Ocean Pointe’s proposed budget increase is 10-15%

[dougp26364]

Yep, that’s right, and it’s NOT based on being fully funded. The budget increase if the reserves are fully funded would be around 45%.

What the heck are they doing down there? Whatever it is, they’re killing me. It won’t be long before owners begin defaulting and the problem escalates IMHO.


“The enclosed budget also represents proposed amounts for the Operating Expenses and the Property Tax Fee. If the issue of waiving fully funding the reserves passes, the Reserve Fee will be lower than shown. The Management Fee will then also be reduced from the Operating Fee shown on this budget, and therefore the net proposed increase for the 2020 Maintenance Fee would be in the range of 10% to 15% instead of the 44% to 48% increase shown.”

 

[dioxide45]

Didn't they have hurricane damage a few years ago? Perhaps big increases in insurance which would be under Operating Expense.

 

[MOXJO7282]

It's likely the insurance. I'm curious about what happens to the smaller non-Marriott HOAs. How do they deal with hurricane damage? I know with disdain how much the Marriotts go up but is the same thing happening at other resorts. if not then I'll be even more frustrated because as OP states at some point it becomes untenable and a mass exodus will occur.

As I think about it more I bet Marriott has that already figured as their endgame where weeks owner just get out and they take all the inventory and turn it into points and keep selling people the BS dream of how great points are bought from them until the whole system implodes because all costs keep going up. Then when the point system implodes in 20 years they're left with the valuable property to churn into something else. Marriott didn't become king by being stupid and without a plan.

 

[bogey21]

As I think about it more I bet Marriott has that already figured as their endgame where weeks owner just get out and they take all the inventory and turn it into points and keep selling people the BS dream of how great points are bought from them until the whole system implodes because all costs keep going up. Then when the point system implodes in 20 years they're left with the valuable property to churn into something else. Marriott didn't become king by being stupid and without a plan.

Sounds like a plan...

George

 

[dougp26364]

These are the largest in terms of percentages.

Front desk 20.2%
Human Resources 59.7%
insurance 51.3%
management 46.1% * will be lower if fully funding reserves isn’t done
Owner service 100%
pest control 57.4%

 

[pedro47]

How many staff members are in HR department can this small resort have and how many full time and part time employees are employed ?

Who Is employed in Owner service and how many full and part time staff members are employed?

 

[TheTimeTraveler]

I wonder if the average Hotel Room is experiencing these same type of increases or is this isolated to just the Timeshare Industry?



.

 

[dougp26364]

2019 BUDGETED EXPENSES 17,562 UNIT WEEKS (PER UNIT WEEK)
2020 PROPOSED BUDGET 17,562
UNIT WEEKS (PER UNIT WEEK)
2019 BUDGET
VS
2020 BUDGET INCREASE/(DECREASE)
$%
2020 PROPOSED BUDGET TOTAL
$
2020 BUDGET BY VILLA TYPE
2 BEDROOM 15,914 UNIT WEEKS (PER UNIT WEEK)
3 BEDROOM 1,648
UNIT WEEKS (PER UNIT WEEK)
Commercial Unit (1)
Revenue
Association Fees - Commercial Units
0.00
0.00
0.00
0.0%
3,515
0.00
0.00
3,515
GOLD (WEEKS 22 - 34)
1,650.50
2,420.27
769.77
46.6%
10,729,090
2,370.82
2,897.79
0
PLATINUM (WEEKS 1 - 17,51 - 52)
1,722.11
2,493.67
771.56
44.8%
16,156,538
2,443.46
2,978.53
0
SILVER (WEEKS 18 - 21,35 - 50)
1,632.09
2,401.40
769.31
47.1%
15,969,356
2,353.85
2,860.57
0
Bank/Investment Interest
5.24
10.02
4.78
91.2%
176,000
9.83
11.83
0
Late Fees
3.42
3.42
0.00
0.0%
60,000
3.35
4.03
0
Maintenance Fee Interest Income
5.69
5.69
0.00
0.0%
100,000
5.59
6.72
0
Miscellaneous Income
6.04
6.04
0.00
0.0%
106,000
5.92
7.13
0
Total Maintenance Fee Revenue
43,300,499
3,515
Expenses
Accounting
19.28
19.55
0.27
1.4%
343,426
19.19
23.08
34
Activities3
39.64
45.02
5.38
13.6%
790,695
44.18
53.15
0
Administration
62.07
63.00
0.93
1.5%
1,106,439
61.82
74.37
111
Audit Fee
0.85
0.85
0.00
0.0%
14,860
0.83
1.00
1
Bad Debt Expense
7.60
7.60
0.00
0.0%
133,467
7.46
8.97
0
Billing and Collections
9.86
10.13
0.27
2.7%
177,981
9.94
11.96
18
Board of Directors
1.11
1.11
0.00
0.0%
19,500
1.09
1.31
2
Cable Television
6.15
6.24
0.09
1.5%
109,500
6.12
7.36
0
Common Assessment4
(3.59)
0.00
3.59
100.0%
0
0.00
0.00
0
Credit Card Fee
27.72
28.34
0.62
2.2%
497,760
27.81
33.46
0
Division of the Condominium, Timeshare, and Mobile Homes Fee (FL)
2.00
2.00
0.00
0.0%
35,124
1.96
2.36
0
Electricity
45.30
42.46
(2.84)
(6.3%)
745,691
41.66
50.12
75
Front Desk
91.21
109.59
18.38
20.2%
1,924,556
107.54
129.38
0
Gas
16.95
16.40
(0.55)
(3.2%)
287,969
16.09
19.36
29
High Speed Internet
2.93
2.93
0.00
0.0%
51,481
2.88
3.46
0
Housekeeping8
237.49
242.25
4.76
2.0%
4,254,888
237.72
286.01
425
Human Resources
16.72
26.70
9.98
59.7%
468,937
26.20
31.52
47
Income Tax
5.24
5.24
0.00
0.0%
92,076
5.14
6.19
0
Insurance
64.23
97.16
32.93
51.3%
1,706,566
95.35
114.71
171
Landscape / Grounds
40.24
40.72
0.48
1.2%
715,177
39.96
48.07
72
Legal
0.57
0.57
0.00
0.0%
10,000
0.56
0.67
1
Loss Prevention / Security
54.68
60.60
5.92
10.8%
1,064,448
59.47
71.55
106
Maintenance
127.16
138.50
11.34
8.9%
2,432,526
135.91
163.51
243
Management Fee
151.81
221.83
70.02
46.1%
3,896,227
217.68
261.90
390
Operating Capital
0.00
0.00
0.00
0.0%
0
0.00
0.00
0
Other Expenses
0.00
0.00
0.00
0.0%
0
0.00
0.00
0
Owner Services7
0.00
46.24
46.24
100.0%
812,009
45.37
54.59
0
Pest Control
2.23
3.51
1.28
57.4%
61,700
3.45
4.15
6
Pool Maintenance
22.06
20.94
(1.12)
(5.1%)
367,768
20.55
24.72
0
Postage and Printing
2.61
2.61
0.00
0.0%
45,899
2.56
3.09
0
Refuse Collection
2.99
3.06
0.07
2.3%
53,691
3.00
3.61
5
Rent for Recreation
0.00
0.00
0.00
0.0%
0
0.00
0.00
0
Taxes upon Association Property
0.00
0.00
0.00
0.0%
0
0.00
0.00
0
Taxes upon Leased Areas
0.00
0.00
0.00
0.0%
0
0.00
0.00
0
Telephone
4.35
4.48
0.13
3.0%
78,654
4.39
5.29
0
Water and Sewer
25.71
27.29
1.58
6.1%
479,392
26.78
32.22
48
Operating Fee
1,087.17
1,296.92
209.75
19.3%
22,778,407
1,272.66
1,531.14
1,784
Total Net Operating
Reserve Fee6
Operating And Reserve Fee
Club Dues1
International Owners Surcharge2 Owner Service Fee7
1,066.78
425.00
1,512.17
4.00 34.50 44.89
1,271.75
985.83
2,282.75
4.00 34.50 0.00
204.97
560.83
770.58
0.00
0.00 (44.89)
19.2%
132.0%
51.0%
0.0%
0.0% (100.0%)
22,336,407
17,314,903
40,093,310
------
------
------
1,247.97
967.39
2,240.05
4.00 34.50 0.00
1,501.43
1,163.88
2,695.02
4.00 34.50 0.00
1,784
1,731
3,515
Estimated Property Tax5
GOLD (WEEKS 22 - 34) 158.72 162.69 3.97 2.5% 721,193 155.46 232.48 0
PLATINUM (WEEKS 1 - 17,51 - 52) 230.33 236.09 5.76 2.5% 1,529,613 228.10 313.22 0
SILVER (WEEKS 18 - 21,35 - 50) 140.31 143.82 3.51 2.5% 956,383 138.49 195.26 0
Total Maintenance Fee Plus Property Tax
43,300,499
3,515
------
------
------

 

[hangloose]

10-15% seems very high. Disappointing.

attached the file.

 

[dansimms]

Perhaps it won’t be passed

 

[Norcal5]

Perhaps it won’t be passed

Does it really make sense for the management fee to go up if the reserves were increased? Once Marriott owns over 50% as trust ownership increases the majority of votes will go for a reserve increase and management fees can go up 50% or more. Maybe this can’t happen, I don’t know.

 

[TheTimeTraveler]

"Most" of the time frame at Ocean Pointe are actual ownership weeks. By the time Marriott converted to points in 2010 Marriott's Ocean Pointe had been sold out. However, most weeks taken back by Marriott (thru ROFR or other means) are likely being put into the Trust.

With that said, I don't believe it will be easy to reach that 50% Trust ownership threshold for many years.





.

 

[SueDonJ]

Does it really make sense for the management fee to go up if the reserves were increased? Once Marriott owns over 50% as trust ownership increases the majority of votes will go for a reserve increase and management fees can go up 50% or more. Maybe this can’t happen, I don’t know.

Using SurfWatch as an example, whether or not it makes sense it's written into the governing docs that the Management Fee is, "... equal to ten percent (10%) of the Estimated Operating Budget (exclusive of the Management Fee itself, but inclusive of Reserves and real property taxes ...)" I'm certain that all of the US resorts use the same 10% but others, like Spain, are a bit higher.

I don't know if there are specific % limits in the docs for Reserves increases (didn't see any that jumped out of the SW docs but I didn't spend much time looking) but in my experience, at least, the resorts do a pretty good job of explaining how they use the Reserves and why any higher-than-expected increases are necessary. Remember that the Destination Club Trust is assessed the same MF's as every other like Weeks Owner for the Weeks which have been conveyed to it so if MVW were to gain the majority and go crazy with Reserves increases as you suggest, just to increase their Management Fee take, they'd also be on the hook for their craziness.

 

[Norcal5]

Thank you SueDonJ for providing that info. It’s making me feel quite a bit better! (The end part)

 

[Saintsfanfl]

I wonder if the average Hotel Room is experiencing these same type of increases or is this isolated to just the Timeshare Industry?

Definitely not. A hotel operator has to answer to the owner, or in most cases the operator is the owner, whether directly or indirectly. They have a direct stake in the expenses and profitability of the hotel. A timeshare operator in this case doesn't really answer to the "owner". They not only do not have to suffer for increased cost, they get rewarded for it with a higher fee. There is simply zero motivation to save money (within reason) and there is no profitability except what they siphon off through the management fee as well as predatory sales tactics on those who stay in the units.

People delusion themselves into believing hotels suffer the same increases in order to make themselves feel better about paying the annual bills. Hotels do have similar issues to deal with but there is simply no motivation to handle it the same way a profit minded business would.

 

[Norcal5]

Please tell me how Human Resources line item could increase by 59%, or owner services 100%. I doubt these employees received 59% and 100% raises, or that they now require 59% or 100% more staff than they did for 2019.

From previous quote:
Front desk 20.2%
Human Resources 59.7%
insurance 51.3%
management 46.1% * will be lower if fully funding reserves isn’t done
Owner service 100%
pest control 57.4%

 

[Luvtoride]

Please tell me how Human Resources line item could increase by 59%, or owner services 100%. I doubt these employees received 59% and 100% raises, or that they now require 59% or 100% more staff than they did for 2019.

From previous quote:
Front desk 20.2%
Human Resources 59.7%
insurance 51.3%
management 46.1% * will be lower if fully funding reserves isn’t done
Owner service 100%
pest control 57.4%

I sent an email to the general manager and asked him all of these questions. I will let you know when I get a response.


Sent from my iPhone using Tapatalk

 

[Superchief]

I think this is another example of the enrolled weeks owners bearing more than their fair share of the increase costs related to the points system. The DC points MF's increase % was much lower.

 

[VacationForever]

I think this is another example of the enrolled weeks owners bearing more than their fair share of the increase costs related to the points system. The DC points MF's increase % was much lower.

DC MF is the weighted average of all resorts in the portfolio/trust. It is not a matter of weeks owners bearing more than their fair share of increase costs. You can own a week at a resort with flat or small increase or you can own a week with significant increase in MF. It is like buying ETF of an industry vs. buying a company stock.

 

[BocaBoy]

We have owned Marriott timeshares since 1987. I have been saying for years that timeshare fees are out of control, and this actually started in earnest around the time of the Great Recession, when other costs were actually going down. The most common response here on TUG has been to defend the increases and somehow claim that costs are going up at timeshares more than the same type of costs are going up elsewhere. One of these years I expect that sentiment to change. We have sold four of our seven Marriott weeks and for now we are stable, but we may well sell two more if this continues.

 

[dougp26364]

We have owned Marriott timeshares since 1987. I have been saying for years that timeshare fees are out of control, and this actually started in earnest around the time of the Great Recession, when other costs were actually going down. The most common response here on TUG has been to defend the increases and somehow claim that costs are going up at timeshares more than the same type of costs are going up elsewhere. One of these years I expect that sentiment to change. We have sold four of our seven Marriott weeks and for now we are stable, but we may well sell two more if this continues.

I’ve been shouted down when expressing concerns about the average 5% increases on an owners forum, by an owner/board member no less. It was a nasty enough attack when I questioned the increases and extra amenities added each year I left the group.

We’ve held on because we enjoy the system and resorts. But if we’re going to be talking 10-15% increases when all others are holding steady at 3-5%/year? We’ll be bailing out sooner rather than later.

Marriott and the board need to get a hold on these, IMHO, ridiculous fee increases. At least at this one resort. Grand Chateau held the line this year after several years of free increases out of line when compared to other higher end timeshares in Vegas. Ocean Pointe has ALWAYS been out of line compared to others IMHO. But our BOD keeps adding amenities, art work/sculptures or other not so necessary expenses and, Ocean Pointes year over year MF increases have been higher than what appears to be average, even for MVC.

 

[cissy]

I'm so happy that I was able to sell my Ocean Pointe this year. Increasing maintenance fees were the reason I had to do so. I'll certainly miss it, but the expense was getting ridiculous.

 

[bogey21]

We have sold four of our seven Marriott weeks and for now we are stable, but we may well sell two more if this continues.

The truth is that voting with your feet is your only recourse. Bitching, moaning and complaining get you nowhere...

George

 

[Luvtoride]

Very true George and Boca Boy, but will anyone really "hear" anyway? I wouldn't expect anyone to shed a tear for selling any of our weeks.

 

[hogs14]

can someone tell me what ocean point mf fees are for 2020 ? in another thread they are stating 10-15% increase from 2019 ?

[Post moved from MF's sticky thread. OP owners, have your MF's been finalized yet? <-- SueDonJ]