Annual increase question

[camack7827]

My sister and brother-in-law are DVC Members and trying to talk my wife and me into joining as well. In my research, the two questions I can find answers for are:

1) What is the average annual increase for maintenance fees?

2) What is the average annual increase for the cost of a hotel room (non DVC)?

I've heard that the maint. fee increase is less than the regular hotel room increase, but I'm looking for an average annual % increase in both.

Thanks in advance,
Chris

 

[RobDoc]

DVC dues have increased 3 - 5 percent per year with a maximum cap of 15 percent.

Cash rates have increased about 4 - 6 percent -- However the actual cash amount of the increase is much smaller on the dues since 5 percent of 4 is much smaller than 5 percent of 200.

Some years the dues have even gone down

 

[camack7827]

DVC dues have increased 3 - 5 percent per year with a maximum cap of 15 percent.

Cash rates have increased about 4 - 6 percent -- However the actual cash amount of the increase is much smaller on the dues since 5 percent of 4 is much smaller than 5 percent of 200.

Some years the dues have even gone down

Excellent info (and FAST!!). Thanks! Only question I have is, what do you mean "since 5% of 4 is much smaller than 5% of 200".

Thanks SOOOO much,
Chris

 

[Maistre Gracey]

DVC dues have increased 3 - 5 percent per year with a maximum cap of 15 percent.

Cash rates have increased about 4 - 6 percent -- However the actual cash amount of the increase is much smaller on the dues since 5 percent of 4 is much smaller than 5 percent of 200.

Some years the dues have even gone down

Doc, yes that's true, and it would certainly be nice if a studio was only 1 point per night...

MG

 

[Happy Birthday Cat]

Excellent info (and FAST!!). Thanks! Only question I have is, what do you mean "since 5% of 4 is much smaller than 5% of 200".

5% of 4 means 5% of $4.00 per point (which is the average maintenance fee per point owned)

5% of 200 means 5% of $200.00 which is a rate for a Disney Hotel room (which is on the low side for many of them).

Hope you don't mind me jumping in.

HBC

 

[camack7827]

5% of 4 means 5% of $4.00 per point (which is the average maintenance fee per point owned)

5% of 200 means 5% of $200.00 which is a rate for a Disney Hotel room (which is on the low side for many of them).

Hope you don't mind me jumoping in.

HBC

Don't mind at all, thanks for the info. I guess I don't understand what 5% of $4/point have anything to do with it if you have say 150 points. Isn't it then 5% of $600 for DVC? Ah... it's late and I'm easily confused. Thanks for the info.

Chris

 

[Shamus]

To take it one step further ....

If a room rented for 10 DVC pts or $200 per night the 5% increase would only make your dues for that night go from $40 to $42 while the cash night went from $200 to $210. If that 5% for both dues and room rates continued on for ten years, your dues cost would be $65.15 for the night while the cash rate would be $325.75 per night.

This shows how owning DVC is a hedge against room rate inflation.

 

[Maistre Gracey]

Don't mind at all, thanks for the info. I guess I don't understand what 5% of $4/point have anything to do with it if you have say 150 points. Isn't it then 5% of $600 for DVC? Ah... it's late and I'm easily confused. Thanks for the info.

Chris

My point exactly, except if we compare apples to apples, it would be approx 5% of $80 (20 points/night/studio).

MG

 

[LisaS]

Don't mind at all, thanks for the info. I guess I don't understand what 5% of $4/point have anything to do with it if you have say 150 points. Isn't it then 5% of $600 for DVC? Ah... it's late and I'm easily confused. Thanks for the info.

Chris

Yes, while a 3%-5% increase on the dues/point of $4.xx is a small number, you will be paying an extra (3%-5% * $4.xx * the number of points you own), which will be a much bigger number.

I focus on that bigger number since that is what I must be prepared to pay over the lifetime of the contract.

 

[RobDoc]

Doc, yes that's true, and it would certainly be nice if a studio was only 1 point per night...

MG

LOL! I must have looked at an old point chart. . That should have been 5 percent of 40 is less than 5 percent of 200.

 

[LisaS]

To take it one step further ....

If a room rented for 10 DVC pts or $200 per night the 5% increase would only make your dues for that night go from $40 to $42 while the cash night went from $200 to $210. If that 5% for both dues and room rates continued on for ten years, your dues cost would be $65.15 for the night while the cash rate would be $325.75 per night.

This shows how owning DVC is a hedge against room rate inflation.

This is how I looked at things as well when I crunched the numbers every which way before deciding to buy in. I used slightly different numbers since a studio requires 12-13 points per night for the time of year we plan to go to WDW. I used a higher number for the room rate since we like to stay in the Epcot area and at the time of year we like to go, an AP-discounted water-view room would be more than $300 (with tax).

 

[JimC]

My sister and brother-in-law are DVC Members and trying to talk my wife and me into joining as well. In my research, the two questions I can find answers for are:

1) What is the average annual increase for maintenance fees?

2) What is the average annual increase for the cost of a hotel room (non DVC)?

I've heard that the maint. fee increase is less than the regular hotel room increase, but I'm looking for an average annual % increase in both.

Thanks in advance,
Chris

PM your email address and I will email my spreadsheet with actual dues increases since inception. It includes comparisons to a moderate resort rates as well.

 

[Caskbill]

Think of it this way. If your State decided to make you pay 5% of the value of your house, OR 5% of the value of your Car, which would be less money?

If your house is valued at $200,000 and your car at $20,000, then taxes on the house would be $10,000 while taxes on the car would be $1,000.

Think of a regular hotel room as the house, and DVC as the car.

In real terms, if a hotel room is $200/night and you stay 5-nights, it's $1000. If it goes up 5% the next year, it goes to $210/night, or $1050 for the 5 nights. A net increase of $10/night or $50 more for the 5 nights.

If your DVC room is 13 points/night and dues are $4.00/point, your 5-nights require 65 points. Dues then equate to $260 for the 5-nights. If dues go up 5%, they increase to $4.20/point so the 65 points now equates to $273. A net increase of $2.60/night or $13 more for the 5 nights.

Go out 10 years and for the same example, your DVC room (in dues cost) becomes $423.51 for the 5-nights while the hotel room becomes $1628.89 for the 5 nights.

BTW, Statistically it's not valid to simply compare percentage increases on different bases if you want to compare relative value.

For example, say you're a family of 4. Next year your food bill goes up by 10%. Your neighbor is a family of 6 and their food bill also goes up by 10%. So who's going to spend more money for the increase, you or your neighbor?

Or, you got a 5% increase this year, and your boss also got a 5% increase. While you may have received the same rate of increase, who got more money?

When comparing things like this, you must compare the effect of the increase, not the rate of the increase.

Hope this helps.

 

[Caskbill]

Don't mind at all, thanks for the info. I guess I don't understand what 5% of $4/point have anything to do with it if you have say 150 points. Isn't it then 5% of $600 for DVC? Ah... it's late and I'm easily confused. Thanks for the info.

Chris

If you have 150 points at $4/point that's $600 in dues this year. If it goes up by 5% next year, your dues become $630, a net increase of $30.

150 points will get you 10 straight nights in an SSR studio (actually only 148 pts). So at a 5% increase that 10-night vacation will cost you $30 more next year than it costs you this year.

If a hotel room is $200/night today, your same 10-nights is $2000. With a 5% increase the 10 nights becomes $2,100. So it will cost you $100 more next year than it costs you this year.

That's an increas of $70 MORE than the DVC increase. Or if you want to throw a rate on it, it's 233% more than the DVC increase.

The difference increases each and every year. After 20 years, the actual dollars (in dues) for your DVC room will have totaled $21,431 in dues. The hotel will have cost you $71,438. (If you don't want to look at future dollars, you can convert them into today's dollars. That's equivalent to $13,000 for DVC stays, or $40,000 for hotel stays, in 2005 year dollars)

That's what is meant that 5% of $600 is less than 5% of $2000.

 

[PamOKW]

There are so many variable it's hard to get a clear comparison. Unfortunately, I can't find a rate for OKW in 1992 or 1993. I do have info for 1997. Remember, a hotel room also has 11.5% tax -- a number that has gone up as well.

1997 Regular Season OKW Studio @ rack rate -- $229
2005 Regular Season OKW Studio @ rack rate -- $289 Up 26%

1997 OKW Dues -- $3.14
2005 OKW Dues -- $3.86 Up 14%


Regular Season overlaps with 3 different DVC Seasons. For comparison, I'll pick Choice but points could be more or less. I also think the tax was less in 1997 but we'll keep it the same for this comparison

OKW Studio for a week (incl. Fri-Sat.) -- 82 points. Dues increase = $59.04

7 nights cash for OKW studio -- (1997 w tax = $255.34 per night/2005 with tax = 322.24 per night) Increase for 7 nights = 468.30


The years since the tragedy of 9/11 have thrown things a little out of whack. Deep discounts were offered on WDW hotel rooms to help drive tourism. DVC dues suffered from increased insurance costs, a drop in interest rates for invested DVC money, and a drop in the amount brought in by breakage (cash rental of DVC rooms). Rooms became easier to get and cheaper while DVC dues went up for the first time in years.

As tourism and the economy recover, the value of DVC versus cash should again become obvious.

 

[manning]

DVC dues have increased 3 - 5 percent per year with a maximum cap of 15 percent.

Cash rates have increased about 4 - 6 percent -- However the actual cash amount of the increase is much smaller on the dues since 5 percent of 4 is much smaller than 5 percent of 200.

Some years the dues have even gone down

Don't forget the increases are compounded, both on DVC and hotel rates. That means that a number of years in the future the cost of DVC could end up being a lot cheaper.