2021 dues, will hotel closures cost us big?

[WB1971]

Wondering if the hotel portions of so many resorts being closed is going to slam us on dues next year? In theory we as dvc are now picking up entire cost to run security and front desk and recreation and transportation at resorts like Poly, Boardwalk and Animal Kingdom. Are we in for a shock?

 

[Sandisw]

Very possible, It depends how things are being done. Disney has moved cash guests to DVC through out this.....much less now that other hotels are open...so they may be covering some of the costs.

Its a good questions for DVC if anyone wants to know. But, it is one of the reasons why Disney did not open SAB until YC opened because their share of that is crazy high...more hotel rooms than DVC...so the cost to DVC to run it...even if allowed...would have not been feasible.

 

[_auroraborealis_]

It is worth mentioning that at the resorts you mention, since only DVC units are open, transport costs are way down, since they don't have a capital expense that spreads across users. It is a per user basis for the transport costs.

 

[Eldon32]

Didn't I read somewhere in the purchase agreement Disney guarantees operating costs (things not related to insurance claims) are not allowed to exceed estimates - and DVD has to cover these; in exchange Disney does not pay dues on the points they own?

I'm pretty sure this would prevent them from passing those increase operating costs this year, but next year owners would only get hit with increased sensitization, ext.

Maybe I'm off base?

 

[_auroraborealis_]

Didn't I read somewhere in the purchase agreement Disney guarantees operating costs (things not related to insurance claims) are not allowed to exceed estimates - and DVD has to cover these; in exchange Disney does not pay dues on the points they own?

I'm pretty sure this would prevent them from passing those increase operating costs this year, but next year owners would only get hit with increased sensitization, ext.

Maybe I'm off base?

No, you are correct. There is also a cap to how much they can increase expenses.

 

[kanerf]

I don't think costs related to hotel closures can be passed to DVC, especially since they are open when the hotels are not.

 

[Sandisw]

Didn't I read somewhere in the purchase agreement Disney guarantees operating costs (things not related to insurance claims) are not allowed to exceed estimates - and DVD has to cover these; in exchange Disney does not pay dues on the points they own?

I'm pretty sure this would prevent them from passing those increase operating costs this year, but next year owners would only get hit with increased sensitization, ext.

Maybe I'm off base?

There has a something to this which is why we have seen furloughs I believe to help in that regard.

What I am not sure about is specifically if it is all or some as I haven’t had time to review the annual dues statement yet. Unexpected expenses from an emergency or act of god may not count toward that and owners could be responsible for those.

ETA: Found the information and extra expenses related to COVID would seem to be excluded from DVD having to pay it all.

 

[BillPA]

I recall the highest expense item is house keeping, since the units were closed or empty for 3-4 months, we should be getting a refund.

 

[DebbieB]

I recall the highest expense item is house keeping, since the units were closed or empty for 3-4 months, we should be getting a refund.

They were being paid the first month and after that, their full health benefits. So may not be as much as you think.

 

[Sandisw]

They were being paid the first month and after that, their full health benefits. So may not be as much as you think.

To add, Disney picks up the employee share of benefits when on furlough in addition to what they normally pay.

 

[we"reofftoneverland]

I recall the highest expense item is house keeping, since the units were closed or empty for 3-4 months, we should be getting a refund.

I am also anticipating a credit.

 

[_auroraborealis_]

I wouldn't anticipate a credit.

Cleaning costs overall are up, what with common area sanitizing, pool loungers, all that. Transport costs are also up on a per person basis due to monorails, skyliner and buses running at reduced capacity. I would guess the costs for ~6 months of revised operations, combined with the pay and health benefits given CMs during part of closure, end up netting out.

 

[TiggerBouncy]

There has a something to this which is why we have seen furloughs I believe to help in that regard.

What I am not sure about is specifically if it is all or some as I haven’t had time to review the annual dues statement yet. Unexpected expenses from an emergency or act of god may not count toward that and owners could be responsible for those.

ETA: Found the information and extra expenses related to COVID would seem to be excluded from DVD having to pay it all.

View attachment 525703

Where is this from? The date is what I find curious. I assume this was not written in relation to COVID and is part of our existing contract, which makes me question if it applies to all properties, or only some (one) of them?

 

[Sandisw]

Where is this from? The date is what I find curious. I assume this was not written in relation to COVID and is part of our existing contract, which makes me question if it applies to all properties, or only some (one) of them?

It is part of the annual dues budget. This was came from BLT but I bet it’s the same for all properties,

The point is that DVD would not be on the hook for the expenses that are extra and can be attributed to the situation,

Now, 3 months of closure had to create some of the operating expenses to be less.....and DVCM must be thinking it’s possible because they have agreed to use any credit to be put toward 2021 for members vs. in capital reserves which is where it is supposed today go.

At the same time, all the extra that is needed, and If there are extra expenses for things at some of the resorts with the hotel side closed, could make that small or even produce a deficiet

The question is how much it will be either way and if it is a shortfall, will it be passed on to owners based on this clause.

 

[TiggerBouncy]

It is part of the annual dues budget. This was came from BLT but I bet it’s the same for all properties,

The point is that DVD would not be on the hook for the expenses that are extra and can be attributed to the situation,

Now, 3 months of closure had to create some of the operating expenses to be less.....and DVCM must be thinking it’s possible because they have agreed to use any credit to be put toward 2021 for members vs. in capital reserves which is where it is supposed today go.

At the same time, all the extra that is needed, and If there are extra expenses for things at some of the resorts with the hotel side closed, could make that small or even produce a deficiet

The question is how much it will be either way and if it is a shortfall, will it be passed on to owners based on this clause.

Thank you for the clarification!

 

[Can_Dannn]

No, you are correct. There is also a cap to how much they can increase expenses.

Isn't the cap 15% increase annually?

 

[_auroraborealis_]

Isn't the cap 15% increase annually?

I believe so, and that is independent of property tax.

 

[jbh275]

Following

 

[tjkraz]

I don't think costs related to hotel closures can be passed to DVC, especially since they are open when the hotels are not.

I do not believe there is any guarantee in the POS that the attached hotels will continue to operate. And without those operating hotels, DVC's share of expenses would increase.

Imagine it takes 5 full time cast members to staff the Beach Pool at Grand Floridian. When both DVC and hotel guests are using it, Disney is probably paying for at least 4 of the staffers with DVC only paying for 1. But with no hotel guests, they still need the 5 staff members to run the pool and all would be the responsibility of DVC.

I recall the highest expense item is house keeping, since the units were closed or empty for 3-4 months, we should be getting a refund.

The question is whether 3 months of savings (closure) will more than offset 6+ months of increased expenses in housekeeping and other areas.