2020 DVC Annual Dues

[Philsfan77]

We have owned VB since 2004. It’s the beachfront property we can afford! Do I like the cost? No, but I love my ocean view rooms and the Beach Cottages are excellent! The Cast Members are top notch.

We have retired to Cape May NJ where we are .9 miles from the beach. My heart sings when I see the Atlantic. I really am living my dream.

Love Cape May...we hit up the Bread Lady on Sunset Boulevard at least twice a summer.

 

[tjkraz]

Of course, but aren't the DVC properties much more profitable than the regular resorts because of owners footing most of the bill? Or not?

DVC resorts are not a direct profit center. Annual Dues pay for Cast Member salaries, theme park buses, utilities, taxes and more. After points are initially sold, they are effectively run as a non-profit.

DVC does collect a "management fee", which adds up to several million dollars annually. But the fee funds all program management needs including Member Services, accounting, etc. All of the cast member salaries, office expenses, IT and other costs needed to administer the program are covered by the management fee.

Compare to a cash resort like the Grand Floridian. Yes, Disney has to pay all of those operating costs itself. But they have 900 rooms that sell for $600+ per night, every night of the year.

 

[tjkraz]

Yes, having CMs make a living wage is great. But, at some point, DVC owners won’t be able to afford the ever increasing maintenance dues on our points to pay for the living wage. There has to be a happy medium

Have you looked at the rates on Disney hotels lately? $7.83 x 10-20 points per night for an Old Key West studio is still a fraction of the nightly rate for any deluxe hotel room.

Some individuals are bound to be priced out of Disney lodging over time. But as long as Disney is routinely renting its 30,000 hotel rooms for 4-5 times the cost of annual dues, DVC remains an outstanding alternative and the resale market will stay healthy.

 

[FireflyTrance]

Yes, the hotels are super expensive. At least the Deluxe ones are. I decided to take a trip to WDW in Feb and couldn't find any DVC availability so I went to book a hotel and the prices were crazy. I stalked the DVC website for a few weeks until something came up. I'm not priced out of the hotels but I can't enjoy a vacation where I am spending $600 a night on a hotel.

Have you looked at the rates on Disney hotels lately? $7.83 x 10-20 points per night for an Old Key West studio is still a fraction of the nightly rate for any deluxe hotel room.

Some individuals are bound to be priced out of Disney lodging over time. But as long as Disney is routinely renting its 30,000 hotel rooms for 4-5 times the cost of annual dues, DVC remains an outstanding alternative and the resale market will stay healthy.

 

[FireflyTrance]

Thank you for this detailed explanation. I wonder if the annual dues at GCV are kept low in part because here in California we have a law that limits yearly property tax increases on commercial properties to 1% a year. I've found Grand Californian to be a particularly good value so far.

They were generally in line with inflation before 2017, e.g., the total inflation from 2010 through 2016 was about 12% and the total dues increases at BWV were about 12% during that period. Since 2016, total inflation has been about 7% but BWV dues have increased 19%. One major cause of that is the new labor contract which resulted in a significant increase in dues beginning with the 2019 budget. The other major cause of that is a 62% increase in property tax dues per point since 2016, caused by the the combination of taxing authorities raising their rates and the assessor raising assessed values -- that assessor won election in 2016 on the campaign promise that he would greatly raise the assessed values of properties associated with big companies like Disney and Universal to aid in making them pay their "fair share" of property taxes; the DVC properties are included in that group.

 

[CanadaDisney05]

I'm an OKW owner and I have serious concerns about these annual dues increases. Not just OKW but all DVC dues. I ran some numbers based on OKW. If you were to take the dues and give them a modest 7% (modest compared to the proposed 8.4% increase for 2020) annual increase each year until 2057, when my contract expires. My 2057 rate shows $95.79/point. That obviously is to the extreme. If you were to make it a 4% (which seems very possible) increase annually it would be $33.44/point. Which is still an insane amount of money.

1) 7% is not a modest LONG TERM AVERAGE increase. Your first calculation is cherry picking the worst case scenario to occur every single year for 37 years. While that is not impossible, that is highly unlikely.

2) Your second calculation seems a lot more likely. The only thing is, your not factoring in inflation. Assuming 2% long term inflation rates, that $33.44 is really $16.07 in today's dollars. While that is still about double where we are currently (your assuming MF inflation will double US inflation), it is not quite as dire as your calculation makes it seem. Keep in mind, that your not going to be paying $16.07 every year for the next 37 years. That is the amount you will pay only in the last year of ownership. You also have to compare it to where you expect future Disney hotel costs to be. If Disney hotel costs start following US inflation, DVC will look worst mathematically. If it matches or exceeds MF inflation, it will look like a better buy

 

[SL6827]

1) 7% is not a modest LONG TERM AVERAGE increase. Your first calculation is cherry picking the worst case scenario to occur every single year for 37 years. While that is not impossible, that is highly unlikely.

2) Your second calculation seems a lot more likely. The only thing is, your not factoring in inflation. Assuming 2% long term inflation rates, that $33.44 is really $16.07 in today's dollars. While that is still about double where we are currently (your assuming MF inflation will double US inflation), it is not quite as dire as your calculation makes it seem. Keep in mind, that your not going to be paying $16.07 every year for the next 37 years. That is the amount you will pay only in the last year of ownership. You also have to compare it to where you expect future Disney hotel costs to be. If Disney hotel costs start following US inflation, DVC will look worst mathematically. If it matches or exceeds MF inflation, it will look like a better buy

What do you think the last say 10-15 years of ownership could look like regarding dues? Could those years be close to $16 or $17 or a lot less?

 

[SL6827]

Thank you for this detailed explanation. I wonder if the annual dues at GCV are kept low in part because here in California we have a law that limits yearly property tax increases on commercial properties to 1% a year. I've found Grand Californian to be a particularly good value so far.

Interesting.

 

[zavandor]

DVC resorts are not a direct profit center. Annual Dues pay for Cast Member salaries, theme park buses, utilities, taxes and more. After points are initially sold, they are effectively run as a non-profit.

DVCMC is run as a no profit. But they don't pay the CM directly, they pay whatever entity manages the resorts and hires the people. Housekeeping, the front desk, Bell services, Disney transportation, they're all services that DVCMC contracts from Disney. There are probably "decency" limits on how much more than raw expenses Disney can charge the DVCMC, and I wouldn't be mad to discover Disney makes a 10% or 20% profit on them. More shady when the resort with the (allegedly) cheapest mass transit option has by far the highest dues for transportation.

 

[CanadaDisney05]

What do you think the last say 10-15 years of ownership could look like regarding dues? Could those years be close to $16 or $17 or a lot less?

Well, in reality it will be much more than $16 or $17, but because of inflation you won't feel that affect. A chocolate bar used to cost a nickel 40 years ago. Now it costs a dollar. Its 20x the price. But nobody thinks chocolate bars are all of a sudden so expensive. Everything else went up by 20x as well including salaries. Same will happen with DVC MF.

In terms of today's dollars (future costs less inflation), MF will likely be in the $12 - $16 PP range. This assumes linear increases which is not the way it really works. But it should atleast give you a good idea of what to expect.

 

[SL6827]

Well, in reality it will be much more than $16 or $17, but because of inflation you won't feel that affect. A chocolate bar used to cost a nickel 40 years ago. Now it costs a dollar. Its 20x the price. But nobody thinks chocolate bars are all of a sudden so expensive. Everything else went up by 20x as well including salaries. Same will happen with DVC MF.

In terms of today's dollars (future costs less inflation), MF will likely be in the $12 - $16 PP range. This assumes linear increases which is not the way it really works. But it should atleast give you a good idea of what to expect.

Oh, I am not going to be paying dues, but this topic really is a good read for myself.

 

[sleepydog25]

Well, in reality it will be much more than $16 or $17, but because of inflation you won't feel that affect. A chocolate bar used to cost a nickel 40 years ago. Now it costs a dollar. Its 20x the price. But nobody thinks chocolate bars are all of a sudden so expensive. Everything else went up by 20x as well including salaries. Same will happen with DVC MF.

In terms of today's dollars (future costs less inflation), MF will likely be in the $12 - $16 PP range. This assumes linear increases which is not the way it really works. But it should atleast give you a good idea of what to expect.

No, I think chocolate bars are overpriced. Lacking in the well-discussed topic so far is that wages--as a whole-- have not kept up with Disney's spiraling costs.

On a separate note, I'm not amused that VWL (BRV if you must) continues to climb precipitously while CCV languishes. So much for cost sharing. . .

 

[CanadaDisney05]

No, I think chocolate bars are overpriced. Lacking in the well-discussed topic so far is that wages--as a whole-- have not kept up with Disney's spiraling costs.

While wages haven't kept up with Disney's costs, they keep up with US inflation. The point really is that if you assume Disney will inflate at 4.5%, then in reality its really about a 2.5% increase on your budget constraint.

 

[Dean Marino]

Deleted.

 

[sleepydog25]

While wages haven't kept up with Disney's costs, they keep up with US inflation. The point really is that if you assume Disney will inflate at 4.5%, then in reality its really about a 2.5% increase on your budget constraint.

Exactly. A 4% rate for DVC dues is fair based on the past few years and peering a bit into the future. Moreover, other Disney products--predominantly tickets--have increased at an alarming rate, as have the price per point of newer builds. All that to say, buying into DVC in the future, one should look more at the most recent inflation rate of not only DVC dues, but the price of buying DVC in the first place and the cost of tickets, as well.

As most commenting here know, you must thoroughly research before buying. Go to the DVC website, and you can find Disney touting that for as little as $243 a month, anyone can own the Magic. That's taking out a loan from Disney for 100 points, paying said loan over the course of 10 years, and not including the maintenance fees. One merely has to figure if those costs--including dues that have been outstripping inflation for years--is worth it.

 

[we"reofftoneverland]

Well, in reality it will be much more than $16 or $17, but because of inflation you won't feel that affect. A chocolate bar used to cost a nickel 40 years ago. Now it costs a dollar. Its 20x the price. But nobody thinks chocolate bars are all of a sudden so expensive. Everything else went up by 20x as well including salaries. Same will happen with DVC MF.

In terms of today's dollars (future costs less inflation), MF will likely be in the $12 - $16 PP range. This assumes linear increases which is not the way it really works. But it should atleast give you a good idea of what to expect.

I think chocolate bars are expensive.

 

[NoTime42]

DVC resorts are not a direct profit center. Annual Dues pay for Cast Member salaries, theme park buses, utilities, taxes and more. After points are initially sold, they are effectively run as a non-profit.

DVC does collect a "management fee", which adds up to several million dollars annually. But the fee funds all program management needs including Member Services, accounting, etc. All of the cast member salaries, office expenses, IT and other costs needed to administer the program are covered by the management fee.

Compare to a cash resort like the Grand Floridian. Yes, Disney has to pay all of those operating costs itself. But they have 900 rooms that sell for $600+ per night, every night of the year.

What about the extra breakage revenue (from cash reservations of villas, often bungalows and cabins, available 60 days out) that is not returned to members?

 

[tjkraz]

What about the extra breakage revenue (from cash reservations of villas, often bungalows and cabins, available 60 days out) that is not returned to members?

Hard to discuss something that we have no way of quantifying.

Breakage only exists when members fail to use their points. And the rooms still need to be rented to cash-paying guests on relatively short notice. Based upon observations of DVC villa availability, does this seem to be a widespread occurrence?

 

[bobbiwoz]

I think Hershey bars were a nickel in the 1950’s, longer ago than you are remembering.

 

[CanadaDisney05]

I think Hershey bars were a nickel in the 1950’s, longer ago than you are remembering.

I'm 30. I'm not remembering any of this