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?
In my opinion, there are no blanket assumptions which can be made. No matter the increase, there are underlying reasons and those reasons vary from year-to-year and property-to-property.
Old Key West is the...oldest...resort at 20+ years. The last four years' worth of increases were: 2.9%, 2.9%, 4.4% and 2.7%.
Each respective county (and its taxpayers) controls property tax rates which can be a big influencer on the final dues numbers. Some expense categories like property insurance and transportation (fuel costs) have proven rather volatile over the years. 2/3 of each resort's operating costs are linked to employee salaries and benefits. Those numbers will change an undetermined amount as union contracts come up for renewal and as lawmakers have an impact on health insurance costs.
And last but not least, we are all subject to Disney's whims with regard to services added or removed from the budgets. When they decide to add a new layer of management at the resorts, change the bedsheets to a more expensive configuration or build a new pool, members pay the cost.
Most DVC resorts are split between timeshare and cash hotel. Even the balance of cash guests vs. DVC can dramatically alter the budgets as more (or less) total operating dollars are attributed to DVC.
You could certainly trend historical increases and come up with a broad expectation for the future. But I seriously doubt the future increases can be predicted with any high degree of accuracy.
At some point it seems the dues will cost more than a vacation on cash.
That will not happen.
Remember the dues represent the actual operating expense for the resort...plus Disney's 12% management fee. DVC member dues are paying for property taxes, Cast Member salaries, bus & boat transportation and so on. But when it comes to the hotel rooms, Disney must fund all of these expenses themselves.
If dues were to cost more than a cash vacation, Disney would be taking a loss on operating the hotels. That simply will not happen. Expect profit margins to remain about the same.
Generally speaking, member dues increase because it costs more to run the hotels. Employees get raises and their benefits are more expensive...gas prices go up...supplies cost more to procure. That is why Disney raises its room rates every year, and they will continue to increase rates to at least match (if not exceed) the rise in expenses.