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Plutofan
11-18-2011, 09:53 AM
Assuming that the following information which was released by a reseller of DVC is correct I am surprised on the percentage increase on some of the reports. It apperas that some went up over 8% assuming that the information is correct.

BEACH CLUB VILLA $5.5043
BOARDWALK $5.6160
WILDERNESS $5.6096
HILTON HEAD $5.9290
OLD KEY WEST $5.2035
SARATOGA SPR $4.7309
VERO $7.1163
ANIMAL KINGDOM $5.4356
BAY LAKE TOWERS $4.2219
GRAND CAL $4.3255
AULANI Pre July 27, 2011 $4.4794

Post July 27, 2011 $5.9607

keaster
11-18-2011, 10:15 AM
I'm a newbie, but I didn't think the 2012 dues come out until after the condo association meetings in December? :confused3

Plutofan
11-18-2011, 10:18 AM
The dues come out before the meeting so that they can be approved at the meeting. Not that we have nay say in approving them.

DenLo
11-18-2011, 10:26 AM
That's a huge increase at BLT. It will be interesting to see why the sudden increase. The subsidy already ended so that can't be why.

keaster
11-18-2011, 11:42 AM
Agreed...BLT and AKL are both over 8.4% increase, GCV is over 6.2%.

Why such a big jump for those and not others? At the condo meetings, do they give any kind of explanation for what's behind the decision making, especially with such a steep jump?

Simba's Mom
11-18-2011, 12:38 PM
I'm curious as to why Vero dues are so much higher than Hilton Head. $7.00 is high! Is it because Property Insurance is higher in Florida?

DebbieB
11-18-2011, 12:53 PM
Agreed...BLT and AKL are both over 8.4% increase, GCV is over 6.2%.

Why such a big jump for those and not others? At the condo meetings, do they give any kind of explanation for what's behind the decision making, especially with such a steep jump?

Maybe some more Jim Lewis "creative accounting" was discovered. All opened under his lead.

It's interesting that the gap between VWL and BWV has narrowed. When VWL opened, it was $3.94 vs $3.62, even last year it was $5.46 vs $5.34. Now it's less than a penny difference.

History:

http://www.disboards.com/showpost.php?p=37806698&postcount=2

Greysword
11-18-2011, 02:16 PM
Not that we have nay say in approving them. The only say we have is nay say :lmao:

That's a huge increase at BLT. It will be interesting to see why the sudden increase. The subsidy already ended so that can't be why.It is my hypothesis (not based on any specific reporting) that DVC was artificially keeping dues at BLT low to reduce the amount DVD had to pay on points they owned, which affected their bottom line. Now that DVD has a very small percentage of the points, are charging more for them, and transferred the common areas to DVC (TotWL, etc), the fees are being normalized.

I also feel it is possible they will potentially increase in this manner over a couple years until the they are at the proper level. Of course, they may include fees for replacing the quickly deteriorating furniture, maintenance and upgrades (adding locks and switching the sinks in the studio bathrooms comes to mind).

It will be interesting to review the itemized list and see if transportation or mouskeeping/front-desk services increased. The former would likely be due to transferring more of the monorail costs (which I thought felt a bit low). The latter would be encouraging for me, as I am ok with paying for it if room availability and maintenance issue response in shored up.

DenLo
11-18-2011, 02:42 PM
I'm thinking that both AKV and BLT are under funded for their reserves and perhaps the remodel of the BLT studio's bathrooms were paid by the reserves and not absorbed by DVD. I will be reading the annual dues statement throughly.

disneynutz
11-18-2011, 02:48 PM
The only say we have is nay say :lmao:

It is my hypothesis (not based on any specific reporting) that DVC was artificially keeping dues at BLT low to reduce the amount DVD had to pay on points they owned, which affected their bottom line. Now that DVD has a very small percentage of the points, are charging more for them, and transferred the common areas to DVC (TotWL, etc), the fees are being normalized.

I also feel it is possible they will potentially increase in this manner over a couple years until the they are at the proper level. Of course, they may include fees for replacing the quickly deteriorating furniture, maintenance and upgrades (adding locks and switching the sinks in the studio bathrooms comes to mind).

It will be interesting to review the itemized list and see if transportation or mouskeeping/front-desk services increased. The former would likely be due to transferring more of the monorail costs (which I thought felt a bit low). The latter would be encouraging for me, as I am ok with paying for it if room availability and maintenance issue response in shored up.

Myself and others posted when BLT was first declared that the dues were too low and that adjustments would be coming. My thoughts were that DVD had set a low dues amount for marketing spin to offset the higher point cost and that after the sold out phase, dues would increase.
I also questioned if Lewis and company had pulled a Aulani with BLT and that this was an additional reason to fire him.

Should be an interesting meeting in December.

:earsboy: Bill

Greysword
11-18-2011, 02:58 PM
Myself and others posted when BLT was first declared that the dues were too low and that adjustments would be coming. My thoughts were that DVD had set a low dues amount for marketing spin to offset the higher point cost and that after the sold out phase, dues would increase.
I also questioned if Lewis and company had pulled a Aulani with BLT and that this was an additional reason to fire him.

Should be an interesting meeting in December.

:earsboy: Bill
yep, your (and other's) postings is where I got much of the hints and inclination to the idea the rates are artificially low. In addition to the marketing potential, I think it was more about the bottom line, though.

Based on his bio, Jim Lewis was at heart a financial planning and analysis manager. As such, he would be exceptional (and drawn toward) keeping the profit margin as high as possible. Low dues on points owned by DVD would be an easy way to save the division millions of dollars each year, which is why I also believe this was the impetus behind the low Aulani rates, too. Once the point levels owned by the company dip to a predetermined threshold, the dues can be increased to make up for any funding shortfalls within the past few years.

DenLo's point is well taken, too. The repairs were likely born by the members somehow, I just didn't think about it too deeply. The reserves would have been an excellent way to make the "member requested" repairs/alterations without costing EDVD more than they already allocated via annual dues.

drewmisha
11-18-2011, 03:15 PM
Doesn't this constitute fraud? When there are villas to be sold, keep the MF's low to make it appear cheap; when the villas are sold out, bam! The MF's jump up. Aside from accounting trickery, sounds illegal to me.


Myself and others posted when BLT was first declared that the dues were too low and that adjustments would be coming. My thoughts were that DVD had set a low dues amount for marketing spin to offset the higher point cost and that after the sold out phase, dues would increase.
I also questioned if Lewis and company had pulled a Aulani with BLT and that this was an additional reason to fire him.

Should be an interesting meeting in December.

:earsboy: Bill

BirdsOfPreyDave
11-18-2011, 03:31 PM
Well there's an extra $133 out of my pocket next year. Ouch! That's dinner for two at a nice sit-down. LOL, wish I hadn't read this thread. It wouldn't have seemed quite as bad to see that my monthly checking account deductions had gone up $11.

disneynutz
11-18-2011, 03:38 PM
Doesn't this constitute fraud? When there are villas to be sold, keep the MF's low to make it appear cheap; when the villas are sold out, bam! The MF's jump up. Aside from accounting trickery, sounds illegal to me.

And that's why Lewis and the other Execs were fired. Disney's way of distancing themselves from the bad people who would do such a thing.

Brag about his accomplishments, give him a bonus and a new office building one day and fire him the next. Sounds like many of the other large corporations that are in the news.

:earsboy: Bill

Andrew015
11-18-2011, 03:49 PM
Doesn't this constitute fraud? When there are villas to be sold, keep the MF's low to make it appear cheap; when the villas are sold out, bam! The MF's jump up. Aside from accounting trickery, sounds illegal to me.

It wouldn't be considered fraudulant, seeing as how we've all inked the contracts that state that our dues are subject to annual increases up to 15%. Regardless of whether or not this approach appears to be deceitful or just morally wrong, we've all agreed to play by these rules.

IMHO, this is just good business on Disney's part, no matter how crappy it seems to the end-user (don't get me wrong, I don't like it anymore than anyone else).

This factored into my recent purchase decision, as I wasn't counting on BLT's dues remaining rock bottom for very long. I would imagine that over the next 5-10 years, they'll creep up and be in line with the other resorts. Disney probably wouldn't have sold very many contracts at $140/point PLUS a high maintenance fee.

Add this to the ever-growing list of arguements to NEVER buy direct!

Rob S.
11-18-2011, 03:51 PM
I'm thinking that both AKV and BLT are under funded for their reserves and perhaps the remodel of the BLT studio's bathrooms were paid by the reserves and not absorbed by DVD. I will be reading the annual dues statement throughly.

I agree with this completely. If we look at the increase from 2010 to 2011, AKV went up 1.3% and BLT went up 3.1%. However, if you look at the individual components of the dues, the operating expense portion went up over 14% at both properties. That was offset by a huge reduction in the capital reserves (both >20%). The 14% increase in the operating expenses was driven by an increased cost for Housekeeping (44% at AKV and 15% and BLT), which we were told was driven by health care costs.

The 8% increases at both properties does not surprise me.

arthur06
11-18-2011, 04:04 PM
These increases might control add on's for some people.

Not for me, but for some.

disneynutz
11-18-2011, 04:39 PM
It wouldn't be considered fraudulant, seeing as how we've all inked the contracts that state that our dues are subject to annual increases up to 15%. Regardless of whether or not this approach appears to be deceitful or just morally wrong, we've all agreed to play by these rules.

IMHO, this is just good business on Disney's part, no matter how crappy it seems to the end-user (don't get me wrong, I don't like it anymore than anyone else).

This factored into my recent purchase decision, as I wasn't counting on BLT's dues remaining rock bottom for very long. I would imagine that over the next 5-10 years, they'll creep up and be in line with the other resorts. Disney probably wouldn't have sold very many contracts at $140/point PLUS a high maintenance fee.

Add this to the ever-growing list of arguements to NEVER buy direct!

For a new owner you caught on really quick! :thumbsup2

:earsboy: Bill

randomiam79
11-18-2011, 04:52 PM
Ahh, more fuel for the 'i told you never to buy a timeshare' crowd:sad2:

So why exactly the huge increase? New fire pit and jogging track? Fixing the original design flaw of the bathroom doors? Hey, Maybe they're investing some money into educating people what a 'theme park view' actually means! Whatever it is, nothing we can do but sell off our points or continue to :worship: the almighty mouse and his nifty ways to get more and more of our money and have us enjoy it so much that we don't seem to mind.

drewmisha
11-18-2011, 05:45 PM
Yes we have signed contracts that allows Disney to increase it to 15% max.
However if they increase the rates illegally by whatever means, the contract
provisions will mean squat.

Looking at all the resorts, why did AKL and BLT have 8% raises? One poster
said it was due to housekeeping. Aren't all housekeepers under one union?
Why the difference? The end of the year condo booklets will help explain some
but the line item explanations are watered down.

GCV has a 6% increase. As a smallest DvC villa it is shocking. Wonder if we are getting a 'disproportionate' share of the overhead with the hotel portion.




It wouldn't be considered fraudulant, seeing as how we've all inked the contracts that state that our dues are subject to annual increases up to 15%. Regardless of whether or not this approach appears to be deceitful or just morally wrong, we've all agreed to play by these rules.

IMHO, this is just good business on Disney's part, no matter how crappy it seems to the end-user (don't get me wrong, I don't like it anymore than anyone else).

This factored into my recent purchase decision, as I wasn't counting on BLT's dues remaining rock bottom for very long. I would imagine that over the next 5-10 years, they'll creep up and be in line with the other resorts. Disney probably wouldn't have sold very many contracts at $140/point PLUS a high maintenance fee.

Add this to the ever-growing list of arguements to NEVER buy direct!

Nonsuch
11-18-2011, 06:11 PM
...BLT and AKL are both over 8.4% increase, GCV is over 6.2%.
If increases continue at this rate, dues will double in less than 10 years :headache:
When I purchased, the history of dues was a factor. Based on the earliest resorts, dues would double in 20 years (which seemed reasonable).

If increased at the maximum 15% rate, dues would double every 5 years :teacher:

Nonsuch
11-18-2011, 06:33 PM
GCV has a 6% increase. As a smallest DvC villa it is shocking. Wonder if we are getting a 'disproportionate' share of the overhead with the hotel portion.
That's a good question, I wonder how the share of overhead is calculated.

DLR has had ongoing negotiations with the housekeeping union, and there was an offer to reduce workload. This means more staff, and costs passed on to hotel guest and VGC owners.

Andrew015
11-18-2011, 06:53 PM
Yes we have signed contracts that allows Disney to increase it to 15% max.
However if they increase the rates illegally by whatever means, the contract
provisions will mean squat.

Can you explain to me how an increase in dues, which you are bound to by contractual obligation without exception, is illegal? There's nothing to the effect of "We (Disney) need to explain our annual dues increase to you (owner)" anywhere in the contract. Thus, there's nothing "illegal" about an increase that's in line with the terms and conditions of purchase (i.e. 15% max). I'm fairly confident that Disney's legal department drafted a bullet-proof agreement that allows them to do whatever they want in terms of annual increases.

As I mentioned previously, I don't care for this, but do think it's a prudent move on Disney's part. The pendulum has swung in their favor (more contracts sold and in the possession of "dues-paying" members than those left for sale), meaning it makes sense for Disney to ratchet up the dues. Certainly, if this pattern were to continue, they couldn't expect to sell many more memberships. This will probably result in a down-turn for 2012 sales, but that's something they're probably willing to accept, given the increase in revenues from dues-paying members. I would expect to see things remain flat the following year (2013), thus giving more incentive to purchase then.

Spencerfamilynj
11-18-2011, 06:55 PM
Hi. Does anyone remember what SSR dues are this year? Trying to determine how much more I'll be paying next year. Thanks.

drewmisha
11-18-2011, 07:09 PM
Do you work for DVC?? :)

I hope some members that are going to the condo meeting will
ask some pointed questions regarding the increases.


Can you explain to me how an increase in dues, which you are bound to by contractual obligation without exception, is illegal? There's nothing to the effect of "We (Disney) need to explain our annual dues increase to you (owner)" anywhere in the contract. Thus, there's nothing "illegal" about an increase that's in line with the terms and conditions of purchase (i.e. 15% max). I'm fairly confident that Disney's legal department drafted a bullet-proof agreement that allows them to do whatever they want in terms of increases.

As I mentioned previously, I don't care for this, but do think it's a prudent move on Disney's part. The pendulum has swung in their favor (more contracts sold and in the possession of "dues-paying" members than those left for sale), meaning it makes sense for Disney to ratchet up the dues. Certainly, if this pattern were to continue, they couldn't expect to sell many more memberships.

BirdsOfPreyDave
11-18-2011, 07:30 PM
Hi. Does anyone remember what SSR dues are this year? Trying to determine how much more I'll be paying next year. Thanks.SSR was $4.51 in 2011. According to the numbers posted here, they go up $0.22 per point in 2012.

Spencerfamilynj
11-18-2011, 07:46 PM
Thanks! Appreciate the quick help!

Mickey'sApprentice
11-18-2011, 07:46 PM
BWV went from $5.46 to $5.61. That is 2.9%.

I believe that is the smallest percent increase, even though it is still highest on property.

I love the Boardwalk! :love::love:

Nonsuch
11-18-2011, 07:48 PM
As I mentioned previously, I don't care for this, but do think it's a prudent move on Disney's part. The pendulum has swung in their favor (more contracts sold and in the possession of "dues-paying" members than those left for sale), meaning it makes sense for Disney to ratchet up the dues. Certainly, if this pattern were to continue, they couldn't expect to sell many more memberships.
Disney could abandon building more DVC resorts, eliminating any incentive to keep dues low. There would then be an incentive to increase renovations and repairs paid for by ever increasing dues, to keep the resorts in top condition when they revert back to Disney ownership -- although generally most 50 year old hotels need to be torn down and rebuilt.

DebbieB
11-18-2011, 08:22 PM
Can you explain to me how an increase in dues, which you are bound to by contractual obligation without exception, is illegal? There's nothing to the effect of "We (Disney) need to explain our annual dues increase to you (owner)" anywhere in the contract. Thus, there's nothing "illegal" about an increase that's in line with the terms and conditions of purchase (i.e. 15% max). I'm fairly confident that Disney's legal department drafted a bullet-proof agreement that allows them to do whatever they want in terms of annual increases.

As I mentioned previously, I don't care for this, but do think it's a prudent move on Disney's part. The pendulum has swung in their favor (more contracts sold and in the possession of "dues-paying" members than those left for sale), meaning it makes sense for Disney to ratchet up the dues. Certainly, if this pattern were to continue, they couldn't expect to sell many more memberships. This will probably result in a down-turn for 2012 sales, but that's something they're probably willing to accept, given the increase in revenues from dues-paying members. I would expect to see things remain flat the following year (2013), thus giving more incentive to purchase then.

They are bound by timeshare laws, they can't do whatever they want. The dues must reflect the operating expensives and reserves. They can't just raise them and pocket the difference. They already got busted in Hawaii for setting dues too low to draw in buyers. They were forced to subsidize the dues of people who bought with the deflated dues figures. If it could be proven that they did the same thing in Florida, they could be forced to do the same. Their great legal team didn't save them in Hawaii.

disneynutz
11-18-2011, 08:57 PM
Certainly, if this pattern were to continue, they couldn't expect to sell many more memberships. This will probably result in a down-turn for 2012 sales, but that's something they're probably willing to accept, given the increase in revenues from dues-paying members.

I don't think that the dues increase will hurt sales one bit. Most buyers have no idea what the dues were or what they could be. Most don't read their contracts and if they do, don't really understand the true impact on their membership.

We have met so many members at the resorts and mixers that don't fully understand the ins and outs of ownership. Several didn't know what banking is, and some have never heard of the DIS. :scared1:

:earsboy: Bill

Andrew015
11-18-2011, 09:46 PM
I don't think that the dues increase will hurt sales one bit. Most buyers have no idea what the dues were or what they could be. Most don't read their contracts and if they do, don't really understand the true impact on their membership.

We have met so many members at the resorts and mixers that don't fully understand the ins and outs of ownership. Several didn't know what banking is, and some have never heard of the DIS. :scared1:

:earsboy: Bill

You may be right, as there are so many un-informed buyers with more money than wits. But anyone with 0.02 ounces of common sense would be hard-pressed to buy BLT direct from Disney @ $140 per point with an 8% dues increase, when other properties can be had @ sub $50/point via resales. I would guess that at least a small % of people decided to buy direct @ BLT "because the dues were just so low", which helped to offset the high initial buy-in. Now that the dues are creeping up, that arguement will fall off the table, and must have some impact on sales, even if a small percent. Just my opinion, but yes, that Pixie Dust is hard to overcome!

Andrew015
11-18-2011, 09:55 PM
They are bound by timeshare laws, they can't do whatever they want. The dues must reflect the operating expensives and reserves. They can't just raise them and pocket the difference. They already got busted in Hawaii for setting dues too low to draw in buyers. They were forced to subsidize the dues of people who bought with the deflated dues figures. If it could be proven that they did the same thing in Florida, they could be forced to do the same. Their great legal team didn't save them in Hawaii.

The difference being that Aluani dues increased 33% in one year (breach of contract). Here, we're talking 8%, which is in line with the contract signed by ALL OWNERS. I never said that Disney can do "whatever they want". I stated that they could do whatever they want within the limits of their contractual agreement. There's nothing that "Timeshare Laws" can/will do about an increase that's in line with the buyer's agreement, and thus, not breaking any law or contractual agreement.

tjkraz
11-18-2011, 10:27 PM
They already got busted in Hawaii for setting dues too low to draw in buyers.

Dues were miscalculated for Aulani but we will probably never know the reasoning behind it. Was it a deliberate deception? Was it a careless error? Were the low dues a byproduct of construction cost overruns?

Lewis' dismissal makes it easy to assume fraud but it could have also just been a convenient excuse to get rid of him. Doesn't sound like many were sorry to see him go.

It's also worth noting that the Aulani error was discovered within a year of the dues being calculated...before the resort opened.

AKV is entering its 5th year of operations, BLT its 4th year. Independent auditors and state oversight bureaus exist to protect owners from outright fraud. If Disney could fly under the radar, deliberately deceiving owners for 4-5 years, the reputation of the timeshare industry would still be mired in the 80s.

I don't think that the dues increase will hurt sales one bit.

That's why I'm dubious of any alleged effort to keep dues artificially low. Bay Lake Tower debuted with the lowest dues in the program by a wide margin. Why would they bother keeping dues artificially low when BLT already looked very good stacked-up against others?

Pretty much every resort went up by 4%. That appears to be the baseline figure. Could be something as simple as salary and benefit increases built into union contracts. Could be an across-the-board increase in some service item like maintenance or housekeeping. Could be property taxes.

For resorts like AKV and BLT, the question is why the additional 4%. Gut reaction is maintenance at BLT with all of the reports of room furnishings not holding up as expected.

AKV is more of a mystery since there has never been a groundswell of poor maintenance or housekeeping reports. Something related to the savannah is a possibility since it's unique to AKV.

Whatever the case, we'll have a clearer understanding in a few days when budgets begin to arrive. And I suspect DVC will be well-prepared to address the budgets at the December meetings. Last year some members were up-in-arms over the 2-3% increases while the country was still fresh off a recession. 4-8% increases aren't going to go over any better.

Andrew015
11-18-2011, 10:31 PM
Dues were miscalculated for Aulani but we will probably never know the reasoning behind it. Was it a deliberate deception? Was it a careless error? Were the low dues a byproduct of construction cost overruns?

Lewis' dismissal makes it easy to assume fraud but it could have also just been a convenient excuse to get rid of him. Doesn't sound like many were sorry to see him go.

It's also worth noting that the Aulani error was discovered within a year of the dues being calculated...before the resort opened.

AKV is entering its 5th year of operations, BLT its 4th year. Independent auditors and state oversight bureaus exist to protect owners from outright fraud. If Disney could fly under the radar, deliberately deceiving owners for 4-5 years, the reputation of the timeshare industry would still be mired in the 80s.



That's why I'm dubious of any alleged effort to keep dues artificially low. Bay Lake Tower debuted with the lowest dues in the program by a wide margin. Why would they bother keeping dues artificially low when BLT already looked very good stacked-up against others?

Pretty much every resort went up by 4%. That appears to be the baseline figure. Could be something as simple as salary and benefit increases built into union contracts. Could be an across-the-board increase in some service item like maintenance or housekeeping. Could be property taxes.

For resorts like AKV and BLT, the question is why the additional 4%. Gut reaction is maintenance at BLT with all of the reports of room furnishings not holding up as expected.

AKV is more of a mystery since there has never been a groundswell of poor maintenance or housekeeping reports. Something related to the savannah is a possibility since it's unique to AKV.

Whatever the case, we'll have a clearer understanding in a few days when budgets begin to arrive. And I suspect DVC will be well-prepared to address the budgets at the December meetings. Last year some members were up-in-arms over the 2-3% increases while the country was still fresh off a recession. 4-8% increases aren't going to go over any better.

Very well-stated.

DebbieB
11-18-2011, 11:13 PM
The difference being that Aluani dues increased 33% in one year (breach of contract). Here, we're talking 8%, which is in line with the contract signed by ALL OWNERS. I never said that Disney can do "whatever they want". I stated that they could do whatever they want within the limits of their contractual agreement. There's nothing that "Timeshare Laws" can/will do about an increase that's in line with the buyer's agreement, and thus, not breaking any law or contractual agreement.

They did not increase dues 33% in one year. 2011 was the first year. The State of Hawaii realized the initial dues were too low and forced them to recalculate.

Even though the contract says the max is 15%, I don't think they can do "whatever they want" as long as it's less than 15%. Complaints could be filed with the state and force them to justify their numbers. They can't charge more than the actual expenses.

disneynutz
11-19-2011, 12:40 AM
IMO the BLT low dues were only used as a sales tool. "Buy BLT, you have the monorail, you are close to the Magic Kingdom, and it has the lowest dues of any DVC resort".

Now that they are almost sold out, they don't need the tool and the dues are going up.

I know that when I contacted Lewis' office and requested info on who and how the mistakes were being paid for at BLT, all I got was a "we'll get back to you", which they never have. The same thing happened at the condo meeting 2 years ago when I asked why Disney decided to rebuild the Paddock pool and who was paying for that improvement.

How does Disney decide how to spend our dues?

Around 4 years ago we were at SSR when a team of 4 management types were walking through the Carriage House area looking at the wall art and decorations. I asked one of them what were they doing. Her reply was that they were deciding which pictures to replace because they needed a change. My first thought was "how do I get that job", my second thought was "wait a minute, the owners dues are paying for this".

:earsboy: Bill

JimMIA
11-19-2011, 08:06 AM
IMO the BLT low dues were only used as a sales tool. "Buy BLT, you have the monorail, you are close to the Magic Kingdom, and it has the lowest dues of any DVC resort".Since BLT sales first started, people have been crowing about the low dues. I've been saying just watch what happens in a couple of years, and also cautioning people to look at the other hotel-connected resorts as a guide.

So I'll say it again. Come back 5 years from now and do a comparison between BLT and OKW/SSR.

And anyone who thinks the rises at AKV and BLT are not caused by intentionally low initial MFs to enhance sales is ignoring the entire history of timeshare sales. Every timeshare developer starts low to attract buyers and keep their development/sales costs low and then dumps the full burden on the owners.

jennypenny
11-19-2011, 08:42 AM
I would think if they were keeping dues at AKL and BLT as low as possible to help with sales, this would be a good year to increase them. This will be the annual meeting where everything is blamed on the previous management. If you knew that dues needed to be adjusted upward to keep pace with older resorts, wouldn't you do it the year you had a scapegoat? If they go up this much again next year this argument doesn't hold. But if you needed to do a one-time thing I would do it this year if I ran the show.

And there is nothing illegal about an 8% increase. The contracts we sign are very explicit.

Andrew015
11-19-2011, 08:43 AM
They did not increase dues 33% in one year. 2011 was the first year. The State of Hawaii realized the initial dues were too low and forced them to recalculate.

Even though the contract says the max is 15%, I don't think they can do "whatever they want" as long as it's less than 15%. Complaints could be filed with the state and force them to justify their numbers. They can't charge more than the actual expenses.

Aulani first went on sale back in July, 2010. The mistake of dues being set too low was discovered in July, 2011 (or at least made public), and the subsequent announcement to increase dues and get Aulani "back in the black" was made back in September, 2011. Yes, this increase was 33%, and yes, this did occur over a one year time period. Here's a link to the article:

http://www.orlandosentinel.com/the-daily-disney/os-disney-aulani-maintenance-fee-20110922,0,7012355.story

DebbieB
11-19-2011, 09:04 AM
Aulani first went on sale back in July, 2010. The mistake of dues being set too low was discovered in July, 2011 (or at least made public), and the subsequent announcement to increase dues and get Aulani "back in the black" was made back in September, 2011. Yes, this increase was 33%, and yes, this did occur over a one year time period (14 months to be exact). Here's a link to the article:

http://www.orlandosentinel.com/the-daily-disney/os-disney-aulani-maintenance-fee-20110922,0,7012355.story

The people who bought before the state stopped sales do not have to pay the increase, they are subsidized for the difference for the life of their contract. So they did not pay the 33% increase. People who bought after had the choice to walk away or pay the "revised" 2011 figure.

Andrew015
11-19-2011, 10:02 AM
The people who bought before the state stopped sales do not have to pay the increase, they are subsidized for the difference for the life of their contract. So they did not pay the 33% increase. People who bought after had the choice to walk away or pay the "revised" 2011 figure.

Debbie,

That is correct. But where you are losing me is by trying to compare what happened at Aulani (33% increase, blatant breach of contract, and thus "illegal") to the recent 8% increase at AKL / BLT (in-line with our contracts, and thus, not illegal), which are two totally different things.

The reason that Aulani buyers who bought in prior to the 33% increase are subsidized, and those who bought in afterwards had the option to walk away, is because the increase breached the terms of purchase (i.e. increases not being able to jump by more than 15% in one year).

All I am trying to say is that the 8% increase at AKL and BLT is in line with our contracts, and it in no way, shape, or form breaches our agreement that we have with DVC. Therefore, it cannot be considered to be illegal, and no one should expect "legal action" to be taken. Disney will not be subsidizing contracts or giving anyone the option to walk away from something that we are legally bound to abide by.

Where I think we can agree is that the tactic of marketing "cheap dues" to lure in unsuspecting buyers, and once they're locked in and the property is almost sold out, sending dues through the roof.... is pretty darn crappy.

But as Jim and Bill already mentioned, this is the nature of the business. Buyers should have done their due dilligence to see this is a pattern that should have been expected, based on similar historical increases at other resorts. In its simplest form, this is a "good business" move for Disney, but stinks for the customer.

Unfortunately, the majority of DVC owners and perspective buyers are un-informed. They're blinded by the "pixie dust", or simply don't care enough to understand how much their dues increased or why. If that wasn't the case, Disney would have to think long and hard about making such a move, in fear that perspective customers would turn and run, or current customers would sell like crazy. But they don't have to. Most buyers don't frequent sites like this, and make emotional purchase decisions rather than informed ones, and for the current owners.... what else can we do other than pay up? Sell cheap, so Disney can buy back our contracts, and resell to more, uninformed, Pixie Dust-impaired buyers?

Seems like they have it all worked out....

DebbieB
11-19-2011, 10:24 AM
Debbie,

That is correct. But where you are losing me is by trying to compare what happened at Aulani to the recent 8% increase at AKL / BLT, which are two totally different things.

The reason that Aulani buyers who bought in prior to the 33% increase are subsidized, and those who bought in afterwards had the option to walk away, is because the increase breached the terms of purchase (i.e. increases not being able to jump by more than 15% in one year).

All I am trying to say is that the 8% increase at AKL and BLT is in line with our contracts, and it in no way, shape, or form breaches our agreement that we have with DVC. Therefore, it cannot be considered to be illegal, and no one should expect "legal action" to be taken. Disney will not be subsidizing contracts or giving anyone the option to walk away from something that we are legally bound to abide by.

Where I think we can agree is that the tactic of marketing "cheap dues" to lure in unsuspecting buyers, and once they're locked in and the property is almost sold out, sending dues through the roof.... is pretty darn crappy.

But as Jim and Bill already mentioned, this is the nature of the business. Buyers should have done their due dilligence to see this is a pattern that should have been expected, based on similar historical increases at other resorts. In its simplest form, this is a "good business" move for Disney.

Unfortunately, the majority of DVC owners and perspective buyers are un-informed. They're blinded by the "pixie dust", or simply don't care enough to understand how much their dues increased or why. If that wasn't the case, Disney would have to think long and hard about making such a move, but they don't have to.

DVC did not plan to increase dues 33% at one time, there was no attempt to breach the contract. When the state was reviewing their paperwork for licensing, they picked up on the fact that the figures were very low. Which would end up causing large increases in future years. They could not have hit owners 33% in one year because it would have breached the contract as you said. So what would have happened is owners would have been hit with large increases each year (within the 15% allowed), which the state thought was deceptive to purchasers. Did the same thing happen at AKV or BLT? Who knows.

twinklebug
11-19-2011, 11:20 AM
My increase with my one standard sized contract will be less than $50 for the year. Pennies considered the cost of an actual trip to WDW. Miniscule compared to maintaining a home. Most owners are in the same boat: they'll see the increase, give a knee jerk "What?" reaction and just pay it. The loudest complaints come from those with large contracts. DVC knows this, and knows that at the yearly meeting only a very small percentage of those folk will turn up -- easy to quiet down. Increases will always be approved because they are 'needed'. The real question, given that this is a huge company we're dealing with, is: are the increases justified, or is there some underhand accounting going on here to line the pocketbooks of the executives? Claire, being new to this position, I'm sure is pulling the reigns tight and making sure the dues are justified but properly reflect operating costs with the ability to have decent reserves.

Before we can discuss much further we need to see the numbers to understand how DVC's determined the increase costs. I'm a pessimistic, optimistic analyst. I want believe what I'm told - but NEED to see proof to back it up. How much time does Disney give us to review numbers before the meeting? Is there a person available to answer questions before the meeting? I'm doubting this. I'm just a minnow in the pond, they don't feel a need to answer to me. You can bet though that if their largest point holder has questions (Disney) they'll answer.

Offshoot question: I assume Disney pays the same dues/point on the contracts that it owns as the rest of us do, but do we know this as a fact? There's probably a law stating they have to, but I don't know real estate law very well.

Andrew015
11-19-2011, 12:05 PM
Did the same thing happen at AKV or BLT? Who knows.

Possible, but doubtful. I believe that Aulani was an honest mistake, and once discovered (Timeshare laws aside), Disney would have done the right thing regardless.

Before we can discuss much further we need to see the numbers to understand how DVC's determined the increase costs. I'm a pessimistic, optimistic analyst. I want believe what I'm told - but I NEED to see proof to back it up.

Seeing the statements would be most beneficial, but I think it's safe to say that Disney wouldn't make the same major blunder twice. I think this will just prove to be Disney doing what they do best... extracting the most $$$ possible from their guests and making them like it, begging to come back for more.

Speaking of which, has anyone seen any small BWV resales pop up as of late? :)

tjkraz
11-19-2011, 12:12 PM
IMO the BLT low dues were only used as a sales tool. "Buy BLT, you have the monorail, you are close to the Magic Kingdom, and it has the lowest dues of any DVC resort".

Now that they are almost sold out, they don't need the tool and the dues are going up.


I don't think that the dues increase will hurt sales one bit. Most buyers have no idea what the dues were or what they could be. Most don't read their contracts and if they do, don't really understand the true impact on their membership.


You are contradicting yourself, Bill.

Personally I do think buyers give some consideration to dues and yes, the low BLT dues are a nice selling point. But I don't see why Disney would bother keeping them artificially low when they were so far under other resorts.

In 2009, BLT started at $3.67. Next closest were OKW at $4.73 and SSR at $4.34. Anything under $4.00 per point is still an excellent selling point when compared to the others.

Disney could have easily gone up $.10 - $.20 per point and it wouldn't have impacted sales one bit.

BTW, regarding your questions on the SSR Paddock pool, DVC was straightforward in stating that members would be paying for it. The dues statement which revealed the expansion plans specifically stated that funds were coming from capital reserves.

DVC Dude
11-19-2011, 12:27 PM
This thread is SPECULATION based upon an Internet rumor and the primary source has not been revealed.

I logged into the DVC member website and NOTHING is there regarding 2012 dues.

Thus, unless someone PROVES that these numbers are the Real Thing, then I am not going to get too upset.

However, the 8.5% increase for BLT seems outta whack and I hope it gets corrected soon.

DebbieB
11-19-2011, 01:14 PM
This thread is SPECULATION based upon an Internet rumor and the primary source has not been revealed.

I logged into the DVC member website and NOTHING is there regarding 2012 dues.

Thus, unless someone PROVES that these numbers are the Real Thing, then I am not going to get too upset.

However, the 8.5% increase for BLT seems outta whack and I hope it gets corrected soon.

The budget announcements usually come out Thanksgiving week, so they should be in the mail. They are not posted on the member website until after approved at the annual meeting.

The sources I've seen quoted as confirming are The Timeshare Store & (name deleted by filter). Should be reliable.

twinklebug
11-19-2011, 01:30 PM
The budget announcements usually come out Thanksgiving week, so they should be in the mail. They are not posted on the member website until after approved at the annual meeting.

The sources I've seen quoted as confirming are The Timeshare Store & (name deleted by filter). Should be reliable.

Thank you - that answers one of my questions. :goodvibes

disneynutz
11-19-2011, 01:52 PM
You are contradicting yourself, Bill.

Personally I do think buyers give some consideration to dues and yes, the low BLT dues are a nice selling point. But I don't see why Disney would bother keeping them artificially low when they were so far under other resorts.

In 2009, BLT started at $3.67. Next closest were OKW at $4.73 and SSR at $4.34. Anything under $4.00 per point is still an excellent selling point when compared to the others.

Disney could have easily gone up $.10 - $.20 per point and it wouldn't have impacted sales one bit.

BTW, regarding your questions on the SSR Paddock pool, DVC was straightforward in stating that members would be paying for it. The dues statement which revealed the expansion plans specifically stated that funds were coming from capital reserves.

My point is that most buyers don't pay attention to the dues, BUT I am sure that they were told buy their Guides that BLT has the cheapest dues as a sales tool. I know that we were.

We aren't SSR owners so we never saw the dues statement. Weren't there several threads where members were told that Disney was paying for the Paddock pool?

:earsboy: Bill

JimMIA
11-19-2011, 02:33 PM
They did not increase dues 33% in one year. 2011 was the first year. The State of Hawaii realized the initial dues were too low and forced them to recalculate.More importantly, no OWNER's dues were raised. Sales were stopped (by the State of Hawaii) when the matter came to light and DVD agreed to subsidize the existing owners' dues for the duration of the contract.

ArtieMcD
11-20-2011, 01:53 PM
Maybe some more Jim Lewis "creative accounting" was discovered. All opened under his lead.


This is exactly what I think is going to happen... Remeber in 2011, the Operating costs of our dues increased by 14% in some cases (especially AKV and BLT)... This can be easily verified by looking at your 2010 and 11 dues statements. But DVC bragged about holding dues increases at 3% ish at last years member meeting. However if you looked closely at the numbers, it was nothing more than an accounting trick as the "reserve" portion of our dues dropped so that holding the line on the 3% increase can be achieved. I'm betting we will see the reserve portion on this years budget creep back to regular amounts finally realizing the cost increases we all we subject to in 2011....

I would not at all be surprised to hear the new management at the members meeting pass this blame for this on the decisions to artificially lower reserve amounts last year on the now-ex DVC leaders.

DebbieB
11-20-2011, 03:41 PM
This is exactly what I think is going to happen... Remeber in 2011, the Operating costs of our dues increased by 14% in some cases (especially AKV and BLT)... This can be easily verified by looking at your 2010 and 11 dues statements. But DVC bragged about holding dues increases at 3% ish at last years member meeting. However if you looked closely at the numbers, it was nothing more than an accounting trick as the "reserve" portion of our dues dropped so that holding the line on the 3% increase can be achieved. I'm betting we will see the reserve portion on this years budget creep back to regular amounts finally realizing the cost increases we all we subject to in 2011....

I would not at all be surprised to hear the new management at the members meeting pass this blame for this on the decisions to artificially lower reserve amounts last year on the now-ex DVC leaders.

They will not blame the ex-DVC leaders because then people will be screaming for a subsidy like Aulani.

KingRichard
11-20-2011, 06:29 PM
If those new dues are correct then while BLT will increase by 33 cents it is a large percentage because it was also the lowest cost before the increase.

If you look at the last 3-4 years worth the increases then it is not that much more then the other resorts on a percentage increase.

The older resorts had much more time to build reserves to pay for damages and replacement furniture and upgrades while BLT has the shortest time/reserves.

Hopefully the next few years it will average out and stay rather low.

It is and will be still the lowest?

Sammie
11-21-2011, 04:58 PM
We got ours today, the dues are correct.

newyorkmike
11-21-2011, 05:45 PM
I am just catching up on this thread and the discussion of potential claims against DVD for "fraud" in connection with artificially low dues at the outset of BLT or AKV.

I am a securities lawyer by trade and I practice in New York, so my experience is limited to federal securities laws and New York State securities laws principally under the Martin Act. Timeshare, co-op and condo offerings are generally governed by the applicable timeshare, co-op or condo statutes, but certain types of offerings are also subject to regulation as securities offerings under the Martin Act primarily with respect to the antifraud rules. I don't know Florida law, and I know for a fact that are several key differences between Florida and New York or federal securities laws, so please don't construe anything I write as definitive legal advice.

Having said that, the antifraud rules are substantially similar in most states. The general standard of liability is that an offering prospectus, be it for securities or real estate interests, cannot include a material misstatement or omit to state a material fact. In certain cases, a material misstatement or omission is not enough, but rather it must be made with intent to defraud (this is the standard that varies widely from state to state). The standard for determining whether information is material is whether the average purchaser or investor would consider the information to so alter the total mix of information as to be relevant and important in making a purchasing or investment decision.

It is true that the offering prospectus for various DVC properties includes provisions for annual increases in MFs up to 15% each year. At least the AKV offering prospectus that I read (and just double checked), there is no disclosure of any known events or circumstances that would require an increase in MFs at any time.

In my opinion, IF it could be proven that (1) sales were completed at a time when MFs were arbitrarily and intentionally low, and (2) DVD knew that they were low or intentionally priced them low with the understanding that significant increases in MFs were imminently necessary, I think you could make a case that such information is material to purchasers and that the failure to provide disclosure of the potential or known inadequacy of the MFs at the time of sale of the units was a material misstatement or omission and therefore a violation of the antifraud rules (Again, this assumes that the Florida antifraud rules are substantially the same as those rules in most jurisdictions - which is NOT an absolute). In other words, if they knew these big increases were imminent and didn't disclose it, the offering prospectus would be deficient. The available remedies could be anything from subsidized MFs for affected purchasers (most likely) to a right of rescission for anyone who purchased.

I find it very difficult that such a scheme or plan would have been sustainable given the various third party audits that occur with respect to MFs and operating budgets for the DVC properties, but I wouldn't rule it out, and significant jumps in MFs, particularly if they relate to non-extraordinary, ordinary course expenses would certainly give me pause and maybe ask some questions.

JimMIA
11-22-2011, 06:11 AM
Whether something is fraudulent or not often depends on whether you are talking about criminal fraud or civil fraud.

In Florida, criminal fraud is a specific intent crime which means that you not only have to show something like a material misrepresentation (and/or lots of other things), but also that the misrepresentation was made with the INTENT of defrauding a victim. You have to establish "probable cause" of criminal intent to file a case and you have to prove criminal intent beyond a reasonable doubt to get a conviction.

With civil fraud, the elements of fraud are essentially the same but the burden of proof is much less -- so what would pass for fraud in the civil/regulatory arena may be much less than what would bring criminal charges.

My gut tells me they intentionally set the dues low with Aulani and got caught by the State of Hawaii. But even if they did, the devil is in the details in these cases and whether or not there was any fraud involved would depend on those details. There are many other issues that could have caused the stoppage of sales besides fraud, but the fact that the "fix" was subsidizing dues for the life of a lot of contracts makes me think the dues issue was the main problem.

DVD, of course, will insist that any mistakes were inadvertent, which brings me to my favorite fraud cliche:

"Fraud looks a lot like stupid."

DVC SSR Owner
11-22-2011, 09:39 AM
I noticed that they gave themselves a pretty good raise on their "management fee". In this economy with flat or no raises, can this raise really be justified? I think not!

tjkraz
11-22-2011, 09:44 AM
I noticed that they gave themselves a pretty good raise on their "management fee". In this economy with flat or no raises, can this raise really be justified? I think not!

The management fee is a fixed percentage of most other budget items. Always has been.

DVC SSR Owner
11-22-2011, 07:18 PM
The management fee is a fixed percentage of most other budget items. Always has been.

So they have more incentive to raise the mf then?

tjkraz
11-23-2011, 12:11 AM
So they have more incentive to raise the mf then?

Maintenance fees represent the operating costs for the resort. Legally the timeshare manager cannot collect any more than what they are budgeted to spend, plus ancillary obligations like the management fee, property taxes and reserve fund contributions.

Management fees are standard throughout the industry. Without some form of compensation, there is no incentive for the manager to perform. Most of the entity we know as "Disney Vacation Club" is funded by that management fee. It isn't just money in the bank for Disney.

At the end of the day, you either trust the management company to run the program properly and ethically or you are better off moving along. Independent auditors and state oversight boards exist to watchdog the timeshare manager. If you don't trust that Disney is setting a proper budget, and that their auditors and the local timeshare bureau are doing their job in verifying the numbers, you will never be a satisfied owner.

Garthilk
11-23-2011, 01:41 AM
GCV has a 6% increase. As a smallest DvC villa it is shocking. Wonder if we are getting a 'disproportionate' share of the overhead with the hotel portion.
Hmm. I'm going out on a limb and say probably the folks locked into contracts.

Anyone able to do the math on a small resort like VGC to say how much it pulls in on dues every year?

DebbieB
11-23-2011, 10:15 AM
Hmm. I'm going out on a limb and say probably the folks locked into contracts.

Anyone able to do the math on a small resort like VGC to say how much it pulls in on dues every year?

Members get a budget report for the resorts they own that shows the total dues figures by category and then the total for the resort. Should be in the mail if you have not received it already.

One of the categories is "annual audit", which is defined on the BWV statement as "Fee for independent audit of the Association's financial statements as required by Florida law". So there should be verification of their figures, they should not be collecting more than they are using.

DebbieB
11-25-2011, 02:42 PM
Received BWV today. Comparing 2011 to 2012, no major differences in any categoy. Insurance is down, maintenance, utilities are down slightly. Front desk, housekeeping, member activities, transportation are up slightly. Total operating expenses went from 3.7248 to 3.784 before revenue credits (3.5774 to 3.6272 after). Capital reserves budget exactly the same (.9211). Property tax estimate went from .9567 to 1.0677 (that's actually the majority of the total increase). Total dues from 5.4552 to 5.6160.

Anyone analyze BLT or AKV to see where the big difference is?

KingRichard
11-26-2011, 08:43 AM
So with BLT they estimate that it will cost 5-6 million to replace the roof?

Is it not a cement building with a cement roof? You don't ever replace roofs on cement buildings?

Seems strange? Will they stop collecting that money or use it for something else later?

crisi
11-26-2011, 09:07 AM
Initial dues are always estimated. Its in Disney's best interests for sales to estimate low and historically the estimates have always been low. But a low reasonable estimate is legal - you have to start from something.

BLT will always have lower dues per point than the other hotel attached resorts, but its more points per stay. We figured that out with BWV - dues per point are always higher, but when you start looking at dues per NIGHT in a standard view studio, its a huge bargain. Operating costs on a standard view room are the same as on a preferred view room, therefore, dues on a preferred view room need to be higher. Dues per studio room night (and with multiple room rates on that studio, a weighted average - i.e 20% of the studios at BWV have a "discount") is a better measure than dues per point.

tjkraz
11-26-2011, 09:38 AM
So with BLT they estimate that it will cost 5-6 million to replace the roof?

Is it not a cement building with a cement roof? You don't ever replace roofs on cement buildings?

Seems strange? Will they stop collecting that money or use it for something else later?

If they are collecting money for a roof refurb, then it's a project that will be necessary down the road. I don't know anything about concrete construction but it doesn't seem like it lasts forever without any treatment. Disney works on the concrete monorail beams regularly to repair / replace. There may be some water retardant coating on the BLT roof which needs to be maintained. There could be specific portions or elements which are not concrete that need to be maintained. A few years back Disney went through an extensive process of powerwashing or otherwise treating the entire surface of the Contemporary A-frame tower to refresh its look. Something similar may be necessary for BLT.

50 years is a long time. Don't think it's realistic to expect that what Disney built in 2009 will survive until 2059 without any maintenance or replacement.

tomandrobin
11-26-2011, 02:11 PM
So with BLT they estimate that it will cost 5-6 million to replace the roof?

Is it not a cement building with a cement roof? You don't ever replace roofs on cement buildings?

Seems strange? Will they stop collecting that money or use it for something else later?

The roof is not cement.

Garthilk
11-26-2011, 03:11 PM
Members get a budget report for the resorts they own that shows the total dues figures by category and then the total for the resort. Should be in the mail if you have not received it already.

One of the categories is "annual audit", which is defined on the BWV statement as "Fee for independent audit of the Association's financial statements as required by Florida law". So there should be verification of their figures, they should not be collecting more than they are using.

Hmm, here's an example of just how VGC members end up paying to clean the hotel.

Total Cost Component for Housekeeping for 48 units.

$809202 / 365 Days = $2216 per day budgeted to housekeeping.

Lets do the math a bit further and see how many housekeepers we'd be paying with that money. I mean they're only cleaning the 48 units right? They're not doing hotel laundry, or hotel stuff, right?

$2216 / 24 Hours = 1 Employee $92 an hour.
$2216 / 24 Hours = 2 Employees $46 an hour.
$2216 / 24 Hours = 3 Employees $30 an hour.
$2216 / 24 Hours = 4 Employees $23 an hour.
$2216 / 24 Hours = 5 Employees $18 an hour.
$2216 / 24 Hours = 6 Employees $15 an hour.
$2216 / 24 Hours = 7 Employees $13 an hour.

So, if housekeepers made $15 an hour, we'd be staffed with 6 housekeepers 24 hours a day, 7 days a week. So tell me what are all those housekeepers doing during the day. Surely they're not cleaning hotel rooms, or doing their laundry, etc. Cripes, how fast do you imagine 4 people could turn over a room if 1 is off doing laundry and another is at break? Heck, with proper staffing, 2 staff at the night shift and bring 10 during the mid shift you could really turn over rooms fast.

Even if you shave an dollar or two an hour off and toss it to insurance premiums, and shave off an employee per day to pay for supplies. We're still talking about a lot of staff.

I'm going to go out on a limb and say that VGC members are paying to clean hotel rooms that they can't use their points at.

tjkraz
11-26-2011, 03:23 PM
Even if you shave an dollar or two an hour off and toss it to insurance premiums, and shave off an employee per day to pay for supplies. We're still talking about a lot of staff.

Think you may be oversimplifying a bit there. If memory serves, the current union dispute between DL workers and the company revolves around Disney wanting them to actually pay for healthcare. Right now the company pays 100% of premiums (or at least they were--not sure if Disney successfully forced workers to start contributing 10% as they had hoped.)

So included in the dues are employer healthcare premiums for employees (medical, dental, vision, etc.), unemployment contributions, FICA matching taxes, Medicare contributions, 401k matching contributions, pension plans (if any) and all other costs associated with employing an individual. There would also be costs related to Human Resources and other divisions of TWDC involved in the employment process.

General rule of thumb is that it costs 30-40% above base wages to employ someone--more in a union environment where the employer is paying such a large portion of healthcare costs.

A portion of the funds would go toward housekeeping supervisors and management level positions. There would be people responsible for ordering supplies--everything from hand soap placed in guest rooms to equipment that the housekeepers use. There may be some charges from IT for any computer systems and phone systems utilized by housekeeping.

The front line employees would be cleaning not only the room interiors but common areas as well.

KingRichard
11-26-2011, 05:20 PM
The roof is not cement.

What is it then?

Isn't it a 15 story building or how ever many floors? You don't put wooding roofs that supports ac units on sky scrapers(yes I know it isn't a skyscraper).

They report they will need to replace the roof in maybe 6-8 years?

Yes most roofs need maint. They put down seal coating just like driveways. That doesn't cost 5 million.

wdwnomad
11-26-2011, 09:50 PM
Hmm, here's an example of just how VGC members end up paying to clean the hotel.

Total Cost Component for Housekeeping for 48 units.

$809202 / 365 Days = $2216 per day budgeted to housekeeping.

Lets do the math a bit further and see how many housekeepers we'd be paying with that money. I mean they're only cleaning the 48 units right? They're not doing hotel laundry, or hotel stuff, right?

$2216 / 24 Hours = 1 Employee $92 an hour.
$2216 / 24 Hours = 2 Employees $46 an hour.
$2216 / 24 Hours = 3 Employees $30 an hour.
$2216 / 24 Hours = 4 Employees $23 an hour.
$2216 / 24 Hours = 5 Employees $18 an hour.
$2216 / 24 Hours = 6 Employees $15 an hour.
$2216 / 24 Hours = 7 Employees $13 an hour.

So, if housekeepers made $15 an hour, we'd be staffed with 6 housekeepers 24 hours a day, 7 days a week. So tell me what are all those housekeepers doing during the day. Surely they're not cleaning hotel rooms, or doing their laundry, etc. Cripes, how fast do you imagine 4 people could turn over a room if 1 is off doing laundry and another is at break? Heck, with proper staffing, 2 staff at the night shift and bring 10 during the mid shift you could really turn over rooms fast.

Even if you shave an dollar or two an hour off and toss it to insurance premiums, and shave off an employee per day to pay for supplies. We're still talking about a lot of staff.

I'm going to go out on a limb and say that VGC members are paying to clean hotel rooms that they can't use their points at.

In addition to the actual wages paid to the housekeeping staff I am sure their benefits and taxes come out of this line item for them. I don't know what types of benefits they get but in my company, out of my budget there is an employee benefit rate we must pay in addition to salaries. For example. my employee benefit rate is 32.8% of salaries. This rate covers the company's contribution towards health insurance premiums, life insurance, dental insurance, vision, worker's comp, unemployement insurance, 401K matches, employers contribution to FICA and Medicare, etc. I am sure most housekeeping positions are full-time so they would have a similar type of benefits package offered to them. So let's say they get paid $15/hr then you need to tack on another $5/hr in benefits.

Also, the housekeeping dues do go to paying for towels and washing them as well as those cute little bottles of shampoo.

Garthilk
11-26-2011, 09:59 PM
In addition to the actual wages paid to the housekeeping staff I am sure their benefits and taxes come out of this line item for them. I don't know what types of benefits they get but in my company, out of my budget there is an employee benefit rate we must pay in addition to salaries. For example. my employee benefit rate is 32.8% of salaries. This rate covers the company's contribution towards health insurance premiums, life insurance, dental insurance, vision, worker's comp, unemployement insurance, 401K matches, employers contribution to FICA and Medicare, etc. I am sure most housekeeping positions are full-time so they would have a similar type of benefits package offered to them. So let's say they get paid $15/hr then you need to tack on another $5/hr in benefits.

Also, the housekeeping dues do go to paying for towels and washing them as well as those cute little bottles of shampoo.

This is my point exactly though. Are there really 5 people there 24 hours a day cleaning and doing laundry for 48 rooms. But hey, as long as the anual statement is in order, the fact those housekeepers may be cleaning hotel rooms of your DVC maintaince dues isn't on the paperwork. :confused3

tjkraz
11-26-2011, 10:37 PM
This is my point exactly though. Are there really 5 people there 24 hours a day cleaning and doing laundry for 48 rooms. But hey, as long as the anual statement is in order, the fact those housekeepers may be cleaning hotel rooms of your DVC maintaince dues isn't on the paperwork. :confused3

Of course there aren't 5 people working 24/7. Shifts are configured so that they have minimal staffing during overnight hours and more employees working during the day when rooms actually need to be cleaned.

Out of curiosity, exactly how long do you think it takes to properly clean a 1200 sq ft villa with a kitchen, living room, 2 bedrooms and 3 bathrooms?

Consider how big your own house/apartment is and how long it takes to do a thorough cleaning. Not just wiping down counters and running the vacuum. We're talking about cleaning all of the bathrooms (tub, shower, vanities, floor), stripping and replacing linens, cleaning windows, vacuum, dust, clean the entire kitchen, etc. Occasionally carpets need to be shampooed.

disneynutz
11-26-2011, 11:34 PM
Of course there aren't 5 people working 24/7. Shifts are configured so that they have minimal staffing during overnight hours and more employees working during the day when rooms actually need to be cleaned.

Out of curiosity, exactly how long do you think it takes to properly clean a 1200 sq ft villa with a kitchen, living room, 2 bedrooms and 3 bathrooms?

Consider how big your own house/apartment is and how long it takes to do a thorough cleaning. Not just wiping down counters and running the vacuum. We're talking about cleaning all of the bathrooms (tub, shower, vanities, floor), stripping and replacing linens, cleaning windows, vacuum, dust, clean the entire kitchen, etc. Occasionally carpets need to be shampooed.

Don't forget that those 48 units are not cleaned every day depending on check ins and check outs. Laundry attendants are typically paid less starting at $8.89 and the Housekeeping component also covers the cost of linens, towels, and kitchenwear.

:earsboy: Bill

Maistre Gracey
11-26-2011, 11:57 PM
Out of curiosity, exactly how long do you think it takes to properly clean a 1200 sq ft villa with a kitchen, living room, 2 bedrooms and 3 bathrooms?
Since when does Disney properly clean the villas?

MG

Shamus
11-27-2011, 04:23 AM
Late to the party so forgive me for going back a bit on a few items ......

..... The State of Hawaii realized the initial dues were too low and forced them to recalculate. ....
..... The people who bought before the state stopped sales .....
..... When the state was reviewing their paperwork for licensing, they picked up on the fact that the figures were very low. ..... So what would have happened is owners would have been hit with large increases each year (within the 15% allowed), which the state thought was deceptive to purchasers. .....

From the Sentinel Article:
Disney suspended Aulani time-share sales on July 9 after an internal investigation found that executives had underestimated the annual dues it needed to charge time-share buyers to cover the resort's operating expenses. The discovery sparked concerns within Disney that Aulani would eventually face an operating loss or would have to jack up its dues in later years, potentially alienating customers.


Debbie - I have not kept up on the Aulani mess and I know that press releases are often full of "Corporate Spin". Is there a source somewhere stating that actions were taken by the State of Hawaii as you reffered to? Thanks!



And anyone who thinks the rises at AKV and BLT are not caused by intentionally low initial MFs to enhance sales is ignoring the entire history of timeshare sales. Every timeshare developer starts low to attract buyers and keep their development/sales costs low and then dumps the full burden on the owners.
..... But as Jim and Bill already mentioned, this is the nature of the business. Buyers should have done their due dilligence to see this is a pattern that should have been expected, based on similar historical increases at other resorts. In its simplest form, this is a "good business" move for Disney, but stinks for the customer.
....

Jim and Andrew - I'm not disagreeing with your statements that many timeshares may in fact keep their initial dues artifically low , but if this is the case with BLT, AKV, and AULANI, looking at the histrical data it would appear to be the first time that Disney was using this tactic.

arielrocks
11-27-2011, 04:26 AM
will have to wait and see what BLT fees are....

DebbieB
11-27-2011, 10:25 AM
From the Sentinel Article:
Disney suspended Aulani time-share sales on July 9 after an internal investigation found that executives had underestimated the annual dues it needed to charge time-share buyers to cover the resort's operating expenses. The discovery sparked concerns within Disney that Aulani would eventually face an operating loss or would have to jack up its dues in later years, potentially alienating customers.


Debbie - I have not kept up on the Aulani mess and I know that press releases are often full of "Corporate Spin". Is there a source somewhere stating that actions were taken by the State of Hawaii as you reffered to? Thanks!


You're correct, I based my comments on some assumptions or rumors, not on what was officially published.

Lancer
11-27-2011, 11:29 AM
Correct me if I am wrong, but, for those of us owning at the AKV, Dont we have a lot of animals to feed and care for. The costs must be staggering and subject to increases not usually associated with your average property. Perhaps the large increase simply went, in part, to offset increased animal husbandry costs(food,medical etc.).

DebbieB
11-27-2011, 01:59 PM
Correct me if I am wrong, but, for those of us owning at the AKV, Dont we have a lot of animals to feed and care for. The costs must be staggering and subject to increases not usually associated with your average property. Perhaps the large increase simply went, in part, to offset increased animal husbandry costs(food,medical etc.).

See this thread for the breakdown:

http://www.disboards.com/showthread.php?t=2838591

There is a category for animal programs.

wdrl
11-27-2011, 01:59 PM
Correct me if I am wrong, but, for those of us owning at the AKV, Dont we have a lot of animals to feed and care for. The costs must be staggering and subject to increases not usually associated with your average property. Perhaps the large increase simply went, in part, to offset increased animal husbandry costs(food,medical etc.).

In 2012's proposed budget, AKV's Animal Programs budget is increasing 6.56% from $0.2713 to $0.2891 per point. This increase is less than the overall increase of 8.40% in AKV's 2012 budget.

Duchie
11-30-2011, 12:55 PM
Wasn't there another VB category? Subsidized or something? I though there was a separate category that had a different dues amount. Anyone know what that is now?

chalee94
11-30-2011, 01:09 PM
Wasn't there another VB category? Subsidized or something? I though there was a separate category that had a different dues amount. Anyone know what that is now?

the DVC Resource Thread (http://www.disboards.com/showthread.php?t=2823952) is a useful place to check.

taaren
12-09-2011, 02:52 AM
Any more information/speculation on the high dues raise for AKV/BLT/VGC after the member meeting? popcorn::

DVC Mike
12-09-2011, 07:15 AM
During the Q&A session for the budgets, several questions were raised about the higher than average increases in annual dues. They indicated that the two largest components behind the increases were higher labor costs (medical plans) and higher property taxes.

Someone asked why we're seeing double-digit property tax increases when many parts of the country are seeing small single-digit increases or even decreases. They said the taxes are based on the property valuation, and that the valuation is based upon current sales.

No one asked if the current sales was just direct sales by Disney Vacation Development (DVD), or all sales including the resales market. Yes, DVD's prices have gone up, but resale prices have slipped. If you took a look at the sales prices of all deeds recorded, would you really see double-digit increases in property valuations?

Does DVC have a case to appeal the higher valuation/taxes?

Muhlenberg
12-09-2011, 08:00 AM
During the Q&A session for the budgets, several questions were raised about the higher than average increases in annual dues. They indicated that the two largest components behind the increases were higher labor costs (medical plans) and higher property taxes.

Someone asked why we're seeing double-digit property tax increases when many parts of the country are seeing small single-digit increases or even decreases. They said the taxes are based on the property valuation, and that the valuation is based upon current sales.

No one asked if the current sales was just direct sales by Disney Vacation Development (DVD), or all sales including the resales market. Yes, DVD's prices have gone up, but resale prices have slipped. If you took a look at the sales prices of all deeds recorded, would you really see double-digit increases in property valuations?

Does DVC have a case to appeal the higher valuation/taxes?
If it's just DVD sales expressed in dollars (and not resale, too), then it would seem that DVD is controlling the property taxes, since they SET the price, and it's not necessarily set by "whatever the market will bear." :confused3

That would seem artificially inflated to me. But then again, I have no idea how it works with other timeshares.

Another question comes to mind... are the taxes we pay a portion of what DVD is charged?

tjkraz
12-09-2011, 08:34 AM
Any more information/speculation on the high dues raise for AKV/BLT/VGC after the member meeting? popcorn::

VGC was noted due to increases in earthquake insurance premiums.

On AKV and BLT, the guest balance or "mix" between DVC members and hotel guests was adjusted. Charges like resort housekeeping are based upon head counts of hotel occupants vs. DVC occupants. Specifically at AKV and BLT, the DVC percentage increased relative to hotel guests. So even with no changes in budgeted housekeeping dollars, DVC would be asked to pay a greater percentage because there are a greater number of members using the rooms.

"Got Disney"
01-07-2012, 05:49 PM
up up and up it goes....just like everything else...inflation comes in all forms ...even DVC dues....I opened it and went OUCH! :eek:

I need a hug! :hug: :upsidedow

If the dues keep going up up and away....away will be not only new DVC members but old ones as well....they will price themselves right out of business....

kimberh
01-07-2012, 11:32 PM
up up and up it goes....just like everything else...inflation comes in all forms ...even DVC dues....I opened it and went OUCH! :eek:



If the dues keep going up up and away....away will be not only new DVC members but old ones as well....they will price themselves right out of business....

My Thoughts exactly! Property here has gone down, would have thought property taxes would have went down.

DebbieB
01-08-2012, 12:01 PM
My Thoughts exactly! Property here has gone down, would have thought property taxes would have went down.

Your municipality still has to pay for services, how can they do that with decreased taxes? If they decrease property values, they will have to increase the tax rate to make up for it.

For DVC, I can't see the county factoring in resale prices for the property assessment. You really aren't talking about property ownership, DVC is actually a lease. So as you get closer to the lease end date, the resale prices are going to fall drastically but that does not mean the taxable value of the property is decreasing. Come 1/31/42 for BWV, the taxable value will not be $0 even though all the DVC contracts will be $0 (assuming there's no extension). Disney will still have the full value of the property.

normr
01-09-2012, 11:03 PM
IMO, The maintenance costs must be through the roof, on our last stay a coffee table looked like kids were let loose an awl.