Has anyone projected future dues for each resort thru the end of each contract?

[EvaRose]

Making a best guess based on past due increases and inflation, has anyone ever created spreadsheets with estimated future years dues for each resort?

I made one for Boardwalk with 3.1% increase each year based on the data I found that said the average increase was 3.1, but not sure if that's exactly the best way to predict through end of contract. Would also be curious to look at other resorts through the end of their contracts, like Polynesian and Copper Creek.

 

[JackosinDIS]

Making a best guess based on past due increases and inflation, has anyone ever created spreadsheets with estimated future years dues for each resort?

I made one for Boardwalk with 3.1% increase each year based on the data I found that said the average increase was 3.1, but not sure if that's exactly the best way to predict through end of contract. Would also be curious to look at other resorts through the end of their contracts, like Polynesian and Copper Creek.

Ive done it for Copper Creek… based on an increase of 4% per year… it’s over $43pp

 

[Sprinkles&Sprints]

I have as well - doing it with 3% convinced me I needed more points - doing it with 5% told a VERY different story. I am curious what most folks use...

 

[davidhr]

I use 5%.

 

[tom1944]

Ive done it for Copper Creek… based on an increase of 4% per year… it’s over $43pp

I am glad my contract ends 16 years before that.

2042 might not be such a bad idea.

 

[tx911]

Yikes, that will throw some cold water on the thought of buying more points for sure!

$40-50 pp in dues feels crazy.

 

[TheDailyMoo]

Yikes, that will throw some cold water on the thought of buying more points for sure!

$40-50 pp in dues feels crazy.

A gallon of milk will be like $25

 

[BuzzLightyr]

I use a 3% annual increase in annual dues but increase my value of the vacation or renting points by 2% a year. Inflation on dues and inflation on vacations should track together. The overall purchase of points should be someehat of an inflation hedge. You are locking in today's price for part of future vacations (50-70% upfront with the rest being dues - value of $18-25 point rental today minus $8-9 of dues) .

Yes, there is a real risk of the dues getting much much higher, but we should be able to rent out our points at a similar inflation rate if we continue to have higher than normal inflation.

 

[tx911]

I use a 3% annual increase in annual dues but increase my value of the vacation or renting points by 2% a year. Inflation on dues and inflation on vacations should track together. The overall purchase of points should be someehat of an inflation hedge. You are locking in today's price for part of future vacations (50-70% upfront with the rest being dues - value of $18-25 point rental today minus $8-9 of dues) .

Yes, there is a real risk of the dues getting much much higher, but we should be able to rent out our points at a similar inflation rate if we continue to have higher than normal inflation.

One can only hope! My feet are ice cold right now just thinking about dues, especially when a lot of it will fall to my kids. Yikes.

 

[RivShore]

A gallon of milk will be like $25

Exactly. You can't just look at dues cost in isolation...

 

[DanCali]

Exactly. You can't just look at dues cost in isolation...

True, but the reality is that milk prices have increased at 2.1% annualized over 25+ years (https://www.in2013dollars.com/Milk/price-inflation).

Dues growing at 5% may or may not happen, but realistically that annualized increase would be unsustainable going into the 2060s for many members due to the power of compounding. The only way it works is (i) if Disney cash rates will still be substantially higher and (ii) if your wages and/or social security go up by similar amounts annually. If cash rates will be as much as the annual dues, the value of all contracts on the resale markets will be close to worthless. And if income doesn't keep up, more people can't afford the annual dues or the cash rates, cash rates are likely to drop, more owners will try to bail out, leaving remaining DVC owners in that same predicament.

 

[AstroBlasters]

One can only hope! My feet are ice cold right now just thinking about dues, especially when a lot of it will fall to my kids. Yikes.

The dues don’t have to fall to your kids as anyone can disclaim an asset and it will stay in the estate of the deceased.

 

[tom1944]

The dues don’t have to fall to your kids as anyone can disclaim an asset and it will stay in the estate of the deceased.

Unless of course you did what I did and made the purchase with my daughter as one of 3 owners

 

[RivShore]

True, but the reality is that milk prices have increased at 2.1% annualized over 25+ years (https://www.in2013dollars.com/Milk/price-inflation).

Dues growing at 5% may or may not happen, but realistically that annualized increase would be unsustainable going into the 2060s for many members due to the power of compounding. The only way it works is (i) if Disney cash rates will still be substantially higher and (ii) if your wages and/or social security go up by similar amounts annually. If cash rates will be as much as the annual dues, the value of all contracts on the resale markets will be close to worthless. And if income doesn't keep up, more people can't afford the annual dues or the cash rates, cash rates are likely to drop, more owners will try to bail out, leaving remaining DVC owners in that same predicament.

Milk is probably a bad comparison since it is subject to government regulations and subsidies that interfere with it's market rate pricing. But you bring up a great point on cash rates - cash rates are the foundation for DVC direct pricing (Disney has to show some savings vs cash rates when selling) and DVC point rentals are also based on cash rates. I think your right that the whole thing will collapse, if dues outstrip the cash rates. Just some cheery speculation for your Monday!

 

[kilik64]

Eh that’s a problem for future me or someone else to deal with…

 

[tx911]

The dues don’t have to fall to your kids as anyone can disclaim an asset and it will stay in the estate of the deceased.

Thanks, that makes sense.

But stay in the estate, as in Disney would re-claim the contracts, or the estate would be responsible for the dues until the end date?

 

[tx911]

Eh that’s a problem for future me or someone else to deal with…

It does give one pause, if getting to that age where retirement is looming!

I take some solace in knowing I can always sell some contracts, but there has to be a viable resale market for that to be practicable.

 

[obsesseddisneyfan]

If the Dues are reflective of true costs to run the resort then the cash price will always be higher. It's Disney someone will have the money and the want to go. The question is has Disney over built and if wanting or needing to fill all the rooms they take cash prices to the cost to run. I don't think so. As in Covid they will just close some resorts. It's makes more of a profit to charge more for the ones that are running and cut staffing by closing a few. To make it more desirable to stay on sight they can bring on more benefits so those on sight prices are a no brainer.

 

[CastAStone]

Couple thoughts:

Biggest drivers of dues are wages and construction costs (which are also heavily driven by wages). Recent above average working class wage gains have led to above average dues increases.

So your future dues expectations should be heavily influenced by whether you expect working class wage gains to continue at their much higher 2021-2024 levels or go back to the lower baseline they ran at since the 70s.

Separate thought:
I compared current dues with the dues from year 3 (after they understood the actual operating costs) for all the WDW resorts AFTER adjusting those dues for inflation. Interesting results:

Resort	% dues have increased above CPI (inflation)
OKW	73%
BWV	15%
BRV	31%
BCV	24%
SSR	34%
AKV	28%
BLT	39%
VGF	8%
POLY	8%
CCV	-10%
RIV	-7%

The older the resort is the more dues increases have decoupled from inflation. There’s no magic bullet in the data as to why. It may be Disney has become better at estimating reserves needed. It may be that they have become better at designing the resorts so the costs don’t increase as much. It may be that since the CM starting wage has quite literally doubled since 2016, Disney just priced that in up front for the resorts since VGF.

TL-DR:

I would say though that, if you ignore OKW which seems to be an outlier, it’s reasonable to assume that every 20 years, the dues you pay will increase about 25%-30% faster than the rate of inflation.

 

[tx911]

Couple thoughts:

Biggest drivers of dues are wages and construction costs (which are also heavily driven by wages). Recent above average working class wage gains have led to above average dues increases.

So your future dues expectations should be heavily influenced by whether you expect working class wage gains to continue at their much higher 2021-2024 levels or go back to the lower baseline they ran at since the 70s.

Separate thought:
I compared current dues with the dues from year 3 (after they understood the actual operating costs) for all the WDW resorts AFTER adjusting those dues for inflation. Interesting results:

Resort	% dues have increased above CPI (inflation)
OKW	73%
BWV	15%
BRV	31%
BCV	24%
SSR	34%
AKV	28%
BLT	39%
VGF	8%
POLY	8%
CCV	-10%
RIV	-7%

The older the resort is the more dues increases have decoupled from inflation. There’s no magic bullet in the data as to why. It may be Disney has become better at estimating reserves needed. It may be that they have become better at designing the resorts so the costs don’t increase as much. It may be that since the CM starting wage has quite literally doubled since 2016, Disney just priced that in up front for the resorts since VGF.

TL-DR:

I would say though that, if you ignore OKW which seems to be an outlier, it’s reasonable to assume that every 20 years, the dues you pay will increase about 25%-30% faster than the rate of inflation.

Which would then imply that DVC dues will eventually overtake the cost of cash vacations, right? I.e. booking with cash will be cheaper than DVC.