The Orlando Sentinel is reporting that irregularities in the calculation of annual dues for timeshare owners of Aulani, a Disney Resort & Spa lead to the departure of Disney Vacation Club President Jim Lewis and two other executives.
According to unnamed insiders who spoke to the Sentinel, initial annual dues calculations supplied to buyers and state regulators were not accurate. Numbers were not representative of the collections necessary to fund the Vacation Club component of the combination hotel / timeshare.
Per the Sentinel:
"The low fees prompted concerns within the company that Aulani would eventually face a significant operating shortfall, the people familiar with the investigation said. The company also feared the possibility of a brand-damaging backlash from Hawaiian regulators or consumers should Disney attempt to significantly raise Aulani's annual dues in future years to plug any deficit."
Disney claims that the error was unintentional, but it lead to the abrupt departure of three Disney employees. In addition to Lewis, Disney parted ways with Jim Heaney, senior vice president and chief financial officer of Disney Cruise Line and travel operations, and Lawrence Smith, a former director of finance for Disney Vacation Club.
Annual dues or maintenance fees are designed to cover the current and future operating expenses of the property. Dues are used to fund all operating costs including employee salaries and benefits, landscaping, housekeeping and routine maintenace. Dollars are also earmarked for a reserve fund used to cover eaxpensive refurbishment projects including roof replacement, exterior painting and parking lot repaving.
State laws require annual dues collections to be representative of the services provided. Under-stating dues calculations--particularly while a timeshare is in active sales--is one method of misleading buyers into thinking that a property is less-costly to maintain than it truly is.
Disney spokeswoman Rena Langley, via the Sentinel, claims that updated documents will be filed with the state of Hawaii later this week. Disney also vows to work with current Aulani owners to rectify the dues discrepancy.
Source: Orlando Sentinel
