This Just In...2006 OKW dues up 10%

[CarolA]

LIFEGUARDS!

You got the slide, now you get the expenses. Increased liablitly costs and personnel costs.

 

[tjkraz]

The slide opened January 14, 2005.

True, but if memory serves the original estimate was to have it open by mid-December '04. Since the budgets are published in November, I'm sure a full year's worth of projected costs were included in the '05 budget.

 

[disgirl]

Wow! That is a big increase. Wait until I inform DH.

 

[lisaviolet]

I'm out.

Out of DVC? If so, were you considering this before the increase? Or am I misunderstanding you?

 

[DiznEeyore]

Out of DVC? If so, were you considering this before the increase? Or am I misunderstanding you?

I think he's teasing.

 

[Cruelladeville]

It will be interesting to see what happens with Marriott's dues for next year. Since they are also refurbishing and have hurricane damage, it will be interesting to compare them to DVC's increases. I haven't gotten any dues notices yet, from DVC or Marriott.

 

[cobbler]

If you haven't seen already SSR's went up 4% from 3.83 to 3.98.

I expect once the resort does become "sold-out" the dues will go up in a pretty decent size like OKW has. Right now keeping them low is a good selling point.

 

[JimC]

It will be interesting to see what happens with Marriott's dues for next year. Since they are also refurbishing and have hurricane damage, it will be interesting to compare them to DVC's increases. I haven't gotten any dues notices yet, from DVC or Marriott.

Marriott is going up at about the same pace. Some higher, some lower. But overall well in excess of CPI.

 

[tjkraz]

If you haven't seen already SSR's went up 4% from 3.83 to 3.98.

I expect once the resort does become "sold-out" the dues will go up in a pretty decent size like OKW has. Right now keeping them low is a good selling point.

Based upon what assumptions?

DVC has always subsidized dues at SSR due to the fact that it is not sold out. However, the subsidy is down to just $.07 per point (from $.44 per point in 2005).

We also received a substantial bump in capital reserves budget from $.47 to .62 per point. By comparison, OKW has its reserves set at $.48. (Incidentally, I wonder if this means we are paying for the expansion to the Turf Club.)

The only way for DVC to keep dues low on SSR would be through its subsidy (which I've demonstrated is not the case), inappropriately low capital reserves (which I've demonstrated is not the case) or skimping on services--which I refuse to believe they would do.

Also bear in mind that OKW has been open for 15 years now. Prior to this year, the increases from 1991 to 2005 averaged 3.2% per year. Frankly, I think that's pretty darn good, and wouldn't expect to see long-term averages that low at SSR or any other resort.

It will take a detailed analysis of the budget to see where the abnormal increases occurred. My guess is that transportation costs are the single biggest culprit--between fuel for the busses and boats and perhaps even charges for members utilizing DME.

 

[cobbler]

Based upon what assumptions?

None at all. I have absolutly nothing to base it on, just a theory.

My theory is what better way to sell out a resort faster and get those to buy into it instead of the sold out resorts by saying, "Hay we got this great 15% off right now and our dues are the lowest of any of the other DVC resorts. The rest are over $4/point. You will save X if you buy here."

Again, no basis, just a theory.

 

[gppnj]

I haven't seen the actual budget, of course, but this is very understandable. Whether you believe in global warming or not, the frequency and severity of hurricanes has been on the rise, so insurance costs are increasing accordingly.

 

[tjkraz]

My theory is what better way to sell out a resort faster and get those to buy into it instead of the sold out resorts by saying, "Hay we got this great 15% off right now and our dues are the lowest of any of the other DVC resorts. The rest are over $4/point. You will save X if you buy here."

If the subsidy were abnormally high, you might have some room to argue that point. As I said, it was $.44 per point in 2005, which is substantial. But the subsidy is now down to $.07 per point. Even if it had been eliminated completely, SSR would still be the lowest.

When VWL debuted the dues were $3.62 per point vs. $3.16 at OKW.
In BCV's first year, dues were $3.77 vs. $3.22 at OKW.

With the alternative being a violation of timeshare laws, I don't see any track record of artificially deflating early resort dues on DVC's part. The lower dues at SSR are appropriate for the construction type (exterior entrances vs. carpeted / air conditioned hallways) and amenities provided at the resort.

As far as a direct comparison to OKW goes, one thing to bear in mind is that the point schedules for SSR are higher than at OKW. That means--even for an equal number of rooms--SSR has more points in the system and thus more owners sharing the burden.

A single two bedroom villa at OKW represnts 13,998 points (according to Caskbill's planner.) A single two bedroom villa at SSR represents 15,110 points--about 8% more than at OKW. Granted this is a very basic analysis, but you could use this fact alone as evidence to suggest that OKW dues are bound to run 8% higher than SSR in the long run.

Of course, SSR owners need to spend 8% more points (on average) for the same size accommodation as OKW owners, so in the end, the dues would be a wash if viewed on a per-trip basis, assuming that 8% variance in dues exists.

 

[lisaviolet]

I think he's teasing.

Thanks Amy. I was thinking I was missing something!!!!

 

[tjkraz]

I haven't seen the actual budget, of course, but this is very understandable. Whether you believe in global warming or not, the frequency and severity of hurricanes has been on the rise, so insurance costs are increasing accordingly.

I've not seen the OKW budget either, but I doubt insurance has much to do with this. At SSR, insurance costs went from .0916 in 2005 to .0895 in 2006.

I'm not saying that OKW went down, but property insurance is a negligible portion of our resort budgets. Of greater significance would be health insurance and other benefits of resort employees, but this isn't broken out in any detail that would allow for discussion.

 

[cobbler]

See but most people don't look at subsidy or even understand it.
Heck I don't totally understand it as I haven't really looked at it, what its about and educated myself. I know I should be educated on it but oh well right now.

But that is one thing my guide did mention when we were taking the tour, SSR had the lower dues then the other resorts. So I am sure it helps

 

[dcfromva]

recapping so far,

The estimated annual dues for (OKW) 2006 are $4.2410 per vacation point.

BWV was up 6% - 4.41 to 4.69.

If you haven't seen already SSR's went up 4% from 3.83 to 3.98.

And it looks like BCV will be $4.4808 per point for 2006....

(We just need VB, VWL and HH now )


link to JimC's 2006 DVC Dues -- Assistance Requested for the details of the resort dues !
-DC

 

[AFMom]

My DH is going to go into shock when he sees the new OKW numbers.... ug..... that was one of the selling points for him on buying the resale there!!!! I really am interested to see the breakdown of where that increase was spent.....

 

[RobDoc]

I expect that BWV owners benefitted some by the recent exterior renovation that was paid by the contractor- that may have placed less pressure on the reserve for future maintenance/rehab costs in their dues that past couple of years.

SSR dues will still be lower since the resort was not fully open for most of the year and thus had smaller costs for personel like housekeeping, landscaping and maintenance. In addition, some of the expenses for the reduced staff actually in place were also subsidized by the developer, DVD. You can still see the effects of subsidized fees when looking at VB dues for those who got the original subsidy versus those without the subsidy.

The new slide and associated costs at OKW (maintenance/staff) were included in the 05 budget and shouldn't have been a major component of any increase for '06. Some of the increase may be related to the propertyy tax estimate for 2005. It will be interesting to look at and evaluate the budget when we can see it.

 

[llp479]

This is inline with what our increases are at Marriott's Grande Vista, maybe even slightly less. The info that came from Marriott sighted increased labor and utilities cost as the driving force for the increase.

 

[crisi]

About two years ago, I did a dues analysis with statistical software. Because the resorts have been operating such a short time (in regards to statistical datapoints), I said I had no confidence in what I was noticing. But I did notice two things. One: OKW has had increases of a higher percentage than BWV (the only two resorts with enough years to make even vague predictions about) and would surpass BWV in the dues before the contract ran out. The second was that there was a significant increase in dues when the resort was sold out and stopped being subsidized - I suspected all resorts open with estimated dues that tend to be underestimated.