MFs can add up based on its current cost. But we will focus on how much it will increase over time. Eg 3-5% per year

Here’s the MF for 50 yrs current cost $7.33/pt and 150 pts/yr:
1% = $72,685
2% = $95,954
3% = $128,840
4% = $175,671
5% = $242,786

I think most of the folks understand and are ok with it.

Read the original post. The poster said he/she didn't think "most people" gave enough consideration to MFs. I was responding to that, specifically. We considered buying DVC a couple times. Went on the tour, got all the books, etc. MFs were downplayed by the guides AND the book. Future increases were noted in tiny fine print. I never seriously considered their impact on the total cost of owning. I had to do the math myself to get an idea of what we were looking at spending over the long term. When you hear 3% increase in MFs per year, and MFs are in the vicinity of $5, you shrug like "eh, that's nothing."

Your table illustrates the potential problem with MFs. Disney leaves the "annual increase" amounts completely open to whatever they want it to be. Unless I'm wrong and your contract states that there is a maximum percentage they will raise them. Using your 5% scenario, your nightly cost of a studio jumps up to almost $800! That's insane! What happens if Disney decides MFs are going up 8% one year, 10% the next year, etc? You are at their mercy.

We decided DVC wasn't for us. I have a real problem with how Disney markets it as a way to save on vacations. It's not. Why would Disney want that? DVC is lucrative for Disney, not the owners.

 

[John-DVC]

Inflation happens everywhere though. Dvc, rentals, rack rate, admissions, food, merchandise... Everything goes up. Even non Disney. The only way to avoid it is to not buy anything or go anywhere or only go to places that are in the dumps at the moment.

5% per year inflation average over 50 yrs would be crazy regardless of what you are looking at.

 

[DLgal]

My original dues at OKW were a bit over $3. Now they are almost $7 twenty years later. I think as resorts get older and they want to do bigger renovations, they raise the dues more than 3% and closer to 5 or 6%. I think they can actually raise them up to 15% each year.

I missed this earlier. 15%? See...what if they just started doing that? That is crazy to think that they can go that high. Is there a board that has to approve these things and is the board composed of members? Like, does Disney have to justify the annual increases or can they do whatever they want?

 

[Networth]

I missed this earlier. 15%? See...what if they just started doing that? That is crazy to think that they can go that high. Is there a board that has to approve these things and is the board composed of members? Like, does Disney have to justify the annual increases or can they do whatever they want?

They must justify the costs, MF’s are solely to be used for the upkeep of the building including items such as transportation and the front desk, this is written in each contract.

I must say you seem like your mind is already made up, and your just attempting to validate your own choices with questionable math. Your arguing points that numerous posters have pointed out as in accurate or flawed. Why not just say DVC is not for me and move on?

 

[KAT4DISNEY]

I missed this earlier. 15%? See...what if they just started doing that? That is crazy to think that they can go that high. Is there a board that has to approve these things and is the board composed of members? Like, does Disney have to justify the annual increases or can they do whatever they want?

DVC MF's are based on costs.

Disney hotels are the one's that can go to whatever they feel the market will allow.