help! DVC resort audits

i<3riviera

Member
I'm looking into some strange patterns with DVC dues and would like your help!

ask
email DVC to request the the annual audits for the DVC resorts you own; they provide among other things the budget vs. actuals for every year; see the email template below

status
resort​
request​
2014 - 2020 audits​
2013 and prior audits​
thanks!​
OKW
made​
received​
VB
HHI
BWV
made​
received​
BRV
BCV
SSR
made​
received​
pending
AKV
made​
received​
pending
BLT
made​
received​
pending
VGC
made​
received​
AUL
VGF
PVB
made​
received​
n/a​
CCV
n/a​
RVA
made​
received​
n/a​

background
I've notice that the last four WDW DVC resorts (VGF, PVB, CCV, and RVA) have a pattern of dues being extremely high relative to their peers at first and then dropping over time ...

1637123896516.png

when digging into the details, I found some particularly interesting areas for 2022 dues for RVA ...

1637123908897.png

1637123916446.png

my objective is to pour over the budgets and actuals for all of the DVC resorts and see if there are any distinct patterns; a few question I'm trying to answer
  1. were the dues for the last four WDW resorts were overly conservative in certain areas?
  2. is there an incentive for DVD or The Walt Disney Company to have overly conservative dues?
  3. is there a detriment to owners to have overly conservative dues?
  4. how are the budget surpluses actually handled in the cash flows?
  5. DVD has a developer guarantee agreement to cover costs in the event of costs > revenue; has that guarantee ever been called on?
  6. is there anything else unusual going on with cash flows, balances, or budgets?
in general, I have a positive view of DVD, DVCM, and DVC; however, I learned from the 2022 point charts that where there are grey areas, liberties have been taken in favour of The Walt Disney Company and to the detriment of DVC owners; I view this exercise as another way to trust yet verify that DVCM is doing things in our best interests (acting as our fiduciary)

the annual audits for each resort's associations are available to owners by making a written request; in fact, if you request them, DVCM is required to provide you the audits within 7 days for FL based resorts

so if you are willing, please email DVCM for the audits of your resort(s) with the template below; when you get your response, share the audits you receive with via this thread or message me for my email

most likely, DVCM will respond right away and give you the audits from 2014-2020 and claim they cannot provide anything earlier; this is still super useful information! I'm working on the claim they cannot provide anything earlier

any analysis I do, I'll openly share (as I always do); thanks if you're willing to request the audits, check out my analysis, or just made is this far in the post :p

🍷


email template
to: members@disneyvacationclub.com
subject: member accounting: books and records

Dear Treasurer of the Association and / or DVC member accounting,

I would like to request the annual audits from association inception for:
  • [SELECT THE RESORTS YOU OWN]
  • Disney Vacation Club Condominium Association, Inc.
  • Disney Vacation Club At Vero Beach Condominium Association, Inc.
  • Disney Vacation Club At Hilton Head Island Owners Association, Inc.
  • Disney’s BoardWalk Villas Condominium Association, Inc.
  • The Villas at Disney’s Wilderness Lodge Condominium Association, Inc.
  • Disney’s Beach Club Villas Condominium Association, Inc.
  • Disney’s Saratoga Springs Resort Condominium Association, Inc.
  • Disney’s Animal Kingdom Villas Condominium Association, Inc.
  • Bay Lake Tower At Disney’s Contemporary Resort Condominium Association, Inc.
  • The Villas at Disney’s Grand Californian Hotel Condominium Association, Inc.
  • Ali’i Nui Vacation Owners Association, Inc.
  • The Villas at Disney’s Grand Floridian Resort Condominium Association, Inc.
  • Disney’s Polynesian Villas and Bungalows Condominium Association, Inc.
  • Copper Creek Villas & Cabins at Disney’s Wilderness Lodge Condominium Association, Inc.
  • Disney’s Riviera Resort Condominium Association, Inc.
Thank you for your response, I look forward to hearing from you.

Regards,
i<3riviera [YOUR NAME]
Member ID: 867530942138 [YOUR MEMBER IDS] (Disney’s Animal Kingdom Villas) [ASSOCIATED RESORTS]
Member ID: 421388675309 [YOUR MEMBER IDS] (Disney’s Saratoga Springs Resort and Bay Lake Tower At Disney’s Contemporary Resort) [ASSOCIATED RESORTS]

updated: 18 Nov 2021
 
Last edited:

bnoble

he's right
Tim has some of the data that will get you started at DVC News

is there an incentive for DVD or The Walt Disney Company to have overly conservative dues?
I'm trying hard to think of one, but it's not obvious to me. Conservative dues would exert downward pressure on sales---that was a common refrain when RIV went on sale, for example---high point charts, and high dues. Now, the dues are more or less average. Indeed, some other developers seem to have a pattern of lower dues during active sales with fast increases in the early years. I also wonder whether this conservative-early approach is a consequence of the Aulani problem---a significant under-estimate that cost some executives their jobs.


The resorts you mention are all post-Aulani, and so it is possible that this is just "I don't wanna get fired like those guys, so let's (subconsciously) err on the side of caution in each of our estimates." Small over-estimates here and there, rounding up a little bit in each individual component, add up across the components. As the resort approaches full operation, the actual costs become known and the dues can converge.

Some of these things are also going to be hard to compare resort-to-resort. Transportation is the obvious example. There is a minimum level of service for transportation, whether or not the buses are actually full. Think about how often you are on a 10-20% full bus in the middle of the day, but they are still coming every 20-30 minutes. Larger resorts have more efficiency. Resorts that have shared infrastructure with hotels share transportation costs. The smaller the DVC component relative to the hotel component, the more "efficient" that transportation cost will look.
 

Micah008

Moderator
Staff member
I also wonder whether this conservative-early approach is a consequence of the Aulani problem---a significant under-estimate that cost some executives their jobs.
This was my exact thought too, trying to avoid under-estimating.

Some of these things are also going to be hard to compare resort-to-resort. Transportation is the obvious example.
is there anything else unusual going on with cash flows, balances, or budgets?
The Transportation example has been a topic of Riviera from the beginning, and has been discussed/debated before. I think the obvious difference here for Riviera is the Skyliner... and the Skyliner wasn't even open yet when they came up with the first (likely conservative) budgets for Transportation at Riviera.

The costs (including operating costs) of the new system are likely being shared across the official "Skyliner resorts" (Riviera, CBR, Pop, AoA), hopefully in an equitable way.

But my opinion is that Riviera is likely paying more than a "fair" share of this new system, since it is the smallest resort of those 4, and also because I think some of the costs should be shared with other resorts that use it (BC for sure) and also somewhat by Disney parks (EP, HS) since people do use the system to park hop, or even as an 'attraction'. I know others disagree, but I know people are using the system that are not staying at the official 4 resorts. At a minimum I hope they aren't using this as a way to increase dues on Riviera and decrease costs on their own Disney owned resorts.
 

bnoble

he's right
I know others disagree
I think I might be in this camp. Short of actually making people scan in for each transportation use, there is no good way to apportion transportation costs other than by endpoint per-capita. And, nearly all routes have one endpoint at one or more resorts. The park-to-park buses are an exception, and those are probably paid for out of Park budgets somehow.

The SSR people have complained about folks using their Park buses as a de facto Park-to-Springs route from the day it opened, and the financial model isn't going to change.

Do non-Resort guests use Resort transportation? Yes. It is a huge amount? Probably not. Does it happen at each resort (including Disney-owned resorts?) Almost certainly. I know I've used the MK->BC bus to hop to the International Gateway for dinner more than once.
 
Last edited:

Micah008

Moderator
Staff member
Short of actually making scan people in for each transportation use, there is no good way to apportion transportation costs other than by endpoint per-capita.

Do non-Resort guests use Resort transportation? Yes. It is a huge amount? Probably not.
I agree with these points. There is no good way to do it, and probably not a large amount anyway for the example of other resorts and other parks. But it is non-0, just like the other examples you gave.

My real issue is with the lack of transparency of how the costs are shared between the 4 official Skyliner resorts ... what percentage of the Skyliner is Riviera actually paying for? Is it 25% since it is 1 of 4 Skyliner resorts? Is it 9% based on its percentage of occupancy across those 4 resorts? Or is it 50% because they don't have to disclose it and can do whatever they want?

The same question exists with all "mixed use" resorts that have a Deluxe hotel shared with DVC villas (BWV, AKV, BLT, VGF, etc), and its for more than just Transportation, in those cases it is for all shared costs.
 

bnoble

he's right
I assume that Disney has competent accountants, and that whoever is auditing the DVC books is also competent. If that's true, then at worst they are apportioned based on total resort capacity. It's more likely that it is apportioned based on occupancy, but not certain. The difference is probably negligible, and while the latter biases slightly against DVC (which has higher occupancy) it is also probably more accurate.

At the end of the day, if you are going to own DVC, you have to trust that Disney is attempting to be fair and reasonable most of the time. If you don't believe that, you're better off selling. No lodging discount is worth that kind of stress, and there is nothing you can do to convince yourself that you should trust them if you don't. I applaud the effort of combing through 20 years of resort budgets, but even that's not really going to reassure anyone because of e.g. the shared facility splits.
 

George

wishes he had a pink frolicing llama under his tag
@i<3riviera: You might want to block out your member numbers from your message template.

I‘ve requested PVB and VGF for you.
 
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i<3riviera

Member
@i<3riviera: You might want to block out your member numbers from your message template.
thanks for looking out for me! good news is the member numbers are made up …
  • 867-5309 (99999999)
  • 42 the answer
  • 13 Tower of Terror and general bad luck
  • 8 lucky number (also Cal Ripken’s number)
for the second one, I just tweaked the order
 

George

wishes he had a pink frolicing llama under his tag
thanks for looking out for me! good news is the member numbers are made up …
  • 867-5309 (99999999)
  • 42 the answer
  • 13 Tower of Terror and general bad luck
  • 8 lucky number (also Cal Ripken’s number)
for the second one, I just tweaked the order
Thanks for reporting back. I’d been on hold with MS all this time. :ROFLMAO:
 

i<3riviera

Member
I'd love to help but you have already got the ones I could request.
I‘ve requested PVB and VGF for you.
thank you both, I really appreciate it!

My real issue is with the lack of transparency of how the costs are shared between the 4 official Skyliner resorts ... what percentage of the Skyliner is Riviera actually paying for? Is it 25% since it is 1 of 4 Skyliner resorts? Is it 9% based on its percentage of occupancy across those 4 resorts? Or is it 50% because they don't have to disclose it and can do whatever they want?
correctly or incorrectly, my take on the Skyliner costs are that I wouldn't expect it to be significantly different from bussing; the logic being that 88-91% of the guest capacity at the four primary Skyliner resorts were previously served by buses with RVA making up only ~9-12% of the load; even if you throw occupancy rates or other adjustments, the overwhelming majority of Skyliner riders will not be from RVA

so then, would Walt Disney World management add a mode of transportation that was more expensive than what it was replacing? I would say no, they likely ran the numbers and the amortized initial capital + operating costs for the Skyliner are ≤ bussing operating costs; supporting that claim is that the Pop vs. All-Star pricing difference doesn't seem to have changed significantly

resort​
rooms A
RVA: 2b-lo = 2, 3b = 3​
% A​
rooms B
RVA: 1b = 2, 2b = 3, 3b = 4​
% B​
Pop Century
2,880​
41%​
2,880​
40%​
Art of Animation
1,984​
28%​
1,984​
27%​
Caribbean Beach
1,536​
22%​
1,536​
21%​
non-RVA
6,400
91%
6,400
88%
RVA
603​
9%​
882​
12%​
non-RVA: https://touringplans.com/walt-disney-world/hotels/number-rooms
RVA: https://easywdwforums.com/threads/dvc-rooms-charts-with-detailed-room-info.20457/


in my view a comparable DVC resort for bussing to RVA would be AKV because there is little internal bussing at AKV; if anything, the AKV bus routes are longer but it might also benefit from scale; SSR and OKW are also reasonably comparable, they both have internal bussing but also might benefit from scale

but RVA transportation costs is 193% of AKV's, 160% of SSR's, and 132% of OKW using the per point adjusted metric I favour; SSR is also the WDW median; that seems a bit weird to me 🤷‍♀️

I'm trying hard to think of one, but it's not obvious to me. Conservative dues would exert downward pressure on sales---that was a common refrain when RIV went on sale, for example---high point charts, and high dues. Now, the dues are more or less average. Indeed, some other developers seem to have a pattern of lower dues during active sales with fast increases in the early years. I also wonder whether this conservative-early approach is a consequence of the Aulani problem---a significant under-estimate that cost some executives their jobs.
one of the items I keep coming back to is the 12% management fee being based on the budget; as an example if you create an over conservative budget that under runs by say 42%, the management fee does not change so now becomes a larger %, in my example it grows by 36% to become 16.3% of actuals

so then is there a consistent, intentional overly conservative estimate of the annual budget to increase the management fee? is that an outlier example?

At the end of the day, if you are going to own DVC, you have to trust that Disney is attempting to be fair and reasonable most of the time. If you don't believe that, you're better off selling. No lodging discount is worth that kind of stress, and there is nothing you can do to convince yourself that you should trust them if you don't. I applaud the effort of combing through 20 years of resort budgets, but even that's not really going to reassure anyone because of e.g. the shared facility splits.
I think you have can it both ways; you can trust DVC has an incentive to do things mostly fairly while also using the information available to you to confirm they are; should everyone dive into financial statements, recorded deeds, point charts, etc. to gather information about DVC? no, but if you already have an aptitude for such things and a curiosity about DVC, it can be very interesting to analyze; combine that with someone who needs a life hobby and bingo bango

I'm hoping that as we get more data, we'll be able to confirm some of our general assumptions we agree on and dive into the areas that seem peculiar or that we have different theories about; I approach this from open minded curiosity so enjoy the many perspectives
 

Strangeite

Well-known member
I think you have can it both ways; you can trust DVC has an incentive to do things mostly fairly while also using the information available to you to confirm they are; should everyone dive into financial statements, recorded deeds, point charts, etc. to gather information about DVC? no, but if you already have an aptitude for such things and a curiosity about DVC, it can be very interesting to analyze; combine that with someone who needs a life hobby and bingo bango

There has always existed people that become fascinated by something nobody else notices and focuses on it with a fervor. In my wife's tiny town in South Dakota there was a farmer 75 years ago that was obsessed with rocks. He would always ask when someone was about to plow a field, or construct a new irrigation channel, or dig a new foundation, because he wanted to be there to look at the rocks that would be unearthed. This is a guy who's entire education was conducted in a one room schoolhouse (the last one room school houses didn't close in their county until the 1980s). Anyway, when he died 40 years ago, he donated his collection of rocks to the local history museum (also tiny), where they sat in a pile in a back room for decades. About 10 years ago the museum was needing to weed the clutter to make space and the pile of rocks were on the top of the list of things to toss. But before they did, they asked the closest university to come take a look to see if there was anything worth keeping. Long story short, not only were three new fossil species discovered in that pile, but since he had meticulously catalogued where every rock came from, it provided the data some person used to get their PhD in some aspect of geology that is beyond me.

For me, one of the greatest things the internet has done for humanity is allowing the knowledge and beauty produced by those kind of people to reach a much wider audience than ever before possible.
 
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