DVC Annual Dues Rates For 2013

[psac]

Originally Posted by tjkraz

A year ago it was explained that the BLT and AKV increases were due to a larger-than-expected volume of DVC guests compared to hotel guests at those shared facilities.

If 30% of all registered guests at BLT are staying in DVC villas, 30% of the operating cost of shared amenities (front desk, recreation, transportation, utilities, etc.) are billed to DVC.

Dues at those two resorts received an abnormal bump when the guest mix was recalculated and DVC was found to be a higher percentage than previously computed.

Interesting that as owners from other locations stay in the new properties, that can drive the cost of those properties up. E.g., someone buys OKW or SSR resale because of the cheaper costs, books at AKV or BLT at 7 months, potentially leaving open inventory at SSR or OKW for cash bookings, and that drives up the maintenance fees of AKV or BLT and not their own properties.

I'm sure this is not the first time this has come up...

[tjkraz]

Originally Posted by psac

Interesting that as owners from other locations stay in the new properties, that can drive the cost of those properties up. E.g., someone buys OKW or SSR resale because of the cheaper costs, books at AKV or BLT at 7 months, potentially leaving open inventory at SSR or OKW for cash bookings, and that drives up the maintenance fees of AKV or BLT and not their own properties.

Breakage inventory is not budgeted in that manner. Remember breakage revenue goes back to DVC owners so DVC budgets would have to cover the cost of upkeep on those rooms.

It's more about the count of guests staying in hotel rooms vs. DVC villa rooms.

IMO, there is something telling about the villa occupancy at BLT and AKV being adjusted upward and BWV trending downward. With BLT and AKV having the sleeping accommodation for a 5th and 9th guest, it appears larger groups are gravitating toward those resorts in even larger numbers than DVC projected.

Meanwhile, fewer people are willing to overstuff BWV rooms--which only sleep 4/8--than in the past.

[awilliams4]

Originally Posted by tjkraz

Devil is in the details. It will require a look at the full budget to see where increases occurred. Last year's high increase for BLT was attributed to a higher percentage of villa guests vs. hotel guests using shared resort amenities.

The average DVC increase appears to be about 4% so BLT is only 2.5% above that. CMs and technology for the new front desk may be a factor. Changes to TOTW lounge?

According to DVC, property tax assessments are largely based upon selling prices so it's likely BLT taxes went up again as point prices rose in '12.

Aulani problems were (understandably) discovered within a year of the first budget estimate. Resort was not even open yet. This will be the 6th year of operations for BLT with budgets being audited annually by large independent firms and government oversight.

The lower opening day dues for BLT are entirely a function of the higher point charts. Simple mathematics.

If DVC is guilty of any deliberate missteps, it likely relates to furnishings which were not durable enough to withstand years of guest use & abuse. While that may cause money to correct, it should not lead to many years of high percentage increases.

Finally a post that makes sense! Thanks Tim for suggesting Math is in play and not someone bending us over.

[Brian Noble]

You must be only looking at what the current MF are and multiplying that by the current points required for that stay. I'm pretty sure that once you add in your initial purchase cost to the equation that the numbers do not come out quiet the same.

Absolutely. I'm not at all trying to figure out total carrying costs. I'm just trying to answer the question: "Are the dues charged reasonable, or is BLT somehow out of line?" It looks to me like the BLT dues meet most people's expectations that the high rise is less expensive to operate than some of the others.

[dvcterry]

Originally Posted by Brian Noble

Absolutely. I'm not at all trying to figure out total carrying costs. I'm just trying to answer the question: "Are the dues charged reasonable, or is BLT somehow out of line?" It looks to me like the BLT dues meet most people's expectations that the high rise is less expensive to operate than some of the others.

I have to agree with you as to the point of the increase and question it as being reasonable. I did not have an opportunity to check the historical increases of the resorts throughout the resorts. I'm sure someone on the board will jump in with that at some point. But I do recall vaguely when the increases took place there was some justification.

[DougEMG]

Originally Posted by tjkraz

A year ago it was explained that the BLT and AKV increases were due to a larger-than-expected volume of DVC guests compared to hotel guests at those shared facilities.

If 30% of all registered guests at BLT are staying in DVC villas, 30% of the operating cost of shared amenities (front desk, recreation, transportation, utilities, etc.) are billed to DVC.

Dues at those two resorts received an abnormal bump when the guest mix was recalculated and DVC was found to be a higher percentage than previously computed.

It makes sense that the costs for common facilities shared between the hotel and DVC component are split in some manner. If it is a straight number of guest at DVC vrs number of guests at the hotel, then being able to put 5 people in a 1 bedroom because of the sleeper chair and pullout sofa is going to cause the number of guests at the DVC resort to be higher, which means the DVC resort pays more for the common facilities. Plus I would think the demographics of a BLT family is a group with small kids, so they are probably more likely to go up to the room occupancy limit.

[Sir Aaron]

Originally Posted by DougEMG

It makes sense that the costs for common facilities shared between the hotel and DVC component are split in some manner. If it is a straight number of guest at DVC vrs number of guests at the hotel, then being able to put 5 people in a 1 bedroom because of the sleeper chair and pullout sofa is going to cause the number of guests at the DVC resort to be higher, which means the DVC resort pays more for the common facilities. Plus I would think the demographics of a BLT family is a group with small kids, so they are probably more likely to go up to the room occupancy limit.

What common facilities are we paying for at BLT? We have our own pool and now our own checkin.

[tjkraz]

Originally Posted by Sir Aaron

What common facilities are we paying for at BLT? We have our own pool and now our own checkin.

Not all arrivals are handled at the BLT front desk. Passengers on DME and those arriving during overnight hours are routed to the main Contemporary desk so I'm sure there is some contribution for shared use of those facilities. And everyone is linked into the same call center / virtual "front desk".

Also BLT guests have access to the CR main pool so you're likely paying some amount for that.

Other areas that are shared would include security, maintenance, recreation programs, transportation (buses, monorail, DME), bell services. Even housekeeping is likely shared in some manner--I doubt they have duplicate supervisors and dispatch facilities at both the CR Tower and BLT.

[Pirate Granny]

Was the cost to retrofit the bathroom sinks in the BLT Studios done last year? Also share ME airline check in...and food services counter with the hotel.

[DougEMG]

Originally Posted by tjkraz

Breakage inventory is not budgeted in that manner. Remember breakage revenue goes back to DVC owners so DVC budgets would have to cover the cost of upkeep on those rooms.

It's more about the count of guests staying in hotel rooms vs. DVC villa rooms.

IMO, there is something telling about the villa occupancy at BLT and AKV being adjusted upward and BWV trending downward. With BLT and AKV having the sleeping accommodation for a 5th and 9th guest, it appears larger groups are gravitating toward those resorts in even larger numbers than DVC projected.

Meanwhile, fewer people are willing to overstuff BWV rooms--which only sleep 4/8--than in the past.

Agree with the sleeper chair making it easier to stuff more people in the room.

One additional possibility is that at BLT and AKV families staying there have smaller children and thus are willing to have more people in a room, while BWV appeals to a more older crowd with grown children so they have less people in a room.

With BLT now sold out, the occupancy levels of BLT vrs CR should be stable now, so I would think that increases because of this shouldn't happen any more.

[dvcterry]

Originally Posted by DougEMG

With BLT now sold out, the occupancy levels of BLT vrs CR should be stable now, so I would think that increases because of this shouldn't happen any more.

BLT is not sold out. A resort does not get sold out across the board. It's sold out in Use Years. There are Use Years still available. I was talking to my guide today in reference to what points were available at the resorts with the different Use Years. BLT still has points for different Use Years.

[Missyrose]

Originally Posted by dvcterry

BLT is not sold out. A resort does not get sold out across the board. It's sold out in Use Years. There are Use Years still available. I was talking to my guide today in reference to what points were available at the resorts with the different Use Years. BLT still has points for different Use Years.

Technically no DVC resorts ever truly "sell out." You can always buy points from Disney for any of them. But what PP means in this case is Disney is no long actively selling BLT with incentives, etc. The only two resorts Disney is actively selling right now is AKV and Aulani. But you can still buy BLT, you'll always be able to buy there.

[mnra]

We own at several of the resort but a 6.5 percent increase is terrible. What is the rate of inflation? Once again Disney sells something and then increases rates. I totally understand that dues goes up but how many people would accept these increases in their main resisdence if it was a similiar type ownership. In fact I believe Disney feels they can charge whatever they want and really how much say do the membership have.

[tjkraz]

Originally Posted by DougEMG

With BLT now sold out, the occupancy levels of BLT vrs CR should be stable now, so I would think that increases because of this shouldn't happen any more.

There could still be variances over time. Just depends upon how guests respond to a given resort as DVC continues to build out.

I've never felt that BWV appeals to an "older crowd"--it's been our kids' favorite since they were very young. But the addition of larger accommodations at BLT and AKV may have siphoned-off some of the bigger traveling parties.

The other factor--to which DVC doesn't contribute--is occupancy on the hotel side. Sticking with the BoardWalk, historically it is a big convention destination. Average room occupancy for convention groups is probably just 1 or 2 occupants per room. But with the economy in doldrums the last few years, perhaps Disney's convention business is down and BWI is attracting more traditional hotel guests with larger parties. More guests staying on the hotel side could also have been a cause for the shift in dollars at BW.

[tjkraz]

Originally Posted by mnra

We own at several of the resort but a 6.5 percent increase is terrible. What is the rate of inflation?

Rate of inflation doesn't really apply. 75% of the operating costs are employee salaries, benefits (including insurance costs) and taxes. All of those are bound to increase.

Property taxes are determined by the county and subject to their whims.

And another cost component is the addition of new services like the staffed front desk at BLT.

Once again Disney sells something and then increases rates.

Confused by the "once again" comment. Do you feel other resorts have followed similar patterns?

I totally understand that dues goes up but how many people would accept these increases in their main resisdence if it was a similiar type ownership.

Depends upon the specifics. Again, if amenities and services are being added you would expect costs to rise.

In fact I believe Disney feels they can charge whatever they want...

Legally, they can't. The timeshare industry has a long history of developer abuse which lead to multiple layers of government involvement and oversight. Budgets are reviewed by external auditors and state regulators. The dollars billed to owners must be used to operate the facilities.

...and really how much say do the membership have.

None. Unfortunately that's part of the deal we signed on for. We either trust the management company to do a fair job of balancing costs and services or we get out.