A thought strikes me though.. (odd occurrence) wouldn't one have to also know how many new units have been made available and compare it with the number that are empty to really get the picture. Simply saying that onsite room occupancy has declined by 10% only show one part of the picture. What percentage has the number of units increased over that time. If it's less then 10% then the numbers are declining, if it's over 10% then not only have the kept the onsite occupancy as it was, but have increased it (in actual numbers of units occupied) by adding those units.
I don't know if I'm making my thought clear or not so let's do it in simple numbers. Let's say that you have 1000 room available for occupancy and in 2008 they were 89% filled or 890 rooms. If all things remained the same since then in 2013 there were only at 79% filled or 790 rooms. Net 100 room difference.
Since I don't know the amount of rooms added since 2008, I'm just speculating here. But, If they added 20% more rooms then 2008's 89% would amount to 890 rooms filled. If 2013 the number available would now be 1200 rooms available and 2013's 79% would now equal 948 rooms filled. That's actually an increase in numbers. I'm guessing that they have added that many rooms, I do not know, but, in order to tell the complete story, both factors have to be considered. It is a gain of 58 actual rooms sold over 2008. So it's a decline in percentage of available rooms but if factoring in the increased number of rooms available over that time period, it represents and actual increase in physical occupancy, increasing cash flow, etc. I'm sure it's not what Disney wants to see, but, as a thinking person I have to wonder why, if you only have 89% of the rooms you have available rented, what would be the need to put more in there other then anticipated growth in actual numbers, if not percentages.
You have to think of hotel rooms as production capacity.
You don't increase capacity in order to have even more spare capacity. You increase it because you intend to use it.
I don't double production capacity only to have half of that added capacity go unused. That's a poor use of company resources; highly wasteful.
No one can ever accuse WDW of not wanting to optimize production. To the contrary, they've become so obsessed with optimizing production that their leadership has lost site that their guests are not raw material; they are people.
WDW's room additions reflect what they
thought they needed or, more to the point, what they thought they could sell.
AOA increased "production" capacity by 724K room nights per year yet "units sold" went up by only 362K, 50%.
For nearly any vacation hotel, 50% is pretty bad. Given that WDW hotels used to traditionally run at 90% occupancy, it's a disaster. Remember, during WDW's post-9/11 crisis when they were closing buildings and laying off Cast Members, occupancy was 76%.
As recently as 2008, Disney's occupancy was 89%.
In the 21st Century, WDW's occupancy rate has been propped up by DVC. WDW has tripled the number of DVC units since 2000.
As a timeshare, once sold, it becomes the member's problem to make sure that the room is filled.
I'm a DVC member. If I'm not using my DVC points then I better be sure that I am renting them to someone or giving them away to a family member. (Don't you wish you were my relative?
)
However, even if I use my DVC points, that doesn't mean I'm going to show up at the theme parks. I'm like any consumer, I'm going to WDW's theme parks if I think it's worth it.
I really enjoy WDW's water parks. I'm there!
WDW's theme parks are another matter. I've been skipping those and heading elsewhere when I'm in Orlando, mostly Universal. I'm not the only DVC member doing that. Remember, we're timeshare owners; we
have to go every year. That means we get bored with the same old same old faster than most.
My DVC points are being used but I'm not spending money at the theme parks. I'm paying less that $100/night most nights for a Deluxe Resort Studio, less than $300/night for a Deluxe Resort 2-bedroom villa which consists of 3 rooms. (For example, I paid $294/night for a Boardwalk View 2-bedroom villa at the Boardwalk Villas for Thanksgiving.) Compare that to what non-DVC members are paying and what they are getting for their money.
And I'm sure not spending money at WDW's overpriced restaurants (I've got a kitchen in my villa) or on their overpriced merchandise. It's not like the old days when the only place I could find something was at WDW. "One Disney" has sucked the fun out of shopping at WDW.
WDW is making money off me. But they are missing so many opportunities to make even more. They keep grabbing at my pennies and missing my dollars.
The point is, WDW's timeshares help boost the hotel occupancy rates but they don't necessarily translate into park dollars.
Since it's glory days when WDW hotels ran at 90% occupancy, WDW has mostly built timeshares and Value Resorts.
Both opened up new markets to WDW. Both should have improved WDW's occupancy rate even more. The added DVCs and the first 4 Value Resorts did exactly that.
Yet WDW's overall occupancy rate has declined. Imagine what's been happening at WDW's original hotel base, its Deluxe and Moderate Resorts, hotel categories that used to run at over 90%.
Trends at WDW's hotels are bad, really bad.
