2013 Dues Analysis

[tjkraz]

I'm in the process of gathering budgets for all of the resorts. Have 6 of them so far and can share some very high-level observations based upon what I have seen:

Bay Lake Tower

Big drivers of the dues increase at BLT are property taxes and housekeeping.

2012 Taxes: .9805
2013 Taxes: 1.0743

2012 Housekeeping: .6534
2013 Housekeeping: .8502

Meanwhile the budget for capital improvements was reduced significantly.

2012 Reserves: .6817
2013 Reserves: .5836

Total dues increase amounted to $.2753 per point and .1925 of it comes from these three categories. I had personally questioned whether the staffed front desk at BLT caused some of the increase. Turns out "front desk" charges actually went down about a half penny per point from '12 to '13.


BoardWalk

The BWV dues increased $.2249 per point and almost all of it can be attributed to housekeeping.

2012 Housekeeping: .8563
2013 Housekeeping: 1.0403


Saratoga Springs

SSR had one of the lowest dues increases, going up just $.0820 per point. Contributing to that was a reduction in property taxes of $.0644 per point. Without that reduction, SSR would have seen an annual increase of 3.1% instead of the 1.7% actual.

2012 Taxes: 1.0515
2013 Taxes: .9871


At AKV and VGC, nothing really stands out as the major source of the increase. Housekeeping at each only went up about $.04 per point. Other categories were also up in the $.01 - .04 neighborhood.

VGC did have a "front desk" increase of $.12 per point, which is abnormally high. No real explanation can be gleaned from the budget statements, though.

 

[tjkraz]

Hilton Head

HHI dues went up a modest 1.55% from $5.9290 to $6.0213 per point.

That number was aided by the developer loan finally coming off the books. Approximately 5 years ago DVC effectively loaned money to the HHI Condo Association for repairs (roof?) which were needed much earlier than originally planned. In 2012 owners were paying $.1303 per point to repay that loan.

Meanwhile similar to VGC, HHI is seeing a dramatic increase in front desk charges.

2012 Front Desk & Admin: .7890
2013 Front Desk & Admin: .9559

Adding the additional front desk charges and deducting the developer loan accounts for all but $.0557 of the increase.

 

[KLEONARD]

Thanks Tim.

I wonder why the upgrade of the Paddocks pool did not raise the dues to a higher level at SSR?

 

[tjkraz]

Thanks Tim.

I wonder why the upgrade of the Paddocks pool did not raise the dues to a higher level at SSR?

Remember when dealing with percents, the impact is only visible in the first year following the event. Paddock Pool opened in mid 2011 and 2012 SSR dues went up nearly 5%. There's your Paddock increase.

Construction costs came from reserve fund so a modest increase there spread over 10-20 years would help replenish. And day-to-day operating costs are limited to a couple lifeguards, utilities and pool upkeep. Restaurant is a profit center for Disney so owners wouldn't be paying anything for that.

Also it's a big resort with around 11 million points. Just a penny in dues generates over $100K in operating revenue.

 

[CMOORE185]

Good news for me this year as I own at SSR and HHI.

 

[bighoo93]

I'm in the process of gathering budgets for all of the resorts. Have 6 of them so far and can share some very high-level observations based upon what I have seen:

Bay Lake Tower

Big drivers of the dues increase at BLT are property taxes and housekeeping.

2012 Taxes: .9805
2013 Taxes: 1.0743

2012 Housekeeping: .6534
2013 Housekeeping: .8502

Meanwhile the budget for capital improvements was reduced significantly.

2012 Reserves: .6817
2013 Reserves: .5836

Total dues increase amounted to $.2753 per point and .1925 of it comes from these three categories. I had personally questioned whether the staffed front desk at BLT caused some of the increase. Turns out "front desk" charges actually went down about a half penny per point from '12 to '13.

BoardWalk

The BWV dues increased $.2249 per point and almost all of it can be attributed to housekeeping.

2012 Housekeeping: .8563
2013 Housekeeping: 1.0403

Saratoga Springs

SSR had one of the lowest dues increases, going up just $.0820 per point. Contributing to that was a reduction in property taxes of $.0644 per point. Without that reduction, SSR would have seen an annual increase of 3.1% instead of the 1.7% actual.

2012 Taxes: 1.0515
2013 Taxes: .9871

At AKV and VGC, nothing really stands out as the major source of the increase. Housekeeping at each only went up about $.04 per point. Other categories were also up in the $.01 - .04 neighborhood.

VGC did have a "front desk" increase of $.12 per point, which is abnormally high. No real explanation can be gleaned from the budget statements, though.

This was really good analysis. I posted a joke earlier that I thought was obviously tongue in cheek, but it was removed. I hope you were not the one who misinterpreted. I found this interesting.

 

[wdrl]

I find it interesting that both AKV and BLT (the two resorts that I own) have significant increases in Common Element Renovation reserves in 2013. This budget line item is increasing $0.2456 at AKV and $0.1922 at BLT. In AKV's case, its maintenance fees would have actually gone down $0.0063 if the Common Element Renovation amount had remained unchanged.

I'm hoping that DVC Management will explain at the Annual Meeting what is driving these large increases in AKV's and BLT's Common Element Renovation reserves in 2013.

Like Tim, I was surprised that BLT's Front Desk and Administration costs are going down in 2013 compared to 2012. However, I wonder if the modifications made in BLT's lobby and/or behind the scenes to accommodate the new check-in desk are being charged to Common Element Renovation reserves.

 

[marynvince]

Good news for me this year as I own at SSR and HHI.

Us too!! Curious. Did you buy SSR first, stay at HHI and decide I need HHI points too?

 

[CMOORE185]

Us too!! Curious. Did you buy SSR first, stay at HHI and decide I need HHI points too?

We were at HHI looking at a different timeshare and happened to see Disney's HHI resort and stopped in to talk to a guide. We ended up buying right there in the spot. BWV's were also for sale at the time and we chose HHI for two reasons, 11 month booking window in summer and believe it or not HHI had the lowest dues at the time. We bought SSR some years later.

 

[mom_rules]

Would you happen to have a last yr over this year comparison for actual dues amounts?
or know where I could find one?

Thanks

 

[wdrl]

Would you happen to have a last yr over this year comparison for actual dues amounts?
or know where I could find one?

Thanks

Here is a chart that shows maintenance fees for each DVC resort through 2012. I anticipate that it will be updated shortly to include the 2013 amounts: http://dvcnews.com/index.php/dvc-program/owning-dvc/faqs?task=view&id=51.

 

[Bellecruiser]

Tim,

Thanks so much for this. . Your usual excellent analysis. This seems like a very reasonable rise in mf. We appreciate all you do.

 

[mom_rules]

Here is a chart that shows maintenance fees for each DVC resort through 2012. I anticipate that it will be updated shortly to include the 2013 amounts: http://dvcnews.com/index.php/dvc-program/owning-dvc/faqs?task=view&id=51.

Thanks!

 

[Greysword]

The transportation expense at SSR always has me taken back $7.7M for buses... um kay

As for the Front Desk costs at BLT, I wonder if the decrease is due to some services moving to the BLT lobby instead of despite the move. Meaning, it is possible the DVC finance team negotiated a lower allocation of the Contemporary's front desk costs, which may net lower than last year even with the increase in staff in the BLT lobby.

 

[BWV Dreamin]

Any info on VWL? I'm suspecting mostly housekeeping increases however they are getting refurbished soon.

 

[bookwormde]

Thanks for the analysis.

How does housekeeping go up close to 25% in one year and only at 2 resort (BWV & BLT)?

Any one do the 2br equivelent weighted average for all the WDW resorts yet?

 

[dizfan]

Is there some reason house keeping varies in cost so much between resorts?

I could see AKV and BLT being higher because of the extra bathroom, but that does seem to be the case.
Is it shorter stays, which require more cleaning?

 

[tjkraz]

Is there some reason house keeping varies in cost so much between resorts?

I could see AKV and BLT being higher because of the extra bathroom, but that does seem to be the case.
Is it shorter stays, which require more cleaning?

In order to do any resort-to-resort comparison, you really need to start by looking at the variations in number of points required for a night stay.

For instance, let's say OKW had housekeeping dues of $1 per point and it cost 25 points per night for a 2 bedroom. In that example, you're basically contributing $25 per night for housekeeping services.

Meanwhile a BLT 2 bedroom costs 50 points per night and housekeeping is only $.50 per point. 50 points x $.50 is the same $25 per night for housekeeping.

You can't just assume that the $.50 charge for BLT means owners are paying less.

To do any meaningful comparisons, you'd have to try and normalize the data across every resort. Look at the weighted average point cost per night for a given room class--remembering to account for the different "views" (since a BLT theme park room doesn't actually cost more to clean than a Standard View)--and then apply that normalized data to the dues charges. It's a pretty daunting project.

 

[dizfan]

Thanks Tim

 

[Rob S.]

In order to do any resort-to-resort comparison, you really need to start by looking at the variations in number of points required for a night stay.

For instance, let's say OKW had housekeeping dues of $1 per point and it cost 25 points per night for a 2 bedroom. In that example, you're basically contributing $25 per night for housekeeping services.

Meanwhile a BLT 2 bedroom costs 50 points per night and housekeeping is only $.50 per point. 50 points x $.50 is the same $25 per night for housekeeping.

You can't just assume that the $.50 charge for BLT means owners are paying less.

To do any meaningful comparisons, you'd have to try and normalize the data across every resort. Look at the weighted average point cost per night for a given room class--remembering to account for the different "views" (since a BLT theme park room doesn't actually cost more to clean than a Standard View)--and then apply that normalized data to the dues charges. It's a pretty daunting project.

I've done that calculation for the resorts that I own (SSR, AKV, BLT & VWL). Using the information in the budget, I calculate the number of points at each resort along with the number of points in each vacation home (2BR equivalent). I've calculated the annual cost of housekeeping per vacation home in 2013 as follows:
SSR - $11,668
AKV - $13,219
BLT - $17,344 (was $13,328 in 2012)
VWL - $12,150

The BLT number does stand out as high when compared to the others.