33% Increase in Aulani Maintenance Fees

[TheRustyScupper]

Up to $850 a year MORE in maintenance fees !!!
That is not the total.
That is the additional.
Holy Crud !!!

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Aulani time shares
By Jason Garcia, Orlando Sentinel

7:51 p.m. EDT, September 22, 2011
The Walt Disney Co. has been given permission to raise its fees by 33 percent for those who buy time shares at its new, $850 million resort in Hawaii, as the company attempts to fix a financial error that cost three Central Florida executives their jobs.

The approval, granted Thursday by Hawaiian state regulators, clears the way for Disney to resume time-share sales at Aulani, a massive hotel and time share that opened Aug. 29 west of Honolulu on the island of Oahu.


The Walt Disney Co. "We have resumed closing sales for Aulani in Hawaii and hope to follow suit in our other sales locations shortly," said Rena Langley, a spokeswoman for Disney Vacation Club, the company's Celebration-based time-share arm.

Disney must now submit updated consumer-disclosure materials to regulators and other states. The company will begin with Florida, California, New York and Illinois, its most-important sales markets.

Disney suspended Aulani time-share sales on July 9 after an internal investigation found that executives had underestimated the annual dues it needed to charge time-share buyers to cover the resort's operating expenses. The discovery sparked concerns within Disney that Aulani would eventually face an operating loss or would have to jack up its dues in later years, potentially alienating customers.

Disney said the error was the result of an unintentional miscalculation. Still, the company fired three people over the mistake: Jim Lewis, the former president of Disney Vacation Club, and two finance executives who had previously worked in the time-share unit.

Documents approved Thursday by Hawaii revealed for the first time the magnitude of the error. Disney initially set dues at $4.31 for every time-share "point" purchased by a customer. (Disney Vacation Club sells points that can be redeemed at various times of the year and at different destinations, rather than specific units and time intervals.)

Now, however, Disney will charge $5.73 per point — a 33 percent increase.

The increase works out to about $180 more per year for someone who buys just enough points to spend a week in a studio unit at Aulani during the slowest time of the year. It would add almost $850 more a year for someone who buys enough points for a week in a two-bedroom, ocean-view room during the busiest parts of the year.

Disney won't say how many buyers have already purchased points in Aulani, which first went on sale in July 2010. The company says those buyers will get an annual credit towards their dues to account for the new price discrepancy. The resort will have 481 time-share villas and 359 hotel rooms.

Aulani is a hugely important project for Walt Disney Parks and Resorts and the division's hopes for future growth in North America. If it is successful, the company hopes to build more such standalone resorts or smaller, niche theme parks in secondary markets away from its world-famous, multi-park resorts in Central Florida and Southern California

[Maleficent's Dad]

$5.73 per point maintenance fees? What are they selling Aulani for? Last I saw, BLT was going to $150 per point. Anyone know the cost in Hawaii?

Wow...

[VWL Mom]

$5.73 per point maintenance fees? What are they selling Aulani for? Last I saw, BLT was going to $150 per point. Anyone know the cost in Hawaii?

Wow...

If I remember correctly from the webcast it was $10 less than BLT. That offer was good until mid summer I think. At that point it was $120 per point plus visa gift card incentive.

[seanyred]

Wow that blows AKL dues out of the water. I know it was a initial mistake of but I wonder how these dues compare to other time shares in Hawaii?

[Mousemates]

The increase works out to about $180 more per year for someone who buys just enough points to spend a week in a studio unit at Aulani during the slowest time of the year. It would add almost $850 more a year for someone who buys enough points for a week in a two-bedroom, ocean-view room during the busiest parts of the year.

that loss of revenue certainly explains the firings...the big no-no is don't cost the company money.

[Tekneek]

This is funny. DVC is supposed to be their cash cow, which is why they keep going back to that well over and over. I have to laugh when their eagerness to DVC the entire planet bites them back a little bit.

[Aurora]

It sounds high for a new resort.

But $5.73 per point seems somewhat comparable to the other Disney beach properties. They're older and require more maintenance, but they're also not as elaborate as Aulani.

Vero Beach is currently at $6.78 per point ($5.31 subsidized), and Hilton Head Island is at $5.68 per point.

Vero Beach hasn't had dues under $5 per point since 2005.

[Plex]

WOW.

That is not something you mess up... You'd think that after all of the experience that Disney has with these things they wouldn't make mistakes like this...

[SD Price]

I think Vero Beach and HHI maintenance fees are high due to the number of disconnected buildings rather than beach proximity. One of the selling points of BLT when pitched to us, was the lower maintenance fees since BLT was a single building. Those resorts with multiple buildings seem to have higher maintenance fees.

I've seen photos of Aulani, and I don't see the number of buildings that VB and HHI and other resorts have. I think the increase is due to the higher cost of living/cost of goods in Hawaii. I wonder if the accounting team applied a standard maintenance fee pricing model and did not adjust for the higher "cost of living".

[DVC2004]

[QUOTE=SD Price;2212122]I think Vero Beach and HHI maintenance fees are high due to the number of disconnected buildings rather than beach proximity. One of the selling points of BLT when pitched to us, was the lower maintenance fees since BLT was a single building. Those resorts with multiple buildings seem to have higher maintenance fee. /QUOTE]

Typically the beach properties are higher because of the storms, and I know that there was storm surge damage at Vero Beach before. In fact, I believe at either VB or HHI there was a year that the maint. fees/dues were temporarily hiked to the max allowable so as to avoid a special assessment. This was several years ago. They were lowered back down the following year.

At any rate, I am guessing that since Hawaii is also a coastal property this is the reason. The Boardwalk is a single building and their dues are high because it goes to maintain the outside Boardwalk, whereas SSR has different buidlings but their dues are lower that BW. Yet SSR has outside walk up rooms and so does OKW, meaning there's no carpeting to clean and less maintain since there's no interior halls.

[SD Price]

May be, though claiming HHI is a beach property is a stretch. The beach house is a football field's distance from the surf. LOL. That's one of the widest beaches in South Carolina.

And the rest of the resort is on an island within the island and is sheltered from the ocean, though it is on Broad Creek.

Anyway, our DVC guide pitched us on the BLT lower MFs due to the single building architecture. And he specifically compared the multiple buildings at HHI since we were already familiar with that resort. Think that was a sales pitch? Must have been a good one, 'cause we bought BLT. LOL.

[DVC2004]

May be, though claiming HHI is a beach property is a stretch. The beach house is a football field's distance from the surf. LOL. That's one of the widest beaches in South Carolina.

And the rest of the resort is on an island within the island and is sheltered from the ocean, though it is on Broad Creek.

Anyway, our DVC guide pitched us on the BLT lower MFs due to the single building architecture. And he specifically compared the multiple buildings at HHI since we were already familiar with that resort. Think that was a sales pitch? Must have been a good one, 'cause we bought BLT. LOL.

LOL- HHI I agree you are right!


LOL I think you made a good choice- sales pitch or not, the long term cost of the membership is the dues so why not go with the lowest? Congrats and welcome by the way. You'll love your membership! And you know you can still use it at HHI.

[TheDuckRocks]

We lived in Hawaii for 13 years and when they announced the cost of the dues for Aulani I was very dubious that the amount was correct.
You absolutely pay a premium to live or visit paradise.
Labor costs are very high and almost all the hotel industry is unionized there. Heathcare insurance is controled by state regulation which in turn is a huge added cost to the employer.
Every sheet for the bed, roll of toilet paper, cleaning supply and everything else to run a resort must be transported from the mainland which in turn is passed on to the buyer. Other than a small percentage of food that is grown/raised in the islands all things made in Hawaii have to have the components shipped in.
The sum total of all these things alone could have a 33% impact on the cost of the dues.