Can anyone explain the recent dues jump at Poly?

[Jlo85]

We are shopping for a contract at a Magic Kingdom resort after our Poly resale contract fell through. But the recent dues jump of 7.6% has kind of scared me. I'm curious why Poly dues jumped so much? Shouldn't all of the resorts felt similar inflation pressures? And why is Copper Creek so cheap, and jumped so much less? And do we expect these trends to continue?

I do understand Poly studios are larger footprint, but wouldn't that have already been baked-in to the dues?

Resort	2023 Annual Dues	2022 Annual Dues	Growth 2022 to 2023	Inception to Date CAGR*	Standard Studio for a Week	Cost in Dues for Standard Studio for a Week
Copper Creek	$7.92	$7.60	4.19%	1.30%	123​	$974.16​
Bay Lake Tower	$7.43	$7.08	4.84%	5.20%	132​	$980.76​
Boulder Ridge	$8.51	$8.15	4.47%	4.10%	125​	$1,063.75​
Grand Floridian	$7.33	$7.01	4.64%	3.10%	158​	$1,158.14​
Polynesian	$7.95	$7.39	7.60%	3.70%	160​	$1,272.00​

 

[RoseGold]

I can speculate some excuses for you, like the new Poly lobby, but the truth is these numbers are pretty opaque. None of us really know. Legally, these have to be the costs of running the resort, but you can see they've been all over the place over time.

And of course dues will keep going up. I'd argue if Vero keeps pace, dues will be so high that it could get high enough to make it a worthless timeshare. This is not a rare thing in timeshares, it's kind of the point for many of them.

 

[Brian Noble]

Over the long run, I expect most WDW resorts to have a similar total cumulative growth, in terms of percentages. Those tend to be influenced in either direction by the initial estimate. If it is on the high side, the increases are very low in the first few years. For example, Riviera was considered "very expensive" when it first went on sale, but the pack has caught up. Also, the older a resort, the more maintenance costs are likely to creep in and bump the rate up a little bit. But every resort will eventually experience that, and it is not the dominant cost component if you look at individual resort budgets.

I don't worry quite as much about individual year-over-year changes because I expect them to smooth out over time. And, if you look at the Poly, it's cumulative growth rate since inception is not all that different from the other WDW resorts. The outliers are BLT on the high side, and Riviera on the low, followed closely by CCV.

I think dues differences are less important in the overall scheme of things when picking a home resort. For example, we'd probably pass on Poly, because we are not Queen bed people, nor do we need a bungalow for the two of us---and we'd pass on it even if it were the best deal in the area.

 

[_19disnA]

Probably relates to supply & demand. I have never owned a Disney timeshare, but the prices for rooms at Poly have gotten to be among the most expensive on the property, so it doesn't surprise me that DVC is in the same boat. I doubt they would be building a new tower at Poly if they didn't expect to consistently fill the rooms.

 

[Brian Noble]

Probably relates to supply & demand.

Dues are legally required to reflect the costs of resort operation and upkeep. That's very different than room rental rates, which are set based on supply and demand.

 

[eticketplease]

Going with what @Brian Noble stated about new resorts having higher dues when they start out has me thinking that Poly 2 will most likely be part of the existing association and that is part of the reason for the jump.

 

[Brian Noble]

They can't do that yet; the new component does not yet exist, and so its costs cannot be captured in dues.

Disney does estimate what the actual costs will be, but they can't just wildly make up numbers---at least, not within the boundary of the law.

 

[_19disnA]

I doubt the exact formula for resort operations/upkeep is that cut & dried. DVC and non-DVC resort guests share many of the same amenities/grounds so not sure how you 'prorate' those. They recently rebuilt the Poly monorail station which clearly benefits both groups.

 

[RoseGold]

When looking at these numbers, it's important to remember Aulani. Aulani underestimated dues, and I think it's fair to call it a cluster. That's why there are some "subsidized" Aulani contracts from when Disney, er, "miscalculated" dues.

The resorts after that, CCV and RIV, had high estimates when they went for sale, which could explain the slow growth. I think one even went down at some point. So, the slow growth of the newest resort is a mathematical result of that caution. Doesn't mean they will grow slow in the future.

 

[Brian Noble]

I dimly recall conversations about this. Based on that (possibly faulty) memory, some of those costs are apportioned based on the # of rooms in each side, and others are based on the # of guests. For example, I think front desk/admin is per-room, but transportation is per-guest.

 

[pianomanzano]

In looking at the 2022 and 2023 dues breakdowns, housekeeping went up by 800k (6.3 million to 7.1 million), insurance went up by more than 200k (610k to 890k). Those 2 alone account for half of the $2 million increase in the operating budget for Poly.

 

[Jlo85]

So, when I break down dues by square footage of studios, the math starts to make more sense to me. And since housekeeping and insurance costs should correlate with square footage, I think that could explain it. The resorts seems to have similar dues per sq ft with Grand Floridian being a little pricier, but I think that makes sense.

I guess you could maybe extrapolate that if labor and insurance costs continue to be the main drivers of dues inflation, that resorts with larger units are going to have larger increases in dues.

Resort	Standard Studio for a Week	Cost in Dues	Standard Studio Sq Ft	Cost per Sq Ft
Copper Creek	123​	$974.16​	338​	$ 2.88
Bay Lake Tower	132​	$980.76​	339​	$ 2.89
Boulder Ridge	125​	$1,063.75​	356​	$ 2.99
Grand Floridian	158​	$1,158.14​	374​	$ 3.10
Polynesian	160​	$1,272.00​	447​	$ 2.85
Riviera	139​	$1,181.50​	423​	$ 2.79

 

[pianomanzano]

Here's where I got the breakdown of operating budgets in case you're interested.

 

[Nursemanit]

So, when I break down dues by square footage of studios, the math starts to make more sense to me. And since housekeeping and insurance costs should correlate with square footage, I think that could explain it. The resorts seems to have similar dues per sq ft with Grand Floridian being a little pricier, but I think that makes sense.

I guess you could maybe extrapolate that if labor and insurance costs continue to be the main drivers of dues inflation, that resorts with larger units are going to have larger increases in dues.

Resort	Standard Studio for a Week	Cost in Dues	Standard Studio Sq Ft	Cost per Sq Ft
Copper Creek	123​	$974.16​	338​	$ 2.88
Bay Lake Tower	132​	$980.76​	339​	$ 2.89
Boulder Ridge	125​	$1,063.75​	356​	$ 2.99
Grand Floridian	158​	$1,158.14​	374​	$ 3.10
Polynesian	160​	$1,272.00​	447​	$ 2.85
Riviera	139​	$1,181.50​	423​	$ 2.79

Except the GF2 studios are also 447 sq feet and GF1 has a separate check in staff and bell service. So I think we will see that VGF is just being held low for sales purposes. It will jump when sold out. I agree the 8% at PVB is a sign it will be the same association and I expect the dues to be $8.50 is next year so they equal RR.

 

[eticketplease]

Here's where I got the breakdown of operating budgets in case you're interested.

Thanks that is a nice little website that I had never heard of

 

[RoseGold]

Except the GF2 studios are also 447 sq feet and GF1 has a separate check in staff and bell service. So I think we will see that VGF is just being held low for sales purposes. It will jump when sold out

This isn't right. GF2 joined VGF1, so the sales material all used the existing VGF1 dues, which were already calculated. It is right for CCV or RIV, they had estimates, but not for VGF2. And CCV/RIV had fairly high (accurate?) estimates, as evidenced by how little they went up in subsequent years.

 

[Nursemanit]

This isn't right. GF2 joined VGF1, so the sales material all used the existing VGF1 dues, which were already calculated. It is right for CCV or RIV, they had estimates, but not for VGF2. And CCV/RIV had fairly high (accurate?) estimates, as evidenced by how little they went up in subsequent years.

I can not think of any other reason for poly to go up 8% and VGF less than 2% - the staffing has to be similar or even higher at VGF

 

[RoseGold]

I can not think of any other reason for poly to go up 8% and VGF less than 2% - the staffing has to be similar or even higher at VGF

Well, it's not from sales estimates, because they weren't sales estimates. Disney has pulled monkey business with sales estimates, but not this time.

 

[havoc315]

DVC does publish the full budget, so you can get an idea of where the dues are going.
The budgets include funds for maintenance, etc. If for example, Skyliner upkeep costs more than was expected, the Riviera dues will go up. (and if there are fewer unexpected maintenance costs, dues may go down).

So without poring over the budget details, I can't say with any precision why the Poly had a more significant increase. But is is likely that the costs of some aspect of Poly went up more than expected. The most recent refurb cost more than had been initially budgeted, for example.

 

[havoc315]

This isn't right. GF2 joined VGF1, so the sales material all used the existing VGF1 dues, which were already calculated. It is right for CCV or RIV, they had estimates, but not for VGF2. And CCV/RIV had fairly high (accurate?) estimates, as evidenced by how little they went up in subsequent years.

VGF2 is rather unique. Since dues structure already existed, they initially just based the dues on the existing dues.
But what does the addition of another building and 200 units due to the per capita maintenance costs?
This significant change can have a very significant change on the dues -- In either direction.

The addition of a whole new building, with DVC also being charged a high percentage for the general resort maintenance, could cause the need for an eventual large dues increase.
Conversely -- It's possible that spreading out some of the fixed costs across 200 more units -- across 10,000 new owners or so -- Will actually lead to much lower maintenance costs. (For example, those new owners will contribute towards the maintenance of the DVC building lobby). That wouldn't lead to DVC cutting the dues, but it would lead to keeping dues flat for several years.