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New Basis for Fixed Week Fee Calculations
- What was the challenge with the old Fee calculation?
- How does the new Fee calculation method correct this?
- How does HGV factor into this change?
- 2023 Fee Webinar Recording
1. What was the challenge with the old Fee calculation?
Since its founding, the Club's Fixed Week Fees were proportionally calculated based on square footage due to the industry's prevailing belief at the time, that this was the most equitable method of cost distribution.
Today, with the benefit of experience and retrospection, we, like many other Clubs, see this has had the unintended consequence of the value proposition of ownership not holding true across all seasons. The flat year-round Fee meant that ownership in Summer was a much less attractive proposition than owning in Winter when compared to rental rates for the same periods i.e. why would you be inclined to purchase a Summer Week if your Annual Fee did not represent significant savings compared to the rate you could pay as a hotel guest?
With no course correction, we projected the inevitability of the Club's share of the Operational Budget being contributed to by fewer owners over time, with each having to pay more individually to meet the funding requirements - an unsustainable position.
2. How does the new Fee calculation method correct this?
As the manager of the Club, we recognise and are wholly committed to our duty to ALL owners to ensure the Club's long-term sustainability and to ensure the equitable distribution of Fees.
To achieve this, the annual Fixed Week Fee calculations will now consider seasonality as well as inflationary forces, with the announced changes to be phased in over a period of 2 - 4 years.
See example below for a One Bedroom Ocean View Suite:
| Weeks | 6-9, 51-52 | 1-5, 10-14 | 15-16 | 17-18, 27-34, 45-50 |
19-26, 35, 42-44 | 36-41 |
| Crane Point Assignment | 3,187 | 2,891 | 2,651 | 2,169 | 2,049 | 1,781 |
| Adjustment % | 34% | 22% | 12% | -9% | -14% | -25% |
| Inflation % Increase June 2021 - June 2022 | 9% | 9% | 9% | 9% | 9% | 9% |
| Phased Adjustment % | 8.6% | 7.3% | 5.9% | -3.9% | -15.2% | |
| Total Fee Increase (Decrease) % for 2023 | 18.4% | 17% |
15.4% | 9% | 4.7% | -7.6% |
Owners of Winter Weeks though now contributing more proportionally, will still enjoy an exceptional value proposition of savings when compared to rental rates, and similar value/savings will also be realised by owners of Summer Weeks, thus ensuring an equitable and sustainable future for the Club.
3. How does HGV factor into this change?
For context, The Crane Master Association is comprised of The Crane Club and HGV. Each Club is obligated to contribute to its proportionate share of the total Operational Budget, and contribution to the reserve fund.
HGV owns roughly 1/3rd of the Fractional Ownership Weeks at The Crane. Therefore, they are responsible for around 1/3rd of the Operational Budget attributable to the Fractional Ownership Weeks, and contribution to the reserve fund. HGV's contribution is outlined in the Club Accounts within the Owners' Centre.
HGV pays 100% of the Fees attributed to their Owned Weeks, regardless of usage. Their method of Fee collection from their members, however, is based on their own distinct rules that govern their Club.