I don’t worry a lot about this, and I am certainly not privy to any internal discussion, but I take comfort in the fact that it is a somewhat adversarial process within Disney, so in the end, it probably comes out all right.
First there are the costs of the DVC building, the capital reserves for refurbs, the cost of the lobby, the cost of air conditioning, and the like. These are easily assigned to DVC, to be passed on through MF.
Then there are the gray areas. Take the Grand Floridian for example.
Who pays for the incredible landscaping? Who pays for the Christmas Decorations? Who pays for the resort monorail? Who pays for the main lobby, and the Band?
They would typically find some metric that makes sense. For example, for grounds maintenance, it might be divided between the hotel and DVC by number of guests, or square footage. For the Resort Monorail, the thought process might go like this: The Express Monorail is paid for through the sale of park tickets, so maybe an amount equal to the cost of the express monorail ought to be covered by the park tickets for the Resort Monorail. Assuming this leaves a big expense number yet to be covered, you would allocate the remaining Resort Monorail expense to the 3 resorts. Then, at the resort level, you would allocate between DVC and Hotel by picking a metric such as occupancy or square footage.
DVC is incented to argue for a fair allocation so that the MF at a new resort are not too high. Similarly the hotel side is incented to argue for a fair allocation so their pricing does not get out of whack.
Next year, the cost budgets will change, but the metrics and the rules for allocating should stay constant.
Bill
