Rate of increase in DVC annual dues

[DVC Mike]

I'm closing this thread, as this information has been incorporated into:

• The DVC Annual Dues Information Thread

So, after a relaxing Saturday, tonight I did some more poking around annual dues after my post on the cost break-down of DVC annual dues.

I took a look at the recent increases in annual dues - both the year-over-year changes and the Compound Annual Growth Rate (CAGR) since inception.

Why is the CAGR for BLT rising so fast?

Does anything else stand out as unusual to you?

http://i235.*************************************BuyDVC/Dues/AnnualDuesHistoryP1.png
http://i235.*************************************BuyDVC/Dues/AnnualDuesHistoryP2.png

http://i235.************************************************************* DVC Mike - *******.com

 

[dizfan]

One of BLTs big increases was caused by them adding a front desk with several workers. Originally, they had people use the CR lobby for checking in. Icant remember the categories, but the one with the lobby/front desk had a major increase.

Last year, the spike was caused by a big increase in property taxes. Rapid increases in direct because they wanted it priced hire than VGF. At the owners meeting, I believe DVD said they did dispute this increase and they lowered the original assessment. We may well be in for another property tax increase when the next dues statement arrives.

 

[Goofy DVC]

When you look at the CAGR for both BLT and VGC, I wonder if the practice of keeping dues reasonable when resorts are new and there are considerable active direct sales, then increase significantly after selling out, becomes the norm? It will be interesting to watch VGF and PVB going forward.

 

[disneynutz]

When you look at the CAGR for both BLT and VGC, I wonder if the practice of keeping dues reasonable when resorts are new and there are considerable active direct sales, then increase significantly after selling out, becomes the norm? It will be interesting to watch VGF and PVB going forward.

Bingo, lowest dues at BLT was one of the guides talking points just like the low points required to stay in the new THVs. After selling out both saw changes.

Also the low dues at Aulani reportedly got 3 Disney executives fired. Sales were halted and the dues were increased, early buyers are receiving payments by Disney for 50 years to cover the difference in dues cost.

Bill

 

[Bellecruiser]

This is a very helpful thread, Mike. Thanks for gathering all the data. In addition to being beautiful and peaceful, SSR continues to be a solid value. I'm glad we have lots of points there.

 

[wdrl]

Here is something I posted in November 2014 when the 2015 estimated dues amounts were released:

Ad Valorem tax increases in 2015 account for a large amount of the jump in maintenance fees in 2015 for BLT and AKV:


...................................BLT............ ...............AKV
2014 MF: ____________4.7846 ____________5.9748

2015 MF: ____________5.0504 ____________6.2989

2015 % increase: ______5.56% ____________5.42%

2014 Ad Valorem: ______1.1583 ___________1.1964

2015 Ad Valorem: ______1.3335 ___________1.3483

Ad Valorem % increase: __15.13% __________12.70%


Had the Ad Valorem taxes remained constant, BLT and AKV's maintenance fees would have increased to only $4.8752 and $6.147, respectively, resulting in percentage increases of 1.89% for BLT and 2.88% for AKV.

By comparison, Ad Valorem taxes for BCV and BWV increased only 6.20% and 3.79%, respectively, from 2014 to 2015.

It will be interesting to see if VWL has a jump in its Ad Valorem taxes in the next year or two now that Disney is rehabbing the resort.

 

[DVC Mike]

Ad Valorem tax increases in 2015 account for a large amount of the jump in maintenance fees in 2015 for BLT and AKV:

Had the Ad Valorem taxes remained constant, BLT and AKV's maintenance fees would have increased to only $4.8752 and $6.147, respectively, resulting in percentage increases of 1.89% for BLT and 2.88% for AKV.

By comparison, Ad Valorem taxes for BCV and BWV increased only 6.20% and 3.79%, respectively, from 2014 to 2015.

AKV and BLT certainly have the highest property tax increases of the past 2 years.

http://i235.*************************************BuyDVC/Dues/PropertyTaxes.png

 

[LisaS]

I think you may have some mathematical errors in your table. For example, I calculate the CAGR for VWL in 2002 as 2.46%, not 5%. I think the value you used as the period length is off by 1. In other words, you used 1 year instead of 2 years when calculating CAGR for VWL in 2002. The error is repeated in 2003, I didn't continue calculating beyond that.

I think you made the same error with CAGR for OKW. I didn't check the values for any other resorts. Then again, it's entirely possible that I don't understand how to calculate CAGR.

 

[DVC Mike]

I think you may have some mathematical errors in your table. For example, I calculate the CAGR for VWL in 2002 as 2.46%, not 5%. I think the value you used as the period length is off by 1. In other words, you used 1 year instead of 2 years when calculating CAGR for VWL in 2002. The error is repeated in 2003, I didn't continue calculating beyond that.

I think you made the same error with CAGR for OKW. I didn't check the values for any other resorts. Then again, it's entirely possible that I don't understand how to calculate CAGR.

To calculate compound annual growth rate, divide the ending value by its starting value, raise the result to the power of one divided by the period length, and subtract one from the subsequent result.

The formula for CAGR is:

http://i235.*************************************BuyDVC/Dues/CAGR.png​

Remember that VWL opened on Nov 15, 2000, so the first full year started on Jan 1, 2001. So, for 2002, the period length is 1 and not 2.

I vetted this by comparing to how DVC calculated CAGR for VWL. Looking back at 2010 Annual Dues Notices: BLT, BCV, HHI, VB, VGC..., you will see that DVC stated the CAGR as 4.1% for VWL for the 2010 dues. That's what you get if you use a period of 9 years (2010-2001 = 9) instead of 10 (2010-2000 = 10).

I think my figures for VWL are accurate.

However, I'll go back and check them again.

 

[DVC Mike]

I think you may have some mathematical errors in your table.

The only figure that isn't really CAGR since inception is Vero Beach. It opened on Oct 1, 1995, but I don't have un-subsidized dues for the first 3 years because they didn't exist. So, for the Vero Beach figures, it's really CAGR since 1999.

 

[LisaS]

Remember that VWL opened on Nov 15, 2000, so the first full year started on Jan 1, 2001. So, for 2002, the period length is 1 and not 2.

I vetted this by comparing to how DVC calculated CAGR for VWL. Looking back at 2010 Annual Dues Notices: BLT, BCV, HHI, VB, VGC..., you will see that DVC stated the CAGR as 4.1% for VWL for the 2010 dues. That's what you get if you use a period of 9 years (2010-2001 = 9) instead of 10 (2010-2000 = 10).

I think my figures for VWL are accurate.

For VWL you list the first year's dues increase as 0.3% and the second year's as 4.7% but the CAGR as 5.0%. At face value, that didn't make sense so that's why I spot checked that result. I wasn't aware that VWL opened late in 2000 so it makes sense to combine the 0.3% and 4.7% increases and treat them as one 5% increase over one period resulting in a CAGR of 5.0%. Thanks for the clarification!

 

[DVC Mike]

I think you made the same error with CAGR for OKW.

I checked all my numbers against what DVC has reported, and they all line up except for three: VB, OKW and HHI - the three oldest DVC resorts.

I know why VB doesn't line up (I don't know what unsubsidized dues DVC backed into for 1996). I could figure it out but I'm too lazy.

I don't yet understand why OKW and HHI don't line up. Perhaps the figures I have for dues on those resorts in the beginning are incorrect. Maybe someone smarter than I can figure it out.

For example, here is what DVC reported for those two resorts for 2012 (clearly different than my calculations):

http://i235.*************************************BuyDVC/Dues/OKW2012.png

http://i235.*************************************BuyDVC/Dues/HHHI2012.png​

 

[DVC Mike]

It's strange to see the dues go down as some did back in 1999-2001.

Does anyone know what the reason was?

 

[mrsmith9]

It's strange to see the dues go down as some did back in 1999-2001.

Does anyone know what the reason was?

Overestimated property taxes?

 

[ArtieMcD]

I took a look at the recent increases in annual dues - both the year-over-year changes and the Compound Annual Growth Rate (CAGR) since inception.

Why is the CAGR for BLT rising so fast?

Does anything else stand out as unusual to you?

First off.. I agree with most of the previous posts that most of the due variances we've seen in the past are cause by variances in the property taxes. Those are the parts of the dues Disney doesn't control. So really it would be fair to compare due changes based solely on the operation costs to see where there's large jumps there.

Secondly. The numbers for the annual dues used in the original post seem to be the wrong ACTUAL due numbers for each year. They appear to be the "estimated" dues for the year... Not the amount owners actually paid. For example in 2014, the actual dues for BLT was 4.877 per point... NOT 4.785 as is quoted everywhere. This is of course, because the final tax bill isn't known till November and we always true up (plus or minus) at the end of the year to make up for those differences. It's not valid to be comparing dues from year to year without using the correct final numbers.

I've been tracking the correct due amounts for BLT, AKV (since I own there and have the data). I'll post those numbers shortly once I can format them better.

 

[ArtieMcD]

So here's the data I have for BLT with the ACTUAL due numbers. IE, so far the published due numbers for BLT have been lower than the actual numbers every year since 2011 since the tax amount had been underestimated each year since. 2010 was an anomaly since the taxes were still based on undeveloped land and the first year BLT paid full tax was 2011.

BLT Actual dues (% change)
2009 (I don't have the numbers here as everything was prorated on my statement).
2010 3.3797
2011 4.0092 (18.63% increase)
2012 4.2632 (6.34% increase)
2013 4.5075 (5.73% increase)
2014 4.8775 (8.21% increase)
2015 Won't know till November/December

Now, if you take taxes out of the picture.. Here's the due increases solely based on DVC controlled items (operating expenses + capital):
2009 2.8429
2010 2.9059 (2.22% increase)
2011 3.0079 (3.51% increase)
2012 3.2414 (7.76% increase)
2013 3.4229 (5.60% increase)
2014 3.6363 (5.94% increase)
2015 3.7169 (2.50% increase)

 

[DVC Mike]

The numbers for the annual dues used in the original post seem to be the wrong ACTUAL due numbers for each year. They appear to be the "estimated" dues for the year... Not the amount owners actually paid.

First off, it is the taxes which are estimated. Each year’s budget includes estimated taxes for the calendar year. And the ACTUAL annual dues charged are based on those estimates.

Yes, members are responsible for paying only the actual tax amounts after assessments are made by the individual counties in which the resorts are located. If DVC’s tax estimate is lower than the actual assessment, members must pay the difference during the next collection period. If DVC's tax estimate is higher than the actual assessment, members receive a credit on their next year annual dues statement. So, taking that adjustment into account would of course render better precision.

If you have the amount refunded per point since 1991 for all the DVC resorts, then perhaps we could produce a chart showing that. But since we don't have that information, I submit that the amounts charged by DVC are good enough, as you get a credit the next year, and any small amount over the years a resort has been around is likely not material to the CAGR numbers.

In fact, DVC usually (but not always) does a fair job of estimating taxes, so the variance isn't that big, as the examples below shows ($23).

http://i235.*************************************BuyDVC/Dues/DuesStatement.png

 

[rfc0001]

Here's a slightly different view, showing YoY % increases based on inflation adjusted MFs:

 

[DVC Mike]

I'm closing this thread, as this information has been incorporated into:

• The DVC Annual Dues Information Thread