Question regarding increases in annual dues

[A_Princess'_Daddy]

First, I apologize if I am posting this in the wrong place, but it seems to best fit my question.

We've been staying at BWV for several days on rented points, and are absolutely loving it here. So much so that we are considering buying into DVC, something I forswore would NEVER happen. But it has been magical, and this is the first vacation in 12 years when I've truly relaxed, and so it might be worth it.

The question that I've been unable to get a straight answer to, however, is whether there is a cap on how much the annual dues can increase, and if there it, what it is. Our sales rep seemed to imply there was, but when I flat out asked, she hedged and said that it was in Disney's interests to keep the rates low (which I'm not sure is actually accurate, except possibly during the sales stage).

I understand the math quite well, and the possible/likely increases in rack rates through the years, cyclical nature of possible discounts, etc. but unless I have a sense of the maximum possible increases in the annual dues, it's difficult to forecast a break-even point.

Any feedback/input would be gratefully appreciated. Likewise, if there is no cap, if people could share their experiences with annual increases, that too would help me sharpen the focus.

Thanks!

 

[Mtnman44]

I believe the contractual limit is 15% over the previous year. However, the reality is that it has been running in the 2 to 3 % range. Law requires that timeshare dues reflect actual costs and all are publically accounted for each year.

It is a variable expense over the span of your membership, one that likely increases. However, this is no different than normal vacation accomodation expenses over time.

 

[A_Princess'_Daddy]

Thanks. My wife and I own a few different investments that involve CAM charges (very similar concept on the pass-through nature of expenses), but I want to understand the "worst case" scenario before signing up to pay dues for the next 50 years (or 36, if we buy at BWV, which we love).

I'm kind of an OCD CPA run amok. I trust, but like to see the numbers for myself.

 

[hellerjw]

Here is a list of the dues history since 1991. This will give you an idea of what the average increase for each resort has been over the years. Obviously it won't predict future increases but it is the best indicator of what you might expect going forward.

The newer resorts still in active sales (SSR, AKV, BLT, VGC) are a little more unpredictable because the dues there are still being partially subsidized by the developer inventory. Once those resorts sell out there could be larger than normal increases to help compensate or to do earlier than expected refurbishments (as may be needed on the interior at BLT as many have reported how poorly the furniture is holding up early on).

VB(s) refers to subsidized dues for those VB owners who bought in early when Disney planned to build more of the resort than they actually did.

Year OKW VB(s) VB HH - BWV VWL -BCV SSR AKV -BLT VGC

2010 4.87 5.18 6.61 5.57 5.36 5.20 5.15 4.46 4.95 3.78 3.94
2009 4.73 4.97 6.41 5.36 5.21 5.04 5.00 4.34 4.85 3.67 3.82
2008 4.56 4.71 6.04 5.16 5.04 4.87 4.80 4.21 4.71
2007 4.40 4.39 5.63 4.98 4.85 4.73 4.63 4.12 4.62
2006 4.24 4.12 5.27 4.34 4.69 4.61 4.48 3.98
2005 3.86 3.84 4.87 3.86 4.41 4.35 4.27 3.83
2004 3.68 3.67 4.67 3.70 4.25 4.22 4.18 3.80
2003 3.49 3.37 4.37 3.69 4.11 4.05 3.97
2002 3.22 3.33 4.17 3.49 3.92 3.80 3.77
2001 3.13 2.70 3.98 3.32 3.83 3.63
2000 3.16 2.87 4.07 3.25 3.94 3.62
1999 3.16 2.82 3.99 3.18 4.02
1998 3.17 2.76 ---- 3.20 3.94
1997 3.14 2.90 ---- 3.16 3.84
1996 2.99 2.82 ---- 3.16 3.70
1995 2.84 2.76
1994 2.70
1993 2.63
1992 2.56
1991 2.51

 

[cseca]

Honestly though, if I see my dues increase anywhere near 7-8% 2 years in a row I will probably start thinking of selling them... And I think most members will probably do the same. Those increases add up quickly.
Doesn't matter how much I love disney, but I don't want to throwaway $ for no good reason y'know?
But so far in 10 years or ownership I think the increases have been reasonable IMO.

 

[LisaS]

DISboard member robinb maintains a great annual dues chart that includes the increase percentages here. Average increase for BWV is probably around 3% per year, a bit higher if you look just at the past 5-10 years.

 

[disneynutz]

I recommend that you take the time to experience other DVC resorts. BWV is a great resort, (we own there along with 4 additional resorts).

Since buying a membership is a one time deal for most people, making sure that you pick your favorite resort is important. Think about how you are feeling about BWV right now, what if a different resort gave you twice that feeling?

Bill

 

[Mtnman44]

Keep in mind also that it is in DVC's own interests to not have a "worst case scenario", especially if it is often or regular. If DVC is too expensive compared to the competition or simply prohibitvely expense with crazy increases then: A) no one would buy and B) current owners would simply walk away at some point. Either case, disney is left holding all the points and responsibility for funding the resort. They don't want bite the hand that feeds them.