Two weeks before the much-anticipated opening of Aulani resort on Oahu, project developer Walt Disney Co. has disclosed a problem with the pricing of its time-share product that could be costly and delay some purchases.
Disney has been selling time-share units at Aulani since July 2010, but about a month ago realized that it had significantly underestimated annual fees, including maintenance costs assessed to unit purchasers.
Since then Disney has stopped signing binding sales contracts for its time shares, and is taking only nonbinding reservations from prospective buyers who will later be told the amount of annual fees and can back out if they wish.
Rena Langley, a Disney spokeswoman, said the company is working to recalculate the annual fee, restate the figure in an updated public report with the state Department of Commerce & Consumer Affairs and move ahead with binding sales.
"We’re still moving forward," she said. "We’re focused on an exciting future with the impending opening of Aulani on Aug. 29."
Disney doesn’t yet have estimates as to when binding sales could resume or how much the annual fee could rise. "We’re moving as quickly as we can," Langley said.
It’s clear that some would-be time-share buyers won’t be able to complete purchases by Aulani’s opening. But it’s not clear what kind of financial impact the planned fee adjustment will have on Disney or future Aulani time-share buyers.
The Orlando Sentinel newspaper in Florida reported Monday that Disney fired the president of its time-share division, Jim Lewis, on Friday.
Langley confirmed that Lewis is no longer with Disney but said the company does not comment on personnel matters.
Disney announced Monday that Claire Bilby, a Disney sales and marketing veteran, would lead the time-share division.
Disney declined to say how many people have bought into Aulani’s time-share product over the last year. The company said it will pay the difference between its original estimate and restated fee for buyers who already have completed purchases.
The 840-unit Aulani project at Ko Olina Resort & Marina has 481 time-share units. That breaks down to about 25,000 time-share interests based on one-week intervals common in the industry.
Disney sells its time-share product in points costing $120 each. An annual week’s stay at Aulani in a standard-view studio starts at 126 points, or $15,120. At the high end it costs 1,288 points, or $154,560, for an annual week’s stay in a three-bedroom ocean-view unit during peak season.
Annual dues were set at $4.31 per point. That equates to $543 at the low end and $5,551 at the high end per Aulani owner.
Such dues pay for time-share operating expenses including housekeeping, utilities, maintenance, insurance, taxes and a management fee.
Disney may adjust the annual fee each year based on changes in operating costs.
The annual fee is charged to buyers of time-share points at Aulani. However, time-share owners at other Disney resorts can stay at Aulani depending on unit availability. Disney also can rent unoccupied time-share units to hotel guests.
