Rental income for units rented in the last 60 days before a date (the breakage income) is divided 3 ways. First, it goes to offset dues as noted above but the maximum amount of breakage income used to offset dues is that amount which equals 2.5% of the resort's operating budget for the year -- meaning about $300, 000 (more or less) per resort goes to offset dues. Annual breakage income for a resort is well into the millions and thus only a minor portion of it goes to offset dues.
Second,after that 2.5% is covered, the breakage income goes to the "Buena Vista Trading Company" in an amount that equals the annual budget for operating that company plus 5% of that budget. The Buena Vista Trading Company is Member Services to the extent it operates as the reservation entity for (a) persons using their points to stay at a
DVC resort other than their home resort, (b) members using their points to reserve non-DVC resorts. The remainder of Member Services annual costs -- for acting as the reservation agent for members making reservations at their home resorts -- are covered by : (a) $1 per member per year charge in the budget for the "reservation component" shown in the annual budget you receive; and (b) part of the "Management Fee" in the annual budget for the resort -- that fee is a set percentage, about 12% to 13%, of the annual budget (excluding taxes and the management fee before making the calculation).
Third, anything left of the breakage income after the 2.5% payments to offset dues and amounts that go to the Buena Vista Trading Company, goes to the "Disney Vacation Club Management Company," the offical name for the entity that manages the resorts, and it can do with that amount whatever it pleases.
Renting 60 days or less out leads to the breakage income discussed above. As noted, Disney also rents DVC rooms when members use points for a non-DVC resort but that income is offset by the amounts they have to pay for the non DVC rooms the members are reserving. Disney also rents out the approximately 4% of the resort (reservation time) that it always retains as its own after all points are sold and income from those reservations belongs to Disney. Moreover, Disney rents rooms for its own income from points acquired in two other ways -- the promotional programs where it buys back first year points from new purchasers and acquisition of previously sold points through its right of fist refusal or foreclosures.
Finally, Disney does not actually escape paying its share of dues for a resort. As long as Disney retains any ownership of the rooms in the resort (which it will even after a resort is sold out), it is responsible to pay its share of the dues. However, the timeshare laws give it the option, in lieu of paying dues, to guarantee the annual budget set for the members -- it guarantees that the members will pay no more than what is set out in the annual budget and if costs actually exceed that budget Disney covers the excess. Members may have noticed when they received their annual budget that Disney does make that guarantee and has renewed the guarantee annually.
