Who'll stand with me...outside the DVC 'member' lounge?

[TLSnell1981]

Firstly DVC do not make money on annual dues these cover the cost of running the resorts. Secondly long term DVC members are low spenders on vacations. We eat less on site now, buy very few souvenirs and do a lot less park days and I think this is a general trend.

The loss of perks which change all the time even for direct is unlikely to have a significant long term effect on resale prices.

What people are missing is direct buyers have lost a lot of perks this year. TIW is no longer the savings it was this trip we might just break even and if so it will be my last TIW. AP savings are still there but a lot less than they were.

We only spent less on accommodations....still enjoyed 2-3 TS meals pers day when the food was good and reasonably priced. My family and friends also purchased many "treasures" when the merchandise was unique. We also visited 2-3 times a year with different family members and friends, who spent their vacation $$$$ with the mouse. Disney is blaming DVC members for being low spenders? I fault the Disney. The lowered their standards and choices.

Yes, The cost of TIW increased, while food prices have increased, even though quality has decreased. And the discount on annual passes have had an enormous $$$ increase. Not happy on either account.

 

[Sammie]

I think people who make this argument are putting odd blind faith in artificial distinctions. Disney as an entity has overhead, and annual dues go to pay down that overhead - whether it be overhead associated with the running of their DVC operations or their regular hotel operations. The two coexist on the same land, for heaven's sake. How do you pretend that dues we're paying for our stake in the Jambo house, for example, doesn't benefit the Animal Kingdom resort as a whole (being in, let's see...the SAME BUILDING). Again, I think these are artificial distinctions and it's difficult to believe that our dues will only ever be used to keep the utilities in order, replace the couches and paint jobs periodically, etc, for our designated rooms and entailing no overlap whatsoever with the other functions occupying the very same properties.

The upfront cost of these contracts is pennies put to what is spent both while on vacations and via dues over 50 years. It's stunning that anyone would disagree with that.

I most certainly do believe it because one I trust them to be legal or I would not own DVC and secondly it is all audited.

Also our dues pay for a good bit more than what you listed. Plus my post that you quoted has absolutely nothing to do with what you shared. We were discussing that dues are not use to pay for special events such at the MK party which DVD paid for and that DVC gets no profit from ticket sales and food sales.

 

[McCrae]

I don't see much merit in the OP original arguement. If you buy resale why should you get the same perks as someone who paid Disney full dollar for DVC membership?
No problem in someone trying to save a few dollars... It can make a lot of financial sense.... But if you buy on the cheap you don't have strong grounds for a complaint that someone who has paid maybe 50% more than you gets perks that you don't.

 

[disneynutz]

I most certainly do believe it because one I trust them to be legal or I would not own DVC and secondly it is all audited.

Also our dues pay for a good bit more than what you listed. Plus my post that you quoted has absolutely nothing to do with what you shared. We were discussing that dues are not use to pay for special events such at the MK party which DVD paid for and that DVC gets no profit from ticket sales and food sales.

IMO mistakes can be made, (Aulani) and due to Disney's secrecy, and being told different things by CM's and management, I don't know for sure who is paying for what. I know that when I have questioned certain resort room maintenance and cleaning issues and refurb schedules, the resort has told me that it's caused by DVC and when asked of DVC I was told that it's a resort issue.

Bill

 

[supersnoop]

I don't see much merit in the OP original arguement. If you buy resale why should you get the same perks as someone who paid Disney full dollar for DVC membership?
No problem in someone trying to save a few dollars... It can make a lot of financial sense.... But if you buy on the cheap you don't have strong grounds for a complaint that someone who has paid maybe 50% more than you gets perks that you don't.

The basic question is whether DVC is negotiating for the perks on behalf of their members, or if DVD is negotiating on behalf of their customers. Whether you're u buy direct or resale, you're buying the exact same thing.

 

[Sammie]

IMO mistakes can be made, (Aulani) and due to Disney's secrecy, and being told different things by CM's and management, I don't know for sure who is paying for what. I know that when I have questioned certain resort room maintenance and cleaning issues and refurb schedules, the resort has told me that it's caused by DVC and when asked of DVC I was told that it's a resort issue.

Bill

As to Aulani the result was Jim Lewis was fired. That tells me that when something underhanded is attempted they are caught and dealt with.

As to what you were told about maintenance issues, etc it is many times more about who is asking.

 

[disneynutz]

As to Aulani the result was Jim Lewis was fired. That tells me that when something underhanded is attempted they are caught and dealt with.

As to what you were told about maintenance issues, etc it is many times more about who is asking.

But I was told that Aulani was caught by the State of Hawaii during a review of the project because they collect revenue based on dues. It wasn't caught by Disney, Disney's auditors, or accountants. Was it a mistake or intentional, we will never know but 3 executives were fired.

The Florida DVC's aren't necessarily audited by the State in the same way that Aulani was. I know that BLT had some really low dues when it was first sold. We will never know.

Bill

 

[Sammie]

But I was told that Aulani was caught by the State of Hawaii during a review of the project because they collect revenue based on dues. It wasn't caught by Disney, Disney's auditors, or accountants. Was it a mistake or intentional, we will never know but 3 executives were fired.

The Florida DVC's aren't necessarily audited by the State in the same way that Aulani was. I know that BLT had some really low dues when it was first sold. We will never know.

Bill

The dismissals followed an internal investigation into problems surrounding Aulani. According to the people familiar with details of the investigation, it focused on the annual dues that Disney Vacation Club plans to charge buyers of Aulani time shares. Those people said Disney concluded that Vacation Club executives had calculated dues amounts so low that they would not generate enough money to cover the cost of maintaining Aulani. The inadequate dues amounts were included in legal-disclosure documents submitted to the Hawaiian government.

Disney said Aulani's operating costs were underestimated, leading to the inadequate annual dues. It said the mistake was unintentional.
From the Orlando Sentinel

As to whether it was unintentional, I have my doubts. Disney does not fire, remove you form the property with security escort with no notice, for mistakes. They just quietly ask you to resign.

 

[Mdktf]

Firstly DVC do not make money on annual dues these cover the cost of running the resorts. Secondly long term DVC members are low spenders on vacations. We eat less on site now, buy very few souvenirs and do a lot less park days and I think this is a general trend.

The loss of perks which change all the time even for direct is unlikely to have a significant long term effect on resale prices.

What people are missing is direct buyers have lost a lot of perks this year. TIW is no longer the savings it was this trip we might just break even and if so it will be my last TIW. AP savings are still there but a lot less than they were.

I don't believe they make nothing on dues...

 

[chalee94]

Management Fee – Fee paid to DVCMC for providing management services to the Association according to the Property Management Agreement. The fee is equal to 12 percent of the total Operating Budget (total operating expenses less the sum of interest income, Member late fees and interest, and breakage income) and Capital Reserve Budget exclusive of transportation fees and the management fee.

It is a fixed percentage of annual dues. Just FYI.

 

[erionm]

I don't believe they make nothing on dues...

Actually, they do by way of a management fee.

Management Fee - Fee paid to DVCMC for providing management services (including home office expenses) to the Association according to the Property Management Agreement. The fee is equal to 12 percent of the total Operating Budget (total operating expenses less the sum of interest income, Member late fees and interest, and breakage income) and Capital Reserve Budget exclusive of real estate taxes, transportation fees and the management fee.

 

[KAT4DISNEY]

It is a fixed percentage of annual dues. Just FYI.

And anything over the fixed percentage allocated back to members from breakage. More rooms booked out on cash, more to Disney.

 

[OKW Lover]

And anything over the fixed percentage allocated back to members from breakage.

I don't see anything about a fixed percentage of breakage that gets allocated back to members. I thought all breakage was credited against the operating budget.

 

[KAT4DISNEY]

I don't see anything about a fixed percentage of breakage that gets allocated back to members. I thought all breakage was credited against the operating budget.

Sorry, no time to look up the location of the info right now but if I get a chance later I will.

 

[Dean]

I don't see anything about a fixed percentage of breakage that gets allocated back to members. I thought all breakage was credited against the operating budget.

There is a limit where anything above that goes to DVD or DVCMC not to the members as an offset to the budget, I'm thinking it's 2%.

 

[OKW Lover]

There is a limit where anything above that goes to DVD or DVCMC not to the members as an offset to the budget, I'm thinking it's 2%.

Hmm, I'm still not clear on this. Are you saying that DVC members only get credit for 2% (or some other number) of breakage income?

 

[Dean]

Hmm, I'm still not clear on this. Are you saying that DVC members only get credit for 2% (or some other number) of breakage income?

Yes, after that it goes to profit to Disney in some way. Historically it's not uncommon for some resorts to have breakage in excess of 2% and thus lose that.

 

[KAT4DISNEY]

Hmm, I'm still not clear on this. Are you saying that DVC members only get credit for 2% (or some other number) of breakage income?

Yep. That's the gist of it. I also can't recall exactly what the threshold is.

 

[KAT4DISNEY]

Hmm, I'm still not clear on this. Are you saying that DVC members only get credit for 2% (or some other number) of breakage income?

Ok, here is info from a dues breakdown so it's explaining what the amount is showing on the dues that goes back as income to the association. What the Condo documents explain further is that anything above that 2.5% calculation goes back to DVCMC. There may be an allocation that goes to offset expenses for BVTC prior to the remainder going to DVCMC but once again I'd have to pull out docs that are tucked away at the moment.

"Breakage Income - As stated in the Condominium Documents, Disney Vacation Club Management Corp. (“DVCMC”) rents, during the Breakage Period, certain accommodations that have not been reserved by Members. The Association is entitled to receive, as breakage income, the proceeds of such rentals not to exceed 2.5 percent of the aggregate of the Condominium Operating Budget (total operating expenses less the sum of interest income and Member late fees and interest) and Capital Reserve Budget in each calendar year."

 

[MrInfinity]

So odd to me that DVC cares so much and is maneuvering in this way just to suck people into the initial direct sale, when the money they make over the life of a contract comes overwhelmingly from annual dues and money spent by those DVC members while on their vacations. It seems that they win a small amount of money but lose loyalty and trust. Furthermore, if the resale prices fall due to this in the face of the forever-rising direct prices, I'd think direct would become an even harder sale for them.

Also - what's with people selling stocks right after they've fallen? Never understood this (no offense).

I think you're looking at it wrong. If the resale value falls, that means resale offers will be lower and that means ROFRs will be exercised at lower values. Thus, Disney is buying back their property for less, while propping up the value of direct sales by offering select perks exclusively direct. They're saving more on the buy end, and making more on the sell end. It is a win-win for Disney. The people who lose are the ones who own, because the value of what they own has just been reduced.

I know people say you're buying a timeshare and perks are just perks... but those perks are what make people want DVC in the first place. Those perks make one able to go to WDW more, spend more, have fun more. But once you buy in, you hold very little power to do anything except use your stays.

Before you buy, you are the desired customer. After you buy, you become an adversary to Disney in a way. Because once you own, you want your property value to remain high so you can sell it later for a good value, but Disney wants it to devalue so they can buy it back for cheap. They control the perks which determine the perceived value, so Disney holds all the cards in the market.

I don't see much merit in the OP original arguement. If you buy resale why should you get the same perks as someone who paid Disney full dollar for DVC membership?
No problem in someone trying to save a few dollars... It can make a lot of financial sense.... But if you buy on the cheap you don't have strong grounds for a complaint that someone who has paid maybe 50% more than you gets perks that you don't.

The OP is totally justified. Think of it this way. In trying to sell me DVC, many reps tell me about how I can sell it later, and all my perks (except the transferring to the other timeshare which stopped in 2011) are transferrable. Had I bought DVC, and now this is dropped that if I want to sell them they are all of a sudden worth less than they were a month ago, Disney has just made a tactical move that took value from me and moved it to them. Anyone who owns should be as annoyed as the OP. Not because of it creating two classes, but because you just lost real value. What someone might have bought from you for $30,000 is now something you might only get $29,000 for. Perks can come and go, but they definitely affect the value of what you own!