Has anyone projected future dues for each resort thru the end of each contract?

[tx911]

Agreed, people should do the same projection on their favorite Disney hotel room. The Delta is definitely in your favor. $8 dues for 30 years @ 4% goes to $25.95, but a $600 room goes to $1,946.

You are 100% correct.

But I can choose not to pay the $1946. Not true of the $25.95pp dues.

 

[Disney_escape]

Milk is probably a bad comparison since it is subject to government regulations and subsidies that interfere with it's market rate pricing. But you bring up a great point on cash rates - cash rates are the foundation for DVC direct pricing (Disney has to show some savings vs cash rates when selling) and DVC point rentals are also based on cash rates. I think your right that the whole thing will collapse, if dues outstrip the cash rates. Just some cheery speculation for your Monday!

And if average incomes don't keep up (or close to) inflation over the long run then vacations will be the least of everyone's problems....Food, housing, etc. Cash rates should follow inflation as Disney will have increased cost and will keep profit margins at similar percentage rates.

 

[Jlo85]

I'm less about how much the dues cost and more about how well-managed the resort/association is. I'm gonna jinx it, but Disney is good at managing it's properties. Much better than the vast majority of timeshares and condo associations out there. So, I pay my dues with some confidence that they're going to good use, and that I am basically paying the cost/maintenance for the property.

Heck, at least people aren't rioting at the condo association meetings like elsewhere in Florida.

 

[kilik64]

.

You are 100% correct.

But I can choose not to pay the $1946. Not true of the $25.95pp dues.

I mean you could not pay the dues either. At that point the contract might be basically worthless resale so just let Disney take it would be a valid option.

 

[tx911]

I mean you could not pay the dues either. At that point the contract might be basically worthless resale so just let Disney take it would be a valid option.

Is that all that happens if you don't pay the dues? Disney takes the contract with no other ramifications?

 

[Disney_escape]

.

You are 100% correct.

But I can choose not to pay the $1946. Not true of the $25.95pp dues.

Correct, but there will likely be someone willing to pay the $1946 or Disney (and others) go out of Business. So rental and resale should be ok (all other things being normal).

 

[kilik64]

Is that all that happens if you don't pay the dues? Disney takes the contract with no other ramifications?

Basically. They get a lot of points through foreclosure. Might come with a credit hit, but you'll be so old by then probably wont matter or care?

 

[RivShore]

Basically. They get a lot of points through foreclosure. Might come with a credit hit, but you'll be so old by then probably wont matter or care?

if you own it outright (no loan), would it be a credit hit?

 

[kilik64]

if you own it outright (no loan), would it be a credit hit?

That's what I'm unsure about. I'd assume with a mortgage loan there definitely is, but not sure about a dues only foreclosure if there is one or not. I'm sure someone else here knows that answer and will post it soon enough.

It's not super widely known but I think all (or almost all?) of the FL DVC foreclosures go to a public auction where anyone can bid on them. There are people who buy up contracts that way, can get deals but its a lot of work sounds like when I looked into it (like you don't have total knowledge and have to guess as to how many points the contract is and no way to know how much is owed on back dues that you have to pay up on too?).

 

[tjkraz]

You are 100% correct.

But I can choose not to pay the $1946. Not true of the $25.95pp dues.

While that's true, SOMEONE will be paying the $1946 per night. (Otherwise, all of WDW will have collapsed in on itself.) And as long as there are people willing to pay $1946, there will be people willing to buy DVC contracts on the resale market. And/or rent points.

A massive part of our annual dues is CM salaries--as much as 75% of the operating costs, per DVC. In the span of 30 years, we've gone from CMs presumably earning as little as $4.75 to what will soon be $20 per hour. So yeah, dues were going to absorb that. And I expect Disney to bear the weight of being a labor leader in Central Florida. Not just because they have to employ so many people, but in an effort to support the larger community. In a very real sense, arguing that Disney should have tighter reigns on annual dues increases is arguing that CMs should get lower compensation. That's a tough one.

If not that, it's advocating for less frequent room refurbishments. Or a smaller staff of housekeepers, maintenance workers, security, lifeguards, etc. Or for theme park buses that run less often.

 

[Dobermanns]

Basically. They get a lot of points through foreclosure. Might come with a credit hit, but you'll be so old by then probably wont matter or care?

LOL this is how I feel. All our contracts were purchased cash. Most of our points are dues only by now. The rest will have broken even in 6 years. In 30 years we will almost be 90. No kids. So if we don’t end up selling most of the contracts, the mouse can take them back

 

[tx911]

LOL this is how I feel. All our contracts were purchased cash. Most of our points are dues only by now. The rest will have broken even in 6 years. In 30 years we will almost be 90. No kids. So if we don’t end up selling most of the contracts, the mouse can take them back

This would 100% be me, except I have kids, so it's giving me pause with regard to buying more points at RIV.

 

[CastAStone]

if you own it outright (no loan), would it be a credit hit?

I’m guessing @Brian Noble would know how this works.

 

[NY Pirate Princess]

A massive part of our annual dues is CM salaries--as much as 75% of the operating costs, per DVC.

This is news to me and welcome news too. I didn't realize, although I should have, that employee compensation was this high a percentage of total dues. Might make that next dues payment a little easier to make!

The fact that my dues for SSR could be $20,000 a year does give me some hesitation about that second contract.

Yikes. No. That is not sustainable on my retirement budget. Full stop.

Insurance has gone up a lot, but it is less than 3% of dues at most resorts. At many it’s less than 2%.

It is however much higher than that at VB and to a lesser extent at HHI.

Seaside maintenance and insurance have got to be rough and getting worse at both, although as you say a bit less as HHI.

 

[Brian Noble]

I’m guessing @Brian Noble would know how this works.

IANAL.

The word on TUG is that such dings can happen, but they are relatively uncommon. An owner does have a binding contract obligating them to pay dues, and failing to pay an obligation could end up on a credit report.

 

[TheDailyMoo]

Annual dues are very similar to HOA dues from what I gather? And having absolutely zero knowledge of condos and HOA fees can someone enlighten me as to whether or not HOA dues have had similar percentage increases over the years as DVC MFs?

edit: I'm assuming Florida to keep it as apples to apples as possible

 

[CarolynFH]

There’s a thread on TUG listing self-reported consequences of defaulting on timeshare mortgages and dues. I haven’t studied it recently but the impression I have is that credit dings are more common for mortgage or purchase loan defaults than for failure to pay dues. I’ve also read that DVC is pretty good at taking back a deed in lieu of foreclosure, in contrast to some other timeshare companies.

Something else to know is that if the timeshare is in Florida, the timeshare company or mortgage holder can only take back the timeshare itself in case of default. They can’t go after any other assets. Some other states have the same “anti-deficiency” law, but not all.

 

[Shoktherapy]

If not that, it's advocating for less frequent room refurbishments. Or a smaller staff of housekeepers, maintenance workers, security, lifeguards, etc. Or for theme park buses that run less often.

Operating cost and Capital cost are separate budgets altogether. The budgets for each resorts are published yearly and are easily searchable. Being an HOA President myself, I've reviewed the SSR budget with great interest.
SSR has a 2024 operating budget of $77.7M and a capital budget of $19.8M with $54M in capital reserves. Operating expenses for the resort such as housekeeping, administrative, front desk, maintenance, etc, are spent and calculate separately differently from capital reserves which are used for roof replacements, interior refurbishments, external refurbishments/painting, pavement resurfacing, etc. Dues are calculated on each budget separately and added together (along with ad valorem taxes) to make up the total due amount assessed each year.

The largest operating cost is housekeeping followed by transportation. Budgeted for 2024, SSR has planned $26M for Housekeeping, $13M for transportation, $9.3M for Admin and front desk, $9M for maintenance, $8.7M for management fee, $3.6M for member activities, $3.6M for utilities, $2M for insurance, $1.1M for security, and just under $1M for taxes. There are a bunch of smaller budget items for DVC reservations, Fees to the Division (haven't researched that one), audit and legal fees.

Those are resort dues in a nutshell.

 

[Bearval]

That’s the missing piece of data here. What has the cost of a WDW cash room done in the same time period?

I know they went absolutely crazy in the early 2010s with double digit price increases every year. I don’t think it’s been anything like that since about 2018 as they clearly hit a price ceiling.

What will they do moving forward?

I already think there’s resorts and rooms where you lose money buying direct vs paying cash (Beach Club 1 bedroom is the obvious example but there’s a lot of others, including BCV studios most nights of the year by my math, when purchased direct)

Disney technically can "rent" the room at a loss by packaging the room with tickets and or requiring the DDP.

 

[Bearval]

Ive done it for Copper Creek… based on an increase of 4% per year… it’s over $43pp

I would be willing to bet VB and HHI dues will be more than cash bookings for certain dates during the year before their contracts expire.