DVC Dues Increase? potential buyer concerns

[SpacemanSpiff]

having just returned from my honeymoon, and it being my first visit to Walt Disney World (Stayed at Port Orleans French Quarter - really nice place, very quiet resort, lots of fun - loved the boats to Downtown Disney) I have become increasingly interested in joining the DVC but have a few a few issues I hope can be clarified by current members before doing so. Any insight would be much appreciated. My first concern is the price of dues. As I understand the system, you pay a specified dollar value per point each year for maintenance and taxes. According to Disney, the dues are suject to a 15% increase each year. If I was to buy into Saratoga Springs in 2006, a 'worst case senario' (unlikely as it may be) would start with the dues being $3.83/pt. in 2006 and increasing 15% until 2054 resulting in the final dues/pt. being over $2700/pt (in 2054).. Although those types of increases are not likely, it does create a problem when trying to project future dues and overall cost over the life of the lease. Can someone supply me a more realistic projection of dues increases along with any information about scheduled or periodic predictable increases? Again, any help would be wonderful.

PS. it is tough trying to find reasons not to buy into this

 

[dianeschlicht]

Here is a chart of the dues history for all DVC resorts since the first (OKW) opened in 1991.
Year OKW BWV VB VB(sub) HH VWL BCV SSR
2005 3.86 4.41 4.87 3.84 4.04 4.35 4.27 3.83
2004 3.68 4.25 4.67 3.67 3.86 4.22 4.18 3.80
2003 3.49 4.11 4.36 3.45 3.70 4.05 3.97
2002 3.22 3.92 4.17 3.33 3.48 3.80 3.77
2001 3.13 3.82 3.97 2.70 3.32 3.63
2000 3.16 3.94 4.08 2.87 3.25 3.62
1999 3.16 4.02 3.99 2.82 3.18
1998 3.17 3.94 2.76 3.20
1997 3.14 3.84 2.90 3.16
1996 2.99 3.70 2.82 3.16
1995 2.84
1994 2.70
1993 2.63
1992 2.56
1991 2.51

 

[dianeschlicht]

Just wanted to point out that on my chart above, you can see that sometimes the dues have actually decreased.

 

[spiceycat]

DVC tries it best to kept their cost down. the increases are generally in the 5% to 8% range.

that say it can't control property tax (florida) or insurance costs (florida will get a big increase this year in the insurance).

I think that Florida probably has the highest property insurance in the US - too many darn hurricanes....

there were a few years when there was zero increase for OKW.

another thing to remember the WDW hotels are also go to be increasing 5% to 10% each year.

you need to compare a DVC studio with a WDW deluxe resort room (also works with a moderate). Don't compare a 1 or 2 bedroom to a deluxe resort room - not fair to either party.

I love my DVC!!!!

 

[RobDoc]

Dues, since 1991 have averaged an increase of 4% per year. Some years they have increased (I think 8% has been the maximum increase in any year- due to large insurance and payroll increases) and some years they have actually decreased. The 15% is the legal maximum- members would have to vote to allow a larger increase. I consider that 15% figure to be a worst case scenario and not something to use as the norm - and the past history of our dues will substantiate that as fact.

 

[cobbler]

Also keep in mind 2700/year for dues in 2054 isn't 2700 in today's $$. You can't look at tomorrows cost at today's income.

 

[ClarabelleCow]

Here is a chart of the dues history for all DVC resorts since the first (OKW) opened in 1991.
Year OKW BWV VB VB(sub) HH VWL BCV SSR
2005 3.86 4.41 4.87 3.84 4.04 4.35 4.27 3.83
2004 3.68 4.25 4.67 3.67 3.86 4.22 4.18 3.80
2003 3.49 4.11 4.36 3.45 3.70 4.05 3.97
2002 3.22 3.92 4.17 3.33 3.48 3.80 3.77
2001 3.13 3.82 3.97 2.70 3.32 3.63
2000 3.16 3.94 4.08 2.87 3.25 3.62
1999 3.16 4.02 3.99 2.82 3.18
1998 3.17 3.94 2.76 3.20
1997 3.14 3.84 2.90 3.16
1996 2.99 3.70 2.82 3.16
1995 2.84
1994 2.70
1993 2.63
1992 2.56
1991 2.51

Does anyone know why VWL dues are so high??? I understand why VB is, I would think HH would be higher, but tax in SC is lower, but wouldn't it make sense that the DVC's attached to resorts would be lower because they are subsideized by the main resort??? Or am I thinking backwards? It has gone up 20% since I puchased in 2001.

 

[manning]

I'm kinda leaning to a higher than usual increase for next year. The reason is the explosion in energy cost. Everything runs on energy and there is a lot of energy required for WDW.

 

[SpacemanSpiff]

Thanks everyone for the information - I thought it was a little too cautious to base the increases on the maximum and am glad to see history by most accounts shows modest increases. Based on the increase history it is much more appealing to buy in now when comparing with moderate level hotel increases. This point was one of my major roadblocks prior to purchasing (which now seems inevitable ) Thanks again!

 

[Caskbill]

Keep in mind they can't just raise dues in order to make a big profit. DVC cannot make a profit. They can only raise dues to cover the actual costs to operate the resort.

I doubt very much they'll be giving all the DVC CM's a 15% raise every year, and any tax increase also applies to all Florida residents for their own property, so the State isn't going to raise property taxes 15% every year without every politician getting booted out.

In general it's a pretty safe bet that dues will increase about the same rate as general inflation. Assuming your salary also increases about the same rate as general inflation at a minimum, then dues would never be a larger percentage of your income than they are currently.

 

[Caskbill]

Thanks everyone for the information - I thought it was a little too cautious to base the increases on the maximum and am glad to see history by most accounts shows modest increases. Based on the increase history it is much more appealing to buy in now when comparing with moderate level hotel increases. This point was one of my major roadblocks prior to purchasing (which now seems inevitable ) Thanks again!

The big thing to keep in mind is that a percentage increase in dues is nowhere near the same amount in actual dollars as the same percentage increase in a hotel room.

EG, say a DVC Studio is 12pts/night and dues are $4.00/point. Today that room then is $48/night (not counting the initial cost, of course)

Dues go up 4% next year to $4.16/point, so the 12 points costs $49.92/night, a net increase of $1.92/night.

A WDW hotel today is $150/night + 11.5% tax, or $167.26. Next year it goes up 4% and becomes $156/night, or including tax, $173.94/night. A net increase of $6.68/night.

In real dollars, that's an increase that's 350% greater than the DVC increase, even though both are at a 4% inflation increase individually.

Continue that for 10 years, and you'll see the real advantage to DVC. At 4%, DVC dues could be $5.92/point so in 2015 that 12 point room is now $71.00, while that $150 hotel room is now $222/night, or $248.00 including taxes.

Your DVC room over the 10 year span increased a total of $23/night while the hotel room, including tax, increased a total of $81/night.

Again, not counting your initial investment, in 10 years 5 nights in that Studio will run you $355 in dues (in 2015 dollars), while the hotel would be $1240.00.

 

[unixadm]

Here is a chart of the dues history for all DVC resorts since the first (OKW) opened in 1991.
Year OKW BWV VB VB(sub) HH VWL BCV SSR
2005 3.86 4.41 4.87 3.84 4.04 4.35 4.27 3.83
2004 3.68 4.25 4.67 3.67 3.86 4.22 4.18 3.80
2003 3.49 4.11 4.36 3.45 3.70 4.05 3.97
2002 3.22 3.92 4.17 3.33 3.48 3.80 3.77
2001 3.13 3.82 3.97 2.70 3.32 3.63
2000 3.16 3.94 4.08 2.87 3.25 3.62
1999 3.16 4.02 3.99 2.82 3.18
1998 3.17 3.94 2.76 3.20
1997 3.14 3.84 2.90 3.16
1996 2.99 3.70 2.82 3.16
1995 2.84
1994 2.70
1993 2.63
1992 2.56
1991 2.51

Prices increase, on everything...that's a given.

What I would really like the numbers for which would be more telling, is the cash rack room rate for each of they villas. That would give us the real picture of the decrease, increase or non change of the value of our purchase.

If the Maintenance fees went up 20% in 10 years, but the room rate only went up 10%, then the value of our purchase verses paying cash would have gone down (our savings verses paying cash would be less).....but if the Maint Fees went up 20%, and the room rate went up 25%, then the value of our purchase increased (our savings verses paying cash would be even more). If both went up 20%, then the value of our purchase would be unchanged.

Anyone have the room rates over the years?

 

[RobDoc]

OK- here are the rack rates for several years for Studio and 1BR villas from several sources (Birmbaums, WDTC and Unofficial Guide). As soon as these are posted, I fully expect someone to insist that they never pay rack rate for a room and this is not a fair way to compare anything - but here goes anyway. (BTW, there have certainly been discounts available at times for these rooms- most notably bewteen 2001-2003 when WDW and travel in general were down due to the economy and especially 9/11, but most recently, the discounts have been fewer. Whether that trend will continue is anyones guess.) These are the rack rates for Value Season from 1993 to 2005.

...........OKW-St...1BR.....BWV-St...1BR.....VWL-ST...1BR....
1993.....$200.......$255...

1995.....$205.......$275...

1997.....$209.......$285...$229.......$295...

1999.....$229.......$305...$254.......$315...

2001.....$254.......$335...$289.......$325....$269.......$360...

2003.....$254.......$340...$289.......$390....$279.......$380...

2004.....$254.......$340...$289.......$390....$279.......$380...

2005.....$259.......$350...$294.......$400....$284.......$390...

 

[Shawn]

Great thread here, Caskbill jarred a few thought loose in my head.

I agee that DVC CM's and property taxes won't increase by 15% a year.

However it seems like property insurance and energy costs could increase by far more than 15% .

Your salary observation is also correct ... up until the point you retire. Since these are long term contracts, it's very likely that folks will own and pay dues 10, 20, and 25 years into retirement. For many (most?) folks, once they retire they enter a phase of life with a fixed income where their income increases minimally each year, perhaps less than the annual dues increases.

-Shawn

Keep in mind they can't just raise dues in order to make a big profit. DVC cannot make a profit. They can only raise dues to cover the actual costs to operate the resort.

I doubt very much they'll be giving all the DVC CM's a 15% raise every year, and any tax increase also applies to all Florida residents for their own property, so the State isn't going to raise property taxes 15% every year without every politician getting booted out.

In general it's a pretty safe bet that dues will increase about the same rate as general inflation. Assuming your salary also increases about the same rate as general inflation at a minimum, then dues would never be a larger percentage of your income than they are currently.

 

[PamOKW]

Does anyone know why VWL dues are so high??? I understand why VB is, I would think HH would be higher, but tax in SC is lower, but wouldn't it make sense that the DVC's attached to resorts would be lower because they are subsideized by the main resort??? Or am I thinking backwards? It has gone up 20% since I puchased in 2001.

VWL dues don't seem to be too out of line compared to BWV and BCV. While you do benefit from sharing costs with the hotel, you also have additional costs that you don't have OKW and VWL. You are paying for the upkeep of an elaborate lobby and other hotel amenities and the staff necessary to keep them running. VWL is at a disadvantage as a smaller resort there are fewer members to spread the costs around.

Joining in 2001, you hit the first major rise in DVC dues. There were 7 years of almost stable dues. But, 9/11 had an effect on tourism and the economy that was reflected in DVC dues. DVC is very good about investing money in the capital fund and the interest on that money dropped substantially. Insurance costs went up and the income from renting DVC units also went down. Possibly there were default dues payments as well that aren't broken out. As things begin to pick-up again, I hope to see our dues stabilize once again.

 

[sigillaria]

Here is a chart of the dues history for all DVC resorts since the first (OKW) opened in 1991.
Year OKW BWV VB VB(sub) HH VWL BCV SSR
2005 3.86 4.41 4.87 3.84 4.04 4.35 4.27 3.83
2004 3.68 4.25 4.67 3.67 3.86 4.22 4.18 3.80
2003 3.49 4.11 4.36 3.45 3.70 4.05 3.97
2002 3.22 3.92 4.17 3.33 3.48 3.80 3.77
2001 3.13 3.82 3.97 2.70 3.32 3.63
2000 3.16 3.94 4.08 2.87 3.25 3.62
1999 3.16 4.02 3.99 2.82 3.18
1998 3.17 3.94 2.76 3.20
1997 3.14 3.84 2.90 3.16
1996 2.99 3.70 2.82 3.16
1995 2.84
1994 2.70
1993 2.63
1992 2.56
1991 2.51

HH --opened in 1996--Do you have the years 96-97-98 for HH?

 

[sjdisneywedding]

Is the 15% max allowable increase from year to year, or is it an average

meaning if one year its 10% the next it could potentially be 20%

thanks

 

[drusba]

All I want to say is thanks to dianeschlicht and WebmasterDoc for putting together such useful historical data.

 

[manning]

Each year DVC can increase dues up to 15% and you cannot do anything about it. You have no vote. If the proposal is for an increase over 15% it has to go to the members for an up or down vote.

I'm sure as long as DVC is still selling and a Katrina type scenario does't hit you won't see that happen.

 

[disnefile]

Where are the budgets for 2006. We always received them in early November. The meetings are in two weeks and none of the meeting documents, which include the budget have been seen. I wonder what is going on.

I am not talking about the final bill for dues but the multpage little booklet explaining the proposed budget and details of the meeting.

Pete