DVC Annual Dues Rates For 2013

[tjkraz]

Obviously we do not know that yet. However, it is not as simple as blowing it off as "only" 2.5% (or more) above the average. That is an outlier and needs to be explained/rationalized. That may be done when the details are revealed. BLT's MFs have risen nearly 16% in 2 years!

I don't think I'm "blowing it off" any more than you may be overreacting to a situation on which we don't have enough information to draw conclusions yet.

In real dollars your 2.82% outlier is about twelve cents per point. If memory serves, the county raised property taxes $.08 - .09 per point last year at BLT while most other resorts were relatively unchanged.

BLT added a fully staffed front desk this year. Two Cast Members (salaries, benefits, taxes) working 16 hours per day--plus additional charges for equipment, IT, support, etc--could have been the vast majority of the $.12 per point.

It does seems odd that there would be such a disparity in cost increases at only one resort.

AKV has seen similar increases.

Seems like artificial manipulation as a theory as some have expressed cannot simply be overlooked.

Well, as I stated, the budgets have been reviewed and audited for going on 6 years now so I'm not sure what other smoking gun is out there waiting to be uncovered. The Aulani dues adjustment was nearly $1.50 per point--not twelve cents.

And even IF some budget items were marginally understated in the resort's early years:

1) Owners saved money in those years when budgets were lower.
2) Would it really have made a difference in your buy/don't buy decision? If dues were $.12 higher in 2011, 2010 or 2009, would you have passed on the purchase?

I understand eyebrows being raised over some of the numbers but from past experience the reasons are typically revealed between the detailed budget and the condo meeting. At the end of the day, buying into DVC is a vote of confidence for DVC management, auditors and others charged with making sure the program is running correctly. We make the purchase knowing that we have ZERO say in resort operations and will never get line item details in how our dollars are being spent.

I know this sounds glib and dismissive but if you're concerned about future dues trends then you have no confidence in Disney and/or DVC management. The only real option available is to sell.

It certainly looks strange to me that BLT and AKV have such a large difference as compared to all the other resorts.

A year ago it was explained that the BLT and AKV increases were due to a larger-than-expected volume of DVC guests compared to hotel guests at those shared facilities.

If 30% of all registered guests at BLT are staying in DVC villas, 30% of the operating cost of shared amenities (front desk, recreation, transportation, utilities, etc.) are billed to DVC.

Dues at those two resorts received an abnormal bump when the guest mix was recalculated and DVC was found to be a higher percentage than previously computed.

When new resorts are for sale, doesn't DVC provide a dues subsidy that goes away when it is soldout? Check your BLT budget booklet from last year, it should be listed in the notes.

BLT hasn't had a subsidy since its first year and even then it was only $.08 per point.

 

[WebmasterDoc]

The 2013 fees for HH got some benefit from the payoff of a loan/advance provided by DVD about 5 years ago for some unexpected expenses covered by the capital expense fund but needed much earlier than originally planned. That loan will be paid off in December, 2012 so the portion of dues previously used to repay that loan is now unnecessary and has been removed from maintenance fees going forward.

 

[Brian Noble]

Re: BLT costs. If you do the math to figure out the cost of a week in a 2BR in Magic Season, the Lake View units are several hundred dollars less than the other "theme park" resorts (BCV, BWV, VWL). It does not seem as though anything untoward is going on.

 

[silmarg]

I have to say, I am glad I bought SSR resale... low MFs, low increases, low resale prices.

Win win win

 

[keaster]

When will we see the line by line breakdown of dues by resort? Will that come out after the condo meeting?

 

[KAT4DISNEY]

When will we see the line by line breakdown of dues by resort? Will that come out after the condo meeting?

They should be mailing out notices of the proposed budgets to members prior to the annual meeting. Then, once it's approved, the bills will go out.

 

[DougEMG]

Re: BLT costs. If you do the math to figure out the cost of a week in a 2BR in Magic Season, the Lake View units are several hundred dollars less than the other "theme park" resorts (BCV, BWV, VWL). It does not seem as though anything untoward is going on.

You must be only looking at what the current MF are and multiplying that by the current points required for that stay. I'm pretty sure that once you add in your initial purchase cost to the equation that the numbers do not come out quiet the same.

Using Aug 1-8, 2013 in a 2 bedroom lake view for BLT against SSR.

BLT is 386 points at $4.4972/point in MF, for a total of $1,735.92
SSR is 315 point at $4.8129/point in MF, for a total of $1,516.06

So SSR is $219.85 cheaper for the week looking at MF only. Factor in your buy in cost and SSR is going to be even a better deal price wise.

And if BLT MF don't slow down, they will catch up to SSR in a few years, wiping out that advantage as well.

At the end of the day, if price is your motivating factor buy SSR, otherwise buy the location you love and just realize that you will pay a premium for it.

 

[silmarg]

At the end of the day, if price is your motivating factor buy SSR, otherwise buy the location you love and just realize that you will pay a premium for it.

Amen!

 

[emilymad]

I have to say, I am glad I bought SSR resale... low MFs, low increases, low resale prices.

Win win win

Exactly what I am thinking today!

 

[tjkraz]

I have to say, I am glad I bought SSR resale... low MFs, low increases, low resale prices.

Win win win

And if BLT MF don't slow down, they will catch up to SSR in a few years, wiping out that advantage as well.

It takes more than 1-2 years to establish a trend.

Last year the SSR dues increase was 4.8%. From 2010-2011 BLT saw a 2.9% adjustment.

If you look at the history of dues increases, something in the neighborhood of 3 - 3.5% is to be expected. That's the baseline.

If the increase is more than the baseline, there's usually a tangible explanation. In years past extra bumps have been caused by higher property insurance rates (bad storms), transportation (gas prices), a refurb project that needs to be completed earlier than expected (Doc's Hilton Head example, among others), a resort service or amenity being added (SSR Paddock pool), property tax increase (set by county), and so on.

Some years there are lower-than-expected increases for similar reasons: gas prices not as high as anticipated in prior year, final tax assessment lower than estimated, refurb project costs less than budgeted.

DVC claims 75% of the resort operating budgets go toward staffing: salaries, taxes and benefits. Those increases should be comparable across all resorts (at least, all at WDW) since staffing levels are similar and union pay scales are in place. These staff-related cost increases alone will net the 3-3.5% annual rise in dues as employees get raises and employee benefits--like health insurance--cost more.

BLT is subject to the same staff-related cost increases as all others.

It's the outliers which push the annual percents higher. And it's unlikely that BLT will continue to experience a different budgetary outlier year-after-year.

 

[psac]

A year ago it was explained that the BLT and AKV increases were due to a larger-than-expected volume of DVC guests compared to hotel guests at those shared facilities.

If 30% of all registered guests at BLT are staying in DVC villas, 30% of the operating cost of shared amenities (front desk, recreation, transportation, utilities, etc.) are billed to DVC.

Dues at those two resorts received an abnormal bump when the guest mix was recalculated and DVC was found to be a higher percentage than previously computed.

Interesting that as owners from other locations stay in the new properties, that can drive the cost of those properties up. E.g., someone buys OKW or SSR resale because of the cheaper costs, books at AKV or BLT at 7 months, potentially leaving open inventory at SSR or OKW for cash bookings, and that drives up the maintenance fees of AKV or BLT and not their own properties.

I'm sure this is not the first time this has come up...

 

[tjkraz]

Interesting that as owners from other locations stay in the new properties, that can drive the cost of those properties up. E.g., someone buys OKW or SSR resale because of the cheaper costs, books at AKV or BLT at 7 months, potentially leaving open inventory at SSR or OKW for cash bookings, and that drives up the maintenance fees of AKV or BLT and not their own properties.

Breakage inventory is not budgeted in that manner. Remember breakage revenue goes back to DVC owners so DVC budgets would have to cover the cost of upkeep on those rooms.

It's more about the count of guests staying in hotel rooms vs. DVC villa rooms.

IMO, there is something telling about the villa occupancy at BLT and AKV being adjusted upward and BWV trending downward. With BLT and AKV having the sleeping accommodation for a 5th and 9th guest, it appears larger groups are gravitating toward those resorts in even larger numbers than DVC projected.

Meanwhile, fewer people are willing to overstuff BWV rooms--which only sleep 4/8--than in the past.

 

[awilliams4]

Devil is in the details. It will require a look at the full budget to see where increases occurred. Last year's high increase for BLT was attributed to a higher percentage of villa guests vs. hotel guests using shared resort amenities.

The average DVC increase appears to be about 4% so BLT is only 2.5% above that. CMs and technology for the new front desk may be a factor. Changes to TOTW lounge?

According to DVC, property tax assessments are largely based upon selling prices so it's likely BLT taxes went up again as point prices rose in '12.

Aulani problems were (understandably) discovered within a year of the first budget estimate. Resort was not even open yet. This will be the 6th year of operations for BLT with budgets being audited annually by large independent firms and government oversight.

The lower opening day dues for BLT are entirely a function of the higher point charts. Simple mathematics.

If DVC is guilty of any deliberate missteps, it likely relates to furnishings which were not durable enough to withstand years of guest use & abuse. While that may cause money to correct, it should not lead to many years of high percentage increases.

Finally a post that makes sense! Thanks Tim for suggesting Math is in play and not someone bending us over.

 

[Brian Noble]

You must be only looking at what the current MF are and multiplying that by the current points required for that stay. I'm pretty sure that once you add in your initial purchase cost to the equation that the numbers do not come out quiet the same.

Absolutely. I'm not at all trying to figure out total carrying costs. I'm just trying to answer the question: "Are the dues charged reasonable, or is BLT somehow out of line?" It looks to me like the BLT dues meet most people's expectations that the high rise is less expensive to operate than some of the others.

 

[dvcterry]

Absolutely. I'm not at all trying to figure out total carrying costs. I'm just trying to answer the question: "Are the dues charged reasonable, or is BLT somehow out of line?" It looks to me like the BLT dues meet most people's expectations that the high rise is less expensive to operate than some of the others.

I have to agree with you as to the point of the increase and question it as being reasonable. I did not have an opportunity to check the historical increases of the resorts throughout the resorts. I'm sure someone on the board will jump in with that at some point. But I do recall vaguely when the increases took place there was some justification.

 

[DougEMG]

A year ago it was explained that the BLT and AKV increases were due to a larger-than-expected volume of DVC guests compared to hotel guests at those shared facilities.

If 30% of all registered guests at BLT are staying in DVC villas, 30% of the operating cost of shared amenities (front desk, recreation, transportation, utilities, etc.) are billed to DVC.

Dues at those two resorts received an abnormal bump when the guest mix was recalculated and DVC was found to be a higher percentage than previously computed.

It makes sense that the costs for common facilities shared between the hotel and DVC component are split in some manner. If it is a straight number of guest at DVC vrs number of guests at the hotel, then being able to put 5 people in a 1 bedroom because of the sleeper chair and pullout sofa is going to cause the number of guests at the DVC resort to be higher, which means the DVC resort pays more for the common facilities. Plus I would think the demographics of a BLT family is a group with small kids, so they are probably more likely to go up to the room occupancy limit.

 

[Sir Aaron]

It makes sense that the costs for common facilities shared between the hotel and DVC component are split in some manner. If it is a straight number of guest at DVC vrs number of guests at the hotel, then being able to put 5 people in a 1 bedroom because of the sleeper chair and pullout sofa is going to cause the number of guests at the DVC resort to be higher, which means the DVC resort pays more for the common facilities. Plus I would think the demographics of a BLT family is a group with small kids, so they are probably more likely to go up to the room occupancy limit.

What common facilities are we paying for at BLT? We have our own pool and now our own checkin.

 

[tjkraz]

What common facilities are we paying for at BLT? We have our own pool and now our own checkin.

Not all arrivals are handled at the BLT front desk. Passengers on DME and those arriving during overnight hours are routed to the main Contemporary desk so I'm sure there is some contribution for shared use of those facilities. And everyone is linked into the same call center / virtual "front desk".

Also BLT guests have access to the CR main pool so you're likely paying some amount for that.

Other areas that are shared would include security, maintenance, recreation programs, transportation (buses, monorail, DME), bell services. Even housekeeping is likely shared in some manner--I doubt they have duplicate supervisors and dispatch facilities at both the CR Tower and BLT.

 

[Pirate Granny]

Was the cost to retrofit the bathroom sinks in the BLT Studios done last year? Also share ME airline check in...and food services counter with the hotel.

 

[DougEMG]

Breakage inventory is not budgeted in that manner. Remember breakage revenue goes back to DVC owners so DVC budgets would have to cover the cost of upkeep on those rooms.

It's more about the count of guests staying in hotel rooms vs. DVC villa rooms.

IMO, there is something telling about the villa occupancy at BLT and AKV being adjusted upward and BWV trending downward. With BLT and AKV having the sleeping accommodation for a 5th and 9th guest, it appears larger groups are gravitating toward those resorts in even larger numbers than DVC projected.

Meanwhile, fewer people are willing to overstuff BWV rooms--which only sleep 4/8--than in the past.

Agree with the sleeper chair making it easier to stuff more people in the room.

One additional possibility is that at BLT and AKV families staying there have smaller children and thus are willing to have more people in a room, while BWV appeals to a more older crowd with grown children so they have less people in a room.

With BLT now sold out, the occupancy levels of BLT vrs CR should be stable now, so I would think that increases because of this shouldn't happen any more.