What would be your ceiling on the amount of dues you pay?

[we"reofftoneverland]

I've been through the death spiral with my all-time favorite timeshare property (crashed, sold through BK and now a privately held resort) and have watched similar over on TUG for others. I doubt the individual DVC resorts will enter that cycle ... but such an idea shouldn't be ruled out if DVD/DVC should become greedy to recapture inventory for their own purposes using "any measure available."

If I recall from reading the docs, that "any measure available" is in there. And scary.

 

[Frederic Civish]

So you think the "death spiral" is inevitable for all the resorts then? Is there a ceiling that the dues could hit or not? What got me thinking was the talk about the dues at Riviera being so high and how the others will follow.

When there's not really any savings anymore. I have to imagine Disney hotels will keep getting more expensive so there will be savings.

at 3% increase per year -- BWV will be over $10 within 12 years from now. That is well ahead of 2042.

I've been through the death spiral with my all-time favorite timeshare property (crashed, sold through BK and now a privately held resort) and have watched similar over on TUG for others. I doubt the individual DVC resorts will enter that cycle ... but such an idea shouldn't be ruled out if DVD/DVC should become greedy to recapture inventory for their own purposes using "any measure available."

Actually, I could see Riviera, Reflections and whatever else Disney builds in the future, running into that problem. If membership fees rise faster than inflation and resale prices for Riviera are too low to make it worthwhile to sell, then many many many people will default. And it doesn't matter how Disney tries to hid that. If it happens, Direct Sales of new resorts will dry up.

But I do believe there is a ceiling in what people will pay for the regular resorts. We all know that the prices are artificially inflated and I just wonder how high those too can become before Disney backs off a bit.

To be fair 98% of the increase from 2014-2018 was inflation. Since 1914 the average inflation rate is 3.26% so the increase in dues hasn't been that bad if you think about it that way.

There is no upper limit.

If dues rise in lockstep with Inflation then what costs $5 today WILL cost $25 at some point in the future. But it will still only be worth $5 and that is what $25 will be worth then. I remember buying gasoline for 22 cents a gallon. Hamburger for 25 cents a point, etc. etc. So, now I pay more, but I also get paid more, so there really isn't a problem. Inflation is deliberately used as a policy (by the government and the Federal Bank), to give people the impression that their wages and their property are going up in value, when really they might be remaining the same.

The trouble comes in if Disney goes on a streak where they significantly increase Membership Fees above the inflation rate. Then the MFs actually WILL be costing more. During the meantime, Disney definitely is, and has been, increasing the cost of their resorts and hotel rooms significantly faster than inflation. To the point where it is starting to be priced out of the range of middle class families. So, the 'hotel renter' pool is getting smaller and smaller, proportionately, but there still is enough demand that Disney usually fills those rooms. If it costs more to stay in a hotel and if the MFs have gone up by the same amount, then it will all still balance out in the end. Unless the renter pool shrinks too much, and if prices continue to go up at this level, Disney will reach that point.

 

[sleepydog25]

If dues rise in lockstep with Inflation then what costs $5 today WILL cost $25 at some point in the future. But it will still only be worth $5 and that is what $25 will be worth then. I remember buying gasoline for 22 cents a gallon. Hamburger for 25 cents a point, etc. etc. So, now I pay more, but I also get paid more, so there really isn't a problem. Inflation is deliberately used as a policy (by the government and the Federal Bank), to give people the impression that their wages and their property are going up in value, when really they might be remaining the same.

The trouble comes in if Disney goes on a streak where they significantly increase Membership Fees above the inflation rate. Then the MFs actually WILL be costing more. During the meantime, Disney definitely is, and has been, increasing the cost of their resorts and hotel rooms significantly faster than inflation. To the point where it is starting to be priced out of the range of middle class families. So, the 'hotel renter' pool is getting smaller and smaller, proportionately, but there still is enough demand that Disney usually fills those rooms. If it costs more to stay in a hotel and if the MFs have gone up by the same amount, then it will all still balance out in the end. Unless the renter pool shrinks too much, and if prices continue to go up at this level, Disney will reach that point.

Your second paragraph hits closer to home than the first. Not only has Disney been increasing the cost of their resorts and hotel rooms higher and faster than the inflation rate, the same can be said of the general rate of inflation to wages, at least my wages. Over a 30-year span, the purchasing power of most middle class has retreated as wages remain stagnant relative to rising costs. Disney has exceeded even that rate which has led to the perception (as you rightfully pointed out) that Disney is pricing out the middle class.

 

[sleepydog25]

at 3% increase per year -- BWV will be over $10 within 12 years from now. That is well ahead of 2042.

Yep. My decision to drop or not I guess will come a lot sooner than I figured. . .

 

[SL6827]

What makes me really think is when a recession hits again. And then Disney will have to offer some really good deals to get people to come. Even though we were blessed beyond measure and were able to come numerous times during the Great Recession that does not mean we will be able to when the next one hits.
I remember DVC members really hating on the Free Dining deals. I understand that now more than ever. For us, who stay in a studio, a moderate resort room is somewhat comparable and will suffice. I see how having four people in a moderate resort room with a free regular dining plan would have been a better deal than DVC a lot of times back then.

I too would have a hard time loving my DVC now if there were really good deals on Disney's properties, but I am pretty sure those deals will have to return at some point.

 

[kniquy]

I'm pretty sure most of us fall into the boiling frog scenario with respect to MFs.

I can see this being the case. If you want to travel to WDW then you have a few choices - 1. pay what Disney is charging for direct rooms 2. keep DVC paying your yearly MF, 3. stay off site for much cheaper than options 1 or 2.

The problem is - direct Disney room costs keep going up so even our MF increase they still look prettier than what Disney is charging.

It will all depend on peoples financial situations and how those change. My DH work and get very modest raises every year so increased in MF can be handled, but in 20+ years when we want to retire and are on a fixed/more limited income our outlook on Disney might change.

 

[SL6827]

I can see this being the case. If you want to travel to WDW then you have a few choices - 1. pay what Disney is charging for direct rooms 2. keep DVC paying your yearly MF, 3. stay off site for much cheaper than options 1 or 2.

The problem is - direct Disney room costs keep going up so even our MF increase they still look prettier than what Disney is charging.

It will all depend on peoples financial situations and how those change. My DH work and get very modest raises every year so increased in MF can be handled, but in 20+ years when we want to retire and are on a fixed/more limited income our outlook on Disney might change.

But what I am thinking is that Disney will not be able to go up a whole lot more on the room prices in the future. I mean, would people really pay $500 a night for a moderate resort? You think?

 

[DougEMG]

What makes me really think is when a recession hits again. And then Disney will have to offer some really good deals to get people to come. Even though we were blessed beyond measure and were able to come numerous times during the Great Recession that does not mean we will be able to when the next one hits.
I remember DVC members really hating on the Free Dining deals. I understand that now more than ever. For us, who stay in a studio, a moderate resort room is somewhat comparable and will suffice. I see how having four people in a moderate resort room with a free regular dining plan would have been a better deal than DVC a lot of times back then.

I too would have a hard time loving my DVC now if there were really good deals on Disney's properties, but I am pretty sure those deals will have to return at some point.

We use to stay in a moderate with free dining (3 people) and ended up buying DVC in the last recession because the numbers worked out so that owning DVC was the same as a moderate with free dining but whenever we wanted to go. So no more depending on a discount from Disney.

 

[DougEMG]

Currently I am not overly worried about increasing MF. As long as DVC is selling DVC resorts and running hotels at WDW, the cost of owning DVC has to be more cost effective than staying at an onsite hotel, otherwise they won't be able to sell DVC. Once Disney has enough DVC properties on site (~12-14) they will be able to always have a new recycled resort to sell for new as those 50 year lease expires, so it is in their own self interest to keep the cost of ownership a better long term deal than staying at their hotels.

I'm sure Disney is already dreaming of when BWV and BCV expire so they can repackage them at huge new prices with a new increased point chart.

Now if Disney ever gets out of the DVC and hotel business, then time to run for the hills.

 

[kniquy]

But what I am thinking is that Disney will not be able to go up a whole lot more on the room prices in the future. I mean, would people really pay $500 a night for a moderate resort? You think?

I wish we had the data from what prices for rooms at WDW were like 15-20 years ago. But even look at what DVC was selling for when it started - wasn't it around $60 per point - and now prices for new resorts are triple that and people still buy. So i think the slow incremental increases are something we are just ok with we can adapt to those changes. We go often so the sticker shock isn't as shocking.

I think when someone had gone to WDW possibly stayed deluxe and then returns 5 years later -- the price shock is real, which is why they will choose then go moderate or value. For DVC we can still price out a deluxe room through Disney and say -- i guess we are saving money. We can look at moderate rooms and say - hey we are paying the same as a moderate but we are staying in deluxe accommodations. I think as time goes on prices for everything in life will rise. It is just a fact of inflation.

My parents bought a home in 1970 for $40K - now that same home would sell for $300. And people are ok with it.

The ceiling for people will be when they can no longer find the value in their DVC and the MF become more of a burden., but for now we find value in the accommodations and the memories we have when we use our contract.

 

[anomamatt]

When rental rates fall below twice MF.

But this begs the question... are rental rates too low? I think they are. There should be savings from cash rates, but the rental savings these days are pretty massive.

 

[SL6827]

But this begs the question... are rental rates too low? I think they are. There should be savings from cash rates, but the rental savings these days are pretty massive.

I am surprised they are not higher, especially with the parking fee covered.

 

[SL6827]

Currently I am not overly worried about increasing MF. As long as DVC is selling DVC resorts and running hotels at WDW, the cost of owning DVC has to be more cost effective than staying at an onsite hotel, otherwise they won't be able to sell DVC. Once Disney has enough DVC properties on site (~12-14) they will be able to always have a new recycled resort to sell for new as those 50 year lease expires, so it is in their own self interest to keep the cost of ownership a better long term deal than staying at their hotels.

I'm sure Disney is already dreaming of when BWV and BCV expire so they can repackage them at huge new prices with a new increased point chart.

Now if Disney ever gets out of the DVC and hotel business, then time to run for the hills.

Ya, I bet they are really kicking themselves for the point chart at the Boardwalk.

 

[sleepydog25]

I can see this being the case. If you want to travel to WDW then you have a few choices - 1. pay what Disney is charging for direct rooms 2. keep DVC paying your yearly MF, 3. stay off site for much cheaper than options 1 or 2.

4. Stop going to Disney. I've enjoyed my visits over the past decade and a half, and I suspect I will for the next 8-10 years. But, Disney's pricing is outstripping inflation, and in the not too distant future, I'll be on an income that won't appreciate my habit, and I'll just stop. . .and it might not even be that long.

 

[heynowirv]

Frankly, I don't know.

I'm concerned that resale isn't going to be a viable option. DVD is trying to make it that way, for sure with the loss of perks and the increasing restrictions. Won't surprise me if in a year or two new resale contracts are restricted to staying on that particular property only.

Could be, but we'd all be grandfathered in.

 

[MamaBelle4]

Could be, but we'd all be grandfathered in.

Yes, but if the dues get astronomical or more than some are willing to pay, it may not be possible to unload it at a good price with the high dues AND the resale restrictions that would be applicable if the grandfathered in contract is sold.

 

[SL6827]

Yes, but if the dues get astronomical or more than some are willing to pay, it may not be possible to unload it at a good price with the high dues AND the resale restrictions that would be applicable if the grandfathered in contract is sold.

Exactly.

 

[jarestel]

I don't think there's any high water mark that would realistically impact my desire to keep or sell DVC. Dues are a necessary evil when it comes to timeshares and like taxes, they will continue to rise over time. Expected. What would be more likely to motivate me to stay or go is how those maintenance dollars are spent. If I'm paying high dues and the resorts aren't kept up to a relatively decent standard, I'd be a fool to keep paying high maintenance fees to stay in run-down properties. On the other hand, if they use those dollars to ensure the resorts are maintained well, I'd see value for my dues dollar and though grumbling might ensue when writing those checks, I'd continue to do so.

 

[MamaBelle4]

I don't think there's any high water mark that would realistically impact my desire to keep or sell DVC.

I agree with everything you said for the most part. I think if dues get too high, it might be more than I can stomach to pay, but maybe not. It will be gradual increases. While my dues are low (SSR), if DVD keeps the gradual incline, I'd probably be able to stomach a higher price than if they kept the dues stagnant for a number of years then had a dramatic upswing.

 

[mikebb]

That entered my mind. When it might be cheaper to rent than the cost of the dues?

This is really my bottom line. After all, locking my money into DVC was a known tradeoff or "deal" that I made with Disney - I trade (some) flexibility spending my vacation dollars to get a) a hedge against inflation and b) "discounted" (pre-paid) rooms. Once dues start approaching rental rates, I'm willing to spend a little more to reclaim that flexibility to spend those dollars where I like and I'm out of the DVC system.