Projected DVC Maintenance Fees

ct_chris

Mouseketeer
Joined
Nov 24, 2010
In 2011, I made a projection about the cost of DVC Annual Maintenance Fees
http://www.disboards.com/showpost.php?p=40449262&postcount=4
I finally got around to updating my charts for 2012
DVCAnnualMaintenanceFeeHistory_2012.gif

PercentageDVCAnnualMaintenanceFeeIncrease.gif

DVCAnnualMaintenanceFeeHistorical.gif

DVCAnnualMaintenanceFeeProjection.gif
 
WOW! Great work. However, the last chart is a depressing reality that I was not quite ready to digest today and thus I am trying to make myself forget it until after I have a had a few cocktails.
 
Great charts and lots of good information here.

One can see that in the long run MF are the biggest cost by far.
 
Anyone know why Boardwalk went DOWN a couple of years in a row?
 


Not to pick on you, because you have some good historical information there. But speaking as a financial professional you would be better calculating the compound annual growth rate (CAGR) instead of the average - CAGR is a better measure of the average growth rate over time.

It doesn't change the numbers a lot, but BLT's CAGR is 4.23% vs. the 4.81% average, for example. If you take the base year times 4.23% each year you get to the 2012 rate of $4.3255. If you take it times the average the ending rate is $4.40.

Yes, I know I'm anal. But I get paid to be for a living.
 
WOW! Great work. However, the last chart is a depressing reality that I was not quite ready to digest today and thus I am trying to make myself forget it until after I have a had a few cocktails.

Really, going have to make the Social Security check, really stretch. :eek:

What happened at HHI, around 2005 to 2007 to make such a drastic rise in dues?
 


What happened at HHI, around 2005 to 2007 to make such a drastic rise in dues?

I think I read something about a loan that was taken out which would be paid off (via MF's) over time??? I thought I'd read something about it being paid off this year which should possibly result in slightly lower MF's in 2013.

....I'm not holding my breath...
 
Really, going have to make the Social Security check, really stretch. :eek:

What happened at HHI, around 2005 to 2007 to make such a drastic rise in dues?

The resort had to escalate the planned maintenance of exterior siding so they needed to raid the Capital Reserve fund. In order to keep everything in balance, DVD loaned the money for the project to the owners. At the same time, the multiple hurricanes that affected the south (not HH) did cause an increase in insurance rates. Those two situations caused the HH fees to increase considerably. VB also increased due to the insurance costs, but not as much as HH at that time. VB was significantly affected by the hurricanes during that timeframe.

As Kristen noted, the HH loan will be paid off this year so it should have some affect on the 2013 fees, but that will be a minimal amount - so I do not expect the fees to decrease overall for next year.
 
Now show us how average wages will increase over the next 40-50 years to help put this in perspective. ;) (Or how it has risen over the last 20-40 years.)

DVC claims that 75% of resort budgets go toward some form of employee compensation. Thus dues will only continue to rise at these levels if compensation is going up.
 
Now show us how average wages will increase over the next 40-50 years to help put this in perspective. ;) (Or how it has risen over the last 20-40 years.)

yep, back in the early 80s (with $15 park tickets) these same people would have been saying that if disney were charging $90 per day, no one would be there...;)

but it is a good point for those on (or nearing) a fixed income...
 
The resort had to escalate the planned maintenance of exterior siding so they needed to raid the Capital Reserve fund. In order to keep everything in balance, DVD loaned the money for the project to the owners. At the same time, the multiple hurricanes that affected the south (not HH) did cause an increase in insurance rates. Those two situations caused the HH fees to increase considerably. VB also increased due to the insurance costs, but not as much as HH at that time. VB was significantly affected by the hurricanes during that timeframe.

As Kristen noted, the HH loan will be paid off this year so it should have some affect on the 2013 fees, but that will be a minimal amount - so I do not expect the fees to decrease overall for next year.

Thanks, :thumbsup2
 
my DVC-HHI add-on docs from DVC refer to a developer subsidy for annual fees thru 12/2012 and a developer subsidy of reserves thru 12/2011. I couldn't find any details about the amount. Does anyone know how much those subsidies were?
referring to PP re. loan--My docs also said that there was a $930K loan in 2006 to repair "water intrusion" at DVC-HHI which is to be repaid in total by 2013, but it looked like it accounted for less than $.15 per point.
thanks, Elaine
 
my DVC-HHI add-on docs from DVC refer to a developer subsidy for annual fees thru 12/2012 and a developer subsidy of reserves thru 12/2011. I couldn't find any details about the amount. Does anyone know how much those subsidies were?
referring to PP re. loan--My docs also said that there was a $930K loan in 2006 to repair "water intrusion" at DVC-HHI which is to be repaid in total by 2013, but it looked like it accounted for less than $.15 per point.
thanks, Elaine

I think that is a standard component of documents that allows DVC to NOT pay dues on their ownership as long as they agree to cover any expenses beyond the budgeted amount. Most of the DVC resorts have or still do have a subsidy clause in their documents for those reasons. Early VB buyers still have a subsidy for components of the resort that were never built. That subsidy ended around 1996 so buyers after that time are responsible for all operational costs at the resort while those early buyers (and their successors) still enjoy lowered annual fees.
 
I'm just a lurker wondering if DVC is right for me. Realizing there are costs involved, I was following this thread and like where the OP is going with this. I also like economics and stuff. One thing to overlook is all these figures are nominal in that inflation hasn't been factored in. I indexed the figures for inflation with 2010 being the baseline.

I'd post my charts, but I need to have 10 posts...maybe when I get to 10, I will.

Anyway, here are the average increases with inflation factored in:

OKW 1.01%
VB (Sub) 1.9%
VB 2.03%
HH 1.63%
BWV .25%
VWL 1.27%
BCV 1.35%
SSR .3%
AKV 1.22%
BLT 2.4%
VGC 1.84%
All WDW 1.11%
All Resorts 1.38%

So, on average, DVC M&R costs are growing FASTER than inflation. In a perfect world, it would be growing at the same speed.

But not as fast as college tuition. So I guess that is good.
 
Snurk71 and jrm1504.. Thank you for your input. Not being a economist myself I appreciate us all working together to make our best effort at estimating future DVC Annual Maintenance Fees.

I will certainly look to add compound annual growth rate (CAGR) in my calculations as well as make plots for inflation adjusted growth rate.

jrm1054....
To learn something myself and better understand your numbers, why did you use 2010 as a baseline? I was thinking it be best to use the CAGR of inflation from 1991-2012 using longer term historical values?
http://inflationdata.com/inflation/inflation_rate/historicalinflation.aspx
 
I just used annual the CPI numbers from the Bureau of Labor Statistics. In their numbers, 1982-1984 are the baseline; that is they equal 100. Then if you look at the table it would show 2010 as 218. Meaning, if in 1983 you had $100 Reagan bucks, in 2010 you would need $218 Obama bucks to be able to buy the same goods and services. It is like the exchange rate between years...it is the same way those online inflation calculators work.

I just re-indexed it to something "a bit closer to home." I figured 2010 was a nice round number to make as my $100 baseline. So now, with $100 in 2010 Obama bucks, I'd only need $82.50 2002 Dubya bucks to get the same amount of stuff.

Pretty exciting stuff, eh?
 
Thank you for the explanation. It now makes perfect sense. I was looking back at your post and you never listed what was the average % inflation you used to determine the adjusted % for each resort.
 
I know this is an older post; hope folks are still following it.

Great info here.

It seems all rates are increasing at an increasing rate. Which is common for property management: as properties age, maintenance cost do at an increasing rate. You're better off in assumption tracking by putting the inflation factor into a range-bound related to the age of property.


for example, if the property is brand new, I think you're okay using averages as calculated (I'm a fan of real yields)

If a property is 5-10 plus years, I think you have to use inflation plus 2% - 3%, or even double the average.

The value of using the real yield is that if you don't know what rental costs increase at Disney resorts, then you can run the spread as your increasing costs of ownership.

We're exploring buying after-market and an older property, so I'm assuming 6% maintenance cost increases. When I run that scenario the numbers look pretty rough.

Any thoughts?
 
Going to be interesting in the big picture. At some point it seems the dues will cost more than a vacation on cash. But considering a Disneyland Hotel room cost about 30$ bucks a night in 1962 and today anywhere from $250 to $350 a night now, that's an aproximate increase of 833% over the last 50 years. In 2060 a Disneyland Hotel room might cost ya about $2000 a night.

With VGC for example, the graphic in the orginal post shows a projected increase of 720%.

Given a 50 year history, I'd say between 7 and 8 hundred precent increases are on track for normal.

I know it's strange to think about paying $7000 a year in dues, but thankfully you'll also know the average 300% ticket price increase will likely continue, meaning your tickets in 2060 will likely cost at Disneyland $246 for a one day Disneyland ticket.
 

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