DVC 2012 Dues

[tjkraz]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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]

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.

 

[tjkraz]

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.

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]

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.

Bill

 

[Maistre Gracey]

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]

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]

will have to wait and see what BLT fees are....

 

[DebbieB]

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]

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.).