The Price of Progress: Placing your maintenance fees in context
Fresh off the founding of the United States, Ben Franklin wrote, “[I]n this world nothing can be said to be certain, except death and taxes.” If he were writing in today’s age of strong governments, paper money and central banks, he’d likely add a third certainty: price inflation.
In the 74 years since World War II, there have only been three years in which the U.S. government did not chronicle an increase in average prices. The average compound interest during this time has been 3.63 percent, and 1.65 percent in just the last decade. Since 1960, Canadians have not experienced a single year of price decline. The average annual increase according to Statistics Canada is 3.79 percent.
What does this have to with your vacation ownership? Just as a fish must accept the temperature of the ocean, at MLDC we must work with the factors of our environment. And these factors, just like those in your personal lives, increase in price each year.
With this in mind, MLDC’s Jennifer Johnson researched a five-year history of maintenance fees at Meadow Lake, the results of which you can find in the table below. On average across the entire resort, fees increased by 2.35 percent annually. The largest increases were in fees incurred for electronic processing of bills, maintenance, and property taxes. Each of these is a necessary cost of business. MLDC kept the increase of overhead and accounting to 1.6 percent.
To put these numbers into context, price inflation in the U.S. over this period was 1.62 percent, and 1.44 percent in Canada. Also, a significant factor is the Canadian to US dollar exchange rate, which declined an average of 3.79 percent per year.
As much as many of us would like to freeze moments in time, this is simply not possible in the reality in which we live. Real property deteriorates over time and therefore it must be maintained, repaired and replaced. Maintenance fees pay for this upkeep as well as for things such as electricity, water, insurance, property taxes, and other general operating costs. Each is a critical component to the operation of a resort, especially resorts such as Meadow Lake that insist on maintaining a first-class experience for its owners and guests.
Bottom line: At Meadow Lake, we are incredibly grateful to have owners such as you who continue to support your resort’s wellbeing, and we look forward to continuing to provide you with a first-class vacation experience. Although we can’t impede the inevitable rise in costs of certain things, we are diligent in managing the costs that are under our control. Furthermore, we can always explain to owners why your maintenance fees increase, as well as to what uses they are devoted. We sincerely thank you for your ownership. As always, we welcome your feedback.