Think Dues won’t increase as much?

[Can_Dannn]

Wondering if “The Vid” will have an effect on dues pricing in coming years?

 

[Great3]

I hope it doesn’t, but lfor some reason I think dues will always continue to rise. They will find one justification or another. It always seems to happen.

Great3

 

[gharter]

Whether the units are occupied or not, there are still maintenance costs, and property taxes rarely go down.

 

[Cyberc1978]

Any savings from this year will go into the reserve fund and depending of how much that is the amount we need to pay to additionally fund the reserves could be less. That would effectively lower the dues assuming property tax and operating costs remain the same <— but will they?

 

[JPKnapp]

I think dues are going to rise a LOT and maybe by the maximum amount allowed by law. The additional costs of operating a public space that meets the Disney standard are going to increase substantially. They are going to need to double their janitorial/housekeeping staff and the variable costs (soap, chemicals, wipes, etc) are only going up.

I don't think the DVC costs in 2020 are going down that much either. Not only will the continued cost increases eat up any savings, the furloughed workers aren't necessarily coming from DVC properties.

 

[SL6827]

I think dues are going to rise a LOT and maybe by the maximum amount allowed by law. The additional costs of operating a public space that meets the Disney standard are going to increase substantially. They are going to need to double their janitorial/housekeeping staff and the variable costs (soap, chemicals, wipes, etc) are only going up.

I don't think the DVC costs in 2020 are going down that much either. Not only will the continued cost increases eat up any savings, the furloughed workers aren't necessarily coming from DVC properties.

This is a very good point. I tend to agree, I never really thought about it like that. When a resort has a lot of owners either default on their loans or contracts who pays the dues for their points? Does Disney distribute the amount of those dues to the other owners who are still in good standing?

Is this how it works with homes in a HOA? One home owner forecloses and the rest of them have to pick up their HOA fees?

 

[Jack_Sparrow_NJ]

I would think if it is a foreclosure the points and associated maintenance fees would then revert to the developer.

 

[SL6827]

I would think if it is a foreclosure the points and associated maintenance fees would then revert to the developer.

Oh, ok. Just wondered about that. Did this happen during the Great Recession? Did Disney have to pay dues on numerous foreclosed contracts? Very interesting.

I was thinking that with HOAs the fees would be spread around to all the homeowners for those who have foreclosed but I really have no idea. I have never lived in a HOA.

 

[_auroraborealis_]

CM wages are still contracted to rise, and cleanliness is key. So more hours by people paid more.

 

[SL6827]

CM wages are still contracted to rise, and cleanliness is key. So more hours by people paid more.

True. Makes me wonder if the dues will eventually get so high that DVCs value might suffer.

 

[_auroraborealis_]

True. Makes me wonder if the dues will eventually get so high that DVCs value might suffer.

Doubt it. The CM wages and cleanliness will be an issue at every level. It's not as though Disney is going to say "Value Resorts don't get sanitized, plebes!"

 

[Great3]

True. Makes me wonder if the dues will eventually get so high that DVCs value might suffer.

This is very possible. That's why DVC has to walk a fine line, too much, and even direct sales won't make sense. As long as they are still trying to sale direct, they will try their best to keep MF dues low as possible.

Great3

 

[Can_Dannn]

They are speaking about credits for 2019 dues, so that is a sign maybe that MF won't increase as thought above.
I can't see them every raising MF to 15% maximum allowance per contract.

 

[SL6827]

This is very possible. That's why DVC has to walk a fine line, too much, and even direct sales won't make sense. As long as they are still trying to sale direct, they will try their best to keep MF dues low as possible.

Great3

So do you think there could come a time where they quit selling direct DVC? I don't see it, but it made me think. If so, then the dues could hit the 15% with no concerns from Disney's pocket?

 

[DougEMG]

So do you think there could come a time where they quit selling direct DVC? I don't see it, but it made me think. If so, then the dues could hit the 15% with no concerns from Disney's pocket?

I doubt Disney will ever stop direct sales of DVC, it is too big a money maker.

 

[Great3]

As long as they continue to have land to build on, buildings to convert, they will continue to have direct sales. I plan to be out in about 20-25 years, hopefully, they will still be doing Direct Sales than. Eventually though, yeah, they will run out of room to build, and they just become a property manager for DVC Owners. They still have a duty to keep dues low as possible, but they won't have as much skin in the game. So, only time will tell.

Great3

 

[The Jackal]

Oh, ok. Just wondered about that. Did this happen during the Great Recession? Did Disney have to pay dues on numerous foreclosed contracts? Very interesting.

I was thinking that with HOAs the fees would be spread around to all the homeowners for those who have foreclosed but I really have no idea. I have never lived in a HOA.

Don’t worry DVC once the points are foreclosed, DVC can sell them and get a lot of money back and or sell one time use points, those are not cheap either.

 

[bseas]

They are speaking about credits for 2019 dues, so that is a sign maybe that MF won't increase as thought above.
I can't see them every raising MF to 15% maximum allowance per contract.

There are some ongoing maintenance costs during the closure and will be some additional costs to modify public spaces to comply with new guidelines, but in addition to operating expenses during the closure, other charges such as transportation costs, will also virtually disappear during the closure period. I would expect a one-time credit to dues, although ongoing operating costs will rise due to increased room cleaning time. Cost of consumables, such as disinfectants, hand sanitizers, etc. will increase, although on a per-point basis, this cost is negligible - literally cents per room use day, or fractions of a cent per point. The real cost will be on the labor side. I could see housekeeping costs double, but again, those are only a small fraction of your maintenance fee. Assume cleaning time for a studio goes from 30 minutes to an hour once per week (most hotels allow 15-20 minutes to clean a room), you're talking about $0.06-0.07 per point at $15.00/hr. wage rate, which is significantly higher than Disney's current starting wage for housekeepers.

Considering many factors, including more thorough room cleaning, more frequent public space cleaning, increased supply costs, etc., I would estimate COVID-related increases on an ongoing operating basis at maybe $0.10-0.12 per point.

On the non-DVC resorts side, Disney will actually save money in the short term due to the new state guidelines which basically eliminate daily housekeeping service for guest rooms. The parks are where the real cost increases will come into play, but Disney can't pass those costs along to DVC resort associations.

I'm not worried about maintenance fee increases as a result of COVID.