DVC 2012 Dues

[Nonsuch]

...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
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

 

[Nonsuch]

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]

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]

Hi. Does anyone remember what SSR dues are this year? Trying to determine how much more I'll be paying next year. Thanks.

 

[drewmisha]

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]

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]

Thanks! Appreciate the quick help!

 

[Mickey'sApprentice]

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!

 

[Nonsuch]

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]

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]

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.

Bill

 

[Andrew015]

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.

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]

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]

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]

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]

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]

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".

Bill

 

[JimMIA]

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]

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]

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