Hawai'i regulators have approved Disney Vacation Club's updated filings and sales will resume with a new annual dues figure of $5.73 per point--a 33% increase over the initial rate of $4.31 per point.
On July 9, Disney halted sales of timeshare points in Aulani, a Disney Resort & Spa after discovering that its first year budget was set too low to cover actual operating expenses. The annual dues caluculation error ultimately lead to the dismissal of Disney Vacation Club president Jim Lewis and two other Disney executives.
Future buyers will be subject to the $5.73 dues figure for the 2011 calendar year with annual adjustments expected as resort operating expenses increase. This amount represents a 33% increase over the originally published rate of $4.31 point.
At the initial dues rate of $4.31, a buyer of 250 Vacation Club points would pay dues of about $1,077 per year. Those dues rise to $1,432 per point at the new rate, an increase of $355 per year.
Also impacted will be guests' Transient Accommodations Tax obligation. Hawai'i laws require all resort guests to pay a resort tax during timeshare stays. The tax is based upon a percentage of the resort's stated annual dues.
As a result of the dues increase, the Transient Accommodations Tax basis rises from $.1562 per point to $.2077 per point. A guest using 250 points to stay at Aulani will now pay $51.92 in taxes, up from the original figure of $39.05. Details on the tax calcuation methodology can be found HERE.
Disney plans to subsidize the dues disparity for buyers who purchased prior to the suspension of sales on July 9. Existing owners will receive a credit of $1.42 per point--the difference between the original $4.31 rate and finalized $5.73 figure--for the duration of their ownership. Disney has not commented on whether the subisdy will remain fixed at $1.42 per point or if it will be calculated as a percentage of each year's dues going forward.
The $850 million Aulani project includes a combination of hotel rooms and Disney Vacation Club timeshare villas. The timeshare development plan calls for 480 two bedroom equivalent villas representing over 11 million timeshare points.
When fully built-out, the annual dues disparity of $1.42 per point would have lead to a budget shortfall in excess of $16 million per year.
Disney spokesperson Rena Langley told the Orlando Sentinel that "[w]e have resumed closing sales for Aulani in Hawaii and hope to follow suit in our other sales locations shortly."
Timeshare sales are regulated at the state level. After receiving approval from Hawai'i regulators, Disney must update its filings with other states before sales may resume in those areas. Initial efforts will focus on Florida, California, Illinois and New York--states where Disney Vacation Club maintains an active sales presence.
Disney has been accepting deposits on Aulani purchases since the July 9 sales moratorium and will honor pricing in-place on that date.
