Resale owners, restricted resorts & MF

[sndral]

One budgeted item for MFs at each resort is the DVC reservation component which is the fee paid to BVT for providing the exchange component of the Club Central reservation system. Why should resale owners of Riviera & DHV who cannot use BVT to book other DVC resorts pay this item?
Are outside exchanges thru IIL also managed by BVT, if so, then could an argument be made that restricted resort resale owners should pay a lower DVC reservation component which only reflects the cost to manage outside exchanges? Along those lines are non grandfathered resale owners paying to manage things like cruise exchanges which they are barred from using?
What about the more hefty budget item for ‘member activities’ do these activities only include activities that all members have access to, if it also includes activities only available to the “Y”s (like the Epcot lounge) then shouldn’t “N”s only have to pay for that portion of the activities they’re allowed to participate in?
https://dvcnews.com/dvc-program-men...5214-2022-annual-dues-budgets-for-all-resorts
I guess my question is are resale owners & especially restricted resort resale owners paying for things via MFs that DVC bans them from ever using, & if they are, should they be?
I’m sure there’s some logical reason, contractual language, and/or accounting principle which can explain & justify charging some folks/points MFs for items they are barred from ever using, but can’t think of what it would be.

 

[Sandisw]

The resort condo association entered into the agreement with BVTC so the resort itself can be part of the system.

The cost of that is paid by all owners, whether you use it or not, including not being eligible In that respect, I think it’s why owners pay the fees they do because it is a cost of being part of that association. The DVC resort agreement, at least for RIV, says they are paid a straight fee of $25k per year to join, get reimbursed for costs from money created during breakage, and entitled to a straight 5% fee over and above those expenses. So, it’s not based on usage per owner, but actually expenses for trades as a whole.

For DVC management, we pay a set fee for the program and it’s fixed. What and how DVC uses those funds is up to them so they can use those to cover things like exchanges because members, even if only some are elgible.

It’s what we agree to..12% fee to DVC to run the program. They do not need to disclose to owners how those funds are allocated based on each service they provide, which includes trades and helping with the membership extras program.

 

[CarolynFH]

helping with the membership extras program.

Anything that is restricted to DVC-Y owners must be paid for via DVD’s marketing budget. If any part of the cost is paid by member dues, it has to be open to all owners whether DVC-Y or DVC-ND.

 

[drusba]

As to the Member Activities charge, it does not apply to activities that resale purchasers cannot be part of. The charge applies to the recreational items that are useable by members at the resort such as cost of operations, maintenance and repairs of pools and tennis courts, cost of any special activities or events at the applicable DVC resort, cost of the quarterly Member newsletter, and costs of annual association meetings and printing and postage for annual association mailings.

As to DVC Reservation Component, it is a charge payable by the association to BVTC for the association to be part of the DVC Reservation Component. For the pre-Riviera resorts, the agreed charge to the association is $1 a year per member owner at the resort (counting husband and wife as two members). The budget itself then reflects the total amount that is chargeable to members as a charge per point, with the result that any particular member is not actually paying $1 but instead a propertion of the total amount charged to the association for members based on the number of total points a member owns.

With Riviera (and I assume the new Disneyland resort), DVD changed the nature of the charge to avoid stating that it was an annual $1 charge for each member owner of the resort. Instead, it simply made the charge to the association to be a set total amount, $25,000, regardless of number or type of members, applicable to the overall use of the DVC Reservation Component, which could avoid challenges by resale owners to the charge.

The DVC Reservation Component does not apply to anything other than the use of central MS and the computer systems to make member reservations for DVC resorts they do not own. In practice, that total annual amount actually ends up being a profit for BVTC. As to all operations assigned to BVTC -- such as those DVC resort reservations by members for non-owned DVC resorts, trade-outs to Disney hotels, adventures and cruises, and trades done through II -- BVTC has other sources of income.

The main one is BVTC's share of the breakage income for rentals of DVC rooms available at 60-days out from date of arrival (which reservations can legally be made before 60-days out based on reasonable estimates of what will likely be available at 60-days out). The annual breakage income goes first to offset 2.5% of the annual operational and capital reserves budgets (less a couple of the items) of the DVC resort. The breakage income above that next goes to BVTC to cover all of its annual costs plus 5% of those costs. Any breakage income above that goes to DVCM to do with whatever it desires. Many years ago, I was informed that the annual breakage income had always exceeded both the 2.5% and the total costs for all BVTC operations (plus 5% of those costs). (I am guessing that continues today although it is possible something different may have happened due to resort closures during the pandemic.) Net result is that the amount assigned through the DVC Reservation Component charge in the annual budget is simply further profit to BVTC on top of that 5% additional profit above costs it gets from breakage income.

 

[Sandisw]

Anything that is restricted to DVC-Y owners must be paid for via DVD’s marketing budget. If any part of the cost is paid by member dues, it has to be open to all owners whether DVC-Y or DVC-ND.

Costs for the offerings yes, but the fees to MS are a straight 12% to run our program. They are within their rights to use CM's to help with bookings, etc.

So, the cost to run MM is, but if we call MS to help us with buying a Sorcerer AP, ir calling MS to book the events at TOTWL is not.

 

[CarolynFH]

With Riviera (and I assume the new Disneyland resort), DVD changed the nature of the charge to avoid stating that it was an annual $1 charge for each member owner of the resort.

Thank you for this information.