Significant Increase in Annual Dues Proposed

[crisi]

Exactly, "bad" companies. And those all look a lot like government. Lol. I did not think Disney was one of those.

No, not bad companies - functional monopolies. Which Disney is. You are free to give your business to Universal.

 

[we"reofftoneverland]

That would be nice, but that isn't reality because DVC can't work that way. They can't legally set aside huge reserves to cover unexpected expenses (they can for capital improvements) like increases in wages. They can't legally borrow from other parts of the business to cover them either. They functionally work on a more or less cash basis - each year the budget has to balance out - more or less. If there is a jump in wages, there is a jump in costs - and a jump in our dues. What do you expect management to do - not meet their contractual obligations to pay people what they said they would? (Keep in mind that a living wage is a huge PR thing right now - if Disney workers were to strike over a living wage, while Disney rolls around in record profits, they'd have a bigger problem than DVC owners. And DVC CMs are one portion of a combined collective bargaining agreement - this isn't just DVC getting paid more.) Lay off front desk staff and mousekeeping to keep overall wages in line so that our rooms aren't clean and we spend more time waiting for assistance? I'm interested in your solution to this.

I still just disagree. I appreciate your points, but I think good management does not allow for erratic jumps.

 

[jodybird511]

I still just disagree. I appreciate your points, but I think good management does not allow for erratic jumps.

I wouldn't say they "allowed" the erratic jump. If it truly is related primarily to the wage increase, Disney fought this tooth and nail for a long time. Ultimately, it has come to fruition, but not without a lot of resistance. As I stated before, I'm glad they are treating CMs the way they deserve to be treated--like humans--so I'm glad Disney didn't get their way in the end on this one.

 

[we"reofftoneverland]

A

No, not bad companies - functional monopolies. Which Disney is. You are free to give your business to Universal.

While I also appreciate Bing's points, all of his examples were one time government entities or spin-offs or outright government entities. Disney was never a regulated utility. So I would not expect it to be like those companies or have that management legacy. I would never invest in a timeshare with a company like ATand T. People are wary of timeshares. I just believe it is bad management on Disney's part to get in a situation where dues jump so significantly. I know there is nothing I can do about that, but it is still my opinion. And it does not inspire me to go long on dvc.

 

[Bing Showei]

While I also appreciate Bing's points, all of his examples were one time government entities or spin-offs or outright government entities.

Where are you finding that Bell Systems, Comcast/Time Warner, or OPEC were government entities? Bell Systems was a privately owned company subject to a landmark government antitrust suit. And Comcast, TimeWarner have never been government held. OPEC was a series of governments and privately held companies that acted as a cartel - not a government. They are are all "good" companies in that they make their stakeholders a lot of money.

Exactly, "bad" companies. And those all look a lot like government. Lol. I did not think Disney was one of those.

Disney is turning record profits on the backs of the resorts/hotels. In a free economy, a publicly traded company is beholden only to its shareholders. That pixie dust you have in your eyes functions to make you feel good so you do something crazy like commit to 50 years of going back to visit the mouse... which serves the bottom line and the companies shareholders.

Are they an organization that exploits college workers and don't provide a living wage to most CMs while spending tens of billions to create the next streaming empire that will do for online content what Amazon did to bookstores? Depends on who you ask. But they are by all rational definition the opposite of a "bad" company; just ask the shareholders who they serve. How is it that you link their price increases to "government" behavior is unclear to me.

 

[we"reofftoneverland]

Where are you finding that Bell Systems, Comcast/Time Warner, or OPEC were government entities? Bell Systems was a privately owned company subject to a landmark government antitrust suit. And Comcast, TimeWarner have never been government held. OPEC was a series of governments and privately held companies that acted as a cartel - not a government. They are are all "good" companies in that they make their stakeholders a lot of money.

Disney is turning record profits on the backs of the resorts/hotels. In a free economy, a publicly traded company is beholden only to its shareholders. That pixie dust you have in your eyes functions to make you feel good so you do something crazy like commit to 50 years of going back to visit the mouse... which serves the bottom line and the companies shareholders.

Are they an organization that exploits college workers and don't provide a living wage to most CMs while spending tens of billions to create the next streaming empire that will do for online content what Amazon did to bookstores? Depends on who you ask. But they are by all rational definition the opposite of a "bad" company; just ask the shareholders who they serve. How is it that you link their price increases to "government" behavior is unclear to me.

Here is OPEC... "an intergovernmental organization of 15 nations." I will get the others. I don't have a lot of time right now. But they are all regulated utilities. Quasi government entities.


The Organization of the Petroleum Exporting Countries (OPEC, /ˈoʊpɛk/ OH-pek, or OPEP in several other languages) is an intergovernmental organization of 15 nations, founded in 1960 in Baghdad by the first five members (Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela), and headquartered since 1965 in Vienna, Austria. As of September 2018, the 15 countries accounted for an estimated 44 percent of global oil production and 81.5 percent of the world's "proven" oil reserves, giving OPEC a major influence on global oil prices that were previously determined by the so called "Seven Sisters” grouping of multinational oil companies.

 

[_auroraborealis_]

Disney could absorb the wage costs. Or reduce executive compensation. Or any number of things.

But they won't, because "shareholder value."

 

[Orsino]

According to the article: "...will take the $10 minimum hourly wage to $11 by December 2018, $12 by March 2019 and $13 by September 2019. Minimum pay will then increase to $14 in 2020 and $15 in 2021."
So we are seeing a $3 increase for 2019 that is translating to a 4-5% extra increase in the annual dues (since we already typically see a 4-5% increase without the wage bump. The $3 increase represents a 30% increase from the previous wage.

The 2020 $1 increase from $13 to $14 is a 7.7% increase.
Since a 30% increase resulted in a 4-5% bump, I would expect the 7.7% increase to be about a 1% bump over normal year-to-year dues increases (so 5%-6% rather than the usual 4%-5%).
2021 should be similar.

 

[CraigInPA]

I can just imagine the conversations about selling that will happen when annual dues become due...

 

[Bing Showei]

Here is OPEC... "an intergovernmental organization of 15 nations." I will get the others.

I understand the point you are trying to make. But you're getting hung up on the "government" portion of "intergovernmental organization." That's like saying a hamburger is made of ham. OPEC functions as a cartel. They fall squarely into the same category as the other monopolies I had mentioned.

It is yet to be seen what the price increases mean this year relative to the next 24+ years we all have on our contracts. I'm not any happier about it then you are, but the reality is, across all the points I own, I will be paying $210 more in annual dues than I did last year. That is just a drop in the giant bucket that is my Disney addiction. Until Universal can offer me a legitimate replacement for my Disney crack, I'll grumble, but I'll pay for it. And as long as I pay for it, prices will continue to rise at whatever rate Disney wants to raise it.

 

[Orsino]

Disney could absorb the wage costs. Or reduce executive compensation. Or any number of things.

But they won't, because "shareholder value."

I disagree.
First, Disney is absorbing the vast majority of the cost of the wage increases. DVC doesn't pay for park CMs, Disney does.
Second, I don't believe there is an executive compensation line item in the DVC dues spreadsheet. If there is, then I agree, that should get removed; but I don't think there is one. Can't make zero any smaller.
Third, we, as owners of DVC, pay the CMs that work within the DVC system. That means we had been underpaying these workers for years. This is a correction that should have happened long ago.

 

[ScubaCat]

Isn't it interesting that CCV is getting the smallest increase. It's almost like they have some sort of incentive to hold that particular one down for the time being ....

 

[crisi]

Disney could absorb the wage costs. Or reduce executive compensation. Or any number of things.

But they won't, because "shareholder value."

That's a huge misunderstanding about how a timeshare works. Disney isn't going to subsidize DVC - we owners are responsible for the operating costs of our property. That's the deal. Its why they built them. And we bought them because they are legally limited to how much profit they can make off of providing those operating costs.

 

[crisi]

Isn't it interesting that CCV is getting the smallest increase. It's almost like they have some sort of incentive to hold that particular one down for the time being ....

Well, color me SHOCKED.

 

[tjkraz]

I still just disagree. I appreciate your points, but I think good management does not allow for erratic jumps.

Exactly what steps should they have taken to compensate for the 30% rise in minimum wage that was collectively bargained over the course of 2018?

 

[_auroraborealis_]

My point, though, is that Disney charges DVC what they want for "services." It is not actually at-cost. There is profit built in.

 

[crisi]

My point, though, is that Disney charges DVC what they want for "services." It is not actually at-cost. There is profit built in.

There is a mandated profit of (IIRC) 15%. Its cost plus 15%. They don't get to say - "we will pay the housekeepers $15 a hour and charge DVC member $50 an hour in dues." That would be illegal. They say "the housekeepers cost $15 an hour - we will pass along $17.25 to DVC members. (The housekeepers probably cost more than $15 an hour because I'm assuming there is a fully loaded cost in there that includes benefits and uniforms and such).

 

[crisi]

That isn't to say that they can't do some fudging - cost accounting is far from an exact science. But they aren't going to be able to get away with too much without triggering potential legal issues - and after the Aulani debacle, I'm willing to bet that they are being watched carefully by the auditors.

 

[ScubaCat]

That isn't to say that they can't do some fudging - cost accounting is far from an exact science. But they aren't going to be able to get away with too much without triggering potential legal issues - and after the Aulani debacle, I'm willing to bet that they are being watched carefully by the auditors.

"up to 12%" (meaning you're paying the 12%) is management fees to DVDMC. That can be easily tweaked, especially held down for properties they're currently selling and then maxed out once they sell out.

 

[Jerry5788]

Disappointing to see 10% increases but I support that staff should get paid higher wages for all that they do. I can afford the extra $100 or so bucks - still saving a lot off rack rate to pay a fair wage.

Isn't it interesting that CCV is getting the smallest increase. It's almost like they have some sort of incentive to hold that particular one down for the time being ....

That is only issue I had with dues increase - that CCV didn't see same increase....suspicious