2017 DVC Dues Announced Prior to Annual Meeting

[Maverick]

I found the difference between the BWV and BCV increase quiet surprising. Will be interesting to see the details and what caused the big difference in increases.

Hey Doug - One year does not always give a fair interpretation as you know. Over the last 10 years (including 2017), BCV is up 30.65%, BWV is up 28.42%. Both are below my 3.6% annual increase estimate over the long haul, so I'm good with that.

I suspect the main difference between them this year will be in Ad Valorem tax and reserves. Just a guess though as I don't own at BCV. Let me know what you find out!

Mav

 

[bumbershoot]

I think what's happening with BLT and what will eventually happen with VGF and Poly can be extrapolated from the AUL "scandal" where Hawaii busted Disney for under-estimating dues vs. what it really costs to run the place., forcing DVD to update the dues to realistic numbers.

Only Florida doesn't do that.

Could the Bay Lake situation also be because they used such cruddy furniture, etc, that started falling apart?

 

[_auroraborealis_]

Could the Bay Lake situation also be because they used such cruddy furniture, etc, that started falling apart?

Could also be the new build/refurbish model, yeah.

 

[suebeelin]

The jump in maintenance fees were pretty high for BWV BLT and OKW... I do so wish it would slow down.

 

[LAX]

The jump in maintenance fees were pretty high for BWV BLT and OKW... I do so wish it would slow down.

Is there a limit on how much MF can go up on a year to year basis or within a certain time frame? Being a new BLT owner, I am not thrilled that it has one of the highest rate increases. I certainly hope it will slow down soon.

LAX

 

[drusba]

Is there a limit on how much MF can go up on a year to year basis or within a certain time frame? Being a new BLT owner, I am not thrilled that it has one of the highest rate increases. I certainly hope it will slow down soon.

LAX

The legal limit is that annual dues cannot increase more than 15% a year except by an actual vote by the members. That limit does not apply to the property tax portion of dues to which no limit applies. We have never seen an increase anywhere near 15% in one year.

 

[skier_pete]

The fact is - the average increase in dues over the life of the properties is probably 5% per year. I have a table of all the rate increases, but I won't share it here. Suffice it to say if you use 5% to calculate increases, you will probably be spot on.

But when people complain about dues going up, remember that hotel rates go up as well, at roughly the same %.

If your dues are such that you are paying let's say 18 points per night for your DVC studio, and $6.5 dues per point, that's $117 a night. At 5 % per year - in 10 years dues will be $10.08 per point, or $181 a night. Meanwhile, a similar room may be $350 a night at Disney. 5 % increases over 10 years say that room will be $543 a night in 10 years. So while your cost went up 55% or $63 per night - your savings versus room rental increased significantly from $233 per night to $362 per night.

Compounding gets you every time.

 

[kniquy]

AKV is still the highest, but it's within a few cents of many of the other resorts now.

Yes! AKV owner here too and i am very pleased to see that it had one of the lowest increases compared to all the other resorts. When you actually factor the difference in price per point and the overall minimal difference in MF costs -- it really isn't a horrible choice.

Poly had me wondering - are they keeping the increases low because they are still selling or is it simply because it is a new resort and they shouldn't have many repairs or updates needed at this point in time?

 

[kniquy]

hotel rates go up as well, at roughly the same %

That is what i keep in mind when increases are announced. You have to figure that the cash rate is going up as well - so either pay it to DVC or pay it to the disney resorts. I am sure that some number hungry DIS member has gone through the years and compared hotel cost increases to the DVC MF increases. I am sure they increases are pretty consistent to one another.

 

[_auroraborealis_]

You really should account for sunk cost of the point in room calculations, however -- the basic would be your cost per point / how many years were on the contract when you bought it. Dues aren't the only expense of a DVC unit in a year.

 

[kniquy]

sunk cost

so "sunk cost" is the initial amount paid for the contract? If i do this for my AKV contract then if kept until the end of the contract life (which really who knows if that would happen) Then for me that would be approx $270 per year and then add my yearly MF - which i am sure would be much less than a studio at AVK for a week (which just a quick glance on WDW website can range from $300 - 600/night depending on view or season). So can't really complain about MF increases when i know in the long run it is a savings.

Will there ever be a breaking point where DVC will be more expensive than a resort room -- can we really expect that hotel rooms are going to cost $700/night in 20 yrs -- crazy to think it could happen but i guess with inflation who knows

 

[_auroraborealis_]

so "sunk cost" is the initial amount paid for the contract? If i do this for my AKV contract then if kept until the end of the contract life (which really who knows if that would happen) Then for me that would be approx $270 per year and then add my yearly MF - which i am sure would be much less than a studio at AVK for a week (which just a quick glance on WDW website can range from $300 - 600/night depending on view or season). So can't really complain about MF increases when i know in the long run it is a savings.

Right. My point is just that to equate cost of room to cost of dues leaves out a significant investment, especially for those buying direct points at today's pricing. That $16.5k for a 100-point Poly contract needs to be figured as a cost!

 

[skier_pete]

I ignored "Sunk cost" in my examples intentionally - because it's (a) different for every individual and (b) in my view a constant. I realize that my sunk cost is approximately $2 per point in 2014 dollars, and the further I get away from 2014, the number should be adjusted for the value of the dollar, but to me that is simply too complicated to consider. Also, I am not one of those that think "you need to factor in the interest that money would have earned had you not bought into DVC", as far as I'm concerned, that money would have gone somewhere else. Towards another vacation, a new car, home improvements, something that didn't happen because I bought into DVC instead. So the $2 per point fixed value/sunk cost is what I use to add to the dues to determine how much a trip costs.

Our recent 8 night stay at AKV cost me 96 points or 96 x {$6.42/point (dues) + $2/point (buy-in)} = $808. This includes both the dues and the sunk cost of the buy-in.

 

[DisneyStarWisher]

Did HHI have no change at all, or is it just not listed yet? If what is shown is correct, I'm pretty excited since we own at AKV and HHI.

I'm wondering about HHI, too. Any news?

 

[skier_pete]

I'm wondering about HHI, too. Any news?

HHI hasn't been announced. It usually isn't announced with the others. I wouldn't be surprised if there's a big jump because of all the hurricane damage, but maybe not until next year.

 

[DisneyStarWisher]

HHI hasn't been announced. It usually isn't announced with the others. I wouldn't be surprised if there's a big jump because of all the hurricane damage, but maybe not until next year.

I have been a member of both AKV and HHI for almost 10 years. As far as I can remember, I have found out both at the same time. There shouldn't be a jump because of the hurricane. They have insurance. VB got damage but theirs didn't jump.

 

[freediverdude]

Another site announced hhi, it was 6.7% I think? It was a significant jump, and DVD loaned the association $750,000 to help with repairs. I think I read there was a significant deductible on the insurance.

 

[DougEMG]

Hey Doug - One year does not always give a fair interpretation as you know. Over the last 10 years (including 2017), BCV is up 30.65%, BWV is up 28.42%. Both are below my 3.6% annual increase estimate over the long haul, so I'm good with that.

I suspect the main difference between them this year will be in Ad Valorem tax and reserves. Just a guess though as I don't own at BCV. Let me know what you find out!

Mav

Once I see the detailed BWV and BCV numbers I'll post them.

 

[CarolMN]

I always believed that the DVC Resort property/liability insurance policies carried a $1M deductible. But perhaps the deductible for HHI is $750,000, which is the amount of the loan.

 

[mnra]

Just from looking at this. No one gets these increases. They are not paying people more. We you go in the resort I would say the overall condition is worst then it was 10 years ago yet dues go up by 4 times the inflation rate. Does anyone really audit what is a DVC expense and what should be Disney Corp expense. They basically have freedom to raise it as high as they want.